Q3 2022 Better Choice Company Inc Earnings Call

Operator: Good morning. I will be your conference operator today. At this time I would like to welcome everyone to the Better Choice Company's third quarter 2022 earnings conference call. Today's call is being recorded. I'd now like to turn it over to Rob Sauermann, Chief Operating Officer. You may begin.

Robert Sauermann: Thank you, Operator. Welcome, everyone, to Better Choices third quarter earnings conference call. This morning, we issued our Q3 2022 financial results press release and posted our updated earnings presentation under the IR section of our website, which we'll be discussing today.

I'm joined by Lionel Conacher, our interim CEO, Sharla Cook, our CFO and Donald Young, our Chief Sales Officer.

Before we begin please remember that during the course of this call we may make forward looking statements within the meaning of the federal securities laws.

These statements are based on management's current expectations and beliefs and involve risks and uncertainties that could cause actual results to differ materially from those described in these forward looking statements.

Please refer to the Company's annual report on Form 10-K filed with the Securities and Exchange Commission and the Company's press release issued on Tuesday, March 29, 2022 for a detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied in any forward looking statements made today.

Please note that on today's call management will refer to certain non-GAAP financial measures such as gross revenue, adjusted gross margin, EBITDA and adjusted EBITDA.

Although the Company believes these non-GAAP financial measures provide useful information for investors, the presentation of this information is not intended to be considered isolation or the substitute for the financial information presented in accordance with GAAP.

Please refer to our press release and presentation issued on November 10th, 2022 for a reconciliation of the non-GAAP financial measures, the most comparable measures prepared in accordance with GAAP.

With that let me hand it over to Lionel.

Lionel Conacher: Thank you, Rob, and good morning, everyone. I'm excited to be speaking with you today for the first time as both a Director and the interim CEO of Better Choice.

It's only been a few months, but I've already learned a tremendous amount about this company and the passion of our team has for engaging with pet parents.

Before we move into a discussion of our third quarter results I wanted to take time to share a bit more about myself, what attracted me to join the Better Choice Board and ultimately what led me to serve as interim CEO.

Talk to me to join the better choice Board and ultimately what led me to serve as interim CEO .

Over the course of my 30+ year career, I've had the opportunity to hold a number of senior positions in public companies and have helped many businesses realize their growth potential through the lens of operating, investment banking, private equity and venture capital.

Since 2020, I've served as the Chairman of DXL Group, where I've partnered with a great Board and management team as we've navigated the COVID-19 pandemic and delivered strong operating results, which is directly translated into meaningful shareholder value creation.

As I look at Better Choice and the trajectory of the Halo Brand, I see a lot of opportunity to build upon an already strong foundation.

For the last two years, we've focused on assembling the building blocks for growth across every aspect of our multichannel business.

Our team, with a proven track record of success in pets, has driven a number of these initiatives, which include the development and launch of new products like Halo Elevate, the rebrand of our core product Halo Holistic and the transformation of the TruDog brand under the Halo umbrella.

The track record of success and Pat has driven a number of these initiatives, which include the development and launch new products like Halo elevate the rebrand of our core products Halo holistic and the transformation of the Truecar brand under the Halo umbrella.

Simultaneously, we've established several new co-manufacturing partnerships, meaningfully expanded our brick and mortar presence in pet specialty and invested behind our rapidly growing international online business.

Despite having dealt with significant macro challenges this past year, Better Choice is well positioned to continue on its growth trajectory as the strategic decisions we have made begin to pay off.

Strategic decisions, we have made begin to pay off.

Although the pet food industry has been and still is one of the most recession resistant categories within CPG, inflation has negatively affected supply side of the business industry wide.

[inaudible] prices are up 14% year over year, driven by significant increases in raw material or material cost in late 2021 in early 2022.

On the whole, our industry continues to grow meaningfully, but price, particularly in the premium sector among more affluent customers, will likely be the primary driver of overall growth.

In addition, rising interest rates have fundamentally changed how many of our channel partners approach their working capital position as larger partners like Amazon, Chewy, and Petco, all utilized credit facilities to purchase inventory.

As these partners look to reduce interest expense they've chosen to materially reduce weeks on hand in their distribution centers across the board.

That has had a material negative effect on net sales in Q3, and we anticipate that it's likely this trend will continue into Q4.

