Запись телеконференции: финансовые результаты 2-го квартала 2006 г. и приобретение компании «ПигМа»

John Rose, Head, Investor Relations, Amtel Vredestein

I. Preamble

Good evening and welcome to our conference call to discuss our preliminary, unaudited financial results for the first six months of 2006 and guidance for the rest of the year, as disclosed in a press announcement earlier today. We will also answer any questions you may have about recent acquisitions, particularly last week?s announcement of our intention to acquire auto parts retailer, Pigma. On hand to answer your questions today are Chief Executive Officer (CEO), Alexei Gurin; Chief Financial Officer (CFO), Ton Tholens; and myself, John Rose, head of Investor Relations. If you have not received your copy of today's announcement, you may find it on our website, www.amtelvredestein.com. A transcript of this conference call will also be posted to our website in a few days. Before, I introduce our CEO, Alexei Gurin, I am required to read our disclaimer regarding forward looking statements.

This conference call may contain forward looking statements regarding future events or the future financial performance of Amtel Vredestein NV. These statements are not guarantees of future performance, which is subject to risks, uncertainties and assumptions that cannot be predicted with certainty. Accordingly, actual outcomes and results may differ materially from those expressed in the forward looking statements. Amtel Vredestein NV does not intend to update these statements to reflect actual results. Now, I?ll turn the call over to Alexei and Ton, who will each say a few words before we take your questions.

II. The General Situation

Alexei Gurin, Chief Executive Officer, Amtel Vredestein

Welcome, everyone. As always, we are very happy to have an opportunity to answer questions you might have about our financial results, as well as sharing with you some of the thinking behind our business strategy. I will leave it to Ton this time to review our first half earnings in detail, but I would like to provide some context for these results by speaking a little bit about our business and our focus for the balance of this year and 2007.

First of all, we have spent the better part of 2005 and 2006 in building this company, transforming it into a business that we believe will provide long term, sustainable profit for our shareholders. We acquired new technologies, experience and brands via the purchase of Vredestein; we modernised our Russian factories and disposed of antiques and non core assets; and we boldly entered the retail and distribution business. We have also assured ourselves of sufficient capacity for several years through our Voronezh expansion and our acquisition of the Moscow Tyre Plant. Through the acquisition of Pigma, we have given our retail division, AV TO, greater impetus to grow rapidly. All these initiatives come with costs of short term profitability, and the rapidly continuing climb in raw material costs have made it even more difficult for us to translate some of our strong top line growth and market share expansion to the bottom line. However, we have been very careful to manage our cash flows and trim costs, wherever possible, as we create inevitable paths for earnings growth. Though costs were somewhat higher than expected in our retail business, which contributed virtually all of our loss for the second quarter, our business is quite strong in all regards and our ongoing strategy to grow our premium and value segments and eliminate the discount and non branded segment sales is making strong headway. In value terms, total A segment sales grew 324%; B segment sales grew 18%; and C segment sales declined, as planned, by 23%.

In quantitative terms, we produced 6.1 million passenger car tyres in the first six months of 2006 versus 5.6 million in 2005, which represents an 8% increase. We produced 183,000 more A segment tyres; 630,000 more B segment; and 334,000 fewer C segment tyres. Since the majority of the tyre retailers recently acquired by AV TO were not consolidated until late in the period, AV TO contributed only $15 million to sales in the first half of the year. AV TO expenses are expected to remain disproportionately high versus revenues until the subsidiary integrates and re brands all of its tyre retail stores in Q4 2006 and Q1 2007.

However, these early results are very encouraging, especially as we look deeper into the quality of these retail sales. Approximately 8 million of these 15 million sales were tyres sold at retail, of which 2 million, or 25%, were Amtel Vredestein brands, which is even higher than our initial target of 10% and much closer to our overall objective of 30%. $7 million, or 47% of sales, were other products and services. This demonstrates a significant opportunity ahead of us for small tyre, high margin sales at these stores. Our retail story only gets better when we add auto parts distributor, Pigma, which itself is in the process of acquiring wholesale distributor, Megashina. The combined deal will further solidify our position as Russia?s leader in the three critical sectors of tyre manufacturing, distribution and retailing. By entering the auto parts distribution business, we add a high margin, and complementary product lines and distribution channels, and the business that further offsets the seasonality of our tyre production and retail operations.

