Good morning. Thank you for standing by, and welcome to Telefonica's January-September 2024 Results Conference Call. [Operator Instructions] As a reminder, today's conference is being recorded. I would now like to turn the call over to Mr. Adrian Zunzunegui, Global Director of Investor Relations. Please go ahead, sir.

Good morning, and welcome to Telefonica's conference call to discuss January-September 2024 results. I'm Adrian Zunzunegui from Investor Relations. Before proceeding, let me mention that the financial information contained in this document has been prepared under international financial reporting standards as adopted by the European Union. This financial information is unaudited. This conference call and webcast including the Q&A session, may contain forward-looking statements and information relating to the Telefonica Group. These statements may include financial or operating forecasts and estimates or statements regarding plans, objectives and expectations regarding different matters. All forward-looking statements involve risks and uncertainties that could cause the final developments and results to materially differ from those expressed or implied by such statements. We encourage you to review our publicly available disclosure documents filed with the relevant securities market regulators. If you don't have a copy of the relevant press release and the slides, please contact Telefonica's Investor Relations team in Madrid or London. Now let me turn the call over to our Chief Operating Officer, Mr. Angel Vila.

Tech, in the last 12 months, reached EUR 2 billion revenues, at 12% annual increase. Both bookings show an even higher growth rate than revenue, which gives us a very good visibility of the future business. Q3 bookings increased 40% year-on-year, mostly driven by large contracts from the private sector awarded from financial, health care and manufacturing customers. Solid commercial activity is increasing the backlog of higher-value contracts, which will bring more recurring services and revenue flows in the future, enhancing the sustainability of the business. The ongoing improvement is not only evident in the visibility of the tech business, but also in our revenue mix with a stronger contribution from managed and professional services and on platforms and a higher weight of hard currency revenue, already 87% of revenue in 9 months of 2024. With all these positive developments, we remain optimistic for the future. Telefonica Infra, on Slide 11, continue to drive growth and accelerate digital inclusion through the efficient deployment of next-generation infrastructure. Active rollout by fiber progressed at pace. Having passed more than 1 million premises in the quarter to 24 million, advancing well to the target of around 30 million in 2026. In Germany, reached an agreement to acquire Infra Fiber Germany, strengthening position as fiber infrastructure provider throughout selected rural areas and accelerating the planned expansion to 2 million premises passed. Telxius, our global connectivity provider, maintained a double-digit growth rate in traffic and a high profitability level of close to 50% in the first 9 months of the year. I will now hand it over to Laura who will guide you through Hispam performance, the main financial situation and ESG topics.

Thank you, Angel. We are continuously working to try and build a more rational environment in Hispam, reducing network overlap and use of invested capital more efficiently. Additionally, we are exploring potential opportunity for in-market consolidation, and we will keep you updated on any developments. Q3 '24 results are impacted by the depreciation of the Mexican and Chilean peso among other currencies and a strong competition in Chile and Peru. In the latter, our results saw a sequential deterioration. Reported results are hit by EUR 314 million noncash impairment charge. Despite these challenges, Q3 '24 EBITDAaL minus CapEx remained flat compared to Q3 24 in reported terms, thanks to the reduction in lease expenses and CapEx. Moving on to free cash flow on Slide 13. As anticipated, our free cash flow generation shows significant momentum in delivering levels 4x higher than the second quarter. This acceleration follows a typical seasonal pattern and has driven 9 months growth to 27.7% year-on-year. Importantly, this performance is enabled by our hedging strategy implemented at the beginning of each year to protect the majority of our free cash flow, which ultimately drives shareholder remuneration. This puts us in a strong position and gives us confidence in delivering both our '24 targets and our broader '23 to '26 ambitions. As of September 2024, net financial debt declined by roughly EUR 0.5 billion from EUR 29.2 billion in June '24 to EUR 28.7 billion in September '24, mainly due to the solid free cash flow generation in the quarter. Net debt to EBITDAaL was slightly reduced from 2.78x to 2.76x as of September '24, and is expected to be further reduced towards year-end. We are committed to reduce leverage and remain on track to meet our targets. Additionally, we will receive the proceeds from the sale of a stake in CTIL. Meanwhile, Telefonica maintained a solid liquidity position of EUR 19.9 billion, that together with a life maturity profile, allows us to cover 10 maturities over the next 3 years. Our debt is nearly 75% linked to fixed rates with an average life of close to 11 years, which places us in a comfortable position to face any market environment. Furthermore, we lowered our debt-related interest cost to 3.61% versus 3.80% in December last year, thanks to the active refinancing exercise undertaken in previous years the robust position at fixed interest rates in strong currencies and lower interest rates in Brazilian real. This quarter, Telefonica continued to make solid progress in ESG. To show how we are decarbonizing the economy, we have published a new report quantifying how our B2C customers avoid emissions, thanks to our services. On the supply chain side, we have led an ambitious initiative within the sector to train suppliers on lower inhibitions. On gender diversity, we are progressing well. Just over 1/3 of our executives are now women. Meanwhile, we are addressing the needs of B2B customers who require sustainability reference with Ecovadis ranking us in the 99th percentile of all companies access. And finally, on the governance side, we have been recognized for our reporting and transparency, and we continue to lead the way in ethical AI as active participants in the development of the European code of practice. I will now hand back to Angel who will wrap up.

