Q4 2023 Dole PLC Earnings Call
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Hello, everyone welcome to the adult plc fourth quarter and full year 2023 earnings conference call and webcast. Today's conference is being recorded live over the Internet and is also being recorded for playback purposes.
Operator: Hello, everyone. Welcome to the Dole PLC fourth quarter and full year 2023 Earnings Conference Call and Webcast. Today's conference is being recorded live over the Internet and is also being recorded for playback purposes. Currently, all participants are in listen mode only.
All participants are in listen mode only.
Operator: After the speaker's presentation, there will be a question and answer session. For opening remarks and introductions, I would like to turn the call over to the Head of Investor Relations with Dole PLC, James O'Regan. Please go ahead.
After the speaker's presentation, there will be question and answer session for opening remarks, and introductions I would like to turn the call over to the head of Investor Relations with adult plc, James Oh Reagan. Please go ahead.
Thank you.
James O Regan: Thank you. Welcome, everybody. And thank you for taking the time to join our fourth quarter full year 2023 earnings conference call on the web. Joining me on the call today is our Chief Executive Officer, Rory Byrne, our Chief Operating Officer, Johan Linden, and our Chief Financial Officer. During this call, we will be referring to presentation slides to supplement our remarks, and these, along with our earnings release and other related materials, are available in the Investor Relations section of the website.
Welcome everybody and thank you for taking the time to join our fourth quarter and full year 2023 earnings conference call and webcast. Joining me on the call today is our Chief Executive Officer, Rory Burns, our Chief operating Officer, Lindon, and our Chief Financial Officer, just tended to buy.
During this call well be referring to presentation slides to supplement her remarks.
Along with our earnings release and other related materials are available on the Investor Relations section of our website.
James O Regan: Please note, our remarks today will include certain forward-looking statements within the provisions of the Federal Safe Harbour Law. These reflect circumstances at the time they are made, and the company expressly disclaims any obligation to update or revise any forward-looking statement. However, actual results or outcomes may differ materially from those that may be expressed or implied due to a wide range of factors, including those set forth in our SEC filing. Information regarding the use of non-GAAP financial measures may be found in our press release, which also includes a reconciliation with the most comparable GAAP. With that, I'm pleased to turn today's call over to you. Thank you, James. Welcome, everybody.
Please note our remarks today.
Certain forward looking statements within the provisions et cetera, and security Safe Harbor law.
Circumstances at the time they are made on the company expressly disclaims any obligation to update or revise any forward looking statement.
Actual results or outcomes may differ materially from those that may be expressed or implied due to a wide range of factors, including those set forth in the recipe.
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Information regarding the use of non-GAAP financial measures may be found in our press release, which also includes a reconciliation to the most comparable GAAP measures.
I'm pleased to turn today's call over to Uli.
Thank you James and welcome everybody and thank you for joining us today as we discuss our results for the fourth quarter.
Rory Patrick Byrne: And thank you for joining us today as we discuss our results for the fourth quarter and the full year of 2023. Turning firstly to slide four and the recap of the key developments in 2023. Well, 2023 was a year of good progress and positive momentum for Dole PLC, with the business growing its position as the leading provider of fresh produce in the world. Across the group, there were many new initiatives and innovations to drive the business forward. We launched Dole Organics and the Go Organic brand in Europe, and this has been positively received by customers. It complements the Dole Organic banana and pineapple offering already available across Europe and North America. We launched our premium Golden Selection pineapple during 2023, and this was very well received by all of our customers and provides a strong base for further planned innovation in this category.
Full year of 2023.
Turning first to slide four a recap of the key developments in 2023.
Well 2023 was a year of good progress and positive momentum for Joel P&C business growing its position as the leading provider of world class.
Across groups or many new initiatives and innovation strive to beach ball winch launched organics to go organic brand in Europe. This has been positively received by customers.
Organic comprehensive drove organic banana pineapple offering already evaded me call sure.
Yes.
We launched a premium Golden selection panel during 2023, and this was very well received by all of our customers provides a strong base to further drive innovation in this category.
Rory Patrick Byrne: We continue to make good progress in consolidating our third party shipping volume and managing this key aspect of our operations efficiently. As interest rates remain high, we have continued our focus on reducing leverage. During 2023, we realized significant value from the sale of non-core assets such as non-operational land in Hawaii and out-of-service vessels. Altogether, we generated cash proceeds of some $84 million from the sale of non-productive assets, or almost a dollar a share in crystallized cash value, which together with our strong free cash flow generation contributed to a reduction in net leverage from 2.8 to 2.1 at year end. Earlier this week, we announced an agreement to sell our 65% interest in Progressive Produce for gross cash proceeds of just under $120 million. We expect the net proceeds from this sale to be approximately $100 million.
So you can make good progress Saturday third party shifting volumes managing this key aspect of our operations efficiently.
As interest rates remain high we continued our focus on reducing leverage during 2023, we realized significant value can you shed non core assets such as non operational launch in Hawaii.
The share of assassins altogether, we generated cash proceeds.
So $84 million sale.
Deposits are almost a dollar a share crystallized cache body.
This together with our strong free cash flow generation contributed to a reduction in that.
Now, let me bridge from two <unk>.
2.1 after year end.
Earlier this week, we announced an agreement to sell our 65% increase in progressive approaches gross cash proceeds of just under $120 million expected net proceeds from this sale to be approximately $100 million progressive business wasn't discrete parts into diversified Spartacus rest of world segment.
Rory Patrick Byrne: The Progressive business was a discrete part of the Diversified Americas and Rest of the World segment, and this realized a successful exit and an attractive valuation from our initial $30 million investment back in 2016. As announced, we will use the proceeds from this sale to reduce our leverage further. Now turning to slide five and a recap of the financial highlights for 2023. We are pleased today to report very strong full-year results, achieving an adjusted EBITDA of $385 million for the full financial year, which outperformed our initial guidance for the year of $350 million by 10%. For the full year, group revenue increased by 2.8%, driven primarily by higher prices.
This revised SaaS like an attractive valuation.
Additional turnkey dollar investment.
2016.
We will use the proceeds from the sale to reduce R&D Richard here.
Now turning to slide five a recap of the financial highlights for 2023.
We are pleased today to report very strong full year results, achieving an adjusted EBITDA of $385 million.
Here we go.
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The higher pricing.
