Q3 2022 Brinks Co Earnings Call
Earnings Conference call Brink's issued a press release on third quarter results. This morning.
<unk> also filed an 8-K that includes the release and the slides that will be used in today's call.
For those of you listening by phone the release and slides are available in the investor.
This section of the company's website brinks dotcom.
At this time all participants are in a listen only mode.
Jen and answer session will follow the formal presentation.
As a reminder, this conference is being recorded.
Now for the company's Safe Harbor statement.
This call and the Q&A session will contain forward looking statements actual results could differ materially from projected or estimated results.
[noise] formation regarding factors that could cause such differences is available in today's press release and in the company's most recent fleet most recent SEC filings.
Information presented and discussed in this call is representative as of today only.
Brink's assumes no obligation to update any forward looking statements.
The call is copyrighted and may not be used without written permission from brink's.
It is now my pleasure to introduce your host Ed Cunningham, Vice President of Investor Relations. Mr. Cunningham you may begin.
Thanks, Andrea and good morning, everyone. Joining me today are CEO marquee banks and CFO Kurt Mcmackin.
Also joining the call is Ron Domanico, former CFO and current president of <unk> capital and sustainability.
This morning, we reported third quarter results on both a GAAP and non-GAAP basis.
non-GAAP results exclude a number of items, including the impact of Argentina's highly inflationary accounting.
Reorganization and restructuring costs.
Items related to acquisitions and dispositions.
Costs related to frozen retirement plans.
Charges related to an antitrust matter in Chile.
Valuation allowance on tax credits.
And certain allowance estimate.
We're also providing our results on a constant currency basis, which eliminates changes in foreign currency exchange rates from the prior year.
We believe the non-GAAP results make it easier for investors to assess operating performance between periods Accordingly, our panel.
They will focus primarily on our non-GAAP results reconciliations are provided in the press release and the appendix to the slides, we're using today and in this morning's 8-K filing all of which can be found on our website.
I'll now turn the call over to Mark.
Yeah.
Thanks, Ed Good morning, everyone and thanks for joining the call today.
This morning, we reported strong third quarter results, including double digit organic growth in revenue operating profit adjusted EBITDA and EPS.
We achieved these results in a macro environment that continues to be challenging demonstrating the resiliency of our business we.
We remain on track to achieve the midpoint of our full year guidance for adjusted EBITDA and earnings per share of approximately $775 million and $5.75 respectively full.
Full year revenue and operating profit are now expected to be at the low end of the prior range due primarily to the impact of foreign exchange translation.
Our guidance includes full year organic revenue of about 12% and strong double digit growth in operating profit EBITDA and EPS, reflecting approximately 100 basis points of margin expansion driven by our organic growth lean cost initiatives and leverage from our lower fixed cost base.
Through the first nine months of 2022 we achieved 8% revenue growth, 15% operating profit growth of 14% increase in adjusted EBITDA and EPS growth of 23%.
We delivered these results despite a slower than expected start to the year due to the omicron related shutdowns around the world of war in Europe , and an aggressive global monetary tightening trend all of which have led to extreme movements in FX as the U S. Dollar continues to strengthen.
We expect the operational momentum in both organic growth and profit expansion to continue through the fourth quarter, which has historically been our strongest quarter.
It's important to note that our 2022 guidance does not include any contribution from our recent acquisition of note machine, which we expect to be accretive to our results starting in the fourth quarter of this year of approximately four cents per share.
In addition to the positive impact of the note machine acquisition, we will continue to be very proactive in taking steps.
To optimize our operating model.
Only to drive organic profit growth, but also to mitigate the potential impact of a sustained economic slowdown in 2023.
Did that end, we are announcing a global restructuring plan is expected to yield $40 million of savings in 2023, as a result of sustainable fixed cost reductions across the business.
We continue to pursue additional opportunities to reduce costs and streamline our operations and optimize our business model.
We expect a strong finish in 2022 to lead to an even stronger performance in 2023, our recent share purchases reflect our confidence that we will continue to deliver strong growth in revenue profits and free cash flow.
We look forward to providing our guidance in 2023, when we report our fourth quarter results in February of next year.
I'd like to take this time to thank our more than 70000 associates around the world who have been the driving force for the acceleration of our strategy by relentlessly serving our customers and executing our business improvement imperatives related to safety quality cost efficiency all across our global footprint.
Next slide.
This slide provides a brief update on the progress, we're making with our tech enabled solutions, which we formerly referred to as strategy to point out the.
