Q1 2022 Diversey Holdings Ltd Earnings Call
Yes.
Greetings and welcome to the does this is this quarter of 2022 earnings conference call.
At this time all participants are in a listen only mode.
A question and answer session will follow the formal presentation.
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A reminder, this conference is being.
Thank you Hello, everyone and welcome to diverse these first quarter 2022 earnings call with me today are Phil <unk>, Our Chief Executive Officer, and Todd Herndon, Our Chief Financial Officer.
As a reminder, during this call we will make forward looking statements. Some risk factors that may impact these statements and could cause actual future results to differ materially from our projected results are described in this morning's press release.
The reports, we file with the SEC.
The company does not undertake any duty to update such forward looking statements.
On today's call the company will discuss certain non-GAAP measures and make references to certain supplemental data, which we believe can be useful in evaluating our performance.
The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP.
A reconciliation of these non-GAAP measures and referenced supplemental data can be found on our website at IR dot diversity dot com and in our most recent annual report.
And now over to Phil.
Thanks Grant and good morning to all of you dialing in.
Two areas I'd like to highlight this morning.
I'll provide some initial thoughts on our strong first quarter results and the read across to our confidence in hitting our full year revenue adjusted EBITDA and margin goals.
I'll then discuss how our business model is uniquely built to tackle the challenging global dynamics.
And I'm going to turn it over to Todd.
Still some meat on the bones of the quarter I'll cover the 2022 pilots.
Starting with the quarter.
I remain confident about the resiliency of our business and our long term growth prospects.
As I'm sure you're not buying that divesting is one that I can lead to large global company.
Full suites of hygiene and infection prevention and cleaning solutions in a highly fragmented industry.
I mean, it's that fragmentation, coupled with the foundation, we have built the organic revenue growth margin improvement and consolidation.
Gives us a competitive advantage and penetrating a $46 billion total addressable market.
Our first quarter results highlight the strength of our business model. Despite the current macro environment.
Specifically revenue improved by 4.5% as compared to the prior year.
$6, 8% higher than pre pandemic levels with significant recovery still to capture.
On a constant currency organic sales growth accelerated to 7%.
Revenue growth was driven by our base institutional.
The institutional business, excluding infection prevention.
26%.
Food and beverage grew by 15%.
Adjusted EBITDA margin of nine 1% were in line with our expectations for the quarter.
Forecast to significantly improve sequentially throughout the year as our pricing cost containment initiatives are implemented okay.
Continue to mature.
Moving to the Mackay and how our business model is standing up to the challenges.
We are clearly operating in an unprecedented environment with multiple COVID-19 virus impacting global economies.
With rising inflation with supply chain bottlenecks and other operating factors that can be difficult to predict and really challenging to manage.
I've been extremely pleased with the resiliency of our business model and our management team's agility in the short term, while maintaining focus on our long term growth goals.
Some highlights of our current initiatives.
Firstly, we've been focusing hard on pricing to cover inflation.
While input costs continue to rise steadily we're implementing price increases across our various geographies and products in the first quarter, we realized more than 6% revenue growth from pricing and I expect this level of pricing to increase further.
As we move through the year.
To date, our price increases have been well expect well accepted.
We expect these increases to remain intact, reflecting the essential nature of our products and services.
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Secondly, we have maintained our focus on controlling our fixed costs and leveraging our variable costs. Our first quarter margin of nine 1% is reflective of the near term inflationary environment.
Our pricing actions continue to be implemented including additional pricing as required we would expect our margins to meaningfully improve between now and the fourth quarter of the year.
We also continue to invest in opportunities to expand margins into next year and beyond.
Good example, being our plant investments in Kentucky, which remains on track to be completed by the end of this year.
In that example by co locating our main warehouse with manufacturing and adding more capacity to bring currently contracted manufacturing volumes in house in combination with optimizing freight lines.
We expect to improve total company margins by roughly 100 basis points for next year.
Absolutely work to deliver our targeted long term EBITDA margins of 20%.
So whilst it's still early and yeah. We're pleased without early pricing cost containment results and we continue to navigate this unprecedented environment.
Whilst of course, we cannot predict the pace at which variable costs overall inflation begins to normalize we will maintain pricing discipline. So we can drive revenue growth and capture margin expansion opportunities as the aggressors.
