Ladies and gentlemen, welcome to our 2021 Half Year Results Conference Call. I’ll make this call together with Tom Hallam, our CFO. We’ll take you through the presentation before answering your questions at the end. The company news on our half year results 2021 were published on our website this morning. This is where you will also find the slides for today’s presentation. Along with the media release, you will find our 2021 half year report on our website. I’d like now to start going through the presentation, I invite you to turn to Slide number 3, to go through our performance highlights. So I’m very happy to share with you both the excellent sales growth and the strong financial performance for the first half of 2021 we published this morning. For sure, going back six months ago, as we started the year, the outlook for 2021 was full of uncertainties, difficult to predict consumption patterns in a world showing very mixed signals, both from an economic standpoint and from a pandemic standpoint. As our half year 2021 results demonstrate our sales continued to benefit from a robust demand of the resilient categories, while the 2020 pandemic impacted categories strongly rebounded.

Thank you, Gilles. I would also like to welcome you all to our conference call. Gilles has taken you through the business performance of the group as well as the main aspects of the market and regional development. On the following Slides, I would like to focus on the operating performance of the group, as well as the two divisions. Let’s start with the performance highlights on Slide 11, group sales increased by 7.9% on a like-for-like basis, which excludes the impact of acquisition, as well as the currency impacts. In Swiss francs, sales increased by 4.7%. The reported EBITDA increased to CHF809 million, compared to CHF734 million in 2020 and the underlying EBITDA margin remained very strong at 24.2%. Net income was CHF481 million or 16.3% of sales, compared to CHF413 million in 2020. Finally, the free cash flow as a percentage of sales was 5.5% compared to 5.5% also in 2020. In the following slides, we will cover the group performance in more detail. Please turn to Slide 12, which shows the exchange rate development. Once again, the Swiss francs’ strengthened against some major currencies in which the group operates, but it’s more stable against others in comparison to the prior year. The impact is less pronounced in major market – major mature market currencies and more pronounced in some emerging market currencies, such as the Brazilian Real. We still believe that our operational and geographical spread continues to provide good natural hedges and our EBITDA margin remains well protected against these currency fluctuations. Please turn to Slide 13, which shows the group operating performance. In 2021, the group continued to achieve productivity gains and then demonstrate a strong cost discipline. This resulted in a gross margin, which improved to 43.9% in 2021 compared to 42.2% in 2020. Referring to the previous slide, although, we are naturally hedged at the EBITDA margin level currency movements can cause some fluctuations on individual lines of the income statement including the gross profit.

Thank you, Tom. The Company’s 2025 ambition is to deliver sustainable value creation for all stakeholders of Givaudan. Givaudan 2025 strategy is fully in line with its purpose and places customers at the heart of its business, supporting them to grow and to create products that are loved by consumers. Let me remind you the main foundations of our current strategic cycle. The 2025 strategy is focused around three growth drivers. First one is about expanding our portfolio, it’s about extending customer reach and it’s to have a focused market strategies and it is supported by four growth enablers, which are aligned with the Company’s purpose domains, namely creations, nature, people and communities. These three growth drivers and four enablers are all underpinned by a commitment to excellence, innovation and simplicity in everything we do. Let’s turn on to Slide 22 on our performance commitments until 2025. We have initiated our new five-year strategy cycle. And as I mentioned earlier, so far business trends, customer needs and consumer behavior in an environment impacted by the pandemic are confirming and reinforcing our strategic choices. Ambitious targets are an integral part of Givaudan’s 2025 strategy, with the Company aiming to achieve organic sales growth of 4% to 5% on a like-for-like basis and free cash flow of at least 12%, both measured as an average over the five-year period strategy cycle. In addition, the Company aims to deliver on key non-financial targets around sustainability, diversity and safety, linked to Givaudan’s purpose. I’m confident we are on the right path to deliver this ambition. Let’s turn to Slide 23. Let me now give you some facts about the coming month. H1, the first half has demonstrated a strong recovery of the categories most affected by the pandemic and the further development the categories, which revealed as being resilient in 2020. We are quite confident in our choices, our capabilities, and the important role that we played in the global value chain for food and consumer products. The pipeline of briefs with our customers is strong, demonstrating their appetite for innovation and the trust in Givaudan. However, there remains a high level of uncertainty related to the continuing COVID-19 pandemic. We clearly remained focused on operations by protecting and supporting all Givaudan personal by focusing on maintaining operations and supply chain performance at high levels to support day-to-day customers and continued cost discipline throughout the business. Finally, integration of the acquired companies onto the Givaudan’s operating platform continues as planned, and we are progressing further with the implementation of the 2025 strategy. So now ladies and gentlemen, many thanks for your attention, Tom and I are looking now forward for your questions.

