GFT Technologies SE (GFT) Earnings Call Transcript

Thank you very much, and good morning, everybody. Yes, welcome to the GFT first half year '22 numbers. My name is Jochen Ruetz. I'll guide you through the presentation today. I hope the presentation is available to you. We are sharing it. It is on our website. So there should be many ways you can get it. Looking at the presentation -- today, anyway, it's quite a busy day, as I know. So let's jump right into and go to Slide #2. What are we going to look at today? Well, the highlights of the first half year, then we're going to look at the figures and in the end at the outlook. So let's start with Slide #2. Yes, we have seen dynamic growth in the first half of 2022. And on the back of that, we have slightly increased our outlook for revenue and earnings again for the full year of 2022. And the strong demand for digitization is ongoing, right across all our segments. And we've seen market influencers recognize GFT as a leader, and I have a slide coming up for that. We have now participated in Great Place to Work on more than 10,000 talents. We have another slide for that. And we have continued our active price and cost management, which we can see by our increase in EBITDA margin. Again, as I stated, we already upped our guidance again. Revenue is now expected at EUR 730 million, EBITDA at EUR 81 million and EBT at EUR 60 million. I'll skip the numbers on the right side because they're going to come up in the presentation again. So let's move to Slide #4. The first highlight chart, market influencers recognize GFT as a leader. So the 2 rating companies, ISG and Quadrant Knowledge Solutions have included us with very strong valuations in their magic quadrants. On the ISG side, it was -- GFT is a leader in data analytics and machine learning in the Google Cloud ecosystem. Well, it could have been other clouds as well, but this is where we participated heavily. And the praise for GFT was that we have a strong industry traction and expertise in exactly this sector. And our extensive and attractive product and service portfolio was convincing. We have extensive expertise, and we have a strong market presence in the U.S. and in Europe. So as we put us on the chart, and I think we reported on this already a couple of weeks ago. And on the right side brand, new Quadrant Knowledge Solutions, they rated us very high in the leader for digital banking services sector. Here, we have strong ratings across all parameters of this KPI, especially our BankLite solution is a unified solution for developing cloud-based digital banks and something we have been utilizing whenever I speak about our Asian digital banks, locally in Asia a lot. So BankLite is heavily linked to Asia, and we're moving it to other markets as well. We're enabling rapid development and deployment of cloud-based digital banking entities, and we're reducing the time to market for those banks. So if you want to learn more about these 2 proof points, please have a look at our website. And both press releases are there, so you can read deeper into it, including the wonderful magic quadrants that I included. In the last years, GFT has heavily invested in its technology competence. And now we are more and more cooperating with rating agencies. And please be prepared to see us more present in the world of Magic Quadrants in the future. Coming to Slide #5. Another highlight chart on the right side, we have been more than 10,000 talents at the end of June of 2022. So one of the 10 challenges we have set ourselves, 10,000 people, 100,000 million in revenues, well that's EUR 1 billion, right? And in the end, we want to achieve 10% EBT margin, but that's probably the last to come. The first is 10,000 tech lovers and we reached that goal at the end of June. On the left side of the slide, we see that we have participated in a group-wide employee survey. And for the first time, we have collaborated with Great Place to Work with all GFT entities at the same time. We are quite happy to see all GFT countries worldwide or I'd say the countries with more than 10 employees achieved a Great Place to Work certification. And in the coming weeks, we will, as we always do with employee surveys, further improve our working environment based on the results. But just one KPI, I want to mention here that we are very pleased about 87% of the participants would recommend GFT to family and friends, 87%, a very high-top score within the global IT industry. And the first time, Great Place to Work and quite successful results so far. Let's move forward, Slide #6, the agenda slide, which leads us directly to Slide #7 and the key figures. As mentioned, revenue was up 37% year-over-year for the first half of 2022, reaching EUR 357 million. Our order backlog is up 65%. That's a similar growth to what we have seen in Q1. The