Agfa-Gevaert NV

welcome to the ACFA third quarter 2024 results conference call. Please note that this conference is being recorded and that for duration of the call, your lines will be on listen only. However, you'll have the opportunity to ask questions. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero and you'll be connected to an operator. I will now hand you over to your host, Pascal Jouery, CEO, to begin today's conference. Thank you.

Thank you very much, François. Hello, everyone. Welcome to the call. I'm sitting in Motsul today with our new CFO, Fiona Lam, with Vivian Dictus from Investment Relations, and with my colleagues from the Executive Committee of ACFA. Today, as Fiona joined us only a few weeks ago, I'm going to take the call as I did in the previous quarter. So don't be surprised. I'll be covering the full set of slides today. And, of course, we'll open up for questions after my messaging session. So first, what are the key takeaways of the Q3 results for AXA? Number one, I think DPC is on track for growth. Very good performance of DPC, top and bottom line, validating really the strategy of the company. Point number two, healthcare IT is officially a cloud platform. We have started our first ever cloud-enabled enterprise imaging software at customers in the U.S. So that makes us officially a cloud player. I think what is important for us is the traction that we have in the market. We have the highest ever order intakes that we've seen in the business. And the transition to the cloud is probably faster than we anticipated. And that is not without any consequence for the short-term delivery situation of the company because it does change the timing of revenue and margin. You know, going through the cloud is delaying this revenue and margin. But overall, we are very happy with where we are. We have launched cloud solutions barely a year ago And it's now a significant part of our order intake. Then point number three, very difficult situation in film in terms of market background. We are seeing an accelerated decline of some key markets in the film. And when I say key markets, it's mainly on the medical field. and mainly focused on specific geographies, like especially the China market. So in order to offset the impact of this decline, we have launched, as you know, a significant transformation program that we announced back in August. Today we have actually announced what would be the social impact of such a program in our Belgium operations. And we have initiated with our social partners the dialogue that will lead to the implementation of the program. So we confirmed the 50 million. We have announced the specific Belgium social impact today that could be as high as 530 job suppressions. And we have started the what I hope will be a constructive dialogue with our social partners in order to be ready for implementation as soon as in 2025. So that's really the three main messages. The growth engines are doing fine. DPC already on the delivery. LCI on the leading indicator of seeing the context of the cloud transition and a complex situation for film that we're tackling through this self-help productivity program overall. So now when we look at the numbers, you will see for iSCAR-IT, 23% increase in cloud monitoring, highest number of orders, 45% cloud-related for something that we launched only a year ago. meaning showing the excellent traction we've got in the market. More importantly, we are gaining customers, and this is something that needs to be really said here. We are now winning shares and winning customers in a significant way through this cloud transition. So overall, I'm very happy about it. It has an impact on the short term. I'll come back to that when I show you the numbers in the Alkaid system, because indeed, short term, it has an impact on the bottom line. DPC, double-digit top-line growth in our growth engines. So very happy about that. This is an acceleration of the growth. It was to be expected. I will explain why. That's precisely the impact of the FI partnership and and the launches we've done at the beginning of the year and we have also our first packaging printer that is now in operation at our first customer on the first commercial printing will actually happen next week but the the machine is in place and has been printing now for a few weeks Then radiology, as I said, it's mainly a volume issue that we are seeing today. There's an accelerating decline in the market. And although DR is growing 9%, which is a big performance in the current market background, we cannot make this decrease. So if I turn to numbers in the next slide, of course, we have stable sales overall for the group, but a very contrasting situation. where radiology is decreasing double digits and DPC is increasing double digits, while the cells of SKIP are a bit eroded, I would say. Same situation on the bottom line. In TPT, radiology used to be the main moneymaker for the company that now is DPC, illustrated by the way the pivot of our portfolio as well. So small increase of profitability in DPC, radiology under pressure, and the reason why we are launching this productivity program, it will mainly impact the radiology, but other things mainly. And as I see a bit, profitability on quarter, you know, is not as good as last year, that's mainly due to the mix, and I will come back to also again the impact of the cloud transition. So now I'm going to turn to the P&L. So you see that I'm not coming back to the sales, which is overall flat when you remove the impact of currency. The decrease in gross profit is really mainly coming from the field impact. Operational expenses are higher. I believe quite under control and we will continue our effort in this area as well. So it translates into an EBITDA that is below last year, I would say, with a shift, with a specific shift of profitability of the different businesses as discussed. If I look at the bottom part of the P&L, we continue in terms of profitability adjustment which we used to call non-recurring adjustment and restructuring expense as you see are under control and much lower than as already stated. This will change with the implementation of course of the transformation program but this is we will be in a position to tell you about it when we have concluded the negotiation with the social partner, but I can already tell you that for this program, we expect it to be self-funding and actually cash-accretive to the group at... This call was interrupted.

