ABSLAMC — earnings call

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Prepared remarks

CHIEF EXECUTIVE OFFICE · MR. PARAG JOGLEKAR – CHIEF FINANCIAL OFFICER

MR. PARAG JOGLEKAR – CHIEF FINANCIAL OFFICER MR. PRAKASH BHOGALE – HEAD, INVESTOR RELATIONS Aditya Birla Sun Life AMC Limited January 28, 2023

Moderator · Conference Operator

We have the first question from the line of Swarnabha Mukherjee from B&K Securities, please go ahead Aditya Birla Sun Life AMC Limited January 28, 2023

Swarnabha Mukherjee

So, I have three-four questions.

First one, if you could let us know whether like we had - there was a comment during last quarter's call that because interest rates are hardening, and we'll get a higher rate on the debt products.

So, are we able to now garner higher yields on the debt side?

Or is the fact that our overall revenue level yields are holding up is primarily a change in the asset mix?

So, I wanted your comment on that.

A. Balasubramanian

We'll have Parag to answer this question.

Parag Joglekar

So, on the yields are holding up, as you rightly said, one of the reasons is our asset base is slightly getting better towards equity and long duration fund.

But it's just a starting, it will take a little time, a couple of quarters to see a big impact, which we are thinking that once the interest rate gets hardened, the duration product will see flows in those schemes.

Swarnabha Mukherjee

Sure Sir.

A. Balasubramanian

Just to add to this Swarnabha, we have positioned some of our fixed-income products.

The three products we already positioned both for retail as well as for institutional customers.

And while we have been promoting it quite continuously, citing the opportunity to build fixed income as asset class this financial year, the real flow is yet to start coming in.

Given the fact -- only now we believe that rate cycle -- a big rate cycle will come in soon and portfolio yield will start reflecting the real outcome that can add to the customers.

And also, we see flow coming in from now onwards.

Probably we have kept ourselves positioned to have those products readily available.

So that, the readiness will ensure that flows come in.

That's the way we are positioned right now.

Swarnabha Mukherjee

Ok Sir, that’s great.

So, a follow-up on this.

So, does this mean that say, for example, the general -- I mean, a general stance that we see, is that we expect in the industry because of the increase in assets as well as you know what had played out in terms of the commission for the newer flows on the growth-oriented side also that there will be a dilution in the yields also going ahead, more a secular trend.

But in the near term, so maybe over the next three, four quarters as this -- what you said it plays out, then should we see some stability in yields for the next three, four quarters?

Would that be a right assumption?

Parag Joglekar

Yes.

So currently, as you rightly said, equity, we may see some dip due to the new asset coming at slightly higher costs compared to the stock, but if the composition of equity goes up and the long-duration product goes up in the overall AUM, then we may see stability in the yields depending on the what mix it plays out over the period.

Swarnabha Mukherjee

Sure.

So, I mean, just to harp on that point a little bit.

So, if equity also increases in the mix where it is much higher, even at a slightly lower rate than what we have seen earlier, but it is much higher than the blended yield that we have.

And also, we are able to push in a slightly higher yield on the debt side.

Then I mean, ideally, it should stabilize, right?

So, that's what I wanted to confirm, because both these levers will move on Aditya Birla Sun Life AMC Limited January 28, 2023

A. Balasubramanian

Yes.

I think your assumption is right.

I think that should stabilize for the reason I already just explained.

Even the fixed income, the active managed fund also starts growing, that the incremental contribution could also come from there.

So, therefore, these two combinations put together and with the growth of Index Funds, which is lower margin assets.

But still, overall, we'll be to maintain at least the near immediate future.

Swarnabha Mukherjee

Bala sir, could you name the products that you mentioned that you have positioned for both retail and institution to capture this higher yield cycle?

A. Balasubramanian

Yes.

One is the low duration fund on the 9–10-month kind of category.

Dynamic Bond Fund is about two to three years duration period and medium-term plan, again with about two to three years duration and Credit Risk Fund, which, of course, goes down in terms of credit curve to AA, AA-.

These are the four funds we have positioned as retail concerns.

As for institutional customer concerns, at this point of time, most of the inflows have been coming from the target Maturity Fund.

At the same time, we have positioned ourselves with the elevated yield on the one-year rate as well as about two years rates, right from money market funds to the corporate bond fund we have positioned, including floating rate funds also we have positioned as far as the corporate concerns.

