AAK AB (publ.)

Good morning, everyone, and welcome to the AAK quarter one earnings call. In today's presentation, as you heard, it will be myself and our CFO, Thomas. And the agenda for today you have on page two. We'll start with a few highlights on the quarter, some key events, an update on the business and financials, as well as our concluding remarks. And as always, we are happy to take any questions that you have after this presentation. So without further ado, we're moving into page three, some overall comments on the quarter. As communicated earlier in our early profit release, we had a strong start to the year. A strong quarter with regards to our operating profit, up 43% at the fixed FX. Sorry, 34% at fixed FX, reported 43%. As well as a very strong development on our margins, our operating profit per kilo is up significantly in the quarter, up 43% year on year at fixed FX. While profits were strong, our volumes were down by 6%, but this was mainly due to our controlled exit out of Russia. And in addition, our continued focus on optimizing different segments where we operate, and particularly in the bakery industry, we continue with our optimization program. And we have closed the plant in Europe, consolidated volumes into two other factories, but also left low margin business behind. So when looking at that, there is no real drama on the volume decline year on year. We can also, when we compare the results, see that in this and in the year-on-year perspective, our strong improvement of earnings is really due to a continued focus on our speciality solutions. It is also a favorable market condition versus last year, where inflation started to come, obviously starting to compensate for that, but not fully. So in a year-on-year perspective, there's also an element of uh more favorable market conditions or us being able to compensate fully for that so all in all a good development in a combination of focus on speciality solutions improvements internally productivity optimization as well as favorable market conditions on top of that which we now released in our report this morning we have had a strong operating cash flow which is now a one north of one billion positive And this is really linked to a better earnings, better EBITDA, as well as good development on our networking capital. So all in all, a positive also impact on return on capital employed, as well as our net debt to EBITDA being decreased back to 1.36. So with those overall comments, let's move into page number four. We're also proud to announce, and certainly linked to our strategy going forward, we need to be focusing as well as releasing new products into the market, more value-added solutions. And a good example of that is our new product, CBIS Shocker 15, with an attempt to improve product for the consumer, for our customers, while at the same time offering a, call it, value-added solution, which is affordable. So value for money creation for the end consumer. We've also made strong improvements on our sustainability journey from plant to brand. We have released our sustainability report. I strongly recommend you to read that. And we make progress in many areas and remain focused on delivering on our targets linked to science-based target initiative, as well as our deforestation-free targets in our supply chain. We've also opened up our plant-based innovation center of excellence in the Netherlands. This innovation center marks a new step for AK. We will be able to really take our customers in and together with them, develop new solutions in a lab setting, an application setting, a tasting setting, as well as a culinary kitchen to really showcase the possibilities of future food solutions that are more sustainable, more functional, tasty, and with a good performance. So that's a good step forward that we will now start to capitalize on. With those comments, we move into page five and some deep dives into the respective business areas, starting with food ingredients. Pretty much the same momentum as in AEK as a whole for the quarter. So a strong momentum continuing from last year, Margin expansion and that leading into an absolute increase of operating profits. Operating profit is up 48% versus last year at fixed FX and operating profit per kilo is up 59% versus last year, despite volumes being down. But again, part of volumes being down linked to exiting out of Russia, part of volumes being down due to the optimization of bakeries. But in the rest of the segments, we see this positive mix of internal productivity improvements, as well as being more capable of compensating for inflationary effects. So all in all, a strong development for food ingredients. If we then move into chocolate and confectionary fats on page six, here we see a somewhat larger volume drop, but that is also linked to Russia because Russia is and was for us a large chocolate and confectionary fats market. So volumes down 9% year on year, but again, mostly driven by the exit out of Russia. On the other hand, we continue to see strong momentum in our business with strong improvement of margins operating profit per kilo up 29% that fixed FX and that leads us to a total operating profit being up by 16% year on year, despite the exit out of Russia. With that, we're moving into the third business area for AK, technical products and feed. And here we can see that we have had a strong momentum for many quarters in a row, and this continued into the first quarter of 2023. So operating profit up, operating profit per kilo up, And this is mostly driven by a good development within our free business, as well as a continued good demand for natural ingredients to replace mineral oils, fossil-based ingredients in other non-food segments where we deliver. So operating profit up 33% and operating profit per kilo up 26% versus last year. With those comments, by business area, I am happy to hand it over to Thomas, our CFO, for some further comments on raw materials and the financials of AKS.

