Q3 2023 The Lion Electric Company Earnings Call
Good morning, ladies and gentlemen.
Welcome to non <unk> metrics that coach at 2023 results conference call.
At this time all participants are in a listen only mode.
Brief question and answer session will follow the formal presentation.
As a reminder, this conference call is being recorded.
I would now like to turn the call over to you is about gosh, Vice President Investor of a nation sustainable development. Please go ahead.
Good morning, everyone.
Welcome to Lyons third quarter 2023 results conference call.
If we knew a lot goes healthier for Nick so that it does seem as if he'd be plug and play live did exactly as Jimmy said toward their deal.
Today.
I'm here with Mike <unk>, our CEO funder.
Got up with it our president.
And Richard <unk>, our Chief Financial Officer.
Please note that our discussion may include estimates and other forward looking information.
And that our actual results could differ materially from those implied in any such statements.
We invite you to review the cautionary language in this morning's press release and in our MD&A.
Which contains important information regarding various factors assumptions and risks.
That could impact our actual presents.
With that let me turn it over to Mark to begin.
Mark.
Thank you Lisa good morning, everyone.
Today, we are pleased to report that in Q3, we achieved record deliveries revenues and gross margins.
We're really showing that our focus remains our goal to profitability.
<unk> Q3 2022.
Basically doubled our revenues with approximately the same SG&A expenses and our gross margin went from negative 9% to a positive gross margin level versus 6%.
Mostly driven by higher volume favorable average selling prices and continued cost control.
We have a significant EBITDA improvement as well increasing from negative $15 1 million in Q3 2022 to negative $3 9 million in Q3 update here.
Also.
We now have more than 1600 vehicles on the road with more than 19 million miles driven or 30 million kilometers.
Inefficient achievement, demonstrating our leadership position in the EV space.
It is also my pleasure to our knowledge recent leadership appointments.
Cliffs will get deeply acquainted with alliance products customers and operations over the past four years was named President.
And works with me on the elaboration and execution of our strategic aspects of the business is main focus being our commercial operations and the exploration of cells across the United States and Canada Rich.
Richard.
He has been instrumental in driving our growth projects with a lot of success over the last two years was appointed Chief Financial Officer Rich.
Richard will leverage his 25 years and executed finance roles.
To support our objectives of profitability and positive free cash flow.
I will now provide an update on several key decisions. We have made to focus on our profitability objective and optimized capital usage on the bus side.
We will postpone the commercial production of the line in a school bus.
The commercial production of our high demand products and the timely integration of our land batteries on our existing platforms.
On the truck side.
The litigation with Nikola Motors and their decision not to supply us with the Romeo power batteries will result in us using our own land batteries on our laminate tractor truck.
Thus postponing its market entry to mid 2024.
And finally, we have great views with respect to both alliance five truck and alignment D School bus.
As we started commercial production for both of these vehicles and will soon begin customer deliveries.
Now turning to our manufacturing plants and operations.
In Joliet, we now have the infrastructure in place to reach a production capacity of 2500 school buses per year during Q3.
We continued to ramp up the production of <unk> buses and I'd like Jeff mentioned, we have also started the commercial production of <unk> units.
And our battery plant, we continued to ramp up production of Lion battery packs during the quarter.
The current production line allows us to reach production capacity of one seven gigawatt hour per year.
Two pound were over 5000 of our vehicles.
The certification process for the Lions packs is progressing well.
And we expect final certification to occur before the end of the year.
With respect to our innovation centre the.
The building is currently being used as a testing and certification center for our vehicles and batteries as a pre delivery inspection site and as a warehouse or inventory.
Allows us to leverage space available and optimize operational efficiency.
Additionally, we will soon start using the innovation center as a showroom and delivery center for our customers to see and test our vehicles on our test track and take delivery.
In a nutshell.
We have been able to expand our manufacturing capacity to our targeted levels and the capex investments for our two growth projects will be completed by the end of this year.
On that note I will now ask Nicolas to dive into our commercial operations performance.
Turning it to Richard.
We will discuss the financial highlights of our Q3 results.
Thank you.
We delivered 245 vehicles in Q3.
220 school buses and 25 trucks.
132 vehicles are delivered in Canada, and 113 in the U S.
This is a record number of overall quarterly deliveries, but also a record for deliveries in the U S where we deliver purpose built easy school buses to several new customers.
The vast majority of those U S deliveries or part of the Epa's Clean School bus program.
