AGF Management (TSX:AGF.B) Q1 2026 Earnings Call

0:00 Thank you for standing by, and welcome to the Q1 twenty twenty six AGF Management Limited Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. As a reminder, this call is being recorded. I would now like to introduce your host for today's conference, Mr. Sang. You may begin. Thank you, operator, and good morning, everyone. I'm Ken Sang, Chief Financial Officer of AGF Management Limited. Today, we will be discussing the financial results for the first quarter of twenty twenty six.

0:46 Slides supporting today's call and webcast can be found in the Investor Relations section of ajf.com. Also speaking on the call today will be Judy Goldring, Chief Executive Officer. For the Q and A period following the presentation, Ash Lawrence, Head of AGF Capital Partners and David Stonehouse, Interim Chief Investment Officer will also be available to address questions. Slide four provides the agenda for today's call. After the prepared remarks, we will be happy to take questions. With that, I will now turn the call over to Judy. Good morning, and thank you for joining us. Before we get into the specifics of the quarter, I'd like to touch on some exciting news for AGF Investments announced late yesterday. Following a comprehensive global search, we are thrilled to welcome John Porter as Chief Investment Officer for AGF Investments effective 05/01/2026.

1:40 John brings decades of investment management and leadership experience overseeing investment management teams across markets and asset classes. John will also join AGF's executive management team and will report directly to me. I want to sincerely thank David Stonehouse for his contributions as interim Chief Investment Officer. David provided steady leadership that helped ensure disciplined execution and oversight of the investment management team during a pivotal period for the firm. Looking ahead, I'm confident that under John's leadership, the investment team culture of high performance, collaboration and risk management will continue positioning the firm for future growth. Continuing with our Q1 highlights against the backdrop of significant market volatility, AGF continued to demonstrate the durability of our business.

2:34 Outside of the impact of long term investments, which I will speak to shortly, Q1 was a solid quarter. AUM and fee earning assets were over $60,000,000,000 at the end of Q1, up 12 from a year ago. AGF Investment's retail mutual fund business reported net sales of $237,000,000 in the quarter, marking our seventh consecutive quarter of positive retail mutual fund net sales. Seven of AGF Investment Funds earned Fund Grade A plus awards, which are given annually to investment funds that have delivered consistent outstanding risk adjusted performance throughout the year. The seven award winning funds span across our suite of equities, balanced and fixed income strategies.

3:21 We continue to generate strong free cash flows, totaling 36,000,000 in the quarter, which is up 14% from last quarter. Free cash flows were $122,000,000 over the trailing twelve months. Our balance sheet remains strong with $432,000,000 in short and long term investments, net debt of $48,000,000 with $160,000,000 available on our credit facility. The strength of our balance sheet and capital position provides us with flexibility to deploy capital thoughtfully in line with our strategic priorities. On the back of our strong capital position, the board unanimously declared a 13.5¢ per share quarterly dividend for Q1 twenty twenty six, representing an 8% increase.

4:08 This is the sixth consecutive year where we have increased our dividend. Following the quarter, we were pleased to see AGF added to the NASDAQ Broad Canadian Dividend Achievers Index, reflecting our track record of consistent dividend growth and our ongoing focus on returning capital to shareholders. During the quarter, we did see revenue from our long term investments decreased to negative $10,600,000 This represents a 2.5% decline in the value of our long term investments during the period. As a consequence, our adjusted EPS from AGF Capital Partners was negative $05 per share. Excluding AGF Capital Partners, adjusted EPS was $0.35 which is up 21% year over year.

4:54 And our adjusted diluted EPS was $0.30 in the quarter. Starting on slide six, we will provide updates on our business performance. On this slide, we break down our total AUM and fee earning assets into categories disclosed in our MD and A and show comparisons to the prior year. AGF Investment's Canadian mutual fund AUM was 36,000,000,000, up 15% year over year, outpacing the industry increase of 14%. The growth of our ETF and SMA AUM globally remains strong, up 54% year over year. I'll provide more color on our mutual fund sales and ETFs and SMA AUM in a moment.

