Koninklijke Ahold NV AH
Q1 2013 Earnings Call Transcript
Transcript Call Date 06/04/2013

Operator: Good afternoon and welcome to the Ahold Analyst Conference Call on the First Quarter 2013 Results. Please note that this call is being audiocast and recorded.

In today's call, statements may be made that do not refer to historical facts but refer to expectations based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those included in such statements. Such risks and uncertainties are discussed in Ahold's Interim Report quarter one 2013 and they are discussed in Ahold's public filings and other disclosures, which are available on Ahold's website.

The introduction will be followed by a question-and-answer session and any views expressed by those asking questions are not necessarily the views of Ahold.

At this time, I would like to turn the call over to Mr. Henk Jan ten Brinke, Vice President, Investor Relations. Please go ahead, Sir.

Henk Jan ten Brinke - IR: Thank you, operator. Ladies and gentlemen, welcome to our first quarter 2013 conference call. I'm here with Dick Boer, our CEO and our CFO, Jeff Carr. We will take you through short presentation that's also available on our website and after the presentation, we are happy to take your questions. So with that off to you, Dick.

Dick Boer - CEO: Yeah, good afternoon and good morning to all of you. Thank you Henk Jan. Let me take you through a presentation that we have put on our website.

First of all I would like to get you through the highlights of the first quarter 2013. The sales were up 4.4% at constant exchange rates to EUR10.1 billion. We gained market share in all our major markets and our underlying operating income is in line with last year's.

The operating income EUR345 million is impacted by a EUR63 million pension withdrawal settlement which is a settlement we are pleased with and Jeff will discuss later on in more detail.

We also announced today EUR2.5 billion received up today, but – that we received EUR2.5 billion from dividend and sale of our stake in ICA. Today, we announced that share buyback program has increased to EUR2 billion to be completed by the end of 2014.

Let me go through some of the business highlights. First of all, Ahold USA. We gained market share in all our four divisions. Of course, we mentioned it also this morning, favorable impact from weather and timing of year end, but it's partly offset by the conversion from branded to generic drugs we sell in our stores.

Strong performance in the Stop & Shop New York Metro division, driven by more effective promotions and that Washington market has challenging economic conditions, mainly caused by sequester impacts and the region taken by the government in Washington D.C.

The Netherlands; the market share gain is driven as well by identical sales growth and the conversion of 18 former C1000 stores to Albert Heijn. We have continued investments in our online businesses, and it's driving strong double-digit sales growth. And I will come back, but also our performance in Belgium is clearly on a good track.

If I look at Other Europe markets, our share is slightly up. The identical sales growth is impacted again in the Czech Republic by a VAT increase similar to last year but on a lower level, but still the impact is also there in the market.

We continued to improve the profitability in Czech Republic.

Now, let me discuss two of our important strategic initiatives for growth. First of all online and later I will come back to Belgium. We continue to improve our online offering and are driving strong online sales growth, currently close to 3% of our total Group sales.

Couple of things to highlight, first of all, pick-up points. Peapod opened another 11 pick-up points bringing the total to 19. The first store-based pick-up point in the Netherlands opened and we announced the national rollout of pick-up points for bol.com at 700 Albert Heijn stores, which we expect will take place in the next couple of months – couple of weeks, sorry, and we will finish it just after summer.

Some initiatives on assortments, we mentioned, we doubled our number of SKUs for albert.nl to 23,000 in most of our markets, which is more or less the same offer as our retail stores.

We added also six new categories to bol.com since March 2012, recently we added furniture and homeware.

We also expanded our geographical reach. First of all, albert.nl now serving 67% of the Dutch households and Peapod now serving in a market of almost 17 million households, representing almost 45 million people in the North Eastern parts of the U.S. including Chicago. So great news I would say on our online proposition and well on track.

Maybe some words about Belgium. The expense is really well on track. We are currently operating 15 stores. This might sound like a small number but our sales levels in these 15 stores would already generate around EUR170 million on an annualized basis. So, we are clearly on track to deliver our promise to the market in 2016 to have 50 stores open in Belgium.

We're also outperforming the market. The price distance remains very competitive. External price survey last week placed us on the overall second place in the market with an index of 104 versus Colruyt and 7% to 10% cheaper than Delhaize. And we also have an above average ID sales performance in this market.

