COTY

Good morning, and good afternoon, everyone. My name is Chelsea, and I will be your conference operator today. At this time, I would like to welcome everyone to Coty's 3rd quarter fiscal 2026 question-and-answer conference call. As a reminder, this conference call is being recorded today, May 6, 2026, at 8:00 A.M. Eastern Standard Time or 2:00 P.M. Central European Time. Please note that on May 5, at approximately 4:30 P.M. Eastern Standard Time or 10:30 P.M. Central European Time, Coty issued a press release and prepared remarks webcast, which can be found on its investor relations website. On today's call are Markus Strobel, Executive Chairman of the Board and Interim Chief Executive Officer, and Laurent Mercier, Chief Financial Officer. I would like to remind you that many of the comments today may contain forward-looking statements.

Please refer to Coty's earnings release and the reports filed with the SEC, where the company lists factors that could cause actual results to differ materially from these forward-looking statements. In addition, except where noted, the discussion of Coty's financial results and Coty's expectations reflect certain adjustments as specified in the Non-GAAP Financial Measures section of the company's release. With that, we will now open the line for questions. If you would like to ask a question, please press star one on your keypad. To leave the queue at any time, press star two. Once again, that is star one to ask a question. Thank you. Our first question will come from Filippo Falorni with Citi. Please go ahead.

Hi. Good morning. Good afternoon there. First question, Markus. I was hoping you can elaborate on the sell-in versus sell-out gap that you called out yesterday, both for prestige and consumer beauty, different drivers there. How should we think about it going forward into Q4 and as you start thinking about fiscal 2027? One question for Laurent. On the margin side, can you provide some color on the exposure to oil and higher oil prices, both from a raw material standpoint but also from a distribution logistical standpoint? Thank you. Thank you both.

Yeah. Thanks, Filippo. On your first question, I mean, first of all, on the prestige side, it was good that we saw some sell-out growth. Not much, but it was good, and we are happy about that. The sell-in was trailing. There are basically three reasons behind it. Number 1 is the Middle East, because when this hit us end of February, we basically, you know, couldn't sell anything in March. Middle East for us is a mid-teens region, was growing very highly. A good part of that sell-in problem is attributable to the Middle East. Number 2, we still in a highly promotional environment, which can be visible in the gross to net.

Finally, what we also saw is that a lot of our European retailers stocked up quite a bit for the holiday, for the Christmas period, and our sell-out was not as high as they had intended it to be, so they were working down a little bit of inventory in Q3. All these 3 factors combined led to that gap between sell-in and sell-out. When it comes to consumer, first of all, the good news on consumer is that we have closed a bit the gap to the category, especially on Sally Hansen and on CoverGirl in the U.S. Actually, on both of these brands, we are now growing versus the market in unit volume, and we are catching up in value.

Why have we not seen this in the sell-in? There is basically multiple reasons behind this. Number 1, we have basically decided to get our whole organization focused on sell-out and market share. This is, for us, a big cultural shift. We in Q3, we sold in a much slimmer, much sharper bundles because, you know, we sell in in the past, we sold in very big bundles, a lot of volume. Problem with it, if it doesn't sell out, it comes back in returns and obsolescence. We avoided it this time, we sold in less, we sold through much, much more. That's how we caught up against the category. This is short-term effect of selling in less because we changed our strategy in the way we drive retail productivity.

Number 2, we also exited some smaller markets on the consumer business, especially on color cosmetics in Southeast Asia and in Mexico. Obviously, when you exit, you don't sell in. We believe that long term, the focus on sell-out and sharper bundles and much more retail productivity will make us a stronger company, over time, sell-out will equal sell-in.

Yeah. Filippo, I can take the second question on Middle East. Indeed, there are two implications on, of course, top line margin. Indeed, Middle East is a mid-single-digit net revenue for the company. Of course, the other impact is made on the oil price. What I can tell you, if you have to keep in mind some numbers, is that roughly speaking, you know, a $1 impact from oil price is impacting, you know, our profit by $2 million. This is roughly the gross number. This is before any intervention on productivity, change of sourcing, any other kind of activities or ultimately even pricing. That, just to have in mind.