Pleased to make prompt deliveries under the EPA program, demonstrating lyon's leadership in U S. E V School buses.
Cumulatively for the first nine months of the year, we delivered a total of 664 vehicles.
Most twice the 345 vehicles delivered over the same time last year.
With respect to the order book currently stands at 2232 vehicles.
That's 268 trucks, and 1964 buses totaling $525 million with Alliant energy book at 129 charging stations representing $4 million.
Worth mentioning is a conditional order from Highland electric for 50 licensee School buses, which we announced this past Friday.
This quarter's vehicle order book was affected by various factors, including the removal of 140 units from the deferral of the <unk> platform discussed earlier as well as purchase order delays and cancellations related to subsidy programs, mostly stemming from clients awaiting funding decisions, we anticipate a positive momentum in all electric school.
<unk> as a result of attractive funding programs, including awards under the $400 million 2023, EPA Grant program, which drove significant customer interest ahead of applications in August after which customer awards are expected in Q1 2024.
Potential orders under the 2023, EPA rebate program with a budget of $500 million.
Requiring applications by January 2024 with award announcements scheduled for April 2024.
Several appealing programs in states, such as Texas, Colorado, and New York, Michigan, and California, which could drive school bus demand beyond the scope of the EPA program.
And momentum in the Quebec School bus market, where the subsidy program was recently renewed M&A with an increase of available funding from $125000 per bus.
Hundred $75000 per bus depending on battery capacity.
This momentum in the school bus space is further supported by an increasing number of states passing laws to accelerate the electrification of the transportation sector.
Separately, we are in ongoing dialogue with the Canadian Federal government.
Satisfactory.
<unk> applications for school bus deployment placed under the debt ETF program.
Successful completion of this process would enable timely vehicle deliveries and could generate further applications for potential new purchase orders.
On the truck side, while this market is still at a very early stage with electrification just saying we remain very enthusiastic about our prospects in the class five to eight market.
Leveraging our purpose built truck platform.
That is one of the few players a critical mass of vehicles on the road and we expect the upcoming deployment of <unk> units to generate significant customer interest.
Like in a school bus sector.
Mostly monitoring billions in existing and upcoming subsidy programs aimed at accelerating fleet electrification.
To conclude we continue to experience strong customer engagement on fleet electrification underpinned by societal desire to transition to EV as well as emerging regulation and attractive subsidy programs and we believe line is very well positioned to address this upcoming to that.
On that note Richard will now discuss our financial performance.
Sure.
Thank you Nicolas I will start by commenting on Q3 results, including an update on Capex I will then discuss our liquidity position in.
In Q3, we delivered 245 vehicles, resulting in record revenue of $80 million.
This represents revenue growth of almost 100% compared to the same period last year and close to 40% versus Q2 2023.
This increase in sales volume, coupled with favorable product mix and average selling prices as well as continued cost discipline led to gross margins of six 7% compared to negative nine 3% in the previous year.
For the quarter SG&A before noncash share based compensation was $17 million as a percentage of revenue SG&A before noncash share based compensation decreased from 36% to 21% over the last year due to disciplined cost containment efforts. This is a trend we are looking at maintaining as we continue to.
Focus on reaching our profitability and positive free cash flow objectives.
Adjusted EBITDA improved to a negative $3 9 million from negative $15 1 million in Q3 2022 <unk>.
Additions to our net intangible assets, mostly related to R&D amounted to $15 million, a decrease of $3 million when compared to $18 million in Q3 2022.
Capital expenditures amounted to $16 million, including $4 million for Juliet and $8 million for the Lions campus, a significant decrease as compared to $29 million last year.
We anticipate combined capex spend of approximately $12 million in Q4 for the Georgia plant and rely on campus, leading us to the conclusion of our main initial investment on these projects.
We therefore continue to expect minimal capital expenditures in the foreseeable future, mostly maintenance capex as our growth projects at reach their targeted capacity level.
Now turning to liquidity and capital resources in Q3, we successfully closed financings, resulting in the 142 million of gross proceeds or $136 million net which provides us with additional flexibility to continue to execute our plan as of September 32023, our immediate liquidity stood.
132 million, consisting of $36 million in cash and $96 million in immediate borrowing capacity on our revolver at.
At the end of the quarter, our debt balance stood at $176 million finally, as we move forward with our 2020 for budgetary process. We continue to focus on decreasing product costs, optimizing working capital management and improving our internal cost structure.
