Q1 2023 3M Co Earnings Call
This year on year improvement was driven by lower annual incentive cash compensation and a strong focus on working capital management, particularly inventory improvement.
Excluding the impact from disposable respirators, the personal safety business grew low double digits organically.
And closure and masking systems was down low single digits as consumers pulled back on discretionary spending impacting e-commerce shipments.
Margin headwinds were driven by lower sales volume.
We continue to gain penetration on new automotive platforms and expect to outperform build rates over the long run.
Lastly, on slide 11, our consumer business posted first quarter sales of $1.2 billion.
Stationery and office grew low single digits organically year on year.
While the home improvement and home health and auto care business declined organically.
With operating margins of 15%.
Down one eight percentage points year on year.
These headwinds were partially offset by benefits from pricing aggressive.
Turn to slide 13 for a discussion on our outlook for the year and the second quarter.
We are maintaining our full year guidance, reflecting a macroeconomic and end market environment that remains very fluid and uncertain.
Turning to our outlook for the second quarter.
The softness we experienced in Q1 in consumer electronics and consumer retail is expected to continue into Q2.
Including these factors our expectations for Q2, our total adjusted sales to be in the range of $7.7 billion to $7.9 billion versus eight $4 billion last year or down 6% to 8% year on year.
To wrap up.
As I mentioned, we aggressively managed cost focused on serving customers, while navigating end market weakness, particularly in consumer facing markets as we started the year.
We expect organic sales volumes will improve as consumer retail and consumer electronics markets stabilize.
Our year on year comps ease.
We'll now take your questions.
If your question has been answered a little like do they try your registration. Please press. The one followed by this to me is.
Your participation to one question and one follow up one moment, please while we compile the Q&A roster.
Our first question comes from Andrew Kaplowitz with Citigroup you May proceed with your question.
Micro mint money, maybe we could start off by just talking a little bit more about the sales cadence during Q1 and here in April because you know I think money. She mentioned in Q U E. P. S guys modestly below Q1, even ex restructuring what happened is Q1 involved in here in April have you seen signs of consumer and electronics Destocking running its course.
Continued to remain soft in Q1, we were down 20% in China and also the Dr. In Russia comps pretty much came in but he said so the end markets played out pretty much as anticipated coming into the quarter. We had given you a guide of seven four to seven six became in at seven seven.
So when you look at that and you translate that into to Q I would still say that macroeconomic continues to remain fluid and uncertain.
We are still seeing consumer weakness both in consumer our consumer business and in any of our consumer facing businesses, especially consumer electronics and so putting all that into into the equation also looking into industrial markets that remain mixed health care and oral care procedures pretty much remaining flat sequentially.
And then auto will be up a little bit sequentially and also up low double digits year on year, but then semiconductors also down mid teens on a year over year basis.
But with that said just for the year again, we are maintaining guidance, which includes a restructuring charge of 700 to 900 foot for the program. We expect half of that would be incurred in 2023 and the benefits from that program and also $700 million to $900 million and we expect the benefits.
On the new division basis will be planned to do that from <unk> 2024 onwards, hopefully that answers. Your question Andy Yeah. Monday, that's helpful. And then Mike I wanted to ask you you know $700 million to $900 million cost take out obviously, a relatively large program. How do you avoid business disruption and or lower growth you know given all the changes youre going.
Incrementals given the program.
Yeah Andy.
You know as I said three months ago, we've been looking at everything we do as we as we come through the pandemic comes through the supply chain disruptions you been face into the outlook for the year and in our markets. As we move ahead. So the actions that we've come to that they've been something that we've been very deliberate about thinking through what they're taking from learnings about.
What worked well in areas that we know we can improve so it starts with a pretty strong basis. We're confident that these are the right actions about positioning us for growth and profitability as we go forward and it will help us navigate as long as it's laid out would help us navigate some of the challenges and uncertainty we have in the current market. So our focus is.
As your question kind of indicated our focus is on executing successfully and that's these are significant changes our confident we've got the right focus we've made some leadership changes to really ensure that we have our leadership focused on successfully making these making these improvements and and I think that.
This is the next step for US we we believe and we're confident these will be the steps that really help improve our performance in our businesses and our supply chain and as the second part of your question focused on it's about improving our costs and margins, while reducing our costs improving our margin performance gives us.
Our position to be successful in the future leverage our innovation to create differentiated value with customers and deliver that to the.
