Deutsche Post Ag S/Adr

Thank you. Good morning and a warm welcome to everyone out there to our scheduled Q2 2020 reporting call. As you've seen in the invite, I've got Melanie, our group CFO with us, who will take you through the presentation, which I take it you have in front of you. And after that, there will be time for Q&A. So the usual procedure. Melanie, over to you.

Yeah. Thank you, Martin. And good morning, everybody. Welcome also from my side to our Q2 call. As you know, we pre-released our Q2 numbers in early July. I think the first important message is that in the second quarter, our group EBIT was back to growth. And I think what is extremely pleasing, and you will see that in the remainder of the presentation, all five operating divisions had a positive EBIT, and actually four out of five divisions showed year-over-year EBIT growth. The second positive message is that cash flow development has been very strong in the second quarter, but overall for the first half of the year 2020. For me, this is both a confirmation of the fundamentally sound operating performance in our division, but it's also the result of our strong internal focus on improved cash generation. So, obviously, it has been quite a dynamic development in the last month. And in the beginning of the pandemic, our focus had been very much on preserving liquidity, keeping us in a super safe balance sheet position. In early July, based on the good performance we had seen in the second quarter, we had a discussion in the corporate board to reassess our cash allocation. And as you will have seen on that basis, we first of all took the decision to reward our employees with a bonus for their exceptional efforts throughout the last month. And we also scheduled a date for our AGM and honored our commitment to dividend continuity with a proposal of a 1,15 Euro dividend to the AGM. So I guess overall, so far, we have gone through this Black Swan event quite successfully. And I would say that our investment case, which you can see on page three, is fully intact. The first element of our investment case is sustainable growth from our diversified logistics portfolio, and you can see that in action on page four. So as you can see here, we had a reported revenue growth of 3.1%, organic growth of 4.6%. of course, saw an impact of the pandemic situation, for example, in our mail volumes and also overall in global trade-related flows. But four out of five divisions nevertheless were able to report solid revenue growth in the second quarter. The one division, supply chain, where we had a revenue decline, that was driven by the fact that this non-network business is really impacted significantly. by lower activity levels in customers operations. Quite often we have dedicated customer sites and that of course also had an impact on our supply chain revenue development. The growth we saw across the group has also been heavily driven by e-commerce. We have talked about that now for quite a long time as a structural growth driver. And of course that was also an important element now in the second quarter of 2020. The growth in the second quarter is also a manifest of our ability to successfully manage through very unusual market circumstances, like for example the tight air freight market, as well as a very quickly changing volume pattern, which we saw over the last month in Express. Let's take a look at some important volume trends. I think nothing materially new, but I still want to talk a bit about what we saw in P&P Express and global forwarding on the next three pages, starting with P&P on page five. So as previously flagged, dialogue marketing volumes were down significantly, but that was offset by the very significant growth in parcels, up 21% in the second quarter. One of the positive numbers on this page here is the mail communication decline, which this minus 3% has held up very well. Just as a reminder, we had a change in product portfolio at the start of the year, which led to some shifts from dialogue marketing to mail communication. We lost more on the dialogue mail volume side than what we gained on the mail communication side. But of course, particularly in dialogue marketing, we also see the impact of the pandemic. You can also see the strong effect of our continuous yield measures driving higher average unit prices in both mail and parcels. The positive developments, particularly on the parcel side, are really the result of the very focused yield initiatives we have been driving for the last two years since the summer of 2018. So that is also a very structural trend which we're seeing here, which has been helped in the second quarter also by a very healthy customer mix under the pandemic. Express volumes on page six show first on the left side, the monthly pattern, which we also described earlier on. We had a very good start into the year in January. We then saw the effects of the pandemic in February in China and Asia. Early March, we were back into growth, but then, of course, with the lockdowns in Europe and the U.S. taking effect in the second half of March, we turned into negative territory in March again. April was the low point. By May, we were back into growth, and in June, we saw a very strong and healthy growth in our express TDI volumes. This growth is strongly driven by e-commerce. And just as a reminder, for our Express division, it's premium e-commerce. We always had a very strong focus on taking the right type of e-commerce into our most expensive network. So what we always say internally, e-commerce but in a profitable way. And you can also see that in the good margin development in Express. On the right side of the graph, You can see the regional split. I think nothing really surprising here. In the first quarter, Asia was the declining region. In the second quarter, Asia, particularly driven by China, was healthily back into growth. Whilst