But just as important I'm very pleased with our continued progress on strategic price drivers, we continue to evolve our value proposition with digital innovation and a focus on service, which is leading to higher retention levels and acceleration of net new customer wins and a robust pipeline.
Additional growth opportunities.
This is especially strong and our strategic focus areas, including U S food service global accounts and water treatment.
All of this is expected to drive double digit top line growth in Q2 to Q4 this year.
With that let me now pass over to Todd gave you some more detail on our strong first quarter and our outlook for the remainder of the AR.
Thanks, Bill and good morning, everyone.
Before diving into the numbers, let me tell you why I feel so great about our results.
First we did what we said we'd do.
Our top line growth and pricing are at the high end of expectations EBIT.
EBITDA margins will improve throughout the year.
I'm happy with our cash flow and finally I'm confident in our full year outlook now starting with the results.
Net sales for the quarter were $660 million, an increase of $28 5 million or four 5% as compared to the first quarter of the prior year and 7% organic constant currency growth.
I'm, especially pleased with our revenue growth in the quarter, which is inclusive of the headwind associated with the normalization of our infection prevention business. This resulted in a decline of 76 million in infection prevention revenue compared to the first quarter of 2021 in line with our expectations.
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Now moving on to our segments, let's start with institutional.
As Phil mentioned, our institutional base business represents more than 60% of our first quarter revenue and continues to perform well.
First quarter revenue was $395 8 million or <unk>.
26% increase over the prior year quarter, driven by a combination of new customer wins and continued expansion with existing customers as we continue progressing towards a return to pre pandemic levels.
Speaking of new customers, we're on track to exceed 3% annualized net new customer wins, improving from 2% in 2020 and 3% in 2021.
As it relates to our existing customers, we highlighted in our fourth quarter call, but we have an opportunity to organically recapture at least $220 million of revenue in the coming years as countries and businesses begin to ease the COVID-19 restrictions.
Our institutional recovery remains on track with the Europe at above 90% of 2019 volume in emerging markets at above 80% in the first quarter showing good progress to start the year.
Despite the additional remaining recovery opportunity first quarter revenue exceeded pre COVID-19 levels by six 8% in total.
I believe this is a testament to the resiliency of our business model and the effectiveness of our growth initiatives.
Our infection prevention business, which represents approximately 10% of our revenue began to return to more normalized levels beginning in the second quarter of 2021 and continued throughout the year.
First quarter infection prevention revenue of 76 million represents a 50% decline versus prior year and what we believe to be a sustainable run rate reflective of this business as we move forward.
Our infection prevention business continues to reflect new wins with revenue more than 25% higher than pre COVID-19 levels and we expect to continue to make gains in this strategic growth area.
Finally, our food and beverage business, which is roughly 30% of our revenue is also generated positive momentum supporting our long term growth goals.
We continue to experience high customer win rates for new business and recently introduced water treatment to further expand our organic growth initiatives.
Our revenue of about $187 8 million in the quarter is a 15% increase over the comparable prior year quarter.
Now, let's move on to adjusted EBITDA.
Consolidated adjusted EBITDA for the first quarter was $60 3 million, a 35% decrease as compared to the prior year quarter.
This was above the high end of our guidance range and rigs that represents a 15, 7% increase over the pre COVID-19 baseline in 2019.
As Phil mentioned, we're especially pleased with this outcome in light of the numerous inflationary pressures we've had to overcome throughout the first quarter.
Our institutional and F&B segments delivered adjusted EBITDA of $53 million and $22 million, respectively, representing declines of 26% and 31%.
Both segments were impacted by high input cost inflation, particularly in Europe due to the war in Ukraine, and we're taking aggressive pricing actions to address the price cost gap.
Now, let me touch specifically on costs for a moment.
The current reality is that inflation is both difficult to predict and has progressed at an unprecedented pace, which makes life really tough.
Cost volatility can put pressure on margins in the short term, but over time. It will eventually turn positive as inflation receipts and we continue to price for the value we provide to our customers.
To offset and get ahead of course, our full year pricing expectation for 2022 is an increase of greater than 8%.
Combined with our steady productivity gains we anticipated offsetting inflation first.
And as inflationary pressures moderate I believe we can capture margin improvement as well.
In these tough times cash becomes even more important as a result of that I've invested a disproportionate of my time to focus on cash generation and I'm very pleased with the first quarter results.
Free cash flow was $19 million in the first quarter of 2022 as compared to a minus <unk> 73 million in the prior year quarter.
