Q4 2024 Nomad Foods Ltd Earnings Call
So not only mode a question and answer session will follow the formal presentation.
Please note that this conference is being recorded.
Speaker Change: I would now like to turn the conference over to Jason English head of Investor Relations. Please go ahead, Hello, and welcome to the Nomad Foods fourth quarter 2024 earnings call, Jason English head of Investor Relations and joining the call today by Stefan that Shoemaker, our CEO and <unk> <unk> our CFO.
Speaker Change: Now everyone should have access to the earnings release for the period ended December 31, 2024 that was published at approximately 645 am Eastern time, the press release and Investor presentation are available on Nomad Foods' website at Nomad Foods Dot Com. This call is being webcast and a replay will be available on the Companys website. This conference call will include forward looking statements.
They're coming for you
Good day, ladies and gentlemen, and welcome to Nomad Foods.
Speaker Change: Or based on our view of the Companys prospects expectations and intentions at this time actual results may differ due to risks and uncertainties, which are discussed in our press release, our filings in the FCC and in our Investor presentation, which includes cautionary language. We will also discuss non <unk> financial measures during the call today.
Speaker Change: Non <unk> financial measures should not be considered replacement for and should be read together with <unk> results users can find the <unk> to non ifr's reconciliations within our earnings release and in the appendices at the end of the slide presentation available on our website. Please note that certain financial information within this presentation represents adjusted figures for 2023.
Speaker Change: And 2024 call is adjusted figures have been adjusted primarily for share based payment expenses and related employer payroll taxes nonoperating M&A related cost acquisition purchase price adjustments exceptional items and foreign currency translation charges or gains unless otherwise noted comments from here will refer to those adjusted numbers, so with that I'll hand, it over to Stephane.
Stephane: Thank you Jayson.
Stephane: I'm happy to report.
Yes.
Stephane: A strong finish to 2020 full with impressive volume driven sales growth.
Stephane: The robust margin expansion.
Stephane: Before I go too deep into results.
Stephane: I'll just step back a.
Stephane: With respect to the way, we I know journey.
Stephane: As you can see on slide three.
Stephane: We have now delivered nine consecutive years of sales and that just <unk>.
Stephane: Growth.
Stephane: While this growth has been aided by M&A.
Stephane: Again the growth is also in a strong and consistent contributor to these growth overtime.
Stephane: In fact.
Stephane: 2016, we outgrow the organic sales up nearly 3% with.
Stephane: With growth in every year other than 2021 and you will have to come in demand spike.
We all know entering our 10th year as a public company.
Stephane: We're well positioned to continue to deliver sustainable growth.
Stephane: And another year of organic growth in 2025.
Stephane: While generating considerable shareholder value.
Stephane: We have created an enviable company since embarking on this journey in 2015.
Stephane: We have assembled a portfolio of iconic brands.
Stephane: With the and strong market share positions.
And we have accomplished this while remaining focused on building a pure play frozen food business.
Stephane: No expense.
Stephane: We've locked in developing markets across Europe.
Stephane: And we have acted with purpose.
Stephane: Creating a portfolio of high quality, great tasting convenient food that is good value and good for you.
Stephane: Roughly two thirds of our portfolio is comprised of vegetables fish and poultry.
And 93% of our European Western European revenue.
Stephane: Generated from deemed a healthy mid shortly by the UK government.
Stephane: And we've done this in a responsible way.
Stephane: I'm happy to share the Nomad foods has been included in the annual go GA CWC in Europe index for the fourth consecutive year.
Stephane: While receiving them back Shimon school 100 routes and it has the nutrition.
Stephane: For the sixth consecutive year.
Stephane: We are well positioned for the trends that are reshaping this industry, we have a.
Stephane: Clean portfolio advantage and we also have a deeper message.
Stephane: In recent years, we have reshaped the organization, we have rewired, how we work to improve efficiency agility and 90 sharing.
Stephane: And we are all kind of booed by promoting high performance from within.
Stephane: And selectively hiring activity.
Stephane: And <unk> when necessary.
Stephane: This has helped us all in Australia, energized organization and improve our execution.
Stephane: And lastly.
Stephane: Being able to lean in and all team with the tools they need further strategy and initiatives.
Stephane: Our supply chain organization.
Stephane: With meaningful ability to deal with the past two years.
Stephane: <unk> strategic focus on driving growth both in the room I must win battles and broad platforms.
Stephane: Is that EBIT margin mix benefits.
Stephane: No that's to increase investment in our products or advertising.
Stephane: In store merchandising, what everybody needs in areas, such as revenue growth management and cyber security among others.
Stephane: Even all of this I feel great about how we position as we enter our 10th year of the company.
Stephane: Danny.
Stephane: And I'm confident we will deliver our 10th consecutive year of top and bottom line growth in 2025.
Speaker Change: When you said results.
Speaker Change: On the inboard and my confidence in this.
Speaker Change: You can lead to us in 2023.
Speaker Change: He was a board sides inflation in U S revenue growth was nearing an end.
Speaker Change: Unit growth would be a modest 10 and ongoing gains market share expansion and incentive revenue growth management initiatives.
Speaker Change: But then as we introduce a new commercial flywheel innovation framework.
Speaker Change: While beginning to increase our investment in our brothers advertising and merchandising.
Speaker Change: OEM and increased by 14% in 2023, and then again by high single digits last year and 4% of mixes.
Speaker Change: This places us in the double Eagle bulk new group and.
Looking for the 45.
Speaker Change: And we expect ANC growth to once again sales growth in 2025.
He took the results.
More than likely.
Speaker Change: And I'm excited to share some of our new creative with you later this year.
It leads to us in 2023.
All sides inflation induced revenue growth wasn't hearing in that.
Speaker Change: Some of the best I have ever seen from Nomad foods.
Unit growth was.
Speaker Change: Well innovation, Meanwhile, jumped over 2% in pretty easily three to four 8% in 2044.
And then the volume gains market share expansion.
Brittany: Thank you Brittany.
Initiatives.
Speaker Change: [laughter] easily exceed 5% in 2025.
Brittany: But then as we introduce on yoga flywheel.
Speaker Change: And when we combine innovation with innovation with a renewal rate.
Brittany: Framework.
Brittany: To increase.
Brittany: Good news.
Brittany: That's right.
Speaker Change: The status of sales orders you all refreshed.
Brittany: Oh, yes, and increased by 14% in 2023.
Speaker Change: Two level from high single digits in 2020 for mid to high teens is really 25.
Brittany: Then again by high single digits last year and four.
Brittany: What we said the mix is.
Speaker Change: We are grading all food and packaging to achieve superiority across an increasingly large percentage of homelessness.
Brittany: This places us in the <unk> group.
Brittany: And you can go through once again.
Speaker Change: All of this is helping or conversion flywheel spin faster and faster while delivering solid returns.
Brittany: This growth in 2025.
Brittany: Okay.
Brittany: And I am excited to share some of our new creative with you later this year.
Brittany: Some of the best.
Speaker Change: As you can see on slide five we have now delivered three consecutive quarters of volume growth.
Brittany: Have you seen from the life.
Well innovation Meanwhile, jump.
Brittany: You can pretty easily.
Speaker Change: Most of that move around quarter to quarter.
Brittany: For 2024.
Speaker Change: With the trend line is cleaning the ride direction.
Brittany: [laughter] easily exceed 5% equally 25.
Speaker Change: And why is that.
And when we combine innovation with a minimum.
Speaker Change: Important food categories.
Brittany: Should we expect.
Speaker Change: And that's what I'm drawing much on destiny, although investments are supporting pedigree growth, while driving share growth.
Brittany: The reorder rate.
Brittany: That is I'll say is we have all these.
Brittany: You all refreshed.
Brittany: Double from high single digits in 2024.
Speaker Change: As you can see on slide six.
Brittany: Slide <unk>.
Brittany: Five.
Speaker Change: Yeah, no achieved market share growth in each of the last two quarters.
Brittany: Yep grading all packaging.
Brittany: If you review across an increasingly large percentage of bookings.
Speaker Change: And impressively.
Brittany: Yeah.
Is this a lot.
Brittany: All of this.
Speaker Change: <unk> gross margin.