We also gained two dynamic hands on executives for our group: Pigma?s top directors, Mikhail Pigaev and Nikolai Makarov, whom many of you may know. They built some of our most successful retail stores from the ground up, before selling them to us early in the year.

I would like now to turn the call over to our CFO, Ton Tholens. I will be ready to answer any questions after Ton completes his presentation.

III. Financial Highlights

Ton Tholens, Chief Financial Officer

Thanks, Alexei. Hello, everyone. Allow me to give you a few highlights and comments before we take your questions. Net sales increased 22% to $350 million in the first half. Much of these gains were realised during the second quarter because of the seasonality of this business and, of course, our second half will be seasonally stronger than the first half as we sell greater volumes of winter tyres. Our strength for the period was, as planned, in our passenger car tyre business, which was up 52% to $205 million in the first half and now represents 59% of total sales. Gross profit also improved 43% from $80 million in the first half, up 22% in Q2 versus Q1. Perhaps most significantly, our gross profit margin grew from 19.6% to 22.9% in the first half, despite sharp increases in raw material costs.

Profits from operations were up significantly for Q2 versus Q1 to $9 million, but were down 50% to $9 million for the first half, when compared with the same period in 2005 due to higher costs from retail operations, acquisitions, increased advertising and larger unit volumes. Net loss was reduced to $5 million in Q2 versus $10 million in Q1, resulting in a net loss of $15 million in the first half versus a $1 million profit in the first half of 2005. As Alexei mentioned, our AV TO retail unit contributed $15 million to sales and $2 million in losses during the first half. Cash flow used in operating activities was considerably improved during the period thanks to record sales, a reduction of receivables and exceptionally low inventory levels in Russia due to a strong demand for Amtel tyres. This improvement was partially offset by the company?s Vredestein subsidiary which, as is customary for its European sales operation, has been building its inventory for the winter season. Strict control of working capital will continue to be a key factor in the future.

The amount of loans and borrowings increased 19.5% to $528 million during the first half of 2006. The primary reason for this growth was significant investments in acquisition of retail stores and investments in the company?s expansion of its Voronezh facility. $22 million of this increase was the result of currency fluctuations, primarily the US Dollar depreciation over the period.

Going forward the company estimates its net sales will be approximately $800 million for the full year 2006, with a further increase in gross profit margin to 23.5%. AV TO, the company?s retail subsidiary, is expected to contribute approximately $62 million to sales in 2006. These projections exclude the impact of recently announced acquisitions of the Moscow Tyre Plant and auto parts distributor, Pigma.

Questions and Answers

Alexei Gurin

I think we are now ready to take questions.

Bob Kommers, UBS

Good afternoon. I have a few questions. My first question is regarding your sales. You report on a consolidated basis for the first half of 2005 sales of $334 million. I was just wondering what the consolidation basis is for that $334 million.

Ton Tholens

Let me explain. This is on a pro forma basis, as you can see on the upside of the sheet, which means the business of today, including retail. However, in 2005, retail was of course zero. It is therefore the actual business including retail. The growth in these figures therefore includes retail.

Bob Kommers

Okay. Can I ask a question about your guidance? You guide for full year sales of over $800 million. That means over $450 million in the second in the second half and if we exclude the retail operations, that means that you expect 25% sales growth in the second half compared with the first half. You mentioned seasonality as one of the main reasons for this. Can I ask why we did not see that seasonality in 2005?

Alexei Gurin

2005 was skewed by the disposal of Krasnoyarsk and the shutting down of truck tyre manufacturing in Voronezh. The second half of 2005 is therefore not very representative of usual seasonality because in the first half of 2005, both factories — truck tyre manufacturing in Voronezh and the Krasnoyarsk facility were operational. We have sold quite a lot of heavy tyres and that has not resulted in a number of tyres sold, but in larger sales compared with the second half of 2005. I would therefore not put too much emphasis on the second half of 2005.

Bob Kommers

Regarding your retail sales, you report retail sales of $50 million in the first half of 2006. As I recall from your conference call after the Q1 trading update, you had $9 million retail sales in Q1, which would leave $6 million sales in Q2. I was just wondering what the explanation was for that.

Alexei Gurin

Thank you for the question. The point is clear. April, May and June are the lowest points seasonally for retail sales. In October, November and December, our retail subsidiary will sell approximately half of the annual sales volume.