Thank you, Johan. And good morning, everyone. Continuing on slide eight. Raw material prices, as we've mentioned before, and as you've seen, has since the decline began by mid last year, leveled out roughly half of the peak that we saw in Q2 in 22. The current price level is still significantly above pre-pandemic levels, as you can also see. And a quick reminder that changes in the raw material prices have a large impact on working capital and our capital employed. And as you can see on the slide, a 10% change at current price levels is estimated all else equal to have a plus minus 500 million sec impact on working capital and an estimated time lag of roughly six to nine months. There is some uncertainty of the time lag given the mix of raw materials, and the 10% impact value change has been adjusted as the new raw material prices have, or as raw material prices have declined lately. Turning to slide nine. And as you might recall from the last quarter Q4, we had a solid cash flow driven by a strong finish to the year. And when we look at Q1, we can see that the underlying positive trend continued. The quarter generated a positive operating cash flow, as Johan mentioned, of 1.1 billion SEK at par with the Q4 cash flow driven by a strong EBITDA as well as a reduction in working capital of roughly 400 million SEK. And as expected, lower raw material prices as well as improved inventory management had a positive effect on inventories and the cash flow for the quarter. The positive effect from inventories was somewhat subdued by lower accounts payables, as you can see, which declined faster than inventories due to existing shorter account payable terms relative to account receivable terms, mainly related to procurement of raw materials. meaning that there is a timing effect in Q1 in how raw material price impacts payables versus inventories and then subsequently receivables. The cash effect from accounts receivables was slightly positive, as you can see, but just slightly. Interest costs increased quarter of a quarter compared to last year, mainly driven by higher interest rates, as well as a slightly higher net debt and additional committed facilities compared to a year ago. And the average tax rate remained unchanged at 24%. Jan-Willem Wasmann, CapEx total 362 million SEC and what's related to production improvement, such as the bottlenecking capacity optimization and the continued construction of the biomass boilers, we are putting in place in all who's Denmark, as well as our recent acquisition in India. Other non-cash items had a negative cash flow effect of 246 million SEK, and this was mainly driven by unrealized hedging contracts on raw materials. And during the quarter, the valuation of unrealized hedging contracts had a positive impact on EBITDA, but this was offset by a negative effect from realized hedging contracts and inventory revaluation as a result of our back-to-back hedging model. This resulted in a net P&L impact that was roughly neutral between these items. And that's the intent of our hedging model as well. The realized hedging contracts are cash and included in the free cash flow. The unrealized hedging contracts, on the other hand, does not have a cash flow effect and is therefore adjusted for in the item other than on cash items. Next slide, please. Slide 10. Return on capital employed reached 15.2% in the quarter, driven by improved profitability and up from 14.5% at the end of last year. And close to the last peak, we've had a 15.6% at the end of 2021. Slide 11, please. And then finally, net debt EBITDA ratio was reduced further in the quarter, ending at 1.36%. down from the peak of 2.03 in mid 2022. And in all respects, substantially back at the level we saw before the impact of increased raw material prices. Johan, back to you.

Thank you, Tomas. So when summarizing that quarter and to wrap up this presentation, I think there's no doubt that this is a positive quarter. strong improvement of absolute earnings, strong improvements of margins, as well as a strong cash flow. So really good to see that. But more importantly, I see this quarter together with the development we've seen over the last one and a half year. It's a good milestone in a way or a confirmation of our journey towards our 2030 aspiration. We have set out to double our margin in terms of EBIT per kilo, while at the same time growing faster than the market and making increasingly positive impact. And while volumes were slightly reduced, but for reasons that we well know, some positive tailwind, there is also very, very strong development internally, both in terms of optimization as well as a continued focus on really delivering high value added speciality ingredients. So when looking ahead, we feel very confident with our strategy, with our 2030 aspiration, and that's the key going forward. So all in all, we remain prudently optimistic also about the short to midterm, but fully geared towards the 2030 aspiration and making sure that we, in everything that we do in our organization, keep that in mind as we execute on our strategy. With that, we are happy to take any questions on the quarter or our view on the long-term horizon.

If you wish to ask a question, please dial star five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial star five again on your telephone keypad. The next question comes from Alexander Jones from Bank of America. Please go ahead.