And last but not least maybe also good to (tell that it's) – our business is doing, sales per square meter is important as we all know and the index is 105 versus the rest of the market in Belgium with our 15 stores. So great success also from that point of view.

And then last but not least, what's all about is of course, customers. We received very positive customer responses when we open our stores as you're aware. But if you look at the GfK customer survey report, our rank is 2nd immediately and I think that's a great, great award also for the team working in Belgium that they are so highly recognized immediately by our customers in the GfK customer survey report.

Nice to know maybe a bit other things which I would like to mention is that more than 10% of Flemish households shop at Albert Heijn Belgium and that Albert Heijn Belgium has already launched more than 200,000 loyalty card holders.

So, also in Belgium, moving fast and I think with great success in that market.

Now, let me hand it over to Jeff who will take you through the financial aspects of this quarter.

Jeff Carr - Chief Financial Officer: Thank you very much Dick, and good afternoon, ladies and gentlemen. Just starting with the Group performance sales level as Dick mentioned, constant rate sales rose 4.4%. That's equivalent to a 3.4% growth in the U.S. and 7.5% growth in the Netherlands.

Underlying operating income was pretty much flat with last year, the same quarter last year to EUR416 million and margins – underlying operating margins were down 20 basis points, largely due to the Dutch pension charges which I talked about at the end of last year, increasing due to the reduction in discount rates, which I'll come back to and explain in a bit more detail in a moment.

Operating income was down EUR67 million to EUR345 million, and as Dick mentioned, that's largely due to a charge of EUR63 million in relation to a settlement on a multi-employer pension plan.

Now, as you know, we are constantly looking to properly manage our pension liabilities, and we were pleased with the settlement that we made in the quarter with the New England Teamsters and Trucking Industry Pension Fund, where we effectively withdrew and settled all our liabilities under the plan and then reentered on a new basis, where we would only be responsible for the pension benefits of our own employees.

So, we think that's a good deal for our employees and for the Company in terms of managing our liabilities going forward. That will include a $50 million cash outflow this year and a further $50 million cash outflow in several years' time.

Then net income; you can see net income down 19% to EUR208 million, largely resulting from that one-off charge and obviously total net income including the discontinued operations is up EUR1.7 billion due to the profit on sale of the ICA stake.

So, just moving on, clearly we successfully completed the sale of ICA in the quarter and our balance sheet will therefore obviously remain a core area of focus. As we've said, and I'll repeat, we're committed to an efficient balance sheet and we will continue to operate within the guidelines that we've given last year over an appropriate period of time.

I'll reemphasize our strong commitment to capital discipline, which we will aim to balance investing and profitable growth and delivering attractive returns to shareholder, and with that in mind, that we decided to increase the current share buyback program of EUR500 million by EUR1.5 billion to EUR2 billion by the end of 2014.

Now I just have a couple of pages I'm going to briefly touch on. Due to the nature of the first quarter where we have a few accounting changes and misstatement, I thought I'd just break this out for clarification. Obviously there is the ICA discontinued operations which we've restated obviously for prior year.

Also in 2013 we have some internal changes due to standardizing our earnings income – P&L statements through all of our operations which have a small impact, EUR41 million reduction in – increase in operating expenses and a similar increase in gross margin. As I said, that was just a restatement, an internal restatement that we did to get all of our operating companies on a standardized accounting P&L, and obviously then there is the implementation of IAS 19R as well, which we've again restated last year.

Now coincidentally and as we've already discussed and related to IAS 19R that also happens to a significant decrease in discount rates which impact our pension costs in 2013. And we flagged these last year (technical difficulty) if you look at the chart on the right-hand side, bottom right-hand side of the page, you can see the reduction in the Dutch rate from 5.6% in 2007 down to 3.6% which has obviously had a significant impact.

Now just identifying a couple of the key charges, the non-cash impact in the Netherlands on operating expenses versus the restated 2012 is EUR40 million, that's equivalent to 30 basis points. Also additionally, we have EUR24 million notional interest charge included in net financial expenses, this is for the full year 2013, that's what we expect, and additionally the unrealized actuarial losses from December 2012 are now reflected in equity, which have an impact of EUR849 million on equity.

I'll finish off on the – just by on the next page talking, you can see the full year numbers of the impact on the pension accounting changes, both the restatement and the decreased discount rates on our income statement in 2013. I won't go through this chart in any detail, except to point out just one for the time. In the far right-hand column, the 2013 versus restated 2012 numbers, the impact on the underlying operating income margin in the Netherlands will be 30 basis points and for the total Group at the bottom left page, the impact will be 10 basis points and you can look at that chart at your pleasure.

