FT : Can Swiss industrial group ABB gear up for growth?

Can Swiss industrial group ABB gear up for growth?
Chief executive has dramatically slimmed down head office and introduced tough delivery targets to boost performance

Björn Rosengren took the reins at ABB in March 2020 with a mandate to shake up the Swiss industrial group after years of underperformance.

Events — a global pandemic, production shutdowns in key markets and an economic downturn — may have proved an additional challenge but have done little to slow him down.

Almost three years on, the 63-year-old Swede has unpicked ABB’s highly centralised corporate structure and parted with most, if not all, non-core businesses. ABB’s four strategic divisions — electrification, motion, process automation and robotics — have been broken down into 20 autonomous businesses.

Along the way, ABB’s head office has shrunk from 18,000 to just 800 people. Some 7,000 of the original 18,000 have gone to work directly for the different business units. The company employs about 100,000 people in more than 100 countries.

Rosengren’s guiding principle is accountability. After a career spent whipping other industrial companies into shape, including Swedish engineer Sandvik, before landing at ABB, Rosengren said “people like accountability”.

Accountability, he said, is key, crediting it as one of the factors behind the success of private equity groups. People there are “incentivised, meaning that if they make a success of the company, their future will be bright, at least financially”. Today, ABB similarly incentivises people and gives full accountability.

Each of the different businesses has its own management team and is responsible for its own costs. Each also has its own strategic mandate and within that, needs to deliver first on stability, then profitability and then growth.

Performance is closely monitored, with a scorecard system that contains about 15 key indicators. Comparisons of current and past performance are critical in order to gauge the direction of each business and whether it is healthy, said Rosengren.

He is unapologetic if the approach entails shedding underperforming businesses or parting with heritage.

“People like to work for successful companies. I think that’s more important than heritage,” he added.

His method, he insisted, had begun to pay off. When he started, just 30 per cent of businesses were in their third “growth stage”. Today, 70 per cent are growing.

Despite his focus on decentralisation, Rosengren says there are reasons to keep the units together as one group within ABB: all have the same purpose, which he defines as enabling a “sustainable and energy efficient future with technology leadership in electrification and automation”.

There is also collaboration between the businesses — but only if it makes sense, either by adding value to customers or by being more cost efficient.

Andrew Wilson, equity analyst at JPMorgan who has a “neutral” rating on the company’s stock, said Rosengren deserved credit for making a “tangible improvement in the way ABB is run”. 

“People underestimated his ability to repeat the same playbook he used at Sandvik at ABB, a bigger and more complex beast where others had tried and failed before.”

ABB’s balance sheet is in better shape but more remains to be done, including the disposal of the company’s power conversion unit, acquired as part of a $2.6bn deal for General Electric’s industrial solutions business in 2018 and which helps companies run infrastructure more efficiently. A sales process is under way.

An original plan to float its electric vehicle charging business last summer was postponed due to the wider market rout. ABB in November raised about SFr200mn from selling an 8 per cent stake. The private placement gave the business an equity value of SFr2.4bn-SFr2.5bn, with investors expecting a surge in demand for charging points.

ABB’s financial performance has also begun to improve, although third-quarter income, announced in October, was hit by a non-operational provision in connection with a legacy project in South Africa.

Investors say a key target this year is hitting a margin of at least 15 per cent on operational earnings before interest tax and amortisation — one year ahead of plan.

Rosengren also points to a strong order intake, increasing 4 per cent on a reported basis and 16 per cent on a comparable basis from last year to $8.19bn in the third quarter.

“I think the most important [thing] is that we have to stay with 15 per cent over a business cycle, meaning that we should also be able to deliver over 15 per cent in the downturn,” said Rosengren, stressing that conditions look more challenging next year.

Cevian Capital, which bought into the stock in 2015 and had been agitating for a new strategy, said it is happy with the results so far.

Robert Schuchna, a partner at Cevian, said Rosengren had “successfully deconglomeratised” ABB in how it is organised and run. The result was a company that is “significantly more dynamic, competitive and profitable”.

“The 15 per cent margin is a big improvement, but in our view the company can and will become more profitable,” added Schuchna.

On the growth front, ABB has set a revenue growth target of 4 to 7 per cent in constant currency through the economic cycle. “The bit where the jury is still out is, can you sustainably match the peer group growth rates over the long-term,” said JPMorgan’s Wilson.

