U.S. Markets open in 1 hr 15 mins

Edited Transcript of QIWI earnings conference call or presentation 14-Nov-18 1:30pm GMT

Q3 2018 Qiwi PLC Earnings Call

NICOSIA Jan 3, 2019 (Thomson StreetEvents) -- Edited Transcript of Qiwi PLC earnings conference call or presentation Wednesday, November 14, 2018 at 1:30:00pm GMT

TEXT version of Transcript

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

Corporate Participants

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

* Alexander Karavaev

Qiwi plc - CFO

* Sergey A. Solonin

Qiwi plc - CEO & Director

* Varvara Kiseleva

Qiwi plc - Head of IR

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

Conference Call Participants

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

* Andrey Mikhailov

Sova Capital Limited, Research Division - Research Analyst

* Anna Kazaryan

VTB Capital, Research Division - Equities Analyst

* Brady Martin

Citigroup Inc, Research Division - Director

* Cristopher David Kennedy

William Blair & Company L.L.C., Research Division - Associate

* Ulyana Lenvalskaya

UBS Investment Bank, Research Division - Director and Analyst of Media and Technology

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

Presentation

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

Operator [1]

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

Good day, everyone, and welcome to Qiwi Third Quarter 2018 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the call over to Ms. Varvara Kiseleva, head of Investor Relations. Please go ahead.

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

Varvara Kiseleva, Qiwi plc - Head of IR [2]

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

Thank you, operator, and good morning, everyone. Welcome to the Qiwi third quarter earnings call. I'm Varvara Kiseleva, head of Investor Relations, and with me today are Sergey Solonin, our Chief Executive officer; and Alexander Karavaev, our Chief Financial Officer. A replay of this call will be available until Wednesday, November 21, 2018. Access information for the replay is listed in today's earnings press release, which is available on our Investor Relations website at investor.qiwi.com. For those listening to the replay, this call was held and recorded on November 14, 2018. Before we begin, I would like to remind everyone that this call may contain forward-looking statements as they are defined under the Private Securities Litigation Reform Act of 1995. These forward-looking statements about our expectations for future performance are subject to known and unknown risks and uncertainties. Qiwi cautions that these statements are not guarantees of future performance. All forward-looking statements made today reflect our current expectations only, and we undertake no obligation to update any statements to reflect the events that occur after this call. Please refer to the company's most recent annual report on Form 20-F filed with the Securities and Exchange Commission for factors that could cause our actual results to differ materially from any forward-looking statements. During today's call, management will provide certain information that will consist of non-IFRS financial measures, such as adjusted net revenue, adjusted EBITDA, adjusted net profit and adjusted net profit per share. Reconciliations of IFRS measures to certain additional information are also included in today's earnings press release. With that, we will begin by turning the call over to Sergey Solonin, our Chief Executive Officer.

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

Sergey A. Solonin, Qiwi plc - CEO & Director [3]

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

Thank you, Varvara, and good morning, everyone. Thanks for joining us today. I'm excited to share our third quarter results with you. This quarter we continued to grow our business, delivering an impressive set of numbers. Our core Payment Service segment demonstrated robust performance with 34 segment net revenue and 27 segment net profit growth. Our results this quarter were mainly driven by the growth in our key vertical, currently our betting related payment services that presented as part of our e-commerce market vertical as well by the development of our payment ecosystem. On top of that, our new segment which will operate through Tochka multi-banking platform, showed strong growth trends. We continue to enhance our key products and use case and develop our new business segments in order to offer our clients convenient solutions in our focused market vertical initiatives.

Given all of the above, we believe that our performance serves as a solid foundation for future growth. As we continue to benefit from the strong performance of Payment Services segment, which remains a core part of our business, generating significant cash flows, we are well-positioned to pursue our strategy and carry on with investing in new business lines and projects in order to build out our ecosystem, diversify operation, prolong the life cycle of our clients and ultimately secure the long-term growth prospects of our company.