Brittany: Oh conversion flag.
Speaker Change: In fact, our gross margin in the last nine months of 'twenty 'twenty four modestly exceeded the pre COVID-19 level, we achieved in 2019.
Brittany: Boston Foster.
Brittany: And delivering solid returns.
Brittany: And again.
Brittany: On slide five we have now delivered three consecutive quarters of volume growth.
Speaker Change: August.
Speaker Change: He contributed to our success and focus will continue to define our whole go to market in the future.
Well it would be wrong for a quarter.
Brittany: The trend line is leaning in the right direction.
Speaker Change: We continued through the centuries of these propulsion multiple time energy and investments you know must win battles.
Brittany: In Hawaii.
Brittany: Important food categories.
Brittany: Joining much on.
Speaker Change: These are the book I think every country combinations.
Brittany: Although investments are supporting category growth.
Speaker Change: Critically important to our success a margin accretive way, we haven't clear right to win.
Brittany: Driving shameful.
Brittany: As you can see on slide six.
Speaker Change: The top 25 must win battles.
Speaker Change: Yeah, no achieved market share growth in each of the last two quarters.
Speaker Change: All of this for more than half of all since last year.
Speaker Change: Isn't even allowed to share both gross profit and growing net sales by two 7% for the year and three 5% in the quarter.
And impressively.
Brittany: Right exactly.
Gross margin.
Brittany: In fact, our gross margin in the last nine months of 2024 modestly exceeded the level we achieved in 2019.
Speaker Change: Well I don't focus remains on the must win battles.
Speaker Change: Recently, we have inflicted keep investing.
Brittany: Okay.
Speaker Change: Select.
Brittany: August <unk>.
Speaker Change: Its platforms.
Brittany: He contributed to our success and our focus will continue to define our whole go to market in the future.
Speaker Change: These are primarily <unk>, where we see opportunities.
Languages easily in one market to extend our presence in another market.
Brittany: When did you sit with a disproportion of multiple time.
Speaker Change: Let alone to growth.
Brittany: Investments in Alberta.
Speaker Change: Organic sales growth platforms grew by 16% in 'twenty, 'twenty, four and 40% in the fourth quarter.
Brittany: Most of the models.
Brittany: These are the three.
Brittany: Nations.
Brittany: Particularly important to our success.
Speaker Change: Over the past year, we are in.
Brittany: Margin accretive way, we haven't clear why do we.
Speaker Change: Highlighting the importance of government example.
Brittany: The top 25, most impactful at.
Speaker Change: We have more than doubled offices and you came up with about five years.
Brittany: All of this for more than half of all sales last year.
Speaker Change: And that's gone from a growth platform must win battle for us given the success.
Brittany: An even larger share of gross profit.
Brittany: Net sales by two 7%.
Speaker Change: Our goal is to make all of our growth platforms.
Brittany: And three 5% in the quarter.
Speaker Change: Most of them, but those overtime.
Brittany: Our focus remains on the must win battles.
Brittany: Recently, we have.
Italy, and Germany up to more recent markets, where we have made butcher into a growth platform.
Brittany: Investing behind select.
Brittany: Platforms.
Brittany: These are probably areas, where we see all these.
Speaker Change: Seeking to replicate our success in the U K.
Brittany: Language.
Speaker Change: The frozen prepared poultry segment.
Brittany: In one market.
Brittany: In another market, we will lead to larger growth.
Speaker Change: In Italy.
Speaker Change: We began to invest in developing the statement noted pretty plentiful.
Brittany: Organic sales growth platforms grew by 16% and 24.
Speaker Change: I'm happy to say that it is working.
Brittany: 50% in the fourth quarter.
In the fourth quarter.
Speaker Change: It's a propaganda born free in Italy, Rose 19, 8% year on year with market share growing four 8% in important even increased 50% in Q4 to default.
Brittany: Over the past year.
Brittany: Highlighting both routes for example.
Brittany: Yeah more than double what you see.
Brittany: The past five years.
It has gone from a growth platform must win battle for us given the success.
Speaker Change: Yeah, I think the reason why there's no growing 6% and he said he would know hot.
Speaker Change: For more than 100% of renewal.
Brittany: Our goal is to make all of them for growth that follows.
Speaker Change: He is a great story for both us and our retail partners.
Brittany: Most of the battles over time.
Brittany: Okay.
Brittany: Italy, and Germany are two more recent markets, where we have made virtually into a growth platform.
Speaker Change: In the back half of 2024, we've done and the attention to Germany, where the frozen prepared poultry market is lost.
Brittany: Seeking to replicate our success in the UK.
Speaker Change: And when they blocked the dominated by private label.
Brittany: The frozen poultry segment.
Speaker Change: He was really needs to create a premium tier segments.
Brittany: In Italy.
Brittany: You got to invest in developing the statement.
Brittany: Yeah.
Speaker Change: I'm happy to say that we are finding success here too.
Brittany: I'm happy to say that it is working.
Speaker Change: It is early in the fourth quarter or retail sales profits and profit rose 35% year on year in Germany.
Brittany: The fourth quarter.
Brittany: Born free in Italy, right now.
Brittany: 98% year on year, although market Chengguan Paul.
Speaker Change: We mentioned two boats as a percent of market share in the fourth quarter.
Brittany: Totally discrete.
Speaker Change: 70 basis points higher than the prior year and illustrates how long the runway could be for us in these markets.
Brittany: Any thoughts with you before.
Brittany: Meanwhile, there's no rush.
Brittany: Singapore Sydney.
Brittany: For more than 100%.
Speaker Change: Oh the growth platform, we highlighted last year, what's the pesos.
Brittany: Sure.
Brittany: This is a great story for us.
Speaker Change: As a leading Florida, but its only appropriate if we'd be a leading frozen pizza company as well.
Brittany: And though we did boxes.
Brittany: In the back half of 2024.
Speaker Change: In Belgium, Norway do you have a strong market share position in potatoes that we are leaning into maybe even a little stronger and grow our market share by 420 basis points year on year, an important important for.
Brittany: And the attention to Germany, where the frozen poultry market is lost.
Brittany: He loved.
Brittany: Dominated by private label.
Brett: Yes, Brett this is to create a mainland tier segments.
Speaker Change: And we are happy to report that we began to relieve in Belgium last year.
Speaker Change: I'm happy to say that we're finding success too.
Speaker Change: And from a limit to the number one in value share.
Speaker Change: Early in the fourth quarter retail sales.
Speaker Change: And friends, all shake Blu 550 basis points to 16, 1% in the quarter.
Speaker Change: Rose, 35% year on year in Germany.
Speaker Change: No.
Speaker Change: Market share in the fourth quarter.
Speaker Change: And you'll get what the market is very large or share grew 70 basis points year on year to eight 9%.
Have you 70 basis points higher than the <unk>.
Speaker Change: You, probably a year and industries or longer runway for us in this market.
Speaker Change: The voltage months even.
Speaker Change: Even if it's not keeping pace with a fantastic result in France and Belgium.
Speaker Change: Oh the growth platform, we highlighted last year with the pesos.
Speaker Change: As a leading food company, it's all appropriate if we'd be a leading product company as well.
Speaker Change: Turning to 2025.
Speaker Change: Oh playbook not look meaningfully different.
Speaker Change: Yeah.
Speaker Change: Our strategy is working and we will stay the course by SAP getting frozen food.
Speaker Change: Belgium, Norway do you have a strong market share position in potatoes.
Speaker Change: We are leaning in to make it even stronger and grow our market share by 420 basis point year on gainful employment.
Speaker Change: We continue to focus on our investments now know must win battles and targeted growth platforms.
Speaker Change: What we've been doing with more advertising more innovation more innovation and more revenue growth management initiatives.
Speaker Change: And we are happy to report.
Speaker Change: I think it will even Belgium last year lagging from a limit to the number one body shape.
Speaker Change: Ongoing productivity realization from across the organization.
Brian O'shea: Brian O'shea with fiber.
Speaker Change: In investment growth, allowing us to deliver top.
Brian O'shea: It is 161% this quarter.
Speaker Change: Top and bottom line growth.
Brian O'shea: And when the market is very large all shaken was 70 basis points year on year.
