Q3 2022 Diversey Holdings Ltd Earnings Call
Greetings welcome to diversity Holdings L. P D third clutter 2022 earnings conference call.
At this time all participants are in a listen only mode.
Western and answer session will follow the formal presentation, if anyone should require operator assistance during the conference. Please press star zero and your telephone keypad.
Please note this conference is being recorded.
I'll now turn the conference over to grant and favor Investor Relations. Thank you you may begin. Thank you Hello, everyone and welcome to diverse <unk> third quarter 2022 earnings call with me today are Phil Whelan, 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 future results to differ materially from our projected results are described in this morning's press release and in documents, we file with the SEC the.
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 reference to 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.
I'll now turn the call over to Phil.
Good morning, all and thanks for joining our call.
Recognizing the unprecedented environment in which we're operating we're going to take a more abbreviated approach to opening remarks allow ample time for questions.
My comments will first focus on our core business and how the team has been executing.
I'll, then provide an overview of the macro environment and headwinds, we're managing and how they are impacting divesting.
And then finally I'll turn the call over to Todd to provide additional details on the quarter and outlook for the remainder of 2022.
So turning to the core business.
Whilst our core business results continue to show strength with 13% constant currency organic topline growth.
Continued new customer wins and double digit price increases the reality is that currency is a significant drag on our results.
Revenues improved by approximately 4% as compared to the prior year and over 17% on a constant currency basis, we saw strong revenue growth across both halves.
Institutional and food and beverage businesses, which increased by 12, 33%, respectively on a constant currency basis.
While input costs have continued to rise we've been implementing price increases across our various geographies and products.
Through the first nine months of 2022, we've realized more than 10% revenue growth from pricing and it's accelerated to more than 12% in the third quarter.
I expect this level of pricing to increase further.
As we continue to combat the various inflationary pressures.
In addition to our pricing actions. We've also added a number of new customers representing more than 3%.
Annualized net new wins we.
We continue to be encouraged by our ability to add new customers and retain existing customers.
We believe this is a testament to the strength of our product offering and service, especially in this ever evolving and inflation.
Barbara.
Finally, we continue to improve our adjusted EBITDA margins from quarter to quarter.
12, 8% margin in the third quarter is 40 basis points above the second quarter at 370 basis points above the first quarter of this year, reflecting the continued maturity of pricing actions are significant assets to manage costs and a challenging pricing environment.
As we stated last time, we spoke we expect our consolidated margins to improve quarter on quarter throughout this year as our pricing and cost initiatives are implemented.
Before I move to the macro environment I'd like to provide a quick update on our supply chain improvement projects.
We've completed a warehouse transition in Europe and have now largely completed on North American warehouse consolidation into our new Kentucky facility.
Our efforts are now focused on consolidating our manufacturing into the same Kentucky facility, which we expect to be completed in the first quarter of 2020 right.
As a reminder, by co locating our main warehouse and manufacturing and adding more capacity to bring currently contracted volumes in house at all.
<unk> freight lane, we expect this project to bring roughly 100 basis points improvement to total company margin after its completed.
One last item of note as it relates to our warehouse transitions and in flight manufacturing consolidation, we made a strategic decision to build up additional inventory and utilized higher cost freight solutions to minimize supply disruption with our customers. While this puts some short term pressure on our cash.
We believe it's the right thing to do for our customers.
And such pressures are expected to be temporary.
So moving then to the macro environment, we continue to see certain headwinds to space with increased pressure in this global inflationary environment, specifically foreign currency exchange rates continue to be our most significant challenge.
In the previous quarter, we updated our full year outlook to reflect an additional $30 million in headwind associated with existing exchange rates.
Our assumption was predicated on a strong U S dollar persisting for the remainder of the.
Until we see clear evidence.
Road crashes are beginning to subside, we believe it's prudent to lower our fully of adjusted EBITDA outlook to an estimate of at least $313 million.
Whilst we are pleased with our pricing and cost containment actions and the call fundamental aspects of our business. The current macro environment continues to present difficult, but temporary challenges that we need to navigate.
We expect the inflationary environment to eventually stabilized and the majority of our pricing actions to remain intact supporting long term growth margin improvement.
The underlying trends of the business remains positive our confidence that we will exit this unprecedented environment and a much stronger position.