Great. Good morning. Thanks very much for taking my questions. Profitability this quarter. Johan, you talked about some of the profit growth being driven by your ability to catch up on cost inflation that you weren't able to price through quickly enough in Q1 last year. Are you able to put any numbers to how much of the profit growth this quarter was driven by that effect rather than by the focus on specialty solutions or productivity improvements? And then second question, was there any element of the level of profits this quarter that's driven by a temporary benefit from raw materials decreasing that may then fade in the coming quarters and lead to the absolute level of profitability that to dip slightly as raw materials stabilize. Thank you.

Thank you. Thank you so much for your questions. And first, it's difficult to make a sharp line what is really catch up versus what is strong execution in our pricing in the market and so forth. But they are certainly linked. So I'll try to give you as good of an answer as possible. When we compare year on year, as we do in this quarterly results, there is an obvious, there's been quite some dynamics in our industry, like many others. Rapid inflation, raw materials, as well as energy, as well as other input costs, as well as the disturbances in supply chain and relate to the the invasion of Russia into Ukraine, etc. So many elements impacting, of course, business dynamics. You've seen AK being strong in executing, strong in managing, call it uncertainty and dynamics. What we refer to as they call it catch up or ability to compensate is that it's even though we're trying to be ahead of the game always. I think it's fair to say that while a lot of things, if not everything was kind of moving There is, in some contracts, a bit of a lag effect. In some areas, we had to really do our own homework and analysis and make sure we push things through. And we have done that in a good way. So just looking at quarter to quarter, I think it's fair to say that part of this is, call it catching up or now making sure that every contract does include the fair cost valuation before pricing. and then linked to how much is then potentially a positive link to raw material prices falling down and we sitting on contracts. Just like we explained, I think, some time ago when we sat with longer contracts in China, for example, which we couldn't fully compensate for when raw materials came up. I mean, same thing here. We sit with contracts and then raw material prices fall down. In most part of the business, we are back-to-back hedged. There is not a big impact. But of course, there is a slight impact of that. But I think it's more important to say that we are now more across the board covered as we should be. And we priced it according to market conditions as well as our own ability to operate. So difficult to say how much is, you know, risk of fading down. But I think it's fair to say that also a fair chunk is structural improvement by us, one, on pricing or compensating, and two, on a continued focus on the specialities, as well as our internal productivity. We've spoken about our efforts on de-bottlenecking, about the optimization in bakery. Everything plays in here, but we do not give specific numbers on every line item. But that's the mix, as we see.

Maybe we can just follow up to bring that together. Would it be fair to say you would expect or think that this can be a new level of profitability then, that you can grow your 10% algorithm off going forward?

I fully understand your question, but let's be also humble to say, in any journey towards, in our case, our aspiration, which is clearly targeting higher margins, it's always going to be a bit of a curve around a direction of travel. So I would be careful saying, yeah, this is now the next level. It will only go up from this. There will be better quarters. There will be worse quarters. But we are very confident in the direction of travel, which is towards our aspiration of doubling our margin. And that's where we will continue to focus. And we will come back to that in many calls ahead. careful to kind of draw a firm line. This is the new floor when we just delivered a very, very strong result. But it's certainly a confirmation of the reaction of travel.

Thank you.

The next question comes from Oscar Lindstrom from Danske Bank. Please go ahead.

Yes, good morning, gentlemen. Two questions from me. The first one is on the negative volume growth. I mean, as you pointed out, the majority of it is driven by the choice to exit from Russia and a fair chunk also from your own measures to optimize the portfolio. Is any of it, and if so, how much driven by weaker underlying demand And do you see any such weaker underlying demand sort of having a larger effect now later this year? So that's my first question. Should I go ahead and ask the second question as well?