I'll now hand back to Dick just for summary. Thank you, Dick.

Dick Boer - CEO: Thank you very much. So summarizing over the quarter a couple of things to highlight. Sales growth 4.4% at constant exchange rates. We gained market share in all our major markets. We had strong cost control still on track with the EUR600 million cost reduction program. We continue to invest in our strategic initiatives. As you all have seen also in the online world where we opened our third (Corporate Center) in the Netherlands.

We, of course, have said at a couple of times that we remain committed to a balanced approach in capital allocation with a strong capital discipline having increased our share buyback program to EUR2 billion to be completed at the end of 2014.

We'd like to take your questions now.

Henk Jan ten Brinke - IR: Operator, could you please open the line for questions now?

Transcript Call Date 06/04/2013

Operator: Marco Gulpers, ING.

Marco Gulpers - ING: I've got three questions if I may. The first is on the performance of the pick-up points both in Etos and in the Netherlands. Could you update us on what the performance actually is in terms of identical sales growth? The second is, could you update us on what the performance is in the Netherlands region of Gall & Gall and also Etos franchise? And the third is basically what are you seeing in the U.S. in terms of price investments of some of your peers like Wal-Mart and ShopRite?

Dick Boer - CEO: Your first question on the performance of pickup points, it's hard of course to give identical numbers, because most of them are just opened for last year. So, not that many have already identical sales growth. So that's first of all – if you look at the performance, certainly the ones we have opened in the Netherlands have a clear great track record from customers. We got yesterday a number that we already have 50,000 transactions over – I don't think, five, six pickup points we have opened now. So that tells something; however – we started the first one was just before the Christmas period; sort of tells something how the customers really like these pickup points. In the U.S. a little bit different I would say. We have opened 19 now, but there, of course, they combined all with the stores. So, we're reviewing at this moment our marketing campaigning around it, but it's clearly and we have experienced that in the past already, which our Giant stores pickup points were already used. That is clearly also answering customer demand. On Gall and Etos, both of course are more in a market where you have more discretionary (spend) of customers. We had, of course, is (Gall & Gall), a firm increase of our excise taxes on the beginning of this year, where they're still keeping up, gaining market share. In that market, they are clearly the number one in the liquor market but also expanding rapidly in wines, and I think their performance was outstanding last year, and although with the increase of tax, they still performed better than the market. Etos was clearly suffering a bit last year and the markets, first of all, I would say also from a commercial perspective not the right commercial activities in promotions at that moment. I think they reviewed (that a lot) and revised it back to a more aggressive promotions and also the change they have made on the computer systems. Because they were implementing new systems – it has now start helping them at least to manage that of their stores and also their stock level, so both I think are improved. Then your last question is on price investments. Yeah, I would tell you that's not changed last year, this year or even next year I think. There is continuation, of course, in American market as it is in the Dutch market on price investment by competitors and we are answering that in the right way or at least with a different impact in our markets. As I mentioned, for instance, New York where ShopRite is a big competitor. We have clearly a very good performance and not only of course, for ShopRite but certainly also for the rest of the supermarket.

Operator: Fernand De Boer, Petercam.

Fernand De Boer - Petercam: It's Fernand De Boer from Petercam. Two questions if I may. First, inflation on the Netherlands picked up to about 4%. What is actually driving that inflation and do you see that coming off in the coming months? And the second question is on the pension situation in the Netherlands then. Could you say something about the financial position of your pension fund in Netherlands, if it has such an impact on your equity of EUR800 million, what does it mean for the coverage ratio?

Dick Boer - CEO: I'll leave the pension question to Jeff and answer on inflation. It depends a bit on how you look at inflation, if the consumer prices is quite high, but it's also driven by CET increases and excise taxes adjustment, so the real inflation for us is clearly lower and that's why you see a net sales growth for the Netherlands, a lower number, but let's be honest, I think for the perception of customers, inflation is rather high, but as I said mainly driven or partly driven also by our tax increases, our excise tax and CET increases.