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Never happened. Yes.

Yeah, sorry. We can hear you now, okay.

Okay, so I guess I'm back online. Sorry about that. I'm not sure when it was interrupted, but I'm going to start back where I was. I was talking about the adjustment and restructuring expenses, which is much below last year, and I was commenting that, indeed, the program that we are launching will mean a significant, of course... charge, but that this program is expected to be cash accretive during the length of the project and almost at all time of the project, so it's a self-funding program. I want to make it clear that we are not in a position to communicate on it before we have concluded an agreement with our social partners. And that's probably this what I will comment on this P&L. Then working capital, it's roughly in line with last year, especially when you take into account that we have a specific impact of the higher silver price in the value of our inventory and as well the added transit time due to the situation in the Middle East. This being said, this working capital will be worked off by the end of the year, exactly like we did last year. And the plan is to come back to a kind of a similar situation that we have seen last year. Free cash flow for Q3, as you see, impact of indeed working capital, higher capex than usual. I would like to remind you that we are still in full swing building the green membrane plant. So we are still in this effort that will continue in 2025. So overall, a negative free cash flow of 6 million after our pension charges of 11 million for the quarter. The debt position influenced, of course, by especially the seasonality of the working capital during the year. So we expect, as in the previous years, to reduce the debt position by the end of the year. As Q4 will, of course, show cash generation mainly, of course, fueled by the decrease of working capital. Now, if I turn to the businesses and start with the health care IT. So indeed, when I look at sales compared to last year, a bit below last year and significantly below last year, in fact, due to the mix. This being said, quarterly results can be a bit clunky. But what you need to understand is this rapid transition to the cloud has an impact. And it has a kind of a double impact, I would say. First, you have a lot of customers a bit delaying or stopping their refreshment purchases before making the transition to the cloud. So there is a tendency to delay, for instance, the renewal of hardware purchases. and to also take a step back. And that's what we see at some of our current accounts, especially in the US, where the move to the cloud is going the faster. And a second consideration also that everybody needs to understand, and I'm going to try to explain it through a very simple example, is that indeed it's a significant change in the revenue model in terms of timing and therefore of the margin. So it means when you have a transition to the cloud, the first phase will have actually some negative impact on your top line and bottom line. Let me explain. If traditionally, you know, we were selling, roughly speaking, about 100 million euros of orders in a given year, this 100 million euro you could give or take, say, you will find it back in your sales in the next year, to make a very simple projection. However, if now you sell, instead of selling 100 million euros of project-based software, 50%, 50 million is going to the cloud, it means this $50 million will not be there in your sales next year. And with the same order intake, you will probably be in a position to invoice about a fifth of this $50 million. So it means with the same order intake of $100 million, if you split it between a cloud-based project and project, you will have a top line the year after of $60 million instead of $100 million.

Exactly.

