Q4 2022 Allego NV Earnings Call

Participants

Mathieu Bonnet; CEO & Director; Allego N.V.

Ton Louwers; COO & CFO; Allego N.V.

Chandni Chellappa; Research Analyst; Crédit Suisse AG, Research Division

Douglas Lee Becker; Research Analyst; Capital One Securities, Inc., Research Division

Matt J. Summerville; MD & Senior Research Analyst; D.A. Davidson & Co., Research Division

Unidentified Participant

Presentation

Operator

Greetings, and welcome to Allego's Fourth Quarter and Fiscal Year 2022 Earnings Conference Call. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, [Flory Schwartz] with ICR. Thank you. You may begin.

Unidentified Participant

Good afternoon. I want to welcome everyone to Allego's Fourth Quarter and Full Year 2022 Earnings Call. Today's speakers are Mathieu Bonnet, Chief Executive Officer; along with Ton Louwers, Chief Financial Officer.
During today's call, we may make certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations and assumptions and as a result, are subject to risks and uncertainties. Many factors could cause actual events to differ materially from the forward-looking statements made on this call. For more information about these risks and uncertainties, please refer to the risk factors in today's press release and the company's filings with the Securities and Exchange Commission.
Readers are cautioned not to put any undue reliance on forward-looking statements and the company specifically disclaims any obligation to update the forward-looking statements that may be discussed during this call.
During our call today, we will also reference certain non-IFRS financial information. We use non-IFRS measures in some of our financial discussions as we believe they represent our operational performance and underlying results of our business. The presentation of this non-IFRS financial information is not intended to be considered in isolation or as a substitute for or superior to the financial information prepared and presented in accordance with IFRS as issued by the IASB. And our non-IFRS measures may be different from non-IFRS measures used by other companies.
Reconciliations of IFRS to non-IFRS measures as well as the description, limitations and rationale for using each measure can be found in our filings with the SEC. I'll now turn the call over to Mathieu Bonnet, CEO.