Speaker Change: And as always in the business Nomad foods, we will deploy capital in ways that create value for shareholders.
Brian O'shea: 9%.
Brian O'shea: The accomplishments, even if it's not keeping pace with a fantastic result.
Speaker Change: Gulf and beyond organic growth.
Brian O'shea: For instance engine.
Speaker Change: I'm excited to celebrate this year is it could be somebody with you in 2025.
Brian O'shea: Turning to 2025.
Brian O'shea: Oh people not meaningfully different.
Speaker Change: That.
Ruben: He's over to Ruben.
Brian O'shea: He is working.
Ruben: But what we can provide some more detail on what we achieved last quarter.
Brian O'shea: Good job getting probes.
Brian O'shea: What can you do.
Ruben: Ribbon.
Brian O'shea: Focus on melanoma.
Ruben: Stefan and good morning, everyone.
Brian O'shea: I dunno must win battles.
Brian O'shea: The growth platforms.
Ruben: Even with the company now for roughly eight months and I am increasingly confident in the opportunities that lie ahead of us.
Brian O'shea: With more than 90, more innovation more innovation and more revenue growth management initiatives.
Ruben: We have an amazing portfolio and a great pedigree.
Speaker Change: Your talent and nutritional tailings at our backs.
Brian O'shea: Oh great.
Brian O'shea: We got a nation from across the organization.
Speaker Change: Facebook is working and the innovation renovation marketing plans, we have to drive sustainable growth and 75 and deals are competitive.
Brian O'shea: And growth.
Brian O'shea: The <unk> group.
Brian O'shea: Top and bottom line growth.
Brian O'shea: And as always it is.
Speaker Change: Turning to results as you can see on slide seven and nine for the fourth quarter.
Brian O'shea: Nomad foods.
Brian O'shea: We'll deploy capital in ways that create value for shareholders and goes above and beyond organic growth.
Speaker Change: Reported net revenues increased by four 3% to 793 million Euro.
Speaker Change: Organic growth was three 1%, which marked our 10th consecutive quarter of organic growth on growth remained positive for the third consecutive quarter rising by an impressive four 7% while price mix was a negative one 6% offset the volume growth that we reinvested some of our margin upsides.
Brian O'shea: I'm excited to celebrate the 10 P M.
Brian O'shea: With you in 2025.
Brian O'shea: Yeah.
Brian O'shea: Does that mean.
Brian O'shea: Please over to Ruben.
Brian O'shea: More and more.
Speaker Change: Some more detail on what you achieved last quarter rebound.
Speaker Change: Everybody. Thank you Stefan and good morning, everyone.
Speaker Change: To drive impactful merchandising at retail.
Speaker Change: We'll be comping off of roughly eight months and I am increasingly confident in the opportunities that lie ahead of us.
Speaker Change: And that price investment was an 80 basis point headwind to gross margin almost more than overcome by 40 basis points of favorable mix and almost 60 basis points of productivity thanks to efficiency gains.
Speaker Change: We have an amazing portfolio and a great pedigree.
Speaker Change: Your talent and nutritional tailwind at our back.
Speaker Change: Facebook is working and the innovation renovation marketing says we have to drive sustainable growth and 75 deals are competitive.
Speaker Change: This quarter robust gross margins and healthy revenue growth delivered a 9% increase in gross profit, which was amplified by two 6% year on year decrease in SG&A expenses to result in a $17 six increase in adjusted EBITDA.
Speaker Change: Turning to results as you can see on slide seven and not for the fourth quarter.
Speaker Change: Reported net revenues increased by four 3% to 719 senior in Europe.
Speaker Change: The lower SG&A expense was driven by lower A&P expenses as we lap the sharp increase in prior year investments and benefit from a more even investment cadence throughout the year.
Speaker Change: Organic growth was three 1%, which marked our <unk>.
Speaker Change: Second quarter organic growth on growth remained positive for the third consecutive quarter rising by an impressive four 7% while price mix was negative one 6% offset the volume growth.
Speaker Change: A&P investment rose high single digits for the year on top of double digit increase in 2023.
Speaker Change: We reinvested some of our margin upsides to drive impactful merchandising at retail.
Speaker Change: Interest investment growth slowed to low single digits in the quarter as we begin to cycle the capability investments if the game in late 'twenty, three and carried through to 'twenty four.
Speaker Change: And that price investment was an 80 basis point headwind to gross margin almost more than overcome by 40 basis points on favorable mix and on the 60 basis points on productivity, thanks to efficiency gains.
Speaker Change: I'd just offer drove 28% year on year, while adjusted EPS rose, 31% to 42 Euro cents.
This quarter robust gross margins and healthy revenue growth delivered a 9% increase in gross profit, which was amplified by two 6% year on year decrease in SG&A expenses.
Speaker Change: Diluted share count shrunk, 3% year on year.
Speaker Change: For the full year, we delivered our ninth consecutive year of sales and adjusted EBITDA growth.
Speaker Change: As you can see on slide eight and 10 full year revenue grew one 8% with organic sales rising 1% that's fully returned to growth one 3% year over year.
Speaker Change: $17 six increase in adjusted EBITDA.
Speaker Change: Lower SG&A expense was driven by lower A&P expenses as we lap the sharp increase in prior year investments and benefit from a more even investment cadence throughout the year.
Gross margin rose from 40 basis points 40 years with $29 6 million, reaching the third east coast with gross margin we achieved in 2019.
Speaker Change: A&P investment rose high single digits for the year on top of double digit increase in 2023.
Speaker Change: Mix and price and promotion was a 70 basis point year on year headwind to our full year gross margin, which was more than offset by 110 basis points of favorable margin mix and Khalid basis points net productivity relaxed by our supply chain teams. Our teams have a robust pipeline of productivity initiatives and expect these benefits to continue.
Indirect investment growth slowed to low single digits in the quarter as we begin to cycle the capability investments if the game late 'twenty three and carried through to 'twenty four.
Speaker Change: This profit rose 38% year on year.
Speaker Change: EPS rose, 31% 42 euro cents.
Speaker Change: You're funding a broker investments going forward.
Speaker Change: Alluded share count shrunk, 3% year on year.
Speaker Change: Our SG&A expenses grew seven 4% for the full year as we increase our A&P and indirect investments ease by high single digits.
Speaker Change: For the full year.
Speaker Change: We delivered our ninth consecutive year of sales and adjusted EBITDA growth.
Speaker Change: Well higher A&P was a continuation of the reinvestment plans that we started in 2003 and continues in 'twenty four.
Speaker Change: As you can see on slide eight.
Speaker Change: Full year revenue grew 8% with organic sales rising 1% as volume returned to growth.
We expect even more reinvestment in 75.
Speaker Change: One 3% year on year gross margin Rose 40 basis point 40 years with 29 six.
Speaker Change: Well higher indirect expense due to a combination of underlying inflation and capability investments in areas, such as cyber security and revenue growth management.
Speaker Change: Reaching the 30, we've quoted gross margin we achieved in 2019.
Speaker Change: These investments now behind US, we expect much more modern with growth in indirect expenses going forward.
Speaker Change: Investments in price and promotion was a 70 basis point year on year headwind to our full year gross margin, which was more than offset by <unk> <unk>.
Despite these investments made in 2024, we were still able to grow our adjusted EBITDA by five 6% for the year.
Speaker Change: Just two points of favorable margin mix and holidays points.
Speaker Change: Relaxed by our supply chain teams, our teams have a robust pipeline productivity initiatives and expect these benefits to continue funding our growth investments going forward.
Speaker Change: Living near the high end of our initial 4% to 6% EBITDA growth guidance range that we gave this time last year.
Speaker Change: Our full year EPS of one year old 78 was also near the high end of our initial one year of 75 to one you're right you're right.
Speaker Change: Our SG&A expenses.
Speaker Change: 4% for the full year increase in indirect investment needs for ice.
Speaker Change: Turning to cash flow now strong fourth quarter results help us over deliver on our full year cash flow guidance with free cash flow conversion of almost a 1% coming in well above our initial 90 to 95 conversion guidance we.
Speaker Change: Single digits.