The solutions are the basis for our two technology service platforms.
Digital retail solutions for Drs, and ATM managed services referred to as a M S.
Our digital retail solutions, which include Brink's complete and other similar global service offerings, such as copy safe grew organically by more than 20%. During the first nine months of the year, we continue to evolve our service offerings to satisfy specific local market and customer needs and we're seeing growing customer acceptance across all regions are.
Digital retail solutions aimed to make cash it's easy to use debit cards credit cards, and other digital payments and allow our retailers to create full value stream visibility for all payment methods, especially cash.
The higher margin solutions enable us to offer enhanced services to our current customers as well as what we believe is a very large addressable market of unfunded and underserved retailers around the world who currently do not have a cash management solution.
R. A T M management services offering provides a flexible turnkey solution that enables financial institutions and retailers to outsource their entire ATM estate to brakes, thereby maximizing their ATM network performance and freeing up more resources for their core business.
Year to date, our Ams business has grown organically by more than 50% over last year.
We've been actively growing our Ams business, both organically and inorganically across all geographic segments.
The biggest driver of our year to date organic growth is the successful execution of our agreement to provide end to end ATM services for BPC E. The second largest bank group in France are.
Our recent acquisition of note machine has further added to our Ams footprint and we're well positioned to leverage note machines expertise and infrastructure to accelerate <unk> growth in Europe and around the world.
Our confidence in our Ams growth strategy is further supported by a strong pipeline of additional organic ATM outsourcing opportunities in all four of our geographic segments.
On to slide five.
Here, we provide two examples of how we're better serving customers through tech enabled solutions of Drs and Ams.
On the top of the slide we're highlighting the success of our V. P E. B P. C E relationship.
This is the largest tier one financial institution outsourcing award that we're aware of and our team in France has really stepped up to implement this groundbreaking partnership.
BPC is outsourcing their entire network of more than 10000, Atms to brink's and we expect the deployment to be fully complete by the end of this year.
We expect to generate annual revenue of about 50 million euros over the course of this 10 year contract.
This is not only an opportunity to provide to provide a valuable service to a major customer. It's also an opportunity to leverage our infrastructure and internal expertise to become the global partner of choice for future ATM outsourcing customers.
Another customer deployment, that's underway involves a major multinational retailer who has selected one of our Drs solutions as their P. O S integration solution we.
We developed a proprietary self checkout device.
Uses our software to integrate with the retailer's existing Pos system, allowing consumers to seamlessly use any payment method cash coin ricard.
Our device also has recycling function, but not only improves productivity, but also provides additional features to enhance customer service and the retail retailers visibility to their cash ecosystem.
We expect to deploy the initial 400 units in 2023 and this comes with a five year recurring revenue contract.
The next slide here is our most recent acquisition, while we have strong focus on organic growth. We're also looking for ways to accelerate and build capability through acquisitions.
This month on October three we acquired note machine one of the leading ATM networks in the United Kingdom for approximately $179 million or five times the adjusted EBITDA.
No machine brings a strong team of ATM managed services experts and our global technology infrastructure that will allow us to more effectively capitalize on the ATM outsourcing trends in Europe and around the world.
For the fiscal year ended June 30th 2022, no machine generated revenue of approximately $131 million and adjusted EBITDA of approximately $36 million.
This acquisition is expected to add approximately $5 million of operating profit and <unk> per share to the fourth fourth quarter earnings of this year.
The note machine acquisition builds on our organic growth initiatives and is an important step in the execution of our long term strategy to grow our ATM managed services business.
This next slide highlights our global restructuring efforts as I mentioned earlier, we're taking actions across our global footprint to enable growth and mitigate the potential impact of a recession.
Our main focus is on realizing and reducing our head count streamline our infrastructure and operating footprint and shifting our business mix to more profitable offerings, such as ATM managed services and digital retail solutions.
All are in accordance with our long term growth strategy.
We expect our one time restructuring costs to be approximately $30 million, how about $18 million of which was recognized in the third quarter when.
When completed the current restructuring actions are expected to drive annualized savings of approximately $40 million all of which are expected to flow through our results in 2023.
The next slide.
I want to remind everyone about our history of steady performance in organic revenue growth across economic cycles.
This graph shows our annual organic revenue growth over the last 16 years, starting with the great recession of 2008 and 2009 when many companies were down 10, 20, 30% or more.
Brings organic revenue growth was basically flat in 2009 are down less than 1%.
