GDI Integrated Facility Services Inc.

Good morning, ladies and gentlemen, and welcome to the GDI Integrated Facility Services, Inc. Second Quarter 2023 Results Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Wednesday, August 9, 2023. I would now like to turn the conference over to Stéphane Lavingue. Please go ahead.

Thank you, operator. Bon matin à tous. Good morning, all, and welcome to GDI's conference call to discuss our results for the second quarter of fiscal 2023. My name is Stéphane Leving. I'm Senior Vice President and Chief Financial Officer of GDI. I'm with Claude Bigrat, President and CEO of GDI, and David Inchi, Executive VP of Corporate Development. Before we begin, I would like to make you aware that this call contains forelooking information, and we ask listeners to refer to the full description of the forelooking safe harbor provision That is fully described at the beginning in the MD&A file on Sutter at the end of last night. I will begin the call with an overview of GDI's financial results for the second quarter of fiscal 23, and then I will invite Claude to provide his comments on the business. In the second quarter, GDI recorded revenue of $609 million, an increase of $83 million, or 16% over Q2 of last year, which is mainly due to organic growth of 12%. We recruited and adjusted a bid of $34 million in the quarter, a decrease of $4 million, or 11% over Q2 of last year. On a year-to-date basis, revenue increased by $179 million, or 18% to reach $1.2 billion, compared to $1 billion last year. Organic growth was 13% year-over-year, and revenue growth from acquisition was 2%. Adjusted a bit down, the first half amounted to $67 million, a decrease of $7 million or 9% over the corresponding period of 2022. Now, moving to our business segments. Our Business Service Canada segment recorded revenue of $144 million in Q2, a decrease of $1 million or 1% compared to the second quarter of 2022. This segment reported the adjusted bid of $13 million compared to $19 million in the second quarter of 2022, representing a decrease of $6 million. Our Business Services USA segment recorded revenue of $180 million in Q2, representing an increase of $16 million when compared to Q2 of 2022, mainly attributable to the Canadian acquisition in August 2022 and the appreciation of the U.S. dollar relative to the Canadian dollar. This segment reported adjusted a bid of $13 million in both second quarters of 2023 and 22. Both business services segments expressed slack to slight negative organic revenue growth that is attributable to a lower amount of COVID-19-related extra services as compared to Q2 of 2022, which also led to lower adjusted EBITDA margins. Now, our technical service segments recorded revenue of $264 million, or growth of 33% over Q2 of last year, with 31% organic growth revenues. The segment generated an adjusted EBITDA of $12 million, representing an adjusted EBITDA margin of 5%. Revenue growth from the business is attributable to a strong increase in project revenue and higher service revenue compared to the previous year. Finally, our corporate and other segments reported a revenue of $21 million and a negative adjusted EBITDA of $4 million compared to revenue of $18 million and negative adjusted EBITDA of $2 million in Q2 of 2022. The corporate and order segment is composed of GDI IFF, GDI janitorial product manufacturing and distribution business, as well as GDI corporate costs and elimination of intercompany transactions. I would like to turn the call now to Claude that will provide further comments on GDI performance during the call.

Well, thank you, Stéphane. Bonjour à tous. Good morning. And thank you all for taking the time to participate in our earning call this morning. I'm pleased to report that GDI delivered another decent quarter, like Stéphane stated, with $609 million in revenue or 16% growth over Q2 last year, including a double-digit organic growth rate of 12%. As expected, our business Service Canada segment continued to experience a reduction in EBITDA margin as we have been adjusting to the new post-COVID operating environments especially in the Class A office market, as we expected. I'm happy to say, however, that we feel we are approaching the end of the decline and expect EBITDA margin to begin to stabilize in the second half of 2022. Our business service, USA Business, has a good quarter, generating EBITDA that was in line with the prior year. We're also seeing an increase in bidding activities in both our business service business and I am optimistic regarding organic growth in the coming quarters. Our technical service business is continuing to perform well. Ainsworth delivered organic growth of 31% in the quarter as it executed on its record backlog while also generating higher levels of service revenue. Ainsworth EBITDA margin was 5% in what was usually the business second weakest quarter. Again, this quarter, the business was able to book as much as it built, and the backlog remains near record level. I remain very positive on the outlook for Ainsworth going forward. Our manufacturing and distribution business continues to progressively recover from its COVID-19 lows, and we have been seeing a gradual improvement in results almost monthly during 2023. Additionally, our integrated facility service business, is executing on its two inaugural contracts as it has been building a pipeline of potential opportunity across North America. Overall, I'm very happy with our GDI performance this quarter. We delivered strong revenue growth, our margin is stabilizing in the business service segment, and the outlook for LT levels of organic growth is positive across all our business segments. One area where we have identified for improvements going forward is our working capital management and some improvements in our SGLE cost structure. Our technical service business growth is for sure has generated a higher demand in working capital requirements. So as a result, and we're strong organic growth during 2023, we have made significant investment in working capital to support this growth. We are actively working to identify and implement short-term and long-term strategies to reduce working capital requirements across all our business lines, and we expect to see progress being made during the second half of this year. Our balance sheets remain strong, our leverage is within our comfort zone, and we have a healthy pipeline of strategic growth opportunity that we are actively working on. I'm looking forward to seeing our business perform in the second half of this year. So thank you again for your time today. And operator, you can please open the lines for questions.