Your first question comes from the line of Celine Pannuti with JPMorgan. Please go ahead.

Good afternoon, everyone, and thanks for taking my question. So first, I would like to ask about the growth outlook. I mean, you said that what was the difficult part of the business has been resilient? If I look on the two-year average sequentially we have seen a slight decline or deceleration. So my question is, is it possible for you to give us an idea of what is the underlying demand now, maybe that we are entering some form of normalization and the corollary to that question is, in emerging market, I’ve seen that sequentially, there has been a deceleration. So any views that you have when we hear that some of your customers need to raise prices a lot and maybe there could be some elasticity on demand? So that’s my first question. And my second question is on raw material inflation. So you average rated 1% cost inflation for the Europe, if you could confirm the good visibility that you have on that. But more importantly, how should we look at your cost base maybe as we look a bit further out when a lot of the other industries are seeing cost inflation. It does something, I mean, do you think that your RawMat are specific that you would not see that, what you could comment on that. That will be very helpful.

Okay. So thank you Celine for your questions. So when I start maybe by the latter, so on raw material inflation, we can confirm that we are within basically the range of what we already stated in January. So 0% to 1% of raw materials increased for 2021. And the confidence that we have in this visibility is driven by the fact that we have a number of contracts with suppliers and we obviously have managed to source ingredients throughout the year as well with the sort of levels of prices. So for sure, we see inflation with others categories. Now the question was what will happen in 2022 and that’s a bit too soon to articulate a number because a number of contracts needs to be negotiated and the year is not finished. So we make sure that we give an outlook on the RawMat development next year throughout the end of the year. On the first question on the growth outlook, I’m not so sure. I have the same reading of our own figures, because actually if you take – however you take it Celine, on the resilient business and if you take, for example, I think the question was especially on the consumer products. One has to look at half year to half year. So whether you take a CAGR over from 2019 to 2021 or from 2020 to 2021, we actually are on a very regular pace of 8%. So the only thing that you could argue is the difference between Q1 and Q2. And it’s true that we have had a very strong growth in Q1, which sort of decelerated in Q2, but overall, the half year still has a good growth. And I would say the same thing as happened a bit in Asia Pacific. So I’ll give you the – in a way that it’s the same reason for both cases, meaning that in Asia and especially on Taste and Wellbeing, we have seen a very strong growth in the early part of the year in Q1, which sort of was lower in the second quarter. But in both cases that has to be put onto the account of the fact that we have seen maybe a number of clients sort of preparing on a sort of – in the husky way or original way preparing maybe the – for the post COVID by ordering a lot in the first quarter and then slowing down in the second quarter, but this is not from what we hear from our clients, what we see driven by sort of a difference in consumer demand across Q1 and Q2. So it’s really an older pattern, which has a sort of being a stronger in the Q1 versus the Q2. But overall, if we read our figures half year to half year to half year over three years or two years, the pace is really same, so nothing to be, I would say concerned about. The only question in terms of outlook, which is difficult to make for the second semester is simply the fact that it’s really to look at the comparables of Q3 and Q4 of last year and for that you have all the figures. So that’s basically what I can say for those two questions.

Yes. Thank you very much. Just on the point I was making about price being right across the board. It’s not only in EMs, but as well in VMs by some of your clients or many. Do you expect this could have an impact on consumption and therefore demand ultimately for you?

You mean the price increase of our own plans? Is that what you’re saying?

Yes. Yes. Like some elasticity of consumption given higher prices.

Yes. Well, so far we have not seen any trends in this direction in the effect to this. And anyway, I count on the sort of the – I would say the natural hedges that we have, because we don’t forget, we are again across all class or all categories and so forth. So when you have consumers training down to other categories that to our prices, we are still down. So and we have seen that in the financial crisis, we have seen that in economic crisis. We have seen that every time where those natural hedges help us to recap the consumers on other categories, other clients, when they leave the sort of more pre-owned categories. But so far we have not seen any effect of that. And in a way we could argue that fragments, flavors, sort of a value added ingredients around Active Beauty, again, are critical to the consumer choices. The way brands communicate around those consumer benefits and in a way helping or supporting the – basically the sales and whatever happens on from a pricing standpoint, we have never seen this effect of elasticity on ourselves from an overall standpoint.