Some of the company’s growth will come through acquisitions, notably small to medium-sized ones to help divisions strengthen their market positions. Rosengren said ABB had a “huge pipeline” of such deals and expected to do five to 10 a year.

William Mackie, head of capital goods research at Kepler Cheuvreux, said 2022 had been the “year in which the company has done all the housekeeping, including decentralising, cleaning up legacy contracts and selling everything apart from the power conversion business”. 

The coming year, he added, would be “all about driving for growth”.

For Rosengren, one of the main challenges on the horizon is the rising political tension between different parts of the world. ABB’s strategy to be local in most of the countries it operates in, however, should provide some protection.

He is also worried about the rising regulatory push associated with Europe’s push towards a greener economy, which contrasts sharply with America’s strategy of offering incentives to companies to invest.

Europe’s politicians are aware of the need to act. But the question is: will the different member states agree on something.

“I am European and I would like to see a healthy Europe in the future,” Rosengren said.

FT : A pharma partnership that brought a breakthrough in breast cancer

A pharma partnership that brought a breakthrough in breast cancer
Daiichi Sankyo and AstraZeneca’s Enhertu could double time patients can live without their condition progressing

It is not often that a drug receives a standing ovation. When Daiichi Sankyo and AstraZeneca announced impressive results for their breast cancer treatment Enhertu, oncologists took to their feet to applaud.

“It was a goosebump moment, sending shivers down my spine,” said Susan Galbraith, who leads oncology research and development at AstraZeneca.

Ken Keller, chief executive of AZ’s Japanese partner on the drug, deliberately stood apart from his team at the American Society of Clinical Oncology meeting to see the mood of the crowd. “People had basically tears of joy in their eyes,” he said.

But the man who had brought the two companies together — pioneering oncologist José Baselga — did not live to witness the drug’s reception. He died in 2021 aged 61 from a rare brain disease.

One in eight women will get breast cancer in their lifetime — and Enhertu has the potential to change treatment for half of them. David Fredrickson, executive vice-president of the oncology business at AstraZeneca, said the drug “blows up the swim lanes” that previously defined the treatment of breast cancer. For a large group of patients, he said, it could be “one of the most important medicines ever”.

Enhertu was first approved in the US in 2019 for a subset of patients with cancer that has high levels of a protein called HER2. About 15 to 20 per cent of breast cancers are HER2-positive but last June a trial showed that the drug could double the time patients can live without their cancer progressing, even if they have low levels of this protein. About a fifth of the participants with metastatic cancer — usually seen as uncurable — had complete responses: scans could not detect their tumours.

The drug has transformed Daiichi Sankyo into an oncology company. And it is further proof that AstraZeneca, a leader in the field, knows when to pounce: its unorthodox move to raise $3.5bn on the public markets to help pay for the $6.9bn deal to develop and sell the drug looks set to more than pay off. Analysts are forecasting about $10bn a year in Enhertu sales at their peak.

In 2005, Daiichi merged with Sankyo, bringing together chemists from the former and biologists from the latter who would go on to create Enhertu.

The drug builds on a history of targeting the HER2 protein which dates back to Roche’s launch of Herceptin in 1998. Just like with Herceptin, scientists used an artificial antibody to hook on to the HER2 protein on a cancer cell. But they improved on current treatments by creating a strong link to a more powerful molecule that breaks down enzymes and kills cancer cells.

When they tried it in mice, they could see it worked better than the market leader, Roche’s Kadcyla. But Daiichi had never made a cancer drug. “In the end, science won the day back then,” said Ken Takeshita, global head of R&D at Daiichi. “It was courageous for this company to say, we’re going to steer away from being a cardiovascular company.” 

Keller wished he could say that he knew how promising the drug was at that point. By about 2015, the technology started to look “pretty spectacular”. “But there’s a lot of drugs that look spectacular in animal studies,” he said.

He was more convinced after the first study in humans: a hard-to-treat population that had tried several other drugs. “At that point, almost nothing works. And we were seeing the tumour shrink dramatically,” he said.

Keller credits the chief executive of the time, George Nakayama, with making two big bets: focusing the company on Enhertu, and working with AstraZeneca.