Thank you, Laura. On our guidance, we are on track to achieve our full year 2024 targets despite FX headwinds impacting our operating -- our reported revenue and EBITDA figures. Our underlying business performance remains strong. We are controlling the controllables, and our free cash flow is well protected from FX volatility through effective hedging. This is evident in our 9 months results, while EBITDAaL minus CapEx and free cash flow already trending above targeted ranges, while CapEx to sales remains fully aligned with guidance. Moreover, using our guidance FX assumptions, 9 months results would be well within our guidance with more than 1% EBITDA growth and more than 2% EBITDAaL minus CapEx growth. Our robust free cash flow generation continues supporting our deleveraging trajectory towards our 2026 target range. While currency fluctuations may create short-term volatility in reported figures, our 9-month performance and strategic execution reinforce our confidence in both our 2024 targets and the '23-'26 plan. To wrap up on Slide 17. First, we delivered 1 more quarter of solid business momentum across our core markets. Second, the significant acceleration in free cash flow this quarter reinforces our confidence in delivering '24 and '23-'26 targets of more than 10% growth. Third, our natural hedging strategy effectively protects our free cash flow from currency fluctuations. Fourth, our strategic investments in fiber and 5G infrastructure continue driving premium customer experience and satisfaction. Fifth, we maintained disciplined balance sheet management and capital allocation focused on meeting targets, sustaining our dividend and investing in key growth areas. And finally, we see clear catalysts ahead, particularly the authorization model in Brazil and increasing market rationalization in Europe through deregulation and reduced fragmentation. Thank you very much for listening. We are now ready to take your questions.

[Operator Instructions] We will now take the first question from the line of Ondrej Cabejsek from UBS.

Congratulations on the results. I've got maybe 2 questions there, kind of related, I would say, if we look at Spain, obviously posting very good KPIs in terms of net adds that are accelerating, your churn is decreasing, there has been this year a bit of a dilution to your convergent ARPU. So I was just thinking if you can maybe reflect on all the changes that we've seen in competition throughout this year from the merger to the latest kind of rounds of back-to-school promotions by Zegona and then the recent price cuts that DIGI did? Like how is the market shaping up over the past 3, 4 quarters in Spain because the trends are largely good, but not all of them good? And then related to that, just if you can comment on again, DIGI's price cuts where they followed the closing of the deal that you presented last quarter. So is there any relation? And then how do you think the kind of competition in the lower end would unfold from here?

Thank you for these questions on Spain. On the competitive environment and dynamics recently, we are seeing some players repositioning their products and strategy, which is creating maybe some more commercial intensity, but mainly in the low end. We believe that the market continues to be segmented and rationale. We had soft summer campaigns. Market portability was very much reduced with clear winners and losers, and we were between those winners and low market churn levels. Portability has been the lowest in 10 years if we accept, of course, the 2020 pandemic lockdown. And we should not forget that all players implemented price increases this year. And yes, there is some intensity in the low end, but we maintain a rational approach with value-based services, best-in-class infrastructures, which allow us to show very consistent performance in all the KPIs. As you have seen, we have net adds in all the main services. Now it's the fifth quarter in a row of growth, best net adds and portability in 6 years. We have the best journey in a decade. It's 0.8%. If you combine this with the ARPU, which remains above EUR 90, we have stronger customer lifetime value, which is around double our closest follower. The ARPU evolution, yes, in the year-on-year has a decrease of 0.4%, but this is due to a large O2 penetration. And -- but this remains very consistently above EUR 90, and it's differential with respect to our competitors. We believe that one needs to look at all these KPIs altogether. And these results, as I was saying before, is the strongest value of our customer base compared to any of our competitors. Regarding DIGI DG, we signed, as you know, with them the -- a combination of roaming and network sharing agreement. This is value-creating. It's an agreement for the next 16 years. The revenues of this contractor going to be at least at the same level of the existing roaming contract that we have. And this sharing will be progressively implemented when DIGI has full ownership of the spectrum that they will get from Orange.