This is the first time, we have posted positive free cash flow in the first quarter and we see this as a good indicator for the remainder of the year.
However, given the current environment, we will likely be more selective in the short term when considering opportunities and a strong pipeline of accretive M&A.
At quarter end, we had cash and cash equivalents of $216 million and available liquidity of $658 million, which I view as a position of strength.
We have roughly 50 50 split between fixed and floating rate debt with interest rate caps in place for our protection I'm confident in our liquidity.
Our net debt leverage ended the quarter at four seven times, we are focused on generating increased positive cash flow for the full year of 2022 and expect to see net debt leverage improvement by year end.
Finally, let me provide our view on the 2022 outlook.
We remain confident in our ability to grow our top line, while improving our margins.
As we look forward to our long term opportunity we are extremely energized.
We're encouraged by the recovery of our base business as markets reopen from Covid with a continued opportunity to capture additional revenue that was lost during COVID-19.
We also expect to continue to win market share, while maintaining focus on our pricing to cover rising input costs.
The infection normalization should now be substantially behind us for the balance of 2022, we anticipate a return to growth in infection prevention based on our innovation and differentiated technology.
While we're encouraged with our first quarter results and our positive momentum we continue to operate in an unprecedented environment.
I reaffirm high single digit percent revenue growth and adjusted EBITDA of $380 million to $420 million for 2022.
If the positive trends, we saw in the first quarter continue and the inflation environment begins to abate.
We would expect to update our outlook as the year progresses.
One last item before I turn it back over to Phil.
While we do not plan to provide quarterly earnings guidance. Our current forecast is that approximately 37% of our full year adjusted EBITDA will be earned in the first half of 2022 with the remaining 63% in the back half of the year.
This first half second half outlook reflects the pre COVID-19 historical seasonality of our business and the continued progression of our various cost initiatives.
Coupled with our price increases and surcharges that are expected to continue to build throughout the year.
With that said I'll hand, it back over to Phil for a quick wrap up.
Thanks, Todd let me share a few closing thoughts firstly on drugs, we have strong customer attention long tenured customer relationships and a robust pipeline of new customer growth opportunities.
The 2% annualized growth for net new wins in 2020, but became 3% in 2021, showing further growth in 2022.
And secondly on pricing, we have demonstrated pricing power to offset inflation inflationary pressures.
6%, we saw in Q1 will grow to more than 8% for the full year.
This along with cost containment will deliver sequential margin through 2022.
Finally, we are pleased with the progress, we're making in transforming divesting and with the resiliency of the business model, but the Liberals during both good times and challenging times.
Let me close by thanking our team around the world for that continued hard work in delivering on our mission to protect and care for people.
With that operator, please open the line for questions.
Thank you at this time, we will be conducting conducting a question and answer session. If.
If you would like to ask a question Keith Please star one on your telephone keypad.
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One moment, please while we poll for.
The first question comes from Josh Spector from UBS. Please go ahead with your question Josh.
Yeah, Hi, guys and thanks for taking my question just first one on the guidance you held your guidance for the year your pricing appears a bit better growth I assume appears perhaps a little bit worse at least from a macro perspective, just curious if there's any change in bias from the midpoint to perhaps the top or bottom end versus what youre seeing today.
Okay.
Yeah.
So Josh I think.
Firstly I wouldn't say that we were saying all right.
Lower than we were previously, indicating actually a quite a country, where we're really pleased with the way the off price is tracking this year, which we just mentioned.
Full how we're seeing that increase we've seen that increased steadily over the last few months.
Having said that you know, it's still very early in the year and therefore.
It is not appropriate at this time to increase the guidance and therefore, you know I think we stick with the range that we've got and we wouldn't be pushing you in that range at all we're pretty comfortable with where consensus is at the moment.
Okay no. Thanks for that and then just on food and beverage just a question around the growth. There overall and you have a lot of things going on in between pricing you know base, new wins I'm talking about the water treatment business ramping curious just on the volume side. If you could provide any context about how things are.
Trending between the new wind side of the heritage diversity of products versus how much of the volume growth as the water treatment selling are taking place.
Yeah sure maybe it helps for me to unpack those F&B numbers, a little bit if you take huh.
Organic.
Constant currency F&B top line, it's about 14%.
Within that the pricing in F&B is about 8.5%.
And the volume is the balance.