other backlog is a bit lower than in Q1 or at the 30th of March because, as always, like last year I already explained, throughout the year, the maintenance projects for the full calendar year, they are coming -- they are reducing in order backlog. And that is why the number throughout the quarters will always reduce and it will always be highest in Q1. But we're very happy with the order backlog that we see today. The EBITDA adjusted and the EBITDA are identical in 2022 because there are no M&A effects before the EBITDA line. And usually, we have earnouts, but currently there's none. And therefore, the 2 numbers are identical. Last year, there was still a gap because we had an earnout for the company we acquired 4 years ago in Canada. And the EBITDA was strong. Utilization was at normal levels, restructuring measures, as you see on the right side, in the smaller bullet points stood at EUR 1.4 million. And we had a positive FX effect, something that didn't happen over the last years, very often. Overall, EBITDA adjusted grew by 36%. Going down to EBIT and EBT, we see this proportional growth especially on the EBT level of 75%, very strong growth. I'll come back to that a bit later. We see the margins jump to 8.2% after 6.4% last year and the tax rate stood at 29%. Moving forward, Slide #8, we look at the diversification. On the left side of the slide, we see our client groups on a yearly basis, and we categorize them where they stood at the end of each first half year 2021, '22. On the very left, bigger than EUR 50 million is only one client, it's Deutsche Bank. And the share of this biggest client has, as you can see, heavily reduced over the last year. It's now 13% of our total value. The next clients in the group more than 10 million are 18 clients in total, and they now stand for 45% of our total revenue share. And then we see the distribution on the right side of it, which is more or less stable versus Q1. Overall, we see a good distribution of our client portfolio. On the right side of the slide, we can see that the sector growth was similar to Q1, the insurance industry and other clients growing fastest, but biggest group banking also showing strong momentum at 32% growth rate. Let's move forward to Slide #9. Revenue and EBITDA adjusted by quarter when we compare quarter-over-quarter Q2 to Q1 of '22, we see a growth of 6% on the revenue side and an increase in EBITDA adjusted by 13%. When we compare year-over-year second quarter, we will see revenue growth of 34% and an EBITDA adjusted growth of 35%. Let's move forward. Slide #10. Here, we look at the revenues by segment. As always, let's start with the Americas, U.K. and APAC segment, which is today the strongest segment in '21. The gap to the continental European business was not that big yet, but it's getting bigger right now because Americas, U.K. and APAC are growing heavily. Overall, 62%. And of that growth of 62%, which is mainly triggered in Brazil by digital initiatives, but also in the U.S., in the U.K. and Canada from our insurance clients, but we see that 48% are organic and 14% come from FX tailwinds, FX effects. We have seen in 2022 so far a weakening euro and all these currencies, Brazil, Canada, U.S., U.K. and partially Asia, they are improving versus the euro. And therefore, when we recalculate the revenues into euros, we see stronger growth rates. Therefore, roughly EUR 19 million or 14% are represented by FX effects. One of the reasons why we're upping our guidance on the revenue side that we see the weaker euro continue throughout the year. Looking at Continental Europe, we see stable growth driven by banking business in Germany and Switzerland, overall 9%. And then on the group level, the revenue FX tailwind, which is probably the number to really look at represents 7% of the total growth coming mainly from FX. Let's go to the next slide, Slide #11, earnings by segment. Again, the same look and feel. Americas, U.K., APAC first. And I will focus on EBT today because we have the FX tailwind number calculated for EBT. We see sustained demand for profitable digitization solutions in Americas, U.K. and APAC and have seen economies of scale, which has improved the margins despite ongoing strong investments in business development, which we are doing in this market as well, which is, of course, to represent the growth of tomorrow. Therefore, we continue to invest. When we look at the right side, we see a 96% improvement of the EBT. And however, EUR 2 million or 22 points of the 96% are linked to FX tailwinds, particularly in our Brazilian market as the real was surprisingly quite strong versus the euro throughout the whole first. Looking at Continental Europe, likewise. So we also see improved margins as a result of high demand for digitalization projects, and good and enhanced operational efficiency. Here, the EBT