Rory Patrick Byrne: Adjusted EBITDA increased by 6.9%, achieving an adjusted EBITDA margin of 4.7% compared to 4.5% in 2022. This was driven by a strong performance in our diversified fresh produce EMEA segment and stable, consistent performances in both our fresh fruit and diversified fruit America segment. Adjusted diluted EPS was $1.24 for the full year compared to $1.44 in the prior year, with the reduction primarily due to higher year-on-year interest expense.
Adjusted EBITDA increased by six 9% achieved an adjusted EBITDA margin of four 7% compared to 415 and 2022.
This growth was driven by a strong performing charge brush like fresh produce.
Segment Star.
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Adjusted diluted EPS was $1 24 for the full year compared to <unk> 44 in the prior year with the reduction primarily.
Due to higher year on year interest expense.
Rory Patrick Byrne: As we continue to emphasize, efficient capital management and allocation are significant priorities for us. In this regard, we're really pleased with our strong cash generation, which led to a reduction in net debt of over $200 million at the end of 2023. Our success has been driven by a combination of factors such as good operating performance, a disciplined approach to capital investment, excellent working capital management, and, as mentioned earlier, a strong year for the sale of non-core assets. Turning now to slide seven for our operational highlights, starting with our fresh food division.
As you continue to emphasize.
Fishing capital management and allocation a significant priority for us.
With regards we're really pleased with our strong cash generation, which led to a reduction in net cash of over 200 million.
I have to get out to 'twenty two 'twenty three our success has been driven by a combination of factors such as good operating performance Additionally, aged coffee and bathrooms.
Working capital balance sheets are as mentioned earlier, our strong year can say non core assets.
Turning now to slide seven for our operational highlights starting with our fresh food Division.
Rory Patrick Byrne: Well, this segment delivered a robust performance for the year with adjusted EBITDA up $209 million, which was approximately 2% ahead of 2022. In the fourth quarter, the segment faced an extremely strong 2022 comparative, and taking this into account, we were very pleased with the result delivered. Over the course of 2023, a key growth driver was a strong recovery in our European business after a challenging 2022, along with good profitability in our pineapple business, which benefited from an improving supply-demand balance in the key Costa Rican growing region, as well as the success of our golden selection pineapple in the marketplace. In North America, our operations are continuing to perform well, but did face challenges during the year with intense competition in the marketplace and lower commercial cargo profitability We also had the impact of higher sourcing costs due to the combination of lower production volumes in many growing regions and currency pressures in certain sourcing countries.
This segment delivered a robust performance for the full year with adjusted EBITDA of $205 billion between toxicity, 2% ahead of 2022 and the <unk>.
Fourth quarter segment faced an extremely strong 2022 comparison.
Taking this into account, we're very pleased with herself deleverage.
Over the course of 2023, three key goals driving strong recovery in our European business. After a challenging 2022, along with good profitability in our pineapple business, which is benefiting from improving supply demand balance into key Costa Rica growth region as well as by the success of our gold production.
Find out in the marketplace in North America, our operations are continuing to perform well, but did face challenges during the year with intense competition in the market marketplace more commercial cargo profitability.
We also had the impact of higher sourcing costs due to the combination of lower production volumes in that region.
Currency pressures and certain sourcing countries.
Rory Patrick Byrne: As always, supply and demand dynamics in the banana market and, to a lesser extent, in the pineapple market remain important variables for the year ahead. Weather is also an important variable on the supply side that we monitor, and with the new conditions increasingly being felt in the current banana production cycles, we are anticipating industry volumes to remain low in 2024. That said, we believe we're well prepared to handle this.
Its always supply and demand dynamics in the banana banana market and to a lesser extent.
Clinical market remain important variables euro hedge.
Whether it is also an important variable on the supply side that we ship.
Conditions, increasing hating it sounds from the current banana production cycles and guarantees.
Staging industry volumes to remain low in 'twenty three 'twenty four.
We believe we're well prepared to have a strong and experienced management team are keenly focused on risk management driving operational efficiencies investing in projects, which we anticipate will deliver sustainable growth and profitability.
Rory Patrick Byrne: Our strong and experienced management team is keenly focused on risk management, driving operational efficiencies, and investing in projects which we anticipate will deliver sustainable growth and profitability. We believe that this approach, together with continuing to leverage our established and diverse sourcing infrastructure and customer base, will allow us to deliver another strong and consistent performance in 2024. Operationally, the business has continued. Thank you.
We believe that this approach together with the continuing we continue to lead the charge established and diverse sourcing infrastructure and customer base will allow us to deliver another strong condition.
2024.
Operationally the business is concerned it could continue.
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Okay.
Rory Patrick Byrne: Sorry, turning to the Diversified EMA division now. Our Diversified EMA segment finished 2023 on a very strong note to round off an excellent performance for the full year. The segment delivered significant like-for-like growth in the quarter and full year while benefiting further from improved currency rates. Revenue growth continues to be driven by higher pricing, more than offsetting volume declines across the segment.
Turning to slide eight and.
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Our diversified EMI segment finished 2023, that's very on a very strong note to roundup and excellent performance in full year.
The segment delivered significant like for like go to the quarter and full year benefits from improved currency rates.
Revenue growth continues to be driven by higher pricing more than offset volume declines call segment continued to progress while in terms of driving synergies from the Mds segment, that's why does being attentive to internal investment bolt on acquisition opportunities for.
Rory Patrick Byrne: It continues to progress well in terms of driving synergies in the MAS segment, as well as being attentive to internal investment and bolt-on acquisition opportunities that can support further expansion across the European marketplace. Overall, we anticipate continued strong performance for our diversified segment in 2024, as we continue to leverage our strong market positions, operational integration, and investment opportunities. Now on to Diversified Americas.
For further expansion across the European marketplace.
Overall, we anticipate continued strong performance for our diverse diversified segments of 'twenty 'twenty four and you continue to leverage our strong market positions operational integration and investment opportunities.
Now on to diversified Americas diversified tobacco segments delivered consistent results in the fourth quarter to round out a solid full year performance. Despite facing some particular challenges during the year.
Rory Patrick Byrne: Our Diversified Americas segment delivered consistent results in the fourth quarter to round out a solid four-year performance despite facing some particular challenges during the year. Improved supply chain conditions for our South American export business have led to better operating results in this part of the segment in 2023, while robust performance in most of our North American operations has also contributed to strong results. However, the segment has been impacted by challenging performance in our North American dairy business, and work continues to turn around the profitability of this segment. In the fourth quarter, El Nino-driven weather patterns had notable impacts on both the timing and volumes of products being exported out of South America.