So that's what it does to your revenue. The switch to cloud is good news for us because it means we're going to have more sticky customers, longer contracts, good visibility, built-in growth in our contracts. But short-term, it will have a significant impact on the business. So we are in growth mode. As you see, we are growing the business in terms of orders by 20%, but it will not be enough to eliminate this kind of mechanical effect of going to the cloud. And you start seeing some of it already, which is more indirect than direct today, but we start seeing this phenomenon to happen. So again... It's excellent news for us, this switch to the cloud, and what is excellent news is we are gaining net new customers and significant net new customers all over the world, but the translation into growth will be delayed due to this change of revenue and margin model, and that's which we will see in the next quarter as well. So when you look at the P&L, the performance of the quarter of the top line fully reflects in the bottom line. That's really where we're missing a top line and we're missing it with a less favorable mix, in fact. Well, this being said, it's good news for us. Order intake plus 23%, highest ever order intake for the company. We have, if anything, increased our view of the full year. We were saying it was going to be high single-digit increase. Now we say it's going to be at least 20%. In fact, so it means the momentum is still there. And as you see, 45% of these deals are in the cloud. I would like to remind you that a year ago, it was 0%. Net new customers, 57%. This is the highest ever performance in gaming customers. And we have now 56% of the projects that are projects and 44% that are recurring. And when you look at recurring business, this is this part that will take, I would say, five or six years to recognize as revenue, once before it was treated as, I would say, everything in the same year, okay? So that's what it does to the business. As I said, we are very pleased to announce that we have our first cloud project already running, and satisfactorily, it was a good deployment for the first, And here, then after, we give you examples of the gains that we have made. And as you see, it's in the US, in the UK, but also in South Europe and also in Asia. So it's a bit of a global trend that we are today gaining projects. So very happy with the development of the business, even if the short-term delivery is impacted. Now, if I turn to DPC, but DPC double-digit growth, and when you look at where it comes from, it comes from the right areas as well. So it means DPS has a very good drive in digital printing. The start of the year was a little bit weaker, and we told you the reason why. Mainly, we were renewing a significant part of our range of equipment, And as well, the ESI partnership would kick in only in the second half. You see, it happens. That's exactly what happens. Very dynamic situation for BPS. 19% growth versus quarter last year. And Q4 shapes up as an excellent quarter. This is the strongest quarter of the year, anyway, for BPS. Green hydrogen solution sales growth of 15% versus Q3. The comparables are increasing, quarter after quarter. If you look at the year-to-date growth of Zircon, it's plus 34%. But of course, I would say, and everybody knows, indeed, the hydrogen projects are not happening as fast as what we thought. This being said, it was never part of our plan. And for the time being, we are quite on track with what we forecast for the afternoon. We will still see growth, but not as explosive as one could expect. EBDA, on the strength of the good top-line performance, we have delivered, I would say, the corresponding EBDA for the businesses. So I would say DPC becomes indeed a more reliable growth engine for the company and the strength of those businesses. If I look in a little bit more detail about where we are, I think what the key message is, you see the increase in equipment today, after a more subdued first half for the reasons I just explained. Inks continue to grow. On this quarter, it was 10%. Last quarter, it was more than 20%. We believe for the full year, it will be around 15%. I mean, we are doing fine in Inks. We are installing more and more equipment, so we are quite okay in Inks. As I said, the first SpeedSet Orca packaging printer is in operation at the customer site in Louisville. It is trending, actually. And I know that some of you made the trip last year to Cambridge to see this machine. So it's now a machine that is in operation. And as already explained, we have kept bringing new initiatives to the market. And here you have a few examples. That is the illustration of a very dynamic portfolio evolution, where every time we are going kind of upmarket, increase productivity and the value for our customers. So that's really going quite on track. Green Hydrojet Solutions, we are on track for the buildup of the new plant. Anyway, this new plant will not bring only capacity but also the ability to increase the