is up 23%. And when we look at the group level, we're up 75%, a number given already on the slides before. Now the FX tailwind, again, is EUR 2 million or 12 percentage points of the 75% EBT increase are linked to the weak euro. And this is also the main reason why we have upped our guidance on the profitability side. We do see the euro weakness go throughout the year 2022. So let's move forward. Slide #12, revenue by markets. We have seen 6 markets with revenue growth of more than 30%. Growth rates in Brazil, U.K., Canada, U.S. and Switzerland are very strong. However, they are a bit lower in local currencies, while here we show the euro numbers. We are quite content with our worldwide revenue distribution today. Whatever the much-discussed upcoming year 2023 will bring, our broad global footprint will help us find and leverage growth opportunities in all 3x of this. And this brings me to Slide #13, which is the P&L statement. We have seen the significant earnings improvements. We already discussed revenue increase going down the list. Other operating income, somewhat higher because of better FX exchange gains and especially higher government grants, which is linked to the overall business growth. We see the cost of purchased services, which in the case of GFT's always services and freelances purchased. We are up 55%. At the same time, personnel expenses up 30%. These 2 numbers are clearly linked because that's our cost to deliver our revenue. And when we -- and this is now the fourth bullet point on the right -- combine cost of freelances and personnel expenses and compare it to revenue, we have improved that ratio to 81% while last year, it was 82%. The next cost item, other operating expenses increased by 59%. While the next one, depreciation and amortization reduced by 1% despite a strong revenue growth. And let me highlight this for a second. While we see stable or reducing depreciation and amortization or in other words, economies of scale in that cost line, and while on the higher other operating expenses, we see a big increase in cost, we are seeing a move from depreciation, amortization to other operating expenses and the biggest reason being rent. Rent today is depreciation via IFRS 16 and we are not renting more offices these days. And therefore, incenses on office rent is increasing, which we will always see in the depreciation line. At the same time, work from home, our people being in their home office, it doesn't fully come for free, right? In some countries, we're getting cash support, we be giving meal vouchers. And sometimes, we're also adding hardware to their local home office monitor, a keyboard, et cetera. All these costs which are linked to home office, they are happening in the other operating expenses line or in the personnel expense. So depreciation is benefiting from less office space is utilized, especially while growing and the other costs, other operating expenses are increasing because of home office usage. And that's a similar but a weaker trend for expensive hardware because we're not buying any expensive hardware or service anymore and we are using cloud space. While service used to be depreciated in the depreciation line, cloud consumption happens in other operating expenses. Same for software licenses. They used to be depreciated, acquired then depreciated. Today, they are SaaS, Software-as-a-Service licenses, they are running monthly and they are happening in the other operating expenses line. In other words, the EBITDA is getting more cost, while the depreciation and amortization line is being softer over the years to come. And therefore, we will more and more focus on the EBIT and EBT when we look at our profitability. Our level of volume explanation for the P&L slide, nothing more to mention but just one. Interest income is positive because the cash in Brazil is coming at a 10% interest rate locally. So currently, we are slightly positive on interest rates. And as I already mentioned, tax rate is 29% of 6 months, and that's where we expect it to be after 12 months as well. Let's move forward, Slide #14, the cash flow analysis. And so our finance structure remains highly solid. The unused credit facilities of nearly EUR 40 million. Our net cash is slightly negative at the end of June with minus EUR 12.89 million. Let me focus on the operating cash flow. The operating cash flow is our challenge in 2022. And we see clients going back to 2019 payment behavior. So pre-COVID payment behavior, payments coming in late, clients are pushing payments in all kind of ways and clients negotiating payment terms is what is happening again. So the return of 0 or positive interest rates changes behavior, especially in our banking and insurance clients. Well, before this change and with the negative interest rates, they were paying providers rather than giving the money to the central banks and having to pay for it. So we had a very positive effect on our working capital. Now we're back to pre-COVID and they are looking at paying well as late as possible. Let's put it like this. From where we stand today, we will see this back to normal process regarding payment behaviors continue throughout 2022. Our working capital will, of course, reduce again heavily in the last quarter as every year. But overall, we will see an increase in working capital also at the year-end. In other words, for operating cash flow, 2022 will be the back to normal year after COVID. 