Again.
With that let me know cross the call over to Todd give you some additional details for the quarter.
On our outlook for the remainder of together.
Thanks, Bill and thank you all for joining us.
As Phil mentioned I plan to provide some additional color on the quarter, along with some select balance sheet details.
I will then move to our outlook for the remainder of 2022 prior to opening the line for Q&A.
First starting with our quarterly results.
Net sales for the quarter were $689 million, an increase of $24 million or 3.6% as compared to the third quarter of the prior year and 17% on a constant currency basis.
Our institutional business, which is roughly 70% of our revenue was $479 million or 1.6% decrease over the prior year quarter.
On our currency adjusted basis or institutional business revenues increased by 12% driven by a combination of new customer wins pricing actions and expansion with existing customers as we continue to progress towards a return to pre pandemic levels.
Our F&B business, which is roughly 30% of our revenue.
Is also generated positive momentum supporting our long term growth falls.
We continue to experience high customer when rates for new business in our water treatment products are further expanding our organic growth.
Ah revenue of $210 million in the quarter as an 18% increase over the comparable prior year quarter, and a 33% increase on our currency adjusted basis.
As it relates to adjusted EBITDA.
Consolidated adjusted EBITDA for the third quarter was $88 million or 17.4% decrease as compared to the prior year quarter or a 2.5% decrease in constant currency.
Our institutional and food and beverage segments delivered adjusted EBITDA of $69 million and $27 million, respectively, representing declines of 18.4% and 21.6%.
Both segments were substantially impacted by the strengthening of the U S. Dollar as we previously discussed.
And high input costs inflation, particularly in Europe due to the war in Ukraine.
We continue to take 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 difficult to predict and has progressed at an unprecedented pace.
While costs volatility can put pressure on margins in the short term overtime. 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 cost as we progress towards 2023, we initially discussed in our first quarter earnings call that we expected our full year pricing for 2022 to be an increase of greater than 8%.
Considering continued inflationary pressures coupled with the success of our rate increases to date.
We now expect a full year pricing for 2022 to be greater than 10%.
Combined with our steady productivity gains, we anticipate offsetting inflation person.
And as inflationary pressures moderate we expect to capture margin improvement.
Moving to our balance sheet.
Free cash flow was a net outflow of $50 million in the quarter, which brings year to date to $60 million compared with a net outflow of $141 million in the first nine months of last year.
While free cash flow is lower than expected it was heavily impacted by investments and our supply chain projects.
We continue to expect positive free cash flow in the last quarter of the year consistent with historical cash flow can seasonality.
Given the current environment, we will likely be selective in the short term when considering opportunities and our strong pipeline of accretive M&A.
At quarter, and we had cash and cash equivalents of $249 million in available liquidity of $692 million, which we view as a solid position in the current environment.
On that front, we have approximately 2 billion in gross debt with roughly 50% fixed and 50 per cent floating debt after interest rate swaps.
We also previously established interest rate caps that are significantly mitigated our exposure on roughly two thirds of the floating component of our debt.
We have already hit our interest rate caps as of our previous earnings call.
For the remaining $350 million a floating deaths that is currently not hedged every 1% increase in rates represents approximately three and a half million dollars an annualized incremental interest expense, which we believe is manageable considering our strong cash position.
Our net debt leverage ended the quarter at five times.
We continue to target leverage of three times, which we expect to achieve over the next several years as our pricing actions tasteful and the current inflation Mary in foreign currency exchange environment debate.
Moving to our outlook for the remainder of the year.
We continue to be encouraged with the resiliency of the core business and our ability to capture market share while implementing aggressive pricing actions reflective of the inflation environment, we are tackling.
While our execution in the first nine months of the year has been consistent with our expectations. The macro background continues to be broad ranging and unpredictable.
As Phil mentioned, we believe it's appropriate to update our outlook to reflect the fast changing exchange rate environment.
Our current outlook now assumes a full year headwind more than $270 million to revenue in over $50 million to EBITDA associated with the continuous strengthening of the U S. Dollar.
While we have a number of exchange rate hedges in place. We are obviously not in the business of predicting foreign currency swings and when they may revert.
We have assumed such volatility will continue to persist and potentially worse and for the remainder of the year.