It's still the case that you know that the predominance of our volume growth in food and beverage is coming from a cool cleaning and hygiene products.
On a very good winning spree that right through 'twenty and accelerated through 'twenty long water treatment is coming online. Most significantly you know we said at the end of last year, we've got to double digit millions and we thought that that would continue to increase that and I'm sure. It has but you know it's still you know not them.
Significant pop out growth.
Very helpful. Thank you.
Okay.
Thank you. The next question comes from Vincent Andrews from Morgan Stanley . Please go ahead from Frank.
Thank you and good morning, everyone. Todd I just wanted to close the loop on one other guidance items on Cogs, because I kind of remember when you reported the fourth quarter. It was no oil was $125 and I think you added in that $25 million to $35 million incremental cost sort of based on some analysis, you've done regressing sort.
Of that oil price range around a basket of raw. So I'm, obviously oil is not at 125 anymore can clearly be volatile, but I just wanted to see whether sort of the reiterated guidance assume any change in the oil price assumption or the flow down into those intermediate chemicals.
Yeah Vincent I appreciate the question I I would tell you that.
Our view is still roughly the same as the outlook we gave at <unk>.
At the end of our last earnings call, we're still in that range.
Albeit I would say estimated cost of slightly increased and were implementing additional pricing and surcharges to offset that I think that in that range. We gave this last period is roughly the same.
I'd say, we're also confident that we can continue to manage the business in a very challenging operating environment.
And expect really headwinds to ship the tailwind as changes abate.
You know were off and expecting a good jump off point as well as we enter 2023.
But we're effectively out of in the same places that where we discussed last quarter.
Okay understood a lot of moving parts, which I'm sure we'll keep moving.
Maybe just a follow up on the second quarter.
Is that progressing different than you thought you know when you reported for Q or did the street did we all just kind of Miss model it.
No I think maybe it's.
Staying on inflation just for one second clearly inflation is having a significant impact on our cost base.
As a reminder, our direct costs material costs were up 10% in Q3 of last year 16.
Accelerated to 26% in Q1, and we're expecting our full year outlook of 28%.
Implied in this full year view is that we expect costs remain at an elevated level at about where we are for the remainder of the year.
And in terms of putting it into numbers given direct material cost you know roughly 33% of revenue that 28.
Percent inflation's worth about $240 million in the year, which is what we're.
Seeking to overcome in terms of dollar inflation first.
And.
That takes.
Some time to implement given the price price cost time lag that we've discussed in the future. So.
Our full year outlook really hasn't changed I think maybe just the pacing.
Of how the numbers will flow quarter on quarter, you know may have changed a little bit which is why we gave the outlook.
37 63 in the script that are you know you've heard us talk too, which I think is just a little more precise than that.
When we first learned about the.
Ukraine situation and how it may face.
Okay, that's very helpful.
Maybe maybe just another thought.
When you look at the 37 that we're talking about now and in the first half. If you go back to the pre pandemic period that was about 41% right. So that business always had.
You know, there's fairly significant seasonality H, one versus H, two it's obviously a little bit more.
Extreme in that this year, just because it takes time to pass the inflation through to pricing, but I think that 41 59 data points quite interesting when thinking about what we've just been talking about it.
Yeah, that's that's really helpful. Obviously.
Not a lot of clean year comparisons given what's happened over 100 years. So appreciate all the color.
Alright, Thanks Vincent.
Thank you. The next question comes from Chris Parkinson from Mizuho Securities. Please go ahead Chris.
Great. Thank you so much. So obviously the focus on margins has really been the cumulative impact of inflation over the last few years and ultimately can see you know the IPR process, but when you take a step back on slide four you know and you go over your sourcing supply chain and operational excellence plans can you just offer a little bit more color on you know ultimately where you were.
Once inflation is kind of fully dealt with where you ultimately can go on the margin front for both segments and just how that filters entity.
The EBIT CAGR guidance over the long term just so just any additional color would be greatly appreciated. Thank you so much.
Yeah.
Start with the first thing to say is you know we've been very clear and we've reiterated a lot that we're tracking to 20% EBITDA margins nothing has changed in that at all if you look at you.
You know, what we've been able to do on strategic sourcing.
I think we feel really good about what we're doing that in fact, we've probably put even more resource in this area as we thought about how we can work with R&D to reformulate and how we can look at trimming.