2023 should then again be straightforward. And all other cash flow effects in H1 are small and business as usual. And that's why I would go to Slide #15 now. Looking at the balance sheet, not much to mention here. We do see a slight increase in balance sheet total, mostly in line with higher contract assets from projects and higher receivables. So our overall growing business leads to an increase in receivables and contract asset number and a higher overall balance sheet. Nevertheless, equity ratio increased. It's now 37% of the total balance sheet. That's it for this slide. I would now go to Slide #16, which is the people side. Let's go the bullet points down one by one. The global headcount of the GFT team surpasses the 10,000 mark, as I mentioned before. Now this is calculated in headcount and it includes all freelances. When we look at the IFRS-related FTE numbers, which you see in the graph on the left side, we had 8,451 full-time equivalents at the end of June, which is a growth of 24% compared to previous year, especially strong in Brazil linked to the local growth. Looking at the chart in the middle, the utilization. Well, you see it's pretty stable. It's at 90% in the first half, slightly below prior year level. It is linked, of course, to the next one on the right side, the attrition is at 20% as we had expected. And as we're always saying, the market average globally is defined at roughly 22%, 23%. So we are okay-ish, but still it is a high number, especially high compared to 12 months ago when the numbers were still COVID impacted low at 14%. So the higher attrition also leads to some pressure on utilization because you always have to onboard new people, need for replacement, and this costs a bit of utilization. Last bullet point, external contractors at the end of June stood at EUR 1,357, also up roughly 30% compared to last year. It's not reflected in the charts on the top. And this brings me to my last slide, the outlook of 2022. We see strong increased EBIT margin. The revenue with the new guidance will be up 29%. The EBITDA adjusted will be up 25% to EUR 81 million -- or sorry, I didn't mention the revenue at EUR 713 million. EBITDA adjusted and EBITDA, EUR 81 million; and the EBT, EUR 60 million. All the trends we were talking about in the last quarter are still in fact, we do see digitization working nicely. However, our increase is mainly linked to the ongoing FX tailwind we're seeing in the euro, and therefore, on the revenue side and on the profitability side. So that's the main driver of the increase today. I think it's the first time I'm able to show an increased guidance because the euro is weakening over the years, it usually was more not in our favor. So this has changed a bit. So what do we make of this? Maybe kind of a summary. For H2 '22, the growth forecast is somewhat lower than the growth we have seen in the first half year. And this is mainly due to the quite a strong second half of 2021, harder to beat than the first half. What will the future bring? We have seen some clients, especially in the investment banking industry, had some IT budgets of the top already simply because markets are discussing a recession. At the same time, we see major banks starting big core banking platform redesign projects. And so far, no slowdown. And insurance companies going through a rehaul of their coinsurance landscape are less sensitive to short-term GDP changes anyway. So no adoption in spending on that end as of now. What do we make of this? The fundamental technological trends in the industries we serve are intact and offer ongoing growth potential, especially in markets regionally more distant to the Ukraine conflict, we see ongoing positive business sentiment still today. What we see globally is that everybody is discussing recession, but so far, no relevant quorum to our order book. And nevertheless, it is too early to call for '23. And we will see how the pipeline evolves over summer holiday and in the fourth quarter -- sorry, after summer holiday, of course, and then in the fourth quarter. And only then will we be able to indicate what growth rates we expect for the next business year. And that said, I'm done with the presentation, and happy to take your questions.

