Swedencare AB (publ)

Hi and welcome to the presentation of SwedenCare's half-year report, led by our CEO Håkan Lagerberg and CFO Jenny Graflind. We are pleased to have our European CCO Laszlo Varga joining us with a presentation during today's webinar. We will have a Q&A after the presentations, so please raise your hand if you have any questions and we will answer them in the end. Over to you, Jenny and Håkan.

Thank you so much. Håkan Lagerberg and Jenny Graflind here. Thank you for your attention. And we will present the Q2 2024 report here. Yes, Q2 2024, new sales record, so showing growth and profitability and lowering our debt level. That was main areas. The growth was 10%, a bit lower than I expected. And what was the downturn in our sales was primarily the Vettner channel, not on average, but some primarily are big bigger exclusive partners taking advantage of different situations here but where we control the end sales we have had strong growth and looking at online has been fantastic for us and pet retail Overall, really good. And then you should remember that our biggest group company, NatureVet, had a bit tougher comps this quarter. And also due to some of the reorganization we did, the NatureVet as a whole had a small, small decline in sales. So, of course, that makes it tougher for us to show. So really strong growth. Many of our group companies had growth of 20 and 30%. So a bit mixed quarter, but still double digit growth and real strong efforts from all of the group companies when it comes to dedication and hard work. Looking at a record quarter for FlavorPal and Protein Plakoff as an ingredient. I would like to highlight that since it's a bit of a new area for us selling an active ingredient. And we have really strong demand for FlavorPal, record quarter in the sales. Lots of tests going around the world among many of the biggest pharma companies in the world in animal health. And we look forward to having a steady flow of sales when it comes to FlavorPal. Herd and plaque off as an ingredient is when we add it to a pet food. We have... launched together with one world-leading veterinarian brand being launched initially in Europe and looking forward to taking that all over the globe. And also we have increased our sales with our Brazilian partners. So really a good trend there. We made two smaller acquisitions in the quarter, both trademark or brands, HSP, a Generation Z-directed brand where we already are manufacturing the products being sold, primarily sold online as of now, but we see some openings in fiscal retail stores as well. And then we picked up Vetworthy, a well-known brand in both online and primarily pet retail. And we will this year sell out the inventory that we took over and then make a relaunch in Q1 2024, both online and in the pet retail channel. And then finally, just yesterday, we announced that we had signed the agreement for an acquisition in Canada, a company called Medvant, a small and lean veterinary distribution company, and also a product company. They have a product line that's really interesting. led by Brian Thomas, a seasoned leader in the vet space. He used to be the country manager for Siva in Canada, and he has built up this company for a short period of time. And they are our distributor for one of our brands, RX Vitamins. And it's a really lean and... good operation and I expect us to be able to use them for launching a lot more of our brands in Canada. Canada is an interesting pet health market, around 4 billion US dollars in sales and expected CAGR of 7% going forward and we will launch and already have launched one European brand, NutriVet, in collaboration with an IVC company in Canada and MedVent will help with that launch as well. Another happening in the quarter, Interzoo, the world's largest biannual expo. Several group brands participated for the first time in a joint booth and we had lots of activity in our booth and lots of good leads and follow-ups from that. So great happening and also good to see all of the group companies collaborating. And then an important highlight in Q2 was the NatureVet reorganization and the innovation pipeline that's set now for going forward with the NatureVet brand. Lots of things happening there, being a more focused organization, and that will definitely have a big impact on our sales going forward, primarily 2045 and onwards. We have also initiated a strategic overview of our Amazon sales of the NatureVet brand. As you know, we made a change in the UK where we took back the sales selling FBA on Amazon. That means that we control everything when it comes to sales and marketing. We also control and get the top line sales. We have a different setup for the NatureVet brand. We have a a good partner that's handling that today. But we are looking into if we want to make some more changes when it comes to the sales on Amazon. But that will be announced later on if that happens. Jenny, over to you.