That's okay. We can take this one if you like. So you certainly listened in, which is great. So I don't need to repeat, but I'll do it anyway. Like first, yes, exiting Russia. Second, our own measures. But then there is a market impact. So when we look at data on the different industries that we serve, we see that there is a low single digit or 1 to 3% decline in volumes in general. And that I think one could defer to as a general pressure in the total market, higher interest rates, inflation. consumers are a bit more careful. So the underlying market is also reduced a bit. If you look at that, there's no drama in the AAK numbers, more or less following market. On the other hand, I think it's worth reminding us about AAK's position. We deliver specialty ingredients. We deliver plant-based ingredients that in such, we often replace animal-based ingredients. And at the moment, I'm not talking just about the plant-based alternatives to meat and dairy, but the use of plant-based ingredients instead of call it animal-derived ingredients. And that is often due to functionality and price. Same thing in chocolate and confectioner fats, where we have our offerings of ingredients that could replace cocoa butter for a cost-saving and functionality improvement for our customers. So that's why while we are confident when looking ahead, as well as we can look in the mirror, we have often delivered in both upturn and downturn. And I think that has a strong link to our broad portfolio, which often offers a cost performance opportunity for our customers. So even in a setting like this, when there is cost pressure from consumers and society, we have solutions that can help our customers also reformulate towards a more affordable product. So while at the same time, in other segments where we have a high value added solution with a high price, there is a risk that that becomes a bit pressured, but a good balance in our portfolio.

If I may just a follow up on that. Are you seeing any destocking impacts on your volumes in the quarters ahead?

I thought you were going to ask, do we see any destocking in the quarter and the recent quarters, but you asked ahead. So let me answer it this way. We have certainly seen and we know from dialogues with customers that there has been elements of destocking while the destocking in our industry and where we supply hasn't been big like in other industries where it's been very visible. But there has been some destocking. Link to what I believe is a general uncertainty. Our customers having a bit more on stock and buying in advance. Candles is an example of that as well. So and then as we now hopefully entering into a slightly more stable business environment, you see elements of the stock. But we I would say we've already seen that and it's already part in these market numbers that we just talked about. So I couldn't say that we see a major risk of destocking ahead, but I also don't have the exact stock values of every item that we sell to our customers. So there could be something, but I don't think it's any drama compared to some other industries.

I think, as Johan said, our view and the transparency into our customers' stock levels are not fully transparent. I would say it's been in certain segments. We've seen some of it, but as Johan mentioned in candles, but it's not an overall driver over the last couple of quarters, I would say, a feeling of destocking. That's not what we've seen. Right.

Thank you. And then my second question is probably to you, Thomas. When you talked about the working capital, you said that your payables were impacted before your receivables by lower raw material cost, if I understood you correctly. Is that effect then going to reverse in Q2 or is it going to get more negative first?

I think the timing of this, and as I've said before, the model we have is not a perfect one, right? But I think what we've seen now is given the disparity between our existing terms in accounts payable, primarily driven by raw material procurement contracts, and then what we have in our accounts receivable with inventory in between, I think the effect on accounts receivable, and we saw that too, it took place much faster and earlier and then you see the effect on inventory which you do but we expect that to continue to some extent and receivables are fairly flat in the quarter so the effect takes a little bit longer to get to that section of networking capital so I would say that as we've stated before we expect to see continued positive cash flows in the year But the timing of it is a bit uncertain. That's where I would leave it going forward, I would say.

All right. Thank you very much. Those were my questions for now.

Thank you.

The next question comes from Joan Lim from BNP Paribas Exane. Please go ahead.

Hello, I have two questions. So I'll start with the first question first. In terms of the strong operating profits and then the optimization that you have been referencing, how much further is there to go? Because, for example, the optimization has been ongoing for the past two years, right? So it'll be interesting to know how much more you think there is to go on this.

That's my first question. Thank you. Yeah, thank you. Yeah, we are certainly not done with optimizing. We have ongoing activities and at first the most significant we have chosen to highlight, which is in bakery where it includes a factory closed down as well. But there are optimization activities ongoing in our other parts of the business as well as we have commented before. And that is everything from operational improvement, operational excellence activities across the globe, Jone Peter Reistadler, The bottlenecking versus investing in in capacity for higher volumes or other work with the assets, we have to free up capacity and grow with that and that has had a positive impact across the board. Jone Peter Reistadler, Not only in bakery and we think there is more to give I think in bakery were probably closer to. having done a fair chunk of that. But on the other hand, we see opportunities in the other industries where we're sort of rather factory by factory in AK, and that's part of our strategic plan going forward. It's actually part of the journey towards our 2030 aspiration. So to deliver on our doubling of margin, it is one, selling higher margin type of products, but also making sure that we are improving our cost base and productivity. So in essence, lowering the cost per kilo as well. And there we see a continued opportunity. So yes, we have more to give, but one should be humble to look at this sequentially quarter by quarter. This was a strong move forward and a very good step forward, but we should see this in the long run, but we're very confident on that journey.