And these are the funds that are identified clearly for both HNIs and retail and corporate.

Sufficient push is being given around the positioning point of view.

Swarnabha Mukherjee

Okay Sir, very helpful.

Sir, now a question on the channel side.

So, what I see over the last two quarters, of course one queue in terms of AUM if we look, it will anyways look like a blip because the market was down significantly, so there is an MTM impact.

But if I look at Q2 and Q3, what I can see is that a higher share of growth is being borne by the MFDs and the national distributors, while in the bank and the direct channel, there the numbers have been tepid.

So, I wanted to understand, so banks I believe that there are also a lot of variables at play, but in direct why it has particularly in this quarter, AUM gone down slightly.

So, if you could comment on what is happening on this side?

A. Balasubramanian

Since direct is a combination of one, the reduction in the fixed income assets.

I think we have seen net outflows as far as the actively managed debt funds are concerned.

I think most of the money has moved to the liquid fund, and some money, of course, which has moved out, I would assume would have gone to the deposits, the deposits during the last quarter, priced by banks are also pretty high.

I think mainly this is on account of that.

But the channel contribution from IFAs is also looking up.

I wouldn't think we can attribute this to the real incremental growth income.

It's more of a mix of assets, it would have also did that contribution coming from IFAs.

But the direction is mainly the reason why I just mentioned it.

Swarnabha Mukherjee

So, even in the equity sourcing numbers that you provide in the presentation, I think there is a slight dip in direct this quarter.

So that was my question?

Aditya Birla Sun Life AMC Limited January 28, 2023

Parag Joglekar

So, it is not major.

It's a slight dip in direct compared to MFD because there may be some movement that has happened in the direct AUM and institutional customers.

And there may be some movement on the MFD side of a higher share of the sales, which has happened.

But there is a very small movement that has happened.

Swarnabha Mukherjee

Just two bookkeeping questions.

One is if you could tell me the reason why the fees and commission expenses were slightly higher this quarter.

And second, if you could share the SIP AUM number at the end of the quarter, sir?

Thank you.

Prakash Bhogale

Swarnabha, it's ₹53,000 crore.

Swarnabha Mukherjee

Okay.

And on the fee and commission, sir.

Parag Joglekar

Swarnabha, the fees, and the commission has gone up slightly because we have launched a new AIF product in the current quarter for which we collected ₹350-odd crores of commitment on which the brokerage, which we have given or commission, which we have paid out, that has been sitting in that line.

Swarnabha Mukherjee

Okay, sir.

So, this won't be a recurring number, right?

So, this is a one-off?

Parag Joglekar

No. It will be recurring because it's more of a trail which gets paid.

Swarnabha Mukherjee

Thank you so much Sir for the detailed explanation.

Moderator · Conference Operator

We have the next question from the line of Lalit Deo from Equirus Securities.

Lalit Deo

So, I had a question on the SIP inflow.

So, while there has been an increase in the absolute inflows, it seems like we have lost some market share also in the inflows as well as in the new registrations also.

So, just wanted to understand like how are we positioning ourselves to recoup some of this lost market share.

I wanted your comments on the same.

A. Balasubramanian

Yes.

Thanks, Lalit, for this question.

For the SIP flows, what we have understood on the base of the analysis, the large SIPs incremental subscriptions have gone into the funds, which are outside the Nifty and the Nifty 50.

Basically, gone more towards small and mid-cap and to some extent on the large and mid-cap, which is what I think has seen net inflows.

In our case, of course, these three funds generally do not receive as much flow that we shall receive.

But most of the flows for us, the registration has come into our existing flagship fund.

But from an industry point of view, the large flows have whatever the increment flows have come on to this.

That's the primary reason because which our registration rates were marginally low.

Though industry also have seen a reduction in the registration on compared to the overall basis.

In our case, this was the primary attribution.

That's something which I just mentioned in my speech as well that there are a few funds where we have to catch up with respect to the Aditya Birla Sun Life AMC Limited January 28, 2023 performance, we have to cover some distance.

I think once we are done, then the positioning could also happen.

And second, we also launched a few of the SIPs to like Turbo SIP I just mentioned about.

We also launched a few other newer SIPs as a product.

And again, it's being driven the distribution community as well as the sales team to bring in some kind of traction.