We recovered quickly back to 4% in 2010, and then return to 7% growth in 2011 and remained in the mid single digit range throughout the next decade.
Then came into the crisis a global pandemic.
Even during the height of the pandemic when organic revenue initially contracted by 7% we recovered to 5% growth in 2021 and were up 12% so far in 2022.
Looking back over the past four years across a global pandemic, our average organic revenue growth has been about 5%.
It is important to note that even during recessions and other times of crisis. When some retailers are taking in less cash our services are still needed to transport and protect cash that they're bringing in for.
For example, the customers cash volumes are down 10, or 20% they still need our services for the remaining 80% to 90% of their cash.
And our a M. S business is equally resilient since our networks serve as key distribution points of cash for daily Commerce.
Other words brink's is an essential provider of services throughout all business cycles.
Now, let's turn to the third quarter results slide nine.
This slide summarizes the strong revenue growth and profit growth that we achieved in the third quarter revenue was up 6% and organic growth up 13% driven by double digit organic growth in North America, Latin America, and our rest of World segment.
Organic growth in Europe was about 8%.
Operating profit was up 9% with organic profit growth of 22% and acquisition related growth of 1%.
Partially offset by a 14% negative impact from FX translation.
Primarily due to the Argentine peso and the euro.
This profit growth was driven by strong year over year margin expansion, especially in North America, and our rest of World segment.
Adjusted EBITDA was up 11% and up 22% in constant currency with a margin of 16, 6% up 80 basis points over last year.
Third quarter EPS was up 18% over the year ago quarter, which included a <unk> <unk> per share gain from the sale of our position in M. G. I. Excluding this gain EPS was up 21% for the quarter.
I'll now turn the call over to Ron Domanico, who has been a driving force for bring success in the past seven years I want to thank him for his contributions to both brink's and to me personally for his help in the last year since I've been here.
John .
Thanks, Mark as I'm approaching my planned retirement, it's been my honor and privilege to work with you and to onboard my successor.
Curt Mcmackin joined US break CFO in August and has hit the ground running.
As I had been transferring my institutional knowledge, our experienced team of professionals continue to provide exceptional support.
Oh. This is my final earnings call I will retain a significant investment in Bronx, knowing that the company is in great hands Kurt.
Thanks, Ron.
Great to work with you on this transition and thank you for all you've done for brakes.
Morning, everyone.
Let's move to slide 10, which provides more details on our Q3 revenue and operating profit versus the prior year.
As Mark mentioned revenue versus the prior year was up 14% on a constant currency basis.
Entirely from organic growth of 13%.
Our organic growth benefited from price increases further implementation of our Ams rollout in France, and strong Brink's global services volumes.
Foreign exchange translation was a headwind of 8% versus the prior year, driven primarily by the euro and Argentine peso.
Our reported revenue was $1 1 billion up $61 million or 6% versus the third quarter last year.
Next turning to operating profit, which in constant currency was up 23% versus last year organic growth was 22%.
Acquisitions added another 1% and Forex was a 14% headwind.
<unk> reported operating profit of $127 million and 11, 2% operating margin, which was 40 basis points above last year, and 30 basis points higher sequentially.
Our organic operating profit growth was primarily driven by revenue growth and was partially offset by an increase in security losses, including the previously discussed $10 million related to the jewelry robbery in Los Angeles and expenses related to variable compensation.
I think it's interesting to note that this is our fourth consecutive quarter of double digit constant currency growth in revenue and profit in the second consecutive quarter of double digit organic growth in revenue and profit.
Now, let's turn to slide 11.
Starting with our operating profit and walking left or right.
Third quarter interest expense was $34 million up $7 million versus the same period last year, primarily due to higher interest rates and to a lesser extent higher levels of debt.
Tax expense was 32 million up only $1 million versus last year as higher income was mostly offset by a reduction in our effective tax rate.
Our full year effective tax rate forecast was lowered by 40 basis points to 32, 1%.
Which is 150 basis points lower than the full year 2021 right.
I'm doing the math $127 million of operating profit less interest expense taxes, and $3 million and Noncontrolling interest and other which includes higher interest income on health cash generated $64 million of income from continuing operations up $7 million over last year.
That then leads us to third quarter, adjusted EBITDA of $189 million up $19 million or 11% versus last year.
Primarily due to the higher operating profit and noncash variable compensation and as Mark mentioned EBITDA as a percentage of revenue was 16, 6% up 80 basis points versus Q3 of last year.
Finally, a note on our shares and EPS is.