We have also included an additional $10 million to $20 million headwind for input costs with the majority of the increase related the caustic.
We plan to reflect such cost increases in future pricing actions.
Based on these items were updating our full year revenue guide to mid single digit percentage growth.
Which would be mid teens growth in constant currency.
And we are lowering the adjusted EBITDA outlook for the full year to at least $330 million.
As Phil mentioned, the underlying trend of the business is positive.
We remain confident that our business will exit this unprecedented environment in a stronger position than when it began.
With that operator, please open the lines for questions.
Thank you if you would like to ask a question. Please press star one on your telephone keypad and confirmation Telmo indicate your line isn't the question queue. You may <unk>, if he would like to remove the question from the queue.
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We ask that you ask one question and one follow up question.
Our first question is from men of Pattanaik with Barclays. Please proceed.
Hi, how are you. This is actually Ronan Kennedy offering Madonna may I ask you guys, if you're able to disaggregate for each of the decisions that volume.
With commentary on on wins and penetration price and effects.
For the third quarter results.
Yeah. Good morning, Ryan Yeah, I can do that for you is still here.
Hello.
Hotel.
Constant currency was 17% I'm pricing.
<unk>, obviously, the balance of 5% was <unk>, if I break that down for.
Institutional.
Which was 12% on a constant currency basis, the pricing was around 9%.
Meaning the bullying.
3%.
And on food and beverage.
Constant currency growth was 33% with about 20% of pricing and 13% full volume.
She always volume numbers I quoted to include some m&a's may be may significant almost with the food and beverage that 13% volumes about 8% due to M&A and 5% due to sort of underlying business volume growth may be a bit more color that about 5%.
A third.
That was what was the treatment.
That you might remember we introduced proposition they started last year.
On the other two thirds.
Just a result of underlying growth in the business.
Have you got all that.
Yes. Thank you for that I appreciate it and then I'll.
So you've spoken to the resilient to the core business and faces.
Significant challenges COVID-19 than inflationary supply chain constraints exacerbated by geopolitical events of course, there was FX can you just remind us about overall recession resiliency in the downturn playbook and then also if you have.
Your views on outlook and win.
From a timing standpoint, you could recover the dollar cost of inflation and start to extend start margin expansion.
Yeah.
Sure I mean, let.
Let me start by saying if we if we look at history. This business has been pretty resilient in recessionary times and I think that's good logic for that if you think about the part of the business that's in food and beverage manufacturing and health cash in schools. These things not really.
Impacted.
By any recession meet demand and consumers of course, we do have we do have a little bit of.
Exposure, there on food and beverage.
A food service and hospitality. So when he wrote all of that together if you look at.
Previous sections with kind of seen a flat.
Top line.
I'm trying to answer the question what are we seeing.
At the moment and maybe try to give you a bit of.
Geographical insight into that if I start with the emerging markets I think the businesses.
It's really not seeing much impacted toll.
We are seeing.
Most of the emerging markets continue to grow of China would be the exception.
That's still really in the in the grip of Covid, if I look at North America, I'd say, it's a shade softer.
When we last cycle, albeit not too much and I think that.
It's tough to disaggregate, the labour impact from any kind of true recessionary impact and what I mean by that is example in our health care business.
We're selling really strongly an infection prevention, but much less in our building the reason being that the customer doesn't always have the labor that they would want to carry out all of the prices that they would want to and then I guess coming over to Europe again, I'd say, it's a touch softa.
But but but a similar point most of the.
Any change that we've seen as actually being in the UK.
Right.
By some strange political goings on in the economy again, I think Brexit is having a real impact on all hospitality foodservice customers are complaining about the lack of leyva, if I look into southern Europe in particular actually volumes holding up quite strongly so I think it's fair to say that.
We're very cautious we're planning for tough times ahead.
But at the moment.
It feels like it's like the labor issue is a big a woman and underlying recessionary impact on demand.
Oh.
Thank you and that's how I managed just ask on the timing for the expectation of time for recovery of dollar cost inflation, and then margin extension.
Hello.
Dash.
We are recovering.
On a dollar basis.
And you know obviously, we are seeing our margins overall improved sequentially in order to get fully back.
Fully recovered the inflation in percentage is going to take longer.
