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spk00: Good morning. My name is Anna and I will be your conference operator today. As a reminder, this call is being recorded. At this time, I would like to welcome everyone to Timken's second quarter earnings release conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star then the number one on your telephone keypad. If you would like to withdraw your question, press star, then the number two on your telephone keypad. Thank you. Mr. Frone-Apple, you may begin your conference.
spk07: Thanks, Anna, and welcome everyone to our second quarter 2021 earnings conference call. This is Neil Frone-Apple, Director of Investor Relations for the Timken Company. We appreciate you joining us today. Before we begin our remarks this morning, I want to point out that we have posted presentation materials on the company's website, that we will reference as part of today's review of the quarterly results. You can also access this material through the download feature on the Earnings Call webcast link. With me today are the Timken Company's President and CEO, Rich Kyle, and Phil Fricasa, our Chief Financial Officer. We will have opening comments this morning from both Rich and Phil before we open up the call for your questions. During the Q&A, I would ask that you please limit your questions to one question and one follow-up at a time to allow everyone a chance to participate. During today's call, you may hear forward-looking statements related to our future financial results, plans, and business operations. Our actual results may differ materially from those projected or implied due to a variety of factors, which we describe in greater detail in today's press release and our reports filed with the SEC, which are available on the Timken.com website. We have included reconciliations between non-GAAP financial information and its GAAP equivalent in the press release and in the presentation materials. Today's call is copyrighted by the Timken Company, and without express written consent, we prohibit any use, recording, or transmission of any portion of the call. With that, I would like to thank you for your interest in the Timken Company, and I will now turn the call over to Rich.
spk03: Thanks, Neil. Good morning, everyone. Thank you for joining Timken's second quarter earnings call. Timken delivered a very strong second quarter with record revenue of $1.6 billion, record second quarter earnings per share of $1.37, solid EBITDA margins of 18.8%, and free cash flow of $116 million. We went into the second quarter optimistic about demand, but expecting a challenging operating environment, and both played out through the quarter. Demand continued to be greater than the ability to supply across many of our markets, with our backlog growing significantly in the quarter, despite the record revenue levels. The two areas that came in weaker than expected were India and on-highway vehicles, India due to the pandemic and government shutdowns in that country, and vehicles due to chip shortages. India recovered by the end of the quarter. Customer demand has returned to strong levels, and all of our facilities are operating fully. We expect sequential improvement from India in the second half. The global chip shortage had a significant impact on Q2 for automotive and truck revenue and will continue to impact our revenue through at least the third quarter. On a positive note, this is setting us up for a very strong 22 in auto and truck as vehicle sales remain strong and inventories will need to be replenished. Beyond those two areas, demand was very strong across most markets, including renewable energy, where we were up again double digits on a tough comp. We continued to ramp up supply, and despite the global supply issues, we grew revenue 4% from the first quarter. Orders were generally stronger than shipments, and demand for the current quarter remains very strong. In regards to the operating environment, the second quarter continued to be very challenging as we served increasing customer demand in a rising cost environment with widespread supply chain challenges. In addition to the headwinds from India and the chip shortage, logistics, labor, and inflation impacted the results for the quarter. We continued to face significant logistics delays in getting material to our operations and product to our customers. The situation in the second quarter was similar to that of the first, and we expect the logistics delays, higher cost, and higher inventory to continue at a similar level through at least the third quarter. In regards to labor, the third quarter is the first time in over a year that we are not facing any abnormally high absentee levels in any of our global operations. We expect that to hold for the rest of the year, which will provide a nice lift in the second half. However, we are in an extremely tight and competitive labor market, and we are not immune to that. In the vast majority of the locations where we operate, Timken is a preferred employer, Our retention is excellent, and we are normally able to attract new employees in a timely and efficient manner. Our retention remains excellent, but attraction of new employees in many parts of the world, including here in the United States, has become a significant challenge. We continue to make progress monthly, and we enter the third quarter at