Speaker Change: Higher A&P was a continuation of the reinvestment plans that we started in 2003 and continue into 'twenty four.
Speaker Change: We expect even more reinvestment in 'twenty five.
Speaker Change: Well higher interest expense due to a combination of inflation and capability investments in areas, such as cyber security and revenue growth management.
Speaker Change: We saw nice working capital inflows in the fourth quarter due to the normal seasonal timing of inventory balances.
Speaker Change: And one of the higher receivable balances that were a headwind in the third quarter due to the timing of their knowledge.
Speaker Change: These investments now behind Us we.
Speaker Change: We expect much more moderate growth in indirect expense going forward.
Speaker Change: The strong free cash flow allowed us to return 208 million Europe to shareholders in 2004 person other than 71 million euros will you return to shareholders in 'twenty three.
Speaker Change: Despite these investments made in 2024.
Speaker Change: Still able to grow our adjusted EBITDA by five 6% for the year living near the high end of our initial 46% EBITDA growth guidance range. We gave this time last year.
Speaker Change: More than a 20% increase last year, we returned to cash in the form of a 60 bed all of a cent per share annual dividend and share repurchases. We finished the year with $156 1 million basic shares outstanding a 4% reduction from where we finished 2023.
Speaker Change: Our full year EPS of one year or 78 was also near the high end of our initial one year of 75 to one you're right.
Speaker Change: Over the past two years, we've now repurchased 219 million Euro VI church.
Speaker Change: Turning to cash flow and our strong fourth quarter results helped us deliver on our full year cash flow guidance with free cash flow conversion of almost a 1% coming in well above our initial 90 to 95 conversion guidance we.
Speaker Change: Turning to our guidance for 75 on slide 12.
Speaker Change: We're pleased with the progress our commercial team has made improving in market results and restoring our market share to grow while we are happy to see our supply chain team delivering health and productivity savings.
Speaker Change: We saw nice working capital inflows in the fourth quarter due to the normal seasonal timing of inventory balances.
Speaker Change: And one of the higher receivable balances that were a headwind in the third quarter.
Speaker Change: It gives a strong momentum into 75, which will be our 10th year as a public company and is also expected to be our engineer posted revenue and adjusted EBITDA growth.
Speaker Change: Please.
Speaker Change: The strong free cash flow allowed us to return $2 8 million to shareholders in 2000 for first Republic, and 71 million euros, we returned to shareholders in 'twenty three and four.
Speaker Change: We continue to expect organic sales growth of up to 3% 40 year and adjusted EBITDA growth of two 4%.
Speaker Change: More than a 20% increase last year, we returned to cash in the form of a $60 <unk> per share annual dividend and share repurchases.
We had a stronger than expected finish to 2024, which means we now expect a higher absolute level of adjusted EBITDA.
Speaker Change: Finished the year with $156 1 million basic shares outstanding a 4% reduction from where we finished 2023.
Speaker Change: As a result, we have raised our full year adjusted EPS range through while you were $85 one year of age nine from the initial one year about 81 to 185.
Speaker Change: Over the past two years, we've now repurchased 219 million euro but shares.
Speaker Change: At recent exchange rates this translates into U S dollar denominated EPS of $1 94 to $1 98.
Speaker Change: Turning to our guidance for 2005 on slide 12.
Speaker Change: We are pleased with the progress our commercial team has made improving embark results and restoring our market share to grow and we are happy to see our supply chain team delivering health.
Speaker Change: And lastly, we continue to expect full year adjusted free cash flow conversion of at least 90% lease.
Speaker Change: Expect to use this cash flow to create incremental value for shareholders that goes above and beyond our organic growth.
Speaker Change: Savings.
Speaker Change: It gives us strong momentum at the 25, which will be our 10th year as a public company and he's also.
Speaker Change: Relatively new residents is a great example of this.
Speaker Change: E R M Pierre posted revenue and adjusted EBITDA growth.
Speaker Change: As you may have seen that announcement last month, our board of directors has approved 37 increase in the first quarter 'twenty five S incidents.
Speaker Change: We continue to expect organic sales growth was 3% 40 year and adjusted EBITDA growth of two 4% we had a stronger than expected finished 2024, which means we will not take a higher absolute level of business.
Speaker Change: Dollar cents per share from the $16 10 quarters play out in 2024.
Speaker Change: As we think about the shape of the year, we expect growth to be somewhat choppy quarter to quarter, ending a phasing of investments a year comparisons and some seasonal movement.
Speaker Change: And as a result, we have raised our full year adjusted EPS range to one of your 85, one year eight nine from the initial one year about 81 to 185.
Speaker Change: We expect the underlying trend line of improvement to work throughout the year and for 17.
Speaker Change: At recent exchange rates this translates into U S dollar denominated EPS of $1 94 to $1 98.
Speaker Change: Advertising assessment golf will be meaningful leg quarter alone, our new innovation fuel distribution gains and associated merchandising <unk>.
Speaker Change: And lastly, we continue to expect full year adjusted free cash flow conversion of at least 90%.
Speaker Change: We expect it to be more phased into quarter two important trade this year.
Speaker Change: We expect to use this cash flow to create incremental value for shareholders.
Speaker Change: This in combination with Easter falling into quarter, two this year person portable lunch here.
Speaker Change: Well and beyond our organic growth.
Speaker Change: Q2 revenue headwinds in the first quarter.
Speaker Change: Relative to when you visited is a great example of this.
Speaker Change: This moment, we therefore expect organic sales to modest decline in Cornwall.
Speaker Change: May have seen our announcement last month.
Speaker Change: Board of directors has approved a 30% increase.
Speaker Change: These are just timing dynamics and not a reflection of the underlying health of the business and.
Speaker Change: Increases in first quarter 'twenty five incidents.
Speaker Change: In fact, our shipments are moving around we are happy to see our retail sales growing at 1%, 2% range over the past two months.
Speaker Change: Dollar cents per share from the $16.
Speaker Change: 2024.
Speaker Change: As we think about the shape of the year, we expect growth to be somewhat choppy quarter to quarter and phasing of investments prior year comparisons some seasonal movement.
Speaker Change: The later phasing of activity.
Speaker Change: Overall I'm pleased with the progress we are making we returned submissions to both volume and market share driven growth last year and are confident that we can keep the momentum going into 2025 and with that I will now turn the call back to the operator to open the line for questions.
Speaker Change: We expect the underlying trend line of improvement to walk throughout year in totality.
Advertising investments are all building meaningful leg quarter Wong, our new innovation and distribution gains and associated merchandising is expected to be more facings important two important trade this year.
Speaker Change: We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone if youre using a speakerphone. Please pick up your handset before pressing the keys.
Speaker Change: In combination with Easter falling into quarter. Two this year first quarter, one last year will lead to revenue headwinds in the first quarter at.
Speaker Change: At any time. Your question has been addressed and you would like to withdraw your question. Please press Star and then two.
Speaker Change: At this moment, we therefore expect organic sales to monthly decline in Cornwall.
Speaker Change: Our first question comes from Andrew Lazard with Barclays. Please go ahead.
Speaker Change: These are just timing dynamics and not a reflection of the underlying health of the business.
Andrew Lazard: Great. Thanks, so much and good morning, and good afternoon everybody.
Speaker Change: In fact, our shipments are moving around we are happy to see our retail sales growing you can walk to 2% range over the past two months.
Speaker Change: Good morning, Andrew.
Speaker Change: Surely.
Speaker Change: So Tom maybe to start off what is what is your 1% to 3% organic sales growth forecast for full year 'twenty five predicated on you know with respect to some of your expectations for category growth and market share performance.
Speaker Change: The later phasing of activity.
Speaker Change: Overall I'm pleased with the progress we are making we returned submissions to both volume and market share driven growth last year.
Speaker Change: Confident that we can keep the momentum going into 2025.
Speaker Change: Well as you may have seen you know, we we and.
Speaker Change: With that I will now turn the call back to the operator to open the line for questions.
Speaker Change: And the lowest lows low inflation environment, and we've come up with.
Speaker Change: We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone if youre using a speakerphone. Please pick up your handset before pressing the keys if at any time. Your question has been addressed and you would like to withdraw your question. Please press Star and then two.