I'm really the key determinant there is when we see the top.
So you'll you'll neither things like escalate I think we've we've kind of seen the top and what we're seeing some.
Signs if reduction but on other products like cost. It you know it just continues to increase since since we last spoke ta.
We had a we had a big surge in cost steak without a further increase that come out over this week. So.
It's hard to give you a clear view of.
When we when we can cover a percentage margin, but what I can tell you is as we see those increases so we're taking pricing.
Took a big caustic related price increase on the first of October I'm going to take another one on the 15th of November . So, we're just going to keep pricing for this inflation, but until it until it stops we're not going to get to full margin.
Coverage.
Thank you appreciate it.
No lettuce.
Our next question is from Stephen hands with Morgan Stanley . Please proceed.
Hi, guys. Thanks for thanks for taking my question.
I wanted to ask on the kind of the the four Q guidance and what's implied in terms of volume growth.
And you know I was where.
Kind of thinking about the EBITDA run rate that the <unk> guide implies like do you kind of view this as as a bit of a bottom or.
Would you kind of expect continued improvement off of off of that level. Thank you.
Yeah I think.
The adjustments that we've made today.
As we setup predominantly to do with four acts.
Inflation.
Only to a very small extent any view of that.
<unk> Mister I mentioned on <unk>.
Credibly tough to predict what's going to happen to to Xxxx next year of course, we're going to have a year on year impact if the if the forex right thanked changed.
On the inflation I think if you look back since the war broke out and we we gave a guide on what we thought would happen with inflation and pricing. We said we thought we cover most of it in fact inflation was ended up being a lot higher than that but all of the extra we covered with price.
The challenge here is that when the inflation come so late in the year it becomes very difficult to cover it in the year, but as I, just said announced Orion. This question. We are taking the pricing actions with <unk> and therefore will cup of ice.
Inflationary impacts going into.
<unk> will next year.
So overall as.
As we look I was we look at volume I think the other part of your question.
We're reflecting a touch of softness that I mentioned, but we're not including the key for any any significant.
Can change.
Reflecting back some more price.
Got it and then maybe just as a follow up on on the Kentucky.
Transition, how how much of a headwind.
Where you kind of feel skiing.
<unk> in the third quarter and in terms of EBITDA and is there any expectation for further headwind in four Q.
Sure so.
I think when we last spoke to you. We said we might have 20 to 30 million of top line that would move potentially out of the third quarter into the fourth quarter, just because it could be some backlog in.
And delivering to customers.
We actually were able to move a bit quicker than that and the number of top line was about $10 million.
Dollar. So you would expect we see until 10 million moved from Keith three into Keefe also at EBITDA.
Obviously, not a not a significant number.
As we sit here today, we are almost completely co op at $10 million, So I wouldn't anticipate any.
Any impacts coming out of key fall into couponing next year.
Thank you.
Thank you.
Our next question is from Christopher Parkinson like let's say, Ohio. Please proceed.
Good morning does cure Nonpareil, Chris.
I was just wondering in terms of pricing can you break out out of that kind of 10, 12% that you've seen this year what percentage is coming from the surcharges as opposed to kind of the core pricing initiatives and then how we should think about that resiliency once those raw materials start coming down in terms of your ability to keep some of that core pricing. Thank you.
Yeah sure I think we said before about 20% of the overall pricing is relate to the surcharges as my dining anything's changed.
I think what we're now looking to do as we as we do the key for Additionally, the key one price increase.
And institutional.
Is to replace this charge.
With structural price, so we'll be making an overall increase in doing that conversion to the institutional business.
But for the food and beverage business, which which remains <unk>.
<unk> significantly exposed to costate, which continues to go up will be continuing with the.
With the processes that we've had this year in retaining a balanced structural price unset charge.
Great and then maybe just a quick follow up on on cash flows how should we think about kind of that normalizing now that you're through some of the initiatives with Kentucky and maybe.
Capital normalizing liberating 2023, and the use of cash now given the economic backdrop I mean, it does still seem like you have M&A pipeline, which is probably robust things might be attractive at these price levels do you still kind of focus a little bit more on some of those bolt ons or is there more of a focus now on maybe we.
Reducing debt in the near term based on the kind of backdrop that we're looking at thank you.