Thank you. And my second question is on your guidance. So you say you remain prudently optimistic. But given the strong start of the year, why do you still remain prudently optimistic? Do you not expect the growth drivers to continue?

That's a fair challenge or question, I guess. I think it's fair because I think it's always in business and certainly in times of uncertainty. Choose the word prudently or very optimistic, but I think it's fair to say we had a very strong quarter in a year-on-year perspective. We have delivered sequentially improvements quarter by quarter and we remain committed to our strategy, committed to the aspiration, as I mentioned a couple of times. But I think we have all seen dynamics in businesses. There's never a straight line forward. There's always going to be a curve, a bit up, a bit down, a bit worse, a bit better. So I think the best word we have for it is being prudently optimistic and focusing on the value drivers, which is linked to our product development, our focus on speciality solutions, working with our product portfolio. And we have a financial target of 10% EBIT growth year on year. And this quarter is much higher. We have had quarters in the past which were lower. There will certainly be quarters in the future that will be lower in a year on year perspective. So I don't think it makes sense to kind of dissect it more than that. We are confident on the journey. It's a very strong quarter. And there will be maybe not a bumpy ride, but there will be ups and downs on the journey going forward. I don't think we need to kind of change the wording there. We're prudently optimistic, we have good opportunities and we're well positioned to take advantage of growth opportunities going forward.

Okay, if I can squeeze in one more question and just quickly on the EU deforestation. You had a line saying that you have raised concerns on the new regulations.

um are you able to quantify the impact of any additional administrative burdens required to comply with this new regulation the short answer is no because this is it's not given exactly how it will be implemented it's not given exactly uh where we will land and it becomes uh it becomes a bit it will only give a wrong uh interpretation of the future because any Any up costs will then lead to either increased quality raw material prices that will be forwarded into the formulations for our customers at the end of the day, be paid by consumers. If that would be an up cost, but at the same time, we also work with supplier development and enabling us to prove what is needed for the EU. to allow the volumes to flow in. So there's a lot of work that is going to be between now and the implementation. And even if early days there will be some up costs in the longer run, we will continue to develop the supply chain. So the demand and the ask from an EU perspective is not an unreasonable demand and ask. And we are very positive because we also fight deforestation. We have asked for more policymaking coming into play. So in that part, we're very positive to that. The concern we're raising is what we think will be the case now. And that is that the EU is demanding proof points that are called negative from a efficiency point of view. And I think it's a long answer, but I'll try to make it short. So if we buy a satellite photo can prove that there's no deforestation, that makes it still efficient to collect uh crops uh for our suppliers and to process this without having to separate certain flows but if then the eu is demanding geolocations on certain very small plots of land then all of a sudden you trigger the industry to have segregated flow storing fruit bunches raw materials in segregated silos containers and then have batch runs that you segregate and store in different tanks and the same thing on the transportation of ships and on and on and on, right? So it becomes an inefficient way just because EU decides that that's the proof level they would demand, but it's not necessarily leading to any less deforestation. I think it risks leading to EU or countries in EU, customers in EU reformulating to other products, which we can help with. and or buying at an up cost versus the rest of the world so that's where we have raised our concerns and we will continue to work with eu to find hopefully a better balance for how to prove it but at the same time it's certainly possible and we are very positive to policy makers helping us and the industry to move towards zero deforestation okay that's very helpful thank you very much that's all from me

The next question comes from Alex Sloan from Barclays. Please go ahead.

Yeah, hi, morning all. Thanks for taking the questions. I've got a couple, please. Just on the first one, going back to the comments around back-to-back hedging, Johan, I think you said the majority was back-to-back hedge, but there were some longer-term contracts where obviously you have more variability on the input cost trends. I wondered if you could quantify where we are on that now, maybe both in the quarter one that's just gone and for the rest of the year in terms of what is back to back edge versus what's longer term where there's more variability. And then just secondly, thanks for the color just there on the EU deforestation regulation. I wondered if you could quantify within the TP and F division how much of that division relates to palm oil derivatives that are sold in the EU and if there's any risk to that business based on the proposed legislation. Thanks.