As Mark noted earlier, we generated a $1 34 of earnings per share up 18% versus last year on a reported basis.
Share repurchases reduced our weighted average diluted shares outstanding by about $2 8 million shares versus last year or about 5% and accounted for about a five <unk> increase in EPS.
Our lower effective tax rate provided about <unk> versus last year.
Next we'll turn to free cash flow on slide 12.
Our 2022 full year free cash flow target has been adjusted from last quarter for several items that I will discuss in a few moments.
But first let me explain this chart.
The solid gray bars on this chart reflect our prior target.
The shaded gray areas reflect the changes to that target.
Variances at the bottom of the chart reflects the changes from last year and from our previous targets.
Starting on the far left adjusted EBITDA is expected to be approximately 775 million around the midpoint of our prior guidance and about $92 million higher than the prior year.
We now expect to use about $95 million of cash for restructuring and working capital an increase of $25 million over our prior target of $70 million. This.
This change is primarily due to a new restructuring plan as Mark reviewed we see this as an attractive investment given the favorable economics associated with the plant.
We've also included some risk for the change to Mexico Invoicing regulations that we discussed last quarter and that has temporarily increased our accounts receivable.
Our teams have been working diligently on this item and we are seeing progress with our Mexican DSO improving month over month.
Over it is taking longer than we had originally anticipated.
We see this as a timing matter at this point and expect to return to historical DSO levels in Q1 of next year.
Cash taxes are estimated to be about $120 million up $10 million from our prior guidance due to changes in earnings in tax regulations.
Cash interest is expected to be around $125 million also an increase of $10 million versus our prioritize target and $19 million higher than last year, primarily due to higher variable interest rates and higher debt levels.
Well see on the next slide that we are still well below our debt covenant levels.
Net cash Capex is targeted at $180 million.
Which brings us to a free cash flow target of approximately $255 million and a conversion of about 33% of adjusted EBITDA.
We see the 25 million change to our mid point and the restructuring and working capital com as more onetime in nature or a matter of timing.
It will be resolved next year, if you were adjust our full year target by the 25 million that would yield a 36% free cash flow to EBITDA ratio in line with last year.
Note that we have returned $45 million to shareholders from our recent share repurchases, which we see as a positive for our shareholders and has been a contributor to our higher interest expense.
Next we will look at net debt and leverage on slide 13.
This slide illustrates our net debt and financial leverage at the end of 2021 and the first nine months of 2022 as well as our estimate for the end of 2022 or.
Our higher level of net debt is primarily due to funding our share repurchases offset by $67 million in proceeds from our hedge monetization.
Which was disclosed in the last quarter.
As we look at leverage defining our estimated year end 2022 net debt by the midpoint of our expected EBITDA range yields and net debt leverage ratio of three two times.
Our leverage based pro forma adjusted EBITDA, including a full year of note machine should be approximately three times.
Note that our credit facility has a covenant based on net secured leverage with the ratio maximum of three five times, we are well below this maximum level with our expected 2022 secured leverage ratio of one nine times.
With this result, we maintained room for disciplined M&A or other capital allocation opportunities.
Next to slide 14.
To summarize we've delivered another strong quarter and remain on track to deliver strong full year results.
The full year guidance provided at the beginning of the year was based on FX rates at the end of last year, including the projected Argentine peso devaluation.
Since then we've seen significant strengthening of the U S dollar, especially against the Euro.
Based on current rates, we expect to see continued FX headwinds as we approach year end and as a result, we've updated our guidance to reflect the impact of FX translation in the second half of this year.
Despite the significant FX headwinds, our EBITDA and EPS guidance remains at the midpoint of our guidance range.
However, we now expect revenue and operating profit to come in at the low end of the range again based on negative FX translation, resulting from a strengthening U S dollar.
Our 2022 organic revenue and profit growth targets are still intact, and we expect to be able to achieve strong growth and margin expansion. Despite FX headwinds of $265 million on revenue and $51 million on profit versus the prior year.
For additional perspective, it's also important to remember that the three year targets. We provided last December are driven primarily by organic growth and continued operational improvements in our core business, which accounts for approximately 90% of our 2024 target revenue and 85% of our operating profit target.
Conversely, our new ATM managed services and digital retail solutions combined to account for about 10% of our 'twenty 'twenty four target and 15% of our operating profit target.
We're still on track to deliver our 2024 financial targets, which were disclosed on a constant currency basis last December as I mentioned earlier, we intend to provide 2023 guidance when we release fourth quarter results next February we.