With the 1% category growth.
Speaker Change: That's the first piece.
Speaker Change: And the second piece is is us.
Speaker Change: Obviously, it's a.
Speaker Change: Overall, as we said it's growing but also very interestingly you know we all boats. What's yours is really to serve these countries fish vegetables, which are growing very nicely.
Speaker Change: Our first question comes from Andrew Lazard with Barclays. Please go ahead.
Speaker Change: Because the commercial flywheel used to working nicely.
Andrew Lazard: Great. Thanks, so much.
Speaker Change: Good morning, and good afternoon everybody.
As soon as we said is around 5%. So the rest of the 1% to 3% is coming from from this market share and mix.
Andrew Lazard: Good morning, Andrew.
Speaker Change: Good morning.
Speaker Change: Stefan maybe to start off what is what is your 1% to 3% organic sales growth forecast for full year twenty-five predicated on you know with respect to sort of your expectations for category growth and market share performance.
And then beat off.
Speaker Change: So net ERP I would put it that way Andrew you remember that saying Q3, we suffered a thumb on the ERP disruption in the UK, which is our biggest business for us. So we keep going with you know b, which is the right thing to do but this year as we said, we decided to slow down the process come up with.
Speaker Change: Well as you may have seen you know we we.
Speaker Change: Low lows low inflation environment, and we've come up with a with the 1% category growth.
Speaker Change: With a with the lower the smaller part of the business and also all the lessors. So that's why I'm using the word niche ERP. So will there be some disruption may be much much much much more limited than in Q3.
Speaker Change: First piece.
Speaker Change: And the second piece is is that somebody's ourselves obviously, it's oh.
Speaker Change: Overall, as we said it's growing but also very interestingly you know, we all bought sort of yours is really towards so this poultry fish vegetables, which are growing very nicely.
Three last year, so that's where the the 1% to 3% is coming from.
Speaker Change: Great No that's helpful and then.
Speaker Change: Mentioned in the fourth quarter.
Speaker Change: Because the commercial cloud we used to working nicely.
Speaker Change: You reinvested some of some of the upside and some of the sort of promotional activity getting sort of distribution and some retail work and whatnot.
Speaker Change: Innovation as we said is around 5%. So the rest of the 1% to 3% is coming from from this market share mix.
Speaker Change: And then obviously benefited volume pretty nicely as you most of the first quarter I realize there's some impact on volume as you talked about two to a later Easter and such how would you how would you expect sort of the price mix piece to come in now that you're two months through the first quarter would it be consistent on a year over year basis as an impact with what you saw in <unk>.
Speaker Change: And then beat off some.
Speaker Change: So net ERP I would put it that way Andrew you remember that Q3, we suffered.
Speaker Change: On the ERP disruption in the UK, which is our biggest business for us. So we'll see we keep going with <unk>, which is the right thing to do but this year as we said, we decided to slow down the process come up with with a.
Speaker Change: Q, where more and more modest you think again on the price mix side. Thanks, so much.
Speaker Change: A smaller part of the business and also all the lessors. So that's why I'm using the word <unk>. So will there be some disruption may be much much much more limited than in Q3.
Andrew Lazard: Yeah, Let me, let me answer that Andrew.
Andrew Lazard: And hopefully as you know you appreciate that we cannot and will not get to your kind of guidance outlook between Shepherd line items of the P&L and fast flowing but let me do we tried to give you some context.
Speaker Change: Three last year, so that's where the the 1% to 3% is coming from right now that's helpful and then.
Andrew Lazard: So you're absolutely right. If you look at the last three quarters <unk> seen positive voice, especially in quarter four wherever you're almost at 5% a positive volume growth and volume will remain important to us it's important from a consumer perspective retailer perspective, but also how it drives leverage in our factories. So we're not all overnight go to change that strategy wherever drives efficiencies.
Speaker Change: Mentioned in the fourth quarter you.
Speaker Change: You reinvested some of some of the upside and some of the sort of promotional activity getting sort of distribution and some retail work and whatnot.
Speaker Change: And then obviously benefited volume pretty nicely as you moved through the first quarter I realize there's some impact on volume as you talked about two to a later Easter and such how would you how would you expect sort of the price mix piece to come in now that you're two months through the first quarter would it be consistent on a year over year basis as an impact with what you saw in <unk>.
Andrew Lazard: And reinvest that in volume.
Andrew Lazard: So that's one thing.
Speaker Change: And to the point of Stefan show, we've seen in the last two three months lower inflation.
And maybe that that's also a separate question. If we look at kind of the full year and we're not fully hedged yet, but we might be a bit more inflation.
Speaker Change: You work more and more modest you think again on the price mix side. Thanks, so much.
Andrew Lazard: Yeah, Let me, let me answer that Andrew.
Speaker Change: Into this year, how that exactly plays out is still to be seen but then we would need to take some pricing back and again, if we see inflation caused by that'd be absolutely clear first of all as read to be cost competitive. So we will continue all our efforts we've done in terms of savings programs on procurement continuing to drive efficiencies in our factories, but also to drive fulfill.
Speaker Change: And hopefully as.
Andrew Lazard: I appreciate it.
Andrew Lazard: Cancel them they'll all get there kind of guidance outlook between Shepherd line items of the P&L and five floating but let me try to give you some context.
Andrew Lazard: So you're absolutely right. If you look at the last three quarters, you've seen positive volume, especially in quarter four wherever you're almost at 5% positive volume growth and volume will remain important to us it's important from a consumer perspective retailer perspective, but also how it drives leverage in our factories. So we're not all overnight going to change that strategy wherever drives efficiencies.
Speaker Change: PNC is an interaction, but there might be that are leather Asia is the remainder, which we need to do with the price now how and when that price comes through is still to be seen so you know at this moment.
Speaker Change: And you know we've only had one month of actuals, we still see a volume and a bit of pressure on price throughout the year. It could be that price comes back. So I think that that is going to six.
Andrew Lazard: And we invest that in doing so.
Andrew Lazard: So that's one thing.
Andrew Lazard: To the point of Stefan show, we've seen in the last two to three months lower inflation.
Speaker Change: We conjecture at this point.
Speaker Change: Thank you very much.
Speaker Change: And the next question comes from Steve Powers with Deutsche Bank. Please go ahead.
Andrew Lazard: And maybe that's also a separate question if we look at kind of the full year and we're not fully hedged yet, but we might see a bit more inflation.
Steve Powers: Oh, great. Thank you good morning, good afternoon everybody.
Andrew Lazard: Into this year, how that exactly plays out is still to be seen but then we would need to take some pricing back.
Speaker Change: The fun they stepped up innovation and renovation activity that you mentioned in your prepared remarks that.
And again, if we see inflation of cost basis that would be absolutely clear first of all as read to be cost competitive. So we will continue all our efforts we've done in terms of savings programs on procurement continue to drive efficiencies in our factories, but also to drive efficiencies and interaction, but there might be that are leather Asia as are made and which we need to do with the price now how and when that price.
I'm curious as to how much of that you expect to be focused on our existing must win battles as opposed to some of the new and emerging growth platforms that you talked about in 'twenty five and just how you think about striking that balance.
Speaker Change: Well the thing is is to your point, it's going to mean, mostly gross.
Andrew Lazard: Through its still to be seen so you know at this moment and you know we've only had one month of actuals, we still see a volume and a bit of pressure on price throughout the year. It could be that price comes back. So I think that that is six weeks future at this point.
Speaker Change: They must win battles and growth baffles, but let's say, let's put it that way the must win battles are keeping a very much the biggest piece of our business. So it's around 50% of our business and that's where the bulk of the innovation is going to go. These being said at the same time growth platform, which is let's say north of 100 million.
Speaker Change: Thank you very much.
Speaker Change: And the next question comes from Steve Powers with Deutsche Bank. Please go ahead.
Speaker Change: At this stage is growing very nicely very fast is it going to be a lot of listed launch which is great.
Speaker Change: Oh, great. Thank you good morning, good afternoon everybody.
Speaker Change: So it's going to be probably big proportionately a bigger bigger part obviously applied on the smaller part of the business, but that's the way. The book did you say the innovation is going to go first and foremost most of the battles then obviously growth vessels.
