Edited Transcript of VANTI.PA earnings conference call or presentation 1-Dec-22 5:30pm GMT

Q3 2022 Vantiva SA Earnings Call Boulogne Cedex Dec 2, 2022 (Thomson StreetEvents) — Edited Transcript of Vantiva SA earnings conference call or presentation Thursday, December 1, 2022 at 5:30:00pm GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Lars Ihlen * Luis Martinez-Amago Vantiva S.A. – CEO & Director ================================================================================ Conference Call Participants ================================================================================ * David Cerdan Kepler Cheuvreux, Research Division – Equity Research Analyst * Thomas Coudry Bryan Garnier & Co Ltd, Research Division – MD of Equity Research * Yemi Falana Goldman Sachs Group, Inc., Research Division – Business Analyst ================================================================================ Presentation ——————————————————————————– Operator [1] ——————————————————————————– Ladies and gentlemen, welcome to the Vantiva’s Q3 2022 Results chaired by Luis Martinez-Amago, Vantiva’s CEO; and Lars Ihlen, Vantiva’s CFO. (Operator Instructions) Just to remind you all, this conference is being recorded. We would like to inform you that this event is also available live on Vantiva’s website with synchronized slide show. I would now like to hand over the call to the CEO. Sir, please go ahead. ——————————————————————————– Unidentified Company Representative, [2] ——————————————————————————– So this is (inaudible) speaking. Before handing over to Luis, I invite every participant to read the forward-looking statements regarding the forward-looking statement. Thank you. Luis? ——————————————————————————– Luis Martinez-Amago, Vantiva S.A. – CEO & Director [3] ——————————————————————————– Good evening, everyone. I am Luis Martinez-Amago, the CEO of Vantiva. I welcome all of you to this first Vantiva earning call. We are reporting for the first time as Vantiva, a refocused company after the spinoff of the Technicolor Creative Studios business. Vantiva is now entirely focused on its business with 2 divisions, the Connected Home division and Supply Chain Solutions. Let’s go to Slide #3. Vantiva is offering an attractive value proposition based on our commercial positions, our technical and operational competence and an experienced management team. As explained during our Capital Market Day, these businesses has been transformed over the last years. The ambitious objectives defined at the beginning of this transformation has been achieved under a very turbulent market conditions and the results that we’re delivering as part of Technicolor until now and as an independent company from now are the consequence of this transformation. Our customers are trusting us. They are providing new business opportunity to our divisions. Our partners are aligned with us to execute together and to deliver products to our customers finding solutions to the different market challenges. And our teams in Vantiva are focused on the task with expertise, dedication and ambition to execute our strategic agenda. And our main shareholders are supportive and motivated to a company as in this new phase for the company. Our commitment to them is to translate our plans into sustainable profit and positive free cash flow generation. Q3 figures, as you will see in a minute, show that the company is delivering solid results in line with our guidance despite a still complex supply environment. Thanks to the spinoff, the financial leverage has been significantly reduced. However, the intention of the disposal of the TCS stake is now unlikely in the short term, but this is not impacting operationally Vantiva. As TCS and Vantiva are 2 separate companies now, we at Vantiva will continue to execute our plans over the next years delaying delivering plans we initially had. This situation will not impact our operational plans since we can service our debt and run our operations as planned. Let’s move now to our Q3 results. In Slide #5, you see the Q3 results, and they have been good and in line with our expectations, if not and not better. Revenue reached EUR 765 million compared to EUR 528 million for the same period last year. This growth of 45% in the quarter came from the strong performance of Connected Home and a favorable exchange rate. At constant rate, the growth would have been 27%. Connected Home reported an impressive 77% growth in the quarter. On the SCS side, they saw revenue declining by 8.6%. At constant exchange rate, the drop would have been 18.2%. This drop is explained by a strong 2021 Q3 comparison basis and a lower demand for DVDs. The group’s adjusted EBITDA increased by 40% and reached 6.5% of the revenues versus 6.8% a year ago. This slight decrease in percentage is explained by the lower share of SCS in the profit pool as margin in percentage