Mathieu Bonnet

Thank you, [Flory]. Good afternoon to everyone, and welcome to our fourth quarter and full year 2022 earnings call. I will begin today with a brief overview of our results, followed by an update on the progress we have made since speaking with you last time. I will then turn the call over to Ton Louwers, our CFO, for a closer look at the numbers. But first, an overview of the company for those who may be new on the call and I hope they are (inaudible).
Allego is a pioneer in driving and enabling the electric vehicle revolution by building the largest public EV fast and ultrafast infrastructure across Europe. Allego both -- has a vast network of over 34,000 charging points, both public and private, at almost 23,000 diversed locations across 16 countries. This positioning has solidified Allego's market leader status in Europe, and we are expanding quickly.
With a focus on growth, Allego is shifting rapidly from slow and fast EV charging to fast and ultra-fast EV charging that we fully own and operate with already a portfolio of more than 1,500 fast and ultra-fast charging points that are poised to benefit from the growing demand for full battery EV and that consequently accelerate the adoption of EVs.
Through its relentless efforts to expand its network, Allego is uniquely positioned to meet the evolving needs of the electric vehicle market and drive the sustainable future. Importantly, [BNA] estimates that the number of full battery electric vehicles in Europe is projected to reach approximately 14 million by 2025, underpinning our confidence in our growth trajectory. For context, as of 2022, Europe has approximately 4.7 million full battery [vehicles] on the road.
Turning now to our results and progress, I am very pleased with our development to end of 2022, which marks our first year as a public company, 9 months exactly. While the year was filled with milestones, we worked through a very challenging macro environment and I am excited with the way our entire team has performed to deliver our results.
We finished 2022 with revenue of EUR 133.9 million. Our strong revenue performance was primarily the result of significant growth in Charging revenue, which was our objective, while Services revenue also improved meaningfully. Our Charging revenue increased more than 150%, while our Service revenue was nearly 14%, with growth across all key metrics, including full year 2022 total charging sessions increasing to 9.2 million, an increase of nearly [51%]. The fourth quarter 2022 utilization rate of 13.4% compared to 7.4% and full year 2022 total energy sold almost doubling to 154.6 gigawatt hours. This is all in comparison to the prior year period.
Our full year 2022 operational EBITDA was EUR 2.3 million compared to EUR 9.2 million in the prior year period. The decrease was expected as we had took up with massive increase of 135% of energy price due to energy crisis in Europe before the kickoff of our hedge through the signing and preparation of power purchase agreements in 2022. We mitigated the situation with price increases which took place in January, September and October 2022 that has not triggered as explained, a decrease in utilization rate or energy sold, which shows the strong power pricing of Allego.
With these measures, we have seen a strong recovery of our gross margin in Charging revenue, especially for our ultra-fast charging in Q4 2022. We reached in Q4 2022 an operational EBITDA of EUR 7.8 million. We are continuing to see margin improvements through Q1 2023 with our energy hedge being implemented and a strong activity in charging.
Importantly, in the fourth quarter of 2022, we executed on 2 strategic initiatives to buttress our development. First, in December, we increased our credit facility by EUR 230 million to EUR 400 million. The new facility will be used to expand our investments in our ultra-fast charging stations to be deployed to equip our significant backlog of signed contracts. All our 2023 investment need will be largely covered.
Second, last November, we contracted with a leading independent renewable producer that will provide 25 gigawatt hours of solar energy, which took effect in January 1, 2023. This will cover a majority of our operation in Germany for 2023. This contract will provide us with a natural hedge in quality and input pricing for the next 10 years with a very attractive fixed price.
Meanwhile, we signed 3 more PPAs agreements with renewable assets in Germany and the Netherlands at beginning of this year, providing in total already more than 160 gigawatt hour in 2023 and 2024 for a 10-year duration, each at very attractive fixed price. We are on track to reach our target to cover 80% of our energy needs onwards at the end of 2023.
The sale of certificates of carbon credits directly generated from the sale of our green energy as being a complementary source of income that mitigated our energy cost increase in 2022. This provides a robust natural hedge against rising energy prices. The value of these certificates available in our main markets will provide long-term complementary revenue directly linked to the volume of our sales.
During the year, the income generated from the sale of the certificates was EUR 9.5 million compared to EUR 5.4 million during the same period in 2021. With this strategy in place, we believe that we are now well equipped to face the volatility of energy price for our Charging business line. This Charging business on our own network is to be more and more important in our revenue mix compared with Services and provide a stable visibility for our margin.
Now turning to some commercial developments during Q4 2022. I would like to highlight some examples. We commissioned 4 big ultra-fast charging hubs on highway network in France, designed, owned and managed by Allego. In total, we installed 16 ultra-fast chargers, each charger dispensing up to 300 kilowatts. In addition, we signed an agreement with Pathé, again, in France, a theater network to equip 11 prime locations with ultra-fast stations.
In Germany, we added 2 new key accounts, Patrizia, real estate and the network of toom, do it yourself retailer, representing 69 sites with hundreds of ultra-fast charging ports. Germany is a key country in Europe for EVs, and Allego is accelerating very quickly there with an increasing backlog of contract sites.
Very importantly, 2022 has confirmed the execution of our plan in the acceleration of the rollout of our own ultra-fast network. We have increased by more than 8 in the number of ultra-fast charging points we own in 2022 to reach around 750 end of Q4 last year, and we are accelerating. It shows that we are able to execute and despite this massive increase of chargers, we see a continuous increase of utilization rate, which shows that we are catching more traffic.
Regarding our growth ahead, our backlog continues to grow with a higher demand for electric vehicle charging and our size and scale creates additional momentum for our partners. We had a secured backlog of 1,300 sites at the end of December 2022. All these sites are signed up for a lease term of an average of 15 years and include approximately 8,600 fast and ultra-fast charging ports, which translates into growth of more than 90% from December 2021.
Our ability to offer at key solutions with strong core technological competency, bringing high uptime continues to be a unique value proposition and advantage in the market. As Ton will discuss in greater detail, we are pleased to provide outlook for this year 2023. We expect revenue in the range of EUR 180 million to EUR 220 million and operational EBITDA in a range of EUR 30 million to EUR 40 million. From a top line perspective, we will continue to benefit from the growth of the market and increased utilization rates and additional site deployments all over Europe focused on ultra-fast charging. We are observing strong utilization rates through the early part of 2023 and expect that trend to continue.
From a margin standpoint, the actions we took throughout 2022, including the price increase, (inaudible) of our energy price and the rigorous management of our resources to grow in 2023 in order to increase our margin and operational EBITDA.
Before I conclude, I would like to reiterate our confidence in our business quality. It is supported by a demand environment that is conducive to our model. The European Union's confirmation on banning the sale of internal combustion engine by 2035, marks a significant milestone towards the goal of replacing over 200 million passenger vehicles with electric ones in a short period given the current base of 4.7 million vehicles. We are indeed in a comprehensive mobility revolution that will require to expand our capacity to meet the demand for ultra-fast charging, a key component to provide the required energy to EV. With that, I will turn it over to Ton Louwers, our CFO, for an overview of our financials. Ton?