Thank you. First one being, I think we have seen most of the variability in this quarter. But again, from a step function point of view, I think we've seen a lot of that. So don't expect it to be another bump up, if you will, but there's still going to be variability. So both up and down going forward. With regards to the EU deforestation, I think we want to be very clear to say that this is a change in legislation. This is a change in policymaking. We have to deal with that like we have done with others. This means that there is going to be opportunity for reformulations where AAK is very strong. There's going to be risks, as you alluded to, on certain raw material supply that will be at risk, call it, but where we will then put actions into sourcing it in a way that is fully compliant and or reformulating ourselves to offer the same product with a new solution and or doing that together with our customers. therefore it's it's key at the moment to not see it as a as a negative we're quite positive on the change but we are concerned with the way they are uh embarking on or improving this or asking the industry to prove it in a very inefficient manner and then to tpf yes tcf does soar you know secondary secondary fractions or or waste streams which is in itself a very positive sustainability play, but if the EU legislation is then putting a damper on how you can source this, there's a lot of background on this, so can you maybe mute? Is there a possibility to mute maybe? So, thank you. So, while the whole business around technical products and feed has a very strong sustainability play, there is a risk that some of the sourcing will be more difficult to get if it's difficult to prove according to the regulation. But on the other hand, we will then find other alternatives and make reformulations and new offerings. And we're already working on that as a continuous plan. So yes, is there a risk of some of the material source being more difficult? Yes, it is. But on the other hand, is there an opportunity to find alternatives? Yes. And will it lead to potentially other business opportunities when formulators and customers uh linked to other raw materials also being impacted by this legislation coming to aka for help and and that's where we are very strong so again it's a mixed bag it's very early days but we are on top of it thanks very much thank you as a reminder if you wish to ask a question please dial star 5 on your telephone keypad

The next question comes from Simon Ayas from DNB Markets. Please go ahead.

Good morning, guys. So I have two questions. The first one is on working capital. So it was still high in the quarter at 10.5 billion, and I also noticed that this impacted your interest cost in the quarter. So should we expect this effect to become smaller through the year as your working capital normalizes, or how should we think about this? That's my first question. And then my second question is, could you give us an update on India? How is it progressing here?

Thomas, will you go first? Thank you. As regards to working capital, as you can see also in the underlying development of working capital in the quarter, inventory has come down quite substantially and that is offset by the quick reduction in payables as well. And as I mentioned before, I think the payables will, due to the existing that we have, the impact there is faster than what you see in inventories and then subsequently in receivables. So that development will continue. As it then relates to interest payments, of course, we will always try to optimize our networking capital. And then, of course, that's also very much dependent upon where the interest rates continue to go, of course.

But everything else, obviously, with a lower net debt, interest rates will go down over time. But that's how it is. Depending on how it moves and if it stays as it is now, then we expect it to go down over time.

And as we've said then, we expect the cash flow to continue to be positive throughout the year. We're not done networking capital-wise. That's not what we see yet. So, yes, and it will be a cost of impact.

Thank you.

And then we'll go... Okay, that's fine. Yeah, we'll make it up.

New efforts in India, in Kakinada. uh we have taken over that now uh no uh no news in terms of any negative so kind of as a connected takeover we are ramping up the plant the good trials i just had actually a status report yesterday from the team so uh very good development so far but it's still very early days but our testing of equipment and and so forth has turned out positive so we are kind of starting up the plant and then we as you know from the press release we're also going to invest make the plant even better and enable us to serve customers in with our full portfolio but we're already now up and running with the assets that that stand there and when we took over okay thank you that was that was all my questions thank you there are no more questions at this time

So I hand the conference back to the speakers for any closing comments.

Thank you. Thank you all for listening in. Again, a very strong quarter year on year, also sequentially. We are focused on the items that we see and the good underlying trend, which is really a confirmation on our journey towards our 2030 aspiration. So while we are somewhat helped by positive tailwind and now compensating fully for inflationary items. It's also a strong contribution from internal improvements, optimization, a continued focus on our speciality journey. We are a multi-oil ingredient. house focused on plant based oils and fats and we see opportunities within food as well as within non-food solutions replacing mineral oils and fossil based ingredients so when we sum all of that up this was a good milestone there will be a journey ahead and there will be better quarters worse quarters but certainly a good step ahead towards our 2030 aspiration so I think with that we will leave it thank you