Can I maybe follow up on the DIGI? So as you mentioned, you were expecting -- or you're saying that the contract view is obviously value-enhancing. So were you surprised at all about the fact that a couple of maybe weeks or months later, DIGI again cut prices and what does this mean for the competition in the market from their side?

Well, in general, and this applies not only to the DIGI agreement, we have been very careful in renegotiating all the wholesale agreements, that -- and the new ones in such a way that they bring rationality to the market and visibility to the market. We have been extremely careful not to create conditions in wholesale contracts that may create distortions. Spain is already a very competitive market, and there is a full availability of wholesale offers to the different players. But we have been working at this on -- with the mentality of being very rational in the renegotiation of contracts. The DIGI contract is -- the roaming is structured around the scheme that depends on the number of subscribers and the consumption of traffic. And given the projections that we have, we feel comfortable on that. The rent sharing will depend on the number of shares eventually the sites that it will be eventually shared, sorry.

We will now take the next question from the line of Mathieu Robilliard from Barclays.

Yes, and thank you for the presentation. I had a question about the guidance and how you qualify it. I understand that you say you've reiterated all the guidance despite the fact that the FX headwind. But at the same time, it seems to be a bit nuanced in the way you comment possibly for the EBITDA and the revenue growth for this year. So I just wanted to clarify if at this stage, you still believe you could reach despite where the FX is the full year guidance for revenues or EBITDA and whether your level of confidence that remains stable or decreased a bit because of the FX? Sorry, it may seem a bit but I just wanted to make sure I understand exactly what you're saying there. And then the second question was about the German market where clearly, you're posting a strong performance. We've seen quite a few moves in the market, some initiated by competitors, some initiated by you. And I was wondering how you saw the competitive environment developing both on mobile, but also on fixed where we've seen some aggressive offers for high-speed broadband?

Thank you, Mathieu, for the question on guidance. Please, let me emphasize that we are not quite qualifying not changing the guidance. As the capital base, we changed our focus and guidance into reporting and current terms, and we aim to grow in euro terms. This applies, I remind you, only to revenue and EBITDA, as free cash flow has always been in current terms. For that, obviously, we make our own FX assumptions and mild variations will not affect that. We are now in a moment that in the Q3, there was a more abrupt change in the Brazilian real with depreciation year-on-year of more than 12%, and that can temporarily affect our headline reported growth. But we are really, really confident on the Brazilian operation. Let me remind you that Brazil is growing both in euro terms and even more in local currency. And in local currency, they are growing above 7%, both revenue and EBITDA, which is well above inflation and that's the best way to compensate any FX changes. So we are really committed on keep on with a very strong underlying performance of our core business unit, which is not only Brazil, as we saw in the presentation and in the first question explains EBITDA growth is accelerating, there has been really strong commercial results and same for Germany, EBITDA continues growing low to mid-single digit in Q3 and operating cash flow EBITDAaL minus CapEx is growing almost 8% year-on-year. I must admit that Spain remains more volatile with less linear performance, particularly in Peru and Chile, but some countries are definitely doing better than others. But going to the guidance, specifically question, based on our current FX assumptions for the year, we are fine with the guidance committed we say, and that's why we have confirmed, it is true that we cannot speculate on potential FX moves. We have to see now the reaction to the U.S. election. But again, what we need to protect is our free cash flow. Free cash flow is the focus. Free cash flow is much more hedged. The impact in free cash flow is minimal, first, because we have a natural hedge; second, because we also do financial hedges; and we are also having depth in local currencies, which is also helping on our debt to EBITDAaL ratio in the solvency ratio. So very high level of confidence. We expect the core business units to keep on doing -- being in the same good line of direction for Q4. And based on our current FX, we definitely feel we can make the guidance.