In contrast, sell through particularly, for Elevate, in pet specialty and holistic internationally remains strong and growing, which bodes well for the growth of our brands.

Well for the growth of our brands.

In aggregate, we've generated $45.3 million of net sales in the first nine months of 2022, representing more than 30% year on year growth and well exceeding in the industry averages.

Though the launch of Halo Elevate in pet specialty remains a core focus. It's worth noting that almost 70% of all Halo customers today purchase our products online, especially when you consider that more than 75% of our international consumers are online shoppers.

While we've demonstrated exceedingly strong growth internationally, which Rob will get into in more detail later, our domestic ecommerce and direct to consumer channels have struggled on a relative basis.

This has been driven by out of stocks in the first half of 2022 and the delayed launch of new Halo Holistic from Q2 into Q4.

In addition, Amazon has been the most aggressive of all our customers and reducing supply on hand, as they continue to pull down inventory levels and their fulfillment centers across the board. That said our POS sales on Amazon continued to improve reflecting a year to date increase of 15% over the prior year and a 20% increase in the month of September.

Turning to Chewy, our year to date sales are roughly flat to the prior year, driven by softer than expected POS volume, but we've begun to see improved consumer purchases late in the third quarter.

Successfully executing the launch of the new holistic in Q4 will be a key driver of our ecommerce performance in 2023.

The year over year decline in our DTC channel has been driven primarily by planned reduction to customer acquisition spend ahead of the brand migration that we successfully completed early in the third quarter.

While this strategic shift has resulted in an expected short term decline in sales, we are executing market strategies focused on both consumer retention and acquisition of high value customers.

While both our ecommerce and direct to consumer channels have experienced recent challenges, exacerbated by supply chain dynamics beyond our control delivering, successful online growth remains a core strategic focus.

Online pet foods subscribers are highly valuable consumers and it's worth noting that more than 50% of domestic online revenue was derived from recurring subscription, a number that we hope to build upon in the future.

Switching to gross profit, we delivered a third consecutive quarter of gross margin improvement driven by increasing profitability for both our domestic and international lines of business.

In Q3 2022, our adjusted gross margin was 37% and $11.9 million of net sales translating into $4.4 million of adjusted gross profit and getting us back to near pre-pandemic levels.

This represents a six percentage point improvement from Q2 and a 12 percentage point improvement from Q4 of 2021.

12 percentage point improvement from Q4, 2021.

Most importantly, we are seeing signs that this gross margin profile is generally here to stay as raw material costs seem to have stabilized and in some cases have retreated relative to the highs we saw earlier in the year.

In addition to our improved gross margin profile, we continue to aggressively manage costs across all of our business lines without sacrificing future growth potential.

As we turn to our balance sheet, I wanted to highlight our new $13.5 million revolving credit facility, which we closed in October. The facility extends our debt maturity through October 2024, materially reduces cash amortization payments and increases our total borrowing capacity offset by less than one percentage point increase in rate.

I'll let Sharla get into more detail, but it's worth noting that this refinance coupled with positive trends we are seeing on the working capital side of our business, allows us to eliminate the going concern risk from our Q3 quarterly filings.

Taking a step back and looking at the broader picture, we're at an interesting point in our journey.

To date, we've invested a significant amount of time, capital and resources building a brand and product platform design to be successful across multiple sales channels.

We have shifted our focus to execution across every aspect of our business from sales and marketing, to finance and operations, as we push towards profitability and ultimately look to deliver a return on the strategic investments we've made.

Speaking now in my capacity as a board member, I want to provide an update on our search for a permanent CEO to replace me.

We have officially engaged a search firm to lead this process and have already begun interviewing candidates to find an experienced CEO with strong leadership and operational skills as well as an established background in multichannel marketing.

We plan to complete this process as quickly as practicable.

With that, let me hand it over to Rob to discuss our progress in the international channel in more detail.

Robert Sauermann: Thanks, Lionel. On a year to date basis, we've delivered $19.7 million in net sales internationally in our core Asian markets, representing more than 80% year over year growth and already eclipsing our full year 2021 total by almost $5 million.

These results demonstrate the strength of our business and the importance of high quality pet food to consumers around the world.

Although internationals are typically highest in Q3 as they represent the inventory buildup ahead of November promotions, this year, we worked with our partners to bring some production forward into Q2 and ensure that we would be in stock to meet end consumer demand, which continues to remain strong despite the strengthening U.S. dollar.