Now about the timing is, there is some delay. Number 1, because we have inventories on components. Number 2, also that procurement team, they have also some hedging policy with our suppliers, which is also protecting suppliers and as a result is protecting us. All in all, it means that we are protected against oil inflation roughly by the end of calendar year 2026. Okay. This is the rough cut. Maybe just to conclude on this, indeed what are the scope impacted. Number 1 is freight. This has a impact on freight, and it's also on glass obviously.

This is where procurement teams are really finding, optimizing in terms of sourcing, how we can avoid this impact. Number 3, it's about components, when we have some plastic components. Again, we are managing this very tightly. I mean, the procurement teams have really demonstrated over the last years, you know, ability and agility to navigate this kind of volatility of inflation. Was the case 3, 4 years ago when there was a peak of inflation. Again, the teams are really full on and managing all these elements while at the same time, of course, making sure that we keep always, you know, the top quality products.

Great. Thank you very much.

Thank you. Our next question will come from Olivia Tong with Raymond James. Please go ahead.

Great. Thanks. Good morning. You know, you mentioned retail destocking is mostly complete, but promotional levels are obviously still higher than you'd like, and at least in the near term, is likely a continued headwind. Perhaps can you give us a better sense of when you expect that sell-in and sell out to converge? You know, is this a next 12 months endeavor, or do you think it could potentially take longer? I understand your comments to Filippo about some of the actions that you're taking, particularly in consumer beauty. Would love a little bit more detail on that.

Just longer term, can you talk about some more of the building blocks to get you closer to category growth and whether you may need to take even more drastic actions, particularly in consumer beauty, to get you there? Thanks.

Okay. I mean, let me just start with how we get to category growth, both from prestige and consumer beauty. They're pretty similar. Because they're both run under the Coty. Curated. framework. Number 1 is getting the right innovation out there and focusing on the right innovation. What we have done already for fiscal 2027, we have identified what is our best innovation, what is innovation that complements the brand, that has a halo effect on the brand, and what are some small things that we have been doing in the past that we should not be doing at all. We have cut our number of activities, but we're gonna make the innovation that we bring to market bigger, better, and make sure it has a halo effect on the brand.

That's point number one. We're doing this on prestige, and we're also doing this on consumer because we already see now that some of our reduced bundles with bigger, better innovation, some of our items are far ahead of objective, some of them 3x. We've seen we can appeal much more to the consumer, get more traction. Second point is getting consumer engagement, improve consumer engagement. As I mentioned in the last call, by doing so many activities, we have invested a lot of money in creating assets, but even have enough sufficient money to put these assets out there for consumers to see.

We're changing that, creating fewer assets, having more money in working media, and especially, focusing more on what we call advocacy, which is a modern way of doing marketing influencers. We have been a bit slow on this 1 because we still had a very traditional marketing mix up until last year, but we're catching up very quickly, so that we believe that consumers will respond much more to offering. Number 3, and this is very important when you mentioned the sellout, and we're changing our whole company culture to sellout oriented. It used to be fairly sell-in oriented, but now we are, for every innovation, for everything that we're doing, we're asking what is the sellout plan? What is the joint business planning with the retailer?

Does it fit into the cadence of the retailer? We have a really fully synchronized plan to drive sellout, and then sell-in will follow. Number four is, on everything that we do, we put the ROI lens. We have very good ROI measurements now of all our actions, of our media spending, marketing spending, and we're saying everything what we do, does it move the needle, yes or no? Across these four elements, which is basically Coty. Curated. on both prestige and consumer, we believe this is gonna have a big impact over time. There will be, we had a framework. We put out this framework in the last call, as you remember.

We're putting into the market now, and hopefully it will improve quite a bit in 2027. It's probably gonna go much faster on the innovation side because we decided this already. It's gonna go much faster on the ROI side because we have the data.

Moving asset creation to working media is gonna take a little bit more time because you need some lead time to do that. Getting the whole organization that has been traditionally focused on sell-in, sellout-oriented will also take a little bit more time. When everything comes together, we believe we will finally be in a position that sell out and sell in kind of equate. We have a very healthy business from which to grow and reduce the gap we have versus the market. We wanna grow over time, at least with the market, and in the long term, obviously, we wanna outgrow the market.

Thank you. Our next question will come from Sydney Wagner with Jefferies. Please go ahead.