Back to you Mark.
Thank you Richard.
Before we open the lines for questions. Let me conclude by saying that we're pleased with our Q3 performance and thrilled about the opportunities unfolding in the market.
We're positioning.
Our commitment is to achieve profitability and positive free cash flow and we are confident that we have the right elements in place the right focus and the right strategy to achieve our objectives. Thank.
Thank you for your attention. This morning, let's now open the lines for questions.
Operator, we will now open the lines for questions.
I just wanted to ask you to limit to two <unk>.
Number of questions asked to allow other participants to ask their questions.
You can of course go back into queue. If you have any follow up questions.
Yes.
Thank you.
If you would like to ask a question.
Ill.
I will remind you that star followed by one.
We will put extra maintenance wealthy.
Q&A Lee Scott.
Yeah.
Yeah.
And we have a question from Georgia George Please go ahead.
Hey, good morning, everyone and thank you for taking my question excuse me and congratulations on that.
On a great quarter.
Wanted to ask about the sustainability of.
The gross margin momentum that you showed and how should we think about the next couple of few quarters.
In terms of modeling the gross margins going forward. Thank you.
I'll take that one Matt. Thank you for the question George So we achieved a record $6, 7% gross margin in Q3, representing a substantial increase as compared to <unk> <unk> grew by 7% in Q2 of 2023 of negative nine 3% in Q3 2022.
Sustaining positive gross margin and achieving positive EBITDA and free cash flow clearly the number one priority.
It would obviously require you focused on revenue growth and tight management cost management.
We are definitely in the right direction, but we could see some volatility.
To ramp up new platform deliveries.
AMD 95, starting this quarter and the gradual integration of our Lion battery.
Curious the commercial model could temporarily affect our gross margin we continue to be very focused on driving productivity in the organization and we are reducing our product.
Okay.
Thank you for that and then maybe just as my second question again sort of housekeeping you mentioned that going forward.
Your growth Capex is more or less complete can you just remind us what the level of maintenance Capex, we should assume for.
The firm for the next couple of few years. Thank you.
Okay.
Should it should be pretty minimal right now, we're really aiming at single digit Capex for next year, it's going to be largely maintenance capex.
So single digit millions the number you mentioned.
Sure.
Okay. Thank you so much I'll go back in queue.
Okay.
We now have Schatsky with da Davidson Your line is open.
Yeah.
Yes, Hello, good morning, and thanks for taking my question.
So right now youre up and running with some really nice looking.
Illinois, obviously, well established in Quebec, you have any.
Any view as to when you visit always going to be good enough at this point to start giving us some guidance about.
What youre deliveries might be at least one quarter out.
How.
Consistent as your production rate right now.
Oh, Hey, Mike next year at all.
Look I mean, we're.
We're still in ramp up mode. The guidance decision is one that we're always assessing internally.
We have an update to provide this morning.
Lynn.
When things change we will but.
There is no set timing for us to provide any guidance going forward.
Okay. Okay.
Maybe you can just talk a little bit about.
The lion eight.
Tractor I guess I'm curious.
It's just a little a bit behind the scenes as to how you develop the battery guy alluded to trucking.
Net whole projects finalized because there are high cost there over the last couple of quarters that we should be thinking about and do you expect to cover most of that from from Nikola once that cases resolved.
Yes.
Well with respect to.
Two Nikola motors.
Well with that.
The.
We terminated.
Basically the west.
Going through with <unk>.
Right now so the proceeding against Shlomo, but no one Steve a civil proceedings against.
Against against a nickel, but going back to your question on <unk>, we have no choice and using our own battery.
And.
The HD batteries will be certified.
Early next year.
And we will be able to use those bedroom diligently trying to additionally on the tractor.
I need to tell you Mike is is amazing and obviously the whole market is.
Is expecting it we will be able to put a lot of kilowatt hour.
Those.
Those trucks. So we will have a lot of range as well. So we're expecting a good very good demand I mean for us for.
Towards that product, but obviously you know going back to the root of your question on Nikola Motors.
I respectfully I mean, we will not we will not be able to come in further because of the proceedings going on right now.
Okay fair enough. Thank.
Thank you.
Okay.
Thank you Mike.
We now have two little rabbit.
Tom does Shah capital Bank. Your line is now open.
Yes, good morning, everyone.
Just looking at your truck backlog, if you remove that.
40 purchase order sorry for the.