Although there has been significant global uncertainty in recent months, we've been able to deliver record international sales in our core geographies and constantly work with our distribution partners to mitigate potential risks.

Constantly work with our distribution partners to mitigate potential risks.

While our international go to market strategy is tailored for each specific region, our target audience is the same: a young, educated, urban dwelling woman, who in Asia in particular, often owns a cat.

Young educated urban dwelling woman, who in Asia in particular often onto cat.

To put it in perspective, more than 50% of the consumers that purchase Halo were born after 1990, and as Lionel mentioned earlier more than 75% purchase our products online.

Demographics are also working in our favor as the number of households own a pet has doubled in the last five years with younger pet owners leading growth.

While competition has increased internationally since we first launched, we feel strongly that our knowledge of local markets and our strong partnerships gives us a unique competitive advantage. In addition, our longevity in the market as a well known, high quality brand helps insulate us from competitive pricing pressures as we believe a higher percentage of our customers tend to be repeat purchasers relative to other brands.

To other brands.

In addition to the strong dry kibble business we had built in Asia, which makes up the vast majority of the $100 million in aggregate contracted minimum sales from 2021 through 2025, we remain focused on high margin incremental expansion opportunities.

In the second half of this year, we're prioritizing expansion into Latin America, which we see as having similar trends and demographic opportunities in the Asian market.

Before I turn it over to Donald to discuss our brick and mortar channel, I also wanted to touch on three key operational milestones that we achieved in Q3.

With regards to our direct to consumer platform the integration of the Tru Dog brand underneath the broader Halo umbrella occurred on schedule in early July with no disruptions in our ability to supply our existing subscriber base. Now that we have consistent branding and price, we're looking to expand the Halo freeze dried raw offering to other channels, including pet specialty and international.

International.

We officially began our first production runs of new holistic kibble, which will be sold predominantly via our ecommerce partners.

Although this will likely have more of a 2023 impact to sales given its delayed launch later in the year, we will be able to make a few formula tweaks to deliver a more palatable and digestible recipe at slightly lower cost.

Are you able to make a few formula tweaks deliver a more palatable and digestible recipe at slightly lower cost.

We've completed our first full quarter of consolidated international production, with our new co-manufacturer, enabling us to achieve targeted gross margins.

Consolidated international production, our new co manufacturer, enabling us to achieve targeted gross margins.

In addition, we received official authorization from the Chinese Ministry of Agriculture for a key [inaudible] to international diets, enabling us to sell product produced at this co-manufacturer directly into mainland China.

Yes to sell product produced it just kind of manufacturer directly into mainland China.

With that, I'll turn it over to Donald.

Donald Young: Thanks, Rob. This quarter was an exciting milestone for me. It marks the first point where we had full, permanent distribution for Halo Elevate.

As of today, Halo Elevate is now for sale of more than 1,800 rooftops with our sales team of 10 actively focused on driving our recommendation with district managers, store associates and end consumers.

At PetCo, we officially moved to the permanent dog aisle in July from the seasonal wall, where we are now in more than 1,000 locations. While the seasonal wall was ideal for retail associates, education and brand awareness moving to the permanent dog aisle is a key step as this is where the consumer shops everyday.

Seasonal was ideal for retail associates education and brand awareness moving to the permanent COO.

<unk> this is where the consumer shops everyday.

Like we touched on in our Q2 call, after making this move, we saw doubling of weekly POS sales and we have continued to grow our weekly sales from that point forward.

In addition, our most recent customer repurchase rates at PetCo was 51% following the initial trial, representing an increase from 43% that we noted in August on our Q2 earnings call.

Representing an increase from 43% that we noted in August on our Q2 earnings call.

As a reminder, we completed our April launch and more than 600, Pet Supply Plus stores as a preferred brand.

In addition, P.S.P.'s franchise and corporate owned store model drives significant new store openings each year, which is a built in growth lever for Halo Elevate.

And a growth lever for Halo elevate that's.

As a result of our time in the field working with managers and store associates, we've been able to partner closely with Pet Supplies Plus merchandising team to promote Halo Elevate as a premium option alongside their three core private brands.

Halo Elevate as a premium option alongside their three core private brands.