productivity of the way we make membrane. Again, we don't need this new plant to be operating at 100% to see the benefits from the staff. We are continuing today. We have more than 130 customers in the fund and we continue our global expansion and I'm glad to report that we have secured our first significant order for India. We know that the final investment decisions are a bit delayed in this market. However, it was always taken into account in our business plan and we never took to our plan the projections made either by the public by governments or even private players in the range. Now let me turn to radiology solutions where obviously the messaging is a bit different. We are under pressure in the film market and although DR is increasing top line, given the relative size of the two businesses, it's not enough, of course, to offset the film decline. And that reflects fully on the EDBA of the business and the need to launch this program that is in place, as you know. If you look at the P&L, This is clearly the illustration of the past decline. We are also managing as well as we can our OPEX, our rating OPEX, making a significant effort to reduce this OPEX, as you can see. But nevertheless, we cannot eliminate the full impact of the volume decrease. And as well, at the same time, unfortunately, we still have a situation in manufacturing that is not yet ideal in terms of, I would say, quality and productivity for film. So I want to stress, you know, in this market decline, we are keeping the same market share. Actually, we are not losing share. We are keeping up with our share, but we just suffer from the whole situation of the markets. So the actions we are taking, we take actions, yes, in the film production. You've seen an announcement related to Belgium today, but our effort is actually global in the film production. And at the same time, we have also announced actually last week that we will shut down a plant in Germany, Catherine, in the CR market, the Confucius Radiography Market, which is a which is a kind of technology that has been declining for a number of years. So that's also part of the measure we're taking to improve the situation. Apart from that, in VR, we continue to innovate, but more on the AI slash software side, providing more and more features to our customers and the 9% top-line goals that we are seeing for this business. validate our approach in the area. So, CONOPS, a brief word on CONOPS. Well, as you know, this is the division that actually supplies the ECO3 offset business. So here, not much report, sales are, we say, a bit below last year. And the EBITDA is a contractual EBITDA, so actually it covers all our costs and the cost of capital. So the EBITDA that you see here is reflecting this. The year-to-date EBITDA is positive, but the Q3 EBITDA is at zero. Outlook. Well, first, SKIP Q4 is the highest quarter of the year and we expect it to be in line or higher than last year, actually. And as I said, we expect the momentum in order to continue. DPC, we will continue also the trend that we are seeing today and DPC will continue to perform. I would say on these two divisions, there is not much change to our previous guidance at all. Probably the impact of the cloud in healthcare IT is a bit higher than anticipated because the transition is a bit faster than what we thought. However, in radiology, we are not expecting any improvement from what we are seeing today. Certainly not in Q4. And especially as all the self-help measures that we will bring to life will only impact in 2025. And I would say the time to implement will probably impact mostly the second half of 2025. So there is nothing for me that will improve short-term on the results for radiologists. Working capital will be back to normal. It's a bit like the same pattern as last year. So most of us will see all of the decline of working capital in Q4. We will do exactly the same way that we did last year. For Elus and offset division, I would say that, as you know, we are still... actually waiting the outcome of the expertise. The expertise has started actually mid-July. It takes a lot longer than our expectations and the planned conclusion by the experts. So the work is still ongoing and we are still waiting for the final decision of the experts. Depending on the timing and if the decision doesn't come in the next, I would say, in the next two to three weeks, it means the cash that we're expecting for our use will be in in 25 and not 24. We are coming to a situation in terms of calendar that we need a decision, I would say, in the next weeks. And last but not least, I'm not coming back to what I already explained on the transformation program that was announced for the Belgium part this morning. So I'm not coming back to that. We discussed it, I think, already. Just a word of possibility to say that broadly we are in line with our objectives. for sustainability. And I would like now to turn to questions. Operator, I would like to take the questions from the analyst and the press.