Thank you, ladies and gentlemen. We will now begin the question and answer session. Should you have a question, please press star followed by the one on your touchtone phone. You will hear a three-tone prompt acknowledging your request, and your questions will be pulled in the order they are received. Should you wish to decline from the pulling process, please press star followed by the two. If you are using a speakerphone, please lift the hands up before pressing any keys. Your first question comes from Derek Lessard with TD Callum. Please go ahead.

Yeah, good morning, everybody. Hope you're having a great summer.

Thank you. You too.

Yeah, thank you. And in the press release and in your prepared remarks, You did mention that you expect the depth of EBITDA margins to stabilize in the second half. Just curious if, you know, one, if you're referring to both business service segments or just Canada, the EBITDA margin came in at 9%. And if I interpret this right, you're expecting... you know, it to come in around 8% by the end of 2023. And that's still above, you know, the 6% to 7% pre-pandemic level. So can you just maybe help us bridge the gap there and what would be a reasonable long-term expectation for those margins?

Well, you know, Derek, I think you are stating it correctly. You know what, I cannot be extremely precise, my apologies, on exactly the numbers. But we are – this is the path. We are stabilizing on the revenue side with GDI Canada. GDI US has been stabilized for a while now because, you know, the business has been going back to a normality a little bit faster than Canada. But in Canada, we're still – you know, there is volatility. We are still dealing – with office in occupancy, reductions in prices, and the diminution of all the extra work, a significant diminution of extra work. But what we have seen in the last probably month, month and a half, is now there's a certain stability, so we have a little bit more visibility on the revenue. And I was saying before, I do feel like going forward, we're going to have an increase of the margins because of many factors. But yes, I think that we will be in the eighties, nine-ish. This is what we are expecting towards the end of the year.

Okay. I guess I'm curious on what's driving sort of that step up in the margin profile in Canada.

Well, listen, you know what? I don't like to talk about the recipe openly all the time, but let me put it this way is For sure, with the reduced occupancy, we are able to optimize a little bit our efficiency and it helps. And we are still having, you know, a certain amount of, you know, extra work generated by the COVID pandemic, you know, tail. So it makes it overall, the mix together, it enables us to do a little better than traditional.

Okay, thank you. That's helpful. The one other question I have before I reach you is you also noted an active pipeline of new bidding opportunities in business services. Could you maybe add some color to that? What type of markets, what type of properties those are?

Well, actually, you know what we are? Okay, let me respond politically on this one. We have enough, you know, yes, we are pursuing business services both in Canada and the U.S., but I would say that we have a, you know, I think we have a bigger focus in the U.S. actually, and we have completed some technical acquisitions during the year. We're still working actively on this front. I just can tell you that David, Lindsay, and the teams are not, they're not at home with In vacation, they're working hard on a few things.

Okay, thanks for that, Cliff.

Sorry, I couldn't tell you more.

Your next question comes from Jonathan Goldman with Scotiabank. Please go ahead.

Hi, good morning. Thanks for taking my questions. I wanted to ask about the technical services margins. You mentioned that Q2 is the second weakest quarter seasonally. margins were close to flat quarter on quarter. How should we think about the cadence of margins for the balance of the year and going into 2024?