[Operator Instructions] The first question is from Andreas Wolf of Warburg Research.

A couple of questions from my side. So the first one would be on the positive mentionings by the influencers I see in Quadrant. Does this have implications for the business, i.e. does it increase your awareness among customers? The second is related to Great Place to Work. Obviously, other service companies, IT service companies are also proud to have similar certificates. Is this also helpful in recruiting employees? And how does it help you to improve the overall working environment for your employees? And then maybe also related to employees is obviously IT skills remain a bottleneck. You obviously have achieved stronger growth than -- in the past than historically. What has changed in the recruiting process is, obviously, you are now able to handle a significantly high demand growth than in the past. Question #3, it's related to the growing -- to the rising interest rates. So obviously, that is having a negative impact on investment banking as there is less IPOs, et cetera. Maybe you could also comment on your revenue share in Investment Banking versus Consumer Banking, which might actually benefit from higher interest rates. So that would be interesting. And then my last question, question #4 is on purchase services. If I look at the sequential development, they have declined slightly. So is this basically because you've been able to replace contracted by own employees? Or is it a reflection of the employee number development in Poland?

Yes, thank you very much for the questions. Influencers or these rating agencies, as we've been referring to -- and as I said, we have changed GFT over the years from a very client-focused company and we have the very big top 2 clients into a more technological oriented company. And now going to the rating agencies is just another logical step on that journey of being a true tech company. And big implications -- well, it's -- of course, it's too early to call for the numbers because these 2 are just out a couple of days and the other one, ISG a couple of weeks. But they should create awareness exactly, share the news where we are. And as these ratings are read and clients are looking at them, these quadrants matter. We believe it would simply increase our awareness and show the capacity of GFT to potential clients who have not looked at us before or who might feel they are the right partner to go for if we are recommended for example, by one of the cloud providers. So it should be in our favor, and we will continue working on that. Great Place to Work, while you're, of course, right. If everybody does a Great Place to Work, it's no longer a differentiator. First of all, for us, it had 2 meaning. We wanted to do like we have done in the past, the employee survey and improve our working environment for our people. That was the main goal. And the second is the marketing part that we can go to the market and say we are a certified Great Place to Work company. And but we are now looking, of course, at the results. And as we have done internal surveys before that we've done that internally. We are now just using a provider call Great Place to Work, as seen by the public a lot these days and gets a lot of attention. So it will be both, right? We get the results, we will work on it and improve. That's country by country, very country specific. And at the same time, it will help us recruiting because, as you said, with the next question, people are the bottleneck. And what has changed in recruiting? Well, to be honest, not much. Our recruiting efforts are similar to what we have done before. It's simply more today. In countries with near shore focus, it is usually we get people, especially the younger people from university in countries, especially in the U.K., Germany and the U.S. that are more mature. We don't fish so much for the juniors, more people with some experience and this has fundamentally not changed. Again, it is just a bigger number in recruiting today than it was 3, 4 years ago. Interest rates, less IPOs, investment banks under pressure, yes, at least they are the ones who always react fastest. We have a couple of banks who are a mixed bag. Take Deutsche Bank, for example, they are an investment bank and a retail bank, and we have more of those. So it's not that easy to answer how about the share of investment banking. Let's say it's roughly 20% to 25%. It used to be a lot more in the past, but the growth was very broad. In Brazil, for example, not many investment banks in our portfolio, 1 or 2 and including the local stock exchange, which you could put in every basket you want to. And therefore, the share is not outstanding 20% to 25% of the total GFT business. And last but not least, purchase services. Well, yes, they have reduced somewhat versus Q1 because we've been more successful with our own hires. Simply, I think this is an amplitude that will always go up and down, right? There will be a bit more bond higher. Sometimes we will tap into the freelancer market a bit more. This is going back and forth. And always a bit hard to predict. In Q1, you're right, we're pretty high on freelancer growth, and now it's a bit back to normal, and we will see this trend to continue. In Poland, there continues to be a trend towards freelances, but it has not sped up. So it's the same speed as we had in the previous quarter. And therefore, Poland is more flattish when it comes to share of freelances, so we were able to reduce it in the group a bit. I hope I answered that all questions.

The next question is from Sven Sauer with Kepler Cheuvreux.

I have 4 questions. Maybe we can take them one by one. The first one, I'm not sure if I understand it correctly, but you mentioned you're targeting EUR 1 billion in sales and 10% EBT margin. Is this a medium-term target that you have? And if yes, do you have maybe a possible time frame for this?