Baselga joined AstraZeneca in early 2019 as head of oncology research and development. He had been forced to resign from his post as physician-in-chief at New York’s Memorial Sloan Kettering cancer centre because of a failure to disclose payments from healthcare companies, which the American Association for Cancer Research later concluded was “inadvertent”.

But while there, he had led the phase 2 trial for Enhertu, seeing first hand how it was helping patients. In his first week at AstraZeneca, he pushed the idea that AstraZeneca should have a partnership with Daiichi.

Fredrickson said Baselga’s extensive experience studying breast cancer meant that he and AstraZeneca chief executive Pascal Soriot sat up and listened. Soriot had already built AstraZeneca into an oncology powerhouse, producing blockbusters like Tagrisso and Lynparza.

“José really gave us the conviction that this was a medicine that AstraZeneca needed to be a part of,” Fredrickson said.

Daiichi split the rights 50/50 with AstraZeneca, outside of Japan, in return for AZ conducting further clinical trials. Michael Leuchten, an analyst at UBS, said it was a “very, very clever deal”. “What did AstraZeneca see that others missed?” he asked, adding that the company has proved repeatedly it can make good decisions.

For Daiichi, AstraZeneca offered oncology expertise and money. To make the most of Enhertu’s potential, they are planning 40 trials, one of the largest programmes in the industry. They are asking huge unanswered questions: does Enhertu work in earlier stages of breast cancer? It has already been approved for some types of other cancers like gastric and lung, where HER2 shows up; but how many more could it tackle?

“We have so many potential cancers that we can study and sometimes it’s a bit challenging to find all the people and all the resources,” Takeshita said.

The biggest opportunity is early-stage breast cancer. The earlier cancer is treated the better, so it could make an even bigger difference earlier.

Nick Turner, an academic consultant medical oncologist at the UK’s Institute for Cancer Research, who specialises in breast cancer but was not involved in the Enhertu trials, said it is very likely in the future that oncologists will prescribe Enhertu instead of the previous standard medicine, Kadcyla.

“We’ll then be on the way to really curing the substantial majority of patients with early-stage HER2-positive breast cancer,” Turner said.

Roche said Kadcyla will still be an important option for patients, with its well-established record of safety and efficacy, and the company is exploring using it in combination with another of its cancer drugs.

However, Enhertu has significant side effects. Patients often have the same side effects well known from chemotherapy — such as sickness and hair loss — and there is much smaller risk of developing a serious lung condition. Early-stage patients tend to take a drug for longer and they may find it hard to tolerate over time.


Daiichi is also creating other drugs based on the same platform as Enhertu, one of which is also part of a partnership with AstraZeneca. Gareth Powell, head of healthcare at specialist fund manager Polar Capital, said Enhertu has helped take AstraZeneca to a “whole new level in terms of growth potential” — and when sales take off, would ultimately boost margins at Daiichi.

“At some point, this product gets so big, you can’t spend it fast enough in terms of investment,” he said.

Analysts at Credit Suisse in London said the competition is at least three years behind. They believe if all of the treatments based on the platform that combines antibodies with a molecule to kill cancer cells in the pipeline are successful, it could add up to an opportunity as big as Merck’s blockbuster oncology drug Keytruda, which hit $17.2bn in sales in 2021. But they warned that investor expectations are already very high, so that if anything did go wrong, it could hit shares in AstraZeneca.

For patients, Enhertu promises time. Emma Fisher was diagnosed with breast cancer in 2016 when she was just 35, and two years later, found out it had spread. The average lifespan of someone with secondary breast cancer is two to five years.

Fisher’s private health insurance paid for the drug, but she testified to the UK’s National Institute of Clinical Excellence to try to persuade authorities to pay for it for everyone on the NHS. NICE now covers the drug for many patients with HER2-positive breast cancer, and will consider it for cancers with low levels of HER2 in 2023.

“Twelve months is a phenomenally long amount of time. It might not sound like a huge amount of time to somebody who doesn’t have incurable cancer. But for somebody with incurable cancer, an extra 12 months is everything,” she said.