Ton Louwers

Thanks, Mathieu, and welcome, everyone. I will begin by summarizing our financial results for the year ended December 31, 2022, followed by a review of our balance sheet, cash flow metrics and capital structure before closing with our guidance for the full year 2023.
Starting with a brief summary of our fourth quarter '22 results. Total revenue for the fourth quarter of '22 was up 10.7% to EUR 60.9 million compared to EUR 55 million in the fourth quarter of 2021. This improvement was driven by a sharp growth in Charging revenue. Charging revenue grew 228% to EUR 26.9 million with charging sessions climbing 29.6% to 2.6 million from 2 million. In addition, we benefited from the price increase that we implemented in 2022 to offset higher input costs.
Services revenue decreased 27.6% to EUR 33.9 million compared to EUR 46.8 million for the 3 months ended December 31, 2021. Service revenue decrease was largely on the account of an anticipated decrease in revenue of the Carrefour project which was weighted towards the second half and the fourth quarter of 2022.
Net loss for the fourth quarter was EUR 40 million, largely driven by nonrecurring noncash items compared to a loss of EUR 95.9 million during the fourth quarter of 2021. Fourth quarter operational EBITDA was EUR 7.8 million compared to EUR 14.8 million for the 3 months ended December 31, 2021. This decrease is the result of an increase in SG&A of EUR 6.3 million and a decrease in other income of EUR 3.4 million, partly compensated by an increase in gross profit of EUR 2.6 million.
The increase in SG&A is mainly the consequence of expansion and increased revenue. The decrease in other income follows a decrease in the price of our CO2 tickets and fewer government grants. The increase in gross profit is the combined effect of a decrease of revenues on the Carrefour project, more than compensated by a sharp increase in gross profit on Charging revenues.
Now moving to our full year 2022 numbers. Total revenues for the year ended December 31, '22 increased 55.2% to EUR 133.9 million compared to EUR 86.3 million in the prior year. Our strong revenue performance was mainly due to significant growth in Charging revenue, while service revenue also improved meaningfully. Specifically Charging revenues were up almost 2.5x to EUR 65.3 million, largely on account of the 50% growth in total charging sessions to 9.2 million and the price increases to offset higher input costs.
We raised prices 3 times in 2022. The first was [17%] price increase in January followed by an additional 10% price increase later in the year in September. We continuously monitor the energy markets and proactively implement measures to minimize its impact on our margins as part of our overall business strategy in line with which we raised prices again by around 15% on average on October 7.
We are pleased to note that our utilization rate has remained robust, notwithstanding these price increases. Indeed, our average utilization rate jumped to 13.4% in the fourth quarter of 2022 from 7.4% in the prior year period. The average utilization rate for the full year 2022 was 10.4%, up from 5.9% in 2021. We remain vigilant, and we'll continue to take steps as and when needed to protect our margins. Including Mega-E, we sold 154.6 gigawatt hours of total energy in 2022, almost double the amount of 82.7 gigawatt hours we sold in 2021. We would like to reiterate here that our energy sold was 100% green energy.
Full year 2022 Services revenue rose 13.9% to EUR 68.6 million compared to EUR 60.2 million in 2021. As expected and noted on previous earnings calls, revenue from the Carrefour project was weighted towards the second half of 2022 and accelerated during the fourth quarter of that same year. The Carrefour project is making rapid progress, and we installed more than 310 new ultra-fast charging ports in the second phase of development.
We anticipate installing more new ultra-fast charging ports in the currently ongoing third phase of the development process, which we expect to complete in the course of 2023. We remain on track to install more than 2,000 fast and ultra-fast EV charging ports across 200 charging locations in France by the end of 2023. Our contract includes operating and maintaining the network for over 12 years.
Gross profit for the full year '22 was EUR 7.2 million, down 57.8% from EUR 17.2 million in 2021. The decline in gross profit in '22 was attributable to the impact of commodity price inflation, some of which was mitigated by our proactive price increases. Higher energy input costs impacted our gross margin by EUR 17 million, offset by EUR 16.5 million due to the increase in charging prices.
In addition, we changed the accounting for depreciation on our charges and have now included that in the cost of sales to be more in line with our U.S. peers. As a consequence, our gross profit decreased with EUR 12.2 million compared to 2021. The impact to our gross margin was, however, somewhat moderated by income of EUR 9.5 million generated from the sale of CO2 tickets.