Improved supply chain conditions for our South American export business have led to better operating results for this product segment in 2023, while the robust performance of most of our North American operations have also contributed to strong results.
The segment has been impacted by challenging performance of our tobacco business, where it continues to turn around the profitability of this segment.
In the fourth quarter, a menu driven while their passions notable impacts of both the timing and volume of products being exported out of South America.
Rory Patrick Byrne: And while overall, we're pleased that our business is navigating the volume challenge as well in the region, this year's variability illustrates the complexity of reporting full-year numbers in some key business areas that have seasonal peaks close to financial reporting dates, such as, for example, the Chilean cherry business. As we start into 2024, we remain focused on closing out the current South American export season for some of our important products with a strong performance and continuing that momentum through the rest of the year to deliver good growth for the year. Turning to our Fresh Vegetables segment. Unfortunately, the process of obtaining antitrust clearance is taking longer than we anticipated.
And while overall, we're pleased that our business has navigated the volatile John just one of the region diffused variability illustrates the complexity a proportion full year numbers. Some key business areas set up seasonal peaks close to financial reporting dates such as for example, the Chilean Cherry business as.
As we start into 2024, we remain focused on closing out the current south American exports seasons, where some of our important products with a strong performance and continuing that momentum through the rest of the year to never good growth for the year.
Turning to our fresh vegetables segment. Unfortunately, the process of obtaining antitrust clearance is taking longer than we anticipated. We continue to engage with the department of justice, including exploring alternative means to address concerns raised while we continue to believe that the agreement reached with fresh express is best for consumers.
Rory Patrick Byrne: We continue to engage with the Department of Justice, including exploring alternative agreements to address concerns raised. While we continue to believe that the agreement reached with Fresh Express is best for consumers, customers, suppliers, employees, and shareholders, the outcome remains uncertain. Operationally, and importantly, this business has continued to see an improvement in its underlying performance, and with that, I'll hand you over to Jacinta to give the financial review for the fourth quarter. Thank you, Rory, and good day, everyone.
Customers suppliers employees and shareholders the outcome remains uncertain.
Yeah unimportant. This business has continued to see an improvement in the top line performance and with that ill ask Joel between just sent to begin the financial review for the fourth quarter.
Thank you Rory and good day everyone.
Jacinta F. Devine: Firstly, turning to the group results on slide nine, we delivered another strong performance in the fourth quarter; revenue increased 13 million or 1.5% to 2.1 billion, primarily due to a positive impact from foreign currency translation. For the full year, revenue was 8.2 billion, which was 2.8% growth on 2022. Adjusted EBITDA came out marginally lower than the prior year.
Turning to the group results on slide nine we delivered another strong performance in fourth quarter revenue increased $13 million or one 5% to $2 1 billion, primarily due to a positive impact from foreign currency translation.
Full year revenue was $8 2 billion, which was two 8% growth on 'twenty to 'twenty two.
Adjusted EBITDA came out was marginally lower.
Prior year, However, as mentioned by Lori the fresh fruit segment performance in Q4 2022 with exceptionally strong.
Jacinta F. Devine: However, as mentioned by Rory, the fresh fruit segment performance in Q4 2022 was exceptionally strong. Overall, adjusted EBITDA was 76.9 million for the fourth quarter, and for the full year, it was 385.1 million, 6.9% ahead of 2022. Net income for the fourth quarter was $28.9 million and increased from $13.4 million in Q4 2022. The increase in net income was driven by higher adjusted EBITDA and a gain on asset sales of $10.7 million. For the full year, net income was $155.7 million, a $43.9 million increase on the prior year, primarily due to an improvement in performance from operations and higher asset sales, partially offset by higher interest expense following the rise in rates and higher income tax expense, primarily due to one-off non-cash tax adjustments in 2022.
Overall, adjusted EBITDA was $76 9 million for the fourth quarter and for the full year. It was $385 1 million $6, 9% ahead of 2022.
Net income for the fourth quarter was $28 9 million an increase from $13 4 million in Q4, 2022 the increase in net income was driven by higher adjusted EBIT da and the gain on a sale of $10 7 million.
For the full year net income was $155 7 million.
$43 9 million increase from the prior year, primarily due to an improvement in performance from operations and higher asset sales, partially offset by higher interest expense following the rise in rates and higher income tax expense primarily.
Two one off noncash tax adjustments in 2022.
Jacinta F. Devine: Duluth's EPS was $0.23 in the fourth quarter, and for the full year, it was $1.30, again an increase from 2022. On an adjusted basis, fourth-quarter adjusted debt income decreased 14% to $14.8 million, and adjusted diluted EPS was $0.16 compared to $0.18 in the fourth quarter of 2022. The decrease was primarily due to a marginal decrease in adjusted EBITDA and higher interest expense. For the full year, Adjusted Net Income was $118.1 million, and Adjusted Diluted EPS was $1.24, sent compared to 136.4 million and 1.44, respectively for 2022. The decrease was mainly due to the higher interest and tax expense offset by higher EBITDA. In the fourth quarter, underlying performance within the fresh vegetable business continued to improve, and, pleasingly, the division contributed income of £5.8 million. Starting with fresh fruit on slide 11.
Diluted EPS was 23% in the fourth quarter and for the full year. It was one party again, an increase from <unk> 22.
On an adjusted basis fourth quarter adjusted net income.
14% to $14 8 million and <unk>.
Diluted EPS was 16 <unk> compared to 18 cents in the fourth quarter of 2022.
The decrease was primarily or primarily due to the barge and a decrease in adjusted EBITDA and higher interest expense.
For the full year adjusted net income was $118 1 million and adjusted diluted EPS was $4 two four.
Compared to $136 4 million and $1 four four.
With respect to pay for 2022.
Increase was mainly due to the higher interest and tax expense offset by higher EBITDA.
In the fourth quarter underlying performance within the fresh vegetables business continued to improve and pleasingly. The division contributed income of $5 8 million.
Starting with pressure on slide 11 revenue increased by one 2%.
Jacinta F. Devine: Revenue increased by 1.2%. The increase was primarily due to higher worldwide volumes of bananas sold, higher banana prices in Europe, and an increase in worldwide prices of pineapples. Offsetting these were lower banana prices in North America and lower worldwide volumes of pineapples sold. Adjusted EBITDA decreased by 11 million compared to a strong comparative period.