We expect our financial framework to remain intact with mid to high single digit organic revenue growth and 100 basis points of margin improvement annually.
Given our strong performance thus far in 2022, the resilience of our business in challenging environments. The ongoing reopening of global economies, along with our growth and productivity initiatives I'm optimistic about our future performance.
And with that let's turn to questions.
We will now begin the question and answer session.
Ask a question you May press Star then one on your telephone keypad.
Speakerphone, please pick up your handset before pressing the case.
To withdraw your question. Please press Star then two.
At this time, we will pause momentarily to assemble our roster.
Yeah.
And our first question will come from Tobey Sommer of choice Securities. Please go ahead.
Hey, Good morning. This is Jasper Bibb on for Tobey. My first question was just on the revenue guidance beyond FX. What factors would you say came in above or below your expectations for the second half and also can you quantify how much revenue you expect no machine to add a fourth quarter.
Sure Tobey good morning, it's Mark.
Jasper sorry, yes, good morning.
You know we.
Relative to the guide we really are only seen sort of volume softness here really in FX I think there are some pockets of strength in the business.
And you know back and forth and I'd say, the global services business in and Asia continued to perform in the quarter in particular.
More and more metals and bank notes continue to move around the world, but but nothing really.
Fundamental for us underlying in the business and I've seen that weakness, yes, I think that you can see the organic growth in the single digits in.
In Europe , which was not double like everywhere else, but but all in all you know fundamentally I think our you know our.
Gross model organically still still intact. This is really really just an FX issue that we see coming out of the quarter as rates moved.
From our from our last call our end of last quarter into this quarter and Thats what were projecting forward into Q4.
Yeah.
Thanks, and then I was just hoping you could update us on your 24, our margin targets with the context of what Youre seeing in our labor cost inflation and also I guess the restructuring initiatives you announced this morning.
Sure I think our pricing and cost.
Relative to inflation posture will remain the same not only in the year, but you know across the strategic plan period into 'twenty four we expect to continue to match those and.
Drive productivity, but also put those through the market relative to pricing.
The restructuring will continue to do when when we see fit given the market outlook, but our framework is intact. As we mentioned earlier this morning 100 basis points a year.
You know mid to high single digit organic growth is still <unk>.
So our expectation and we feel good about it I think there is.
From a restructuring perspective, you know part of it could be market specific restructuring down the road, depending on what happens in local economies, but I think it's more about realigning our cost structure.
As we begin to.
Shift our business mix to higher margin.
Services, whether that's in our digital retail solutions, our ATM managed services that those are the areas we want to.
Invest more in and free up cost in our in the rest of our business, particularly as we're driving a more efficient business model that allows us to do that with our core infrastructure.
Okay.
Yes, Kurt Jesper as current Mcmackin I think you asked about note machine revenues in the fourth quarter.
And your original question I think maybe the way to think about that is if you.
You take the note machine revenue that we disclosed at the $131 million and divide it by four.
That will give you directionally, where you need to be for the fourth quarter.
Okay got it.
And then following up on M S.
50% organically this year, it's pretty impressive.
Could you maybe contrast for US why do you think your business is doing so well there are while it seems like some of the ATM hardware companies in the same market that really struggled this year.
Sure you know it.
It's.
Maybe there was one common word in there, which is ATM, but theyre definitely definitely different business models.
From our perspective the <unk>.
ATM companies that you referenced.
Our largely seen I think issues on the manufacturing side best I can see from the outside and this has to do with not only global supply chain.
But but inflation as well so I think that's a separate issue from from what we're seeing on the managed services side I think the 50% organic growth for us.
While it's a big number and it feels really good this is really.
Several you know are singles and doubles, along the way in our in our base business, whether it's P. A a or are the rest of our global footprint, but it's also a big step up as we're bringing on the BPC E network that we've previously announced.
In prior year, but were now, bringing all that on and expect to have that implemented kind of full.
On a full run rate by year end.
Last one for me would you say the current macro uncertainty is impacting your customers' behavior at all at this point and then do you think that macro might be also influencing your ability of this out and they were quite counts on the brink's complete the euro Felicia.
Sure.
I don't know that there has been.
A big shift due to the macro environment in listen I think people are definitely getting pressured.
With inflation.
And with currency devaluations in markets, particularly outside of.
Of the U S.
But I think this is.
This is still a function of as I mentioned, regardless of sort of where the economy. The economy is down 5% to 10%. There's still 80, 90% of our 90, 95% of the the money's still has to be picked up and still cared for and processed.