Some of newly launched features in the SIP side.

Lalit Deo

And sir, like in your earlier comment, you mentioned that there have been some outflows in the fixed income funds where the funds are being slightly moving towards the deposit sides due to the higher rates being offered by the bank.

So, how long do you think that this trend could continue in the future?

And like since when do we expect that we can get a high good share of inflows in the debt side?

A. Balasubramanian

I think the way we see is while it will be difficult to actually predict how far the banks will be aggressive in terms of raising deposits.

Given the high credit deposit ratio, which is more in the range of about - growth is about 130%.

That being the case and our own belief is this may at least carry on for at least this year till March ending.

At the same time, we also believe that as the credit demand continues to rise, we will probably see marginal uptick in the yields, especially for spreads widening and that's the time the risk-reward ratio, including adjusted for tax benefit, where mutual fund would become more attractive.

Once the rate stabilizes, which is what we believe that once the rate stabilizes, I think there will be stability both in the deposit rates which is being offered by banks as well as lending rate and the market rate stabilizes, then mutual fund will become more attractive compared to the other fixed income instruments.

So, that we believe that could happen in the 2023 second quarter onwards.

Lalit Deo

Thank you sir.

Moderator · Conference Operator

We have the next question from the line of Prayesh Jain from Motilal Oswal Financial Services.

Prayesh Jain

Sir, just a few questions.

Firstly, in December, the SEBI had come out with a press release with regards to reconsideration or the restructure and all the other expenses that the AMC charge.

And I think additionally, yesterday, there were some media articles which have kind of outlined some contours, which the SEBI is kind of considering wherein they're talking about capping the TERs at the scheme category level and also subsuming the GST and the brokerages, which are out of the TER currently into the TER.

So, your thoughts there as to whether what kind of, what kind of things the SEBI is considering or how this could pan out and how could really this impact the yield for you guys if such things are being brought across?

That would be my first question.

A. Balasubramanian

Yes, sure.

Thanks, Prayesh for this question.

Of course, there is a deliberation within SEBI and SEBI always drives this decision through with MF Advisory Council, which is setup for the development of the mutual fund industry.

In fact, I'm also part of a member of this MF Advisory Council.

The deliberation has been how the investors can benefit as a form of reduction Aditya Birla Sun Life AMC Limited January 28, 2023 expenses, which basically are coming from the fact that the industry has been growing steadily each year.

Now it has reached about ₹40 lakh crores size.

Some bit of scale benefit should come to the investors and at the same time, the overall AMC growth should continue to be the driver of the Indian economy.

And these two aspects, they have of course in their mind.

There is a deliberation in order to relook at the current infrastructure and look at the merit of whether it can be further reduced.

At the same time, the industry continues to add more customer base and go to the next level of growth.

The way I see is and as it is basis assuming the scenario that they go by what they are saying, then of course, there will be a need to look at the cost structure on one side and an operating model on another side.

At the same time, focused on volume.

The way so far, we have built in the last almost seven eight years despite the fall in the expenses as you would have seen the glide path given in the year 2018, higher the AUM lowered the expenses.

And despite living in that kind of scenario, AMCs have been able to adjust and continue to build a scale, continue to build expansion.

At the same time, generate absolute profit, which is a free cash flow generation that they do and also bring in absolute profit bringing in which is largely coming on the back of the scale benefit.

So, that's the way I will see it.

To what extent the reduction in margins could come at this point in time, is very difficult to gauge.

Given the fact that whatever is being discussed, is just deliberation and the industry has been making a representation, the need for industry growth over the next level, the need for distribution expansion, and an increase in further growth in equity AUM, in order to give more stability to the capital market, given the fact the FPIs continue to remain a seller in the market, all these representations are being done.

And till such time, the debate happens, the discussion happens, very difficult to come to any conclusion at this one point in time, how it could impact.

Anyway, that comes, of course, the operating model also needs to be suitably looked at to ensure that they remain profitable in terms of absolute growth and absolute profit increase.

Maybe the time will come we may have to actually measure the factor on the basis of the absolute profit that is on the table rather than the basis point contribution.

Prayesh Jain

Bala sir, in this context, would we look at so this is something of the sort is implemented, this would mean two things.

One is a reduction in distribution and commissions.

Secondly, this could also impact the AMC yield.