Greece was primarily due to higher worldwide volume a phenomenal those higher banana pricing in Europe, and an increase of more than white pricing of pineapples.
Offsetting these were lower banana prices in North America, and lower worldwide volume.
So.
Adjusted EBITDA decreased $11 million compared to a strong prior period. The decrease was primarily due to higher fruit banana enforcing call a weaker performance in our commercial cargo business and other diversified pardon.
Jacinta F. Devine: The decrease was primarily due to higher fruit banana sourcing costs and weaker performance in our commercial cargo business and other diversified products. Turning to diversified fresh produce and media on slide 12. Continuing the positive momentum for the first nine months of the year, this segment again performed very strongly in the fourth quarter. Revenue increased 14.8 percent, driven by price increases and favorable impacts from foreign currency translation and M&A activity. On a like for like basis, revenue increased 8.7 percent, and adjusted EBITDA increased by 10 million.
Turning to diversify fresh project EMEA on slide 12.
The positive momentum for the first nine months of the year. This segment again performed very strongly in the fourth quarter revenue increased 14, 8% driven by price increases and favorable impacts from foreign currency translation and M&A activity on a like for like basis revenue increased $8 seven.
Percent.
Adjusted EBITDA increased by 10 million the increase was driven by strong performance within our Dutch Swedish and South African businesses, and a positive impact from foreign currency translation of $1 1 million.
Jacinta F. Devine: The increase was driven by strong performance within our Dutch, Swedish, and South African businesses and a positive impact from foreign currency translation of 1.1 million. Finally, turning to diversified fresh produce Americas and the rest of the world on slide 13, revenue decreased 14.7% primarily due to lower, expected lower volumes of cherries due to seasonal timing differences and weather impacts, as well as a continued challenging performance for the berry category in North America.
Finally, turning to diversified fresh projects Americas and rest of world on slide 13.
Revenue decreased 14, 7%, primarily due to lower.
As expected lower volumes of Cherry due to seasonal timing differences and weather impacts as well as the continued challenging performance for the Berry category in North America.
Jacinta F. Devine: Adjusted EBITDA was $15.4 million, in line with the prior year. The division had a significant recovery in profitability for Apple and, to a lesser extent, Kiwis after a challenging 2022. However, offsetting this was the impact of seasonal timing differences in the Chilean cherry season and the impact of the performance of the berry category in North America.
Adjusted EBITDA was $15 4 million in line with the prior year.
The division had a significant recovery in product recovery and profitability for <unk> and to a lesser extent Kiwi. After a challenging 2022 offsetting this was the impact of seasonal timing differences in the Chilean Cherry season, and the impact of the performance very fast growing in North America.
Turning to slide 14, now, let's discuss our cash generation capital allocation and leverage a.
Jacinta F. Devine: Turning to slide 14 now to discuss our cash generation, capital allocation, and leverage. As Rory mentioned, capital allocation and managing our leverage remains a key focus for the group. We are pleased that at the end of the year, our leverage was 2.1 times, a very significant reduction from 2.8 times at the end of 2022. The reduction was driven by excellent cash generation across the group, which has reduced our reported net debt by over 200 million euros.
As Rory mentioned capital allocation and managing our leverage remains a key focus for the group. We are pleased that at the end of the year. Our leverage was two one times a very significant reduction from two eight times at the end of 'twenty two.
The reduction was driven by excellent cash generation across the group.
Which has reduced our reported net debt by over 200 million.
Jacinta F. Devine: For the full year 2023, free cash flow from continuing operations was £221 million, driven by strong adjusted EBITDA performance, good working capital management, sorry, excuse me, and good working capital management across the group. We saw a very strong working capital performance in Q4 and in 2023 overall, primarily driven by the unwinding of some of the significant supply chain impacts of the prior year, but additionally due to favourable seasonality at the year end. In line with previous years, we expect to see a seasonal working capital outflow in the first half of the year as production levels increase and a number of important growing seasons come in. Cash capital expenditure from continuing operations was $26.7 million in the fourth quarter, and this was complemented by the addition of $5.3 million in assets acquired through finance leases.
For the full year 2023 free cash flow from continuing operations was $221 million driven by strong adjusted EBITDA performance good working capital matters.
I am sorry, excuse me and good working capital management across the group.
We saw a very strong working capital performance in Q4 and in 2023 overall, primarily driven by the unwinding of some significant supply chain impacts of the prior year.
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In line with previous years, we expect to see a seasonal working capital outflow in the first half year as production levels increase on a number of important growing seasons credits.
Cash capital expenditure from continuing operations was $26 7 million in the fourth quarter and this was complemented by the addition of $5 3 million in acquired through finance leases.
Jacinta F. Devine: Full year expenditures included important efficiency projects in our warehousing and processing facilities, as well as ongoing farm renovations in banana farms, new planting in plantains, and other products, and ongoing investments in IT and logistics across the group. Overall, capital spend was 87 million euros in 2023. For 2024, we do anticipate a higher spend as we seek to execute certain projects that were planned for 2023. We expect CapEx from continuing operations to be in the range of 110 to 120 million in 2024, as we have previously noted. 2023 was a very strong performance for the sale of idle and non-core assets, and we realized gross proceeds of 19 million in the fourth quarter to bring us to a total of 84 million for the full year. At the end of the year, the combined value of our assets held for sale and actively marketed property was 16 million, and we continue to seek further asset sales in 2024. Interest expense, including discontinued operations, for the fourth quarter was $20 million, slightly higher than the prior year. For the full year, interest expense increased $26 million to $87 million.
Full year expenditure included important efficiency projects in our warehousing and processing stuff as.
As well as ongoing farm renovations and banana farms, you're planting in planting and other products and ongoing investments in I T and logistics across the group.
Overall capital spend was 87 million and <unk> 23, or 'twenty 'twenty four we do anticipate a higher spend as we seek to execute certain projects that were planned for 'twenty. Three we expect capex from continuing operations to be in the range of $110 million to $120 million.
In 2024.
As we have previously noted.
23 was a very strong performance for the sale of idle and noncore assets and we.
We realized gross proceeds of $19 million in the fourth quarter to bring us to a total of $84 million for the full year.