Well, you see, the way that, you know, like I was saying before is we don't have a great seasonality, you know, in our revenue, but we still have a little bit of it. So example in the technical service, you know, the... You know, the service, the break fix, and open, you know, the maintenance, opening up air conditioning, setting up system for air conditioning. You know, in the first quarters, we have, you know, we have, you know, holidays. We have less working days. In the second quarter, we really start making... working heavily with service calls and everything towards the half of the second quarter, and it goes along all the third quarter and fourth. So when we say weakest quarter is the business mix is different. We do a lot more project than maintenance and break-fix calls, but as the second quarter comes in and the third quarter, these margins are really picking up and providing us with a better overall return. And also in the summer, this is a time where, you know, we execute a lot of installs and it certainly is healthy for the margin as well. And 2024, I think it's going to repeat itself. You know, allow me to just add up a little bit on this. You know, with the backlog that we have and the way that we're building it, and that we are positioning it. Our visibility is 2024 is looking to be a very good business year also for Ainsworth. And like I said, our challenge is to cope with the increase in revenues. We have to work on the margin. We need to be better on our working cap management. You know, we need to change a little bit our approach on the financials as the interest rate has grown significantly. So this is where we have to work. But on the revenue side and profitability, I don't think we have a big issue at this time.

Okay, so just to follow up then on the margin, what's your confidence level that you can get back to 2019 margins or even exceed that 6% high water mark? And also, what would it take to get there or above that?

Well, maybe we misunderstood each other. What I'm telling you is the technical business, by the end of the year, will be within its margin as the next two quarters increase. the next two quarters are usually very profitable on the business. So it's not like what are we going to do to get back to the margin. I think we are right working towards that with the next two quarters. Now, I think on the business service side that we actually will perform going forward, we'll perform slightly better than our 6% margin. So we're not into a recuperating mode. The business is right into it.

That makes sense. Thank you for clarifying that. No problem. One on capital allocation. I guess just given where the stock's trading and also what you're seeing on the deal flow side of things, how do you assess the relative attractiveness of M&A versus buybacks?

Well, you know, we still believe that smartly acquiring businesses is Integrating them and optimizing them is the best value creation. We're not in a position where we don't see opportunities. We are still working on our $3 billion by 2025. We are very well into it, as you see. I don't see the need to – I don't see the need – to actually invest heavily on using capital to buy back shares. I think the opportunity is still into growth going forward.

That makes sense, and it seems to have worked in the past as well. Thanks for taking my question.

My pleasure, my pleasure.

Your next question comes from John Zampero with CIBC. Please go ahead.

Thank you. Good morning. Good morning, sir. Good morning. I wanted to start on the working capital dynamics and you identified some efforts you're taking to improve this. I wonder if you can give some detail on what exactly these efforts are. What's the kind of timeline you expect to have them in place?

Can you just repeat, please? Because the first part, you know what? I did not hear you at all.

Sure. The press release and also your prepared remarks, you referenced some improvements you're trying to make in working capital and reducing that level. So I wonder if you can talk about some of the details of what exactly these efforts are and what kind of timeline you expect to have these remediations in place.

Okay. Thank you very much for repeating. Okay. Working cap strategy. You know what? We're working on three, four fronts at the same time. So let's go one by one very quickly. First front is, you know, when the interest rates were one, one and a quarter, one and a half percent, you know, we had a tactic to, you know, to, you know, ensure the best service by being a fast payer. And now with the new environment, now we're getting a bit more savvy on the way we treat our money outflow on that front. Secondly, on the revenue side, especially in the technical group, is we are redefining our strategy, meaning that requiring deposits for customers on projects where there is heavy equipment to acquire, improving on our order-to-cash segment, implementing more stringent AR collections, uh effort so as you see it's many pieces like this that will improve overall and so if we reduce our dso by four days we increase our cash inflows through deposits and example um improving our whip because for me my order to cash there is a portion in work in progress that is you know shows in the revenue but it's not uh you know built directly to mr customer So now we're working extensively to reduce that gap. So this should improve significantly our working gap requirement in the technical segment. And on the business service segment is we are reorganizing our subcontractor base into more advantageous terms of payment.

Okay, that's great, Collar. Thank you for that. And just to follow up on that, is more of the source of the increase in receivables, is it fair to say it's coming from technical services rather than your other two segments?

Well, yeah, you know, you're not far from the truth. They both have experienced a little bit of lag. You know, interest rate is growing, and we see it in our receivables. People are a little bit more savvy by paying. But yes, for sure, the technical business is a big user of our working cap lately. And in receivables, because we're working with commercial real estate, we're contractors working within this space, we need to be a little bit more annoying, let's put it this way.