Now on to some operating highlights. Payment Services segment volume increased by 26% to reach RUB 297 billion, driven by significant growth in e-commerce and Money Remittance verticals, which grew 56% and 46%, respectively, over the third quarter of 2017. The growth was largely driven by the circle of trends in our core categories including the boom of sports betting markets triggered by the football World Cup of 2018. The rollout of the products we report for our partners as part of our B2B2C and self-employed focus as well as by the development of our P to PS system. As of the 30th of September, we had 20.8 million Qiwi Wallet accounts, an increase of 1.8 million as compared to the prior year, resulting from our continuous effort to grow and leverage our ecosystem and implementation of B2B2C strategy. Our total Consumer Financial Services segment payment volume reached RUB 3.7 billion for the third quarter of 2018. While we also see positive dynamics across key operating metrics of the project including clients' lifetime value. Moreover, last month we have signed a partnership with Otkritie Bank, launching SOVEST Multibank platform. We're currently in the testing phase, verifying and enhancing the business model. With the launch of SOVEST Multibank, already we've transformed this project into a platform and on the operator of the (inaudible) products for banks. The derivative is one of the milestones in developing and scaling up [services sector] with building up wider Qiwi consistent. We will further focus on developing SOVEST project and position and extending the Multibank platform. Our SME segment, which we developed through Tochka, continues to demonstrate robust and great financial performance in the first quarter of 2018, significantly improving and creating efficiency through tariff optimization and cross-sell amplification, demonstrating attractive client domains. Fully devoted dynamics in our key market verticals converts into strong payments services and net revenue growth. And together with our new segment, contributed to the overall robust performance of our business. Alexander will walk you through the third quarter numbers in more detail just in a moment, but I would like to walk you through some recent developments.

This quarter we have finalized the Rocketbank transaction on the terms materially equivalent to those [regionally] agreed and consolidated this business as part of Qiwi Group. We started to transfer Rocketbank clients to Qiwi at the end of July. And by now, we have nearly finalized the process, transferring over 175,000 clients with over RUB 9 billion current account balances. We aim to conclude the transfer of the Rocketbank customers, personal and business processes to Qiwi by the end of 2018. We believe that Rocketbank is a unique proprietary product offering that has the potential to reach our [ecosystem.] We will provide an update with respect to this line of business during our inaugural Investor Day that we will hold in London on Monday, November 19. With this, I will turn the call over to Alexander, who will take you through our financial results in more detail. Alexander?

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

Alexander Karavaev, Qiwi plc - CFO [4]

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

Thank you, Sergey, and good morning, everyone. This quarter (inaudible) 62% to reach RUB 5.2 billion, up from RUB 3.2 billion for the third quarter of 2017. The increase was mainly driven by Payment Services and the Financial Services net revenue growth. Payment Services segment net revenue is 34% to reach RUB 4.3 billion compared to RUB 3.2 billion in the prior year. Payment Services, payment adjusted net revenue increased 38% to RUB 3.7 billion, up from RUB 2.7 billion in the prior year. As a result of the net revenue growth in our e-commerce and money interest verticals, we grew [63%] and 43% respectfully, offset by a decline in net revenue in Financial Services vertical by 10%. Our financial results in this segment was driven both by increase of volumes, as Sergey just described, and the improvement of the payment average net return income by 10 basis points year-over-year, as a result of change in category and product mix, offset by slight degree of decline in most key categories. Payment Services other adjustment net revenue increased 14% to RUB 589 million compared to RUB 518 million in the prior year. Consumer Financial Services segment net revenue was RUB 125 million for the third quarter 2018 as compared to the net revenue of RUB 52 million in the third quarter of the prior year, showing the development of our service project as well as the effect of the introduction of new consumer-focused options. Net revenue of the SME segment was RUB 842 million for the third quarter 2018 compared with nil in the prior year. Although the majority of company Tochka has been established as of September 30, 2018, business operations of the entity were not launched due to the timeline associated with legal procedures. But we'll continue to recognize Tochka project net revenues, which includes mostly Tochka revenues from information and technology agreements with Otkritie Bank for providing services to Tochka clients that have their accounts with Otkritie Bank in full for the third quarter 2018.

