U.S. Markets open in 6 hrs 41 mins

Edited Transcript of 7201.T earnings conference call or presentation 12-Nov-19 8:00am GMT

Q2 2020 Nissan Motor Co Ltd Earnings Press Conference

Tokyo Nov 21, 2019 (Thomson StreetEvents) -- Edited Transcript of Nissan Motor Co Ltd earnings conference call or presentation Tuesday, November 12, 2019 at 8:00:00am GMT

TEXT version of Transcript

================================================================================

Corporate Participants

================================================================================

* Joji Tagawa

Nissan Motor Co., Ltd. - Corporate VP

* Stephen Ma

Nissan Motor Co., Ltd. - Corporate VP

================================================================================

Conference Call Participants

================================================================================

* Hans Greimel;Automotive News;Editor

* Naotoshi Okada;Nikkei;President & CEO

* Sean McClain;Wall Street Journal;Journalist

================================================================================

Presentation

--------------------------------------------------------------------------------

Unidentified Company Representative, [1]

--------------------------------------------------------------------------------

Thank you very much for waiting. We now commence the presentation session of the Financial Presentation for Fiscal 2019 of Nissan Motor Company. Thank you very much for coming despite your busy schedule, and thank you very much for a large turnout.

First of all, I will ask Mr. Stephen Ma to make the presentation regarding the financial results. Mr. Ma, floor is yours.

--------------------------------------------------------------------------------

Stephen Ma, Nissan Motor Co., Ltd. - Corporate VP [2]

--------------------------------------------------------------------------------

Ladies and gentlemen, good afternoon. My name is Stephen Ma, and I'm currently the Corporate Vice President and Global Controller of Nissan Motor Company. Starting next month, I will be the Chief Financial Officer, and I'm looking forward to working with all of you. Thank you for joining us for the announcement of Nissan's half year's earning for fiscal year 2019.

Today, I will outline Nissan's global sales performance and financial results for the first 6 months of fiscal year 2019 as well as the full year outlook. Following the presentation, we will be happy to take any questions you may have.

For the 3-month period ending September 30, Nissan Global retail sales declined 7.5% to 1.27 million units. Looking at our key markets in detail, our sales in China outpaced the market but sales in the other key regions including the U.S., Europe and Japan underperformed in those markets. This resulted in an overall decrease in market share. Excluding China, Nissan sales declined 9.5%. However, as we successfully adjusted inventory levels in the first quarter, we began the following quarter with an optimal level of dealer inventory. As a result, the decline in wholesale volume was limited to 6.3% year-on-year.

Compared to the first quarter of the fiscal year, our retail sales excluding China increased 8,000 units while wholesale sales increased 90,000 units. Therefore, profits increased quarter-on-quarter.

For the 3-month period ended September 30, consolidated operating profit totaled JPY 30 billion. Similar to previous quarter, external factors including foreign exchange fluctuations, regulatory compliance expenses, product enrichment costs and rising commodity prices had a negative impact of JPY 44.6 billion. Sales performance was a negative JPY 60.5 billion in the first quarter.

In the second quarter, the decrease in selling expenses offset the negative impact from lower sales result, resulting in a positive contribution of JPY 1 billion from sales performance. We are starting to see the result of our ongoing efforts to improve our quality of sales, particularly in the U.S. The positive impact from sales performance is a good sign, and I will provide additional details in a moment.

Monozukuri and others had a negative impact of JPY 27.6 billion. Furthermore, in the second quarter, quality-related costs increased by approximately JPY 40 billion, which was JPY 30 billion to JPY 40 billion higher than the average quarter. However, if quality-related costs had been at normal levels, operating profit in the second quarter would have reached approximately JPY 60 billion to JPY 70 billion due to the contribution from Monozukuri and others.

Nissan is progressing steadily towards its business transformation plans, which we discussed in May and July. I will provide an update on one of the key pillars of the plan, the recovery in the U.S. business. This slide shows the movement in geographical segment operating profit in North America for the second quarter. The negative impact from external factors, including foreign exchange fluctuations, regulatory compliance expenses and commodity prices was offset by U.S. sales performance. For the quarter, operating profit was near the previous year's level.