5:40 Segregated accounts and sub advisory AUM decreased by 9% compared to the prior year. The decrease is driven by the redemptions from two institutional clients as disclosed in previous quarters. Subsequent to quarter end, we saw inflows of $350,000,000 from an institutional client. We continue to see strong interest in our strategies in the institutional space with a number of existing clients. Our private wealth AUM increased by 13% compared to prior year to approximately $10,000,000,000 And our AGF Capital Partners AUM and fee earning assets were $4,500,000,000 at the end of the quarter. As a reminder, New Holland Capital's AUM of approximately $10,000,000,000 is not consolidated into AGF's total AUM and fee earning assets at this time.

6:31 Turning to slide seven, I'll provide some details on mutual fund sales. The mutual fund industry in Canada saw net positive sales of 19,000,000,000 in the quarter. AGF Investments retail mutual funds delivered the seventh consecutive quarter of positive net sales totaling $237,000,000 in line with the industry net sales rate of 0.7% of AUM. Since Q1 twenty twenty four, the Canadian mutual fund industry has recorded approximately 55,000,000,000 of net sales, representing 2.5% of AUM. Over that same time period, AGF's retail mutual fund business generated roughly $1,000,000,000 of net sales or 3.3% of AUM, demonstrating our ability to continually grow market share.

7:19 The strength of our retail mutual fund sales reflects the successful execution of our distribution strategy and our strong investment performance. Let me provide a brief update on our investment performance. AGF Investments measures mutual fund performance by comparing gross returns before fees relative to peers within the same category with the first percentile being the best possible performance. Our one year performance was in the thirty fifth percentile. Our three year performance was in the forty sixth percentile. Our five year performance is in the thirty ninth percentile. And nearly two thirds of our funds are outperforming our peers on a three and five year basis. Turning now to slide eight. In addition to our retail mutual fund net flows of $237,000,000, the AUM and our ETF and SMA vehicles, which has now reached 4,500,000,000 have grown at 64% on a compounded basis over the last two years.

8:19 We continue to see consistent growth and momentum in our SMA vehicles across US, Canada and Asia, where many of our strategies are available on leading wealth management platforms. In January, we launched ETF series of AGF Global Select and AGF American Growth Fund here in Canada, two funds with longstanding and proven track records. The launch expands our Canadian ETF lineup and addresses growing advisor demand for more choice and how they access our capabilities for investors. I will now pass it over to Ken to discuss our financial results. Thanks, Judy. Slide nine reflects the summary of our financial results with sequential quarter and year over year comparisons. The financial results in these periods are adjusted to exclude severance, corporate development, non cash acquisition related expenses, as well as other adjustments as noted in our MD and A.

9:13 Adjusted EBITDA for the quarter was 30,000,000 down $22,000,000 from the prior quarter and $18,000,000 from the prior year, primarily reflecting lower net revenues from AGF Capital Partners long term investments, which we will expand on in a moment. SG and A was $65,000,000 down $3,000,000 from the prior quarter and up $1,000,000 from the prior year. The decrease from the prior quarter was attributable to lower non compensation and performance based compensation, offset in part by the seasonally higher government benefits recorded in this quarter. The increase from the prior year was primarily due to higher non compensation expenses, reflecting the impact of inflation, as well as increased sales and marketing and other AUM driven costs.

10:02 Net income attributable to equity owners for the quarter was $20,000,000 and adjusted diluted EPS was $0.30 Free cash flows for the quarter was $36,000,000 which is $4,500,000 higher than the prior year and prior quarter, reflecting strong cash generation. As a reminder, free cash flows excludes noncash items such as fair value mark to market adjustments on our long term investments. Slide 10 provides a further breakdown of our net revenues. Within our traditional asset and wealth management businesses, net management fees were $93,000,000 for the quarter, which is $2,000,000 lower than the prior quarter and $7,000,000 higher than the prior year.

10:48 Sequential quarter decrease in net revenue rates reflect the timing of fund expenses as well as one less day in the quarter. Revenue from AGF Capital Partners was $800,000 this quarter, which decreased by $22,000,000 against the prior quarter and $23,000,000 against the prior year, driven primarily by lower revenues in our long term investments. This quarter, we recorded a negative $16,800,000 fair value adjustment of long term investments, partially offset by $6,600,000 in distribution income, resulting in revenues from long term investments of negative 10,600,000 This was primarily driven by our legacy long term investments in the infrastructure space.