Okay, fair enough. Just one more on the receivables. I didn't see an aging schedule in any of your filings. Can you say approximately what percent of the 550 million or so in receivables would be considered overdue on your terms?

Well, listen, you know what? I think that traditionally, no, not traditionally. Lately, I think we're saying about, you know, hopefully I won't get in trouble with my team if I make a number, but I would say probably between 12% and 16% is usually our going rate over 90 days plus.

Okay. And no meaningful change to that versus historical levels?

You know what? I'm used to think about 12%, 10% to 12%, so it's a little bit. there but the big gap is not so much on those over overdues because we are very we are added regularly you know what I'm saying continuously it's the 45 to 55 to 65 to 75 that are moving upward you know you know my point so and there's a lot of money there so the slide is not from 40 to 120 but the slide is from 45 to 60 or 65 And this is why I'm saying that I want to improve by four days.

Got it. Okay. That's good color. Just two more subjects. The first is on labor. And we've seen an increase in labor disruptions and labor disputes and strikes across different service industries. Has there been any change in your relationships with labor? I would wonder how you characterize the relationship at the moment.

Well, we have great union relationship. We love them all. And we're all happy together. No, okay. Okay, I'm sorry. I was dreaming for a moment. So, you know what? Traditionally, we are a business that is quite stable on that front. We rarely experience significant labor shortage. I don't expect any major, major... issues going forward. We're going to have a large union agreement negotiation next year. But, you know, we're working with unions that are sensible to the economics. For sure, the inflation has provided a point of pressure in our negotiations. But we went through most of our business service in Canada on the larger ones, and we were able to reach agreements. And I've worked with our customers into that. So I don't expect major, major issues, but I hope that 2024 and 2025 will have a certain stability on inflation and interest rates, and I think it will help better.

Yeah, understood. Okay, just one final one. In your prepared remarks, Claude, you referenced that you're looking to cut some costs out of the business. What segment does that relate to, and can you quantify what level of costs you'd like to reduce?

Okay. Well, listen, again, I don't know if I can put a number, but if I were to think to reduce by 5% over the next three quarters, you will be not out of the gate. And we are doing it on every segment. Each segment, we can find better efficiencies. You see, I would say something maybe not nice, but, you know, COVID was very, very, very destabilizing overall. And I'm sure that you have that in many business. So now what I'm doing is, and what we're doing, because I'm not alone in that, the management's working as a team on that, is we are straightening up our approach. We are refocusing on the business necessities. You know, we're tightening up the ship. This is what I'm saying by cutting costs is, you know what, we're trying to remove whatever is not supposed to be there. And we change from, managing volatility to efficiency management. So this is the shift. I would say that like this. I'm not moving to crisis mode, but I'm saying is we have to be extremely prudent and we're acting accordingly. Does it make sense to you?

Yes, that's very clear. All right. I appreciate all the insights. I'll leave it there. Thank you very much.

Thank you very much.

Your next question comes from Zachary Evershed with National Bank Financial. Please go ahead.

Good morning.

Good morning, Mr. Zachary.

So I'm curious if there are further levers that you'd like to pull for margin expansion in technical services once you've looked through the working capital and that's optimized. What's the next step for that business segment?

Well, the next step is to, you know, to, I would say, improve our customer projects and margins. So we have a very extensive backlog. Probably in some regions, it gives us a little bit of flexibility on improving our gross margins. And for sure, this will affect the bottom line. So this would be one strategy to be a little bit more aggressive on our project pricing. This is one thing. Secondly, the same thing I said for our overhead. For sure, the technical service requires far more support than expected. But by growing, I think we can find a little bit more efficiency. And at the end of the day, Stéphane and the financial teams are working actively into our new systems, our future in technology and systems. And we also think that this will provide more visibility, more flexibility, and also overall financial efficiency in our overhead spends.

Good color. Thank you. And I did miss the beginning of the prepared remarks, so apologies if you've covered this already. But did you provide any color on the ERP unification project?

The European Unification Project?

The ERP.

Oh, okay. I'm sorry. I was saying, I said I did not know we were in Europe. Okay. Okay. I'm sorry. Okay. The ERP. Well, actually, ERP is, as you know, we are completing the integration of our HRIS systems. So now we have most of Canada and most of the U.S. is on board, and we're completing the transition. And by the end of the year, we should have completed the integration of the whole company. Beginning of 2024, we should be done and integrated. So this is our main focus right now. There is a little team preparing and working around the products and the systems and building up, you know what, the skeleton of it. But this project will really see the light of day starting early 2024 going on. But it is in the project. We have the team to do it. We have the means to do it. But now the focus is to really complete our HRIS transition.