General and administrative expenses were 1.8% lower at EUR 323.3 million in 2022 versus EUR 329.4 million in 2021. The improvement in these expenses includes a decrease in noncash stock-based payment expenses of EUR 33.8 million.
Now moving to the finance income. 2022 finance income was EUR 10.3 million compared to a finance cost of EUR 15.4 million in 2021. The change was mainly as a result of the recognition of EUR 27.1 million of mark-to-market adjustment income from the warrant liability. Net loss for the full year 2022 was EUR 305.3 million versus a loss of EUR 319.7 million in 2021 with higher input cost being the major contributor. Cost of sales was up 77.3% year-over-year in 2022.
2022 operational EBITDA was EUR 2.3 million compared to EUR 9.2 million in the year ago and the decrease was mostly on the account of commodity price inflation. We are impacted by EUR 17 million of higher electricity costs in 2022 relative to 2021.
I'll be moving now to our key balance sheet figures. PP&E for 2022 was higher because of additional investments in our network and the first time consolidation of the Mega-E assets worth of EUR 19.7 million. Intangible assets and other financial assets in 2022 climbed on the account of the first-time consolidation of both MOMA and Mega-E. Noncurrent borrowings were higher due to the net impact of the conversion of shareholder loans into equity and additional drawdowns for the expansion of our credit facility to EUR 400 million.
Related to working capital, we've seen an increase in inventory and payables, mainly to anticipate the increased investment in our network. The short-term provision liability in our balance sheet reflects the fair value of the current portion of an agreement with a former adviser. Our cash and cash equivalents as of December 31, 2022, were EUR 83 million. We had a secured backlog of 1,314 sites as of December 31, 2022. All these sites are signed up for lease agreements of an average of 15 years and include approximately 8,600 fast and ultra-fast charging ports, which translates into growth of more than 90% from December 31, 2021.
Moving to capital structure and guidance. As said before, we expanded our credit facility by EUR 230 million to a total of EUR 400 million at the end of 2022. The new facility expires in December '27 and is available to finance green investments in compliance with the green loan principles. Following the expansion of the credit facility and our ability to access the green infrastructure financing market at attractive cost of capital in other terms, we are fully funded to execute and support the development of our secured backlog of 1,314 sites.
Moving to guidance. We expect to generate revenue between EUR 180 million and EUR 200 million and expect our operational EBITDA to end between EUR 30 million and EUR 40 million. Total energy sold is anticipated to be between 215 and 225 gigawatt hour for the full year. We expect Services revenue growth to be driven by the Carrefour project, which should be running at scale in the second half 2023. Charging revenue is also anticipated to grow further as we expand our network and the transformation of Europe's EV charging infrastructure continues apace.
I wanted to briefly highlight the role of the power purchase agreements or PPAs before turning to margins. We have signed 3 long-term PPAs with leading independent power producers to supply renewable and reliable energy for 10 years at lower cost. These PPAs are effective beginning January 1, 2023. Such agreements are key to our cost strategy because they help mitigate volatility across our most significant input cost, the cost of electricity by locking in a low price for 10 years, thereby stabilizing our overall input cost base. We expect to sign additional PPAs to cover more than 80% of our operations by the end of this year.
In terms of margins, we believe there is significant upside potential. Our gross margin improved meaningfully during the fourth quarter of 2022 as we realized the full impact of the price increases throughout the year. We are pleased to note that our gross margin trajectory has maintained its momentum through the first quarter of this year. In 2023, we anticipate gross margin to improve beyond current levels as we benefit from the combined impact of the 2022 price increases, the lower input cost base from the PPAs, the shift in revenue mix towards services and the operation of the Carrefour project at scale.
Our guidance assumes that energy prices are expected to remain high and/or around current levels for the foreseeable future and excludes the impact of any potential future sites, assets and acquisitions.
In summary, 2022 had its challenges, but our resiliency and solid execution helped us realize growth opportunities, expand our business and position us well for the future. We look forward to the remainder of this year as we generate growth and deliver returns for all our stakeholders.
With that, I'd like to hand back to Mathieu.