for the quarter overall, we had negative numbers in Europe and the Americas. But there as well, we of course saw an acceleration in growth from April towards June. That takes me to page seven and the forwarding volumes. I think obviously global forwarding and particularly air freight has been the most distorted market where we saw the most unusual patterns. Volumes are down significantly, but I guess it looks compared to markets as if we still performed relatively well, particularly on the air freight side. I think I really have to say thank you to our air freight team here. They did an outstanding job in early on securing capacity in this extremely tight market, where the name of the game in the second quarter was getting the right type of capacity at all. And by moving swiftly and using our long-standing relationships and our size advantage, we have been able to deliver strong GP uplift, and that has been the main driver for our strong Q2 EBIT overall. That being said, it is also encouraging to see that GP per TU was up in ocean freight, and also on the road freight side, our colleagues have equally managed to navigate successfully through these unusual circumstances. One very positive number, which you may have noticed, is our GP to EBIT conversion for DGF, an order of magnitude we had never achieved before. And as you know, Tim and the team are very focused on structurally improving the GP to EBIT conversion by improving our core processes. We have to be honest, however, the number we now saw in the second quarter is, of course, also due to the unusual circumstances and a positive outlier. The underlying trend is also going in the right direction, but miracles take a bit longer in an underlying way. Yeah, let's take me to page nine and the overall profitability improvement, which you can see in our P&L on page nine. In a nutshell, based on a solid revenue increase and strong cost focus, we turned the roughly 5% organic revenue growth into a 19% EBIT increase, which I think is quite a pleasing development. No unexpected moves otherwise below the EBIT line. Tax is up, reflecting both higher earnings as well as an increase in the tax rate in line with our guidance for the year 2020. The bridge on page 10 is something that we already showed you in early July. We have now updated the page with our final Q2 numbers. The message ultimately remains the same as on July 7th. If you adjust for all non-recurring items, group EBIT was up significantly, plus 26% year over year. In that number, we have included all operational COVID impacts. With every month, it's got more and more difficult to quantify them in isolation. So we're not doing that anymore. The only precise COVID-induced one-off number we are showing on this page is the minus 99. Those are the extraordinary effort impairments which we did induce by the lockdown measures. So 26% overall operating EBIT growth is a very healthy result. And if you ask me, honestly, probably not the number I would have predicted at the beginning of April when we're just all going through the low point of the pandemic to date. Yeah, so page 11 recaps the main drivers by division. I'm not going to go through all the numbers and all the information here on the page. That's a couple of words by division. I think in P&P, two things are sticking out. Under the pandemic, we have seen an acceleration of the structural shift from mail to parcel. It's a little bit fast forward to a state we may have achieved otherwise in maybe three years' time. The positive news is that we have been able to operationally cope with this acceleration in mail volume decline and the boom in parcel, and it has obviously also worked financially, and that is due to the second important point to emphasize on P&P, For the last two years, we have made great progress in all those structural improvement programs, be it the overhead cost reduction, be it the systematic yield improvement programs, and that is what is really helping the strong P&P performance. The express colleagues have once again done an excellent job in adapting the network to the quickly changing circumstances and to make sure that the extra costs we had in the network We're already also offset on the use side. We have been able to really provide our customers with ongoing service quality and we have been able to give them capacity which under the current circumstances wasn't to be taken for granted. Global forwarding, as already mentioned, the really great DGFF performance is predominantly driven by the strong air freight DP development as the main driver. Supply chain, our not network business, we here also on the either side see the impact that this business is more closely linked to activity levels of individual customers. And I think that explains why the impact of the pandemic in the second quarter has been more pronounced for supply chain. However, also here, cost focus and the diversified customer portfolio have been key to maintaining a positive profit contribution despite the 500 million euro lower revenue shown earlier. And finally, last but not least, VHL eCommerce Solutions is taking full benefit of orientating its network strongly towards B2C. Our youngest division was just in the positives despite a 30 million asset impairment in the second quarter, which is great, and they are firmly on track towards the first positive EBIT contribution for the full year 2020. With that, I'm turning to the important topic of cash flow generation and cash usage. The Q2 cash flow statement on page 13 shows how the EBIT performance is translating into even stronger OCF growth. Where is that coming from? Well, in addition to the strong reported EBIT growth, this reflects the fact that a lot of the Q2 one-offs The asset impairments, some of the provisions for the street suitor restructuring costs, and we also delivered an ongoing strong working capital control, and