So, in a way, doesn't this kind of go against the philosophy of expanding the reach, especially in the current scenario where we want to enhance the reach in the B30 and deeper penetration of financial products? if distributor commissions are kind of impacted further, then why would the distributor be keen to distribute these products further?

And like especially on the competitive product, if you look at the insurance sector, we've seen that the expense of management ratio has kind of been completely getting deregulated wherein Aditya Birla Sun Life AMC Limited January 28, 2023 they just capping the 30% expense of management and the commissions could go higher as well going ahead.

So, in that sense, the competitive products will get better commissions.

So, what incentivizes the distributor to sell mutual fund products over other products?

A. Balasubramanian

Sure.

That is the representation, there's the discussion is on Prayesh.

As I rightly pointed out, the industry still needs to grow bigger and mutual funds gained significant prominence and under which we have now grown to where are we today in terms of size, ₹40 lakh crores size, the ₹20 lakh core in equity size.

We still have a long way to go with respect to penetration.

I think the point that you exactly mentioned basis for which the discussion is also happening.

That's why it's too early to make an assumption that I think the regulation also would definitely respect the need for growth and need for expansion of the B30 market or maybe deeper penetration in the country.

The need for distribution expansion has happened given the fact we as an industry body have gone and encouraged more and more people to join the distribution community.

And we also encouraged them under the guidance of the regulator.

So, keeping all this in mind, I'm sure the representation or the viewpoint that is coming from people would also be taken into account before they come to any conclusion.

So, that's why too early to right now say that it will get pushed through.

I'm only hoping that whatever the points that the distributor mentioned which we also have echoed as industry players, hopefully, get listened and then they take suitable action accordingly.

Prayesh Jain

And sir, if you can help us with some understanding as to segment-wise, what could be the EBITDA bps for us as an AMC, say broadly, it's not very specific, but equity, what kind of EBITDA in terms of bps you will be earning and debt and liquid and others, that would be helpful.

A. Balasubramanian

Sure.

Parag will address this question.

Parag Joglekar

Yes.

So, Prayesh the contribution, we monitor and overall and at the asset class level.

So, equity is more or less in the range of 70 basis, the liquid is in around 11-12 basis, and debt is in the range of around 25-28 basis.

Prayesh Jain

Yes, that's helpful.

So, if we look at the salary expenses and the cost, what would be the EBIT with the respect to EBITDA bps in the segment?

Parag Joglekar

So, we don't disclose these numbers, but basically, equity is more of a retail-oriented product.

So, it will have a lot of sales push, which will be allocated to that.

But there is no specific number, which we disclose on this.

Prayesh Jain

Yes, I understand.

But then honestly, while most of the expenses will be sitting on the scheme.

So, on the AMC books, it will be ideally the fund manager and the research team charges, right?

So, can you just, even for the equity segment, what kind of EBITDA spread, EBITDA could you be making, could you give sir, that indicatively Aditya Birla Sun Life AMC Limited January 28, 2023

Parag Joglekar

It will be more or less in the similar range for EBITDA, which we are currently generating in the proportion.

So, it will be similar.

I don't have the numbers currently handy.

It is more in the same range should be.

Moderator · Conference Operator

We have the next question from the line of Dipanjan Ghosh from Citigroup.

Dipanjan Ghosh

Just two – three questions from my side.

One, if you can just, is a data-keeping question – if you can just give your employee count for the quarter.

Second, you can split your revenues into domestic mutual fund revenues and PMS and others for the quarter and nine months.

And third, in terms of your alternatives, now you have a strong product lined up, and product pipeline.

Just wanted to get some sense of the medium-term targets in terms of contribution in revenues or EBITDA level.

And also, what kind of incremental cost will be incurred in getting this part of the business up and going?

A. Balasubramanian

Yes.

I'll just take the last question first, Number of employees, 1,450 total employee count.

And I think with respect to the AIF pipeline, as we mentioned, Service Opportunity Fund, we have been running for the last almost six months, rather than four months.

We'll be closing in the month of March ending this year, 2023.

We've already done about ₹350 crores and incremental collections are still awaited.

Once this is closed, we have kept three more products on the pipeline.

Again, on the equity-oriented funds and we think we'll launch those funds immediately after that.

We also kept one AIF on the fixed income space, mainly taking into account the opportunity that we see on the credit side on a customized product that also we intend to do.