Bob Kommers

Right. If I therefore look at the average number of shops that you had in the first half, there was an average of about 70 shops — 40 in the first quarter and just over 100 in the second quarter -which would give annualised sales of about $400,000 per shop. That is an unfair assumption.

Alexei Gurin

It do not think it is a very fair assumption. Firstly, because shops are different; they are not very comparable with each other. Secondly, I would suggest that we wait for the full year before analysing sales because, again, the first half of the year is not very representative. I would suggest that you take a look at comparable chains that belong to other tyre manufacturers and you will see the same kind of seasonality.

Bob Kommers

Right. Regarding your B segment sales, you report them to be up 18% in the first half of 2006. At the same time, you mentioned you were gaining market share in the B segment of Russia. How do I read that compared with the Nokian sales performance, which reported a sales increase of 50% in Russia in the first half of 2006?

Alexei Gurin

First of all, comparing us with Nokian, I would suggest that you look at the accounts receivable and inventories for Nokian Tyres year by year and quarter by quarter. If I remember correctly, inventory was up about 25% and receivables were up €50 million, which is close to 30%. Our receivables and inventory are exactly at the level they were at 12 months ago and at the end of the year. We are therefore selling our product for cash. That is the biggest difference. If we had an objective to stuff distribution channels, we would definitely have much larger sales in B segment or even A segment. We simply have a different strategy. We believe that for this particular year, when we are investing quite a lot of money into the Voronezh II project and further acquisitions, we need a very strong cash flow. It is always a very challenging task to have a very healthy cash flow and to increase prices at the same time. Our cash flow, to a certain extent, came therefore at the expense of wholesale and retail prices. Therefore, for the second half of the year and going forward, we will change our objective and will go more for gross margins and operational profit.

Bob Kommers

Okay. One final question, perhaps. Would you expect to be net profitable in the full year 2006?

Ton Tholens

There is an easy answer to this. It depends quite a lot on the further development of the raw material costs, of course, and the retail costs.

Alexei Gurin

It is the retail costs, as well. However, we are close to that and are growing towards that point.

Bob Kommers

Thank you very much.

Gairat Salimov, Troika Dialog

Good evening. I have a question which probably was covered by Ton during his introduction. Nevertheless, I will ask it again because I missed that. This is other informal expenses net. I look at your income statement and I see that you have quite a significant charge for $71 million and I see no details of that. It has grown quite significantly, on a pro forma basis, from $50 million for the first half of 2005. Could you please give details of that?

Alexei Gurin

You mean the increase in costs in general?

Gairat Salimov

No. The gross profit line.

Ton Tholens

I can explain. That is no problem. Primarily, you are thinking about the heading of retail getting about $7 million extra costs. Up until that, [inaudible] cost is growing as well, with about the same amount in total. There, you have to think about some extra advertising costs in the first half year, as well as a higher volume which gives higher distribution costs. In 2005, there were a number of income items in the Russian operations and this gives a bigger variation in the figures. Effectively, therefore, what we are talking about is a real increase in costs of about $14 million, with the rest being explained by one time disposals of assets in 2005.

Gairat Salimov

Sorry. Could you repeat what you said about the assets? I couldn?t hear.

Ton Tholens

The total of assets in 2005 in the Russian operations.

Alexei Gurin

It was one time gained.

Ton Tholens

Therefore, if you really compare the cost development, there is then a growth of about $40 million, of which $7 million comes from retail.

Gairat Salimov

Do you therefore mean that this significant increase is the result of [inaudible]. Sorry, I am trying to understand it myself. This is $7 million of additional expenses going to retail and some money going to advertising? An additional advertising budget?

Ton Tholens

Yes. The rest is salary increases and that kind of thing. These are minor amounts, which in total add up to a couple of million. Distribution is important because of the higher volume that we are shipping and of the need to store.

Alexei Gurin

There are [inaudible] of retail that has contributed a quite significant charge as well. This is more or less the start up costs of retail. Something that we might have questions on, but if not, something I would like to talk about is the question of the Pigma acquisition. We will answer this question and address the issue by showing how we will reduce this overhead cost.

Gairat Salimov

I see. In addition, then, to this retail acquisition, which is $7 million, I see that the total increase in other income and expenses is around $20 million. Is the rest, which is S12 13 million, a recurring item and something that we should expect in the future?