that all leads to our OCF being up $381 million year over year. In the second quarter of 2019, we saw the peak in the 777 capex. So I think to have an honest free cash flow year-over-year comparison, you have to take out the 777s, and that is what we did in the last line on page 13. And you can see that excluding the 777 capex, we actually improved our free cash flow by $444 million compared to the second quarter of 2019, and overall reported a free cash flow of more than $600 million in the second quarter of 2020. On page 14 and 15, we have updated our expectations for the major cash flow drivers in 2020. And we have also given you an indication towards our 22 guidance. One obvious question when you look at our guidance for the year 2020 is, why are we able to keep our free cash flow guidance at 1.4 billion, which we also had pre-COVID? when we were still targeting a significantly higher EBIT. I think the first thing to bear in mind is that our EBIT guidance, the 3.5 to 3.8 billion, include around about 700 million in runoff costs, and the biggest chunk of those 700 million are non-cash, so depreciation, amortization, and changes in provisions. Secondly, we have seen a very strong working capital performance so far in 2020, where we are quite confident that we should be able to hold on to at least part of that in the second half of the year. And thirdly, while we have 200 million one-offs in real cash from the employee donors, we also expect 200 million lower capex than in our original guidance, due to a different way of financing the 777. You can see more details and numbers on those two pages, and we do hope that they will be helpful to model the free cash flow, not only for 2020, but also for the outer years towards our 22 guidance. Let me have a quick word on the balance sheet. You can see that on page 16, where I want to mention two significant movements in the second quarter. The first one, also nothing new, is we issued 2.25 billion euros in bonds in May at record low coupons. And that is obviously, yeah, I would say further safety buffer on liquidity. This has led to a balance sheet extension per quarter end and of course it has also been one of the drivers for the step up in our cash and cash equivalents position at the year end 19 that stood at 2.9 billion, 30th of March 2.6 and now on the 30th of June up at 4.6 billion. The second point I want to mention is the development in our defined benefit pension obligations. So obviously interest rates have further declined in a very extreme way in the UK. You can see that in the lower right corner of that page. In Germany, we had a bit of refinement in the methodology that helped to dampen the decline. But I guess the big topic is the UK. I guess we will not be the only company to tell you that we are currently in discussions with our UK pension trustees how to address this topic. I mean obviously that size of design nobody had ever seen in the UK before in a quarter. Turning to a couple of pages which are completely unchanged compared to July 7th. So I guess I can be rather quick on pages 18 to 20. as we basically confirm all guidance components as given in July, as well as our dividend proposal, which is a good sign of stability in our finance policy. So page 18 shows our new 2020 guidance as introduced on July 7th, no change here. And yeah, I just talked about the bridge to the 1.4 billion free cash flow targets. Page 19, tries to kind of like put this guidance a bit into context, pointing towards the one-offs, 700 million of one-offs included in the 3.5 to 3.8 billion guidance. So if you take that out and you look at the operating performance implied by the guidance, you can see that this guidance actually implied 4 to 11% growth in 2020. towards an EBIT run rate of 4.2 to 4.5, excluding the earlier flagged and explained one-offs. On page 20, 22 guidance is also fully confirmed. No changes here. And last but not least, on page 21, I'm very happy that based on the good Q2 performance, we felt indeed able to schedule a date for our AGM and to fully deliver on our performance of dividend continuity by proposing a stable dividend of €15 per share, also under the very unusual circumstances of the year 2020. And I know every once in a while it still comes back, so should any one of you still have 2009 in mind, I hope that this eventually testifies our strong commitment to shareholder returns and our finance policy. Technically, we are in the final stretches of preparing our virtual AGM for August 27th, and the dividend payment is then expected on September 1st. So, to conclude, it has been a challenging and unusual year, I guess, for all of us. I think on the positive side, it has shown how mission-critical logistic services are to keep the world moving. And for us as a company, it has shown how our leading and diversified positions across the industry provide us with a resilient base for sustainable success. And that is what gives me strong confidence beyond this second quarter. Our stable strategic logistics footprint in combination with our agility and which we have proven now in the second quarter, that we really had to respond rapidly to unforeseeable events, and the colleagues out there have done an amazing job. I think the fundamental basis for this success has actually what we have worked on continuously over the last years, and that is our company culture and the values. We have had our purpose connecting people, improving lives out there for many years now, and our people across the organization have probably never felt this contribution this purpose so real and first hand like under the pandemic circumstances now in the second quarter I think that shows that also with our strategy 2025 aspiration we are on the right path to keep delivering sustainable performance also for the next quarter and with that Martin back to you and we are happy to take your questions