Hi, thanks for taking our question. Just curious on, you know, we're encouraged to hear some of the progress early from CoverGirl. Which of those strategic steps do you think are most repeatable outside of the U.S.? We are seeing several mass retailers, you know, developing and broadening their beauty offerings. Can you talk about how you think about where the Coty brands fit into that evolving, you know, mass retail environment and kinda how your strategy fits around there?

Yeah. I find it quite interesting when you look at CoverGirl and Sally Hansen. We had a lot of, you know, failed efforts in the last couple of years to position the brands where the brands don't fit. You know, I think at one point in time, we tried to turn CoverGirl into the ultimate Gen Z brand. That didn't really work because this was not credible for the consumer. You know, each time when I go see a retailer in the United States but also in Europe, they always say, "Please, can anybody do something for Gen X?" Gen X women have money, ready to spend it, but nobody talks to them and nobody has an offering for them.

Basically, what we are doing, what we've done with CoverGirl, we've made CoverGirl again in the process of making the penultimate Gen X brand, and retailers really support us in this. What this means, the way we're going to market, we need to have a good mix of advocacy. As I just mentioned, we gotta improve that. Also some traditional media to focus on the core on the core properties. You know, Simply Ageless, Lash Blast, all these kind of things that people know, that people trust in. Where we bring innovation on these existing franchises versus new all the time, and I think that it's highly appreciated. That helps us now to actually get much closer with CoverGirl to the category.

We're actually outgrowing the category at the moment in terms of units in the U.S., and I believe this model is also applicable outside of the U.S. We're gonna apply this on Rimmel in the U.K., and on some of our other properties like Bourjois and Max Factor in Europe.

Thank you. Our next question will come from Oliver Chen with TD Cowen. Please go ahead.

Hi, Markus and Laurent. Regarding the focus on the sellout culture, what does that mean in terms of your systems and/or capabilities or working capital and what you're thinking that requires? It sounds like it's quite prudent. As you mentioned earlier, Markus, on the promotional environment that you're seeing as well as the European accounts being overstocked, how long might that persist or what are you monitoring in terms of the relationship of what you're seeing there relative to guidance? Lastly, Laurent, on the A&CP shift, was that planned or was that in relation to what you were seeing in the marketplace? Thank you.

Okay. Yeah, in terms of sellout culture, which is obviously, you know, like, probably the more difficult part because culture change is usually more difficult and takes a bit longer than strategy change. What we're doing is we're trying to implement this in all parts of the organization. When we do a business review, we basically say what are the selling plans? What is the retailer plan? How we can engage with the retailer? Has the retailer verified these plans? It's asking the right questions. Also personally if on a top level, we're connecting with the right retailers, which we're doing.

Number two is, we will also, as we move forward, putting some of these metrics into our evaluation system. If you put market share, right, into your way how you evaluate the organization, you see a shift, you know, to on sellout almost immediately. I think it's a mix of putting it into our performance metrics, KPIs, measure it and drive it home with the organization every single day, but also building the capability for a joint business planning with retailers. Not just selling it in and hope it sells with top-line media, but having the right plan every time.

It's much easier to have the right plan, if you go back to the curation, if you have fewer bigger initiatives because you can focus on that to make the right plan versus throwing out too many things where you just don't have the bandwidth and the capacity to do the right plan. I think this is gonna help quite a lot. When it comes to retailer inventory, again, we said before that we don't think there's any more much more structural de-stocking in the trade. Structural de-stocking means retailers are in general dramatically reducing their inventory or their days on hand. We don't see that at the moment. It was just for us that our Christmas sellout was not as great as we wanted, yeah?

We've worked through that in the first quarter. As we go into the next holiday period, which is Mother's Day and Father's Day, we obviously are much more attuned to that. Now that we get into the sellout culture, I think we will be better in sellout. Sellout and inventory will be much closer correlated than what they were in the past. I think it's gonna go get better over time. Laurent?

Yeah. Oliver, I would take, just maybe to build on in your first question about working capital. I would like to build on this also to make clear that as part of the Coty. Curated. and again, this focus on sellout, I mean, there are also some strong benefits on cash and working capital because of course, by, you know, focusing on the biggest SKUs, you know, reducing the tail, it has some implication on inventory and on working capital. That's one. And it's part really of the discussion. And number two, when we say, you know, focus on sellout culture, it's also behind this is also to have a very strong focus on forecast security, really understand better the dynamic with the retailers.