While the U.S. volume mix were negative, this was more than offset by the improvement in U.S. selling expenses, mainly from decreased incentive spending. These are the indicators noting the progress and the sales normalization efforts for the U.S. Average net revenue per unit exceeded the previous year since May, thanks to the decrease in average incentive. Furthermore, the Nissan Versa sedan underwent a model change in August and a new Nissan Sentra is scheduled for this winter. The company will launch and introduce several new models for fiscal year 2020 and onwards.

As the average Asia product portfolio becomes younger, these indicators should improve further. Dealer inventory levels in the U.S. are at healthy levels. At the end of September, inventory decreased by 22,000 units from the first quarter. While the fleet ratio exceeded the previous year, we expect the ratio to decrease in the second half of the fiscal year.

Our ongoing efforts to improve and stabilize the sales finance business also remain on track. Nissan's business in the U.S. took the first step towards this recovery. We will continue our efforts to normalize and improve the quality of sales.

Another pillar of Nissan's business transformation plan is steady growth through new models, new technology and Nissan Intelligent Mobility. At the Tokyo Motor Show last month, Nissan premiered the Nissan Ariya Concept and Nissan IMQ. These 2 EV concept cars embody Nissan Intelligent Mobility and will soon be available to customers. These models represent the direction of our future lineup with entirely new designs and technologies that are enhanced by the new EV platform. Nissan continues to work on the other pillar, operational and investment efficiency improvement. And we will provide a more -- we'll provide more updates at a later date.

For the second quarter, consolidated net revenues were JPY 2.63 trillion. Operating profit totaled JPY 30 billion and net income was JPY 59 billion. Free cash flow for the automotive business was a negative JPY 29.5 billion. We ended the period with an automotive net cash position of JPY 1.1 trillion.

I will now present the global sales result for the first half of fiscal year 2019. For the first half, industry demand decreased in all markets except Japan, and Global TIV fell 5.9% to 43.85 million units. Nissan's sales decreased 6.8% to 2.501 million units and market share decreased 0.1 percent point to 5.7%.

This slide describes our sales performance for the first 6 months in the key markets. In Japan, Nissan sales decreased 1.3% to 281,000 units. Sales of registered cars decreased, while K car sales increased 20.9% due to strong demand for the new DAYZ, which launched in March. The new Skyline arrived this past September and has been well received by many customers. The hybrid version features the world's first advanced driver support technology, ProPILOT 2.0, and performance-enhanced turbo engine.

In China, the market remains challenging. While TIV was down 12.8%, Nissan sales were stable at 718,000 units. Market share increased 0.8 percentage points to 6.2%. Key models, including Qashqai, X-Trail and Sylphy, continued driving sales. For July to September period, Nissan continued to outperform the market. The new Sylphy was launched in July and is off to a good start.

In the U.S., Nissan sales decreased 4.3% to 679,000 units due to the aged product portfolio and the company's continued efforts to normalize sales.

In Europe, we continued to be impacted for environmental regulations and the aged product portfolio. Nissan sales decreased 19.7% to 265,000 units.

Moving to our financial results. For the first 6 months, consolidated net revenues totaled JPY 5 trillion. Operating profit was JPY 31.6 billion, which equates an operating profit margin of JPY 0.6 billion. Ordinary profit was JPY 115.6 billion. This figure includes JPY 84.3 billion in investment income from companies accounted for under the agreement [bid], including our joint venture in China. Net income was JPY 65.4 billion.

This slide illustrate the operating profit variance analysis in detail. External factors, including foreign exchange fluctuations, regulatory compliance expenses, product enrichment costs and rising commodity prices had a negative impact of JPY 87.1 billion. The impact from sales performance was nearly flat for the 3-month period compared to the prior year. However, the negative impact from the first quarter resulted in a negative JPY 59.5 billion for the first half. Purchasing cost reduction efforts were a positive JPY 52.8 billion while R&D expense, manufacturing costs, quality-related costs and other items increased.

I will now present the outlook for the full fiscal year. Nissan is progressing steadily towards its business transformation and profit recovery. However, operating profit for the first half is behind regional plan to achieve the initial full year forecast of JPY 230 billion. In addition, the yen has appreciated compared to our regional assumption of JPY 110 to the dollar. Furthermore, economic uncertainties and the slowdown in TIV continues. Therefore, we have decided to revise the full year guidance. We have reassessed the outlook for China and the other markets, and have revised global TIV for the full year to 85 point -- 88.5 million units, a decrease of 4.7% from the original assumption.