Yes, Q2 of 24. Håkan will present more about the revenue for the regions. And it was another record quarter. We had 10% organic growth. Our operating growth margin increased with 17% to almost 28% compared to 54.7% last year. EBITDA is 141 million with a margin of 22.3%. We continue to decrease our net debt to EBITDA, which is now at 2.37%. And our operating cash flow amounted to 81 million. And at the end of the Q2, we had 170 million of cash. So again, I will not talk about the revenues much because Håkan is going to cover that, but we had growth in all our segments, in all our products group, and also in all our regions, except for the rest of the world, which stands for 2% of our revenue. In addition to that, we grew with 6% compared to Q1. Growth margin has increased as we expected and is now at the level which we have communicated that we wanted to be at. The OPEX cost has been slightly higher this quarter than previous quarters. About half of this increase is related to increased marketing spend and marketing cost, which is associated with the sales that we have in the online channel. And then the second half of the increased costs are more one-off costs, such as, for example, we paid severance costs for the reorganization at NatureVet. We have had some moving costs because we have just one more entity moving into our logistics center in Tampa. During the quarter. So in addition, Q2 was also the last quarter where we have double rent cost for three of our locations, which we have now left in the last nine months because they are now sublet. It's also the last quarter where we have double salary costs for some positions, which we have been phasing out. And despite the slightly higher opus cost for the quarter, I'm happy to see that we have leverage in the business when both gross margin and EBITDA margin improves and that at a higher pace than the revenue. And this trend, I expect to continue. Cash. We had a negative change in working capital this quarter with 36 million. 10 million of the increased inventory is due to this acquired inventory for a wet birthday, which I just spoke about, which we acquired during the quarter. And in addition to that, part of the higher inventory is also due to some preparation for product launches that we have in the second half of the year. And the higher level of receivables is mainly linked to the higher sales. And during the quarter, we've been able to make a dividend to our shareholders of 36.5 million. We have made these two asset acquisitions with a cash payment of 38.4 million. And we have also paid down our debt with 50 million. As I mentioned in the past and in the report, we have set up a cash pool structure in the US, which is the main reason we now have a lower cash level. And we can use much more of our available cash in the group for investments or decreasing our debt. On our net debt to EBITDA, it continues to decrease. It's down 30% compared to one year ago. And we were able to decrease this compared to Q1, despite the fact that the net debt was impacted by the purchase price of the two acquisitions. While at the same time, they did not contribute to the performance of EBITDA. For the first six months, our revenue is 1.2 billion. growth of 12%, which 11% is organic. EBITDA is 280 million. This is an increase of 25% compared to last year. And margin has also increased from 20.5% for the first six months last year to 22.8% this year. Rolling four quarters, as you can see, we continue the trend. We have now 2.5 billion in rolling 12 months revenue. Product and brand split. Like I said, growth in all product categories, which is great. Dental, which mainly then includes the Proton Black Off and a few other dental products, grew with 35%. The main contributor to this is the Proton Black Off powder and the ingredient that I mentioned, which we sell to pet food producers, as well as our soft chews. All these had growth over 40% for the quarter. And Pharma also had a record quarter, and there's both growth in development projects and manufacturing projects, as well as the sales of this company's unique flavor ingredient.