Hello?

Yes. Time for Q&A. As a reminder, if you would like to ask a question or make a contribution on today's call, please press star 1 on your telephone keypad. If you change your mind and want to withdraw your question, please press star 2. Please ensure your lines are unmuted locally. As you'll be prompted when to ask your question. Our first question comes from Alexander Kramish from Kepler Chauveur. Please go ahead.

Hi, hello everyone. Alexander from Capri Chevrolet here. So, the first question would be on the healthcare IT segment. It's a nice flow into the cloud solutions there. But I'm struggling to understand a bit the match between the outlook and the ongoing business. the guidance is to perform to have a performance roughly in line with prior year for the full year 2024 and that would imply a 20 increase in avid in q4 whilst the sales are trending lower the order intake seems to be skewed towards cloud storage which you mentioned that is stretched over a longer period of time and the nine month mark is 26 below uh prior year on the adjusted avid level so Could you just help us understand where the sudden sharp increase in profitability would come from? And then maybe the second question on healthcare IT would be on the consensus of 2025. Am I correct that your remark is basically saying that the consensus in terms of sales is rather too high because the sales at this stage implies a sales increase next year, but if I understand your remarks on cloud storage correctly, that would imply a sales decrease. But then, of course, margins that are higher. That would be it on healthcare IT. Maybe I can follow up with some other questions later.

Okay. On healthcare IT, very simply, Alexander, Q4 is the highest quarter for healthcare IT. The same every year. It was the same last year. So indeed, I think it's a practice that is not only for us in this market. But indeed, we will have a very strong fourth quarter sales and EBITDA. But again, it's similar to last year. And this is why I'm sticking to what you say. Yes, indeed, not all quarters are built the same. And this is a pattern that we have that this year, more than 50% of the business will be done probably in December. But we stick to our guidance and we will be striving in order to deliver that. Regarding... I think your second question is extremely important because it's about the modelization of the transition to cloud. I would... I would, however, you know, we're in the process of planning next year and making our budget. So it's a bit early for me to give you a guidance for 25. Normally, I prefer not to do that before having a very complete view. But I repeat, indeed, I repeat what I said. When you have a transition to the cloud, even if you grow significantly your order intake, you understand that the first, the short-term impact is a decrease of your sales. And again, because in a project, you invoice everything in one go. If you have a 10 million project, you will invoice 10 million and then have an SMA for the next year, but a relatively modest one. In a cloud environment, by the way, SaaS or non-SaaS, because you have also hybrid models, this $10 million of revenue would probably not be $10 million anymore, but $12 or $13. But this $12 and $13, instead of invoicing in one year, you will invoice in five, six years, for instance, depending on the length of the contract. So mechanically, it has an impact on your supply, even if you are growing your other intake. But I want to be very precise answering your question. And I will do it. I will do it at the next opportunity because now it's a bit too soon to guide on 25. But there is a mechanical impact. But again, I want to stress that transforming this business, you know, from a project business to a recurring business is the right thing to do. The value of the business is increasing, I think. And a real but, but it has this impact. So it's overall very good news. We have done this quite rapidly. We are well positioned in the market to take advantage. And again, that's a business that is gaining customers today. So we have momentum because not all the players can do what we do today. And the tremendous increase that we've seen in customer satisfaction and in class reports mean actually a lot of interest in our solution.

Okay. Thank you for that. That's very clear. But just one small follow-up on that. So I am not mistaken to say that traditional solutions get cannibalized by the cloud solutions and therefore this would imply that your sales would decline and if those traditional sales get transformed into cloud sales. That's correct, right?

Let me come back to you on that at a later stage, because it might be, we don't know, we have yet to finalize our plan, but could it be declining? That I don't know, but at least I would say it's going to be stable, probably stable to decline. Having stability or decline means, in fact, a lot of underlying growth, in fact. But indeed... I would like to give a more precise guidance when we know what the plans are for 2025 and we are working on it, I would say.