Although independent store growth will be more of a focus for us in 2023 and beyond, we have had the opportunity to secure several new independent partners with local and regional players.

While this won't have a material impact on sales this year, we secured a 2023 launch of Halo Elevate with Pet Supermarket, which has 220 locations focused primarily in the South East.

With regards to the sell through of the Halo Elevate, we're continuing to see point of sales data that indicates that the brand is being well received by consumers. In Q3, we eclipsed another important milestone. We achieved our first week of more than $100,000 of sales.

We continue to build upon this number and we are progressing well against our joint business plans with PetCo and Pet Supplies Plus.

As a point of reference, I also wanted to highlight our performance relative to the launch of Stella & Chewy's, Essential line, which our retail partners consider a best in class launch within the last five years.

Even though we have a much smaller starting presence in independent pet, we've outperformed the first 13 weeks of that launch, which gives us and our retail partners confidence that we are building something special with Elevate.

As we look at brick and mortar channel in aggregate, we delivered $1.3 million of net sales in Q3, representing a decline relative to Q3 '21 net sales of $1.8 million.

On a year to date basis, we have delivered $9.6 million of net sales relative to the $5.4 million in the same period last year, representing more than 75% growth.

Presenting more than 75% growth.

It's Lionel mentioned earlier, brick and mortar sales had been negatively impacted by our customers' decision to hold less inventory in their DCs, regardless of the strength of our sell through.

regardless of the strength of our sell through.

While this doesn't affect our total sales in the long term it will have a negative effect in the short term results. In addition, Q3 results include the effects of our strategic pull back from food, drug and mass channel, representing a $250K year over year decline, which is a helpful point to note when comparing performance relative to last year.

food, drug and mass channel, representing a $250K year over year decline, which is a helpful point to note when comparing performance relative to last year.

With that said, let me turn it over to Sharla.

Sharla A. Cook: Thank you, Tom.

In the third quarter of 2022, we delivered gross sales at $14.2 million and net sales of $11.9 million, representing a decrease in net sales of $1.3 million or 10% compared to the third quarter of 2021.

As mentioned on last quarter's call, a portion of international sales that are typically generated during the third quarter ahead of the 11/11 in China were pulled forward to Q2 in order to ensure production and avoid potential shipping delays.

On a year to date basis, we've delivered gross sales of $53.7 million, net sales at $45.4 million and adjusted net sales at $45.9 million, an increase of $10.9 million or 31% versus net sales of 2021.

The decrease in Q3 net sales relative to the prior year period was driven by declines in our e-commerce and DTC channels, as well as the strategic exit of the FDM channel.

To fit in with what many Amazon customers are experiencing, our e-commerce sales have been impacted by ordering patterns with Amazon as they continue to pull down inventory levels in their fulfillment centers. We have heard directly from our vendor management team that ordering programs across essentially all categories have been affected by network capacity constraints.

Our P.O.S. sales on the platform continued to improve reflecting a year to date increase of 15% over the prior year and a 20% increase in the month of September, despite a pullback in marketing spend ahead of our holistic relaunch that is currently underway and will be rolled out over the next few quarters.

As inventory levels normalize and we optimize our marketing investment to drive traffic to updated product pages with improved formula and re-branded packaging, we expect to return to higher sales volumes over the coming months.

As it relates to our performance on the Chewy platform, year to date sales are roughly flat to prior year driven by soft P.O.S. volume.

Chewy has reduced customer acquisition spend across their platform and has focused on driving retention and basket building through increased promotional activity.

We began to see improved P.O.S. volume late in the third quarter and expect to see continued improvement as we execute the holistic relaunch in Q4 and focus on promotional spend on new customer acquisition and driving trial with a rebranded and reformulated product offering.

The year over year decline in our DTC channel has been driven primarily by a planned reduction to customer acquisition spend ahead of the brand migration that we successfully completed early in the third quarter.

With a complete offering now available on the Halo pets website, we are executing marketing strategies focused on both customer retention and acquisition of high value customers.

Quarter and year to date net sales in our international channel are up 31% and 82% respectively due to continued growth in Asia, driven by strong consumer demand and continued penetration of the Halo brand in that region.

continued growth in Asia, driven by strong consumer demand and continued penetration of the Halo brand in that region.

Brick and mortar net sales declined 26% in Q3, driven by a decline of $0.3 million, resulting from our exit of the FDM channel.