Net sales for the different regions. North America, 485 million SEC is 6% growth, and Lower than expected, as I explained. And it was primarily due to the NatureVet brand. Last year, we had launches of scoopables and also some of the products in NatureVet that had ingredients of protein pack-off. And this year, we launched breed-specific products. a specified product line with focuses on different breeds. And that launch has happened in Q2, but has been pushed a bit in Q3 with some of the bigger retailers. So that's why it couldn't really make up for the big launches we did last year. But important happenings, improved and channel-focused leadership in NatureVet, as I said. RxVitamins, really interesting. It's a vet-focused holistic brand that we have only sold directly to vet clinics and a bit online. And now we have signed our first national distributorship. So it's a lot more accessible for veterinary clinics. So that will be interesting to see next half year and also next year what that will impact our sales for ARX vitamins. One of the challenges we had was with our bigger distributors and their non-performance of the forecast that we got in the beginning of the year and what we expected. And it's been, I guess, focused from them to be very lean on inventory and having a higher frequency of orders to us, but that has created some challenges for us. And actually, it's been too low, low inventory levels with our distributors for us to be able to fulfill and also for them to be able to fulfill the market demand. So now we have come into an agreement to extend the days of inventory that they will keep on hand. So I expect it to be a lot better second half year in this channel. Looking at the different brands, brand winners, definitely PetMD continues to grow plus 25%. Really strong performance online and also improving the profitability on those sales. Proden Plakoff continues, really fantastic. All of the... big retailers that bought in Black Off last year and early this year has exceeded our expectations in sales. So plus 30% growth. Riley's we knew would grow a lot since it was from low numbers. And then I would like to highlight the RCDMO activity up in Canada. Fantastic quarter and the demand is really really strong and we are now getting into the momentum where we have more, let's say, frequent and more regular manufacturing activities up there. And I expect that to continue the years to come. So really nice to see that having a 39% growth and we expect a lot more from them going forward. Looking at Europe, the trend from Q1 continues, 31% growth, all channels strong, and specifically the demand both internal and external when it comes to our soft shoe offerings. So we're ramping up both in UK and Ireland. And you should note that we have had basically one month down in UK during the quarter. So, and that... And that was the reason that we had to utilize our US manufacturing for the European market. And that will probably phase out during second half year. And in any case, we will ramp up our capacity a lot when it comes to Ireland and UK. So the demand is really high there also going forward. And both internal, what I mean with internal is where we have our own sales activities and external European markets grow. So we have had a really strong quarter when it comes to markets where we don't have our own setup. And that's, lastly, we'll present that a bit later on. Just strong brands, well-issued launch of that, not really taken off. I mean, a good... Reaction from the market and interest, but the sales volumes, of course, small from the beginning. Plakoff Soft Juice, really good launch. And NatureVet by Swedencare. Lastly, we'll present a bit later on. Brand winners, Proto Plakoff and NutraVet. NutraVet had a really strong quarter, both for the UK main market, but also on the international side. Rest of the world, a solid quarter, still working on some big opportunities that will materialize a bit later. It always takes some time when it comes to international market, but strong interest for all of the brands that we all have out there already. And really, really... encouraging to see that China is starting to pick up again for the first time for a couple of years. And they have also forecasted a strong second half year. So looking forward to that. And then priorities going forward. Not much change from when we presented last quarter. Definitely growth, profitability and lowering debt level. Looking at Q2, as Jenny said, the profitability wasn't at the expectations that I had, but there was a lot of one-offs and going forward, I expect it to improve from now on. Closing the right partners for NatureVet in big box retail for 2025 and onwards. That's a lot of focus on that. And I'm very confident that the team will come up with some good partners for us going forward. Evaluating move from external to internal concerning manufacturing. Yes, as you know, we are at the high level now when it comes to manufacturing our products, our own products, but still there are some opportunities where we can take it back and perhaps expand the product offering. Looking at online sales, what I mean here is that we have a couple of brands that have their online sales that they handle themselves. And we are now looking to utilize the PetMD platform for more brands in our group, since they have a really good setup. So that will happen in the second half year. Continue having lots of product launches and development. And to mention some, both Innovetta, our Italian company, very research-focused company, have launched a new ear product line with three products. And also Neutroeth is just about to launch a series of ear-related products. And then lots of my focus is really the strategic partnerships and integration with major customers, being updated with that and helping where I can with that. That's really the go forward for us to be able to grow faster than the market, like we did this, even this quarter when a bit more, when we delivered 10% growth, that's definitely more than the market, but I expect more. And then evaluating potentially closing on M&A opportunities. As you've seen, we have made some smaller acquisitions. We are in some other discussions. But I would say that the M&A market as in general, not only for us, is still a bit cautious. And the sellers and buyers are not really moving as of yet. But there are activities not only for us, but also in the market. So I am sure that will happen.