Exactly. Thanks, Melanie. And Emma, if you will then push all the right buttons to initiate the Q&A, please.

Thank you. Ladies and gentlemen, at this time we will begin the question and answer session. Anyone who wishes to ask a question may press star followed by one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star followed by two. If you are using speaker equipment today, please lift the handset before making your selections. Anyone who has a question may press star followed by one at this time. One moment for the first question, please. The first question comes from the line of Daniel Aguska with Birdstein Research. Please go ahead.

Morning, Daniel. Daniel, can't hear you. Good morning. Oh, sorry.

Good morning, everybody. Maybe first on the express pricing, that seems to be fairly benign, so it didn't really move that much in the quarter, although air freight capacity was very tight. Kind of what did you see in terms of price and mix development in Express, and how should we think about that kind of in the quarters going forward as air freight capacity likely remains fairly tight? And second, I mean, on supply chain, could you comment a little bit on the different verticals in your supply chain mix and, again, how you would be thinking about those over the next couple of quarters? It seems that that's a business that really cranked down on cost, and that was a big benefit in Q2. But I'm sure there are different developments depending on the verticals, and just some guidance on how that's progressing would be helpful. And lastly, on the pensions, which you already touched on, It seems like, you know, the plan assets are proceeding nicely. But, of course, there's a question around how plan assets will develop in the next, let's say, 12 to 24 months. What scenarios are you considering when it comes to your pension kind of in the medium term? And is there kind of any scenario out there where you would consider funding a little bit more into the pension deficit? Thanks.

Mm-hmm. Yes, so first of all, on the express pricing, so our basic philosophy here under those circumstances, as we saw in the second quarter, has been that we have to find a way through special pricing to offset the extra costs we incurred in the network. And that is why we introduced an emergency surcharge in the second quarter, which we refined several times in the course of the quarter. And I think really the fundamental approach here has been not to really squeeze the orange to the limit and go for the maximum yield, but to also work with our customers and to support our customers and get to a level where we are able to offset the additional costs. In the second half of the year, we will go through our general annual GPI exercise. Those discussions are ongoing, are of course influenced by the pandemic. but I think the express team doesn't see a necessity to fundamentally change our approach here. And I think this approach has been extremely successful over the last years, where we saw good growth and a good margin development at the same time. In terms of the supply chain verticals, indeed a mixed picture. Not surprisingly, the best performing sector has been life science and healthcare. We also had positive developments in part of retail, but other parts of retail like fashion weren't doing really well. And then, of course, in terms of the low light, that has been automobility, the whole automotive sector. I would say overall we have now seen towards the end of the second quarter that across all vertical things are moving in a more positive direction. We are, for example, tracking the number of closed sites where there is no activity at all. That has come down significantly. We are also tracking sites where the volume levels are significantly deviating from the normal levels. Here we still have a number of times, but also the number has come down overall. So for supply chain, we also expect a gradual recovery in the second half of the year. But obviously, given that some sectors like, for example, automotive are still not doing well, we won't come back to what we had originally planned for supply chain for the second half of the year. Yeah, in terms of pensions, I mean, the one, A country where we have to keep a close eye on in terms of pension deficit is the UK. Due to this dramatic decline in discount rates, the deficit has gone up. As I mentioned before, we are not alone in this situation, and what normally happens is that you discuss with the trustees a multi-year approach to closing a gap. but the UK is really the main country for us. I hope that answers your questions.

Thanks. So basically, you're not worried about the German defined benefit at this point?

No. In German, we don't have a required funding level. There's no pressure from anybody, so I'm not concerned about the German situation at all.

Thanks. Thanks, Daniel. And next question, please.

The next question comes in the line of David Parsons with Jefferies. Please go ahead.

Hi. Good morning, everybody. Two questions, please. First of all, on your TDI volumes in DSL Express, I was wondering if you could give a split between the growth in, or the decline maybe in B2B and the growth of setting in B2C. I think some of your peers had seen an earlier recovery than June. But I was wondering how strong was the recovery that you experienced in June in TDI volume. Then secondly, on the air freight market, you seem to have gained substantial market share and still managed to increase the yield by far the strongest in the sector. I was wondering what's driving that substantial gain in market share? Is it the access to capacity, partly facilitated by DHL Express? some more call on that would be very useful. Thank you very much.