Mathieu Bonnet

Thank you, Ton. In closing, I am indeed pleased with our progress in 2022. We have continued this positive momentum into 2023 and are excited to drive long-term shareholder value as we execute on our growth strategy. Allego has a very robust pipeline of fast and ultra-fast chargers that ensure revenue visibility until 2024 and beyond. Our technological edge an expansive network combined with reliable service and helps us establish a loyal customer base.
As planned, we have made progress in realigning our cost base to reduce exposure to commodity price fluctuation and our pricing power has been validated with recurring high gross margin going forward with our charging business. We are confident that the current high demand for electric vehicles in Europe will continue to grow driving the acceleration of the e-mobility revolution.
Lastly, I would like to express my gratitude to all our Allego team members for their unwavering commitment.
With that operator, we are ready for questions.

Question and Answer Session

Operator

(Operator Instructions) Our first question comes from the line of Matt Summerville with D.A. Davidson.

Matt J. Summerville

A couple of questions. You guys mentioned in your prepared remarks that utilization rates have continued to move higher, given that we're sitting here in mid-May, and we have the 13.4% from Q4, which is great. I was wondering if you could give a more up-to-date reading on where the utilization rate is today and what is baked into the revenue guidance for the year as far as utilization? And then I have a follow-up.

Mathieu Bonnet

Thank you, Matt, for your questions. We will issue in the next weeks, Q1. But to give you a flavor, we are already at this level. And you know that we see -- so the level of Q4 2022 for this year already 2023. And we have some patterns with always strong utilization rates end of the year, a bit less at the beginning of the year, but we see that the trend -- the upward trend is continuing, that's good thing. So that's the reason why we can support our guidance with this utilization rate.

Matt J. Summerville

Then I just want to make sure I'm clear on kind of the credit facility and your ability to finance. So to my understanding, Ton, properly, that you're able to fund the entire 1,300 with the credit facility you now have in place? And can you remind me over what time period you would expect to convert that 1,300 into an actual installation?

Ton Louwers

Yes. No, Matt. That's -- I think what we tried to say is that with the access to the green loan market, we are confident that we can fund the entire 1,314 sites. So the facility in itself has been upsized with EUR 230 million of which EUR 200 million CapEx facility and a EUR 30 million guarantee line that we need for the PPAs and the EUR 200 million will bring us into, let's say, mid-24, which will cover and ballpark here around 600, so let's say, half of the locations that are currently secured.
And I mean maybe the second part, yes, I think you were asking about the duration. So it's a bullet structure and the duration is 5 years. So it expires in '27.

Matt J. Summerville

Okay. And then just with -- I'll sneak one more. Just with respect to electricity pricing, what do you anticipate as far as pricing in '23 relative to '22? Do you expect to maintain your '22 exit rate? Do you expect to capture more price or have to give price?

Mathieu Bonnet

So with what we see now, because we have reduced and what is important, dramatically our cost base with what we have achieved in terms of [hedge]. So we will be able, either and the price is still decreasing for us, we'll be either try to capture or to increase the margin. So it will be a bit of choice we have given the market and the trends so we see with the last result, continuous data we get if we want to increase our market share or if we want to maybe increase the margin. That's the possibility and the 2 directions we have, which is, I think, good for us. But so far, that even with the price we had, we are in the market -- in the range of the market.

Operator

Our next question comes from the line of Chandni Chellappa with Credit Suisse.

Chandni Chellappa

Just wanted to understand from your results, it looks like the third-party public charging ports reduced by 36% almost. And so could you provide some context on this particular aspect.

Mathieu Bonnet

Ton, do you want to take it?

Ton Louwers

Yes. No, sure. I think during the year, the -- so the -- you were referring to the third-party locations?