for SCS is higher than the one for Connected Home. Corporate and Others weighted for EUR 9 million in the quarter, in line with last year. Free cash flow before interest and tax was positive at EUR 10 million, showing a EUR 21 million improvement. Moving to Slide 6 for a view of the first month of the year. In the Slide 6, you can see the same picture, but for the first 9 months of the year. The revenue stood at almost EUR 2 billion versus the EUR 1.6 billion last year. This 26.5% increase has been totally driven by Connected Home division, which achieved a 35% growth rate while Supply Chain Solutions was about flat. At constant exchange rate, the group growth would have been 11% with 20% for Connected Home and negative 9% for Supply Chain Solutions. The group adjusted EBITDA amounted to EUR 123 million for the first 9 months of the year when it was EUR 86 million a year ago. This led to a margin of 6.3% versus the 5.4% of last year. And the free cash flow before interest and tax was still slightly negative at minus EUR 26 million, but it’s EUR 235 million better than the one for the first 9 months of 2021. Moving to Slide #7. In this slide, we’re showing our guidance for 2022 that we are confirming based on our current and expected performance in quarter 4. This guidance is based on a EUR 1.15 dollar exchange rate, and it will be converted where we communicate the actual results in the current rate. We are also confirming our 2023 guidance as well in the exchange rate of EUR 1.15. And we will update this guidance to the new exchange rate when we are communicating the results of 2022. Let’s move now to the business update by division. In Slide 9, we will start by the Connected Home division. Starting by the right-hand side of this slide, we keep executing the business in line with our strategic priorities. We are prioritizing the broadband business since we believe this is a key strategic priority for our customers and will remain so for the years to come. As you can see, this represents already 70% of our business from 58% last year and less than 40% the year — several years ago. On the video segment, our priority is in the new and growing Android TV and RDK ecosystems, where we maintain a good performance. Our 2 pillars of value proposition are the technological leadership and our operational agility. On the technological leadership front, we are focused on the fast introduction of new standards. On the technological leadership front, we have always led the introduction of new standards. We led the market with DOCSIS 3 and DOCSIS 3.1. And very soon, we are going to do the same with DOCSIS 4. We deployed the first product with Wi-Fi 6 and Wi-Fi 6E. And we have recently shown in the Broadband world forum the first ever product performing Wi-Fi 7 technology. In addition to that, we have launched new commercial products with key customers, as you can see some few examples in this slide. We are very proud of all these deals and we expect this to continue. At the bottom left corner of the slide, you can see our corporate social responsibility priorities. And we are working in these priorities already for several years. But the relevant aspect in this space is the company’s commitment, but also the measurable results that we are reaching in this space. On the commitment front, we are the only company in our industry that has signed the 2050 Net-Zero standard and also has committed for the climate change science-based initiative. On the results front, we have obtained the EcoVadis Platinum status, which placed Vantiva — placed us on the top 1% of the companies in terms of results achieved. We are really proud of all this achievement. Now moving to Slide #10. Despite the still challenging environment, we have seen the Connected Home division has enjoyed a strong development in the quarter with revenues up 77% or 54% at constant rate. And adjusted EBITDA at EUR 33 million, representing 5.7% of revenue versus EUR 16 million and 4.9% in quarter 3 2021. Beyond the exchange rate impact, this is explained by lower constraints on the supply and easing logistic issues that have allowed a better product availability and higher deliveries of our backlog. Concerning margins, it is worth to mention that our customers are leaning forward and helping us to absorb the additional cost of components than this industry is experiencing. This has allowed to protect our EBITDA, but it had a mechanical negative effect on the margins in percentage as it has increased revenues with no incremental contribution to the margin. Nevertheless, this dilutive effect has been compensated by higher volumes and the highly efficient cost structure, allowing us to increase the EBITDA margins or 78 basis points. For the rest of the year, we expect the supply difficulties to remain and the cost of components to stay high. Moving now to the Supply