Yeah. Thanks. This is Todd let me take that one.
First I think our cash flow is a little bit less than we wanted in the third quarter, mainly driven by these flip print projects we spent ah.
More than we expected or anticipated some of that will bleed into the queue for us we fit.
Finished the warehouse, but also start up the manufacturing and just for some color on that.
We.
Had.
Incremental inventory of about $20 million when you look at the queue.
In Q3 that was kind of by design, so that we could service our customers and the transition as best we could understanding it's not an easy thing to convert and move warehouses hire a bunch of new people, who don't understand you're picking process.
And so we wanted to make sure that we.
<unk> had as much inventory as we could to help soften the landing on that transition. So that was about $20 million in the quarter. We also had a longer period.
In terms of crossover of running multiple warehouses at the same time, which drove some higher duplicate.
Cos and those transitions, both in Europe , and North America.
And so that was the preponderance of the cash flow.
Challenge in Q3, and like I say, we would expect some of that to spill over in queue for but the good news on that is.
One time in nature and linked specifically to these two transition projects, which will come to as Phil mentioned almost full completion here in the next several weeks so that's.
That.
As as we look out.
And think about <unk>.
Collection going forward.
With some expected earnings improvements next year and to take out of those significant one times. This year year on year, you would expect to see pretty decent free cash flow next year.
Great. Thank you.
Thank you.
Mmm.
Our next question is from Joshua Secondarily Ely S. Please proceed.
Good morning. This is Lucas by loan them for Josh. So I just wanted to go back to crossing if we could so it looks like you guys had probably like mid cadence kind of tricky to stack and the quota, they're making like kind of get to change carriers stack in the fourth quarter is your exit right. So.
<unk> on the Annualization of that heading into next year.
Does that mean, we should say you should have at least mid single digit crossing or are you thinking it's gonna be five in that even with what you've got coming in the fourth quarter.
Yes, <unk> firstly spot on.
With those two.
Stacked numbers, but kind of mid teens in the third quarter it'd be high teens.
In the fourth quarter, so yeah look I think.
There is going to be quite some significant rollover pricing.
Just mentioned, we're also expecting to take some further price at the start of the year in key one so I think the overall pricing number.
Probably be a little bit ahead of her.
Mid single digits space thing.
Which I think it was what you said so yeah I think we will have some quite nice pricing and gain for next year, which I think we're going to need because obviously there's also.
Some rode over on the on the inflation.
And therefore, it's going to be really important that we have both the rollout of a price on the new price.
Great. Thanks, and then and just on the role of materials. So so I think we sort of previously talked about.
The expectations, there was kind of like a 45% sure you stack in the second half. So I was just wondering if you could tell us kind of I guess, what the third quarter wasn't then.
Are you expecting that to kind of accelerate further into the fourth quarter.
I guess in line with what.
Your competitor does it kind of staring at the moment I think where they are kind of.
They're probably ended up above 50% on a curious tech.
And I think instead of at this stage you guys would kind of be a couple.
Couples of fear, probably specialty chemicals that it's still saying like market increases sort of sequential is mccalip from sort of three Q to full care. So if you could just kind of yes, I understand you're out.
Yeah sure. So you're absolutely right last time, he said Q3 would be around 45%.
On the two years that keeping them was actually 50%.
And again I think you are right, we could we could see that in a jar a little bit.
In key full.
Really just depends on what else happens to cost date as we as we close out of the year.
Great. Thank you.
Our next question is from Adeline Rodriguez Smith Fred Smith. Please proceed.
Thank you good one.
Real quick question I'm going back to the surcharge question me one.
How successful have they been <unk> been able to fully implement them and two can you talk about the receptive of your customers like how subdued all day incongruity into surcharges into spoke through a pricing like what is the rationale for them to accept that.
Yeah. So.
I think the surcharges have been very successful.
It's worth maybe just reminding you that they want.
And every geography.
For example, a lot of.
The emerging markets where surcharges.
Sorry <unk>.
But it has often been high inflation.
And customers are used to that we've continued purely with structural price. The main place that we've used.
Charges. Additionally, this year as in Europe , well, obviously, it's tradition ebay.
Very modest inflation and now we've seen very.
Very significant.