Jeff Carr - Chief Financial Officer: On pensions, I think it's important to distinguish between the (statutorial) obligations and the funding requirements of the pensions and the accounting changes. From a statutory funding perspective, the Dutch pension plan was, I believe the number was funded at about 119% level, which is in a fairly healthy state. As a consequence to that, our cash contributions into the Dutch plan were broadly in line with last year – will be broadly in line with last year – this year, so there is no increased cash contribution requirements. So, I think you have to distinguish that from what happened with the accounting changes and the accounting changes meant effectively with the elimination of the corridor method meant that balances previously held on the balance sheet were just written off directly to equities. So that's a one-off change which we've taken into account and also the lower discount rates from an accounting perspective mean that the charge in the P&L has increased, and that's a non-cash charge. But over time, I think, we will probably stick my neck out, likely to be able to say that 2012 was a low point in terms of discount rates. Already in the first quarter we have seen a slight increase in discount rates which would imply a lessening of that situation going forward in 2014 potentially.

Operator: James Anstead, Barclays Capital.

James Anstead - Barclays Capital: Three questions if that is okay. Firstly, I just wondered if you could give us a little bit of insight in terms of why you decided to return this extra EUR1.5 billion via an additional buyback rather than say share consolidation, which you used a few years ago with the U.S. Foodservice proceeds. I'm just thinking in terms of clearly there's (quite) a visibility at the end of the next, but it will take quite a long time for that see through to earnings. That was the first one. Secondly, it was very helpful you gave us that color in terms of the sales you're generating from the first 15 stores in Belgium. Do you think those stores are representative in terms of the sales volume? So, that would indicate that by 2016 you should be as annualized rate of say EUR600 million or something like that? Is that broadly fair or are the first 15 a bit unusual? And then finally, this deal you've done in terms of the U.S. multi-employer plan. Is that kind of an arrangement or something you could do much more widely with your U.S. plans or is that a slightly unique situation?

Dick Boer - CEO: Yeah, maybe I'll start on Belgium first. The details, I'd say, what we just gave also to you clearly is also similar to what we expect as an average number for the expansion program. So, the stores we open now are certainly not dissimilar to the ones we are expecting to open in the future. On the share buyback, of course, we've been through all this. Jeff, can make a bit more follow-up maybe on it because he was certainly even more behind to the discussions we have with the Board and proposing also finally to do it in this way. So, Jeff, maybe you can give some color also to James.

Jeff Carr - Chief Financial Officer: Well, James, obviously, we considered all types of returns and we looked at the pros and cons of all. Clearly, the share consolidation was implemented after the sale of U.S. Foodservice, and actually at the time we did get some negative feedback in terms of the fact that it does force all shareholders to participate. Now, those pros and cons, clearly, it has a more immediate effect on earnings per share, but we weighed up all of the pros and cons in coming to the decision, both in terms of the amount of the share buyback and in terms of the timing and the timing of the impact on earnings per share, and we came up with what we think is the best position for Ahold and our shareholders at this point in time. We will continue to look at our opportunities to continue to invest in growth, and we'll continue to drive towards an efficient balance sheet, and all of those factors were taken into account. Now, I think in terms of the U.S. multi-employer pension plans, what I would say is we are being proactive in all of our plans to look at ways of limiting or understanding better and limiting our liabilities on ways that we can work with our members and make sure that their pensions are protected and that we end up with plans which are in the interest of both Ahold and our employees. The type of deal that was struck with the U.S. Teamsters is I think, a very positive move. We are looking at – we have 13 monthly employee pension plans. They all come up for discussion as part of collective bargaining agreements and we look to have full negotiations and discussions with all of the unions as they come up. If you recall last year we did put into effect the restructuring of the (indiscernible) plan which is the largest plan. The Teamsters, the one we just announced is our second largest plan. The output of the salary discussions was it gives us more certainty about the cash flows going forward over the next few years. So, we were able to create more certainty about the cash outflows and with the Teamsters plan we feel we have a better situation of controlling our own liabilities relative to our own members. So, we're pleased with both of those types of restructuring and we'll continue with the other plans. Although those are the two biggest, we'll continue to – with the other plans, look at ways of managing the liabilities that we see in terms of multi-employee pension plans.

James Anstead - Barclays Capital: That was very helpful. Thank you.

Operator: Edouard Aubin, Morgan Stanley.

Edouard Aubin - Morgan Stanley: Good afternoon. Two quick ones for me. First of all, you mentioned that you gained market share in the U.S. Could you just broadly quantify, including and excluding discounters what was the evolution in the first quarter and how it compared to the 2012 year? A question to Jeff, I think your target is to be roughly at around net debt-to-EBITDAR of around 2 times. Could you just give us a sense, if you implement half of your additional incremental share buyback this year, where you would be this year in terms of this ratio?