Okay. Thank you so much.

The next question comes from the line of Jean-Philippe Bertschy with Vontobel. Please go ahead.

Good afternoon, gentlemen. The first question would be on your comments, Gilles that you are investing in new facilities. When I look at the strong growth over the first – over the past three years, if you take like LATAM or Active Beauty, if you still have some capacity, if you have to invest in additional capacities or facilities in those areas, I think LATAM is like one-third more volume than each one 2019 as an example. And the second one is on M&A, if you can give some color on the impact on both growth and gross margin improvements and especially on Naturex, which probably was outperformed in this crisis. And then a sub-question would be on your ambition in the make-up, you spent quite an amount on b.kolormakeup. And what is your plan with that stake in this company please?

Okay. So thank you Jean-Philippe. So yes, new facilities, CapEx expansion, well, if we look back where we are growing extremely strongly, I mean, first, I would say China, India those two markets, we actually have invested quite a bit. And actually the largest investment we ever made was for the fragrance compounding room in China. And every time we make those very significant investments, it gives us well, depending on the growth rate, but it gives us five to 10 years of capacity to grow within those sites. And then you increase capacity as you go by adding equipment and so forth. So in Latin America, for sure, we have plans to further expand some capacity, but this will be within the range of what we spend in terms of CapEx 3% to 4% for the group. We can really accommodate for those types of facilities. But it’s a good problem to have in any case, adding capacity to sustain growth. But so far we are well equipped in terms of capacity. So then the second question about M&A. I’m really happy about the fact that we did not commend that, but it’s true that if you look at the already at the end of 2020 or if you look at the first half of 2021 that especially the acquisitions, which went into Taste and Wellbeing, but also the one that like all going on their fragrances. You can see from the EBITDA level that we already brought most of them to the level of the division pre-acquisitions. And that includes also Naturex, which basically – yes, there is still some things to be done in terms of rolling out SAP, GBS, and so on. So still a bit of savings to be made. But so far so very good, we’re bringing all those assets and that’s to name a few, Drom, Ungerer, obviously, Naturex are familiar – basically to the level of the division, then we are very happy also about what Naturex brings in terms of growth when you think about immunity products, immunity – natural extracts from Naturex, represent roughly 40% and all, and let’s say 80% of that is in the U.S. that has been booming in 2020 and continues to do extremely well. So those are the types of when we talk about 2025 and when I talk about, portfolio expansion that includes those types of products, which is such environment with the pandemic really plays a very good role. So in terms of M&A we are really, really happy. I mean, if you just think about the value creation as you’ve seen, obviously, we pass the 40 billion mark in terms of market cap. I would say that acquisitions and the way we have created value through them has contributed to nicely to this increase. As it needs to be color, well, it’s an very interesting step into a category, which is part of beauty. If you just think about let’s say beauty, the market of beauty in terms of retail I would say to make things simple, it’s one-third, one-third, one-third. So one-third fine, one-third skincare, one-third makeup. We are quite active, obviously in Fine Fragrances. We have made great progress with Active Beauty in the skincare. I know it’s really are we with all those – I mean, Active Beauty is also a success story for Givaudan it’s going to hit more than CHF100 million this year, it’s growing high-double-digit. It’s really a success story. So makeup is really about exploring how we can participate with high value-added not only ingredients with solutions actually what’s very interesting with the b.kolor is that in a way they have the same sort of business model, combining ingredients to create solutions which are specific and customized for the brands. So this is really something that we want to explore, build upon alongside of b.kolor, so very happy about this step into this sort of – third leg of beauty, where we never really participated. So yes, that’s – I hope I answered your three questions.

Thanks very much.

Next question comes from the line of Heidi Vesterinen with EXANE BNP Paribas. Please go ahead.