Just looking on the bus side.
There was 140 purchase orders removed from the alliance, but it looks like there.
The booking was it more on the plus side could you comment about your bidding pipeline and your ability to.
To secure more momentum on the bus side in 2024.
Yes, certainly.
Thats one.
Look there were a number of moving parts in the order books during the quarter as you mentioned the most important one was the removal of the 140 <unk> units related to the postponement.
But theres also some volatility caused by the timing of the subsidy programs and that's expected as customers await to know what their allocations are what the programs that are being put in place a renewed before placing the order I think it is important to reemphasize that we continue to see strong engagement from the customers towards fleet electrification.
And we see some some upcoming catalysts in the order flow.
I mentioned earlier, the EPA round, two and three for which allocation to customers. Our expected allocations of awards are expected early next year, that's $900 million.
Robust funding right, that's coming in the U S et cetera.
And so somewhere in between.
Q1, and beginning of April.
In the Quebec market here, obviously, a big market for US there was a.
Yes.
Posit you willing the subsidy program as it was being extended and renewed and the good news is that the subsidy that previously paid $125000 per school bus was extended and it was increased where now the operators can obtain up to 175000.
For <unk> based on.
Depending on battery capacity there is the debt ETF program that we talked about that.
Or near term deliveries for us when the approval.
When we hopefully get the approvals.
But also that will drive more purchase order flows we believe and then Theres a number of our various funding alternatives as well at the state and at the provincial level. So overall, we continue to feel very good about the demand environment, but those subsidy programs can create some volatility in the order book on a quarter to quarter basis.
Okay and with respect.
Order from Ireland.
Conditional what is the timing with regard to the final approval for the kidney again Etfs subsidies.
Yes.
We have a number of orders that are in the queue for the <unk> Etfs.
Tough to point to specific timing of each but we stay on the larger orders.
<unk> well in the dialogue and we hope that it does in the near term.
But obviously.
If it got to pinpoint a specific time.
Slide right now and that they're with us.
Thank you very much.
Thank you Ben.
Thank you.
We now have been of Barclays.
Yes.
Yeah.
Hi, Joshua on for Dan today.
A quick question on <unk>, if we're getting any mix benefits from increased U S sales.
The U S volumes ticked up quite a bit this quarter on ASP also went up accordingly.
If there was any correlation with special benefit from increasing sales into the U S versus Canada.
Yes, I'll take this one.
The.
The short of it is yes typically in the U S market, we tend to sell units with.
More onboard energy higher battery capacity more options to the U S market is a more intricate market relative to Canadian market, where there is less.
Yes.
Differences in between.
And the states obviously, there is the regulatory environment is different.
And so we do tend to sell vehicles with more options that are more custom in the U S and have a higher average selling price.
Obviously keep in mind in the U S market is about 10 times the the Canadian market.
It's our goal.
Yes, Matt.
That over time.
Thank you and as a follow up we're seeing somewhat slower uptake among the medium and heavy duty trucks.
And I was wondering if you have any inclination on the mother, maybe like some of the states of California or any of those other states on the offense.
Well potentially consider bumping up the baton.
Regulatory credits to spur some more demand there.
I mean look there.
Let me start by saying that.
In the truck space.
EV market for the class five to eight is really still at its infancy right. As you look at as of June 30. This year were less than 1000 vehicles registered.
And based on this data alone will be the fourth player in this space. So one of the one of the very few players with critical mass and importantly, with a purpose built product out there.
We have seen some.
Positive legislation.
Talk about California, Baskins, and Thats, certainly a positive development.
This is more on the regulation side typically yes, we've seen that following regulation is.
The.
Modification, if you will of the subsidy programs, we don't have direct visibility into that but we've seen it in other markets and we're still certainly hoping it will be the case as well altogether again the market is just at the beginning and we have the product and the manufacturing capacity to accommodate clients as things ramp up and we're very hopeful for this market.
The increase significantly over time.
Exactly when it remains to be Sir.
Yeah.
Thank you.
We have our next question is from.
Kelly Chen with BMO capital markets.
Hi, good morning, Thanks for the question.
Go back.
Ah <unk> program.
Yes.
What's causing some of the.
The opex.
Application versus operational nuances or revisions required and so there's just been a delay.
Illustrative perspective, I'm, just trying to understand.
What's going on there.
Okay.
Yes, I mean look.
Is that ETF program is.
It's one that.