As always, right? So you give the little finger and you grab the arms. Well, that's our vision. The vision is no link to a date. It's simply the stepping stones we want to achieve, right? And 10,000 people, of course, was the first. It was a prerequisite for EUR 1 billion revenues, which will, depending on EUR 23 million take a bit of time. And the 10% EBT is a long-term goal, right? We always talk about we want to continuously improve the EBT at the 15% growth rate. We can improve it by 0.5 percentage point per year. That's what we face. And then the 10% would come one day. But there is no formal guidance for these 2 numbers.

Okay. Yes. Great. The second question is that you mentioned that you're doing a lot of investments in business development. And I was wondering if you could maybe explain what specifically these are more investments for recruiting or training? Yes, maybe a bit more color on that.

Yes, it is -- a lot of it is training. And sometimes, therefore, it is linked to recruiting, but mostly training. The new technologies we see upcoming. I think I talked in the last quarterly call about the technology thought machine. It is a core banking software product from a U.K. start-up, which we're using a lot in our Asian digital banks, which is now getting more traction also in the European and American banks. And investing into business development here today means, well, winning some of the projects and then getting your people trained. That's the big is effort. And sometimes we build solutions like BankLite, which is an extra effort. And then it should help us do the next digital banking projects faster or cheaper. And so these are the kind of investments we're doing. They're always around the technologies that will drive the future of our clients.

Perfect. The third question is regarding ForEx. So obviously, as you mentioned, there was a benefit in the first half. I mean, at one point, this could go in a different direction in the future. Have you ever thought about hedging in currency hedging?

Yes. And we're doing currency hedging wherever there is a true business relationship that involves FX. For example, we deliver from Poland into the U.K., which means there's a true link to FX because we sell on a pound basis in the U.K. and the guys in the U.K. need some safety about what they will have to pay to our Polish subsidiary. And there we do hedge, right? But hedging comes with the cost. You can't hedge, how much was it, roughly EUR 250 million or EUR 500 million of P&L to hedge all FX effects. This is simply too costly. Therefore, the pure translation FX crisis we do not hedge because it would be a tremendous amount and a lot of costs behind, which would easily eat any advantage we could get. Therefore, yes, for true business reasons, no for simple recalculation into euro FX.

Okay. Very clear. And the last question is also regarding FX. So in the presentation, you mentioned that around EUR 2 million of EBT is from FX. And I was wondering if you could maybe give a split of how much the EBT increase comes from active price management and how much from the economies of scale?

You mean the one that remains, right? If you take out the 12 percentage points that come from EBT FX tailwind, which would deliver us with 63%, right, true increase in margin. Well, part of it, of course, is size is economies of scale. I think on the pricing side, we're doing well, compensating all the salary increases we are handing out to our people, which are extensive in 2022 and the salary increases we're buying into when we hire new people, right? They always come at the new cost, the new salary already. So we are compensating for that with price effect. And I doubt we have a strong gain out of that. It's probably pretty even in '22 because the cost increase is so strong. However, the efficiencies come below our sales efficiencies, our administration efficiencies, all the costs in the back end. They are driving the improvement mostly. So not so much from the GM1, right? So the gross margin most is coming from the cost behind. I think in '23, '24, we will have the opportunity to again discuss increasing the gross margin when the salary increase is not outrageously high. And the year is not really in the benefit of companies raising crisis. You had to do it within the first 2 quarters. Now everybody, every client comes back to you and says, well, there's a recession coming. I'm hired to discuss prices. So it's a bit tough while you already have included the price increases for your salaries to now discuss it with clients in the second half. It's working, right? Again, as I said, we're probably a bit positive on that, but it's not the big part of the EBT equipment.

The next question is from Knud Hinkel of Pareto Securities.