The range, making sure that it works better for customers and also Optimizes efficiency. If you look at supply chain, we've talked a lot about some of the M&A we've done.
To get a more strategic control of our supply chain in places like Australia, but also this new plant that we're building in North America, we're really excited about that it's going to come.
Come on line towards the backend of this year, maybe slightly ahead of where when we were first expecting I'm asking to deliver 100 basis points improvement.
Operational excellence also.
It's going well I mean, I think we were well into that we were well into that at IPO.
We're still tracking with that and I think maybe pricing.
Is the is the one that we've really had to put extra focus on for obvious reasons, when we set a IPO.
The you were gonna see us taking our responsibility as a market leader extremely seriously and you know we've done that I think if you looked at the pricing that we've passed in Q1 I think you can see that bearing fruit, we've invested a lot of time effort and resource.
Into the basics, but also just some of the more systems based solutions.
Just to make sure that we're really doing everything we can to optimize across the board.
So rolling all that together I think we feel really good about the 20% I think it drifts back a little bit because of course, we're having to manage this cost inflation.
Don't know exactly when it's going to abate, we're expecting it to sort of be somewhere near the peak at the moment, but that's what happens from here quarter by quarter. It's hard to tell so hopefully that gives you a bit of a sense of why with guy.
That's that's helpful and just a quick follow up on the on the free cash flow I mean, you made a conscientious effort to kind of bring some attention in your prepared remark on this but just to dig in a little bit more you know there was a decent amount of noise. Yeah for the first couple of quarters as from 2020 one much of that associated with the IPO IPO process, which is perfectly understandable.
Well once again, you know once we get through kind of this difficult time on inflationary fronts.
How should we think about further about you know the working capital metrics any other moving parts cash taxes, you know just.
Any data points that can give the investment community additional confidence yeah to further drive your net debt down.
Down further you know over the long term less than four and a half times I would be greatly appreciated, but what should we be ultimately monitoring. Thank you.
Yeah, Let me let me just give you a color. This is tod again on the maybe the 'twenty two view if you take that midpoint of the EBITDA guidance, we're going to see about $50 million of cash taxes.
So you know north of $75 million, just a little bit of cash interest.
75 to 85 or $80 million of one time costs, and that's really broken down by $30 million of our North America footprint project. We're excited about that goes away.
Seven $8 billion of one time Sox implementation, and then I'd say, maybe $10 million of ongoing M&A, which puts to our kind of growth algorithm of a couple of points of inorganic growth each year.
And about 25 million of restructuring, which helps us towards our progression to 20% EBITDA margin outlook.
And then we're going to have this year about 130 of capex of which about $25 million to $30 million linked to our North American footprint project, which then after this year allows us to reset around that 3%.
Cash kind of target investment and on an ongoing basis and capex.
And then this year, we expect to have a bit of a favorable working capital or are progressing on a number of issues.
As an example, implementing supply chain financing to help extend our payables.
I'm doing a lot of work on investment in.
Advanced planning to help our inventory accuracy service levels as well as reduce our inventory over time. So we have a lot of focus in that area.
And so that's kind of this year and you should get around $100 million of free cash flow in 2022.
And then as our EBITDA outlook.
Increases will clearly have that going forward and if you want to think about your cash tax modeling.
Might take about 12, 5% of the incremental EBITDA and apply that to cash taxes, because we have some.
Significant positive attributes.
To allow for that.
Around 3% on Capex going forward and our one times should migrate towards this $40 $45 million.
Going forward, which then will clearly generate significant increases in <unk> and 'twenty three.
Free cash flow over 'twenty two either that's that's hopefully a complete answer for it.
Very much so thank you so much.
Okay.
Thank you ladies and gentlemen, just another reminder, if you'd like to ask a question Keith Pakistan Big one if you'd like to ask a question. Please.
The next question comes from Ashish <unk> from RBC capital. Please go ahead Ashish.
Hi, This is our day on for Ashish. Thanks for taking my question I. Just you know given it's been a few weeks since you guys implemented the the fuel surcharge I was just wondering if you guys had any comments on.
How the customer receptivity has been around that if you're getting any pushback and then maybe if you could just comment on how quickly. The surcharge is sort of designed to roll walks, you know if and when oil prices ease off as well. Thank you.
Yes, let me try to give you some insight here.
I think the first thing to say is whereas in Q1.