Dick Boer - CEO: I think our market share development is more or less in line with what we've seen over the last year on both sides by the way as long as Walmart, (our outlook is those) supermarkets. So we haven't seen a trend change, let's put it in this way, in the markets we operate and Jeff can elaborate on the question on EBITDAR multiple.

Jeff Carr - Chief Financial Officer: Well, clearly, with the transaction, the ICA transaction, we're in a little bit of transitionary phase. So, therefore, while we remain committed to having an efficient balance sheet, getting to around the two times leverage target will take a little longer. By the end of this year, I imagine we'll be in the mid-to-low one-time numbers. I couldn't give you an exact number, but we'll certainly not be in the high ones. It will be more in the mid-to-low ones, I should think, by the end of this year. That's assuming, obviously, that we continue with the balance sheet as it is with just the buyback going forward. But we do remain committed to getting to those targets. But obviously, ICA is a once in a every only now and then type of transaction and that will mean that 2013 will be a little unusual.

Operator: Andrew Kasoulis, Credit Suisse.

Andrew Kasoulis - Credit Suisse: Two, if I may. The one-off adjustment in the financial expense line, does that change your financial expense guidance for the year or can we still use the EUR200 million to EUR220 million excluding the EUR24 million notional interest as guidance? Secondly, just following up from I think James' point, what broadly proportion of the MEP total liability of the '13 schemes have you now addressed with looking at scheme one last year and scheme two this year?

Jeff Carr - Chief Financial Officer: In terms of the guidance, I think that could put us to the top end or slightly over the top end that being the higher expense of the guidance. Since that's an adjustment – one-off adjustment, I think, it was EUR11 million due to the adjustment on the financial – one of the financial instruments. So that will tip us towards the top end of that guidance, if not slightly higher. In terms of the proportion of multi-employer pension plans that have been reviewed, the two that I mentioned represent about two-thirds of our total liabilities. Those were laid out in the annual accounts. We increased our disclosure on those to break those out in more detail last year. The Teamsters plan and the (indiscernible) plan represent around two-thirds if not slightly more than two-thirds of the total liability. So that takes into account quite a significant element of that.

Operator: John Kershaw, Exane BNP Paribas.

John Kershaw - Exane BNP Paribas: Just a couple (if I may). Just coming back on the distribution, looked at another way, if you've got an annual EUR500 million of actually natural buyback from your cash generation. You've only therefore distributed perhaps EUR1 billion of the proceeds upfront. Does that leave optionality to return more subsequently? Or put another way, what sort of deals might you be looking at of reasonable scale? Can you give us an update on where you are on that? Then secondly, just on Belgium, you clearly encourage that. Can you give us a sense that at these levels sales density once you get to 50 stores and scale, what sort of margin you might make?

Dick Boer - CEO: On your question on the first one, of course, as to how you can interpret it yourself. We've seen it as – this is the share buyback announced as base of the ICA proceeds and also to have an efficient capital use in our Company. So you can interpret it differently, but I think that's what it is from our side. On the Belgium situation, I think it is clear, we are very pleased with our performance from sales perspective. Of course, it is an investment we do today in these markets with opening new stores and clearly, of course, looking for the fast expansion to the 50 stores, it makes it also sizable and, as you know, with that size we also can still supply and support it from our warehouse in the South of Holland and that clearly will benefit finally. I would say not in the line exactly on the Netherland's EBIT because as we all know it's a very good number in the retail world, but certainly as we will start benefiting and adding to our business here in Netherlands. On the other thing, we said also today and several occasions, of course, we've balanced not only with share buybacks but also with investments and future investments we do from a strategic point of view and that's also how we announced today the share buyback. So, we continue – we'll try to find and continue to find ways to grow our Company as we did last year with acquisitions like C1000, Genuardi's, bol.com on one hand from a strategic manner, and of course, on the other hand to give also the good returns to our shareholders. I think we anticipate at least that their share buyback increased and that's in a good balance for our shareholders.

John Kershaw - Exane BNP Paribas: I suppose it's being more direct, the extent which you've (lacked) yourself, balance sheet legal room suggests that you could be interested in doing larger scale M&As and then the deals you previously mentioned. So, why should we interpret that differently?