If I may just to make sure I fully understood. So based on your current FX guidance, you believe that or rather not guidance, forecast, you believe that the guidance is safe. But are your assumptions for FX that, for instance, Brazil real trajectory would move in a more positive territory or is that based on what it is today and what do you think of all the businesses on a local currency basis? Hopefully, that's clear.

We have assumptions on the real, which could be similar to what we have today, but it definitely may vary and it also depends on the average. So -- but as I said, it's very difficult to speculate on potential FX moves. So we will focus attention on the strength of the operations. We will focus attention on Brazilian growing both in local and euro terms, growing locally so strong overperforming inflation with no doubt and we'll put all our focus on the free cash flow. You have seen how strong has been in the first 9 months of the year, regardless the FX moves. And let me remind you that the FX hedge we do for the Brazilian real is not flowing through free cash flow yet. It's flowing through P&L. But when we close the derivatives at year-end, we will have all the compensation impact for Q4. So very, very focused on free cash flow, a resilient free cash flow and resilient core business units.

And in Germany, we have been simplifying and sharpening our portfolio to remain leaders in value for money, Markus, you could help me elaborate on this question.

Thank you, Angel. Our Q3 performance has clearly shown that our focus on value for money and the segmentation of the market has delivered very strong commercial results. Also the new portfolio that we launched yesterday shows that we focus on customers around the EUR 30 up price point. This is all mobile service through revenue accretive. So from that perspective, we fully focus on our value-for-money strategy consequently as in the past and clearly believe in segmentation and value growth. On the fixed question that you raised, Telefonica, Deutsche and have access to all infrastructures in the German market. So we also have the possibility, clearly to join promotional activities also on the cable networks in order to shift all the volumes between technologies. And we clearly also have been able to show very strong fixed service revenue growth with the Q3 results.

We will now take the next question from the line of Luigi Minerva from HSBC.

Yes. Two questions. The first one is on tower leases and the potential opportunities in the Spanish market. I was referring to the press rumors about negotiations between Vodafone, Spain and Totem where Vodafone Spain is trying arguably to get better terms, perhaps getting out of tenancy terms switching towards secondary tenancy terms. So I was wondering if your agreement with American Tower can offer at some point some upside? And if I remember well, there is no all or nothing clause at renewal of that -- of the current agreement with American Tower. So I'd be interested in hearing your views on that. Secondly, on -- one question on free cash flow, if I may. The -- yes, the reported one is 27% up year-to-date, well ahead of guidance of 10%. However, as usual, in the Telefonica free cash flow, there are many moving parts. Some are organic, some are not, but particularly I'm wondering if it's appropriate to keep the EUR 298 million of rural 5G subsidy in your free cash flow definition for what guidance matters? Because if I simply adjust the year-to-date free cash flow by those EUR 298 million, you're actually down 10% year-to-date compared to 2023.

Thank you for your questions. I'll take the first one on tower leases. We cannot comment on competitors' intentions to renegotiate these contracts with third parties. What I can say is that all our agreements with TowerCo's in Spain are flexible allowing us to renegotiate and capture efficiencies, and we don't have in the name that you alluded to all or nothing clauses.

Yes. On the free cash flow, yes, we did have a good performance. We said, as usual, it will be backloaded in the year. So it's been very strong for the first 9 months, and it will be even more stronger for Q4. So we will hit the 10% guidance we provided. It's again, bits and pieces. We have a delta of more than EUR 200 million year-on-year and 1/3 of that approximately comes from operating cash flow, EBITDAaL minus CapEx, then if you go below working capital, and I will talk specifically about the subsidies question you mentioned. Let me remind you that working capital is still negative. So we are still consuming, but it has a better year-on-year comparison. We also are benefiting from the lower leakage as we made the operation on Telefonica Deutschland. We also have financial payments, as you see, really, really controlled and even lower, and we remain working on the tax payments. There we have -- last year, we -- no, this year, we have the Peruvian tax payments, and we also have the back and forward of the tax in advance in Spain that it also has some seasonality, but we are very happy with our free cash flow, a strong growth, and we anticipate that growth to continue in Q4, again, based on the continued momentum on EBITDA, the solid operational rates, working capital should reverse and the continuous optimization on interest, leases and tax payments. On the 5G subsidies, this is a working capital movement, no doubt, which happens not specifically this year. It's part of the rural deployment and part of the UNICO program. This is ultimately less CapEx, and it is true that it concentrates in certain times of the year. But if we talk about things, we -- last year, we also have the benefit of the review of the Brazil in Brazil. And this year, we have nothing in that regard. So it's not just a matter of taking this out. So this, as I said, is another working capital element as many others. Working capital is seasonal. Every quarter has its ups and downs. We are still consuming. It will reverse, and we -- this is very related to our operational. So again, we are very confident on the free cash flow for the year, I'm very satisfied with this year-on-year performance.