Chain Solutions division in Slide #11. As you can see on the right-hand side of this slide, the DVD volumes were significantly down at 43% and this is due to a high comparison basis versus quarter 3 2021 and an unexpected manufacturing or the reduction from one of our big customers, which is reducing the high level of inventories they had. The retail market performance remained in line with the expectations with a gradual secular decline, which is taken into account in our plans. The division continues to implement efficiency measures to maintain this activity at the right level of profitability contribution. The Vinyl market continues to show significant growth. Vantiva accounts already with 2 global players in this field among its customers, and we are in conversation with a third one to start business with them as soon as possible. While the group has proven its technical capabilities for pressing records, the current capacity in place remained limited versus the demand. We are putting in place the additional capacity as quick as we can and the situation is progressively improving. Fulfillment and transportation, which is another axis of our diversification in this division is growing at a good pace and is benefiting from lower pressure from the freight pricing. In the next slide, you will see that in this context, Supply Chain Solutions revenues were down 8.6% in the quarter and 18.2% at constant exchange rate. Despite lower volumes and revenues as well as higher material costs, the EBITDA margin has shown good resilience and they were down only 90 basis points at 13.7%. And with this, I will pass the floor to Lars Ihlen, our CFO, to walk through our figures. ——————————————————————————– Lars Ihlen, [4] ——————————————————————————– Thanks, Luis. Okay. The table on Page 14 shows the combined result for Q3 and the first 9 months of the year. Luis has just explained the movement for sales and EBITDA, so I will not repeat those. EBITA for the quarter is increasing from EUR 9 million last year to EUR 21 million this year and is explained in full by the improvement of EBITDA. For the first 9 months, the EBITA is EUR 43 million versus EUR 11 million last year. The free cash flow from continuing operations for Q3 before tax and financials has turned positive and reached EUR 10 million for the quarter. Year-to-date, we are also showing a significant improvement from last year and the cash fund for the period reduced from a negative EUR 261 million to EUR 26 million. Next slide. Let’s now have a look at the free cash flow bridge in a bit more detail. So as just mentioned, free cash flow before tax and financials reached EUR 10 million for the quarter and shows a EUR 21 million improvement year-over-year. The improvement is explained by higher EBITDA of EUR 9 million and reduced net restructuring cash-out of EUR 8 million. This was partially offset by slightly higher CapEx of EUR 2 million and a negative change in working capital of EUR 6 million. Pension and other fees yielded a positive impact of EUR 11 million and this was mainly coming from intra year timing differences. The detailed bridge for the first 9 months can be found in the appendix of this presentation. On this last slide, you can find the debt and liquidity position at the end of September. We reached a cash position of EUR 83 million and an undrawn credit facility of EUR 125 million, of which EUR 83 million are immediately available. The net debt amounted to EUR 369 million, and you can find the details on how the net debt is calculated in the press release we just released. So this ends our presentation. And Luis and myself will be happy to answer any questions you may have now. ——————————————————————————– Luis Martinez-Amago, Vantiva S.A. – CEO & Director [5] ——————————————————————————– Okay. Operator? ================================================================================ Questions and Answers ——————————————————————————– Operator [1] ——————————————————————————– (Operator Instructions) First question from Thomas Coudry from Bryan Garnier. ——————————————————————————– Thomas Coudry, Bryan Garnier & Co Ltd, Research Division – MD of Equity Research [2] ——————————————————————————– My questions, I have 3, please. Well, congratulations for these good results. Please allow me in my first 2 questions to ask you about read across versus what’s happening at TCS. So my first one would be the businesses and the companies are now fully different and distinct, yet part of the management were common between the 2 companies. How can you reassure us and how can we feel comfortable that the same managerial and operational issue will not happen at Vantiva in terms of quality of monitoring and reporting and the problems that we recently saw at TCS? That’s my first question. And my second question, again, as far as TCS is concerned, so you said that