11:35 While these investments have returned over $36,000,000 in distributions over the last thirty six months, the sector has not been immune from the economic and trade environment. As a reminder, AGF is an investor in these legacy long term investments where we also have retained an economic interest, but not the management of the funds. We view these as long dated investments. And as we have seen in prior quarters, fair value adjustments can be lumpy, but we remain pleased with the long term performance. Since inception, these investments have generated returns of over 11% per annum, exceeding our target annual returns of 8% to 10%. In addition, this quarter, we recorded $4,600,000 in other fair value and income mostly related to our share of the twenty twenty five profits earned at New Holland Capital.

12:31 On slide 11, we outline adjustments to our EBITDA. As you might recall, M and A transactions in the AGF Capital Partners business gives rise to various LTIP contingent consideration and put obligation liabilities. These liabilities are fair valued each quarter with a difference flowing through to the P and L. These accruals and fair value adjustments have no immediate cash impact, which is why we've adjusted for these items to facilitate easier comparisons of our quarterly results. Adjusting for these items, along with severance and other adjustments, our adjusted EBITDA for this quarter is $30,000,000 Turning to slide 12, I will walk through the yield on our business in terms of basis points. This slide shows our average AUM, net management fees, adjusted SG and A and EBITDA as basis points on our average AUM in the current quarter, previous quarter and trailing twelve months.

13:26 This view excludes AUM and related results from AGF Capital Partners as well as DSC revenues, other income, and any other onetime adjustments. The EBITDA yield this quarter was 24 basis points, which is consistent with the prior quarter and trailing twelve months. Turning to slide 13, I will discuss our free cash flows and capital uses. This slide represents the last five quarters of consolidated free cash flows on a trailing twelve month basis as shown by the orange bars on the chart. The black line represents the percentage of free cash flows that was paid out as dividends. Our trailing twelve month free cash flows was $122,000,000 and our dividend paid as a percentage of free cash flows was 26%.

14:13 In the same period, we returned 71,000,000 to shareholders, consisting of $32,000,000 in dividends and $39,000,000 in share buybacks. During the quarter, we repurchased over 1,000,000 shares under our NCIB. We ended the quarter with net debt of $48,000,000 We also have $432,000,000 in short term and long term investments and have $160,000,000 remaining on our credit facility, which provides credit to a maximum of $250,000,000 Our future capital allocation will be balanced and includes return of capital to shareholders in the form of dividends, share buybacks, as well as investing in areas of growth. Before I pass it back to Judy, let me take a minute on slide 14 to look at our valuation.

15:02 AGF's current enterprise value is approximately $1,300,000,000 Taking into account our four thirty two million dollars of short and long term investments with a conservative 10% discount, our remaining enterprise value is about $945,000,000 This implies a seven times EV to EBITDA multiple on our fiscal twenty twenty five adjusted EBITDA, excluding income from our long term and short term investments. Comparing this multiple to those of other traditional and alternative asset managers and recent acquisitions would suggest further potential upside to our valuation despite the strong positive share movement over the past few quarters. When we do see volatility in our stock, we continue to be very active and we'll continue to look for opportunities to buy back shares opportunistically.

15:56 I will now pass it back to Judy to close out the presentation. To sum up this first quarter, we continue to make progress against our strategic objectives. Our traditional asset and wealth management business remains strong. Our AUM and fee earning assets continue to climb reaching over 60,000,000,000 or 12% higher from prior year. Our investment performance remains solid and our sales momentum remains strong. We are confident in the progress and direction of our private capital and alternatives business, notably its contribution to the diversification of AGF's overall business. We remain disciplined in our expense management while investing for growth. We increased our quarterly dividend by 8% continuing a six year track record of dividend growth.

16:45 And the strength of our balance sheet and capital position provides us with the flexibility in our capital allocation strategy and the resilience to weather different market environments. I would also like to take a moment to thank our AGF team for all their hard work. We will now take your questions. Thank you. Our first question comes from Gary Ho with Desjardins Capital Markets. Your line is open. Thanks. Good morning. Just wanted to start off with a question on your private alt side.