Thank you for that. Maybe then a question on radiology. So the silver prices, do you have a plan in place to pass some of these silver price increases on to the customer or is it impossible in the current environment? And then on the outlook there, the EBIT is negative and you mentioned that results will not improve. So can we then also expect a negative EBIT in the final quarter? Is that what has been said there? Thank you.

Well, first on silver, overall on the film, we have a lot of segments where we do increase the price of silver. And sometimes it's even contractual in our commercial activities. So there are only specific geographies and markets where we cannot do it. But most of the time we would do it, I would say. But it's not possible to do in specific markets and segments. So that's for silver. And then your next question regarding the EBIT of radiology for Q4. I think for Q4 we are going to be, I'm saying no improvement, but I think normally we will have a positive EBIT in Q4.

Okay, thank you for that. I'll pass it on to my colleagues. Thanks.

Thank you. Thank you. Before proceeding to the next question, as a reminder, if you would like to ask a question, please press star 1 on your telephone keypad. The next question comes from a line of Maxime Starnard from ING Bank. Please go ahead.

Hi. Good morning all. I hope you can all hear me well. So a couple of questions on my end. First of all, coming back on the guidance for FKIT, I hear what you say, Pascal, about the guidance being roughly the same. But if you look at what you said in Q2, you were mentioning continued progress. This is slightly different to roughly in line you're saying now. So could you shed some light on what basically has changed there? That would be the first question. Secondly, looking at the restructuring program, you know that your ambition to cut the cost base by $50 million Could you provide us with some granularity on what's additional to the current level and what's required to just remain at the current level? And thirdly, if I may squeeze that one in, basically looking at radiology, medical film being down 17% compared to last year. given the accelerated decline of the market, is that the new normal we should look into? That would be all for me. Thank you.

Okay. Okay, thanks. Elskar Haïti, first, what has changed? What are the key changes that we've seen? more rapid transition to the cloud. We were not expecting to be at that level of almost, well, as you've seen, 45% of our projects are now cloud. That was not what we thought was going to happen in the past quarters, and we're a bit surprised by the speed of the transition and the fact that it goes actually that fast. That's the first change. Second, as I said, as a lot of customers contemplate to go to the cloud, it has a bit of a withholding effect on their current purchases. They would not refresh their hardware. They would not do something that they would plan to do if they plan to have a larger move to the cloud. So it has a short-term impact where it's impacting also our business. So that's really what has changed for us. I must say that order intake, if I look, we always, of course, communicate compared to last year, and we said plus 23%, and it's going to stay over 20% growth at the end of the year. Our first projections of order intake, I mean, our budget, if you want, was below that. Actually, we're way above what we thought we were going to be. But the two things impacting short-term, that's really what I told you. I mean, the speed of the transition to the cloud and the impact it has already on some holding patterns with customers. That's really what has changed, actually. Regarding the restructuring program, well, 50 million. After two years, we will have probably 80% to 90% of the initiatives that will be already implemented. We believe, therefore, that if we are able to conclude the agreement that we want to conclude with our social partner, we will start seeing benefits in 2025. But again, the full benefits will be at the end of 27. In terms of granularity, when you look at the social announcements, we have made today about 530 positions that could go part of this project. You understand that the vast majority of the savings is actually indeed related to cost of labor. But it's not only that. We also have initiatives regarding operational excellence and initiatives that are also purchasing-based and initiatives that are leveraging different productivity levels. So that's what I can say. I think you had a question on... And we will guide further, you know, as we go. Our plan is to try and finalize our social agreement by year-end, meaning at the time of yearly results, we'll tell you also about the cost of the program and how it's going to work. But I already can tell you and repeat that this program will be self-funded and that we will see... cash benefits from this program and that, yeah, even if we have to, of course, spend money to implement it, again, the benefits of the program will be higher than the cost at all times. And regarding films, yes, you mentioned 17% decrease and I'm not sure I've not checked the number, but it's probably directionally correct indeed. Our expectation, well, I don't have a crystal ball first, and I cannot really tell you if it is going to continue, but let me tell you that in our current assumptions and in the way we are also structuring our transformation program, yes, I mean, we count on... in the decrease of the market. So we are preparing all these scenarios accordingly. Now, will it be minus 15%, minus 10? I cannot tell you. Next year, it's a bit too early, I would say. But yes, we are setting up everything in order to be able to face this order of magnitude of decrease, and hence the program that's that we are implementing. Have I covered all your questions, Maxime?