probably it will be harder to sell the TCS stake and that your deleveraging plan will take a bit longer than planned. Can you please confirm to us that this doesn’t raise any issue as far as your debtholders are concerned? Or anything specific about the debt that you should — that you would need to reimburse soon and that having difficulty selling the stake in Vantiva would raise any specific issues there? And please then my last and third question is about so on Vantiva cash flow. You generated accumulated negative EUR 26 million. To reach the guidance over the full year, you would need to generate at least about EUR 85 million in Q4 versus EUR 10 million in Q3. So what would be the bridge between Q3 and Q4 cash generation in order to reach your guidance? ——————————————————————————– Luis Martinez-Amago, Vantiva S.A. – CEO & Director [3] ——————————————————————————– Okay. I’ll take the first questions and Lars will take the last one. So on the first question related to TCS, we are 2 independent companies. To answer your question, the management of Vantiva, which is sitting here, we were running this activity, the Connected Home activity and the Supply Chain’s already in the past. And the main — the only answer I can tell you is that due for the results, we are transforming this activity already for many years. And we are fully focused on executing our plan, okay? And as you have heard, we are confirming our guidance that we have already communicated for some time and we are managing the business. We are really focused on that business. And I have nothing more to comment on this aspect. The second question was… ——————————————————————————– Unidentified Company Representative, [4] ——————————————————————————– Deleverage. ——————————————————————————– Luis Martinez-Amago, Vantiva S.A. – CEO & Director [5] ——————————————————————————– Deleverage, yes. ——————————————————————————– Unidentified Company Representative, [6] ——————————————————————————– (inaudible) to the… ——————————————————————————– Luis Martinez-Amago, Vantiva S.A. – CEO & Director [7] ——————————————————————————– So we had a plan as we communicated in previous communications of trying to deleverage the company as soon as the conditions were the appropriate. As I’m saying, okay, the conditions are worse than the last time we communicated, but this doesn’t represent any operational issue for us. We can service our debt. We can run our company with enough liquidity moving forward and we need to get — wait a little bit of better conditions to maybe execute what we were planning to execute. But this represents 0 impact in our focus and what we need to do in this business. It’s only a change of a possible time. And the last question, Lars. ——————————————————————————– Lars Ihlen, [8] ——————————————————————————– The last question was on the free cash flow and how we were going to reach our guidance by generating EUR 80 million to EUR 85 million in the fourth quarter. And Thomas, as you know, and if you have followed us for a while, so you know that we have a heavy seasonality in both Connected Home and in Supply Chain Solutions where we generate systematically a lot more cash in the fourth quarter than we do in the remaining part of the year, okay. So we are fully confident that this will also continue into 2022. On top of that, we also have the improvement of the supply situation for Connected Home, where we — as we have mentioned earlier, we have tied up a lot of inventory due to the longer transportation times in the first part of the year. This is now unwinding. Transportation times are back to normal and this will also have a positive impact on the cash in the fourth quarter, okay? So we are fully confident to get to where we have to be by the end of December. ——————————————————————————– Operator [9] ——————————————————————————– Next question from David Cerdan from Kepler Cheuvreux. ——————————————————————————– David Cerdan, Kepler Cheuvreux, Research Division – Equity Research Analyst [10] ——————————————————————————– I have a question related to TCS liquidity issues. The company says that they will discuss with their stakeholders, including their shareholders. So in the case of capital increase, what will be your position? ——————————————————————————– Luis Martinez-Amago, Vantiva S.A. – CEO & Director [11] ——————————————————————————– Okay. Today, this is a question which is a speculation. We have heard what has been communicated. Again, our main objective is to remain focused on executing the Vantiva plan. And we need to defend our shareholders’ interest. And when the moment arrives, this will be debated to see what is the position that we will take. Okay? But it’s too soon, too early to comment on any position in this front. For me, the main message is first priority is to remain focused on the Vantiva plan. And second, yes, we are conscious of our responsibility