Moving on to expense. Strong operating performance of our Payment Services business that continues to generate substantial cash flows, supported our investments and the development of our new projects. This being said, adjusted EBITDA increased 23% to RUB 1.6 billion from RUB 1.6 billion in the prior year. Adjusted EBITDA margin was 31% compared with 41% in the prior year. The adjusted EBITDA margin contraction primarily results from the increase in the final expense of related taxes, as well as increase in client acquisition advertising expenses, all in short in connection was the development of the SOVEST project and the Tochka and Rocketbank projects and previous loss expenses. In short, the use of (inaudible) SOVEST project. Group adjusted net profit increased 10% to RUB 1.2 billion from RUB 1.1 million over the prior year. Adjusted net profit was largely affected by the same factors as adjusted EBITDA, as well as by foreign exchange loss, an increase of income tax expenses as compared to the prior year. Payment Services segment net profit increased 27% from RUB 2.5 billion compared with RUB 2 billion in the prior year, driven primarily by Payment Services segment net revenue growth. Consumer Financial Services segment net loss was RUB 699 million in the third quarter 2018, as compared to a net loss of RUB 625 million in the same period of the prior year, resulting from the expansion of the operation for the SOVEST project. The increase in cost mostly related to debt expenses and (inaudible) of taxes. SME segment net loss was RUB 80 million, resulting mostly from personal expenses as well as client acquisition and marketing costs. Corporate and other category net loss was RUB 538 million compared with a net loss of RUB 156 million in the prior year. The net loss was primarily driven by expense in certain connection with full-scale launch of Rocketbank project in September 2018, as well as several other individual insignificant projects. Finally, I would like to point out we are continuously driving our dividend distribution retention. As you saw in our earnings release, our Board of Directors refrains from this previous dividend for the third quarter of 2018. However, considering our expectations above the performance of the group, as well as our anticipated level of investments in 2019, the board intends to review the previously announced suspension of dividend payments in the third quarter from '19. As you heard, the long-term intention of the Company is to distribute all excess cash to its shareholders.

Now on to our guidance. We've increased our Payment Services segment net revenue guidance and expect Payment Services segment net revenue to increase by 22% to 27%, driven by the strong performance of our Payment Services business. We increased our total adjusted net revenue guidance and [cover] the increase of our Payment Services segment net revenue guidance, as well as the full recognition of the Tochka project net revenue for third quarter of 2018 and our expectations regarding SME net revenue for the full year. Thus, we expect our total adjusted net revenue to increase by 40% to 45% over 2017. We increased our Payment Services segment net profit guidance to incorporate the increase of our Payment Services segment net revenue guidance, and expect Payment Services segment net profit to increase by 17% to 22% over 2017. The increase in our group adjusted net profit guidance is offset as described above, and expected to decrease by 10% to 15% over 2017. With that, operator, please open up the call for questions.

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

Questions and Answers

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

Operator [1]

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

(Operator Instructions) Our first question is from Brady Martin with Citibank.

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

Brady Martin, Citigroup Inc, Research Division - Director [2]

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

Just wanted to get more color on exactly what surprised you in the second half of Q3, I guess, to raise the guidance. I mean you're generally a late reporter, you reported at mid-August with a certain level of guidance, now it's a much more bullish numbers. I read your statements saying your guidance increase was due to the upgrade in the Payment Services segment. I'm just wondering, what part of your results from mid-August to today, really surprised you and made you want to increase the guidance.