Hi, good afternoon. So the question, the first question is on Taste and wellbeing. If food service keeps improving, should we expect retail to slow further? Or are there any new initiatives that could keep retail growing regardless of what happens out of home? And then on inflation, you had said 1% for the full year. Could you tell us what it was an H1? And I wondered if you plan to add strategic stock in H2, given it is an uncertain environment out there. And then another one, lastly, on margin, the related question, given that many of your customers are warning on margins, given high raw material costs, do you see incremental appetite to reformulate or perhaps even price pressure or resistance to take pricing from customers? What’s the outlook there? Thank you.

Thank you, Heidi. So inflation on raw materials, essentially it’s across the two within 1% in the first half and when we continue to have the same level in the second half, so overall, 1% of inflation. We usually don’t play too much building stocks to play the market in a way because that’s also eating a lot of free cash flow, but those strategies are used in a sort of a minimal way. And so then your question is about margins. Sorry, you said, I didn’t understand on the margins, you said…

On reformulation.

The reformulation side. So on the reformulation, we have not seen any ask any request so far to reformulate. Again these demonstrates that it’s the importance of those ingredients in the – basically in the consumer liking in the consumer behavior. If you start to play around with the whole essential profile of a product for cost reduction reasons you retake a risk on the performance and the success of the brands. So and plus, we counsel so little Indians products is whatever. It doesn’t really help on the whole cost of the formulation. So this is risk, not something we have seen. We can – this is something which is being used when you have an increase of our own RawMat. And there we work with our land sometimes to reformulate and try to mitigate some of the costs increase. Then on Taste and wellbeing, so your question, you said – food service is improving. Is that what you said?

In food servicing.

Yeah. It’s food service improves, what happens to retail?

Well, it’s – yes, what you don’t eat outside, you eat inside and vice versa, but at the same time, you still have potential increment and net benefit because in food service, you have a lot of things around, for example, sports events or corporate events in hotels, or all those events basically are being served and helps to development of the food service. So those things as this sort of come as the activity sort of increases, you can help the food service without necessarily cannibalizing or reducing the rest. But so yes, it may be an incremental improvement of the – but you have to also take, be mindful that “food service” only accounts for CHF400 million to CHF500 million of sales out of CHF6.3 billion, CHF6.4 billion. Thanks.

The next question comes from the line of Matthew Yates from Bank of America. Please go ahead.

Good afternoon, everyone. Couple of questions, maybe the first one for Tom, you talked about cost discipline helping the margins but also in the introductory marks, you emphasized that things like travel and entertainment are probably still well below pre-crisis levels. So can you just elaborate for me in terms of when you say cost discipline, how much of that is just transitory or temporary savings that haven’t gone back into the business yet, and how much is perhaps make more fundamental or sustainable. And then the second question, maybe for Gilles. There’s an awful lot of distortion at the moment from the comp effects of last year and you talked about the customer restocking getting ready for reopening. But other parts of the portfolio where you believe you’re meaningfully taking share from your competitors because of your better product offering.

Yes, so I can start with the second question. Well, to answer the question on market share gain, we are the first one to publish or let’s wait for the other ones to publish, to answer more accurately this question. If I go alongside of what has happened for the last, not only year, but I would say years, we certainly have gained market share from some of our key competitors. And I’m confident that we are if not market share gaining, but clearly being at the level of the market, but let’s see, how the others are doing. Again, we are very happy about the self development on all fronts. And there is something that I think it needs to be reminded since we are comparing to competitors, as the sort of growth of natural hedges across the three dimension client, products and geographies. And this is really something that I think is helping delivering those consistent results. This is part of our strategy. This is part of the way we do acquisitions. This is part of the way we define the spaces in which we want to grow. Usually the spaces where we have low market share. So this is really the consequence of this – natural hesitancy is the consequence of the strategy. And I think that helps us growing well against the competitors. And so the first question, Tom maybe you want to…

Yes. Thanks, Gilles. Thanks for the question. Look, I think if you look really from a macro perspective, I think the easiest thing to do is look at the improvement in the margin over the last this first six months compared to the last or the first six months of 2020. And on that incremental growth of just under 8%, we had an EBITDA margin of 31%. So, when we are growing, we are growing at a high margin to our existing margin. A couple of the items that you mentioned, I mean, you mentioned travel and clearly we’re not traveling in the first six months of this year. To be very honest, we were probably not traveling for four months out of the six months last year as well. On the other hand, and of course, you’ve seen this for many companies, and Gilles also referred to it. If you look at some of the ancillary costs, I mean, particularly freight cost has been extremely high in the first six months of the year. Just the general transportation cost is high. And then very specifically, the so-called Texas freeze, which had an impact on us and here we were absolutely determined to make sure we continue to supply our customers. And of course that came at a certain cost. So I think as I said, probably last year, it’s a swings and roundabouts, you tend to have one cost bucket going up the other one going down, but overall we maintain a very, very strong cost discipline.