Gotcha. Thanks. And just one last quick one. In the M&A pipeline, do you think you have a greater focus on scope, scale, or geographic expansion?

Scope and geography. You know, again, I don't want to jinx anything, but I do believe that we saw a lot of activities in the COVID time on acquisition and everything. We do believe that within the next couple of years, there will be opportunities that will present themselves. Now, you know, the interest rate is going up and, you know, we have not seen the end of it. I mean, as far as the effect on businesses. So now what we are doing is we stay focused on our usual past prudent approach. And I just want to make sure that we're ready when opportunity shows up, probably in the next four or five, six quarters. We do believe that there will be opportunities.

Great. Thanks. I'll turn it over.

Thank you, sir.

Your next question comes from Frédéric Tremblay with Desjardins. Please go ahead.

Good morning, Michel. Good morning. Good morning, Claude. On the positive organic growth outlook in business services, you highlighted that. You also highlighted in the call that office was kind of stabilizing over the past month, month and a half. So should we understand by that that the organic growth outlook is stronger in other end markets, such as industrial or maybe education or healthcare? Can you just maybe comment on sort of the organic growth outlook by end market, if there's anything that stands out?

Well, we are redefining, you know, that's a very interesting thing because we're working and redefining our target sector because commercial real estate, I don't think it's a news to everyone. It will be a little bit under the weather for a while. So, yes, for sure, we're focusing a lot on industrial, a little bit in healthcare. Education, education, and again, I don't want to make a statement here, but I will do a little bit. You know, it's very interesting. You know, there's a lot of revenue to pick up. Bottom line is not always at the rendezvous. So I'm a little bit cold feet on education, but we have to, you know, what we have done best so far is pick and choose properly. And this is the key. A good business mix, a good geography, focus on margin. Don't, you know, try to not take, you know, negative projects. It has been a recipe that has worked so far, and I intend to keep it like this. You know, we're not for the show. You know, I'd love to show 8%, 10% organic growth top line, but this is not my main focus. We have to grow organically, yes, and we have to go with the right project. But so far, you know what, we see, you know, beginning of the year was a little bit, I would say, you know, shaggy. But as the year goes, I'm encouraged with our bid. our bid structure and everything. So, you know what? I don't see it as an out-of-this-world growth, but I see that there's good potential.

Great. That's very helpful. Thank you. Maybe switching to technical services, when speaking about margin levers, you mentioned pricing for projects. Anything to do on the on-call services? Are those maybe higher margin than projects? And perhaps you could try to shift the mix, if that's possible at all, either organically or through future M&A.

My friend, what do you think we're doing? Absolutely. You know what? Recession times, dangerous times, you want to make sure that you're the brake fixer of everyone. So, you know what? We have a vice president. We shift a vice president. and the team 100% focused on developing and, you know what, promoting and growing our break-fix and service call and maintenance business because we do believe that if tough time comes, again, I'm not saying that it will come, but better safe than sorry, we are focusing actively to bring back our business to – I should not say it, but to a 50-50 probably mix between project and service business. There's an old saying, if service cost pays for the whole overhead, you can go through any storm.

Great. Last question for me, maybe on Energer and your energy efficiency solutions. Can you maybe provide an update on that? sort of the demand and demand environment and backlog maybe there are just general comments and just an update as well on your, I guess, ambitions to grow your energy efficiency solutions outside of Quebec.

Okay. Okay. We acquired this business February last year. There was a lot, let me put it this way in a very blunt way. There was a lot of legacy projects we had to complete, which were not fantastic. So we suffered a little bit on that front. Secondly, over the last three, four months, they have turned the corner into profitability where they're supposed to be. And thirdly, we have significant wins in these divisions. So it's very, very encouraging going forward that the business is going to deliver on the promise. This is one bucket. Second bucket. We are very involved in pursuing our development in energy efficiency and technology. Our head of the technology division has now moved to Montreal and he will oversee this segment as a global segment. Thirdly is we have issued a press release lately regarding an alliance with energy and energy engineering firms in Ontario. And this will enable us to participate in partnership with them into microgrid development projects. So, yes, it is a very, very big focus in the business. And we want to make sure that we will be the go-to guy for decarbonization and energy management projects. But now it's a built-up, it's a, you know, it's a work in progress. I think that within the next year and a half, we should have a structure that we'll be able to service every segment of the business.