I will say, though that as people, particularly retailers are focused on streamlining their business and by the way this varies from retailer to retailer depending on how they did with inventory forecasting through the through the.
The pandemic.
Some retailers are playing offense, but certainly I think some are certainly battening down the hatches to to make sure. There I've got their cost structure in line have their store footprint in line, which which might create some apprehension I think the sales cycle on on any solution that is different or replacing a you know a long.
Standing service.
It has a longer gestation period, particularly when you think about pilot programs and getting through the pipeline, but you know we.
We don't see any real aversion to listening and or pilot and in fact, I would say on both.
Drs, but but even more so on on the.
The Ams side of the ATM managed services side, we're continuing to see pilots are all over the world and this is this is not just aggregating around P. A I are only around.
BPC, although we're seeing opportunities in those markets, we're seeing them in markets.
Where we are a trusted.
Trusted advisor, let's say for our banking partners that have allowed us to.
Have the opportunity to move upstream in the ATM managed services side and we think this is a.
A real opportunity going forward.
Okay I appreciate the detail there thanks for taking the questions guys.
Yeah.
The next question comes from George Tong of Goldman Sachs. Please go ahead.
Hi, Thanks, good morning.
And you just provided.
Hi.
Slide eight you provided the history of how brinks responded to various economic cycles. As you look at prior performance leading into a or heading into a recession. What are some of the indicators or responses that you would typically see from a customer in the event of a pull.
Back end.
And how quickly with those.
Signs of a slowdown show up in the business.
You know I like to say that there is.
However notes processed or how many.
How many stops but in fact that really probably isn't a great leading indicator because for instance, you know in the pandemic or our volumes actually went up.
As we nosed into a into the middle of 2020, just given the fact that.
Banks.
And.
And central banks, where we wanted to make sure that there was cash available in the marketplace for consumers and so we wouldn't necessarily see that I think what we would see George.
Would be.
Customers, either canceling locations closing closing down stores, especially.
Larger national accounts that have multiple stores, if you're starting to see store closures or.
Less frequency you know maybe of stocks, if we're servicing customers 345 times a week, maybe they pulled back it's not something we've seen yet and in fact, we're continuing to see sort of an expansion of that but for us.
Our answer and as we think through any.
You know potential situation first of all we want to look at we've looked at our cost structures, we announced restructuring.
Restructuring to get ready for something that might happen that just in case, but also shifting to brink's complete and our tech enabled solutions, particularly on the traditional money processing business.
Is a.
Benefit for us and we have the opportunity to create benefits for customers relative to allowing them to reach you know maybe a better price point down the road.
Great. That's helpful. And then as you think about your pricing power in the current inflationary environment. How would you compare it to historical trends has your pricing picked up commensurate with inflation and how does your organic revenue growth split between volume and pricing.
Sure.
I'd say pricing is.
The pricing environment has been.
I'd say consistent George.
And the last certainly since that since I've been here, but I'd say you know even in prior times.
Iran. Ken can speak to that if we need to do but I would say that this inflationary environment has certainly touched all industries, including our customers and I think this is where the conversation with customers is one that as well.
While no one wants to do.
To see increased costs I think they also clearly understand because we're seeing it in the same place.
<unk> had their own four walls, but the other side of that though is we've got a responsibility.
To also drive used productivity is our lever and mix to drive.
<unk>.
Profitability and deliver our commitment to our shareholders and not just put that on the backs of customers that that's not what we're doing and not what we intended to do I would say the environment itself has been globally.
It has been.
Consistent relative to moving inflation through I think in some markets like Europe , we tend to see a lag in inflation to price realization could be a quarter or two and we have seen that.
But I'd say that.
No difference in sort of the pricing posture on the other side you have to concern about the volume versus price. We've said this historically, it's been about 50 50.
It's largely.
In that similar range and maybe it's in some markets, particularly in North America, we've seen that move.
Not quite to 60 40, but closer to that.
Towards that but we really haven't.
We haven't seen a big shift there to be perfectly honest.
Very helpful. Thank you.
Great.
This concludes our question and answer session I would like to turn the conference back over to Mark for any closing remarks.
Thanks, Andrea and thanks, everyone. We appreciate.
The questions and certainly appreciate your support look forward to speaking to you next quarter.
Thank you conference is now concluded. Thank you for attending today's presentation you may now disconnect.
[music].
Yes.
[music].
Okay.
[music].