17:34 Just wondering if you can walk us through that $16,800,000 of non cash fair value adjustment loss in the quarter. I know you carry infrastructure assets, private equity through Kensington and some private credit exposure. Can you maybe just break down what that relates to? I know there's sometimes DCF kind of involved in valuing these assets. Is it lower expected cash flows looking out or higher discount rates? And are the marks appropriate now in your view and what gives you that confidence? Hi, Gary, it's Ash here. I'll take that question. As mentioned in Judy and Ken's earlier comments, the net $10,600,000 in fair value adjustments after the distributions, that was largely driven by markdowns in our legacy infrastructure fund holdings.

18:27 Based on recent discussions we've had with the general partner for those funds, those adjustments were largely driven by the impact around the current economic environment in certain sectors, as well as the continued uncertainty through the end of last year with the cross border tariff environment, and that is impacting certain businesses within their portfolio. I would also note that the net adjustment amount, the 10,600,000 equates to a pretty modest 2.5% adjustment in the value of our long term investments. And Ken mentioned this in his comments as well. But over the long term, our long term investment portfolio has produced an 11% return to AGF. And as with most private investments, we have a long term perspective on these investments, and we continue to be pretty pleased with the performance that they're giving us.

19:17 That said, we are reducing our expectations for returns on the portfolio for this fiscal year for fiscal twenty twenty six from our typical long term guidance around 8% to 10% to a more modest 5% to 6% for this year. And just to remind you again, our infrastructure investments, these are legacy fund investments where while we do retain an interest in certain fund economics, we do not have an ownership in the manager of these funds. Okay. Thanks for that. Ash, maybe just clarify that. That 5% to 6%, does that include the negative 2.5% in Q1? And then also the infrastructure assets that you mentioned, any Middle East exposure there?

20:03 Are they all North American? Yes. So, on your first question, that does include the 2.5%. There is no direct Middle East exposure. Certain assets in that business will have energy market exposure, which obviously at some point will tie back to what's going on in The Middle East. Okay. Got it. Okay, great. And my second question, I did see decent retail flows in the quarter, which included the RSP season. Can you elaborate on the retail environment today? And also last quarter? What are you seeing through your distribution channels? I know the markets have been choppy of late, geopolitical risk. Has that kind of put a dent in the retail flows at all? How's the retail side holding up?

20:53 Yes. Thanks Gary. Judy here. Well, we did comment that we saw $237,000,000 of net sales for the quarter. That was adjusted for one institutional outflow that occurred during the quarter as well. That being said, we found we were quite pleased because we were right at market at 0.7% of AUM, which is the same as what industry saw. As well, mutual funds obviously a primary source for us, we do see continued growth in our SMAs. And I think as we look to the industry and as it continues to evolve, looking to how we count for the SMA flows is something that I think a number of our market participants are trying to deal with. But really we would have seen double of our net sales had we included our SMAs.

21:42 And quarter to date, can just let you know we're about $40,000,000 net positive quarter to date. What we are seeing is a bit of skittishness with investors as they sort of assess where this market turmoil and the economy generally is going given the volatility. But we're still seeing strength in our SMA business, a little bit of softness on the mutual fund side. And Gary, the $40,000,000 of quarter to date net sales excludes the SMA flows. Yes, got it. Okay. And then maybe if I can sneak one in for Ash. I believe in the you passed the lockup terms for the ability to increase your stake in New Holland Capital. I would have expected announcement by now, but given the outperformance there, is there something that we're missing or talks are just ongoing? Just would appreciate an update there.

22:31 Yes. Hi, Gary. You are correct. We are in a position starting in the first half of this year to exercise an option to increase our ownership in New Holland Capital. One thing to note, that window remains open through the first half of 'twenty seven as well. So it is not a one time singular event. We have a window to exercise. We are actively evaluating that option. And I think we've mentioned this on prior calls, but we are pretty pleased with our partnership and with the progress that New Holland has made over the last couple of years. In Canadian dollar terms, we've seen their AUM increase from approximately $7,000,000,000 when we made our initial investment to around $10,000,000,000 today. So, we are in active analysis and discussions around that option now.

23:18 Okay, great. Thanks for the update. I'll jump back in the line. Thank you. Thank you. Our next question comes from Bart Ziarski with RBC Capital Markets. Your line is open. Great. Thanks. Good morning, everyone. Just wanted to ask around AGF Capital Partners. The recurring manager earnings of $6,300,000 they're down sequentially and year over year. Can you just help us understand what's driving that trend? Yes. Hi, Bart. It's Ash again. So that trend is largely due to some fair market value adjustments in Kensington's Evergreen private equity and venture portfolio.