higher staffing and production levels than we were to start the second quarter. We expect labor markets to remain tight through the rest of the year and into 22, but we also expect to make steady progress in ramping up our operations. In total, the supply chain and ramp issues remain abnormally high, but they did improve through the quarter and are better today than they were three months ago. We expect them to be a headwind the rest of the year, but less of one in the second half than the first half. Inflation was also an impact in the quarter as steel and other input costs continued to We do not expect inflation to improve in the second half, but inflation in total remains manageable and less of an issue in magnitude than the supply chain and ramp costs. Overall, inflation has been increasing sequentially, and we expect that to continue through the end of the year. Price improved very modestly from the first quarter to the second, mostly due to pricing mechanisms that we have in OEM contracts to pass through raw material cost increases. In the second half, we expect price to be a more significant offset to cost than the first half. This is due to both the continued catch-up of the pass-through mechanisms as well as price increases currently being implemented. Our previous guide was for flattish pricing, and we now expect price to be 50 to 100 basis points favorable in the second half. Despite the supply and cost challenges, we took care of our customers, grew revenue 32% over last year, 4% from the first quarter, and delivered just shy of 19% EBITDA margins. Excellent results in a very dynamic environment, and one that continues to demonstrate the resiliency and strength of our business. We also continue to invest in and advance our strategic initiatives. The Aurora acquisition is off to a great start, and the combination of Groeneveld-BECA is progressing well. We will consolidate two more ERP systems to our global digital platform this year. We continue to optimize our global manufacturing footprint. Our new bearing plant in Mexico will be ramping up in the second half of the year. We just announced the closure of a small bearing plant in Italy. We completed the relocation and consolidation of our solar operations in the second quarter, and our wind investments are advancing. We're also pursuing new business opportunities and winning with our differentiated portfolio. Let me shift to the outlook. Our normal seasonality is a modest step down in revenue and earnings from first half to second half, with a significant percentage of our cash generated in the second half. We are expecting our seasonality to be more moderate this year, and we are planning for a strong second half. We expect demand to remain strong and second half sales to be in line with the first half. We expect supply chain issues and the associated costs to persist in the second half, but to be less than the first half. inflation to be modestly higher in the second half than the first half, and pricing to be higher in the second half. We expect cash flow to be good, but less than prior forecast due to persistence of the supply chain challenges, as well as working capital to support higher revenue levels. And while it's a little early to talk about 22, we are planning for the industrial expansion to continue at strong levels in the next year. Many of the macros are favorable, including supply shortages, low channel inventories, tight labor markets, commodity prices, and the possibility of infrastructure spend. It's not clear how much of the current inflationary environment is temporary versus permanent, but we are confident that Timken will perform well if inflation persists into 22. And finally, from a capital allocation standpoint, we're expecting good cash flow for the rest of the year, and we will be approaching the low end of our targeted leverage range. We do not plan to dip below the low end of our range, and capital allocation will be accretive in 2022. We continue to have a bias for M&A over buyback. In summary, Timken is in position to deliver record performance again this year, and we expect to move into 2022 with significant momentum. I'll now turn it over to Phil.
spk02: Okay, thanks, Rich, and good morning, everyone. For the financial review, I'm going to start on slide 10 of the materials. with a summary of our strong second quarter results. Revenue was a record $1.06 billion in the second quarter, up 32% from last year and up 6% from the second quarter of 2019. We delivered an adjusted EBITDA margin of 18.8% and adjusted earnings per share of $1.37, which was up 34% from the prior year. Strong performance any way you look at it. Turning to slide 11, Let's take a closer look at our sales performance. Organically, sales were up 26.5%. Both segments posted strong double-digit sales increases, with mobile industries leading the way. Currency added almost 5% to the top line in the quarter, while Aurora Bearing contributed close to 1%. Total sales increased nearly 4% sequentially from the first quarter, even though on-highway auto and truck demand was negatively impacted by semiconductor chip shortages. On the right-hand side of this slide, we show year-on-year organic growth by region, so excluding both currency and acquisitions. All regions were up strongly and broadly in the quarter. Let me comment further on each region. In Asia, sales were up 25% as