Again, by doing this is really to be much more efficient on our inventory and also on excess and obsolescence. It's really a big element, and that's also what you saw that, you know, what procurement implementing, you know, All-in to Win project, which is really about streamlining our supplier ecosystem. It's also another benefit as part of this Coty. Curated. That's very important, and it has indeed concrete implication on top line, on the gross margin and also on the working capital and the cash. Now I go to your last question on A&CP. First of all, I want to remind that our level of A&CP in Q3 is flat. Which means that even in terms of %, it has increased.

It's really that there is no cut or drastic reduction, and it's part of our tight monitoring that we are implementing. Because when we say focus, it's of course focusing on the big bets. But it's also focusing on where we are seeing strong ROI. This is also the analysis and the decision we made during the Q3 that we believe that we need to preserve and we need to invest more for the KCP and indeed Mother's Day and Father's Day are really KCP, especially for prestige. This is a conscious decision that we made during the quarter to say, "Okay, let's reserve some money from Q3 because we are in a good place," and then reallocate this money where we are seeing in fact a strong ROI. That's really part also of the new dynamic, okay?

Not to be absolutely stuck on some decisions made three months ago. We are seeing how things are evolving, and when we have to make the decision to reallocate some money, we do it. It's absolutely conscious decision.

Thank you. Our next question will come from Susan Anderson with Canaccord Genuity. Please go ahead.

Hi, Alec Lagoon for Susan. Thanks for taking our question. I guess how should we think about the exit of Orveda and then also some of the brands from smaller markets? When should we expect, I guess the Orveda exit to occur? Can you give any details on how large that business was? Thank you.

Let me put it that way. Orveda, we have started transitioning out of Orveda since February, basically. We have reserved for all these costs in our Q2 already. We're executing this at the moment, which means, you know, closing some of these big boutiques. Some of them might be taken over by the previous licenser. We're still working on that. We think we're gonna be out more or less completely by the end of this fiscal year. Come June, July, August, we should be out of that business and can reallocate some of that spending that were on this business on our core fine fragrance brands. The size of the business, you know, we don't break out individual brands, but you can imagine it was not huge to say the least.

That is Orveda. From the other brands you mentioned, mostly the consumer business where we exited some smaller markets because they're just not economical. We cannot create any scale or make any money or have any ROI. With our new ROI culture, we will continue some of these. But there will not be You know, it will not be dramatically pronounced because the volume per market there is fairly small. We will focus in consumer beauty on our most important franchises, CoverGirl, Rimmel, Sally Hansen, Max Factor. We've got a win in North America. That's job number one. We got a win on Rimmel in the U.K.

That's job number 2. We got a win in Europe with the rest of our portfolio, job number 3, in that, in that priority.

Thanks. That's really helpful. Just a quick follow-up. Are you able to quantify the tariffs you've paid over the last year and any insight on if there's a chance for getting refunds on that? Thank you.

Yes. Laurent?

Yeah, yeah. Indeed. You know, roughly it's about $30 million impacting the P&L this year. Of course, I mean, we are looking carefully at any opportunity to refund and depending how situation is evolving, if, when and if we can do it, of course, this is something we will contemplate to help indeed our P&L.

Thank you. Our next question will come from Charles Scotti with Kepler. Please go ahead.

Yes. Good morning and good afternoon. Two questions for me, please. The first one, you mentioned that the competitive environment remains very intense. Could you provide more details on this and who is putting pressure on pricing and in which regions? More broadly, do you think that, similarly to the luxury industry, consumer are starting to push back against the perfumes price increases? Could prices eventually start to decline at some point? You know, could you push more on the smaller formats to adapt to a lower purchasing power? Second question, there have been, you know, many media rumors suggesting that you could dispose of certain licenses to other industry players in order to accelerate your deleveraging.

I think these rumors have since been denied. Do you have any comments on this topic? Regarding Gucci more specifically, you previously seemed open to a disposal ahead of the license maturity. Could you give us an update on this matter, please? Thank you.

Yeah. Okay, okay. Now I have to make this as 3 questions, so I have to make sure I don't forgot them one by one. In terms of the price, first of all, I mean, you gotta know that the beauty market is extremely resilient. You saw again 5% growth in the market in Q3. Both 5% on prestige and 5% on the mass. Basically, the consumer is shopping across a very, very wide price spectrum. So far we have seen an amazing resilience of the consumer out there. Yeah, there is a bit of, you know, everybody's fighting for market share, so there is a lot of promotion in the market.