We will now take the next question from the line of Fernando Cordero from Banco Santander.

My question is related with Telefonica Tech, thanks for the update on the top line performance. But I would like to understand as well how is the profitability of Telefonica Tech performing, particularly within the different product services segments within Telefonica Tech, which are the ones that are performing strongly and which are the ones that are lagging right now? .

Thank you, Fernando. As you see in the presentation, Telefonica Tech continues to be growing above comparables and above the the growth rate of the group. It's a crucial growth driver that helps us to outperform in the B2B segment. The revenue growth had a slight slowdown in Q3 in the growth rate versus previous quarters for a reason of displacement of some projects because there are some seasonal fluctuations in revenues and sale activities and also linked to the change of mix. We are getting into greater weight of more complex projects with more consulting and professional services elements with which, on 1 hand, have longer term of revenue conversion, but also will have a positive impact on the recurrence and predictability of the revenue. So we are moving into contracts that have more time to prepare and then start giving the operations, but then become recurrent and give us long visibility to the future. Bookings are very strong in Q3, in particular, 40% of bookings. And with this change of mix of projects into more complexity, more value-added, this is also improving the margins of -- and the profitability of Telefonica Tech, which is going in the direction that we wanted to be in the 3-year plan and we are progressing nicely towards the objective of reaching the target that we stated at the Capital Markets Day of EUR 3 billion revenues by 2026.

We will now take the next question from the line of Keval Khiroya from Deutsche Bank.

I have two, please. So firstly, your Q3 EBITDA grew 1% but estimated it fell 4%, roughly excluding count reduction benefit, which is the deteriorated on last year? And what you think are the main barriers to achieving a better EBITDA performance? And how do we think about the 2025 EBITDA in Spain? And then secondly, you've mentioned the IOU with Mass Orange. Will there be any upfront payments from Mass Orange part of the agreement and will you include that into EBITDA and free cash flow and will count towards guidance?

Thank you, Keval. On the EBITDA, first, in Spain. It's growing 1% year-on-year in the third quarter. We managed to get it into positive in the final quarter of last year. We guided for growth for the full 2024, and you saw in the first quarter, it was growing 0.2%; the second quarter, 0.6%; in the third quarter, it's growing 1%, and this reflects revenue growth and efficiencies, including the redundancy plan and the copper switch-off. This is improvement or acceleration in the growth rate is on the back of several moving parts. So on 1 hand, we have the additional revenue, some of them coming with lower margin. On the other hand, we have efficiencies coming from headcount resizing and realization AI initiatives. We have, on the other hand, because 1 could even expect a bit higher EBITDA growth. We have some elements that are not -- either are analyzing or no longer contributing to growth. So for instance, the energy prices that, in part, we are passing through to customers no longer help or drag in any direction. The price of the content that we are selling La Liga also have changed. But we had suppressions of fees like the one that we had to finance the TV in Spain. So all in all, a lots of moving parts, but EBITDA for Spanish operation to grow. And this, by the way, combined with the stabilization of leases is getting our EBITDAaL, EBITDA after leases into the positive territory, as we said, would be in the second half of the year. We already achieved that in Q3. On the contract regarding Orange. We cannot disclose this type of details. This was a contract that was signed in the month of August. The fiber network agreement replaces deals that we had independently with Orange and with MasMovil. We are evolving this towards a single relationship on a full nationwide And we have entered into new use agreements. But there is some CPI indexation, but I cannot disclose more information because of confidentiality clauses in the agreement.

We will now take the next question from the line of James Ratzer from New Street Research.