Ton Tholens

No. You have to look at the 2005 figure. When you take out one time incomes, as we explained, then you get to about $58 million. You therefore have to compare $71 million with $58 million, with $7 million coming from retail and $6 million or $7 million coming from the existing business, where I explained that part of it was advertising costs. These are therefore non recurring.

Gairat Salimov

I see. Thank you.

Ron Smith, Alfa Bank

Thank you, gentlemen. A couple of my questions have been answered. However, I would like to dig a little deeper on the advertising levels. You said that advertising expenses are higher. I remember for the initial public offering (IPO) last year, you were talking about having an aggressive advertising campaign. Can you shed a bit more light for us on that in terms of how much your advertising expenses have increased and at what levels were we seeing them in the first half of the year?

Ton Tholens

Firstly, I have to explain that we did an introduction of the [inaudible] tyre and trading[?] organisation, which created higher costs in the first half of the year. This is a one time cost and is not to be translated to the second half of the year. It is important to understand that and this might give the wrong impression. It was because of the high profit[?] that we have to show the costs in the first half year. Whereas for the advertising budget in total, the story there is that it has not been changed and we will spend about the same amount of money that we spent in 2005.

Ron Smith

Since you mentioned it, can we talk a little bit about the Pigma acquisition? What will it do for revenue adds? You were talking about the potential to cut some overhead costs. What will it do to your margins and, in particular, how will if affect your retail strategy?

Alexei Gurin

First of all, we are not exactly sure when we will start the consolidation of Pigma finances into our operations. We intend to close the transaction in the middle of September, although, in effect, we more or less have had operational control since the middle of August. Pigma has sales of over $100 million budgeted for this year. This certainly does not mean that the budget will remain unchanged after the acquisition. Pigma is an auto components distributor and Megashina is a tyre distributor. Megashina has $100 million sales budgeted for this year with [inaudible], with about $25 30 million third party sales. The rest is inter company — sales of Amtel and Vredestein branded tyres — because Megashina was one of our major distributors. Pigma has $100 million of sales budgeted and their history of earnings makes us quite confident that this budget can be fulfilled. They have budgeted $6.5 7 million net for this year. Last year, they had a bit less than $6 million net, with earnings before interest, tax, depreciation and amortisation (EBITDA) for 2006 of approximately $8.4 million. Megashina, quite a new company created about a year ago, with $100 million of sales, has an EBITDA of more or less zero. It is therefore not adding any kind of bottom line to our financial position. However, overall, the company that we are creating on the retail side, after the addition of Pigma and Megashina, will be a company with more than $250 280 million pro forma sales for this year with a positive bottom line. That is how we envision the financials of our retail operations, definitely with at positive EBITDA as well.

On the other hand, all three companies have their own headquarters and it is the low hanging fruit that creates quite a lot of synergies. For example, our total cost of the AV TO headquarters in Moscow was projected to be about $2 million for this year. After the acquisition, the process of which has started already, the head office of the company will be transferred to Nizhny Novgorod. In Nizhny Novgorod, Pigma have an existing head office and an existing team that has historically managed not only distribution logistics, but has also created the managed retail operations quite successfully. This team will therefore manage all operations on the retail and wholesale side for us, as well as logistics.

In terms of Moscow headquarter costs, then, these will be practically eliminated from our profit and loss (P and L). On a pro forma basis, as I said, this is $2 million. How much actual costs will be reduced, we will figure out in the next couple of months, as soon as the transaction is completed. The same applies to Megashina, as Megashina adds 16 subsidiaries with sales offices across the country. Some of these subsidiaries are located in the same cities where we have subsidiaries of our retail AV TO business. Certainly, therefore, head offices and head office costs, where both companies have the same representation, will be eliminated. Again, as I said, this is the low hanging fruit in terms of synergies and cost cutting. Certainly, Pigma, Megashina and AV TO together will create a fundamentally different business. Through purchasing Pigma, we are entering into the distribution of auto components and auto parts, which is very complementary to the distribution of tyres. Our short history of managing Pigma retail stores in Nizhny Novgorod shows that those six stores that we purchased from Pigma in Nizhny Novgorod have so far created 35% 37% of EBITDA and about 15% 18% of sales of all our retail division. This is six stores versus 104 stores overall. The concept of auto components, tyres and accessories retail distribution is therefore much more profitable and seasonally stable compared with the distribution of tyres alone. That is the rationale and those are the synergies. This has produced an immediate effect after the acquisition of Pigma and Megashina.