Driven by a decline of <unk> 3 million, resulting from our exit of the STM channel on.

On a year to date basis brick and mortar sales have increased 78% due to a $6.3 million or 129% increase in pet specialty driven by the Halo Elevate lunch, partially offset by a reduction of $0.8 million in FDM sales.

Gross profit for the third quarter totalled $4.2 million, yielding a gross margin of 35%. On an adjusted basis, excluding the impact of one time costs related to the holistic relunch and backing out the positive impact of customer refunds in the e-comm channel related to prior year periods, adjusted gross margin was 37% reflecting an improvement of six percentage points from Q2 of 2022 and a 12 percentage point improvement from Q4 of 2021.

reflecting an improvement of six percentage points from Q2 of 2022 and a 12 percentage point improvement from Q4 of 2021.

Turning to our balance sheet, the improvement in gross margin throughout the year is consistent with expectations and reflects the successful execution of several key gross margin improvement initiatives, including the transition of our dry kibble production to a new co-manufacturer, the execution of multiple pricing actions since Q4 of 2021 and supply chain efficiencies, including the selective prepayment and consolidation of production runs.

the execution of multiple pricing actions since Q4 of 2021 and supply chain efficiencies, including the selective prepayment and consolidation of production runs.

Turning to our balance sheet, we ended the third quarter with $12.6 million in cash and cash equivalents and restricted cash compared to $17.8 million at the end of Q2.

The change in our cash balance during the quarter reflects an increase in inventory primarily related the rebrand of Tru Dog under the Halo umbrella.

Additionally, we offered temporary extended payment terms to one of our key international partners, while we switched co-manufacturing partners and to coincide with a material price increase that was effective at the beginning of Q2, and we will see a positive working capital impact in Q4, resulting from those collections.

During October, we completed the refinance of our credit facility, resulting in a $1.3 million dollar increase to our total borrowing capacity, the elimination of $4.7 million of quarterly amortization payments through January 2024, a reduction to the minimum liquidity covenant from $13 million to $8.5 million and a reduction to restricted cash from $6.9 million to $6.3 million.

and a reduction to restricted cash from $6.9 million to $6.3 million.

Additionally, the improvement in our liquidity position and amendment of the liquidity debt covenant allowed for the removal of disclosures within our 10-Q expressing doubt about our ability to continue as a going concern. It is important to note that the initial inclusion of this disclosure within the Q2 filing was related to the potential for future non-compliance with the liquidity covenant under the terms of the prior credit facility, not our expectations regarding our ability to sustain operating cash level.

The potential for future non-compliance with the liquidity covenant under the terms of the prior credit facility, not our expectations regarding our ability to sustain operating cash level.

Net loss for the third quarter was $6.5 million.

After adjusting for non-cash and non-recurring charges, adjusted EBITDA for the third quarter was negative $2.9 million. On a year to date basis, adjusted EBITDA was negative $7 million consistent with our prior estimates for quarterly cash burn.

As referenced, we've also provided a detailed reconciliation of Q3 EBITDA and adjusted EBITDA in Q3 net sales and gross profit and adjusted net sales and gross profit.

Adjusted net sales and gross profit.

With that, I will turn it back over to Lionel.

Lionel Conacher: Thanks, Sharla and thanks again to everyone for joining today.

To wrap up our prepared remarks today, I want to leave you with a few thoughts. Despite what has been a challenging operating environment so far this year, we now have the foundation in place to be able to compete and grow across all of our distribution channels.

We've committed brick and mortar retail partners, a network of international distributors, a

recurring base of online subscribers, strong ecommerce partners, co-manufacturing partners with the capacity to support growth and a banking relationship that allows us to strategically deploy working capital.

Going forward, it's our plan to focus on execution, reduce our quarterly cash burn and grow to ultimately deliver a return to shareholders.

reduce our quarterly cash burn and grow to ultimately deliver a return to shareholders.

Now, we'd like to open up the call for questions. Operator, please.

Operator: Thank you. We will now begin the question and answer session.

To ask a question you may press star than one on your touchtone phone.

If you're using a speakerphone please pick up your handset before pressing the keys. To withdraw your question please press star than two.

At this time, we will pause momentarily to assemble our roster.

Our first question comes from J.P. Wollam from Roth Capital Partners. Please go ahead.