>>> US After Hours Summary: WWE +10.5% jumps as Vince McMahon plans his return,

After Hours Summary: WWE +10.5% jumps as Vince McMahon plans his return, will push for strategic alternatives; AEHR +15.5% higher on earnings; USNA -1.1% lower on guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: AEHR +15.5%, SRTS +8.2%, DCT +2.5%, RCM +2.4%

Companies trading higher in after hours in reaction to news: CTMX +61.5% (CTMX announces collaboration and licensing agreement with MRNA), EFTR +17.8% (provides data update for Zotatifin and general corporate update), WWE +10.5% (Vince McMahon expects to return as exec chairman; will participate in upcoming media rights negotiations; also will push for review of strategic alternatives), FUSN +7% (FUSN and BWXT enter into supply agreement for actinium-225), CACI +4.4% (wins $2.25 bln Defense contract), TPIC +4.3% (extends supply agreements with GE Renewable Energy), DRS +3.8% (awarded U.S. Army contract), COST +2.8% (reports Dec sales), TDOC +1.4% (launches new app enabling whole-person care), LTC +1.4% (announces investment in 12 assisted living/memory care properties), MRNA +0.3% (CTMX announces collaboration and licensing agreement with MRNA), CHPT +0.2% (announces plans to rapidly expand 400 charging hubs), ASR +0.2% (reports December traffic), IPSC +0.2% (announces internal portfolio prioritization), SPWR +0.1% (SPWR and MAXN extend supply relationship)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: KRUS -4.9%, USNA -1.1%, PCRX -0.1%

Companies trading lower in after hours in reaction to news: FATE -49.5% (terminates collaboration agreement with Janssen), GRPH -42.8% (voluntary pause of Phase 1/2 CEDAR study), BBBY -7.1% (preparing to file for bankruptcy within weeks, according to WSJ), WKME -2.2% (names new Chairperson), LGIH -1.5% (closed 504 homes in Dec), ENVX -1.3% (delivers custom sample cells for US Army), MSA -0.1% (divests subsidiary holding legacy product liability claims), BWXT -0.1% (FUSN and BWXT enter into supply agreement for actinium-225), PFE -0.1% (may pull back on early-stage rare disease research, sell some major assets, according to Barron's)

FT : SEC says ex-BlackRock manager did not disclose conflict of interest with fi

SEC says ex-BlackRock manager did not disclose conflict of interest with film studio
Regulator says former employee asked client to assist his daughter’s acting career

A former BlackRock portfolio manager has paid $250,000 to settle claims that he failed to disclose that a film company in which one of the asset-manager’s funds invested had helped his daughter land a small acting role.

The Securities and Exchange Commission alleged that while working at the world’s largest money manager, Randy Robertson asked BlackRock client Aviron Pictures — which distributed movies featuring Hollywood stars such as Keanu Reeves and Anne Hathaway — to “help his daughter’s career”.

Aviron received as much as $75mn from BlackRock’s Multi-Sector Income Trust (BIT) fund, which Robertson and others managed, the SEC said, making it one of the fund’s single largest investments.

The company — whose founder William Sadleir was convicted last year for fraud involving a Covid-relief programme — “presented [Robertson’s daughter] with potential opportunities in the film industry”, the regulator added.

In 2014, Robertson emailed his daughter’s curriculum vitae and headshots to an intermediary between the now-defunct Aviron and BlackRock, noting that “[a]ny help is appreciated”, the SEC said. The manager later discussed his daughter’s career with Sadleir on several occasions.

Sadleir offered to send Robertson’s daughter screenplays, claiming that he had “reasonable influence with the producers and their casting choices”, according to the SEC order. He also offered to fly her to the Cannes film festival, the SEC alleged.

Robertson’s daughter met an Aviron executive in August 2018, who later emailed the BlackRock manager to say he “was able to offer her a small talking role” in a film and was “setting her up on a few casting agents in LA”, the order said.

Lawyers for Robertson did not immediately respond to a request for comment. The 62-year-old has not admitted to wrongdoing. BlackRock declined to comment on the SEC settlement.

“Investment professionals must be forthcoming about any conflicts of interest they may have with the companies in which they invest client funds, including situations involving favours or assistance to family members,” said Andrew Dean, co-chief of the SEC’s enforcement division overseeing the asset management sector.

“Investors must be able to know that the advice they receive is free of undisclosed conflicts, regardless of whether the conflict is financial in nature.”