And then third, AIF is around real estate.

Having now raised about, current size about ₹550 crores in real estate funds.

We have been seeing the deployment of money leading to a better result from an experience point of view.

At the same time, we are also filling a pipeline for launching one more product on the real estate side.

So, this is the pipeline that we have and put together, we'll be launching it as we see an opportune time for each of these segments that we are identifying.

What's your second question?

Dipanjan Ghosh

No, sir, just -- so one was if you can split your revenues into PMS and mutual funds.

And just a follow-up on this part.

Would you like to give some colour on your medium-term targets in terms of revenue and profitability coming from the alternatives, I mean, on the non-mutual side of the business?

A. Balasubramanian

Sure.

Revenue contribution.

Yes.

Prakash Bhogale

So Dipanjan, our revenue contribution from the PMS and other alternate assets is in the range of around ₹50-55 crores, for nine months.

A. Balasubramanian

Yes.

In terms of outlook on this segment, right now, having had the team and having now launched, our idea would be to launch continuously to ensure the size that gets built.

As you know, in the AIF space, the money is paid upfront, but the revenue comes as the time progress.

So, that is we will do it.

Therefore, as Parag mentioned earlier this thing to the extent, we have to spend the money to build the future profitability.

That's the model in which we will be running Aditya Birla Sun Life AMC Limited January 28, 2023 it.

Though, I don't have right now number to give, but clear plan that we have is our product pipeline and the experience that we have created in existing product that has been launched, would help us in increasing our share and for which including fixed income schemes for which we have already getting our products in pipeline.

Dipanjan Ghosh

Sure.

Just one point, Sir, if I had the employee number correctly, it was around 1450, which seems almost an addition of net ratio of around 100 employees’ quarter-on-quarter.

So, where are these employees really getting deployed?

Is it on the MF side or just building up on the alternative side of the business?

A. Balasubramanian

In fact, two, or three areas.

One is the direct HNIs model we are building.

We have an almost about 20-member team.

They built it only for Mumbai and Delhi, and we'll expand this as we start seeing the success in this model.

Second, we also added more people on the service side, customer service side, especially in the service-to-sales RM.

And third is the VRM, we have set up a separate VRM cell to increase the number of connections to the people.

And last, of course, is on the retail sales side, an increased number of customers.

As for the investment concerns, we added our analysts, about 2 or 3 more analysts we have added, especially, the mid-cap, and small-cap analysts.

But these are, of course, one- or two-member addition both in the AIF side as well as on the mutual fund side.

Moderator · Conference Operator

We have the next question from the line of Abhijeet Sakhare from Kotak Securities.

Abhijeet Sakhare

Bala sir, just going back to the question on regulation again.

So, the last round we had the revision was in 2019 itself, right?

And the regulator is now wanting to have a relook at it again.

And going by what we currently have, it's already like the current framework itself builds some scale benefits to be passed on to the customer, right?

So, what is the regulator worried about that they have to kind of have a relook at it again?

And secondly, from an industry point of view, like is there a way to sort of have a, let's say, more fair distribution between the AMCs as well as the distributors going ahead?

Is there a more permanent model that can be worked out, that kind of protects your margins as well on an ongoing basis?

A. Balasubramanian

Yes.

Sure, Abhijeet.

I think the first assumption that, under which the normal review, I think when I go back in the history, to 2012 the first circulars then they revisited in 2015, then they revisited in 2018 and 2019, both the times they revisited.

After every five years, or three years, I mean they seem to be thinking that there is a merit for them to revisit if there is a merit for them to consider any reduction expenses with respect to giving investors benefit.

That's the primary objective assumption from which they are coming.

Second, I think the last few years as is known for a variety of reasons, the actively managed funds, would not have beaten the benchmark, which is of course not just the India scenario, but even the global scenario.

And we also know, of course, for a variety of reasons, the money managers could not have beaten the benchmark more from the point of view of the risk of warning certain stocks which are heavily overweighted in the index and so on and so forth from Aditya Birla Sun Life AMC Limited January 28, 2023 risk management perspectives and that's something also is making them think is there any merit for that to be cut down.

So, this is coming from these assumptions only.

As I mentioned earlier, these are deliberations and not necessarily what is being currently assumed would come.

Of course, we also cannot rule out any marginal changes also coming in after multiple rounds of discussion.