Thank you. So, two good questions. First of all, on the TDI volumes, I think the comparison with peers is always a bit difficult, and I think under the current circumstances even more so, given that our peers have a much stronger exposure to the trans-specific lane. while our portfolio is really globally more balanced. So when we look at what we saw on the Trans-Pacific, that is much more in line with what our competitors reported. In terms of B2B, B2C, so I would say B2B also recovered in the course of the second quarter compared to the low point in April. but is still negatively impacted towards the end of the quarter. So the strong growth driver for this significant growth in June has been B2C. Again, what is pleasing for me is that, and this is what we consistently showed over the last years, we are able to get the right type of B2C in our express network, so the express margin was really good now in the second quarter, even with this different mix compared to normal circumstances. On the airfare side, I think it's a combination of factors. The good working relationship between Global Forwarding and Express was clearly helpful, but overall our airfare colleagues did an outstanding job in securing capacity early on. And, of course, we were also able to leverage our longstanding carrier relationships and our sheer size because the name of the game in air freight in the second quarter was securing capacity. And I think we have been obviously quite successful in doing that for our customers.

All this is. Thank you very much.

Thank you.

Thanks very much. And on to the next participant, please.

The next question comes from Sam Bland with J.P. Morgan. Please go ahead.

Morning. I've got two questions, please. The first one was maybe a little bit more color on P&P and specifically what you're seeing in dialogue marketing and parcels as economies open up and shops start reopening. And the second question was on cargo-wise. I know the statement mentioned some good progress on rolling out cargo-wise. How do you think you'll see the eventual kind of efficiency improvements come through? Do you think you'll see a big, some kind of cost savings program to rationalize on the headcount or to take account of that efficiency, or do you think headcount stays the same and you scroll into the higher volume? Thank you.

Yes, first of all, on the P&P development, what we saw with the lockdown was a dramatic drop in dialogue marketing volumes, I guess not surprisingly. Here we have seen a bit of a recovery now with shops opening up. Overall, the decline rate is still stronger than what we would have expected under normal circumstances, but it has improved compared to the low points. On the parcel side, we saw the strongest peak in growth in April. And at this point in time, we are still at a growth level which is significantly higher than what we had assumed in our internal plans at the beginning of the year. So it is still very healthy growth on the parcel side, but also in an operationally manageable way. In terms of cargo-wise, thank you for that question, because unnoticed and relatively surprisingly undeterred from the pandemic circumstances, we have been able to continue with the rollout. We have a bit of a delay, but nothing material in the great scheme of things. So the cargo-wise rollout is progressing. The colleagues have found ways to do lots of the training which had normally happened physically, now in an online format. And on that basis, we are also sticking to our plans to, over time, improve the GP to EBIT conversion on the back of the cargo-wise rollout. I mean, at the moment we are still obviously far away from volume growth in air and ocean, but over time the anticipation is that we will grow into the freed-up capacities. I think that's really something we now have to see in the second half of the year, depending how both air and ocean develop on the demand side.

Thank you very much. Thank you, Sam. And the next caller, please.

The next question is from the line of Christian Nadeau with UBS. Please go ahead.

Hi. Thank you very much for taking my questions. Maybe firstly in Express, how should we think about Express margins going forward into Q3 2021? It is fair to assume that there should be upwards pressure as volumes are picking up and as the low factors improve sequentially. Secondly, in parcel Germany, could you give us a bit more color? What is happening with Amazon volumes versus your expectations at the beginning of the year? And secondly, in parts of Germany, looking at this price mix in Q2 of 6.5% or so, could you elaborate a little bit how much is due to yields, how much is due to the actual customer mix? I'm just trying to think what could be sustainable in the second half of the year. Thank you.

Mm-hmm.

Yes, so I mean on the express margins, we obviously saw now in the second half of the second quarter how good it is for a fixed cost network when volumes are coming back. And if that trend now continues in the third quarter and growth levels have been quite healthy also in July, That should be quite helpful for the express profitability overall. It's almost a textbook volume coming back into a network business. With regard to Parcel Germany and Amazon, we had said at the beginning of the year that we expect continued insourcing from Amazon and that this will lead to a reduced exposure With regard to the Amazon share, that is what we see happening now in the second quarter. So Amazon insourcing continues. But I think also on the positive side, we see such a strong and broad-based growth across many, many customers that it's really a very healthy development on the NIC side. Which takes me to the second part of your partial question. When you look at what we have now shown consistently over the last quarter, we always had a good spread between volume and revenue growth in parcel. The pricing measures are still giving us a solid tailwind here. In the second quarter, that was complemented also by a very good structural development.