Nissan's global sales forecast has been reduced 5.4% to 5.24 million units for the fiscal year. Based on our revised sales forecast and earnings for the first 6 months, we revised the full year outlook as follows: consolidated net revenues are now expected to be JPY 10.6 trillion; operating profit has been revised downward to JPY 150 billion, which equates to an operating profit margin of 1.4%; net income is expected to be JPY 110 billion, a 1% net income margin; the assumption for foreign exchange is JPY 105 to the dollar for the second half of the year and JPY 107 to the dollar for the full fiscal year.

This slide describe the variance between the original outlook from May and the latest outlook. Our initial assumption for the exchange rate between the Japanese yen and U.S. dollar was JPY 110 to $1. We have updated the assumptions to JPY 105 to the dollar for the second half and JPY 107 to the dollar for the full fiscal year. Aside from the U.S. dollar, other currencies, mainly emerging markets, are depreciating against the Japanese yen. Foreign exchange volatility is expected to have a negative impact of approximately JPY 80 billion. Based on the revised sales outlook, sales performance is expected to have a negative impact of JPY 70 billion compared to the original outlook. However, Monozukuri and others are expected to benefit from some improvement in commodity prices and tighter cost control and is now expected to be a positive JPY 70 billion. This should offset the negative impact from sales performance.

In May, we announced a dividend plan of JPY 40 per share for the full fiscal year. Today, the board decided on an interim dividend of JPY 10 per share given the slower-than-expected progress of result in the first half and the downward revision of the fiscal year forecast. Along with the new CEO and a new management team, we will review the full year dividend plan and the mid-term plan. We will discuss this in detail at a later date.

That concludes my presentation. I will now take your questions. Thank you very much.

================================================================================

Questions and Answers

--------------------------------------------------------------------------------

Unidentified Company Representative, [1]

--------------------------------------------------------------------------------

Thank you very much, Mr. Ma. Now we'd like to open the floor for discussions. If you have a question, please raise your hand and a staff will bring the roving microphone and please speak through the microphone. Incidentally, regarding questions, please limit to 2 questions per person. I hope you -- I hope to have your cooperation. Any questions from the media?

--------------------------------------------------------------------------------

Naotoshi Okada;Nikkei;President & CEO, [2]

--------------------------------------------------------------------------------

Okada from Nikkei. First of all, my question regarding incentives. From April to September, on average for 6 months, it is above $4,200 compared with Toyota of the same period, 70% more in your case. But earlier on, you said that the incentives are coming down. So you have some improvement, but I can't feel improvement from the average numbers. So incentives are going to be improved and then new models will have to be launched. What are the ideas of lowering incentive levels. What is your idea? Can you talk about it?

The second question, the free cash flow of automotive business. July to September, it is in the red zone. So you are not able to earn cash, and dividend is lowered. So fund allocation is becoming rather tough, that's why I think dividend is decided to be lowered. Was that a decision factor?

--------------------------------------------------------------------------------

Stephen Ma, Nissan Motor Co., Ltd. - Corporate VP [3]

--------------------------------------------------------------------------------

I believe the first question is about the incentive improvement in the U.S. market. As we show in this chart, we have been consistently trying to improve our quality of sales in the U.S. We're trying to be reducing the incentive per unit on a consistent basis and having less volatility in the incentive per unit. So instead of adjusting on a monthly basis, we are now doing more on a quarterly basis and having more consistent visibility for dealers, which I think will help with the stability. And it's going -- as you can see from the chart, it's going in the right direction. And with the new launch, the new Versa and also the new Sentra as well as new model combination expect these trends to continue going forward. So that's for your first question.

For the second question, our free cash flow in our business, you're right. The first half free cash flow is minus JPY 415 billion. But if you look at Q2 stand-alone, it's only minus JPY 29.5 billion, almost breakeven. So Q1 was mainly a correction. And for our dealer inventory and our car flow, if you remember from the Q1 announcement, we're improving quality of sales, we have lower sales and production. So therefore, our free cash flow was mainly negative in Q1. Q2, we almost break even. And in second half, we expect a significant improvement in Q3 and Q4 for free cash flow.