Bottom line performance that we expect both in terms of margins and cash flow.
Does position us for confidence in being able to do that as we go forward that incremental margin from our differentiated innovation. So yes. It.
It's exactly exactly the reason and I'm confident we are positioned at the right with the right strategies in place.
Thank you.
Our next question comes from Stephen Tusa with J P. Morgan Securities. You May proceed with your question.
Hi, good morning.
Steve.
So just on this restructuring costs could you maybe just give us a quarterly cadence on the costs and then the savings and I mean getting half of the savings this year that that seems like a pretty quick.
Quick payback on on half the spending you know like Oh is there anything unique to this program that would have an accelerated pay back like that it seemed like a one for one on a quarterly basis, which which as you know pretty fast.
Yeah. So I'll just start again, Steve its 700 to 900 million, we expect half of that to be incurred in 2023, and 175 to $2 50 to be incurred in the second quarter.
The benefits of that program is also have in 2023.
Very little into Q, so the benefit's actually show up in the second half. The reason the benefits are stronger than you would have normally seen as not all of these costs are just.
People related costs, we are taking a lot of other costs out from the center of the company that reducing rooftops et cetera, which allow us to exit some of these.
Cost structure is faster and that's where you get a better payback.
And so as far as the cadence of the of the charges is there is it should we assume that there are spread throughout the <unk> and additionally, with the savings.
Right now I would just focus on <unk> and the total year and we'll update you Steve as we get through the announcements today and work through all the people related costs and work through the rules and regulations in various countries I would just focus on total year and then into Q.
Okay, and then what was it as far as like the go to markets are concerned and and how you're changing things what was the catalyst for this you know what what did you see in the business that you thought you needed to improve on them from a go to market perspective with all these changes that you were talking about it seems like some pretty significant.
You know initiatives from that perspective, and a and a change in the way you guys have done business historically.
The catalyst for that what did you see that need it but you didn't like yeah. I think the catalyst is really the learning and the experience. So we've gone through over the last few years, we put in place a business led model really around our go to market models we.
We also put in place a global supply chain model that was end to end managed and managed in one consistent model across the world and we we've been operating that through the pandemic through these supply chain disruptions are businesses are learning that go to market model models that we have in place we're learning how to optimize.
Those and I would say, where we've gotten to a point when we look at where our markets are going in the future, where we want to invest how we want to operate best to serve our customers. It's really a learning more of a learning over that that experience then a catalyst there there's a catalyst that's to position ourselves as we take action now for the future make sure that we are.
Stepping into the changes that will do.
Drive the performance in the near term and also position us for the future. So the learning was really and I think a clear view of what we can do to improve in the go to market models and also in our supply chain that is is really I think I said, giving us the.
Strong focus on the actions that we're taking and announcing today can I just add one more Steve has always said this before digital as a multiplier for three M and some of the digital capabilities that we have built over the last few years allows us to serve customers better for example, Mike mentioned one of the areas, where we are re looking at her.
How we go to market in certain countries, but in the past we've ever had a full rooftop and a full cost structure and now we are going to work through our partnerships with third party distributors leverage our digital capabilities leverage our export capabilities and that also allows us to reduce cost while making sure. We still continue to take care of our customer.
And those countries.
Right, Okay. Thanks for the color.
Our next question comes from Scott Davis with Melius Research you May proceed with your question.
Hey, good morning, Mike and Bruce Good morning, Scott.
We've got a couple of different things I mean, this restructuring as large as the sellers have said.
But.
You're also going to be getting out of the P. Fast manufacturing business is that is that included in this rush restructuring or there'll be separate actions.
Kind of sequentially on top of that as you exit each of these things.
Yes, Scott.
<unk> exit I would say this where we are executing what we announced at the end of last year end and working to discontinue the use of PFS and our products and working to exit the manufacturing it's not it's not a specific focus on the restructuring actions that we've got a dedicated team following through on the on that.
Set of actions and we continue to make good progress, we're working closely with customers and and I would say, making progress on our innovation to discontinue the use of the fashion and our products across the company. So it's a separate focus separate team and a separate strategy for us just to remind us Scott from a numbers perspective.
We announced the exit of the intent to exit our PFS manufacturing and reduced.
Our use of PFS and our products, we had announced a fourth quarter charge off we said the total program would cost US 1.3 to $2 3 billion.