as a major shareholder of TCS and responsibility of defending the interest of our shareholders, but we will address these possible scenarios when the moment arises. ——————————————————————————– Operator [12] ——————————————————————————– Next question from Yemi Falana from Goldman Sachs. ——————————————————————————– Yemi Falana, Goldman Sachs Group, Inc., Research Division – Business Analyst [13] ——————————————————————————– Congratulations on the quarter. A few ones — a few questions from me, if that’s okay. Maybe if I start off just in terms of the success of the print, it seems like the Connected Home business is trending clearly above plan. You called out Deutsche Telekom, but are there any major contract wins that you’d be flagging at this point? Secondly, on the — sorry, maybe I stop there and come back. ——————————————————————————– Luis Martinez-Amago, Vantiva S.A. – CEO & Director [14] ——————————————————————————– Okay. As you prefer, but I can answer this question. So I will comment on a number of them that we have announced publicly. We need to be conscious that some launch we cannot announce because we have confidentiality agreements with customers. But okay, you saw the reference on Deutsche Telekom. We had announced it also a new important gateway with Vodafone in the U.K., which is a significant new product because it’s bringing Wi-Fi 6E functionality and is the first one in the U.K. market. We have also announced a video with another operator that I cannot name in the U.K. It’s the first Android TV product that will happen in the U.K. And we are announcing today, which belongs more to quarter 4 than quarter 3, a new product with Bouygues Telecom and [On and On]. It’s a pity that we cannot communicate publicly some of them because as I repeat the confidentiality, but we have a significant pipeline of deals that is giving us a good prospectus for the future. ——————————————————————————– Yemi Falana, Goldman Sachs Group, Inc., Research Division – Business Analyst [15] ——————————————————————————– Very helpful. And then maybe on the timing, perhaps on a slightly more negative side on the contract loss in Supply Chain Services, when did that come out? And so when can we think about that lapping within financials? I think maybe connected to that, could you maybe just give us an understanding on where we are with respect to supply chain? Clearly, they’re being constrained all through the pandemic. And then it feels like they’ve improved steadily from there and you’ve spoken about improvements that you’ve seen on the Connected Home side of things. How far are we away from kind of a normal operating environment? Can you see that far out? Or is that — are we too early to say that? ——————————————————————————– Luis Martinez-Amago, Vantiva S.A. – CEO & Director [16] ——————————————————————————– Okay. Thank you. So the first question on the Supply Chain Solutions and the DVD business, we have not lost any contract. Sorry if that was misunderstood. We have running contracts with the main studios, almost all the studios. And the only thing we have plans with them that they can give us forecast for the year and after that they execute on the volumes gradually. What I said is that during quarter 3, one of our customers, they were not asking the production from us as they were committing, they were asking less, but simply because they wanted to deplete the inventory they have instead of asking new production. So it’s not a contract loss. It’s just the normal run rate of business that we have with them that some cases, they ask for more because they have more demand. Some cases like this one in quarter 3, they were asking less than they were committing, but it’s not any loss of contract or change of the policies. We are running with them and this is just an incident, but it doesn’t have any long-term consequence. Going to the other part, which is supply chain for Connected Home. So we are still in a very constrained situation. The logistics part of it, transport finding containers or moving containers in the world, this is improving, as Lars has mentioned recently. So we see the lead times that went very long lead times in moving containers for one point of the world to the other is getting back to normal, I would say, even to pre-COVID situation, not the prices yet. Prices are going down. But I think the lead time, which is important for our inventories in transit, this is getting in a much better situation overall. And on the component front, it’s not getting worse. It’s still constrained, but we are still finding difficulties. I think we are performing very well in this front and we have very good suppliers and we have a strategic partnership with them and we are managing quite well. The forecast for the future, we consider that that will start easing a little bit in availability of components throughout 