we saw broad growth across most sectors in the region with renewable energy, off-highway, distribution, rail, and heavy truck posting the strongest gains. In Latin America, we more than doubled sales versus last year, and the significant growth was led by the distribution and on-highway auto and truck sectors. In Europe, we were up 27%, driven by growth across most sectors there as well, led by off-highway, on-highway auto and truck, and distribution. And finally, in North America, our largest region, we were up 20% in the quarter, driven mainly by strong gains in the off-highway, on highway auto and truck, distribution, and general industrial sectors, partially offset by lower aerospace revenue. Turning to slide 12, adjusted EBITDA was 200 million, or 18.8% of sales in the second quarter, compared to 164 million, or 20.4% of sales last year. Keep in mind that our incremental margin and year-on-year margin comparison were impacted by the significant amount of temporary cost actions we took last year in response to the pandemic. If we exclude those temporary actions from the analysis, incremental margins would have been nearly 30% in the quarter, with adjusted EBITDA margin expansion of over 300 basis points. Looking at the change in adjusted EBITDA dollars, the increase compared to the prior year reflects the benefits of higher volume and related manufacturing performance, which more than offset higher SG&A expense and material and logistics costs, as well as unfavorable mix. The unfavorable mix was driven mainly by the significant growth in OEM sales, mainly within mobile industries during the quarter. Currency had a positive impact on EBITDA this past quarter, and Aurora Bearing added nearly 2 million, with adjusted EBITDA margins of roughly 20%. That acquisition is performing extremely well for us right now, and there's more to come. Let me comment a little further on our manufacturing and operating expense performance. On the manufacturing line, we benefited from higher production volume versus last year, which enabled us to more than offset cost pressures related to supply chain inefficiencies and continued production ramp-ups, as well as the non-recurrence of temporary cost actions from last year. Overall, our teams navigated the challenging supply chain situation very well and delivered solid customer service in the quarter. Moving to material and logistics, as expected, we saw higher costs in the quarter compared to last year. Logistics was the bigger headwind of the two, with much of that volume related. And finally, on the SG&A line, the higher expense was driven almost entirely by the significant amount of temporary cost actions taken last year. Excluding those actions, SG&A expense would have been relatively flat year on year, and that's despite higher incentive compensation expense in the current period. On slide 13, you'll see that we posted net income of $105 million, or $1.36 per diluted share for the quarter on a GAAP basis. This includes a penny of net charges from special items. On an adjusted basis, we earned $1.37 per share, up 34% from last year, and a company record for the second quarter. Our adjusted tax rate was 24.5% in the quarter, which brings our year-to-date rate to 25%. This reflects our geographic mix of earnings and other tax benefits compared to the year-ago period. We expect the tax rate to remain around 25% for the rest of the year. Next, let's take a look at our business segment results, starting with process industries on slide 14. For the second quarter, process industry sales were $569 million, up 23% from last year. Organically, sales were up 17%. with the distribution, renewable energy, and general industrial sectors posting the strongest gains. Heavy industries and marine were also up in the quarter, while services revenue was down. The favorable impact of currency translation added almost 6% to the top line in the quarter, while the Aurora bearing acquisition added nearly 1%. Process industries adjusted EBITDA in the second quarter was 142 million, or 25% of sales, compared to 129 million, or 27.9% of sales last year. The increase in adjusted EBITDA dollars versus last year reflects the benefits of higher volume and currency, partially offset by higher SG&A expense and material and logistics costs. Now let's move to mobile industries on slide 15. In the second quarter, mobile industry sales were 494 million, up about 44% from last year. Organically, sales increased over 39%, with the off-highway, automotive, and heavy truck sectors posting the strongest gains. Rail was also up in the quarter, while aerospace revenue was down. Currency translation added about 3.5% to the top line in the quarter, while Aurora Bearing added over 1%. Mobile industries adjusted EBITDA for the second quarter with $69 million, or 13.9% of sales. compared to 42 million, or 12.3% of sales last year, with margins up 160 basis points year on year. The increase in adjusted EBITDA versus last year reflects the benefits of higher volume and related manufacturing performance, offset partially by higher material and logistics costs and SG&A expense, as well as unfavorable mix. Turning to slide 16, you'll see we generated operating cash flow of $147 million in the second quarter. And after CapEx, free cash flow was $116 million in the period. This represents over 100% conversion on adjusted net income. Note that