At the end of the year with a combined value of our assets held for sale and actively marketed property was 16 million and we continue to seek further asset sales in 2024.
Interest expense, including discontinued operations for the fourth quarter was $20 million slightly higher than the prior year for the full year interest expense.
Increased 26 million to $87 million.
Jacinta F. Devine: Under an assumption that base rates will remain broadly stable in 2024, and not assuming any cash impacts of the vegetables or progressive produce sales, we expect full-year interest expense for 2024 to be circa $85 million. Continuing with our commitment to return cash to shareholders, we are pleased to declare a dividend of 8 cents for the fourth quarter, which will be paid on April 4th to shareholders on record on March 21st. Now, I will hand you back to Rory, who will give an update on our full year outlook and closing remarks. Thank you, Jacinta.
Under an assumption that base rates will remain broadly stable in 'twenty 'twenty, four and not assuming any cash impacts of the vegetables are progressive project sales, we expect full year interest expense for 2024 to be circa 85 million.
Continuing with our commitment to return cash to shareholders. We are pleased to declare a dividend of <unk> <unk> for the fourth quarter, which will be paid on April 4th to shareholders on record on March 21st.
Now I will hand, you back to Laurie who will give an update on our full year outlook and closing remarks.
Thank you Jason.
Rory Patrick Byrne: Well, we're very pleased with the Group's exceptional performance in 2023, delivering $385 million of adjusted EBITDA from continuing operations, and a result that we believe gives us a strong platform from which to build further momentum in the 2024 financial year. As ever, the operating environment continues to present new challenges and, indeed, new opportunities. On the macro side, we are pleased that inflation has continued to moderate across our key operating regions. We're also pleased by the relative stability in some key foreign exchange rates, as well as some stability in energy prices, and more recently, stability in interest rates. While forecasting is always complex, overall, we believe our business is well positioned to deliver another good result in 2024. Given our strong 2023 overall performance, our target at this early stage of the year is to deliver a full year adjusted EBITDA in line with 2023 on a like-for-like basis. 2024.
Wow.
The exceptional performance in 2023, delivering $385 million of adjusted EBITDA from continuing operations.
The result will be a strong platform from which to build further momentum into 2024 for launch in the U S.
However, the operating environment continues to present new challenges.
New opportunities on the macro side. We are pleased that inflation was continued moderation of course, our key operation regions. We're also pleased by the relative stability in some key foreign exchange rates as well as some stability in energy prices are more recently stability streets.
On forecasting as old complex overall, we believe our business is well positioned to deliver another good results in 2024.
Our strong 2023 over performance our progress at this early stage of the year should enable full year adjusted EBITDA in line with 2023 on a like for like basis.
2024, we're focusing on the following key strategic priorities.
Rory Patrick Byrne: We're focusing on the following key strategic priorities: Accelerating growth in our core business areas and categories. Investing for growth while obviously maintaining a disciplined approach to capital, exiting the fresh vegetable business, focusing on cost control and operating efficiencies across the businesses, and advancing our sustainability goals. In conclusion, we are very pleased with the excellent results we delivered in 2023, and we expect to continue the momentum into 2024 as we also advance on our strategic priorities in the year ahead. I want to finish by once again thanking all our excellent people across the group for their ongoing huge commitment and dedication to drive Dole PLC forward, as well as our suppliers and customers for their ongoing support, which provides us with great confidence as we begin the 2024 financial year. And with that, I'll hand you back to the operator, and we can open the line for questions. Thank you. The floor for the question and answer session is now open. If you'd like to ask a question, please press star and number one on your telephone keypad. That's a star and number one on your telephone keypad.
Accelerating growth in our core business areas and categories investing for growth, while obviously, maintaining a disciplined approach to capital.
Thanks for taking the fresh vegetable business, focusing on cost control and operating efficiencies across the businesses.
And about two more sustainable than she goes and confusion.
Very pleased with the excellent results we delivered in 2023.
To continue the momentum into 2024.
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To finish by once again thanking all our excellent people across the group for their ongoing huge commitment and dedication to drive DAU plc board as well as our suppliers and customers for their ongoing support which provides us with great confidence.
We begin 2020 full financial year.
With us on the operation we can open the line for questions.
Thank you.
Question and answer session floor is now open if you'd like to ask a question. Please press star and number one on your telephone keypad. That's the star are number one on your telephone keypad. Our first question comes from being from Ben Bienvenu from Stephens incorporated your line is now open.
Operator: Our first question comes from Ben Bienvenu from Stephens Incorporated. Your line is now open. Hey, thanks. Good morning.
Hey, Thanks, good morning.
So I want to ask Rory as it relates to the 2024 guidance expectation of.
Rory Patrick Byrne: So I want to ask Rory, as it relates to the 2024 guidance and expectation of roughly $385 million of EBITDA, can you talk us through the puts and takes that get you to that level, the good, the bad, how much variability you see embedded in that assumption? And then does that guidance take into consideration the sale of progressive produce? Yeah, I think to deal with the last point first, Ben, what we've said is the guidance is on a like for like basis. So I think, you know, post the closing of the Progressive Deal, we'll give you more clarity on the guidance adjustment for the disposal when it actually happens. So it's on a like for like basis.
385 million of EBITDA and.
Can you talk us through the puts and takes that get you to that level. The good the bad how.
How much variability you see embedded in that assumption and then does that guidance take into consideration the sale of progressive Proteus.
Yes, it's dealing with the last 0.1st and what we've said is the guidance is on a like for like basis. So I think post closing of the D. Progressive scaling will give you a little more clarity on the on the guidance adjusted for the disposal when it actually happens.
On a like for like basis.
Rory Patrick Byrne: I mean, forecasting as it is just generally has become more challenging with the variability and volatility just in the world in general terms. The world is emerging, hopefully emerging, and at least from some of the very high levels of inflation that we've seen over the last few years. And I think the markets are taking time to adjust to that changing environment. So it's a little more complicated. It's very early in the year.
I mean, it's this.
You're forecasting I suppose just generally has become more challenging.
Rory Patrick Byrne: You know, I think during the variable update on the results that I've just given, I highlighted it, but, you know, we're feeling comfortable in our three main categories. There will be ups and downs, but we're not anticipating any major shifts really. And, you know, we just, you know, I guess you could look back and we probably doubled our expected growth in 2023. So if we can consolidate our 2024 number at that level, it gives us a really, really strong platform to continue to grow in future years. Okay, fair enough.