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

Alexander Karavaev, Qiwi plc - CFO [3]

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

Okay. Brady, thank you for your first question. First, it's primarily 2 major components of our Payment Services segments. First of all, it's e-commerce, which primarily is concentrated around (inaudible) and digital inter-payments -- actually on the previous call, we were discussing that we were expecting certain revenues in terms of euros and net revenue plus the World Cup. But this is something that we actually had been first time full-service for this segments itself and initially it was not having enough basis for (inaudible)of that segment. So it proved to be -- intent we would, I would say concerned for that time. And second part is our focus on self-employed, so it's (inaudible) -- it's primarily only concentrated around e-commerce and (inaudible) fellow projects that we discussed that were launched in the short half of this year. They are performing very well for this. And again, this is also the segment itself is relatively new. So we don't yet have full visibility on the size of markets or the dynamics of the markets. These 2 reasons are probably the major ones.

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

Brady Martin, Citigroup Inc, Research Division - Director [4]

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

On the first -- your first -- your response, part of it was around, I guess this betting around the World Cup. Are you just -- you're saying that the kind of your retention of clients or the -- post World Cup, the amount of business you're getting in that segments is more than you expected?

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

Alexander Karavaev, Qiwi plc - CFO [5]

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

Yes, that's exactly right. We weren't expecting that (inaudible) around the World Cup, we were thinking that it would probably be declining after the World Cup end, but up until now it looks like we attract a lot of an audience into that market and the growth that we are creating in August and September are slightly lower than in July but still very good, so fairly higher than our (inaudible).

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

Brady Martin, Citigroup Inc, Research Division - Director [6]

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

Great and this final question, is that continuing into Q4? I mean is that business maintaining into October, November?

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

Alexander Karavaev, Qiwi plc - CFO [7]

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

Exactly. That is what we expect. That is what we expect. So really, again, it's still probably maturing and growing, cannot definitely reach conclusions, but it looks like the future of that segment is kind of long-lasting so we would expect that trend to continue in Q4 and next year as well.

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

Operator [8]

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

Our next question is from Chris Kennedy with William Blair.

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

Cristopher David Kennedy, William Blair & Company L.L.C., Research Division - Associate [9]

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

I'm sure we'll get an update next week, but can you just give us an update on SOVEST and kind of how you're tracking. I think initially you were talking about like 2 million users by 2020 and mid 30% EBITDA margins. Please give an update on that.

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

Alexander Karavaev, Qiwi plc - CFO [10]

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

Yes, generally, we will be providing the update, as you mentioned, next week so we have quite a bunch of information that we're going to give before for SOVEST. So what I can say is that we really see the project dynamics on the user accounts as sort of -- we probably feel that we started to grow the net revenues, looks like that trend is going to continue. Again, we will provide some more color and details on the financial metrics of the project but what realize that it's starting from April or May, the core of users of service are already profit making so we figured out the proper composition of the distribution channel form the -- for the component of the -- to actually a positive. We (inaudible) and interest rate is promising as to say so. That is the conclusion so far and we will provide some more numbers on that next week.

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

Cristopher David Kennedy, William Blair & Company L.L.C., Research Division - Associate [11]

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

Okay. And then just one last one, any update on the macro environment and the consumer environment in Russia? That would be very helpful.

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

Alexander Karavaev, Qiwi plc - CFO [12]

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

I know what we see, I mean we see -- looks like it seems fine so far. So the generally macro parameters are not obviously shining but they're good. So what we see so far with (inaudible) that general dispense per consumer is at least stable. In certain lease verticals, it increases so that's general. So if we think about specifically I think the markets where we are really concentrated around so we see the continued shift from offline to online and this basically concerns the majority of Otkritie, our new partners. From that point of view, we continue to benefit from the cyclical of trend. And generally speaking, again, as I thought when I was answering the first question, we have not yet figured out in detail how we're going to be sizing, for example, the self-employed market, but our understanding as of now is that only the touch parallel will be for the penetration of additional service into that market is still very low. So the market itself is huge. And from that -- and we see a clear trend that audience is requesting more and more digital and online services. From that point of view -- from a secular standpoint of view, we're going to be benefiting a few more quarters.