Speaker Change: The fun they stepped up innovation and renovation activity that you mentioned in your prepared remarks that.
Speaker Change: Curious as to how much of that you expect to be focused on our existing must win battles as opposed to some of the new and emerging growth platforms that you've talked about <unk> 25, and just how you think about striking that balance.
Speaker Change: Okay very good and then you would also.
Speaker Change: You talked about the organizational changes and the rewiring efforts that you've done to improve our overall execution agility et cetera.
Speaker Change: Well the thing is.
Speaker Change: Oh boy, it's going to mean mostly growth.
Speaker Change: Most of the bundles and both vessels with let's say, let's put it that way the must win battles are keeping a very much the biggest piece of our business. So it's around 50% of our business and that's where the bulk of the innovation is going to go. These being said at the same time growth platform, which is let's say north of $100 million.
Speaker Change: To what extent do you feel that mission is.
Speaker Change: Sort of accomplished versus there being more work to do and what would be the priorities and twenty-five on that front.
Speaker Change: Well, let me start with the weather.
Speaker Change: This my statements is never finished that's the first piece never finished because well you may know me as I'm never I've never fully satisfied anyway. So that's a that's you'll never hear me something like Fantastic and then what do you think because these what does it do they.
At this stage is growing very nicely.
Speaker Change: <unk> is it going to be a lot of listed launch which is great.
Speaker Change: So it's going to be probably big proportionately, a bigger bigger buck, but obviously applied on the smaller part of the business, but that's where the innovation is going to go first and foremost mostly battles then obviously growth vessels.
Mike: This is Mike.
Speaker Change: Okay very good and then you would also you talked you talked about the organizational changes and the rewiring efforts that you've done to improve our overall execution agility et cetera.
Speaker Change: Pardon me, ladies and gentlemen, please stand by while we reconnect the speaker line.
Speaker Change: What extent do you feel that mission is yes sort of accomplished versus there being more work to do and what would be the priorities and twenty-five on that front.
Speaker Change: Well, let me start with it.
Speaker Change: Got it.
Speaker Change: This my statements.
Speaker Change: Never finished.
Speaker Change: The first piece.
Speaker Change: Other finished because well you may know me as I've never fully satisfied anyway. So that's a that's you'll never hear me something like fantastic in there what do you think because these what does it do they.
Mike: This is Mike.
Speaker Change: Okay.
Speaker Change: Hi. This is the operator, we have now brought in the speaker line.
Speaker Change: You can proceed.
Speaker Change: Pardon me, ladies and gentlemen, please stand by while we reconnect the speaker line.
Speaker Change: Thank you very much so Steve sorry for the interruption.
Speaker Change: So I can feel that I can feel your passion your passion was so great.
Speaker Change: Yeah.
Speaker Change: I'm not pleased with what's happened right no I get that.
Speaker Change: [laughter], rather dull, but five so my partners know is never finished but this being said we have I mean, we have really simplified the organization Big time last year. So you remember that we had you know at some stage 22 countries and then reporting the Mvpds with Watson.
Speaker Change: I would I wouldn't say it was optimal no. We have all these guys reporting to one person six clusters and I think it's a big it's a big big change.
Speaker Change: In the meantime, we have always been investing heavily in things like that like to a gross lack them like your revenue growth management innovation as well in service of the.
Speaker Change: Okay.
Speaker Change: Hi. This is the operator, we have now brought in the speaker line.
Speaker Change: Can proceed.
Speaker Change: Obviously these clusters supply chain is really a it's a never ending process anyway restructuring improvements, making sure that you know these savings are going to come back and then be in a position to invest behind the beyond the E&P and gross margin. Ultimately so my phone is is never finished but let's see what we have accomplished this year.
Steve Powers: Thank you very much so Steve sorry for the interruption.
Steve Powers: So I could feel like I can fill your passion. Your passion was so great first of all.
Steve Powers: Yes.
Steve Powers: So pleased with what's happening right now.
Steve Powers: [laughter].
Steve Powers: That's fine. So my partners know is never finished but this being said we have.
Speaker Change: Last year was really meaningful no. Obviously, we also have to admit to remain very very cost conscious because basically what they want to do to achieve is to put most of all let's say savings behind.
Steve Powers: I mean, we have really simplified the organization Big time last year. So you remember that we had you know at some stage 22 countries and then reporting.
Speaker Change: A&P and innovation agenda.
Steve Powers: I wouldn't say it was optimal no. We have all these guys reporting to one person six clusters and I think it's a big it's a big big change.
Speaker Change: Obviously in service of short term and long term EBITDA, but that's our that's how we want to be so lean in terms of indirect after having restricted and clarify the whole structure and then making sure that obviously or top line, we'd be served the right way.
Steve Powers: In the meantime, we have invested heavily in things like lack of growth.
Steve Powers: Like maybe growth management innovation as well in service.
Speaker Change: Very good I appreciate all that I will pass it on thank you. Thank.
Obviously these clusters.
Speaker Change: Thank you.
Speaker Change: Hi, Jamie is really a it's a never ending process anyway restructuring improvements, making sure that you know these savings are going to come back and then be in a position to invest behind the beyond the E&P and gross margin. Ultimately so my point is never finished but let's see what we have accomplished this year last year was really meaningful.
Speaker Change: And the next question comes from Rob Dickerson with Jefferies. Please go ahead.
Rob Dickerson: Great. Thanks, so much.
Rob Dickerson: I guess, maybe just first a question on around gross margin.
Rob Dickerson: Yeah, I think about a year or so ago.
Rob Dickerson: You know kind of the the idea was you can gradually get back right to the to the 30% gross margin range or somewhere around there it really based on volume recovery.
Speaker Change: No. Obviously, we also have remained very very cost conscious because basically what they want to do to achieve this two points most of all let's say savings behind.
Rob Dickerson: Also combined with just all of the probe the productivity initiative there in the.
Speaker Change: And innovation doesn't obviously service of short term long term EBITDA, but that's that's how we want to be so lean in terms of indirect after having restructured and clarify the whole structure, and then making sure that obviously or topline we'd be sort of the right way.
Rob Dickerson: And the mix benefits.
Rob Dickerson: As you would think through 'twenty.
Rob Dickerson: Twenty-five relative 'twenty four I guess the first question is like.
Rob Dickerson: Seems like you're kind of already there right. You finished the full year 'twenty four you're pretty close already is.
Speaker Change: Very good I appreciate all that I'll pass it on thank you.
Rob Dickerson: Is there a is there any kind of change the thinking in terms of like what the real gross margin benefit you know from here could be on the business just given.
Speaker Change: You.
Rob Dickerson: And the next question comes from Rob Dickerson with Jefferies. Please go ahead.
Rob Dickerson: Great. Thanks, so much.
Rob Dickerson: Clearly the focus on must win battles given the volumes starting to recover given the productivity initiatives. That's just the first question. Thanks.
Speaker Change: I guess, maybe just first a question on gross margin.
Rob Dickerson: I think about a year or so ago.
Rob Dickerson: Yeah, Let me answer that thanks for the question.
Rob Dickerson: Kind of the idea was you can.
Rob Dickerson: <unk>.
Rob Dickerson: Again, you know our strategy will continue in the same way and no change that we will continue and that's our commitments drives efficiencies in supply chain you've seen it in quite a while for in both the full year, we had full year, Ron Haan, another 10 basis points of our supply chain efficiencies quarter, four we had supply chain efficiency well, we will continue to drive that.
Rob Dickerson: Gradually get back right to the to the 30% gross margin range or somewhere around there it really based on volume recovery.
Rob Dickerson: Also combined with the productivity initiatives and the <unk>.
Rob Dickerson: Got it.
Rob Dickerson: As we think through.
Rob Dickerson: 25 relative to 'twenty four I guess the first question is like.
Rob Dickerson: Right and what we then said we will reinvest junction efficiencies together with our continued effort of driving mixed into our brands and products now most of that will be an investment in A&P and into the drop but it could also be that we do some investments in price as you have seen over the last three quarters. So that is our commitment.
Rob Dickerson: It seems like you're kind of already there right. You finished the full year 'twenty for you pretty close already.