Again, therefore, Pigma adds auto components and a net profitability, a strong team and debt[?]; Megashina adds a lot of breadth and a federal distribution network.

Veronika Lyssagorskaya ING

Good evening, gentlemen. I have a question regarding the seasonality of your business. I was thinking that people normally buy summer tyres in April and May, which should project an increase in retail sales in the second quarter. I see that there is a decrease over the first quarter.

Alexei Gurin

In April and May, there are usually no purchases of tyres, except for people who want to replace tyres that have been damaged in some way. Summer tyres are purchased in March primarily. April and May is usually a bad season for tyres.

Veronika Lyssagorskaya

Okay, thank you very much. I also see that your full year forecast for retail sales is $62 million, which is much lower the $72 100 million that you were talking about before. I was therefore just wondering what the reason behind this is.

Alexei Gurin

$72 100 million, which we might have discussed before, referred to pro forma sales. Our pro forma sales for the whole year will be significantly higher than the $62 million that we are projecting on a statutory basis.

Veronika Lyssagorskaya

Yes. However, it still seems a little bit low given that you?re talking about $800,000 1 million sales per store. If you had 100 stores at the end of the first quarter, this should be higher, I think?

Alexei Gurin

If we say that on a pro forma basis sales will be higher than $62 million, it means that for 100 stores, sales will be higher than $600,000 per store. We think, therefore, that on a pro forma basis it will be closer to $800,000 per store. However, do not forget that we have not reached our targeted sales per store, and have not even come close to it.

Veronika Lyssagorskaya

I understand. What is the average sales per store number?

Alexei Gurin

Again, you can do the maths, yourself, very easily. We are saying $62 million for 104 stores, so it is $600,000 per store, on a statutory basis. On a pro forma basis, it should be closer to $800,000 per store.

Veronika Lyssagorskaya

Okay. You therefore expect to have these 100 stores at the end of the year as well?

Alexei Gurin

We are not going to dispose of any of the stores.

Veronika Lyssagorskaya

Yes. However, I thought you were trying to increase the number of stores?

Alexei Gurin

The number of stores will definitely be increased. The question is by how many and how quickly. That is the issue we are addressing right now and discussing with top managers of the company that we have acquired, because this definitely changes strategy a little bit. This is because we need much larger stores, with more service area and a much larger area for retail. We are therefore talking about stores of, for example, 1,000 2,000 square metres, as opposed to the stores that we have acquired that were on average 300 square metres.

Veronika Lyssagorskaya

Okay. Finally, how many A class tyres did you produce in the first half of the year?

Ton Tholens

A segment?

Veronika Lyssagorskaya

Yes. In Russia.

Alexei Gurin

In Russia, we manufactured 51,000 Vredestein and Maloya branded tyres that were shipped to Europe. For the second half of this year, we have budgeted for 350,000 tyres. We are confident that we will be able to manufacture these tyres. I have just come back from Kirov myself. In July, we manufactured over 40,000 in one month and for August, the budget is closer to between 50,000 60,000. Annualised, we are on target to manufacture around 700,000 800,000, if not for the backlog of the first half of this year that was associated with some technical difficulties. Now these have been resolved and we can go forward and manufacture as many tyres for Europe as planned.

Veronika Lyssagorskaya

I then have a question regarding the limited capacity. You are saying that you produced 2.8 million units in the first half of the year, is that right? B tyres.

Alexei Gurin

We manufactured 6.1 million. For B tyres, 2.8 million is right.

Veronika Lyssagorskaya

Annualised, therefore, that will be 5.6 million and given [inaudible] 6.8 million.

Alexei Gurin

Annualised, it will be more because you must not forget that we do not work in the first two weeks in January. In terms of production, therefore, we have lost approximately 300,000 tyres.

Veronika Lyssagorskaya

300,000?

Alexei Gurin

Yes, because of the first two weeks in January.

Veronika Lyssagorskaya

That gives you 5.9 million and your overall capacity in Russia in A an B tyres is 6.8 million. This is therefore just an 87% utilisation rate. I am just trying to make this clear for myself. That is the maximum utilisation rate that you can operate at?