Thank you very much. Okay. And then on to the next caller, please.

The next question comes from Moniba Kayani with Bank of America. Please go ahead.

Hi, two questions from me. On parcels in Germany, given the strong volumes that you've seen, how are you thinking about capacity and do you see need for investments to increase your capacity there? And then secondly, on the forwarding side, how should we be thinking about unit GP in the second half of the year as the air freight market somewhat normalizes?

Yeah, two questions. So first of all, on the parcel capacity side, I think what really helps us enormously here was the structural work we had done on making also better utilization of freed up capacities on the letter side. So, for example, using letter sorting centers for small parcels. I think without that, we would have really struggled operationally. So, as I mentioned before, it's a bit of a fast forward to a situation we would have seen with normal development probably in two to three years' time. Which brings me to the capacity question. We, of course, will have to continue investing into our parcel network, but that is something we had included in our regular CapEx plans. So I don't see any dramatic new spikes now due to what we saw in the second quarter. In terms of GP per unit in forwarding, That's a very good question. I think what we clearly expect is that the supply side will continue to be distorted in the second half of the year. I guess nobody is anticipating a significant increase in intercont air capacity in the short term. So the supply side of the air freight market will continue to be distorted. I think the difficult question is, how quickly and on what trade lanes will demand actually come back. And I think that is going to drive the overall profitability dynamic in the second half of the year. What we have seen now in July was a bit of a continuation of the second quarter trends, but it's really very difficult to predict how long this distorted situation is going to last. We really have to face this month by month.

Thank you.

Thanks, Moniba. And I think there's one caller still in the queue.

Yep, if there are any further questions, please press star followed by one to ask a question. The next question comes from Mark McVicar with Barclays. Please go ahead.

Yes, good morning. Two questions. slightly off the normal beat track. On the asset impairments, can you say a little more about what sorts of sites or assets you've had to impair and what gives you such certainty that the value won't return or those assets won't become usable again is the first question. And then second question, could you elaborate a little bit on the alternative 777 financing? If it's not on the balance sheet, it's not an operating lease, What sort of structure are you using? And is it possible that, you know, as much as the balance of the order will end up being financed that way and therefore out of CapEx? Thank you.

Yeah, so two new questions indeed. Thank you, Mark. So first of all, on the asset impairments, there are two big elements in the 99 million. The first one is 60 million in supply chains. which is an asset impairment on our pubs drink delivery business in the UK, where obviously with pubs being closed, we had a material impact to that business and also the way we now see things coming back. We had to adjust the growth perspective and that led to the asset impairment to the new assumed fair value. The second big chunk in the asset impairment was in our e-commerce solutions division, where we have a stake in a parcel shop network in France, which was negatively impacted by the lockdown measures because the majority of the shops was closed, which likewise led to an asset impairment on that investment. Those were the two big chunks, $60 million in the pub business in the U.K., $30 million the French traffic shop network. In terms of aircraft financing, we really have a very customized approach for each of the new 777s coming into operation, depending on where we want to operate the aircraft and what is, at that point in time, the best available financing construction. What we now did for the last three 777s was financing these type of transactions, which unburdened our cash flow and capex from an accounting perspective and is now leading to payments over time. And with now each of the new ones coming into service, we will take as the best solution for the respective aircraft. So it's difficult to give a forecast, which is why we have now assumed that the additional aircraft will be coming out of CAPEX.

Okay, that's very clear. Thank you.

Thank you.

Thank you, Mark. And am I right, no further callers?

Yes, there are no further questions at this time.

Okay, so that gives me opportunity before handing back to Melanie for closing. Just a bit of advertising on our behalf. As you've seen yesterday on the invite, we're going to run another virtual tutorial in September, September 3rd, on how we deal with data analytics and its various aspects throughout the group. And four weeks later, early October, we will have John Pearson's and members of the team educating us a bit on why e-comm works for Express, which has been topical also in Q2, obviously. So looking forward to that. But first, let's deal with the month of August. Melanie, over to you.

Yeah, thank you very much, Martin. Yeah, so to wrap up, I think the second quarter, under those very unusual COVID circumstances, has shown the strength of our portfolio and the agility of our organization to really react to unforeseen events. And I think we have really lived up to our purpose, connecting people, improving lives. And I think on that basis, no matter what shape or form the recovery is going to take over the next quarter, we feel quite confident that we will be able to deal with the new reality and the changed circumstances. So thank you very much and all the best to all of you out there and have a good summer if you still have a bit of a vacation coming up.