<unk>. So I think the surcharges worked while we were able to put it in quickly more quickly probably then we could have done with structural price.
And that's why I think it's theft as well, but I think now feels like a time.
To move to structural price.
I think that.
The conversation.
Having I think we're operating in the new world in a new environment.
Where costs are elevated and I don't think there's any expectation in the in the in the short term that we're going to go back to 2019.
Cost levels and therefore.
I think it's better that we moved back to a a structural relate.
Relationship with customers and that will take the surcharges charges out so that the prices that were going through at the moment.
Okay, and if you get into downturn next year.
Will it become more challenging to raise prices.
[laughter].
I think I would actually I'd area I think.
We're not anticipating.
Really significant.
Downward volume movements and we're extremely committed.
Maintaining the profit pool for ourselves onto the industry over the over the medium term and therefore will be very clear.
That we need to pass pricing. The other thing I think that's worth saying is if you think about what we do we.
We we provide cost and efficiency savings for our customers. So it does not extend a new high cost base.
He is an opportunity for us to deliver more value to customers and we're certainly seeing the solutions that we can offer to save on on water and energy and labor.
Customers are even more receptive I would say now than they were before and I think in that context.
And given the hour costs, a very small <unk>.
Proportion of a customer's cost space.
I don't see any reason why we can't continue to.
Take take price increases as we continue to deliver real value our customers that they can see we can measure of improve.
Okay. Thank you for the insight.
Thank you.
As a reminder to star one on your telephone keypad. If you would like to ask a question. Our next question is from <unk>.
Tapper with RBC capital markets. Please proceed.
Hi, This is John filling <unk> could you just quickly touched on customer reception to the price increases and maybe retention just my second if possible. Thanks.
Sure look I think Ah on customer.
Receptivity.
It's been.
<unk> felt like a long process and nutritional process, both for us and our customers.
But I have to say I think the team had done a really fantastic job.
Really explaining to customers, what's happening to input costs.
Demonstrating to customers the value that we give and therefore I think that process has gone actually really well, particularly given we've done wave after wave and food and beverage I think we've probably had six waves of pricing this year.
<unk> attention, we haven't really seen much.
Much changed so I think we lost reported in 99% retention rate for top cost for the large customers.
That hasn't changed so we haven't seen a rail drive.
To churn as a result of the pricing is clearly something we are enormously.
Vigilant all of them were talking to the customers. It very very regularly through this difficult period as we as we sit here today.
Retention or Chinese is no different how it was before.
Mhm.
Great. Thank you let me just quickly could you just touch on get M&A given.
Globally, Franklin and market in multiples coming down given the strong pretty profile is there any areas are more focused on today or is there just kind of the same the same playbook as always.
Yeah in terms of our approach to M&A I don't think that's changed what we target just as a reminder, we've been targeting companies $10 million to $50 million in size.
We would expect to spend six to 10 times for those companies.
We do have a funnel.
We're actively and currently working the good news is that in those in that funnel on the ones that were talking with were in a proprietary discussion on almost every one of them. So that allows us to actually control some of the timing.
Clearly we're cognizant.
To the opportunity, but also to our current net debt leverage and.
Are you are not likely to see us close the deal in the fourth quarter here, but that does not mean, we don't have an active funnel and will act appropriately if something is strategic to us and makes sense.
And has a high return so that's how that's how we're thinking about it it hasn't changed the opportunity hasn't changed our excitement hasn't changed about it we're just being prudent in the current market situation to make sure. We have the right balance between free cash flow and cash flow and emanate.
Great. Thank you.
You have reached the end of our question and answer session I would like to turn the call back over to management for closing comments.
Yeah. Thank you for that in closing I would just like to say I'm really proud of the team have and what they've done this yet so far in pricing.
Managing costs and.
In customer attention.
And and winning new business, particularly in a strategic drivers around global accounts of water treatment in U S. Food service, Yes of course, we're having the grapple with inflation and currency.
I think we all believe some point.
Those issues.
So we're going to remain.
Steadfastly focused on our strategy on I think you've seen the underlying business numbers that we're doing a good job of delivering against that so thank you. All hope you have a good day and thank you for listening.
In Kansas does conclude today's conference you may disconnect. Your lines at this time and thank you for your participation.
Mmm.
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Uh-huh.
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