Thanks.

The next question comes from the line of Daniel Buerki with Zürcher Kantonalbank. Please go ahead.

Yes. Good afternoon, gentlemen. I had a question regarding your restructuring cost there much lower than we saw. It means you are ahead of plan with the integration of all the companies, or is more coming maybe in the second part, if you could elaborate a little bit on this. Thank you.

Yes, actually Daniel, I think we’re probably slightly behind plan simply because of the way that we’re operating today. I mean, if you look at many of our facilities as Gilles and I both mentioned, I mean, we’re very much focused on meeting the demand of customers with an extremely high volume demand. It’s challenging really to also look at the – let’s say the supply chain and the footprint. So we’re slightly behind a small timing issue. And there will be some in the second half of the year and probably some more coming into 20 – the first half of next year as well.

Thank you.

The next question comes from the line of Lisa De Neve with Morgan Stanley. Please go ahead.

Hi. Good afternoon, everyone. So far we talked a little bit about reformulations and market shares, and coming back to that, and sort of more broadly, what are you seeing in consumer pipeline in customer briefings? Is there a difference between regional and multinational customers? Is there a notable difference between certain categories, for example, between Active Beauty and plant-based. And alongside that, I’ve also – you mentioned a number of new business wins. So I would like to understand if this references to, again, you’re taking share, is this a better market backdrop, or is this you growing into newer markets, such as plant-based functional nutrition and so forth. A bit of granularity around that would be very helpful. Thank you.

Right, it’s a bit of everything. That’s the magic of our business. So yes, what we see – so first what we see in terms of the nature, and that’s always interesting to analyze what we call the risk pipeline. What’s the nature of the risk that we receive, so essentially when we say that the strategy choices that we have made around naturals around clean label, around plant-based proteins, around essentially the – as well on the co-business around Fine Fragrances, around Fabric Care using more capsules, for example. The importance of making fragrances to forming on fabric, all those things, which are in a way consumer driven for more cleansing, caring, but also enjoying. And I’ve been amplified, especially the thing on health and I’ve been amplified by the pandemic. The thing which comes on top is also the whole – let’s say this is really very much are customers driven basically more demand and appetite for sustainability, meaning that even though you could argue that what we make in terms of ingredients have a very small CO2 footprint, extremely small CO2 footprint is still part of – we are still part of the journey that we are embarking with our clients to make products and to whether on the ingredient side or the way our perfumers and the flavors formulate to make those formulations less CO2 impactful. So the element of facility is coming on top and it’s contributing to the nature of the risk that we see. So what’s the difference between local and regional clients, and the large ones, usually it’s about time. It’s about the speed of execution of locals is quite fast. The appetite for risk is quite high. And so it’s – and the granularity of understanding consumer then so far is also quite fine. So that’s also the typical differences that we see across those categories of clients. Then – yes, in terms of new business, this is at the heart of our business to grow and to grow faster than competitors. It’s all about winning more risk than the others. That’s as simple as that simply because as you know, the arithmetics about our sales growth is a combination of an erosion of our existing business, which we can’t do much about because that’s what is being driven by our clients by consumers. And we can’t really act on it and it is compensated by enough new wins to have a net growth of whatever 4% to 5%. And so that’s the part that we can influence. And so winning more risk on the risk pipeline that we work on, on a continuous basis is the key to grow and to grow faster than the others. So, yes, when we grow faster than the other, it’s just a question of winning more business than the others. And that’s driven by a combination of number of things, which is basically the magic formula of Givaudan or at least in our business, which is about client’s relationships, innovation and so on, and making success products, which are successful on the shelf for our clients.

Okay. Thank you very much for that.

The next question comes from the line of Isha Sharma with Stifel. Please go ahead.