Rory Patrick Byrne: My second question is related to the portfolio. You noted a desire to continue to divest non-core assets. Do you also have a desire to pursue M&A opportunistically? Where do you see the balance of your portfolio sitting at this point?
Instead of the desire to continue to divest non-core assets do you also have a desire to pursue.
Renee Opportunistically.
Where do you see the balance of your portfolio sitting at this point.
Yeah, I'm Gonna think that's it shouldn't to dynamic scenario and nurture check one of the reasons, probably that'd be disposed of progressive is something about other allergic to before and these calls is that the private market valuations are quite a bit higher than the public market valuation. So.
Rory Patrick Byrne: Yeah, I mean, it's a dynamic scenario in that one of the reasons that we probably disposed of a progressive is something that I've alluded to before in these calls is that the private market valuations are quite a bit higher than the public market valuation. So an element of that was taking advantage of that scenario, and hopefully, public market valuations will change over time so that that dynamic changes around. But we, you know, we're constantly we have our own internal corporate finance department, you know, all of our, all of our key management team are very focused on their individual segments, on the operation that the companies participating in those segments and the opportunities that they prevent.
Unlimited matchless, taking advantage of that uhm thoughts scenario and hopefully the public market.
Valuations change over time, so that's <unk> dot dot dot dynamic changes around but we we you know we're constantly we have our own internal corporate Finance Department you know all of our all of our key management team are very focused on their individual segments on the operation, but the good companies participating in those <unk>.
<unk> on the opportunities that take prevent so we've got an open mind, obviously, it's going to be subject to getting add any deals are acquisitions that you might look at them I'm terms of January and be outside neutral or shareholder base, but that has always been the principal on the continued to be the principal.
Rory Patrick Byrne: So we've got an open mind, obviously, it's going to be subject to getting any deals or acquisitions that we might look at done on terms that genuinely add value to our shareholder base. And that has always been the principle and will continue to be the principle. Okay, thank you very much.
Okay. Thank you very much.
Operator: Thank you, Ben. Our next question comes from Adam Samuelson from Goldman Sachs. Your line is now open. Yes, thank you. Good morning, everyone.
Thank you then.
Our next question comes from Adam <unk> from Goldman Sachs. Your line is now open.
Yes, thank you I'd be morning, everyone.
Operator: Morning. Good morning. I guess the first question, Rory, I mean, you talked about a variety of different puts and takes and volatility. As you think about 2024, maybe hoping to narrow in a little bit more on the fresh fruit business and bananas and pineapples and how you see the supply and demand environment progressing, how contractual renegotiations with key retail customers went for calendar 24, and kind of where you see the, kind of upside and downside risks to that business in Maybe Johan will give a high-level overview of that start, and I'll add anything further if you're on those there. Can we hear you, Johan? I think we've lost Johan somewhere on the call.
Good morning.
I guess the first question worry when you talked about a variety of different puts and takes the volatility as you think about 2024, maybe hoping to narrow it down a little bit more on the on the fresh fruit business and bananas, and pineapples and just how how you see the the supply and demand environment.
Progressing.
How contractual renegotiations with.
Retail customers went for calendar 24, and kind of where you see the <unk>.
Kind of upside downside risks to that business in particular or for the year.
Maybe you'll hang on and give them a high enough along with you on that <unk>.
<unk> was there.
Can we hear you Johan.
I think we've lost Ya Hudson.
Rory Patrick Byrne: Okay, I'll deal with it. You know, I think in terms of supply and demand, what we are seeing is, you know, there's an avenue a year. So we've seen some drought conditions in some of the Central and South American countries. In Ecuador, we've seen, you know, volatility in weather.
<unk> <unk> I think in terms of them.
<unk>, what we are seeing is you know it isn't that a new year. So we've seen some dry conditions and some of the central and South American countries in Ecuador, we've seen volatility and whether we think that some of that is going to reduce volume and there's no doubt that in the north American market C. At the <unk>.
Rory Patrick Byrne: We think that some of that is going to reduce volume. There's no doubt that in North American markets, the retail price has probably been under more competitive pressure, and that has put some pressure on pricing in 2024. However, Europe has remained balanced.
Retail.
Price Husby number probably more competitive pressure on the has put some pressure on pricing in in in 2024, Europe Hustler nine balance is probably just a little bit to reflect some of the and push on freight costs growing interest.
Rory Patrick Byrne: It's probably adjusted a little bit to reflect some of the input on freight costs going into it, but, you know, it's finished at an acceptable level. So, I think overall, you know, it should be a solid year for the banana segment within that. And then within that overall segment, pineapples, with innovation and development, are referred to as continuing to perform well. Plantains are a developing category first. The consumption of plantains, both in North America and Europe, has continued to improve.
And you know, let's finish unacceptable level.
So I think overall you know it should be a solid.
<unk> for the Banana segment within National then within that overall segments pineapples with innovation, what's available for just continue to perform well.
<unk> just have have a good category furnish the consumption of plan change both in North America, and Europe has continued to improve.
There's lots of work going on within that division uneven complimentary products lines mangoes and a few other category.
Rory Patrick Byrne: And there's lots of work going on within that division on complementary products, limes, mangoes, and a few other categories that might fit well with what they do. You know, with the fantastic management team we've got in that segment, I think we've got all the right ingredients in place to continue with what has been a very, very successful and our single largest investment and single largest stevia dinner generator. So, do you hear me now, Rory? We've got you now, Johan, yes, sorry.
<unk> like fish wild with what they do.
Get on with this fantastic management team, we've got enough segments.
We've got all the <unk> place to continue.
With redfin as being a very very successful on our single largest investment <unk> send the largest <unk> generator.
Sure.
You hear me now Roy.
We've got you know Yohan, yes, sorry, Okay, sorry, just just didn't they made me to add a little bit I don't know what happened there, but the the overall industry supply is down compared year over year is driven by El Nino, but we are very very well supplied because of our diversification and act practices that we.
Johan Linden: Okay, sorry. Yes, yes, then maybe to add a little bit, I don't know what happened there, but the overall industry supply is down compared year over year. It's driven by El Nino, but we are very, very well supplied because of our diversification and ag practices that we have, so we have not been disrupted by the rain as much as others.
<unk>, so we have not been disrupted by the rates.
As much as others.