In the fourth quarter of last year, we took a charge of $800 million, which was largely noncash. We continue to make progress along that are currently excluded numbers include what that the extra charge in the quarter.
For a total program basis, we still expect to incur right not 1.3 to $2 3 billion.
Okay.
And Mike I wanted to just ask you on R&D productivity.
You know when you think about the investments that you guys have made over the last you know.
50 years forever.
And there's been periods, where growth has been great and a lot of support in the margins and then theres been.
Perhaps the last decade, where I'd characterize growth is pretty minimal and.
Maybe not as much supported the margin structure as you had in the past but.
As part of their restructuring and the changes you're making to help drive more accountability and productivity and in R&D.
Is there a I guess a more polite way to ask the question is is there a <unk>.
Is there any you know.
Cultural or structural problems in R&D that you can address and perhaps improve that productivity going forward yes.
Yes, Scott.
It's an important part of the actions we're announcing today I would say is to position us to be successful in delivering on the differentiated value that is three of them innovation and we are always innovating around how we do that we.
I talked about in the announcement today that we are prioritizing some large high growth market segments, where we have strong commercial presence and we can leverage strong innovation. So I think if there's a.
Kind of a consistent message over the last year or so for me is that we are prioritizing more and more where are we where we focus that R&D investment and it's still the first priority in our capital allocation invest in R&D invest in Capex to drive that growth, where we see the opportunities in those high growth market spaces. We also called out and we are as part of our actions.
We're announcing today, we're putting in place a central.
Central group to really focus.
Some of the capabilities that we have in broad material science going after some emerging market segments like climate attack in industrial automation sustainable packaging, even nextgen or creation electronics has got over the horizon. Some really exciting spaces. So it's about continuing to evolve that prioritization and in the business.
As they they've got I would say very clear focus on where their priority markets are where their customer.
Opportunities are that they can really create the most differentiation. So that's the I would say a continuous innovation and evolving nature of how we how we think about investing R&D, how we think about driving growth in our our goal remains the same to leverage our innovation to grow at or above the macro economies that we're part of an and.
Really focusing on those high growth market segments. So that we can do that.
Okay. That's helpful. Good luck guys on the restructuring thanks Scott.
Our next question comes from Chris Snyder with UBS you May proceed with your question.
Thank you I wanted to ask on China, I think you guys called out trying to down 20% in the quarter was that worse than you guys anticipated and it sounds like there's an expectation of.
China's stabilization or improvement as the year goes on is there anything youre seeing here through April maybe that gives you confidence that that things there are getting better. Thank you.
Yes, so Chris we did call out down 20%, it's pretty much played out exactly where we expect it to be when we gave you the first quarter guide.
And in the second quarter currently we are expecting China to be down low single digits low single digits to mid single digits, but sequentially few days into April it's pretty much playing out maybe saw and just talking to customers talking to and looking at all the external factors. There is an expectation that China GDP growth.
<unk>.
Increases in the second half sequentially and year on year, and our full year guidance as I've talked about assumes overall recovery in all economies in the second half, including China and as supply chains continue to heal we should start also seeing the productivity of cost reductions in our cost of goods to <unk>.
That's showing up in the second half and so sitting right now that's that's how we see China, China was impacted heavily by consumer electronics down in the first quarter and that's also reflected in our results.
Thank you for that and then.
My follow up I wanted to ask on.
The destocking that you're seeing at the customer level I think you guys called.
Called out retail as Destocking.
Year to date and we've seen the same in the data can you maybe just talk about where you think the supply chain is in that destock cycle. Thank you.
Yes, Chris.
<unk> talked a bit about the consumer retail destocking as we came into the year and we saw that play out in Q1, there I would say is in the U S. In particular retail has been destocking and the discretionary.
Categories, and we saw that and that was part of our expectation and pretty much played out as expected we see that getting.
Back to closer to a more consistent weeks of stock, but theres still probably some destocking to continue there not maybe as aggressively as we saw in Q1, but we still see that playing out as we move ahead. We're also seeing destocking I would say across some of the industrial markets, we've talked about that back on our.
Q4 earnings call as well that it was maybe out of cautious view of the outlook and I would say that has played out as expected we saw destocking in China around the slowdown in electronics also in automotive.