Is there a specific application by application and so I'd say every approval is different the.
The orders that we have in the queue are we believes the first big ones for the school bus because recall that the program has multiple transit and school buses and those are the first big ones for the school bus and so there's there is dialogue between the federal government ourselves and our clients declined.
Appropriate to get the appropriate terms I need to point out that the.
The acts of our clients.
Rectory within the parameters of.
The program.
And so we're hopeful that we'll get a good resolution.
And again, it's very bespoke application by application and obviously there is that yes, there is an administrative burden to that.
We believe that one.
The first large one are hopefully approved that things can accelerate some from that.
I see okay and the the lineup.
The school bus side, just wanted to make sure I understand.
You posted 400 flying for 140 <unk> preferred in your order book is that on the line at school bus and so was that the customer deferred or you made the decision to prioritize other high demand product I just want to make sure I understand that correctly.
Yes.
Yes. Good morning, this is <unk>.
Related to the declining school.
<unk> Boston, it's a matter of focus.
We're strong believers in our focus is at.
As you know when we decided to.
To focus in on the commercial production of the item in front of US as we were saying so it's the mining fleet.
And it's almost it's also the mining.
Coming to market. The line five underlying 18 little difficulty here, it's all a matter of focus on cost control and if I just address the order book part.
US we're moving those units from the order book is we're undertaking dialogue with the customers to see if there is a desire for the FERC the longer period, the order or converted to a <unk> order, but just in our in our review we thought prudent to remove those from the order book.
Yeah.
Understood. Thank you.
Thank you Tammy.
Sure.
We now have Chris <unk> with B Riley financial.
Chris Inc.
Hey, guys. Thanks for taking my question and congrats on the progress here I just wanted to touch a little bit on.
The production mix between the two facilities could you give us any sense of what the output is starting to hit it out of Juliet here.
And then as a follow up.
Yes, good morning, Chris Yes, the cadence is going well.
You will probably remember we have a manufacturing capacity of 1000 buses in.
In March we only we have the manufacturing capacity of 2500 buses and Julian and Didnt mentioned, all we also add capacity for <unk> 15 under Trump.
On an annual on an annual basis.
So the cadence is doing very well and there was no question yet on the supply chain, but supply chain is getting a lot more stable and that was a discussion that we have obviously the last two years.
It's getting a lot more stable and we've been working a lot of the redundancy.
Suppliers as well.
It's one well so our goal is really to increase.
The pace.
And the you know the goal is also to manufacture in the country, where the buses are being.
Being delivered and we're getting there. So obviously, we're doing less buses in the U S. Right now and then we're doing on the Canadian sites.
As Nick was saying earlier I mean, the U S market is 10 times bigger than the Canadian market and with the manufacturing capacity of 2500 buses on the U S side, we're very very well equipped to increase that pace as we get more orders, we'll be able to deliver.
Yes.
Just to clarify then so like.
In the third quarter deliveries.
By country kind of matched up with.
Yes.
Geography of the manufacturing facility or are we or are we not quite there yet.
Our U S School bus side.
Yes.
By and large yes.
Okay.
Got it Okay and then.
If I'm kind of looking at the margin increase I think pricing had a big big piece to do with that.
As we kind of trend higher with can you just kind of talk through what that premium in the U S should be that we can kind of take.
And as we have U S kind of ramping up more I just wanted to get a sense.
Much continued.
Opportunity of price increase.
On the ASP side, we have in.
Is there any kind of delta on the production cost side between the two at this stage.
And then I will have to make to you yes.
Chris as I mentioned earlier, it really is about selling its about the onboard energy that we have in the vehicle without the options that we have in there.
For a fair and equal.
There is no price difference or at least no material price difference between producing in Canada, producing in the U S. It really is about.
Mix.
And options on the vehicle more of an idea.
And then I Couldnt point.
The U S versus <unk>.
You now have the next question from retail.
National Bank.
Hi, good morning.
On working capital your working capital increased a little bit in the quarter I'm wondering if you can get some color on what drove that I imagine combination of Ah.
Batteries and <unk> vehicles.
How do you see that evolving over the next few quarters.
Yes.
Well then thank you for the question I'll take that one. So obviously there is a portion of the working capital increase that's directly connected with the growth in our in our production, but also the introduction of the <unk> five.
We're also preparing for the integration of our own batteries into our platform. So this is somewhat driving some of the increase I can tell you. We're very focused on working capital one strategy, we have in place with Overstocking of inventory given the spike in prices that we went through in the last year or so.