Johan Linden: We have seen shipping disruption as well because of the Panama Canal, but with our own ships, we've been able to handle that better than the industry. So, overall, for us, we see stable demand and a balanced supply, so we feel good, as Rory said, about the demand. Okay, that's helpful.
We have seen shipping distribute disturbance as well because of the Panama canal, but with our own ships, we've been able to handle that better than the industry. So rule for us we see stable demand and the balance supply. So we we feel good as always said about the future.
Okay. That's helpful. If I could ask follow up on on cash on.
Jacinta F. Devine: If I could ask a follow up on on, and Cash Flow. If we were to look at the EBITDA guidance, at least the start of the year at 383.85 on a like for like basis, you're given the interest expense, you're given CAPEX. How should we think about other kinds of items that would affect the cash flow, the dividends, the non-controlling, the equity earnings, cash taxes, working capital, just as we think about the kind of the underlying cash generation, cash conversion, Hi Adam, good morning.
Cash flow if you were to look at the EBITDA guidance or at least I started here three 385 on a like for like basis, you've given the interest expense you're given capex, how should we think about other kind of items that would affect free cash flow.
The dividend Noncontrolling, the equity earnings cash taxes working capital.
Just as we think about the underlying cashing or issue cash conversion before any.
<unk>.
Hi, good morning, <unk> and I suppose first of all just <unk> just check to restate 2023 was positively impacted by a couple of things the online.
Jacinta F. Devine: I suppose, first of all, just to restate that 2023 was positively impacted by a couple of things, the unwind and consumable stocks from the supply chain disruption in 2022, and that was a positive for us. And also, you know, one of the important things in our industry is the impact of seasons over quarters, and in particular, the Chilean cherry season over the year end. So that had a positive impact, a very strong positive impact on Q4. As we go into 2024, we'll see the usual outflow of working capital that we would typically see, but it may be a little bit heightened because of the inflow we had in Q4. And so working capital, we wouldn't expect to see the same benefits from working capital going into 2024 as we did in 2023.
Online to confirm for stocks.
The supply chain disruption in 2022, and never say a positive for us.
Also you know one of the important things.
Our industry is the impact of seasons over quarter Sen in particular, and the Chilean cherry season over over to here and so that had a positive impact.
Very strong positive impact.
Four Q4 as.
As we go into 2024, and we'll see the usual outflow of working capital B wait we would typically see.
Maybe a little bit heightened because of the info, we had in Q4 and S. A working capital we wouldn't expect to see the same benefits from working character <unk> 2024, if we actually seen in 2023.
No other things.
Jacinta F. Devine: Other things, apart from things I've called out, would be like, for like, based on the current year. Okay, that's all. Just one other quick follow-up: the income from discontinuing operations was actually income in the quarter. What was the What's the What did the fresh vegetable business do any but in the fourth quarter and for full year 23? We don't break that out separately, but our underlying performance is is better year on year. But we don't we don't break out just to do the D.A.
<unk> would be like for like Adam based on on the current here.
Okay. That's just one other quick follow up the <unk>.
Just cause hearing operations was actually income and the quarter what was the <unk>, what's the what's the fresh vegetable business do an EBITDA in fourth quarter and for full year, 20th <unk> three.
We we don't break that out separately, but.
Underlying performance is is is better than here on here, but we don't we don't break out <unk> for the vetch segment to any further.
Jacinta F. Devine: for the veg segment any further. I appreciate the, Thank you all. Our next question comes from Gary Martin from Daisy. Your line is now open. Hi Rory, Jacinta, and Johan, just first off, congratulations on a really, really strong year.
Okay, where the trial I appreciate the the the times that thank you.
Thank you Adam.
Our next question comes from Gary Martin from Daisy. Your line is now open.
<unk> just first off congrats on already really strong year, just a few questions on my side.
Operator: Just a few questions on my side, I guess, just kind of starting off, and I'm conscious that you can't really give, you know, kind of too much, too many details on the progressive deal until it's until it's closed. But I guess maybe just kind of some high-level color as to whether the deal was opportunistic in nature, maybe you could kind of dial into just how the kind of the nature of the product portfolio differed from diversified Americas. That's just my first question. And then, just second, I think it'd be useful just to kind of dial into some of the moving parts around costs. Just how do you see that evolving in FY 24?
I guess, that's gonna start off unconscious I know you can't really give.
You know.
Which to too many details on the.
On the progressive deal until it until it's closed but I guess, maybe just kind of some high level of color see you know.
Whether the deal was opportunistic in nature.
Maybe you kind of dialogue to just have that kind of the nature of it off the product portfolio different to diversify its America's that's just my first question and then just a second I think it'd be it'd be useful just to kind of dialect. This one with the the movie parts around cough.
Just how you see that evolving in F y 24.
Rory Patrick Byrne: Thanks. Okay, I'm in progressive, I suppose. As an organization, we've always tried to be opportunistic and agile and flexible in terms of how we look at businesses, and we're not normally sellers of businesses like this. In this particular case, it's very much a standalone segment, you know, focused on potatoes and onions, asparagus and a few other products that are a little bit unique for our American operations.
Okay I'm in Progressive I suppose you know as an organization do so we should try to be <unk>, one flexible in terms of.
How will look like businesses and we're not normally sellers of businesses like this and this.
This particular case of <unk> isn't very much stand alone segment and focused on potatoes, and onions, and a few other projects that.
Unique for an American operations.
I suppose the minority shareholders stuff, we have to 35 per cent shareholder.
Rory Patrick Byrne: I suppose the minority shareholders that we had, 35% shareholder, they wanted to explore liquidity options legitimately. So we as well, obviously, looking at value, you know, looking at the interest rates remaining high, perhaps even the absolute level of debt, you know, being an overhang to some degree on our share price. Again, something that I had liked to call, you know, earlier is, you know, in this unusual circumstance where you have the private market valuations are higher and significantly higher in some cases than the public market valuations, it is a little bit hard to understand that, you know, this is the group with the asset base we've got, with the customers we've got, the facilities we've got, that it warrants a significantly lower overall rating than one subsection, which is a good business of the business.
<unk> to explore liquidity <unk> options legitimate police are we as well.
<unk> looking at value go looking at the infrastructure 90 high perhaps even the absolute level of data.
Being an overhang to some degree on our share price.
Again, something that I had left it the call.
Alright here is you know.
This unusual circumstance, where you have the private market valuations are higher on significantly higher in some cases on the public market <unk>.