The dividend payout is mainly consideration of the progress that we have in the first half of profit at JPY 31 million or JPY 32 billion OP for the first half. You can see, it's only about 14% versus original announced JPY 230 billion. And our proposal is based on the fact that our earnings per share, if you saw the number, if you divide that number by earnings per share, it's roughly JPY 16 or JPY 17 per share. We did not want to exceed the earnings per share in terms of paying dividend. That would not be responsible in this time and age. So we are now just offering interim dividend of JPY 10 per share. And then the full year dividend, we'll wait for the new CEO with the new management come in and propose the full year dividend. Does that answer your question?

--------------------------------------------------------------------------------

Naotoshi Okada;Nikkei;President & CEO, [4]

--------------------------------------------------------------------------------

(foreign language)

--------------------------------------------------------------------------------

Unidentified Company Representative, [5]

--------------------------------------------------------------------------------

Thank you very much. Next question, please?

--------------------------------------------------------------------------------

Sean McClain;Wall Street Journal;Journalist, [6]

--------------------------------------------------------------------------------

Sean McClain from the Wall Street Journal. I have 2 questions as well. First, if I could return to North America again. I note your operating profit for North America is higher than your entire operating profit that you've reported for the second quarter. Can you talk a little bit about how we should read that number? What does that say about the rest of your businesses? And on the incentives, as my colleague from Nikkei mentioned earlier, I mean all the data we're seeing show your incentives sort of going up, but it seems you're saying incentives per unit is decreasing. Could you explain maybe what the separation there is? Maybe there's something about fleet incentives that is factored into analysts' numbers that we're not really understanding here. Your fleet numbers are quite high still.

--------------------------------------------------------------------------------

Stephen Ma, Nissan Motor Co., Ltd. - Corporate VP [7]

--------------------------------------------------------------------------------

Yes. As I mentioned, fleet plan for the full year, we're still on track to reduce the whole year fleet volume. In Q2, it's slightly higher as a percentage because the retail volume is slightly down. So as a percentage, it's a higher percentage. And we have some delivery timing, a little early delivery of some fleet units. But for the full year, the rental fleet separate from commercial fleet is still on track to reduce the full year rental fleet volume. That's the first question.

And for the incentive, I mentioned from the -- that you see, the incentive unit that we -- per unit that we see here is our financial result, meaning these are what's actually booked in our books. So there might be other numbers from other agency that we don't know the sources, but these are actually matching our financial results and figures.

For North America, the profit, this is geographical segment profit. So obviously, we have still other costs that's not yet fully allocated. This is just geographical segment profit. But I will direct more to the team later to give you details about how this fits into the global picture. Is that okay? Or if Tagawa-san, if you can help me with answering that a little bit more in detail?

--------------------------------------------------------------------------------

Joji Tagawa, Nissan Motor Co., Ltd. - Corporate VP [8]

--------------------------------------------------------------------------------

[Interpreted] Thank you. Mr. Tagawa of Investor Relations division. Yes, as Steve mentioned earlier, this is geographical segment. It's this -- and this -- on the geographical segment basis, yes, U.S. operating profit is larger and Japan is worsening. But then this is due to negative impact of the foreign exchange and also internal transactions. So therefore, a negative impact of the forex, that's one factor. And also, in terms of quality costs, some costs are booked in Japan. For example, quality costs that are actually generated in the U.S. might be booked in Japan in terms of reserves. So at the end of the day when -- actually, yes, overall, geographical segment shows that U.S. is doing better. But generally speaking, the situation is different. I think that's how you should interpret the number.

--------------------------------------------------------------------------------

Unidentified Company Representative, [9]

--------------------------------------------------------------------------------

Thank you. More question? Yes, please.

--------------------------------------------------------------------------------

Unidentified Participant, [10]

--------------------------------------------------------------------------------

[Oue] from NHK. The business transformation, how is it progressing? In the first Q, the production line is going to be improved and 12,500 headcounts would be reduced. And also, other reductions was announced. So how is the progress status? How much reduction did you achieve? And are you planning any additional reduction?

One more question. The industry demand, the TIV, you have lowered your expectation, and I think business environment is becoming tougher. Are you considering any additional restructuring? Do you think that there is a need for you to consider additional restructuring?