That has more to do with building sell out and market share than it has to do with absolute price levels. We believe we're still in good shape when it comes to the resilience of the consumer. At least we haven't seen anything negative yet. On the rumors that you may have heard that we will be divesting anything in our prestige portfolio, I can say here for everybody, very clear, that there is no truth to this. We categorically deny this. There's no plans whatsoever. We're very happy with our portfolio. We're very happy with our brands on the prestige side. Each of them has an important role to play for us in the future.

If you go to the specific article, our Burberry and Hugo Boss, our biggest brands, they are our global brands, we love them. We continue to strongly build them in the future. Okay. Very clear. No doubt about that. No. When it comes to Gucci, yes, obviously we are open to everything, to an early exit if it creates value for us. It needs to create value for us and for our shareholders. If anything becomes clear and fixed, we will obviously notify the public as is based on our requirements. Okay. Nothing to report here at the moment. We'll keep you posted.

Thank you very much.

Thank you. Our next question comes from Andrea Teixeira with JPMorgan. Please go ahead.

Hi, good morning, everyone. Thank you for the question. Markus, you, and Laurent, you, both talked about going back to the SKU, the SKU rationalization, brand rationalization, consumer beauty. This has been obviously a very long journey, I just wanted to see what inning you are in terms of that, if how many more iterations of that you think you need. Related to that, on the cost side, I think you talked about returns of obsolescence impacting your numbers. How, again, how we should be thinking where these margins will land, how long you think you're gonna take as you focus, to your point, more on the sell out vis-a-vis the sell-in.

It seems to me that you're gonna have to, you know, incurring something, kind of restructuring those brands and making sure that you get the best returns on those. Thank you.

Well, I think in terms of getting the innovation to a place where it really makes sense for shelf and retail productivity. I mean, in the past, you probably know that, you know, we put out such a big innovation bundle every spring and every fall that we almost like crowded out, you know, productive SKUs on the shelf. So it's a double-whammy. You have stuff out there doesn't sell, and you have lost some productive SKUs, and if you add it all up, it's all coming back to you in either returns or obsolescence. Okay? We're still suffering from the hangover of that.

This quarter, Q3, was the first time where we are breaking that cycle, and we're gonna break the cycle even more in the fall bundle, which is gonna even be sharper. The most important thing, it's not like just reducing the number of properties. It's actually important to bring properties out there that resonate with the consumer. We're gonna be much more consumer-based, much more trend-based, trying to meet the market in creating some of these trends. The first results we have seen now, and are really, really good.

I mean, we have some of the innovations are really far above our expectations, and they help actually to build market share in volume, but also catching up very much in value now to the market with actually a much smaller number of bundle and a much lower number of SKUs. Much more efficient model. It probably going to take us, you know, 1, 2, 3 iterations through those bundles to work through that and see the full effects. As you will see, you know, less and less obsolescence over time. Give us a few quarters, and you will see the effects of this. Laurent, there was a second part, right?

When we were talking about E&O.

Yeah

You know, it is really to build on this and, you know, what we were referring before. I think it's really important you look at all these initiatives really from an end-to-end element or cycle. It's not just one bucket, but reducing the number of SKUs, but how we are can be very precise. Again, it will have some implication on forecast accuracy, on inventory and E&O. Indeed today, this is, as you saw in the Q3, it's really an element which is hurting our gross margin in prestige, but also in consumer beauty. By reducing this and with the working example, you know, reducing the bundle, it's indeed a way that we are reducing inventory.

We reduce E&O, also we will reduce the returns that we get from retailers. This will flow into the P&L. Also there are also currently some, let's say, exceptional elements. Markus was referring to some markets that we are closing in consumer beauty because they are not profitable. It also triggers, I would say as a short term, that sometimes it's impacting we need to get some inventory here, and it's hurting E&O or even in some cases we have some returns. These are also some exceptional costs that, you know, as time goes, will disappear. On the other hand, we get really the benefit from these decisions. It takes time, but again, it's really part of a very consistent plan, and it will be visible in the gross margin improvement.