China saw a slowdown in automotive builds in Q1 and Asia more broadly destocking around electronics, I think the automotive levels more broadly given the growth of our relatively imbalanced, maybe even low in some areas healthcare is pretty well aligned with the market and the recovery that we're seeing in procedures.
I think.
The consumer is also.
Saying that the dynamic of seasonal builds there are some seasonal builds going on in the channel as well. So some some destocking was played out as expected in the first quarter I would say some of it carrying into the second quarter. As we go forward and then and then when you see the downturn in demand in electronics, there's there's naturally some destocking in the channels related to electronics as well.
Thank you.
Our next question comes from Josh <unk> with Morgan Stanley You May proceed with your question.
Hi, good morning, guys.
Yes.
Well I just want to follow up on the restructuring program in my comment.
Sure I think you guys have had a few programs now over the last several years and I know that they are approaching different aspects of the cost elements and different regions et cetera, but trying to roll up to you know where do you see the margin entitlement for the business as we get through these programs over the next several years is there anything that you sort of have pencil out there that.
We should keep in mind.
Actually with you know a few of these programs overlapping.
Next changes et cetera going on within the business.
Yes, Josh So I would say a couple of things one is of course there too.
Have these programs look through as we said, it's 700 to 900, a large piece of those charges will be completed by 2024. So you will start seeing the benefit without these charges in 2025 and beyond.
It's that time of course here how to think through what the revenue is but if you just use 2023 as a guide as a basis the margin expansion. Excluding these charges are when these charges are done as a 200 to 300 basis points of margin expansion that you should see on an annualized steady state basis, what I would tell you is that allows us to.
<unk> definitely get the better leverage that we have all been talking about but the second other factor that comes into play is as supply chain start to heal.
You should start seeing productivity and.
Cost out starting to show up which again is in our second half guide for the year, but that should continue into the future years, and then you add on data data analytics and the digital capabilities that we have that will allow us to do better a better network and logistics optimization.
Also dual sourcing programs kicking in et cetera. So we should continue to see margin rates expanded into the long term. Once these programs are done so hopefully I answered your question Josh.
Yes, that's helpful and I'll leave it there the interest of time.
Our next question comes from Joe Ritchie with Goldman Sachs. You May proceed with your question.
Hi, good morning, everyone.
Good morning, Joe.
I know, we've had a bunch of questions on the restructuring.
I want to delve in a little bit deeper there because there's lots of cost levers that you described I'm. Just curious is there a way to bucket, perhaps like some of these how big like whether it's reducing the layers or supply chain is in that $700 million to $900 million cost out and then maybe maybe specifically on the simplification.
Keith.
Again, any kind of quantification like how many P analysis E streamlining any any other color around that would be helpful.
So.
Joe the $700 million to $900 million. If you just break it out into broad buckets, 40% of it is around the supply chain simplification that might talk about the remaining 60% you can split between costs at the center of the company and costs at the Bgs.
From a P&L perspective couple of items that Mike talked about again on the go to market.
There'll be a couple of divisions in T. B G that'll be combined and then from a consumer perspective, we will serve our customers more from an area perspective, and then realign them around portfolios and the other piece on our go to market cost savings is as we look at some of the countries the way we serve.
Using our digital capabilities, we will look at using our partnerships that we have at that third party distributors in those countries.
And use of digital slash export model to serve those customers in those countries, which will also allow us to take out rooftops.
And fully loaded P&L as in those countries that will also allow us to save cost.
Got it that's super helpful and maybe my follow on question I didn't hear it earlier, but how much pricing came through this quarter, what's the expectation going forward on price cost.
Yeah, so depending on the business group, Joe we had anywhere between low to mid single digits. The average is low single digits. The guide for the year is <unk>.
Low single digits and at the same time as we've said before if we continue to see inflation, we will readjust as needed.
The teams have done a good job I would say of looking at it product by product market by market and making the right necessary.
Price moves as required when they see the see inflation.
Okay.
Okay. Thank you.
Our next question comes from Julian Mitchell with Barclays. You May proceed with your question.
Hi, good morning drilling maybe good morning, maybe leave aside the firm wide restructuring for a second then just wanted to focus on the health care businesses. That's meant to spin out in a matter of months you know the margins down pretty heavily.
Year on year, again down sequentially, as well and and not a lot of organic growth. So.
Just trying to sort of understand how comfortable you feel with with that health care business is kind of ahead of the spin.