--------------------------------------------------------------------------------

Stephen Ma, Nissan Motor Co., Ltd. - Corporate VP [11]

--------------------------------------------------------------------------------

Today, we are focusing in the first half results. So for the business transformation plan that we announced in May and July, I will wait for the new CEO with a new management team to come and provide an update at a later time. But as I show, one of the key pillars of that plan was recovery in the U.S. And for that first pillar, you can see we are well on track, and we are seeing recovery in the U.S. quality of sales.

For the product optimization and efficiency optimization and other improvement action, the 2 other pillars we have, we are right now progressing as planned. But again, like I said, I will wait for the new management come in and give an update at a later time. Given the current market situation and the economic situation. Naturally, we are now revisiting all the assumptions. And as you can see, that's why we have updated TIV and we revised down the volume for the full year. And naturally, when we implement a restructuring plan or other actions within the company, we will take these consideration into account too in execution.

--------------------------------------------------------------------------------

Unidentified Company Representative, [12]

--------------------------------------------------------------------------------

Thank you. Anyone else with additional question, please? Yes?

--------------------------------------------------------------------------------

Unidentified Participant, [13]

--------------------------------------------------------------------------------

[Sangyu] Times, my name is [Oueta]. The full year capital investment compared to the initial expectation, you have reduced amount by JPY 10 billion to -- this JPY 10 billion reduction. What's the reasoning behind this reducing the capital investment for the full year? That's my question.

--------------------------------------------------------------------------------

Stephen Ma, Nissan Motor Co., Ltd. - Corporate VP [14]

--------------------------------------------------------------------------------

I think capital investment -- sorry, one second, let me see the number. I think I have to come back with you. I don't have that information in front of me. But as we mentioned earlier, we are obviously having very good effect on tight cost control in the first half, as you saw from our various analysis. In addition to that, we are also very frugally, efficiently investing in everything we do. So please be assured that our investment right now is conducted for all the project we need. So I don't think this is just a reduction of projects, but I will come back to you on that.

--------------------------------------------------------------------------------

Unidentified Company Representative, [15]

--------------------------------------------------------------------------------

It's just optimization.

--------------------------------------------------------------------------------

Stephen Ma, Nissan Motor Co., Ltd. - Corporate VP [16]

--------------------------------------------------------------------------------

It's just optimization of the CapEx so far. I'll come back to you with more detail from the Communication team.

--------------------------------------------------------------------------------

Unidentified Company Representative, [17]

--------------------------------------------------------------------------------

Okay. Anyone else with additional question, please? No? No additional question?

--------------------------------------------------------------------------------

Unidentified Company Representative, [18]

--------------------------------------------------------------------------------

[Interpreted] Excuse me, going back to your question, as a consequence, the total amount is JPY 10 billion less. But it doesn't mean that -- I cannot -- we are not giving you the breakdown of each item, but -- okay. Do we have the reasoning behind JPY 10 billion at the end? We cannot disclose it to you, because there we have been revising the overall picture. And as a total, we reduced it by JPY 10 billion as a consequence. I hope you understand this.

--------------------------------------------------------------------------------

Unidentified Company Representative, [19]

--------------------------------------------------------------------------------

So anyone else with additional question? Yes, go ahead.

--------------------------------------------------------------------------------

Unidentified Participant, [20]

--------------------------------------------------------------------------------

[Interpreted] [TVS TV], my name is [Umeda]. Talking about Japanese market. In October, there was a raise in the consumption tax. And how did you -- how do you analyze the impact on the consumption tax hike? And there, what is the repercussion or backlash from the raise of the consumption tax today?

--------------------------------------------------------------------------------

Stephen Ma, Nissan Motor Co., Ltd. - Corporate VP [21]

--------------------------------------------------------------------------------

October, we saw decline in TIV for Japan. And right now, it's a little difficult to decipher how much of that is due to consumption tax hangover. As you know, we had typhoons. We had many weather factors in the month of October, which affected our [weekend short-term] traffic. So we are still trying to analyze the impact of that in October.

--------------------------------------------------------------------------------

Unidentified Company Representative, [22]

--------------------------------------------------------------------------------

Okay. Yes?

--------------------------------------------------------------------------------

Hans Greimel;Automotive News;Editor, [23]

--------------------------------------------------------------------------------

Hans Greimel from Automotive News. I'd like just to get an update on the performance or the outlook for the performance in the U.S. market. Last time we heard from former CEO, Saikawa. He said that they were still targeting 1.4 million vehicles in the year ending March 31, 2023. When do you expect to see actual turnaround in the U.S. sales for Nissan? And is that really critical or hinging on the performance of the overall market there? So I'd like -- 2 questions, really. What's your outlook for the overall market in the U.S? How long will it keep going down? And when do you expect Nissan to turn the corner and recover in the U.S.?