I have two questions, please. I suppose you had your celebration back in April of this year when the copper shutdown of the network was a big kind of milestone for you. So what I'd be interested in understanding is, can you help us give an update on how that process is going? How many exchanges have you now shut down? How much of the kind of cost savings from this have you already been able to achieve and in particular, then how much more could there still be to come over the next few years, cost savings from the copper shutdown? And then secondly, just be interested to understand what's happening with your stake in Telefonica Brazil? Because I noticed this quarter, it's now gone up to 76.2%. So it's been gradually increasing over the year. Could you just explain what's going on there? And do you have some target here where you're trying to take your stake in the asset to?

Thank you, James. I'll take the first question on the copper shutdown. We have already shut down all the retail copper, but we have still pending is with third parties that were whole buying copper from us, we need to have some switches. But we are leading the copper switch off in Europe. We have accomplished more than 90% of the shutdown of the copper network. Switching off is the right decision. This has brought us significant savings in terms of OpEx, but also of CapEx. This is allowing us to maintain EBITDA margins above 36% that is quite consistent with what we have been having in the last year and all along this year. With respect to CapEx, our Spanish operation is already benchmark in CapEx to revenues, and we committed in the Capital Markets Day to reach a 10% CapEx of our revenues, intensity for the Spanish operation which would be leading in Europe. We are -- we have behind us the 2 waves of CapEx that come with a fiber migration. One is passing and the other one is connecting. We see other players that still need to do the way of passing, some others need to do the way also of connecting. We have both ways behind us. So this allows us to be efficient in terms of energy consumption, in terms of maintenance, in terms of CapEx, and therefore, we were able to commit, and we are on track to this CapEx intensity reduction in the Spanish operation.

That's clear. Do you have any idea of what the kind of still the incremental EBITDA margin upside might be just from the copper shutdown that's still to come?

Well, we don't we don't guide on CapEx margins per OB and we don't get forward-looking CapEx margins per OB, but you should expect us to stay on these levels and on a downward trend on CapEx intensity, which we have been very public about.

The increase in the stake of Brazil is a consequence of the share buyback that Brazil is undertaken. They have recently increased from BRL 1 billion to BRL 1.5 billion and share buyback has become part of their remuneration scheme of Telefonica Brasil. They do a combination of interest on capital, dividends, capital reduction and share buybacks. So that's the result of them doing that and automatically our participation in Brazil increases.

Is that lower or that's a conscious decision to not participate pro rata to your stake? So do you expect that to continue, and therefore, your stake will continue to rise?

Now it only applies to Brazil. But in general, if I had applied also for Germany, if the companies decide to remunerate through share buyback, our general course of action is not to go for that shares, but just increase. So that is -- I think it's a natural action that we don't take part of that and we just automatically increase. And even more in the case of Brazil, which the company is doing so well, and we see growth there, as I mentioned in 1 of my questions.

Our last question comes from the line of Joshua Mills from BNP Exane.

First one, very quickly. On the 5G subsidy benefit of EUR 300 million, is that something we should expect to continue next year and in subsequent years or is it a one-off? And just getting a bit of guidance around that specific item to be helpful. And then secondly, could you just give a quick update on the progress on the Brazilian regulatory changes and when we might get an update there, right? As I understand that it could be quite a meaningful opportunity for you to reallocate capital more efficiently in that market. But some sense on timing and the granularity of the guidance you'd be able to provide once you do get that change would be helpful?

On the 5G subsidies, it could. It depends on future deployment cases and so on. It has been more concentration in this year and particularly in this quarter. But this is something which is business as usual and it could definitely continue. Probably not at this size, but it really depends on more processes in this line.

And regarding the move from concession to authorization in Brazil, ANATEL approved the agreement already in June, the company's Board of Directors also in June. The proposal is moving from a different regulatory regime that allows the termination of some proceedings and some obligations. This will allow us to dispose off reversible assets. It comes with some commitments for investment, but at the same time gives us lots of flexibility to conduct our business and should be very accretive for our Brazilian business. We expect it to be finally approved in the fourth quarter of this year latest, early next year, but we believe it will be fourth quarter of this year. Well, thank you very much for attending this call. We expect that we have provided you with answers to your questions. Please address to our IR department any further needs of information that you may have. Thank you.

Telefonica's January-September 2024 Results Conference Call is over. You may now disconnect your lines. Thank you.