Rob Dickerson: Is there a is there any kind of change the thinking in terms of like what the real gross margin benefit.
Rob Dickerson: From here could be on the business just given.
Rob Dickerson: We're not.
Rob Dickerson: Oh, My God, you say dishes or guidance for gross margin and 25, whether that will be 30, we're very happy that you see the recovery in 'twenty four we will continue to drive to drive.
Rob Dickerson: Clearly the focus on must win battles given the volumes starting to recover given the productivity initiatives. That's just the first question. Thanks.
Yes, let me answer that thanks for the question.
Rob Dickerson: But as I said also there will be a bit of inflation again, we need to be cost competitive we have to take some projects and that Malaysia, and let's see how we done and better gross margin.
Rob Dickerson: <unk>.
Rob Dickerson: Again, our strategy will continue in the same way and no change that we will continue and that's our commitment to drive efficiencies in supply chain, you've seen that in quarter four in both the full year, we had full year, Ron Haan, another 10 basis points of supply chain efficiencies quarter, four we had supply chain efficiency well, we will continue to drive that.
Rob Dickerson: On the long term I think we will continue to drive in verticals Martin My coffee how it plays out in 'twenty five is still to be seen.
Rob Dickerson: Okay, great perfect.
Speaker Change: And then maybe just a bigger question for you Stefan to surround.
Rob Dickerson: Right and what we then said we will reinvest docks efficiencies together with our continued effort on driving mix into our brands and products now most of that will be an investment in A&P and into drop but it could also be that we do some of the investments in price as you have seen over the last three quarters. So that is our commitment.
Rob Dickerson: Kind of.
Rob Dickerson: Strategic opportunities inorganic strategic opportunities.
And kind of where you sit now you know kind of.
Rob Dickerson: For a long time know bad was clearly.
Rob Dickerson: Acquiring a lot more actively.
Rob Dickerson: What's occurred.
Rob Dickerson: Over the past three or four years.
Rob Dickerson: That made that may be a little bit more complicated maybe you know valuations, even a little lower I'm just.
Rob Dickerson: We're not at this point I'm going to say this is our guidance for gross margin.
Rob Dickerson: Area sake.
Rob Dickerson: 25, whether that will be 30, we're very happy that you see the recovery in 'twenty four we will continue to drive to drive.
Rob Dickerson: Where you sit today you know.
Rob Dickerson: Like are you okay.
Rob Dickerson: More actively thinking about acquisition potential like if there were something that awarded.
Rob Dickerson: But as I said also there will be a bit of inflation again, we need to be cost competitive we have to take some projects and then Malaysia and let's see how we then gross margin.
Rob Dickerson: Were to come up that were attractive.
Rob Dickerson: Would you still consider that or you know or.
Rob Dickerson: On the long term I think we will continue to drive and further gross margin my coffee how it plays out in 'twenty five is still to be seen.
Rob Dickerson: Are you may be you know in a period right now such that you know the focus on the core portfolio really is primary number one initiatives.
Rob Dickerson: Yeah.
Rob Dickerson: Okay, great perfect.
Speaker Change: And then maybe just a bigger question for you Stefan just around.
Rob Dickerson: You really you know kind of you know.
Speaker Change: Got it.
Rob Dickerson: At some point, we'll get back there, but right now we're really not thinking about acquisition.
Speaker Change: Strategic opportunities inorganic strategic opportunities.
Speaker Change: And kind of where you sit now you know kind of.
Rob Dickerson: Sensual at this point that's all thanks, so much.
Speaker Change: For a long time know bad was clearly.
Rob Dickerson: Well, thanks, Rob well.
Speaker Change: Acquiring a lot more actively.
Speaker Change: The point is with or without acquisitions, Rob. The focus has always been an order both from the existing portfolio. That's the first piece, we never deviated you know even when we did you know the Switzerland or all good filler, though on this easel geriatrics, we never deviate that's the key piece and that's the key.
Speaker Change: What's occurred.
Speaker Change: Over the past three or four years.
Speaker Change: That made that may be a little bit more complicated maybe valuations, even a little lower.
Speaker Change: I'm, just curious like kind of.
Speaker Change: Where you sit today.
Speaker Change: Are you okay.
Speaker Change: More actively thinking about acquisition potential like if there were something that wording.
Speaker Change: Because I don't think you can be a good acquirer, if you're not doing the right job with your with your with your book of business because the business model beyond the acquisitions are always predicated on a very solid model organic model and that's why we never did and the way the acquisitions between 15 and 16 and 17, because we are.
Speaker Change: Were to come up that were attractive.
Speaker Change: Would you still consider that or.
Speaker Change: Are you may be in a period right now such that the focus on the core portfolio really is primary number one initiatives.
Speaker Change: No nothing to offer we have first to clean up the whole thing and then we started so now obviously since she is basically the 2020 do we start to your point because basically first we need to focus on on the business you know assets, even more that's one thing and second because there was a big difference between.
Speaker Change: And you really cut it.
Speaker Change: At some point, we will get back there, but right now we're really not thinking about.
Speaker Change: This should potential at this point that's all thanks, so much.
Speaker Change: Thanks, Rob.
Speaker Change: Well.
Speaker Change: The point is with or without acquisitions drove the focus has always been.
Speaker Change: And sellers and buyers.
Speaker Change: Both from the existing portfolio. That's the first piece, we never deviated even when we did you know the Switzerland or all good filler, though on this easel geriatrics, we never deviated thats the key piece and that's a key piece because I don't think it can be a good acquirer.
Speaker Change: I think this.
Speaker Change: This is the this is reducing the gap is declared easy is reducing a beat in the meantime, no regrets we keep buying back shares which is the best acquisitions. We can do but also at the same time I think what we also see is they're awesome.
Speaker Change: You're not doing the right zone with your with your with your book of business because the business model beyond the positions are always predicated on a very solid model organic model and that's why we never did you do any acquisitions between 15 16 17.
Speaker Change: Maybe under the radar screen things you know not shiny objects that we could consider it in the in all category you know you've I've got to get sub categories in some countries, where we have a lot of synergies.
Speaker Change: We have no nothing to offer we have first to clean up the whole thing and then we started so now obviously seems seems basically the 2022 and we stopped to your point because basically first we need to focus on on the business you know assets, even more that's one thing and second because there was a big difference.
Speaker Change: And that's the kind of things more and more we are considering nothing done yet and obviously I'm not in the business of disclosing any names that would be that would be nothing that there'll be this month is the smart thing to do no guarantee to do anything Rob because if you guarantee and is something that the best way to make mistakes by the way, but definitely we believe.
Speaker Change: Between sellers and buyers.
Speaker Change: That you know we have something to offer which is not necessarily the big names in the in Europe with others add ons.
Speaker Change: This is this is reducing the gap is the cloud is reducing a bit in the meantime, no regrets we keep buying back shares.
Speaker Change: These and I think by doing so you know we could create a nice pipeline of M&A as we also creating a pipeline of innovation.
Speaker Change: The best acquisitions, we can do but also at the same time I think what we also see is there are some maybe under the radar screen things you know not shiny object.
Speaker Change: And maybe just to build on that and that I can give credits to suffer Stefan I wasn't dabbagh since 2016 end of 2016.
Speaker Change: Business has deployed roughly $1 2 billion for M&A, while shrinking the share count by 13% 13, one three.
Speaker Change: Could you do it in the in all category.
Speaker Change: I've got the sub.
Speaker Change: Sub categories in some countries, where we have a lot of synergies and that's the kind of things more and more we are considering nothing done yet and obviously I'm not in the business of disclosing any names that would be that would be not suddenly there'll be the smart thing to do no guarantee to do anything Rob because if you're a guarantee and it's something that's a bit.
Speaker Change: This combined them with our organic growth has allowed us to increase our EBITDA by share per share by 97, almost 100% nearly doubling it from 2018 to 2024 and we were doing this whilst you've seen the dividends and lowering our net debt to add to EBITDA leverage. So I think that also tells you something in my humble opinion.
Speaker Change: We do make mistakes by the way, but definitely we believe that you know we have something to offer which is not necessarily the big names in <unk>.
Speaker Change: Yeah of course, thank you so much very impressive.