John-Paul Wollam: Great. Thanks, and good morning, everyone. Thanks for taking my call.

I wanted to maybe first touch on the point of sales data from brick and mortar. Donald, I know you said that during the quarter you achieved the first week of $100K in sales and I was just hoping you know-. I don't know if you want to or are willing to disclose kind of average weekly sales for the quarter, but maybe if you could kind of just help us understand what the trend looks like? Maybe when in the quarter that $100K hit and kind of how things have looked since then? Any clarity or detail there would be highly appreciated.

During the quarter you achieved the.

First week of 100 K in sales and I was just hoping you know.

I don't know if you want to or willing to disclose kind of average weekly sales for the quarter, but maybe if you could kind of just help us understand what the trend looks like maybe when in the quarter down 100, K here and kind of how things have looked since then any clarity or detail there would be highly.

You did.

Multiple speakers: [inaudible.] Awesome, thank-. [inaudible.] Go ahead, Donald.

Donald Young: Go ahead, Rob. I'm sorry.

Robert Sauermann: Go for it, Donald.

Donald Young: Again, as we've talked about P.O.S. sales, it is that momentum build, right? We've looked again at how long we have been in the market and they really the key point for us is the distribution of the 1,800 stores. That's what really is building the momentum as it just continues to just grow week over week P.O.S. sales. As you know, J.P., we really don't do forward leaning.

I would say again right now the key to that, that we talked about, really is as we are progressing very, very well against our joint business plans, which makes both PetCo and Pet Supplies Plus extremely excited about our launch in what they consider best in class.

John-Paul Wollam: Okay, great, and then maybe if we could just touch on -.

Got it.

If you could just touch on, kind of, the difference you guys-. If you guys are seeing any kind of difference in what's going on between Chewy and Amazon? I think you mentioned Amazon point of sale systems are 15% year over year and Chewy is about flat. So, just curious if there's, if there's any major noticeable differences in the two channels? Thank you.

kind of difference in what's going on between Chewy and Amazon? I think you mentioned Amazon point of sale systems are 15% year over year and Chewy is about flat. So, just curious if there's, if there's any major noticeable differences in the two channels? Thank you.

15% year over year and Chewy is about flat. So, just curious if there's, if there's any major noticeable differences in the two channels? Thank you.

Robert Sauermann: Awesome.

Hey, J.P.. It's Rob. I'll take that one.

What what I would say between the two is you know Amazon has been more aggressive in terms of managing inventory in their warehouses than Chewy, but has had slightly stronger P.O.S. growth than Chewy, as we mentioned.

P.O.S. growth than Chewy, as we mentioned.

I would say that generally speaking, Amazon was maybe a little less impacted relative to out of stocks earlier in the year than Chewy was and that's probably a bigger, decent reason for that change.

Amazon was maybe a little less impacted relative to out of stocks earlier in the year than Chewy was and that's probably a bigger, decent reason for that change.

Relative to out of stocks earlier in the year.

And she was and that's probably a bigger.

Decent reason for that change.

John-Paul Wollam: Okay, and then if I could just sneak one last one in, just on inventories. I know there was a sequential increase. Just curious if there's anything you want to highlight going forward and maybe how you're feeling about that level?

Robert Sauermann: Sharla, you want take that one?

Sharla A. Cook: Sure, yeah, and I mentioned during the prepared remarks, if you think about the brand migration from Tru Dog to Halo, we actually, kind of freeze dried raw inventory that we sell on that DTC platform primarily, inventory levels in prior quarters, were actually depleted to pretty low levels, just given that we were changing packaging and so what you're seeing in the quarter is a build back up of that freeze dried inventory. That'll start to come back down obviously, as we put them on our platform, it's available now, and start to sell through. And that's primarily the reason for the increase in Q3 from Q2.

were changing packaging and so what you're seeing in the quarter is a build back up of that freeze dried inventory. That'll start to come back down obviously, as we put them on our platform, it's available now, and start to sell through. And that's primarily the reason for the increase in Q3 from Q2.

John-Paul Wollam: Great. Thanks for taking my questions.

Operator: Again, if you have a question please press star then one.

There are no more questions in the queue. This concludes our question and answer session and the conference is now concluded.

Thank you for attending today's presentation. You may now disconnect.

Okay.

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Okay.

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Yes.

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