I got a couple and you decide whether you want the entire catalog or answer them one by one. First of all, you mentioned that you shifted the hardware internalize to the cloud. I would be interested to hear whether this is rented or if you got your -- build up your own data centers? Or what's -- how are you organizing that? That would be my first question. Second question, the tech crisis. Some IT service providers, they complain a bit that projects are postponed because they are not -- the chips available that they need. So I would like to hear your assessment of that topic. Thirdly, you mentioned top 2 customers, certain percent of revenues when I got the math right, that means that did you have just seen a slight increase of revenues year-over-year. Does that mean that we should expect at least a stable result over the entire year? So that would be my third question. Then fourth question, M&A pipeline. I mean you haven't done a deal for some time now. Prices have come down a little bit, I would say. Yesterday, there was a big deal announced by one of your not direct competitors but IT service companies. So there are deals out there, obviously not too expensive. I would like to hear an update maybe on that, what are your plans? And what's your pipeline here? And then last word, just housekeeping items, I would be interested to hear your restructuring guidance for the full year. How much do you think you will spend on that and will be incurred for that? I think utilization will be around 0 again. And also the tax rate for the full year -- so first, how we have seen 29%. I think you guided at 28% for the full year. Is that still valid? I hope that was not too much, and we are still on time.

So let's take them one by one. Hardware to the cloud. Our data centers so far -- well, they were only used for GFC internally. So we don't host data for our clients. Therefore, it was a small or midsized data center in Germany and the backup in Spain, and which we are constantly reducing. So we're moving all the applications GFT internally is using into the cloud, and we hope that somewhere in Q1, Q2 of 2023, we will be fully in the cloud, and we can kind of switch off our data centers, kind of, right? There's always something left, but the big part was the diesel generator in the back to support whatever downtime we might have, we will be able to replace. So this will go to 0, which would also reduce, we believe, cybersecurity risks, which are stronger in on-premise data centers and in cloud space. The chip prices, well talking to all our MDs and salespeople, I can't remember anybody saying we've lost a deal because of the chip prices. So no, it doesn't really impact us. I remember that the last chip prices impacted us on the hardware side because the laptops were had a higher time getting laptops, but this is not a problem this time. And therefore, from my perspective, we don't have any issues with the current chip prices. Question #3, top 2 clients or let's directly say Deutsche Bank, 13% of the revenue in the first half year. And you're right, that's slightly up versus last year. And yes, we believe throughout the year 2022, we might see a slight positive, but for sure, we say at least the same revenue in Deutsche as we have seen in 2021. We continue to believe there will be a bit of a decline in the next year because there's still one market, Spain, where we will be replaced by internal resources of that client from India. But this is taking longer than expected. Therefore, we're staying on the high level quite a while, but this is just a risk of EUR 5 million to EUR 7. But in the overall scope of GFT today, this is really minor. M&A pipeline. Yes, we're working on it. Absolutely, yes. We have been looking at companies in countries, and we continue to do. There's not a deal that I will be able to push over the ramp in the coming days. So no news to be expected, please. And hopefully, we can see something work out in the second half of '22. And you're right, the prices are coming down. But this takes a bit, right, to ripple through to the small- and medium-sized companies. We are looking at. At the same time, we're growing very strongly organically. So we have to think about M&A and the market, we do that M&A very cautiously because it will always distract local management from the growing own business from the organic growth they should focus on. So that's why we're a bit cautious in some countries. In some countries, we're very optimistic that we could integrate M&A, but we don't have a target at the moment. It will change as always, things take long, and then you have too many. And currently, we're waiting to find the right target and believe we will find one, maybe not '22, maybe it will be 2023. But we will continue combining organic growth and inorganic growth. However, the second part has to come back on. And last but not least, the restructure costs so far, it was EUR 1.4 million for the year, right? This is getting a bit bigger, but we're getting bigger as a company as well. So this is a number we always had a little percentage point of revenues goes into restructure because you always have some changes. Therefore, I would expect roughly double the number, EUR 2.5 million, maybe even EUR 2.8 million for the full year as the structure costs, which is just kind of a base number we need. I hope that answered all your questions.

The utilization costs that you will incur is probably around 0, I guess, even though…