the decline in free cash flow from last year was expected and reflects the impact of higher working capital this year to support our sales growth, as well as higher cash taxes in CapEx, which more than offset the impact of higher pre-tax earnings. From a capital allocation standpoint, Timpton raised its quarterly dividend by 3% to $0.30 per share and paid its 396th consecutive quarterly dividend in the month of June, which marks 99 straight years and counting. Taking a closer look at our capital structure, we ended the quarter with a strong balance sheet and ample liquidity. Our leverage as measured by net debt to adjusted EBITDA was 1.7 times at June 30th, an improvement from 1.9 times at the end of March. This puts us in great position to continue to drive our growth and capital allocation strategies, including M&A and share repurchases, in the second half of the year. Now let's turn to the outlook on slide 17. We now expect sales to be up around 19% in total at the midpoint of our guidance versus 2020, which is up slightly from our prior outlook, mostly due to currency translation. Organically, we're planning for sales to be up around 15% at the midpoint, essentially unchanged from our prior outlook. We expect both segments to be up double digits organically, with high teens growth in mobile industries and low teens growth in process industries. The strong revenue outlook reflects our expectations for continued strong market conditions, which is supported by our growing backlog. On the bottom line, we expect adjusted earnings per share in the range of 515 to 545 per share, which is in line with our prior outlook. We're keeping a 30 cent range, reflecting the wider than normal range of possibilities in the current environment. At the midpoint, our current outlook represents roughly 29% earnings growth versus last year. The midpoint of our outlook also implies that consolidated adjusted EBITDA margins will be roughly flat with 2020. As Rich mentioned, we're implementing price increases to mitigate the impact of higher operating costs. We expect a step up in pricing in the second half, which will carry over to 2022. Note that our outlook for the rest of 2021 assumes that inflationary and supply chain headwinds will persist, but we are planning for some improvement in the supply chain situation over the course of the rest of the year. For 2021, we now estimate that we'll generate free cash flow in the range of $300 to $325 million, which represents around 75% conversion on adjusted net income at the midpoints. This is down slightly from our prior guide due to anticipated higher working capital to support the sales growth. We continue to expect capex spending of around 150 million, or just over 3.5% of sales, which includes ongoing growth investments in areas like renewable energy and marine. We anticipate net interest expense of around 60 million for the full year, which is unchanged from our prior outlook. And as I mentioned earlier, we expect a tax rate to be around 25%. So to summarize, we delivered record performance in the second quarter by serving our customers well and operating with excellence. We are confident in our ability to deliver record sales and earnings performance in 2021, and with markets continuing to strengthen, we are very positive on 2022. This concludes our formal remarks, and we will now open the line for questions. Operator?
spk00: Yes, sir, thank you. And as a reminder, if you would like to ask a question, please signal by pressing star 1 on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, that's star 1 if you would like to ask a question. And we'll now take a question from Stephen Volkman with Jefferies.
spk08: Great. Good morning, guys. Thanks for taking my question.
spk01: Good morning.
spk08: I was... I was a little surprised, I guess, just on the commentary relative to mix. I think one or both of you said that OE was just quite a bit stronger than aftermarket. Is that just because aftermarket isn't as volatile or is there something holding back? Do you think the aftermarket, maybe you're even prioritizing OE versus aftermarket in this environment? I don't know. Just any commentary on kind of the thinking around that?
spk02: Yeah, Steve, this is Phil. I'll take it. I think, you know, in the quarter, I think the right way to look at it is, you know, last year we were down so much on the mobile side, and particularly OEM customers like automotive and truck customers, which recovered, and off-highway as well, which recovered, you know, relatively more in the second quarter of this year, just on a percentage basis. So that drove most of the negative mix in the quarter. You know, year on year, I would say sequentially, it was roughly flat with the first quarter. So I think from that standpoint, it was relatively flat. But I think when you look at the, it's really OEM that drives that mix for us versus distribution. And then, you know, more of that's in mobile and process. I think this quarter with what we saw on the on-highway and off-highway sectors in particular were the biggest drivers of the mix.
spk08: Okay. All right. That makes sense. And then maybe can you just talk about pricing in the aftermarket? I would think you'd be able to adjust that sort of more quickly and It doesn't seem like that's happening as much as I might have thought. Just any outlook there, and I'll pass it on. Thanks.