Robertson was fired by BlackRock in February 2020. The asset manager sued Aviron, and said in a statement in 2020 that it had managed to “fully recover the amounts it loaned to Aviron and to realise a rate of return that is the same or better than the rate of return of the other assets in BIT’s investment portfolio during the relevant investment periods”.

WSJ : ChatGPT Creator Is in Talks for Tender Offer That Would Value It at $29 Bi

ChatGPT Creator Is in Talks for Tender Offer That Would Value It at $29 Billion
Deal at that valuation would make OpenAI one of the most valuable U.S. startups

OpenAI, the research lab behind the viral ChatGPT chatbot, is in talks to sell existing shares in a tender offer that would value the company at around $29 billion, according to people familiar with the matter, making it one of the most valuable U.S. startups on paper despite generating little revenue.

Venture-capital firms Thrive Capital and Founders Fund are in talks to invest in the deal, which would total at least $300 million in share sales, the people said. The deal is structured as a tender offer, with the investors buying shares from existing shareholders such as employees, the people said.

The new deal would roughly double OpenAI’s valuation from a prior tender offer completed in 2021, when OpenAI was valued at about $14 billion, The Wall Street Journal reported. OpenAI has generated tens of millions of dollars in revenue, in part from selling its AI software to developers, but some investors have expressed skepticism that the company can generate meaningful revenue from the technology.

No final deal has been reached and terms could change, the people said. OpenAI didn’t immediately respond to a request for comment.

OpenAI released a series of artificial intelligence-based products last year that captured the public’s attention, including the image-generation program Dall-E 2 and chatbot ChatGPT. If the tender goes through at that valuation, OpenAI would be one of the few startups able to raise money at higher valuations in the private market, where investors have pulled back from new deals given last year’s technology rout.

Microsoft Corp. has also been in advanced talks to increase its investment in OpenAI, the Journal reported. In 2019, Microsoft invested $1 billion in OpenAI and became its preferred partner for commercializing new technologies for services like search engine Bing and design app Microsoft Design.

WSJ : Citadel Posts Record Revenues for Hedge-Fund, Securities Operations

Citadel Posts Record Revenues for Hedge-Fund, Securities Operations
Hedge-fund business is said to have taken in $28 billion in revenue for 2022

Citadel’s winning streak continued in 2022, with Kenneth Griffin’s hedge-fund and electronic-trading businesses both posting record revenues even as markets swooned, people familiar with the matter said.

Citadel, the hedge-fund operation with $54.5 billion under management as of Jan. 1, had about $28 billion in revenue, the people said. That far outstripped its prior record of $16.2 billion the year before. The separate Citadel Securities, one of the world’s biggest electronic-trading firms, had $7.5 billion in revenue, up from the prior record of $7 billion in 2021.

After a near-death experience in 2008, Citadel went on in recent years to outpace many rivals, and each of its hedge funds posted double-digit gains after fees in 2022. Operating under tight risk controls that leave Citadel with little directional exposure to markets, the firm’s 1,000-plus traders make bets across asset classes in markets around the world. The firm doesn’t provide detailed information to clients about significant trades, though earlier in the year it told them it had benefited from successful commodities bets.

Citadel Securities is a global market-making operation that handles more than 20% of the shares that change hands in U.S. stock markets each day. The business, which also trades futures, options, Treasurys and currencies, benefits from increased volumes and volatility, allowing it to prosper even when markets fall. In 2022, it added new institutional clients and improved its technology and analytics, one of the people said.

The pandemic-era boom in activity by individual investors has benefited Citadel Securities’ so-called retail-wholesaler unit, which executes orders for brokerages such as Charles Schwab Corp. and Robinhood Markets Inc. Last year’s uptick in revenue for Citadel Securities took place even though overall retail stock-trading volumes declined in 2022 relative to 2021, underscoring the strength of Citadel Securities’ other businesses.

The revenue bonanza will add to the already considerable fortune of Mr. Griffin, 54 years old, who in addition to regularly breaking records in the real estate and art markets, has emerged as a major GOP donor. Forbes estimates Mr. Griffin’s wealth at around $31 billion.

Many hedge funds had rougher years. Goldman Sachs Group Inc. told its prime-brokerage clients in a recent note that hedge funds betting on and against stocks lost an average 12.9% for the year, on an asset-weighted basis, while the S&P 500 lost about 18% including dividends. Citadel’s flagship multistrategy fund, Wellington, returned 38.1% by contrast. The Wall Street Journal previously reported that commodities made up more than 60% of the second-quarter gross investment gains for Wellington.