2023, almost certain for the second part of the year of 2023, but we are still not out of the woods, okay? I think we need to keep our focus and we have our supply chain teams all over the world and mostly in Asia, in Hong Kong, Taiwan, China, very focused on keeping our flow of components to build our products. But overall, in ’23, I am expecting certain improvements in this situation, a gradual improvement in supply and maybe a bit later on the price. But supply, we will see some improvements moving forward. ——————————————————————————– Yemi Falana, Goldman Sachs Group, Inc., Research Division – Business Analyst [17] ——————————————————————————– I appreciate, I’ve taken up a bunch of time, so I’ll keep it to 2 final questions. On the more operational side, I think there was an expectation that you were going to see more competition and potentially some margin pressure, especially given kind of strong dollar and dollar-based cost base into next year. Could you maybe give us some color on the moving parts there, especially in some of those kind of COVID (technical difficulty) unwind in a less constrained market environment into 2023? And then finally, on the financial side, I think there’s no escaping that the free cash flow outlook here is pretty compelling, but the guidance is on a pre-financial cost basis. So could you maybe give us a flavor of kind of what your expectations would be from an interest and tax perspective for the remainder of the year and into 2023 based on the peak structure of the debt plus recently financed debt? ——————————————————————————– Luis Martinez-Amago, Vantiva S.A. – CEO & Director [18] ——————————————————————————– Okay. I am not sure to have understood well the first question. I think competition stays very tight and we are competing in very competitive industries, but we are performing well, as you can see by the results. We don’t expect major competition changes in the landscape moving forward. I think difficulties, let me put it in this way, in the market, when the market becomes difficult is good for companies like us, like Vantiva, because then our value proposition and our competitiveness is highlighted in these situations. More competitors can access the same type of performance, but in difficult situations, our value is highlighted. So I don’t know if I’m missing any specific aspect of your question, but we consider competition is stable over the next future. And the difficulties in a way — not that we are happy with difficulties, but in a way, it’s helping us in position us as a better performance than maybe many other competitors. And on the free cash flow. ——————————————————————————– Lars Ihlen, [19] ——————————————————————————– So I think on the free cash flow, you need to think all the items below the interest and tax in 3 buckets, okay? So you will have the interest, okay? You have the tax and you have the impact on the IFRS 16. So I don’t think it makes much sense to look at this for 2022 because the legacy cost we had on the old debt and the costs we had of replacing the debt is not comparable to what we will have going forward. But if you look at what we will have with the new debt and our new business plan, I think you can think of each of these 3 buckets in the area of EUR 20 million, okay? ——————————————————————————– Yemi Falana, Goldman Sachs Group, Inc., Research Division – Business Analyst [20] ——————————————————————————– Very clear. And just a final one, perhaps is one for you, Lars. Just on the covenants around your debt and that net leverage ratio, is that based on a net leverage that includes the value of the TCS stake as an asset held to sell? ——————————————————————————– Lars Ihlen, [21] ——————————————————————————– No, we are not consolidating the debt or the results of TCS, okay? So the net… ——————————————————————————– Yemi Falana, Goldman Sachs Group, Inc., Research Division – Business Analyst [22] ——————————————————————————– No, is the net debt net of the value of the assets you hold in your balance sheet for TCS effectively? ——————————————————————————– Unidentified Company Representative, [23] ——————————————————————————– (inaudible) ——————————————————————————– Lars Ihlen, [24] ——————————————————————————– No. ——————————————————————————– Unidentified Company Representative, [25] ——————————————————————————– TCS for the covenants? ——————————————————————————– Lars Ihlen, [26] ——————————————————————————– No, we’re not. So you can see how we are calculating our net debt in the press release, okay? In Appendix 1, you have the full bridge from how we get to the net debt. And this does not include the value of TCS, okay? ——————————————————————————– Operator [27] ——————————————————————————– Next question is from (inaudible). ——————————————————————————– Unidentified Analyst, [28] ——————————————————————————– Apologies, I’m a bit new to the name. So I was just