spk03: Yeah. As you know, Steve, we have a lot of pricing mechanisms. We have thousands and thousands of part numbers and customers, and the fragmentation is good from a stickiness standpoint, the stickiness of price, but also a lot of complexity within that. So specifically your question on distribution, We did raise prices late in the second quarter for global distribution, I'll say. And that's a big part of why we expect pricing to be more favorable in the second half than the first half. In addition to that, we have most of our, well, certainly all of our contracts that extend out extended periods have surcharge mechanisms that lag, sometimes a quarter, sometimes a couple quarters. Those are passing through and increasing a small uptick in the second quarter. We'll see more of that in the second half. And then where we have contractual pricing as it opens, although more of that would be on a calendar basis, but some of that is open as well. We've started taking action there. But I think the evidence of the distribution pricing will be significantly more evident in the second half than what you saw in the second quarter.
spk08: All right, thank you, guys.
spk03: Thanks, Steve.
spk00: And we'll now take a question from David Rosso with Evercore ISI.
spk06: Hi, thank you for the time. Speaking about 22, these price increases you're putting in toward the end of the quarter on distribution, thinking through contracts that roll off and assuming a bump up in prices on those contracts, when you think about your pricing carrying into 22, actions already taken and just being logical about some bump up on the contracts that are rolling off, how should we think about how 22 starts on pricing gains, just with actions already in place and some of those contract issues? And the second part of that on the cost side, given some of the long lead times and some things at your own disposal, say, hey, if we feel comfortable on our pricing, maybe we lock in costs a little earlier. I'm just trying to get a feel of the price-cost dynamic starting 22. on things that you can lock in and actions already taken. Thank you.
spk03: Yeah, certainly would expect the price-cost dynamic for us to really invert in 22, and I think the magnitude of that remains to be seen, but would certainly expect it to be positive by the time we get to January of 22. We'll have the carryover of the actions that we're taking now. and then we'll have contractual actions then. And, you know, materials shot up in the fourth quarter of last year and has been creeping up since. So specifically on the materials side, we'd certainly expect that to go into next year positive. I think the magnitude of the price, particularly on the contractual side, will somewhat depend on what happens with – with material costs. And it'll be more if the material cost continues to go up or a little less if the material cost flatlines or recedes from here. But expect it to be a pretty good pricing environment. And obviously with demand as strong as it is, we choose to be a little pickier with how we partake in that if we so choose as well. But we think we feel good that we can both move prices up, give price cost positive, and gain share next year as well.
spk06: And so if I heard you correctly, I think you said 51 bps of better pricing. Was that sequential, first half, second half? And if that's the case, how should we think about that year over year in January?
spk03: More than 50 bps year on year, second half was my comment. So second half would expect more than 50 basis points and would expect that to roll over to next year plus more.
spk06: But again, the 50 pips was a sequential comment, correct? Or is that year-over-year, the 50 pips?
spk03: Year-over-year. It was year-over-year. Year-over-year. All right. Thank you very much. It started with a sequential comment that pricing will be better sequentially, but it was 50 base points favorable year-on-year.
spk06: Year-over-year, but then even greater in January year-over-year.
spk03: Yes. Right.
spk06: Okay. Thank you very much.
spk03: Thanks, David. Thanks, David.
spk00: And as a final reminder, that is star one if you would like to ask a question. And we'll pause for just a moment.
spk07: Okay, Anna, we'll take our next question, please.
spk00: Okay, great. We'll now take a question from Steve Barger with KeyBank Capital Markets.
spk04: Hey, good morning, guys. Thanks.
spk02: Good morning, Steve.
spk04: Rich, just staying on that line of thought about the possible outcomes around pricing as it relates to your contracts, what's your view on how input costs play out in the second half and into 22? What are you hearing from suppliers?
spk03: I believe under the scenario I described of a robust industrial market next year, they will continue to go up, and our pricing will have to go up more to cover it, and I think we're in a good position to do that. I think the step change on steel cost is over. I don't think we'll see another step change like we saw in the fourth quarter, but I think you'll continue to see pressure there. And then as I described in my comments as well, there's certainly some pressure on the labor side as well. So we're preparing for a gradually increasing cost environment through the second half and into next year.
spk04: And I know it's too early to get specific on next year, but you did kind of bring it up. With incrementals under pressure this year because of all the things we've talked about, if we get into mid to high single-digit growth next year organically, is it possible to think that you're going to run above that typical incremental and put up double digit earnings growth?