That's what normally they do more of the evaluation process that they have, evolving decisions in a consultation with the industry.

So, let us wait for that.

As far as the cost concerns, naturally, if this is going to be continuous affairs in terms of reduction of expenses, in terms of TER, then naturally, the cost structure also needs to be re-looked at both at the distribution level as well as the other cost is involved also need to be revisited.

Alternatives are to be revisited and that's something my own belief is that will evolve as we move ahead gradually.

At the same time, keeping in mind the real need for distribution expansion to happen, more and more people should join the mutual fund industry to distribute mutual fund products, therefore, helping the industry to grow on one side.

At the same time, build other alternates, such as the direct in order to reach out to the customers also on the other side.

So, I think all will have to go hand in hand and then keep in mind the growth needs.

At the same time, be conscious of the cost element that all of us at AMC have to also pay attention to it.

That's I think that's something that my own belief will evolve.

Moderator · Conference Operator

We have the next follow-up question from the line of Prayesh Jain from Motilal Oswal Financial Services.

Prayesh Jain

Sir, just on this regulation bit again.

So, what is the current brokerage roughly being paid on the equity and the debt side and also the GST rates?

A. Balasubramanian

Talking about the market transaction?

Prayesh Jain

Yes, for the transaction, what would be the brokerage that would be paying to the broking companies?

A. Balasubramanian

Roughly in the range of about 8 basis points.

Parag Joglekar

So, 8 basis points on the equity side and derivative in the range of 4 or 5 basis points.

A. Balasubramanian

Yes.

Prayesh Jain

And what will be that cost on the debt side?

A. Balasubramanian

Debt is very minimal Prayesh.

Debt is insignificant actually.

It will not be going to come into the fourth decimal of basis points.

Prayesh Jain

And what about the GST rate?

A. Balasubramanian

GST is as applicable, right?

It's not GST, STT is here.

Aditya Birla Sun Life AMC Limited January 28, 2023

Parag Joglekar

You're talking about STT or GST?

Prayesh Jain

GST.

Parag Joglekar

So, GST will be depending on the scheme.

So, 18% of the fee.

So, if it's 71 basis for this thing, it will be in the 18% of it.

Prayesh Jain

18% of the fees.

And secondly, sir if you think about the debt schemes, there has been a significant increase in close towards the passive category as well over the normal duration side, right?

So, how do you see this?

Eventually, even when the cycle picks up, do you think that the flows will be towards the passive categories only?

Or do you think that the active can see further improvement in flows?

A. Balasubramanian

No, the way we see is there will be a switch from Target Maturity Funds, of course, Target Maturity will continue to grow given the fact it has the element of certainty on return expectations.

In fact, even Target Maturity Fund also, we all are aligned to the minimum expenses that we're also charging.

Therefore, it is not something non-profitable per se, like a liquid fund where you get about 20 basis points.

The same thing has been being followed in the Target Maturity Fund as well in order to be fair to both investors and even from AMC’s point of view.

While that's been the case, we believe that some bit of more acceptance will come for the duration funds, one, in the duration funds we don’t have any restriction in terms of we'll buy only in G-sec, SDL or AAA whereas, Target Maturity Fund large there will be a restriction in terms of, we'll invest only in the AAA names or PSUs and SDLs and G-Sec. But that is not the case as far as the open ended funds are concerned.

Also keep in mind, as we go down the credit curve, even to AA, AA+, the pickup in yields has been ranging about 30-40 basis points, which nobody would like to ignore given the fact a basis point adds to the overall return as on fixed income concerns.

That is why we believe that more participation could come from the HNIs and retail and in the actively managed duration funds in the range of about two to three years or two to four years.

Moderator · Conference Operator

Thank you.

As that was the last question for today, I would now like to hand the conference over to Mr. A.

Balasubramanian for closing comments.

Over to you, sir.

A. Balasubramanian

And thank you very much, ladies and gentlemen, for tuning in and with this, we conclude our Q3 & 9M FY23 earnings call.

Do feel free to reach out to our IR, Mr. Prakash Bhogale for any queries that you may have.

And thank you and have a nice weekend.

Moderator · Conference Operator

Thank you, sir.

Ladies and gentlemen, on behalf of InCred Equities, that concludes this conference.

Thank you for joining us, and you may now disconnect your lines.

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