It's hard to understand that too and are you looking to go go with the group quickly.
<unk> with the customers we've <unk>, we've got that it warrants a significantly lower overall duration than one subsection, which is a good business off the business. So.
Rory Patrick Byrne: So, you know, putting all of those together. We've got an attractive offer, and we decided to take it. And then on your second question, on costs and input costs, we're seeing stability in some of the input costs at the farming level, cartons, fertilizers, inputs like that. And then at the international freight level, there have been some significant reductions, but obviously that's a cool pass-through in our two diversified divisions, you know, fixed costs in our own shipping, primarily in the fresh food division. So I think that stability, though, it makes managing and planning a little bit better. It's helpful to the consumer, and it may encourage, you know, more volume throughput through the system, particularly with freight rates for, you know, a product source out of Chile or South Africa or other long haul products.
Putting all of those together.
<unk> and we decided to take a <unk>.
I'm not on your second question Cos and.
Cause some nausea wish you were saying.
They will see and some of the input costs of the <unk> <unk> it looks like.
At the international level, there have been some significant reductions, but obviously, that's a cool pass through and are too.
Diversified divisions fixed.
Fixed costs in her own shipping primarily in the fresh fruit division.
So I think that's <unk>, it makes managing or planning a little bit better. It's helpful to the consumer may encourage you know <unk> to put through the system, particularly with French rights for <unk>.
Products or side of Chili South Africa <unk> so.
Rory Patrick Byrne: So a more balanced and a moderation of inflation in those categories, for sure. Excellent. Thanks. Good call. Thank you, Gary. Our next question comes from Chris Barnes from Douche Bank. Your line is now open.
<unk> on a moderation of inflation on those categories for sure.
Excellent thanks, good color.
Thank you Gary.
Our next question comes from Chris <unk>. Your line is now.
Operator: Hi, thanks for the question. I just wanted to ask about the diversified EMEA business. I mean, throughout the last year, you drove nice life or life growth and revenue in EBITDA, as well as margin improvement, particularly in the fourth quarter. So could you maybe just unpack the drivers of that performance on the top line and on profits? And what's underpinning your confidence that you can continue to drive strong performance on this elevated base in 2024? Yeah, I think we've got a strong position in, you know, many European markets with a number one player in Sweden and Denmark and Spain and the UK and Ireland, strong position in Ireland, strong position in Hamburg, in Germany, and a number one position in the Czech Republic. So you put all of that together, you know, with a strong customer base, mature business, and a well-developed team. And I would also say that we had some favourable tailwinds in 2023 that, you know, a lot of those businesses all worked pretty well. They're solid, steady, consistent growth businesses.
Hi, Thanks for the question I just wanted to ask on the diversified Yummy a business I mean throughout the last year and you drove nice like for like growth in revenue and EBITDA as well as margin improvement particular area in the fourth quarter.
So could you maybe just unpack the drivers of that performance on the top line add on profits and what what's underpinning your confidence that you can continue to drive strong performance over on the celebrated base over 2024.
Yeah, I I think we've got a strong position in many European markets with the number one player in Sweden.
Denmark, and Spain, and U K and Ireland strong position in Harlem strong position Romberg office in Germany, and number one position Czech Republic Uhm. So you put all of that together you know <unk>.
Strong customer base base mature business, well developed teen Uhm and I would also say that we had some favorable.
<unk> 2023 that you know a lot of those businesses all work pretty well, they're solid steady consistent growth businesses. So.
Rory Patrick Byrne: So, you know, we're optimistic that we can continue on that path there. I think I said in the introductory remarks as well, they are ripe for some further consolidation, food service and wholesale, and smaller businesses. And, you know, we're constantly looking at adding not material acquisitions but interest in bolt-on acquisitions within that segment, which should help to continue to grow revenue paths for that division.
Optimistic with US we can continue on the <unk>.
<unk> remarks, as well now they are ripe for some further consolidation since I was on hold so some smaller businesses. You know, we're constantly looking up adding material acquisitions, but interesting bolt on acquisitions within that segment should should help to continue to grow pastor that division.
Got it that's helpful. And then I just thought I'd follow up question on the progressive produce transaction.
Rory Patrick Byrne: Got it. That's helpful. And then I just had a follow-up question on the progressive produce transaction. I believe it was consolidated in the diversified America segment, but correct me if that's wrong. Is there any reason Okay, got it. Is there any reason to believe that the margin profile of progressive was materially different from the balance of the segment? Or is it roughly in the same ballpark, two to 3%?
I believe it was consolidated in the <unk> in the diversified American segment, but correct me if I. If that's wrong <unk> are there any <unk> Oh, Okay. Got it is there is there any reason to believe that the margin profile of progressive was materially different from the balance of the segment or is it roughly in the same ballpark.
Two to three per cent. Thanks.
Rory Patrick Byrne: Thanks. I think we'll give, we've said with the Q1 numbers, when we get the transaction closed, we'll give a little bit further color on that Chris, but for the moment, we won't go into that any further. Okay. Thank you so much. Thank you. We don't have any questions at the moment.
I think we will give we said with the G. One number so when we got the transaction closed so we could put a little bit further color on that Christmas at the moment.
We won't go into that any further.
Understood. Okay. Thanks, so much.
Thank you we don't have any question says at the moment is now like to hand back over to the management can make your closing remarks.
Operator: I'd now like to hand back over to the management for their closing remarks. Thank you. Well, thank you all for joining us today. And I think it's, you know, it's been a great pleasure to look back over 2023 as a year of extremely positive momentum for what is now the one group of Dole TLC. I think, you know, we've done very well. We're very lucky to have the people we have; we're very lucky to have the customers and suppliers with us. And I think we're really well positioned, hopefully, to continue for a strong 2024 as well.
Thank you well. Thank you all for joining us today. So I think it's you know it's been a great pleasure to look back over 2023 is a.
A year of extremely positive momentum for what is now the one go puff double T. L C.
I think we've done very well we're ready to go if you type of people, we have a very lucky to have the customers and suppliers with Russia, I think I really love physician to hopefully get to you.
For a strong 2024 slot. So thank you all for joining us.
Rory Patrick Byrne: So thank you all for joining us. Thank you for attending today's conference. Call you may now disconnect. Have a wonderful day.
Thank you for attending to these conference call you May not August connect have a wonderful day.