Thank you. Our next question will come from Bonnie Herzog with Goldman Sachs. Please go ahead.

All right, thank you. Hi, everyone. I had a couple questions on your FY 2027. First, you know, how should we think about the impact from the Middle East? Is the 2-3 point headwind that you expect in FQ4 a good proxy? Could you provide a little more, you know, context of these pressures and, you know, maybe investments to support your launches in the year? You know, ultimately, is it reasonable to assume continued EBITDA declines or could EBITDA start to flip, you know, positive? Thank you.

Yes. Thank you, Bonnie, for the question. I think you agree on, you know, in your question that there are a lot of moving pieces. We always make clear that we operate in an environment where there is a lot of volatility. Indeed currently the geopolitics is bringing, of course, some additional volatility. On Middle East, I think like all of us and we read the news every day, as we understand the big numbers, mid-single-digit % of the size of Coty as a whole. Indeed, it's a very strong fragrance business and also very dynamic. Indeed it's creating a headwind. Now, you need really to understand that within Middle East there are different dynamics.

The channel which is the most impacted is travel retail, which of course given the circumstances is drastically reduced. Also in the Emirates because you have a, you know, a lot of tourists, and currency of course this is very to the minimum. On the other hand, you have markets like Saudi, which are, you know, pretty well protected. We need to understand these dynamics. We are monitoring as we go and also we are managing the P&L equation and the investment and the spending of the region according to how the situation is evolving. We have very good team on site and very close to all the actions and really the agility.

We'll keep you posted, but of course we are making sure that we are managing this very closely within our equation. Now when on your second question. Again and again, the big focus and it brings all the discipline and the organization is a focus on sell-out. This is really what will drive the performance and the improvement. Of course, at some moment it will be visible in the selling, but that's really a matter of discipline that Markus shared loud and clear. Gradually improve our sell-out to reduce the gap versus the category which is resilient. Of course is really our goal is really indeed to improve our EBITDA year on year trends over the course of fiscal year 2027. That's for sure.

At the same time, we've been very clear, we need to manage potential inflation, which is, you know, was the first question, you know, from oil increase. Also we've been very clear on the presentation that there are also some short-term benefits that also will create some headwind next year. Again, the trend, the organic trend is really to improve sell-out and of course indeed to improve, you know, the trend of our EBITDA trajectory.

All right. Thank you.

Thank you. Our last question will come from Anna Lizzul with Bank of America. Please go ahead.

Hi, good morning. Good afternoon. Thank you so much for the question. I know you talked a bit about the promotional environment here being a bit elevated. I was wondering if you could comment more on both the prestige and consumer beauty lines of business and when you expect this to better normalize. Thank you so much.

Good morning, Anna Lizzul. Indeed, we are seeing some promotion, you know, being more elevated. It is coming from, you know, specific actors, specific retailers. I think this is something that I would not call as, you know, a major change versus what we observed in the previous quarters and what we flagged. We are always making sure that we are protecting our brands, we are protecting our innovation, and really that we are not playing that game. I will insist also, and you saw in the consumer beauty presentation that we have been also very cautious in terms of price increase versus most of our competitors.

You see that in fact our sellout in units, especially in the U.S. is growing, this is very encouraging. It really helps also to avoid playing this kind of promotionality game. You see tangible results in the sellout improvement in CoverGirl, in Sally Hansen. We are managing this very closely, managing really all the revenue management approach. This is the way we are looking at it. You know, when it will normalize, I can tell you on our side, we stay very disciplined on this. On how our peers want to play that game, of course, this is a question that you can raise with them. We stay very disciplined managing the revenue management in a very targeted way.

Great. Thank you very much.

Thank you.

Good. Let me do just final closing comment. Obviously we are not where we want to be yet, but we're improving, and I think Q3 demonstrated our ability to protect profitability and cash flow while taking first concrete steps to strengthen execution across the business. Coty. Curated. is the framework that's guiding the shift, sharpening our priorities, simplifying operating model, and scaling what works. With sustained focus and disciplined execution, we are confident Coty is well-positioned to deliver more consistent profitable growth in the long-term value creation. I wanna use this opportunity again to thank all Coty employees around the world are working very hard to make this happen, and especially our colleagues in the Middle East are doing a tremendous job under a high state of high uncertainty.

Thank you very much.

Thank you, ladies and gentlemen. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.