24:03 That obviously results in lower net asset values on which the fee rate is applied for those vehicles. So depending on exactly which historic period you're comparing to, there may also be a little bit of impact from capital that was redeemed from that same fund in Q1 of twenty twenty five. But that impact is largely driving that reduction you're seeing. Okay, great. Thanks. And just a clarification, how big is the Evergreen PE venture portfolio? That vehicle is approximately $1,200,000 of NAV. Okay, thank you. And then if we could just get an update on Kensington, the redemption suspending, is there any line of sight or clarity that you can give us as to when we could sort of get through that?

24:56 Yeah, absolutely. So, there's an update on March 25, actually, Kensington held a unit holder vote to pass certain amendments to the terms of the private equity fund. As a result of that vote passing, the suspension is actually lifted now. It also eliminated the redemption queue, and it implements a new redemption framework that will allow the fund to operate without the need to further suspend redemptions. The amendments basically allow the fund to manage liquidity in a manner that's more consistent with the underlying investments, while also avoiding the pressure to liquidate assets either at inopportune times or at discounts.

25:41 And this sort of preserves the long term value for all the unitholders in the fund. So we are now in a position where the Kensington team is focused on the underlying assets again and managing that fund for its objectives for its unitholders. Got it. Thanks, Ash. Very helpful. That's it for me. Thank you. Our next question comes from Rommel Sabbat with Jefferies. Your line is open. Hi. Thank you for taking the questions. So I just have a question on the 4,300,000 of special interest income that you received in New Holland. Assuming that you don't convert to notes, should we expect another 4,000,000 to 5,000,000 of interest income in Q1 twenty seven?

26:33 Yeah, hi, it's Ken. The short answer is no. The $4,500,000 represents our proportionate share of the earnings of Newhall and above and beyond kind of the coupon that's collected. You will note that this is an increase. I think in prior year, we would have recorded a similar revenue amount to about $1,000,000 And so there is some volatility depending on sort of the overall profitability of New Holland. And 2025 was a good year for them. Part of those earnings were driven in part by the strong performance fees that they would have earned in a year as well. Okay, got it. Thanks. And the other question I had was so when we're looking at so so we when we're looking at the Internet management fee rate that you're collecting, so I think in the past, you've mentioned that you're expecting two basis points of annual compression.

27:34 Is that still relevant today? Like, we're still seeing two basis points of annual compression on that management fee, and what would that compression look like on on the revenue basis only? Yes. So we do still expect a roughly two basis point annualized rate of decline in a year. That's driven in part by the success in the growth of our fee based IROC channels as assets shift from MF Series to F Series, as well as what Judah alluded to earlier of just a tremendous success in the SMA business, which has grown by more than 50% since last year. So as a consequence, will see that while our revenue basis points will trend lower, our overall revenues will increase over time. This quarter was compounded by some volatility in terms of the level of AUM that we saw.

28:25 Just in the way it's calculated, there are the fees are determined based on daily AUM, but the denominator of that calculation is calculated based on simple averages for each of the months. And so that volatility does create a bit of noise in that number for this particular quarter. Okay, got it. All right, thank you for answering the questions. Thank you. Our next question comes from Graham Ryding with TD Securities. Your line is open. Hi, good morning. Ashley, if you could just go back to the Kensington, just maybe a little bit more color on how you're managing those, redemption requests going forward while while still preserving the performance of the fund. Can you give us a little more detail on what the what the specific changes are?

29:23 Yeah. Sure. So the the structure they've implemented going forward really provides the manager a little more flexibility in terms of making capital available for investor redemptions that is more consistent or in line with the cash management needs of the fund. It also basically eliminates an ongoing queue from ramping up, which can have sort of spiral effects on vehicles of this type. So, from a long term perspective, that allows them to manage the fund consistent with what are generally illiquid assets below. But it will require from a cash management perspective, ensuring that there is liquidity available to investors on relatively consistent basis, but it just doesn't put you in a vice grip at certain points in time in the market.

30:24 Okay. So, is there any sort of quarterly limit to redemptions in place, or is the entire structure fluid going forward? It's a little more fluid going forward. So the fund will endeavor to make 5% a quarter available, but that is neither a cap nor an obligation. Understood. Okay. And then the the earnings that you earned from, I guess, New Holland Capital this quarter, is that that's based on 2025 earnings for that business. So does that reflect your 25% sort of interest in that entity?