Citadel returned about $8.5 billion in profits to its investors Dec. 31, up from the $7 billion it earlier expected. (Funds that have notched huge gains regularly return some money in efforts to limit their size and stay nimble.)

Rivals Millennium Management and Point72 Asset Management gained 12.4% and 11.8% for the year, respectively. D.E. Shaw Group’s flagship multistrategy fund, Composite, returned about 24.7%.

All of Citadel’s five strategies—fixed income and macro, commodities, equities, quant and credit—were profitable for the year, people familiar with the matter said. That was evident in the returns of its three other hedge funds, which notched gains of more than 20%. One of the funds, Citadel Equities, was up 21.4% for the year.

WSJ : Crypto Lender Genesis Considers Bankruptcy, Lays Off 30% of Staff

Crypto Lender Genesis Considers Bankruptcy, Lays Off 30% of Staff
Firm suffered steep losses from loans it supplied to Alameda, Three Arrows

Massive crypto lender Genesis Global Trading Inc. laid off 30% of its staff and is considering filing for bankruptcy, according to people familiar with the matter, the latest sign of financial turmoil at the crypto lender.

The layoffs weren’t confined to one department and were across the company, some of the people said. Genesis has 145 employees left after Thursday’s layoffs.

Genesis is working with investment bank Moelis & Co. to evaluate its options for the future, including a potential chapter 11 filing, said some of the people.

A Genesis spokeswoman said that the firm is working with its advisers “to preserve client assets and move the business forward.”

The crypto lender has become the latest digital asset firm to struggle for survival. Last year was marked by a series of crypto bankruptcies as the Federal Reserve boosted interest rates, deflating the most speculative investments. Blowups in the little-regulated sector trickled down to other companies, demonstrating the interconnectedness of the nascent industry. The Fed has signaled it will continue raising rates. Investors are bracing for more pain in crypto.

Genesis suffered steep losses from loans it supplied to the now-defunct trading firm Alameda Research and crypto hedge fund Three Arrows Capital. Both Alameda and Three Arrows filed for bankruptcy last year.

“As we continue to navigate unprecedented industry challenges, Genesis has made the difficult decision to reduce our head count globally. These measures are part of our ongoing efforts to move our business forward,” a spokeswoman for Genesis said.

Last summer, Genesis cut 20% of its 260-person workforce—and its chief executive Michael Moro stepped down—after Three Arrows was forced to liquidate. Genesis had given the hedge fund a $2.4 billion loan with 50% collateral. Genesis has disagreed with this characterization, and Mr. Moro has said the collateral was closer to 80%.

The lender also struggled to keep leaders in its risk management team. Most recently, Michael Patchen, who served for only a few months as its chief risk manager, abruptly resigned in October, according to his LinkedIn profile.

Its woes deepened with the collapse of FTX. Genesis lent at least hundreds of millions of dollars to FTX’s sister trading firm Alameda Research before its implosion in November, according to people familiar with the matter.

Genesis paused loan originations and redemptions on Nov. 16. As a result of Genesis’s move, crypto exchange Gemini has $900 million of its customers’ funds trapped in Genesis. Genesis used Gemini as a partner for its yield program.

Genesis has sought lifelines in the form of an emergency loan of $1 billion from investors.

The company also tried to raise capital from crypto exchange Binance and private equity giant Apollo Global Management.

Moelis was brought on last year by Genesis to help the company shore up its finances and figure out a road map for its future, according to a company statement.

Gemini and other creditors to Genesis have attempted to recoup owed funds in recent weeks. Tensions between heads of both companies erupted into an open dispute on Twitter earlier this week.

Derar Islim, interim chief executive of crypto brokerage Genesis Global Trading, said Wednesday that the company needs more time to resolve the financial crisis brewing in its lending business and has made progress in reducing costs in its business lines.

Genesis is owned by the crypto conglomerate Digital Currency Group, which also operates crypto asset manager Grayscale Investments, crypto news outlet CoinDesk, mining and staking firm Foundry, crypto exchange Luno, data platform TradeBlock, wealth management firm HQ and DCG Real Estate.