Laszlo, over to you. Thank you. So let's start the video. Hi there. My name is Laszlo Bargett. I'm the chief commercial officer for Europe. I joined SwedenCare in August last year, and my background is within mostly digital retail. There is some physical retail, both European and in the US. And I'm happy here to share with you some of the highlights of the European strategy going forward. So let's dive right into it. The European market is very similar to the US market in many ways, and the reason I'm comparing it to the US market is because the US market is the leading market in pet supplements and the pet segment, and the European market follows the US market. by a couple of years trailing. So there is about the same amount of households and pets, cats and dogs in the European market, but the spending per household is lower in the European market compared to the US. Europe is following most of the trends that we see over in the US. For example, the premiumization of pets and the humanization of pets. Around 70% of Europeans now view pet as part of the family, where if we go back 10, 15, 20 years, the pets were in the garden and now they're in the house and even sleeping in the same bed. So there's been a huge shift towards that. Other factors that are relevant for our market and our segments is the increased focus from pet parents on preventative care with the increased life expectancy and pet health care costs. There was an underlying strong growth in the pet supplements market in Europe with a CAGR of around almost 6% expected until 2033, which is up from the past five years trend of 4.7. And the global e-commerce sales of pet care products is also growing strongly with an expected care of 7.64% in the next seven years. So how are we going to position ourselves to make the most out of this? The European market is somewhat fragmented compared to the US market. There's different languages, different markets, which is both a challenge but also a strength that we have. because we have all the capabilities that a strong multinational company have. At the same time, we have local competencies and knowledge in the local markets, both by our own presence and by recent acquisitions. Our brand portfolio in Europe is good, but it's not as wide as it could be. And this is another strength we have. We have both brands in Europe that we can introduce into the European market, but we also have strong local brands that we can expand to new markets within Europe. There's also product categories that we're not really utilizing to the full potential here in Europe. The best example is topicals and grooming products, which account for around 23% of group sales, but a great majority of this is in North America. There's only a small piece of this, which is in the European market. And then the online shift, as you can see, the online growth of pet products and pet care products is growing quite good. And it's important for us to have the right capabilities and competencies, both in-house and externally, to be able to take most of these opportunities. So it's building on strategic partnerships, expanding in marketplaces and our own in-house performance team. So diving deeper into these different segments of where we position ourselves the best for growth. Launching the US brands. NatureVet is one of the leading or the leading pet brand in the US market. Bringing that over to Europe will help us not only as a trusted brand, but it's also extremely palatable and a very nice formula and flavor. So we're bringing over the most popular products in the first batch and launching that we've launched it in Q2. We're also increasing focus on PetMD on the European Amazon markets for the rest of the year. PetMD is growing very solidly and strong over in the U.S., And we believe that we can bring some of that success over with the reviews and the data that we have to get the same success over here in Europe. And RxVitamins, very strong niche products towards more of the veterinarian sector. We have done some pilot tests or some smaller tests with good success. So we're rolling that out even further. Then looking at our local brands, we have NutriVet and Innovet, very strong in their local markets, and we're going to expand these to new markets across Europe, both through subsidiaries and through distributors. We've already started in Spain and Greece, and France is being planned for next quarter. Looking at the dermatology and topical products, these are shampoos, anti-itch shampoos, ear cleaners, tear wipes, and similar products. Extremely popular and high in demand. We have a high quality range of products in the U.S., that are selling really well. And we've started to introduce these in Europe. First, under existing brand umbrellas, for example, NutriVet launched Best Choice just recently in Q2. And we're going to be launching it under the Nature by Swedenker brand in Q4. We're going to be doing additional launches in Q4 and more on that later. The InnoVit range is a strong, highly scientific and research-based range, and we're introducing them together with the other InnoVit products in the select markets that I presented previously. Lastly, but not least, looking at the online strategies that we have, we're looking to really strengthen our presence online because this is where consumers go and look, whether they're purchasing in a physical retail store or making their purchases online, Almost all of the research is, prior to purchase, made online. And this is where it's important for us to make sure that we have the right presence and the right strategies to make sure that we position ourselves and capture the audience when they're making their research. So for strategic partnerships and online growth, we are going to introduce NatureEd by SwedenCare in Europe with Zooplus. Zooplus is the leading online platform and that will be rolled out in Q3. We're very excited to see that because Zooplus is a major player in the European market and have around 11 million active customers and being able to tap them and doing activities with them to launch the product is something that I'm really excited to do and looking into. Marketplaces is around 30 to 40% of online sales in Europe and the European markets, around 44% in the UK and down to around 33% in France, I think. We've done very successful strategies with Amazon in the UK, and now we're going to be rolling that out across the more European markets. We also see a growth in more marketplaces. It could be on the social media platforms where you can start to make purchases, and that activity is growing, but also more of the local marketplaces like Otto in Germany and bol.com in the Netherlands. To be able to support this and all of our other online activities, we're building an in-house performance team. which will help us both with the activities that we ourselves are doing, but also the activities that we're doing together with strategic partners and on the marketplaces. We've also launched a new e-commerce website in Europe. The main value that this will give us is a one-to-one relationship with our customers, which will provide us with deeper insights and understand the needs and behaviors which will make us be able to act faster, whether it's in our own channels or external channels, everything from communication, but also to product development, where we get the feedback instantaneously. So just to look at our possibilities in the European market, it's a growing market and we have a great platform to end the pieces to continue and accelerate growth here. Growing 31% over Q2 compared to last year and I believe that we can continue that and even increase that if everything falls into place. With the strong product portfolio, expanding the offering that we have across the European market, launching new products in the largely untapped topicals and dermatology ranges, continue with existing but also new strategic partnerships, and then just building our online strengths overall for all products and all channels. That was the European strategy going forward. I would also like to share a couple of highlights from our sustainability work in Q2. We have researched and reviewed alternatives to more sustainable product packaging in Vedeo South. Our products are perishable and have a different demand, so it's a little bit more complicated to change the product packaging, but we believe that we have a couple of really good alternatives that we can move on to. And once we're finished with this, we will be implementing that across the group. We have also a double materiality assessment that is ongoing. And I'm very happy to say that we hired a sustainability controller that will start in October 2022. 24. 24, sorry. Thank you, Yanni.