31:11 Is that the right way to think about it? And then what would be is it safe to assume that the run rate, the earnings run rate is higher than what's implied with that $4,600,000 that you received? Yeah. Hi, Graham. So yes, the earnings from New Holland does represent our 25% stake. I will sort of highlight that a proportion of that is related to performance fees. And so these earnings, again, could be lumpy as a consequence. Okay, understood. And then last question just for Judy. With the new hire of John Porter, can you just maybe elaborate a little bit on what it was about his track record or his skill set that sort of makes you think he's going to be a good fit for AGF and the right person for the role of CIO going forward?

32:05 Yes, thank you Graham. We're really excited that John has joined us. He'll start May 1. He comes from Boston, The U. S. He has a long decades, years of experience in investment management. He's been in leadership positions as well and certainly has overseen investment management teams across different markets and asset classes. And so the combination of sort of his passion, his capabilities, his leadership strength, being a talent portfolio manager, understanding the role of a CIO, I think he'll make a very strong addition to our investment team. So we're really excited by that. Certainly want to make sure I give credit to David Stonehouse as well for his significant contributions. It really was truly valued during a very pivotal period of our firm. And again, thank you to David for his work as interim CIO.

32:55 Okay, that's it for me. Thank you. Thank you. Our next question comes from Tom MacKinnon with BMO Capital. Your line is open. Yes, thanks. Good morning. Just to follow-up with respect to the March 25 agreement with respect to Kensington. I think you mentioned about clearing the redemption queue. Were there any redemptions then? What does that mean in terms of where the AGF Capital AUM, was sitting at $4,465,000,000 at the end of fiscal the end of Q1.

33:57 How should we be thinking about where that would be sitting right now as a result of clearing that redemption queue? Hi, Tom, it's Ash. Good question. So let me clarify. When I say cleared the redemption queue, I should have said eliminated the redemption queue. So no redemptions were paid out as a result of the amendment passing on March 25. So that AUM going forward or at least for now until liquidity is made available for redemptions will generally go forward reflecting fair market value adjustments in the portfolio until such time as liquidity is available for redemptions. And was there any in order to get that agreement, was there any reduction in fees that Kensington can get?

34:52 There was no reduction in fees. There was a consolidation of two classes that had a very nominal impact on fee levels for one of those classes that got a little bit lower from result of that consolidation, but nothing material. No. Okay. And then just a question with respect to severance and other expenses. Mean, these aren't supposed to be part of normal course, but they were like in 20 the last couple of years, they seem to be running about 2% of your overall expenses. They're closer to 5% in this quarter. Is there anything to call out? And should we continue to kind of see these below the line severance expenses going forward?

35:39 Yes, hi, Tom. Yes, the elevated expenses this quarter reflected some targeted workforce adjustments that we've made to align our portfolio and reposition for our initiatives. We make these tactical adjustments periodically in an effort to focus on improving efficiency while investing for growth. The number is quite lumpy. I mean, just to give you a sense, I mean, last quarter it was virtually zero, right? And so the end of this quarter it was 3.5, which is why we've adjusted it out. It just doesn't represent a normalized EBITDA run rate for the business. I mean, everybody's always investing in the business, but what's the decision then to move some of these below the line? I think it's a number of firms actually do adjust out severance just because the point of making the adjustments is to provide more of a run rate EBITDA number for evaluation purposes.

36:34 And it, you know, to my earlier point, you know, you similar to how we view fair value adjustments on the liabilities, which again can be lumpy. We try to just eliminate that noise. It's one of the few adjustments we make to the EBITDA. It's a fairly short list, but we felt that it's appropriate to do that for the investors to better evaluate our core underlying business from an EBITDA perspective. All right, thanks. Thank you. I'm not showing any further questions at this time.

37:31 Thank you very much for your questions. And in closing, our investment performance and sales momentum remain strong. Our strong balance sheet and strong cash flow position provides flexibility to return capital to shareholders, continue investing in the long term growth and remain resilient through challenging market conditions. We continue here at AGF to make progress against our strategic objectives and we look forward to our Q2 earnings call on 06/24/2026. Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.