Dick Boer - CEO: You asked the question to Jeff, so let him answer.

Jeff Carr - Chief Financial Officer: Well, I think we've always said, John, if we see – we have a strong balance sheet with or without the disposal of ICA. We have one of the stronger balance sheets in the industry. And if we see deals where we feel we can create value for shareholders, then we'll certainly look at those. I wouldn't try and put a size on it in terms of whether or not we've done a buyback or not done a buyback, I would look at value and say if we'd see good quality assets, which we feel we can get at a – that we can improve, that we can create value for our shareholders, and that's clearly something we've talked about over the last two years that we will look to participate in. But as you know, as well as I do, that's not an easy challenge in this industry. So, what we're not going to do is destroy shareholder value. So we will be cautious in that regard.

Operator: Nick Coulter, Nomura International.

Nick Coulter - Nomura International: If I could just ask one, just a reverse of John's question really, and (push you) on timeframe for getting to an efficient balance sheet. Clearly, you do have a material amount of surplus ICA prices, you do have underlying free cash flow, there is a time value or cost of using a buyback to dispute those proceeds. So how do you view the timeframe for further buybacks or accelerating buybacks or share consolidations in the future, should you not find alternate uses for those funds?

Jeff Carr - Chief Financial Officer: Nick, that's fine. Nick, what I'd say is, it's constantly under review. I mean we have announced today a significant buyback which will take our total buyback to EUR2 billion. We will continue to look at the efficiency of the balance sheet and (indiscernible) accordingly, but I can't say more than what we have announced today that we are committed to the EUR2 billion buyback over the next 18 months or so to the end of 2014. In the interim time we will continue to look at the efficiency of the balance sheet and make decisions as appropriate. We are very much aware of the negative cost of carry by the way.

Nick Coulter - Nomura International: Yes.

Jeff Carr - Chief Financial Officer: And I do appreciate that and therefore, I think the capital targets we put in last year are a good reminder and the reason we put them in is to give you guys a good excuse to remind me that we have targets and that we need to be conscious of that in order to get to what I expressed as an efficient balance sheet. But obviously, it's not possible at this stage for me to give you a timeframe by which we will get to that level. We were very happy with the way that the sale of ICA went. We're happy with the position that those proceeds put us in and we will invest them wisely to the best interest of all shareholders over the near to mid-term, and I don't want to be benchmark – put into a box of (sand) that we have a specific date or timeline to get back to a balance sheet at this stage. But I think we will continue to update the markets and talk to the markets about our progress on that and we will continue to have a review of that balance sheet on an ongoing basis.

Nick Coulter - Nomura International: I guess the concern would be that it seems to be further out in December 2014 which kind of moves you more from the near into the mid-term.

Jeff Carr - Chief Financial Officer: Well, I think, what we've said is that there are many different ways of achieving that efficiency and obviously, the earnings that ICA created will be partly replaced in the – well, fully replaced by this program, but it will take over an 18-month period. We have other opportunities to invest in growth, and we'll continue to review those. And you'll just have to I think be patient for a little longer and see how we perform with that. But it's not possible to speculate or to talk about opportunities beyond the fact that we've announced the buyback – a significant buyback of an extra EUR1.5 billion today.

Henk Jan ten Brinke - IR: Operator, if there are no further questions, I'd like to hand over to Dick to make his closing remarks.

Operator: Please go ahead, sir.

Dick Boer - CEO: Yeah, thank you very much Henk, and thank you also for calling in today in our quarterly results. I think it has been – for us, at least the quarter was quite some big events. First of all, Group sales number, growing sales as well in Netherlands as the U.S. and Netherlands 7.5% sales growth, continue to have double-digit growth in online. We're well on track with our Reshaping Retail strategy. We're confident also on that. We closed the deal with ICA, and I think also to repeat that, it has been a very good number coming out finally out of the transaction, which we also announced today, and we promised it also to the market that in the first half year – the first half year of 2013 we would come back to that, that we increased our share buyback to EUR2 billion, which tells something about the discipline we have to look at our capital and also the way that we quickly are responding to the changes we have. So, I think that's good news. I am also pleased with the initiatives we're taking in the different markets in this economic environment to continue to be competitive. And I am looking forward to meet you again later this year. Thanks for joining and a good afternoon or a good morning for you out of the U.S.

Operator: That does conclude our conference today. Thank you for participating. You may now disconnect.