Thank you, Laszlo. And by that we are open for questions. And the first one comes from Rikard. Please go ahead.

Good day and thank you for taking my questions. Hopefully you can hear me okay. So the first one or the first area I'd like to talk about is maybe you could remind us of what percentage of group sales come from vet channels and maybe also estimate what share of that come from the larger chains. And maybe also you can elaborate on what indications you see for the second half improving for this channel, as you mentioned in the CEO letter. Thank you.

Yeah, the VET channel is roughly a bit over 30% of our sales. And the areas where we had lower sales than expected, I would say is around 10, a bit over 10% of that, or 10 percentage points. So 30% of the VET channel. And the indications are, like I said, that we've had a dialogue about the inventory levels because we have seen out the door sales have been a lot stronger than our sales. So we have now agreed upon a plan for them to stock up. And also we have a couple of new collaborations with with vet sales groups that sell inventory from those major distributors. So there will be a lot happening in second half year.

Very clear. And I noticed that nature vet sales was down around 15% in the quarter. Could you elaborate on some of the drivers there and what we should expect going forward? It sort of stands out a bit.

Yeah, and that's important to remember that NatureVet or the Garmin company has the NatureVet brand and then they have contract manufacturing slash private label. So as a total group company, it wasn't down 15%, but the NatureVet brand was down 15%. And that was really... really connected to the big launches that we had last year with Scoopables and opening up a couple of new retail chains. And this year, with the launch of Breed Specific, that was a bit delayed or just, let's say, seasonality from our bigger customers not being launched in all of those areas. retailers in Q2 that will come in Q3. So it wasn't a big drop in sales overall. I wouldn't say that, but it looks a bit more problematic. And also we've had, as I wrote about this strategic overview, so we have some discussions and looking at how we are going to attack the online channels. So that has also a from our partners.

Clear. And the final question. So in conjunction with Q1, you hinted at being able to achieve, you know, 24, 25% EBTA margin and, you know, close to 15% organic growth or so in 24. Is this still valid or should we interpret it as, you know, individual quarters in H2 or the full year just to get a sense? And it seems like the underlying EBTA was closer to 25% in the quarter if we adjust for some of the one-offs. Is that correct?

Yeah, I would say profitability-wise, we're definitely expecting improvements second half year. Looking at the organic growth, I did expect us in Q1, I did expect us to have a stronger Q2 than we had now. But I'm sure that we will have a strong second half year. But if we will... go over the 15. I can't promise that we will definitely have the double digit growth. But let's see where it takes us. It's difficult when we get forecasts and plans with customers. And then when they don't really deliver on that, it's not always that easy. But let's see. We have good momentum, as I said, in a large part of our group. So let's see where it takes us. We will definitely grow faster than the market.

I'll stop there. Thank you for taking my questions.

Thank you. Next question comes from Adela. Please go ahead.

Hello, guys. Going back to the question on the veterinary channel, could you maybe give us some more clarity on was this like, did it get worse throughout the quarter? Because I don't think you were having these challenges in Q1. And yeah, I fully get that you have signals that are suggesting that H2 will be stronger. But was it, you know, a balanced development throughout the quarter? Or did it get worse towards the latter month? Thanks.

No, I would say that it was primarily the inventory levels that are bigger customers that weren't filled as we expected and that we could see the outdoor sales needed to be. So I would say it was at the... the end of the quarter, but I can inform you that the beginning of Q3, it's a lot stronger. So.

Okay, great. Makes sense. Then on gross margins, I think you've previously guided for at least 57% and you're on a very nice trajectory already in the first half of the year. And I would assume with the profitability comments that you just gave us that that's the direction that we should assume for H2 as well.

Yeah, I don't expect the gross margin to be lower than where we are now. And the improvement in profitability will come partly from the improvement in gross margin, but also in the OPEX.