Everything we do on pricing was strike price a nice charge as the key two onwards, it is going to be a mix of straight pricing and surcharge. So you shouldn't think of this as it is all going to be surcharge going forward at what rate.
Any matters here is that we explain the underlying dynamics to the customer so they understand what's going on and what needs to happen.
To the pricing, let me give you a couple of examples that might help. So if you think of the emerging market right where volatile inflation.
It has always been part of the operating landscape.
It's almost full price rise is still so so most of those changes that we're going to see in Q2 will be straight price rises.
But then if you're coming to western Europe , where obviously it its tradition of being a much more benign environment that we are going much more with the surcharge and we've implemented a system based on energy index.
We're going to update quarterly.
So.
First one is gone in on a quarterly basis going forward, we'll be making adjustments and that would be.
And then at some point, we would expect that to come down maybe give you a sense of it as we think about our total pricing for this year I think about 20% will be a charge on the balance of it.
It's gonna be strike price.
Maybe just coming back I think to the other part of your question look I mean customers do not love this but I think overwhelmingly they understand that.
We're able to explain very clearly the underlying movements.
In the commodity prices and as we do that they.
Are they relatively readily understand and accept that we need to do there. So I think we're feeling really bad as confident as we can at this stage of the process that we're going to be able to make the progress that we need to cross the pricing and the surcharges.
That's very helpful. Thank you.
Thank you. The next question comes from John Roberts from Credit Suisse. Please go ahead John .
Thank you the market's obviously concerned about high debt level companies and that's rising interest rate environment.
Are there ways you can accelerate the debt reduction by divesting or partially divesting when I'm thinking about is Cassie.
Relatively standalone unit and do you need to own 100% of capacity in order to get full value for the rest of your portfolio.
Hey, John It's Phil Let me deal with the Tasking thing and then Todd maybe you can give a fuller answer to your question, we don't have any.
Plans, our expectations too to sell task and I'll tell you why the taxi business is performing incredibly well.
We've invested a lot in innovation are the guys have done a terrific job in it and it's really bearing fruit and that the future growth prospects are fantastic and as we said before we know the task proposition integrate really well with the chemicals proposition and we think they they work really well together to allow us to to.
Tight market share I said no I don't think we've got any plans at right now in that respect on Cascade, but maybe you could give a broader answer is it.
Interest rates and how it kind of trying to manage the impact of that yes sure Phil.
First of all I'd say, we're cognizant about our net debt leverage.
Which was four seven times in the quarter, we believe that that number will be four four or below by the time, we get to year end here based on our outlook.
I'd also say we're.
Pleased with our liquidity position at the moment.
We had over $650 million of liquidity at the end of the quarter and the fact that we have no maturities coming due on our long term debt until earliest 2028, I think puts us in a pretty good place at our weighted average cost of debt is less than 4%.
The other thing I think I would mention is we are looking at ways to.
Generate cash creatively.
We refinanced the business at an optimal time in the fall of 2021.
And as part of that refinancing we executed.
$5 billion of cross currency swaps that were in the money and in Q1 as an example, we converted that favorable.
Cross currency swap valuation and to $44 million of upfront cash here.
Uh huh.
It also increases our liquidity. So I think you know that's not an example of a.
Divestiture or noncore asset, but it is.
Great example of how I think we're doing a nice job managing liquidity and generation of cash.
I was just thinking since water treatment chemicals could be managed without you fully owning all of the assets in operation that maybe there might be other parts of your business that could be still a big part of the portfolio, but you don't have to own everything.
Yes.
Yeah, John It's a good story and it's one obviously, we've been spending but at time thinking through but there's nothing significant that I can tell you about at this time.
It's effective.
Okay.
Thank you ladies and gentlemen, we have reached the end of the question answer session and I would like to turn the call back for closing remarks. Thank you Sir.
Thank you for that these are clearly tough times, but against that backdrop, we feel like were acquitted ourselves really well the pricing as you've seen.
Has been market, leading on new business growth continues to accelerate and our cost containment is.
Is bearing fruit. So you know, we're really facing into the challenges at <unk>.
Steering the business both for the short term, but also making sure that we've got at least half an eye on the medium term our navigating two to optimize against that timeline as well with that thank you all for your questions and for listening and we'll talk to you all again soon thank you.
Thank you. This concludes today's conference you may now disconnect. Your lines at this time. Thank you for your participation.
Yeah.
Okay.
Right.
Okay.
Yeah.
Yeah.