That's great. Merci, Claude.

Your next question comes from Jeff Fenwick with Cormac Securities. Please go ahead.

Hi, good morning, everybody.

Good morning, sir.

I think most of my questions have been answered, Claude. I appreciate the colour. I wanted to circle back to the M&A discussion, and you mentioned there may be some opportunities on the horizon out there. Could you put that in the context of your balance sheet position? When I look at your debt level today, debt to EBITDA is around three times, I would imagine, on a go-forward basis. How comfortable are you with the leverage level there, and would you still feel comfortable taking on a bit more debt if you find the right acquisition?

Yeah, well, as I was stating, I'm prepping, you know, what we're prepping for this opportunity. So it means that for sure, this is why we are, you know, we are investing a lot into, you know, improving our working cap. That takes a significant part of that, paying the debt. So we want to get the money in. So that's one thing we're doing in order to be better prepared. This being said, we have room.

Hello.

I'm sorry. One moment, please. This is the operator. His line has been disconnected. One moment, please.

Hello, hello.

Hi there. Can you hear me? I'm still on point.

My apologies. Technical difficulties with the provider, so I don't know what happened. Okay, so where was I? Oh, yeah, working cat. So, yes, we are in our comfort zone. We have maneuvering. We have a margin of maneuvering if we find the right opportunity to For sure, you know what, we are comfortable to, you know, take a little bit more room into it. But the general idea is to be the best prepared in the next four to six quarter to be, you know, with maximum capabilities. But we have great relationship with our bankers. I don't think there is any discomfort at this time. So we'll do it one thing at a time. But yes. you know what, I want us to improve our debt level so we are able to gain when we have those opportunities. So growing EBITDA and reducing the debt should help.

Absolutely. And then from the working capital, I think the build this year has been about $65 million. So you think there's an opportunity to recover a meaningful amount of that back into cash through the back half of the year, or is it more gradual than that maybe?

I think it would be gradual. I think it would go over three, four quarters. You know, the gang is working very hard to provide me, you know, their specific day-to-day planning. But if I were to say a number, probably we could recuperate half of that. You know what? Taking out timing issues, you know what I'm saying? But I think that Stefan and the teams are working to recuperate probably, I would say, half of it. But again, it's a guesstimate. I don't want you to go with it and make it a statement.

Okay, that's a very helpful color. Thank you. I'll leave it there. Thank you.

Your next question comes from Derek Lessard with TD Calum. Please go ahead.

Yeah, thanks, Claude. I appreciate the follow-up. I just wanted to hit on another one in technical services. I'm curious as to what's preventing you from converting more of the backlog into revenue?

Well, people to start with. You know, there's a limitation on the usage. You know, we're working now, I would say, to the I-90s on our labor utilization. So, you know, it goes with technical. So we are close to our capacity. Secondly is also in projects. we have to go with the flow of the general contractors. So we cannot install more than we are provided for as a space to work. And I would say that I would privilege higher margins than growing, making more revenue. Mind you that we try to work on both. The good news is since we have a very good reputation, we have been able to attract more quality technicians to work within the group. So that's good news. So we have a good pace of work. And example, just to give you an example, we have acquired and we are installing laser cutting equipment on our piping division in order to be able to execute more and improve margins. So I'm working more on the efficiency than absolutely beating the top line all the time.

Okay, that's helpful. Thank you.

Thank you. Ladies and gentlemen, as a reminder, should you have a question, please press star 1. There are no further questions at this time. Please proceed.

Well, thank you very much for your questions and for taking the time to listen to this call. I would just say in closing that we're focusing on what I call the four to-dos that we have. Improve working cap, increase the margin, work on the debt. And these are points that we're working and continue on to our prudent acquisition mode. So these, for me, are very important. The second thing I would like to share with you is we just have lived a tremendously You know, we have lived very, very special times with a lot of volatility, a lot of changes, and we have to adapt to that. I think the good news is that we are in the tail of it. So I think we're starting to have more visibility. So I hope in the next quarters we'll be back to our stable result and stable growth that we have been doing for the last 10 years, but with an improved margin. So it's not all bad, but we're still coping with all the changes that we have to go through. So thank you again, and I look forward to the next call with you.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Thank you.