Makes sense. Then lastly, on M&A, you made a strategic acquisition yesterday. Is this the type of, I guess, targets that you're looking for going forward? And what would you say that your current M&A pipeline looks like? And should we anticipate acceleration from here on out? Or do you feel comfortable with the situation as is?

I would say that we've always been looking and have dialogues with many, but you don't know when they will materialize. So I would say that expect us to keep on working on it and it could absolutely be, be more activities in that area, but you never know. So there's a focus from me and from the directives from the board that we should continue to be active. So yeah, that's what I can say about it.

And then implied EV, EBITDA multiple of roughly seven times, is that a level that you're considering also for other acquisitions? I think that's high single digits is what you've been- Yeah, high single digits.

This is a bit, let's say, different acquisition than a pure play, let's say, product company since they are a distributor as well. So I think that's part of the... ending up at seven times. That's not, let's say, in general. If they have a distribution part of their activities, then I think it's a fair price. But looking at if it would have been a pure product or brand company, then the multiple would probably be a bit higher.

Makes sense. Thanks a lot.

Thank you. Your next question comes from Johan. Please go ahead.

Yeah, good morning, guys. Thank you for taking my questions. Just a quick follow up on the The gross margin expansions, and we saw significant increase year over year, and as mentioned, a solid trajectory. But could you just elaborate a bit on the drivers or the factors behind the dynamics that we're seeing in the gross margin expansion? Thank you.

Well, one of the drivers is that now in Q2, I think it's 94% of all our price increases that we have implemented are now fully affected. So that's one of the reasons. That takes quite some time. They are starting in Q3, and then it takes almost nine months until they are fully implemented in our number. So that's definitely one. We have seen some good improvements in raw material prices when we are working among each other in the group. So that's another reason. And then we have had, like we have mentioned in the past, some, let's say, supply chain issues, which we have been constantly working with and improving over the time. So I would say those are the three main items.

Yeah, great. Very clear. Thank you. And sort of building on Rickard's question on NatureVet, from your comments earlier on the call, I gathered that the effects of the current restructuring will materialize more towards 2025 rather than 2024. And as you're facing quite tough comps here in H2, how should we think about the underlying growth drivers going into H2?

Yeah, I would say, like you said, more... taking bigger bigger leaps that will happen in in 25 uh but we have a a strong uh strong position and growth in in um in most of our companies and and brands so so i i think uh you should expect the double digit growth for us going forward so but uh and and uh And specifically on the nature side, and also when it comes to our CDMO activities, that will be more substantial growth coming in 2025 and 2026.

OK, got it. Thank you. Those were all of my questions.

Thank you. Your next question comes from Christian. Please go ahead.

Yes, good morning. I hope you can hear me. Yeah, we do. Okay, great. I was wondering if you could disclose how much the online channel counted for of total sales in Q2 and the growth rate.

No, I don't have that on top of my head.

You can say that the growth rate on online sales is definitely over 20.

Right. And another question for perhaps Jenny, if you could confirm if half of the OPEX increase was related to one-offs.

Yes, it was. Like I said, half of it was related to increased marketing spend and the fact that we are selling a lot more in the online channel. And the other ones, I would say it's one-off that we included in EBITDA.

So that would be around 14 million in the second quarter.

No, not compared to last year. I'm talking about increase if you look at the prior quarters, because there was an increase about 12 million or so if you look at prior quarters.

Sorry, I'll just make a comment on the online sales. When I said over 20, it was all of the brands except for NatureVet, because with NatureVet, we work with a partner. And as I said, we have initiated some strategic discussions. So in the quarter, the growth for our sales of NatureVet wasn't over 20%.

But it was a double-digit growth?

No, not in our sales. Okay.

Jenny, back to the one-off costs. Could you please quantify the amount of one-offs in the quarter?

It's somewhere between 5 and 10 million.

5 to 10 million, right. Would it be fair to assume that the other external costs would come down to around 115 million in the third quarter?

No, I don't think 115. I can come back to you on that, Christian, exactly. I just know, for example, if you compare to Q1, half of the increase from Q1 to Q2 was the one-offs.

Okay, perfect. Thank you. That's all from me.

Okay, that concludes our Q&A session. Back to you guys for any closing comments.

Thank you so much for the interest and wish you all a great ending of the summer. Thank you so much.

Take care. Bye-bye.