Are we seeing a big front loading of investments. So it has kind of less to do post spin I'm just.
Trying to understand kind of the approach there for this year and why those margins seem to be under such pressure.
Yes Julien.
I'll come to kind of the organic growth and margin I would say we continue to.
We continue to see that health care procedures.
An important driver of our health care performance and there we see some improvements were monish highlighted in his prepared remarks, some of the headwinds and challenges that are still the labor shortages and some of the challenges in health care recovering to pre pandemic levels. So that's an important factor in driving our growth.
If you look at our business.
They also had some headwinds from from the Russia exit and D are so close to 2% organic growth in and we.
As procedures do recover that we'll see improvements in our organic growth on the margin side, you know monish called out some of the headwinds we have are still seeing some supply chain headwinds still seeing some carryover from material raw material and logistics inflation energy cost inflation, and we are making some investments investing in it.
<unk> prioritized area of growth for us and we're making and really staying focused on those investments. So it's a it is part of the the performance in the quarter, but again confident that as procedures approvals, we'll see growth in growth gives us the best leverage to a margin, we'll see those margins improve as we as we see some of the supply.
Chain healing in and some of the actions that we're taking help impact that as well.
Just one more to add is biopharma as we mentioned in our prepared remarks Biopharma. This quarter was also impacted.
Due to the normalization of Covid related demand and as Mike mentioned, the health care business is for US is a great business, we will see volumes grow as elective procedures grow oral care procedures go in Biopharma demand comes back once we get the normalization out of the way from an inventory level.
And with all that put together the margin rates will also go up as volumes come through but this is again a segment Mike has called out multiple times in area, where we see great opportunity, which means we will continue to invest in that segment to make sure. We take advantage of long term growth.
Thank you and then just my follow up on electronics specifically.
I think you mentioned that was down sort of 35% in Q1 year on year. It looks like the second quarter's down maybe in the in the teens based.
Based on the slides the teen in electronics.
How are you thinking about that sort of rate of improvement.
It's baked into the back half for electronics.
In your guidance do you think we should see year on year growth by the fourth quarter.
Electronics any sort of color there around how youre looking at that business through the balance of the year.
Yes, that's you got it right right.
Right now our second quarter is also going to get impacted continuing inventory challenges and destocking at consumer electronics, whether it's tablets notebooks Tvs.
Our view is that as China stabilizes as we start seeing our comps ease.
Compared to last year fourth quarter should be on a much more normal run rate, which means on a year over year basis, it'll show positive growth.
Great. Thank you.
Yep.
Our next question comes from Nigel Coe with Wolfe Research you May proceed with your question.
Thanks, Good morning. Thanks.
Yeah, great. Thanks, So just wanted to touch on the appointment of Mike Vale.
As we present, just a first of all congratulations to Mike, but how does this change your Roe.
Mike Roman in terms of your focus areas I mean, my micro apathy.
Seems like he's getting direct responsibility for the three segments.
How does this change your focus areas going forward.
Yes, Nigel I think it's a reflection on really what are the strategies and actions that we're driving in the priorities that we're focused on right now and the importance of having leadership that brings the nestle.
The necessary focus as we go forward and so it's even looking back to 2022 of the some of the pivotal actions that we announced as we came through the year. There are you know the.
Health care spend our actions in terms of our supply chain changes focusing our leadership now with the actions we're announcing today to go further and really.
Make the changes in our next set of changes in our supply chain are moving forward with our new go to market models Mike's role as really focusing on that when I when I talk to Mike about stepping into this leadership role it's about really.
<unk> success as we as we drive these actions and changes forward position us for the future help the businesses help our businesses working with our supply chain to be successful in integrating these changes in and building for the future help us to focus on the high growth market segment. So it's really about putting up taking our priorities and putting our strong leadership support.
In place to drive that these are important and really significant actions that we're putting in place an important that we have that we also are supporting.
Our leadership with a dedicated project management office. These are significant changes so it's a it's really a <unk>.
Strong statement about what's most important both on the the restructuring, but also on our strategies in terms of growth and executing for our customers.
Okay. That's helpful. Thanks, Mike and then one for me just following up on Joe's question on pricing.
It seems like you know given the the 1.3 percentage point hit to margins from raw materials. It seems like price cost was positive. This quarter just wondering if theres been any change in the way you're viewing the supply chain stroke raw material kind of dynamics for this year.