Hi, good afternoon, gentlemen. Thank you for taking my questions. I’ve actually just two left. One is on plant protein. You mentioned that you saw a strong growth at plant-proteins. Could you just tell us the size of this business and how should we expect this to develop? The other question is on the opportunities in Active Beauty. So we’ve been talking a little bit more about Active Beauty recently, and you renamed your segment Fragrances as well. I’m just wondering where do you see the opportunities the most because the competitive landscape seems to have changed. So what are you doing differently that puts you at an edge compared to competitors and where should we see the business developing? Thanks.

Yes. So the size of the plant-based protein, I mean, actually it’s a very exciting space because we actually started innovating, developing specific ingredients, which are usually called taste modulators combined with flavors to make solutions, which actually make those proteins, those alternative proteins, whether it’s made of peas, of soy or whatever other source of proteins. It’s all about making those things stays good. And because that’s extremely key for consumers at the end of the day, it’s not good enough to say I replace animal proteins by plant-based protein. If it doesn’t taste good, consumers won’t try it second time. And so the business now the business size was CHF66 million in the first half, so we are talking, roughly we are at the base of CHF130 million, CHF140 million for a full year and growing very fast because we started maybe four years ago. How far can it go? Well, it can go quite far, difficult to define, because it’s all going to be – it’s a new space, it’s a new space for consumers. So it’s all going to be defined by the fact that our consumer is going to pick up the plant-based proteins propositions. But a lot of startups, a lot of existing clients are investing into this space. And I think it’s – whether it’s a risky one or not, we ought to be in this business because the likelihood that it’s going to be big is high. And we are very well-placed in this field, if not the best place in the plant-based protein. The Active Beauty is also a space which we came into as an adjacent space to Fragrance and to Fine Fragrance. Why it is successful? I think it’s a good – we achieved a good combination of the acquired company in the part of – in the case Soliance, but also some other small businesses that we managed to expand portfolio, which is becoming a much diverse wide, and we are becoming a significant player in the space of highly specialized Active Beauty ingredients. On top of that, the value proposition of Givaudan, which I think is unique and very important is that all of those ingredients are naturals, but made in a sustainable way with biotechnologies. And that’s very unique, because it’s a very good way to make products which are claimed to be natural, but in a sustainable way. So that’s I think also explains the success and the third thing, which I think explains the success is the unique combination with our Fine Fragrance clients. We have access in a very intimate way with most, if not all Fine Fragrance beauty players in the world. And so we leverage the relationship with those to actually present and work on Active Beauty ingredients. So some of those goes to answer your questions on those sides. So now I think we take the last question, operator.

The last question for today comes from the line of Kenny Cathal with Davy Research. Please go ahead.

Good afternoon, folks and thanks for taking my questions. Two questions from me, firstly, for Tom. Just how should we think about operating leverage in the second half in the context of recovering in Fine Fragrance and Food Service? My second question relates to natural extracts and the beverage category. Just interested to know your comments on the opportunity set around that and I think you referenced that was booming in North America. So there are my two questions. Thank you.

So just on the operating leverage, I mean, I think you probably – if you look at the half year numbers last year, when we saw a significant decline in Fine Fragrance and in Food Service, there’s not such an impact on the overall margin. I mean, if you look at the relative size of the businesses, 16% of the portfolio is discretionary, 84% is resilient. So, overall it has a very little impact on, let’s call the operating leverage. And you see it actually even in the first six months of the year. So it’s more driven by the total leverage of the group and the use of the facilities rather than any single category overall. Maybe on the natural extracts, I’ll hand it to Gilles for the comment.

Yes, what that refers to is those what we call the immunity boosting type of natural extracts, which was really – which is again, a legacy family of products, which had been developed by Naturex, which we thought was really attractive. That’s also part of the reason why we acquired Naturex. And as I mentioned, 80% of that is very much in the U.S. and that goes into not only beverages, but all forms of applications, because that’s really sort of a nutrition type of natural exercise that you add to the number of applications. And those things are – I’ve been really welcomed, especially in the context of the COVID pandemic in the U.S.

Thank you.

So, that ends our Q&A session for half year results. I thank you very much for your questions. And I’d like to welcome you in-person or virtually, we’ll have sort of a hybrid half-year conference on the 26th of August in Zurich. And that session that they will be dedicated on our nutrition, health and sense offering, which I think will echo some of the questions you asked about this space, which is quite interesting and exciting. Thank you again for your questions.