Chandni Chellappa

Yes, that's correct. I think that's reduced from almost 6,000 in 2021 to about 3,800 in 2022.

Mathieu Bonnet

Yes. So I can just jump on this. So yes, because the choice -- what happened here is that -- first of all, we focus on our own network now to build our own assets, so that's really the input. And some of these assets has been taken back by end of contract we had. And instead of renewing, we were referring to develop our own site. So that's the reason why you see a change of this number. That's one.
Another one is that we acquired last year, the program Mega-E, which was before in 2021 considered as a third party. And when we acquire all the chargers, fast and ultra-fast began our own. So they moved our category of own chargers as well.

Chandni Chellappa

Got it. Another question I have is around, I know 2022, you replaced some of your fast chargers with the ultra-fast charging sites. So could you talk through what that looks like for the year 2023? And if your current sort of financing facilities will cover that as well.

Mathieu Bonnet

Yes, sure. So indeed, we are moving from fast to ultra-fast. And for fast, as to remind you, it's 50 kilowatts. So older chargers and ultra-fast, it begins for us at 150 kilowatts up to 300 kilowatts. So we are shifting some places these old chargers with new ones, so bigger ones in order to provide more power and quicker for the customer. And basically, that's what they prefer. That's what we can see in our market trend.
So this CapEx facility will be used for a small part in upgrading these sites. But for the majority of it, it will be used for new sites. And for the new sites, we [own it]. Most of the time, I would say, 90% of the time put ultra-fast chargers. Since we can complement big sites with fast chargers, 1 or 2 to accommodate everyone but the strategy for us is really to place and to install ultra-fast charger as much as possible.

Operator

(Operator Instructions) Our next question is from the line of Doug Becker with Capital One.

Douglas Lee Becker

I was hoping you'd provide a little more color on the expectations for the quarterly progression that's embedded in the annual guidance for this year.

Ton Louwers

Okay. Yes. So I think the point here is that it's not evenly skewed on the -- over the year, right? We have the Carrefour project, which is really a project and as we currently see it, it's going to be, let's say, a bit more into Q2, Q3 and Q4, mainly rather than Q1. So rather than just dividing it by core, it's probably, let's say, progressing. So we're building out the network as well. We're going to add a substantial amount of high-power chargers for '23 to the network. So expect H2 to be, let's say, more weighted than H1.

Douglas Lee Becker

That's helpful. Thinking about the site backlog, shown some ability to accelerate installations. Is there a scenario where you might actually see site backlog decline year-over-year at the end of the year?

Mathieu Bonnet

Well, that's a good question. And I think that depends upon the dynamics. But what we see right now is that we -- even though we increased the installation rate, we see an increase as well of the backlog because of the trend we see and the momentum we got. And what is interesting for us is that actually with a bigger network, we catch bigger contracts from land owners because what the key is and what they want is to be sure that the parties they work with and they deliver the site to, is able to execute and roll out many chargers and many sites when they provide us.
So we can provide this with the technology and the high uptime. So that's the reason why, as a matter of fact, the more we build, the more interest we receive from some big partners. So, so far, we see growth, still growth on our backlog. And given the fact that we need to charge all these new cars that are hitting the road. And again, I want to highlight the ban of fuel car sales in 2035. We have many cars to charge. So I think that the backlog will stay high for some years, Doug.

Operator

There are no further questions in the queue. I'd like to hand the call back to management for closing remarks.

Mathieu Bonnet

Thank you. Well, a few words about this year 2022. In the fourth quarter, I think this year, as highlighted in the presentation, confirm the strategy to focus on our own chargers and ultra-fast chargers. Definitely, the market is here. The number of cars sold is growing dramatically in Europe. We can see it on a daily basis and a monthly basis, new figures. So we need to provide this energy in the best way, and that's what we see in the trends between slow public chargers and fast and ultra-fast public charger. We see that the trend is really to provide a quick charge, very quick charge. So the ultra-fast charging is really a key to provide all the energy needed.
So in 2021, we have a split of our revenue between services and Charging business 70%, 30%. In 2022, we see the trend to 50-50. And well, the expectation is that the Charging business will overrun, I would say, the Service revenue on our own network, which give us some high visibility in the months and years to come.
So with that, I would like to thank you for all the questions. And I give you the floor, operator.

Operator

Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.