wondering, my understanding was that one of the difficulties that [Vantiva] faced in the past was not being able to pass on component inflation. Can you talk to how you’ve been successful in this in recent times, whether this is contractual or whether this is just unprecedented deflation triggering reactions from your customers? And whether we could expect them to continue to support you in this way going forward? ——————————————————————————– Luis Martinez-Amago, Vantiva S.A. – CEO & Director [29] ——————————————————————————– Okay. Look, the point is, as I said during the presentation, we are very happy of the support of our customers in covering the cost of the increase of components. I think they have understood that that was critical to have supply. And on the 2022 space, we have covered the cost and they have leaned forward. It’s not always a contractual commitment, but is let me say, an operational commitment and I think all of them to be that flexible. So we have covered this. The other question that maybe you are referring to previous years. The situation is the same, but the point is when we suffer a crisis of this kind, there is a component of a speed. The component goes up in a ratio and then we need to establish conversation with customers and agree with them on how they are going to compensate. And this may have a partial coverage for a period of time in which we keep serving product. And after that, when we agreed they start covering the cost. And this is where in previous year, we — maybe the percentage was not totally. But as I said, in 2022, we have a very good support from our customers in covering the cost. Moving forward, one of our services that we provide is keeping our customers inform about market disruptions. We have experts in many aspects in the world and we are debriefing customers about situations, not only components, not only evolution of some new technologies, but also impact of COVID lockdowns in China, closer home factories, et cetera. And we bring them to then the situation and the solution that we are proposing to them to fix the situation. And normally, this help us in really executing quickly to guarantee supply, but also in being very transparent with our customers and facilitate that they participate in guaranteeing the supply. So we are pretty happy and we thank all our customers for the help they have provided. ——————————————————————————– Unidentified Analyst, [30] ——————————————————————————– Okay. Would I be fair in saying this is a step change from Vantiva of old or the Technicolor of old and that the relationship has strengthened in this manner going forward? Or is the conclusion that unprecedented macro movements such as Chinese COVID lockdowns, et cetera, you will get the pull for, but there is a range of supply chain disruption that you would still have to wear? ——————————————————————————– Luis Martinez-Amago, Vantiva S.A. – CEO & Director [31] ——————————————————————————– I don’t understand what you made the link to previous company of Vantiva. One thing I may say is that our customers are happy of this new topology because — okay, we are a strategic supplier. We are very critical for our customers because if they need to commercialize their product, their service, they need our products. And being in a group as before, some of them that they are very dependent on us were a bit concerned that maybe the priorities of how we allocate investment, et cetera, can be distorted with other businesses. Now with Vantiva, they see a full play, a very core play in our core business and they are very happy because they can be sure that all my decisions are based on their interest. And they have full transparency of the performance of the company. Now moving maybe to the second part of your question is this in terms of how we act in the market related to components has no impact. And whatever is happening in the future will continue to have the same type of engagement with customers, okay? The world is not ending now and it will not end when the supply will facilitate and we’re going to be — we’re going to keep the transparency to our customers, working with them in guaranteeing supply and being transparent on the — all aspects involved in the delivery of the products. ——————————————————————————– Operator [32] ——————————————————————————– We have no more questions for the moment. (Operator Instructions) Gentlemen, we have no more question by phone. ——————————————————————————– Luis Martinez-Amago, Vantiva S.A. – CEO & Director [33] ——————————————————————————– Okay. Thank you very much to all of you and let’s talk in 3 months when we are presenting the full year results. Thank you. ——————————————————————————– Operator [34] ——————————————————————————– Thank you. Ladies and gentlemen, this concludes the conference call. Thank you all for your participation. You may now disconnect.