Yeah, No change I would say, it's the same so price cost was positive and the teams continue to manage both as we think about the second half that's where supply chains are belief is supply chain start healing, which means we should be able to see better cost product cost from our factories as well as.
The costs from sourcing.
That should continue to help us build on margins, which goes back to where it would be if talked about it earnings talked about it last to last quarter earnings currently to that.
That all of this is baked into our guide maybe see supply chain starting to heal in the second half an EBIT market starting to heal in the second half because as you know we've talked about volume gives us the best leverage. So those are the three things we are counting on in the second half.
Alright, Thanks, a lot and good luck. Thanks.
Thanks.
Our next question comes from Deane Dray with RBC capital markets. You May proceed with your question.
Thank you and good morning, everyone. Good morning.
We got an update on the.
Health care.
All analysts.
Meeting and what's the expect.
The separation of our N T theres so much in the way of share technologies, what's the plan there and also for stranded costs.
Yeah, maybe I'll make a comment about the R&D.
Something that we manage with the other separations and divestitures nothing out of the healthcare spin scale, but it's something that we're able to manage we were part of the.
The focus of the separation team is on this.
This area and it's important to be able to set up both health care and three of them going forward with the strong foundation for innovation that they both need and and you know the.
Fields of use are actually quite distinct between health care and what will be three <unk> company going forward. So that's really a big part of it and then where we worked through the details to make sure that we are positioning both companies to have the not.
Not only the access to the technology and intellectual property that is at the foundation of what what makes our innovation really that that differentiate it so.
Good progress on that and feel.
Feel like that's an area that we have a good roadmap ahead for us to follow up just on your second question on timing as you know Deane last quarter too Mike had said the teams are continuing to make good progress this quarter too, they're making good progress.
We were going we were working towards a Q4 23 early 2024 timeline, but just a reminder, our spend timing ultimately subject to the IRS rulings because we want this to be a tax free transaction government approvals, making sure. We get final board approval and also taking into account other conditions like equity and debt.
<unk> other.
Other external conditions that could impact on other developments that could impact three M or any of its business. So put all that together I would just say the teams are focused dedicated teams continuing to make progress.
Working through all the government regulations that we have to work through to get ready.
That's helpful and just if you can comment on the plan for Strand is Pos and are there other spin offs being contemplated by the board.
So I was just on stranded cost when we when we announced this transaction mid last year one of the items, we had talked about was <unk>.
That benchmarks for anywhere between one to one 5% of revenue was stranded cost and we had talked about saying we believe we can do much better than that based on all the actions that we are taking today.
Currently our view on stranded costs ultimately it depends on the revenue of parent co tool is between 50 to 75 basis points are much lower than benchmark, but we'll keep working it we'll keep working it from now till the end of the until the spin off and we'll keep working it post that to reduce debt and Dean I would say we're focused on.
Successfully moving forward and making successfully making progress with our spend on health care and we are of course focused on the actions that we announced today. So we don't plan on any other major portfolio actions in the near term.
Thank you.
Thanks Gene.
And our final question comes from Nicole <unk> with Deutsche Bank. You May proceed with your question.
Yeah. Good morning, guys. Thanks for squeezing me in.
No.
Hey in the interest of time I'm, just going to ask why then that's can you just comment on how organic growth kind of trended throughout the quarter. If there were any discernible differences between Jan March and then into April . Thank you.
So Nicole I would say overall the quarter pretty much played out as we thought Jan Jan February March we expected.
Acceleration, which we saw.
April is also playing out pretty much where we be solved so there's I would say there was nothing.
In the intra quarter trends in Q1 that stood out from where we had expected it to be China remains soft consumer facing businesses.
Remains soft industrial end markets ex electronics remain strong.
And then health care elective procedures pretty much remain the same and you normally in that industry see a Q4 Q2 of <unk> slow down just as procedures slow down and we saw that too. So nothing I would say is is our major to call out intra quarter in <unk>.
Thanks, Tony.
That concludes our question and answer portion of our conference call I will now turn the call back over to Mike Roman for some closing comments.
To wrap up we are taking significant actions to create a streamline and stronger three of them. We will stay focused on creating greater value for customers and shareholders, improving our performance and using three of them science to make a difference in the world. Thank you for joining us.
Ladies and gentlemen that does conclude the conference call for today, we thank you for your participation and we ask that you. Please disconnect your lines.
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