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

Operator [13]

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

(Operator Instructions) Our next question is from Ulyana Lenvalskaya with UBS.

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

Ulyana Lenvalskaya, UBS Investment Bank, Research Division - Director and Analyst of Media and Technology [14]

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

The first question will be a follow-up on the e-commerce. To me, volumes in e-commerce were really surprisingly strong in the quarter. Were there any one-offs? And how should we think about the volumes in e-commerce in absolute ruble terms in the fourth quarter as compared to third quarter?

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

Alexander Karavaev, Qiwi plc - CFO [15]

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

So as I was telling previously, no, we don't see -- again, it's relatively a new market for us, especially around sport betting and self-employed but very strong user dynamic. In September and October, we feel that in Q3 there were no sort of say one-off items. So generally speaking, the trend is going to continue. And not only in Q4, but again, a yearly kind of RUB 50 million at the top of penetration of rubles in this market is still very low. So we would really expect to benefit from cycle of trend, from increasing of the penetration of those markets. For the Q4, I mean look, we are not really guiding on very specific segments, so I cannot tell you exact kind of growth rates but we would expect that to continue for the rest of the year.

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

Ulyana Lenvalskaya, UBS Investment Bank, Research Division - Director and Analyst of Media and Technology [16]

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

Because it was a fairly significant step up quarter-on-quarter, RUB 69 billion in volumes, and I guess seasonally, the fourth quarter should be even bigger, right? If there were no one-offs.

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

Alexander Karavaev, Qiwi plc - CFO [17]

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

Yes, generally that's what we expect.

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

Ulyana Lenvalskaya, UBS Investment Bank, Research Division - Director and Analyst of Media and Technology [18]

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

The second question will be on Tochka. Did I get you right that we should expect the revenue for the fourth quarter to be recognized by QVS again similar to the third quarter?

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

Alexander Karavaev, Qiwi plc - CFO [19]

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

Yes, that actually depends on when the migration of the Tochka operations will be completed -- migration of Tochka to a new joint venture is going to be completed. For now we have in mind the date December 1, when we will start actually signing the contracts and OpEx activity from here belongs to Tochka. And from that point of view, we -- the only portion of review remit by QIWI will only relate to the (inaudible) both Tochka clients have done, both of them. But generally, we may realize that the Tochka revenue for the fourth quarter should be around the same number as Q3. So that's our estimation for now.

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

Ulyana Lenvalskaya, UBS Investment Bank, Research Division - Director and Analyst of Media and Technology [20]

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

And another clarification if I may, on the bottom line guidance from the earnings guidance. This decline by 10%, 15%. To me, it sounds like it's a very conservative one, just mathematically the fourth quarter of last year was fairly low in terms of net income. So I just cannot -- cannot see how it can end up with this negative 10%, 15% in terms of earnings growth. Do you expect any one-off of growth in the fourth quarter we should keep in mind?

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

Alexander Karavaev, Qiwi plc - CFO [21]

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

I'm not seeing any. By this, I mean generally, yes, you're right, the guidance on net income is conservative, but it has a number of reasons. First of all, we're still investing on new projects like SOVEST, and towards the end of the year is actually a good time for the execution of clients for that type of product. And secondly, it's around August. So we have just almost migrated almost all the clients from (inaudible) and we're now seeing the dynamics of the clients and the perception of the clients of this kind of movement from accretive position is good. So we were expecting that probably have a churn rate that we were expecting should have been higher. So we have been continuing and we have been thinking of attracting some new clients for [Rocket]. So just probably 2 major factors why we would like to have some additional cash in Q4.

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

Operator [22]

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

Our next question is from Anna Kazaryan with VTB capital.

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

Anna Kazaryan, VTB Capital, Research Division - Equities Analyst [23]

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

The first one is again about guidance. So Payments Service segments, net revenue growth guidance seems quite wide taking into account that we already see results for 9 months and it implies quite significant deceleration in the fourth quarter. That's the low end of the guidance makes sense and isn't this guidance too conservative?