spk03: Yes and yes. I would say definitely better incrementals next year than this year and would expect our operations to run better next year and a little less churn there. And then the big one I want to talk about, we came in and probably undershot pricing to start the year. We're starting to make amends for that, but would not expect that to happen next year. So certainly would expect significantly better incrementals next year. And yeah, I think we should get good leverage on a mid-single digit to low double digit revenue situation. And I think we have the capacity and ramp ability to get up to those kind of levels should the demand situation run through that way next year?
spk02: Yeah, the only thing I might add to that is that, you know, you look back in history, Steve, you know, you look back in 17 as an example, we ran, you know, below 20% incrementals that year, and then they stepped up in 18, and that particular, they stepped up to north of 30, and I think, you know, this year, our guidance kind of implies, you know, just shy of 20%, high teens, 20%-ish kind of incrementals, you know, year on year. And I think that's with the perfect storm of all the things we're dealing with this year. So, you know, I think the performance is actually quite good, excluding temporary cost actions from last year, taking into account some of the, you know, unique, I would say rather unique headwinds this year. So I think, you know, fast forward to next year with pricing, if the top line cooperates, you know, I agree with Rich, I think it'll be a, step up in incrementals and a step up from there.
spk04: Got it. And as I look at slide 11 and the strong growth rates across the geographies, can we just talk about available capacity in the footprint? You've done a lot of acquisitions over the past few years. Do you have room to build out production without a lot of CapEx dollars to support or to meet this demand?
spk03: Yeah, I would expect our CapEx to stay pretty consistent with, with where it's been. You know, we do have a heavy mix still going on, uh, expanding our renewable capacity and, uh, there'd be nothing there that, uh, would, you know, would preclude us from, uh, hitting a double digit type, uh, growth next year. I mean, we really just in most of these areas just kind of got back to where we were in 19, some are above, some are still below. Um, so no, we think we'd be, uh, in really good position for next year.
spk04: And I'll just ask one more. You talked about the back half being at parity maybe on the top line. Do you think that 2Q will be the highest EPS quarter, which is typically the case, right? Or will the back half ramp and pricing come through to make 3Q at or above what you put up for 2Q?
spk03: Yeah. Well, I think if you, you know, fourth quarter we would expect to be a step down typically. So, I mean, you'd be looking at second quarter or third quarter, second quarter pretty close. I think to get to the high end of the guide and on the lower end of the guide, it'd be a little further down from that.
spk02: Yeah, Steve, I would probably say if you look at sort of the midpoint of the guide, it would sort of imply, at least imply sort of third quarter kind of flattish with the second quarter on the top line. which would normally be a step down but kind of flash on the top line, then with a little bit of a decline from third to fourth with a little bit of that seasonality, albeit less than what we would normally expect in the second half. And so I think when you look at that, we would think as margins progress for the rest of the year off the second quarter, probably flattish into Q3 and then a volume-related slight step down in Q4 would be the right way to look at it, taking into account the volume and the seasonality that we would see in the fourth quarter. So, you know, second quarter probably with the tax adjustment is probably at least a penny or two above the third quarter and then adjustment from there. And, again, talking from the midpoint, and then as things progress, if we do better than that, obviously we'd be north and so forth.
spk04: Understood. No, that's great detail. Appreciate it. Thanks, Steve.
spk00: And we'll now take our next question from Stanley Elliott with Stifel.
spk05: Hey, good morning, guys. Thank you all for taking the question. You mentioned M&A, and you're getting close to the low end of your targeted range. You mentioned M&A. Can you talk about what you're seeing out there in terms of your deal pipeline? I mean, a large deal kind of happened here recently. Would love to see what you're seeing both in terms of volume and then also in terms of price points.
spk03: I would say volume is back to pre-pandemic levels. Price points, I think expectations are high. It depends on also if you're looking at forward versus trailing, because obviously most things you'd be looking at right now still have fairly significant pandemic impact in them. But I think the pipeline is healthy and certainly would expect to be active in the coming 12 months, so to say.
spk05: Perfect. Thank you very much.
spk03: Thanks, Taylor.
spk00: And it appears there are no further telephone questions. I'd like to turn the conference back over to our presenters for any additional or closing remarks.
spk07: Okay. Thanks, Anna. And thank you, everyone, for joining us today. If you have any further questions after today's call, please contact me. Thank you, and this concludes our call.
spk00: And once again, that does conclude today's conference. We thank you all for your participation.
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