And today as Mark pointed out we don't necessarily need.
Our strategy anymore. So right now we're very focused on really reducing working capital and we expect to see where the data is turning around in the next few quarters.
Is there much in inventory related to vehicles that are awaiting set ETF funding and when you get funding could you see some of that in working capital.
Coming out.
Yes, well as Nick pointed out earlier there is a couple that were waiting approval that they are the ones that have been lagging from last quarter, but with landfills.
There's 50 of them that are definitely just waiting to be delivered so yes. There are some and you will see some uptick era.
As we get difficult.
Great. Thanks, and then secondly, you talked about the fact that our supply chain is easing in an earlier Ron in your your.
<unk> comments, you talked about <unk>.
Focus on cost reduction I'm wondering if you can give.
Give us some color about where we are today and the costs and where are the opportunities to drive out cost in the future and also if you could give a comment on inflation and if.
If you are seeing now.
Say a reduction in the inflation that we've seen over the last few years.
Yeah.
Yeah, Hey, good morning, Rupert this is mark.
We're focused on.
On reducing their costs.
As you know so there is many many places.
There's going to be there will be savings in the future and obviously you know the inflation didn't help I mean still hitting us.
The inflation right now as we.
As we all know, but there are a lot of places where we still are.
Benefits first of all I need to tell you that some of our manufacturing processes are a lot more stable and this is what we've been doing this for many many years and we see the benefit obviously with volume going up.
Dan.
Amortization of the fixed cost is getting is getting better.
<unk>, please where we will be reducing significantly and this is starting now it's also in R&D I mean, we've invested a lot in R&D in the past.
And.
In the future.
R&D investments will be will be going down.
Speaking of cost control.
You probably saw also that the SG&A and be very stable and we are looking at reducing the percentage of <unk> over <unk>.
In the next quarters as well. So for example, we've been able to double the snow this year.
<unk> two last year with about the same.
SG&A expenses. So it's all about the focus on our products, it's about the focus on the.
On the margin, bringing down those costs and.
You probably saw as well that in Q3 of last year Rupert.
We sold 156 vehicles.
And we have we had the negative EBITDA of $15 million.
This year we.
At a negative EBITDA of $3 $9 million with 240 type vehicles. So you can do the math I believe that everyone can see that the business model is scaling very well and we said that in the past, but I think this is the proof that you were seeing now is scaling very well and the good thing is that we don't need very high volume to reach.
Stability.
Great. Thanks for the color Mark, Yes, definitely solid margins this quarter congrats.
Get back in the queue.
Thank you.
Thank you we have.
The final question on the line registered from Appalachia with <unk> capital.
Yes.
Yeah. Thanks for taking my question this morning.
And your gross margin. The law you have two consecutive quarters of positive gross margin. So I understand the margins could be lumpy given the nature of the business but.
We see it.
And that the margins would be positive from hereon.
Given the ramp up when you do that.
Sps or whatnot.
Yes.
And yet this was mentioned earlier.
We see some movement in gross margin. So obviously with <unk> volume I mean, the margin is this is really helping the margin as I was just.
Just saying earlier, but the the launch of the new platforms now and were talking about the <unk> and next year, we're talking about the mining site.
We are starting the deliveries I mean.
In Q4, this year and also the alliance.
While it is obvious that the gross margin at the beginning of those products is not as good as the one.
It's going to be in the very near future. So we expect some or all of it.
In the.
The gross margin for the next two or three quarters because of those items.
Got it.
Could you comment on the M&A landscape in the sector I mean, we see some of the peers.
Just wondering how you guys any rather being any such a partner.
Our mostly just focused on organic growth from here.
Okay.
Yeah, Andy we are fully focused on managing our.
On managing our business, we were increasing our margin.
Commercial.
The meeting with customers and.
Having a very efficient operation as well I mean this is this is this is our focus so we're we want to just for example on on those items right now so we're not looking at this.
That's right. Thank you very much sir.
Okay.
Thank you we have no further questions from the lines I'd like to hand, it back to MS. Staci 20 final remarks.
Well, thanks, everyone for joining liquid today, and we look forward to.
A discussion and decreased consulting for any follow up questions EMEA have a nice day. Thank you.
Yeah.
Thank you for joining I can confirm this does concludes today's conference call. Please have a lovely rest of today and you may now disconnect your lines.
[music].