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

Alexander Karavaev, Qiwi plc - CFO [24]

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

Our position generally is to be conservative with the guidance. So again generally speaking, as I talked when answering previous questions, we are gaining several segments that we've got to renew. They have been quite promising, they have very promising results over the past couple quarters, but we still have to actually carefully assess how the users behave and what will be the take rates and the net revenue yield around all those verticals. So from that point of view yes, we would love to be conservative on this front.

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

Anna Kazaryan, VTB Capital, Research Division - Equities Analyst [25]

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

Then another question is that, we see that e-commerce yields, for example, decreased below 3% in the third quarter. How should we look on it further in this vertical?

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

Alexander Karavaev, Qiwi plc - CFO [26]

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

So I think they should be relatively stable. I mean it's basically a lot of new trends within the segments but we are still catching up. The long-term on this generally should have increased a bit, but we're also increasing out in the field, I mean the volumes and new verticals like in acquiring, in domestic, that means the express banking and many other things. And these kind of large segments usually provide for lower yield. So generally speaking, we do not really feel that there will be a lot of substantial changes around the yields within the next several quarters. But in general, we have been -- we discussed that many times in our earnings quarter, over the next few years, we really believe that in general, the payments costs will have constant pressure on the -- so that historically will happen with -- mainly for our verticals and this is something that is happening around the globe. So from that point of few, we really have to count on a increase of yield -- general for all this year because -- over the next several years. But this will not be happening kind of general but will take all this time for the changing deal.

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

Anna Kazaryan, VTB Capital, Research Division - Equities Analyst [27]

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

Final question is about other payments service revenue, it shows quite volatile in your dynamics, and particularly in excesses, but could you clarify what happens in this subsegment and what should we expect?

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

Alexander Karavaev, Qiwi plc - CFO [28]

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

I mean generally, it was not really changing a lot over the past few quarters. But it has been substantial change since kind of moment of time a couple years ago because we basically were refocusing from certain types of savings to other types of savings. Now we have to expect more or less stable level, so generally the majority of the line items will be in the other segment, as I said, more of this depending on volumes. In predefining environments (inaudible) to a certain extent mainly depends upon the marketing components and situation components that there are. But generally we would not really feel that there should be a lot of changes from that point of view.

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

Operator [29]

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

(Operator Instructions) Our next question is from Audrey Mikhailov with Sova capital.

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

Andrey Mikhailov, Sova Capital Limited, Research Division - Research Analyst [30]

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

My question is on dividends. Could you share the approach that you may have next year for the dividends? Could it be similar to the one we had before the [clause] or maybe it can be something different?

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

Alexander Karavaev, Qiwi plc - CFO [31]

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

We have debated that a lot internally and looks like -- at least from a management point of view, obviously all the decision has to be made by the board. But for management point of view, and based on the numbers that we see in our estimation of 2019 budget compared to the budget for the company, we will be in a position to offer to the board that we have to restart paying dividends. So we would generally expect that the total amount of investments into new projects as a percentage of profit-making segments will slightly decrease due to many factors. And this actually is divided for that company. Again, we will provide certain kind of view on that next week on the Capital Markets Day, but generally, the decision by the board will be taken post Q1 as well which we believe is going to be very different (inaudible).

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

Operator [32]

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

We have reached the end of our question-and-answer session and I would like to turn the conference back over to management for closing remarks.

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

Sergey A. Solonin, Qiwi plc - CEO & Director [33]

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

So thank you everyone for joining us today, and we would really appreciate if you could join us in person or by video stream for our inaugural Capital Markets Day next week, November 19, in London in (inaudible) with Barclays. Thank you all.

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

Operator [34]

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

Thank you. This concludes today's conference. You may disconnect your lines at this time, and thank you for your participation.