Alexei Gurin

I think there is a little bit of confusion here. I think we have addressed this issue already in our previous conference call.

Veronika Lyssagorskaya

The connection was so bad that [I could not hear?].

Alexei Gurin

When we talk about the capacity, capacity varies depending on size, whether it is mass production or small badge, and so on. Right now, we are at maximum capacity. We cannot increase the capacity of Kirov any more without certain changes. These changes are planned for next year, not in terms of investment, but in certain layout changes and certain ancillary equipment changes and so on. For this year, we have therefore budgeted for 7.15 million tyres to be manufactured in Kirov. This is more than a 10% increase compared with last year. Kirov is definitely 100% at budget. The same applies to Voronezh, where at the moment one project is manufacturing over 200,000 tyres monthly. That is just the Voronezh 1 project. Annualised, this gives 2.4/2.5 million. We have always considered the capacity of the Voronezh 1 project to be 2.2/2.3 million, or maybe even 2.4 million. We are therefore at capacity, or even above capacity. In terms of capacity, then, I do not know why it is such a big sticking point. Trust me on this. If you do not trust me, please go and see for yourself. We are at capacity and above capacity.

Veronika Lyssagorskaya

However, you sent me your capacity numbers. This number of 6.8 million has come from your company.

Alexei Gurin

Capacity of a tyre factory is not the capacity of a bottle, for example, where you have a clear mark of two litres or three litres or .75 litres. It is not therefore a clear cut number.

Ton Tholens

It depends on the complexity.

John Rose

These numbers are not static. They vary from year to year based on the configuration. Every new tyre introduction will change the capacity of a plant. It will change therefore.

Veronika Lyssagorskaya

I understand. However, if you send me some numbers, I just assume I can use them.

John Rose

When you ask for capacities on a historical basis, we provide you with capacities for previous years. Going forward, we have to recalculate those capacities based on the configuration as planned.

Veronika Lyssagorskaya

However, I also have the forecast capacity until 2008, which is [the same?].

John Rose

I think probably more to the point is that we have sales goals and sales budgets. We are told how many tyres we require and we produce as many as we can sell. That is more to the point.

Veronika Lyssagorskaya

Okay. I have another question, then. How many tyres do you plan to produce in Russia, in A, B and C segments this year? Can you give these numbers?

Alexei Gurin

We definitely have production budgets for this year. However, in order not to confuse you with these numbers, let me or John send you the numbers by email. We simply do not have them in front of us. Do we have the numbers?

Ton Tholens

No. Not for the whole year, only for the half year.

Alexei Gurin

We will send them to you and anybody who wants to see them.

Veronika Lyssagorskaya

Okay, thank you very much. I would also just like to clarify the point on other expenses. Does this basically come from retail? Is it retail, additional advertising and additional distribution and transportation costs?

Ton Tholens

Yes, they are the basic things.

Veronika Lyssagorskaya

Okay. Thank you very much. That is all for me.

Alexei Gurin

As there are no further questions, I would like to thank you all very much for the questions. I think they were to the point and I hope that we provided answers that satisfied you. One point that was on the agenda that I think has still not been discussed is the acquisition of the Moscow Tyre Factory. We discussed it in the conference call several weeks ago, but I would like to update you with the picture that we have at the moment. Firstly, we believe that the Moscow Tyre Factory will be a net contributor to our earnings, starting in December. Secondly, we will start production at the Moscow Tyre Factory on 1 September, starting with 50,000 tyres and moving to 100,000 tyres on a monthly basis in November/December. Thirdly, and very importantly, the Moscow Tyre Factory is already profitable at 70,000 80,000 tyres production per month. At over 80,000, which is more or less the break even point, the Moscow Tyre Factory will be net and cash flow positive. We expect that when the Moscow Tyre Factory is at full capacity and full speed, which will be next year, the EBITDA contribution will be in the ballpark of $12 15 million. That is not only EBIDTA. This EBIDTA basically translates into a positive cash flow because we only need to serve existing debt at the Moscow Tyre Factory, of which the cost of servicing is approximately a half of EBIDTA. The rest will more or less therefore be bottom line. This is good news for us. We think that it is not only capacity constraints that we have addressed, but we will definitely improve the profitability of our operations after running the Moscow Tyre Factory at full capacity and full speed.

With this, thank you very much for taking part in this conference call. Goodbye and thank you.