You did. I just have one follow-up, if I may. Looking back at healthcare IT, if I look at Q2, order intake, 41% was related to cloud, 45 now. So I have a hard time reconciling what you just said about a more rapid transition than expected. This doesn't look like a major difference to me, 41% to 45% of the other intakes. So just so you can maybe elaborate a bit more on that.

Well, I think it's still a lot of – I was not really referring to – I was more referring to Q1 versus Q2 and Q3. And what we have seen as well, as I told you, again, is a kind of a holding pattern of some customers in terms of current trading patterns. so to speak, and that also is impacting our business. Let me give you an example. I mean, if a customer contemplates going to cloud, he will not refresh its hardware and its servers anymore. He will not request any further, I would say, feature and whatnot. And that's what's impacting also a bit our current trading, I would say. As the market is in transition, I mean, the decision time for our customers is slightly different, and it has a short-term impact on their current activities. That's what I meant by that. Okay.

Thank you for this. Have a good day.

Thank you.

The next question comes from a line of Laura Roba from DeGroove Petercam. Please go ahead. Laura.

Good morning. Thank you for taking my questions. First, one follow-up on healthcare IT. So I understand that the transition to the cloud means temporary decrease in sales, but do you already have some visibility on how much time it will take for this higher order intake to translate into higher sales? And then I have a second question regarding the situation with the Aurelius transaction. What would be, in your view, the worst-case scenario here? Thank you.

Okay, on SKIT, excellent question on the time. I think, Laura, that's precisely what I would like to be able to probably guide after our yearly results. But indeed, you don't do a cloud transition of this magnitude in a year. It's going to take a few years before you actually pivot your business. But there are also lots of moving parts, and especially the growth rate that we can extract from this transition to the cloud, which seems to be happening for us. So sorry, but we'll guide more at the end of the year. You know, I had a question by Alexander. Can you guide us for 2025? If I told Alexander you've got to wait a bit to tell you so that I can tell you what indeed is in store for 2025, it's also true for the next year. But again, I want to stress it's not going to be, it's going to have an impact, not a huge impact on sales, but the impact is we are not going to grow you know, according to the growth of our other intake, of course. Not at all. Regarding our values, the worst case scenario, for me, you know, it's, frankly speaking, we have an expert that takes a lot more time than originally anticipated to give the assessment, right? So, for me, it's just a question of time, again, on which there is very little we can do in terms of influencing the time taken by the experts. So, for me, the worst-case scenario is just time delay, in fact. We are not... We are not in dispute for the full amount that is owed to AXA. We are in dispute, roughly speaking, for two-thirds of it. But the worst-case scenario is indeed this delay.

Okay. Very clear. Thank you.

Okay. There are no further questions, so I hand back to you, Mr. Jouery, to conclude today's conference.

Thanks a lot, operator. And again, I want to repeat, all the growth engines of the group are really doing well. The short term of LCAIT is a little bit less bright due to the situation I explained, and especially this rapid transition to the cloud. But everything that we see in terms of leading indicators are extremely good. The difficulty we are facing is really with the film, and we tackle that really up front with the significant program we have to transform our operations. And we will continue to give you more details and facts on the program as we implement it. And last but not least, the Q4 will see the specific improvement of working capital should be cash positive for us as well. And we are going to land in a kind of a similar situation that we did in Q4 last year in terms of working capital. So thanks a lot for your attention, and I'll talk to you soon. Thank you.

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