--------------------------------------------------------------------------------

Stephen Ma, Nissan Motor Co., Ltd. - Corporate VP [24]

--------------------------------------------------------------------------------

Okay. So I believe in the outlook we just showed here, the outlook we have for U.S. is 1.31 million units for the full fiscal year. So slightly down versus what we had announced before and in line with what we see based on current pace. And as we saw -- as we showed in Q2 for the U.S. stand-alone, we are already starting to see improved quality of sales in the U.S., which is our primary focus right now. Unlike in the past, we're not chasing market share. We're not chasing volume. We are really primarily focused on sustainable long-term growth. So the most important thing for us right now is the business fundamentals in the U.S., making sure we are doing everything we can in every aspect of quality and sales. So with the new Versa and the new Sentra that's coming and the new models, as I mentioned, I think we will start to see very good improvement in the following months. Does that answer your question?

--------------------------------------------------------------------------------

Hans Greimel;Automotive News;Editor, [25]

--------------------------------------------------------------------------------

(foreign language)

--------------------------------------------------------------------------------

Unidentified Company Representative, [26]

--------------------------------------------------------------------------------

Thank you. Okay, anyone else with additional question? Yes?

--------------------------------------------------------------------------------

Stephen Ma, Nissan Motor Co., Ltd. - Corporate VP [27]

--------------------------------------------------------------------------------

So maybe just come back about the earlier question about CapEx. Sorry, I didn't answer it properly before. Just looking at the detail, there's no change in CapEx. This change of JPY 10 billion is purely the FX impact. So the translation of the overseas and all the different currency CapEx is the result -- resulting in about JPY 10 billion.

--------------------------------------------------------------------------------

Unidentified Participant, [28]

--------------------------------------------------------------------------------

[Interpreted] May I? Nippon Hoso, my name is [Hatanaka]. This financial results themselves that you showed us, is this -- as a company, do you have a sense of urgency or can you be optimistic? I mean now you will be appointed the new CFO. So looking at the financial performance, I mean how do you see it, your frank opinion, please? What's your perception on it?

--------------------------------------------------------------------------------

Stephen Ma, Nissan Motor Co., Ltd. - Corporate VP [29]

--------------------------------------------------------------------------------

Well, the company is very urgently working on all the improvement actions, and we are as I mentioned, on track in one of the main key pillars, which is the U.S. market. For the improvement, more action details in the future, I will wait for the new CEO and then the management team to come in a later date to explain, as I said before. Is that okay? But so far, we are progressing very well and on track in most of the improvement actions we are doing inside the company.

--------------------------------------------------------------------------------

Unidentified Company Representative, [30]

--------------------------------------------------------------------------------

Okay. Thank you. Yes?

--------------------------------------------------------------------------------

Unidentified Participant, [31]

--------------------------------------------------------------------------------

[Interpreted] Yomiuri Shimbun, my name is [Kawaguchi]. Dividend revision that you made. So far, Nissan has been enjoying a high payout ratio. And going forward, how -- what will be the dividend level going forward? What's the direction for the dividend going forward? That's my question.

--------------------------------------------------------------------------------

Stephen Ma, Nissan Motor Co., Ltd. - Corporate VP [32]

--------------------------------------------------------------------------------

Yes. So as mentioned, this JPY 10 per share based on the first half profit per share is roughly 60% payout ratio. In the past, we've been paying around -- paying out around 30% payout ratio. The new dividend policy or if we're going to revise, we have to wait for the new CEO, and we'll kind of discuss with the new management team and propose to the Board. So please wait for our future update. Thank you.

--------------------------------------------------------------------------------

Unidentified Company Representative, [33]

--------------------------------------------------------------------------------

Okay. Thank you. Yes. Anyone else? No? No more question?

Okay. Since there's no one else who is asking question with us, we would like to conclude the press conference. Thank you for joining us.

--------------------------------------------------------------------------------

Stephen Ma, Nissan Motor Co., Ltd. - Corporate VP [34]

--------------------------------------------------------------------------------

Thank you very much.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]