Speaker Change: Thank you Rob.
Speaker Change: Europe with others.
Speaker Change: And the next question comes from John Baumgartner with Mizuho. Please go ahead.
Speaker Change: Dogs.
Speaker Change: And I think by doing so we could create a nice pipeline of M&A. We are also creating a pipeline of innovation.
John Baumgartner: Good morning, Thanks for the question.
Speaker Change: Hi.
Speaker Change: And maybe just to build on that.
Speaker Change: Yes.
Speaker Change: Hey, good morning, good afternoon.
Speaker Change: I can give credits to Stefan I wasn't there, but since 2016 end of 2016.
Speaker Change: First question I wanted to come back to the enterprise wide transformation.
Speaker Change: Business has deployed roughly $1 2 billion for M&A, while shrinking the share count by 30% 13, one three.
Speaker Change: Just taken for that program in the quarter were fairly sizable how far along are you in terms of taking these charges at this point implementing the program and then on the other side of that how should we think about the ramp and the related efficiencies.
Speaker Change: This combined them with our organic growth as it allowed us to increase our EBITDA by share per share by 97, almost on the percent nearly doubling it from 2018 to 2024 and we were doing these wells you've seen of dividends alone.
Speaker Change: No. It's not something you normally discuss in detail what should that ramp in efficiencies beginning in 2025 is it more 2026, just any any thoughts there.
Speaker Change: Our net debt to EBITDA leverage so I think that also tells you something in my humble opinion.
Speaker Change: Yeah, Let me answer that's a good question, Jon So a couple of points.
Speaker Change: <unk> seen that.
Speaker Change: Yes of course, thank you so much very impressive.
Speaker Change: For those on the line.
Speaker Change: Yes, maybe you can go to Jonathan.
Rob Dickerson: Thank you Rob.
Speaker Change: Good luck.
Rob Dickerson: And the next question comes from John Baumgartner with Mizuho. Please go ahead.
Speaker Change: So they did indirectly.
Speaker Change: It was around 5 million in the quarter as well as if you look at the last year, what we said before some interaction Asia, we will bring that down to tell you. We don't all of sudden going to help that they can we can bring that down as wrong as with 2025% and that is clearly the aim in which we are working towards that and that's Walmart.
Speaker Change: Good morning, Thanks for the question.
Speaker Change: Hi, Joe.
Speaker Change: Hey, good morning, good afternoon.
Speaker Change: First question I wanted to come back to the enterprise wide transformation charges taken for that program in the quarter were fairly sizable how far along are you in terms of taking these charges at this point implementing the program and then on the other side of that how should we think about the ramp and the related efficiencies.
The other point about snap on stratospheric onto your question on locations. Each the other point is about Stephens you said in terms of not having disruption to get moving.
Speaker Change: We'll go slower smaller and simpler and slower means one of the lessons as you know you need proper time to test states to join boards, our teams and our people and our suppliers. That's one part we will go smaller so what we're going to put lives at the end of this year. The current plan is that you know we went live last year was around a third of our.
Speaker Change: It is not something you'd normally discuss in detail what should that ramp in efficiencies beginning in 2025 is it more 2026, just any any thoughts there.
Speaker Change: Yeah, Let me answer that's good question, Jon So a couple of points.
Speaker Change: <unk> seen that.
Speaker Change: Also on the line.
Speaker Change: Business.
Speaker Change: Well, we're going to put like this year is not even 15% of our business. So it'll go smaller in the third bit is where we can we're going to simplify so that's the second point I want to bring in the third point is the efficiency ramp up there are elements related to the fact that you need a whole new enterprise system and that will help us, but the big efficiency.
Speaker Change: Yes, maybe you can go to Jonathan.
Speaker Change: Good luck.
Speaker Change: So the direct cost was around five minute well during the quarter as well as if you look at the last year, what we said before some interaction is we will bring that down to <unk>. We don't all of sudden going to help that so can we bring that down these run rates with 2025% and that is clearly the aim and wishes.
Speaker Change: Gains in terms of what Stefan spoke about simplifying the organization in terms of our factory optimization balk at a factory as well as on a macro level in terms of supplier rationalization nothing is stopping us to do that already into next quarter and the next one or two years.
Speaker Change: Towards that that's one part.
Eric: The other point Eric.
Eric: To your question on locations East. The other point is what Stefan just said in terms of not having disruptions again will go slower.
Speaker Change: <unk> is simpler.
Speaker Change: Florida being one of the lessons you need proper time to test states to join boards, our teams and our people and our suppliers. That's one part we will go smaller so what we're going to put life at the end of this year. The current plan is that we went live last year was around a third of our business.
Speaker Change: Okay.
Speaker Change: Okay, Okay, great. Thanks for that and then.
Speaker Change: Follow up on the commentary on pricing.
Speaker Change: Curious as you sort of see the waves of material inflation, having passed and you look back and assess how the volumes are evolving yes.
Speaker Change: The rebating to these higher price levels for the category. How do you think about everyday value for your frozen categories. At this point the sensor anything has changed in terms of maybe cross elasticity relative to fracture shelf stable options for consumers the categories.
Speaker Change: Well, we're going to put like this year is not even 15% of our business. So it'll go smaller in the third bit is where we can we're going to simplify so thats. The second part of it wasn't being in the third part is the efficiency ramp up there are elements related to the fact that you need a whole new enterprise system and that will help us but the Baker.
Speaker Change: Well, it's I think BW BW, let's say the center store Windows, and obviously fresh it's a bit more difficult to see the only thing we see we've seen is during this crisis.
Speaker Change: She gauge in terms of what Stefan spoke about simplifying the organization in terms of our factory optimization bulk as well at a factory as well as on a macro level in terms of supplier rationalization nothing is stopping us to do that already in the next quarter and an excellent two years.
Speaker Change: As expected as you know we as category leader, we led the price increases and the other guys have been a bit slower to react including the price. The private label. So it's been a great time for private label in terms of market share is expected by the way, but we have no regrets.
Speaker Change: Okay. Okay.
Speaker Change: Thanks for that and then.
A follow up on the commentary on pricing I'm curious as you're starting to see the waves of material inflation habit pattern. When you look back and it's that type of volume sort of evolves absolutely baked into these higher price levels for the category. How do you think about everyday value for your frozen categories. At this point the sensor anything it's Chuck.
Speaker Change: Because that's what the right thing to do it by far prefer back to.
Speaker Change: To Rob's question, you know where do we stand with both margin and I can tell you. We wouldn't have this you know we would not talk about you know whether you were going to go back to 30% that we would have been very far from that though what we see is at least in the category.
Speaker Change: In terms of maybe Boston elasticities relative to fracture shelf stable options for consumers.
Speaker Change: John I would put in the category.
I think what we see is is.
Speaker Change: Yeah.
Speaker Change: Well I think vis vis vis vis let's say the center store windows, and obviously fresh it's a bit more difficult to see the only thing we see we've seen as you are.
Speaker Change: We obviously, it's we regaining market share it will be choppy stealing a little bit that we're gaining market share versus private label, which is good because the magnitude of price stabilized, which is which is a good news as well go back to your question and correct me if I'm wrong.
Speaker Change: During this crisis.
I would expect as you know we as category leader, we led the price increases and the other guys have been a bit slower to react including the price. The private label. So it's been a great time for private label in terms of market share as expected by the way, but we have no regret.
Speaker Change: We're doing this as you know other categories like fresh or center store.
Speaker Change: But overall, there's always thinking so.
Speaker Change: It's more than never frozen has proven to be a very resilient and goods category and I would I.
Speaker Change: Because that was the right thing to do by far prefer.
Speaker Change: I would say with all the things we have ahead of the high end of this in terms of long term trends in terms of a good food and obviously also waste and all these things I think is going to only and define the future.
Speaker Change: To Rob's question, you know where do we stand with both margin and I can tell you. We wouldn't have this you know we would not talk about you know whether you're going to go back to 30% that we would not be very far from that now what we see is at least in the category John.
Speaker Change: Thank you.
Speaker Change: John.
Speaker Change: In the category.
Speaker Change: When it comes out.
Speaker Change: I think what we see is as.
Speaker Change: And our next question comes from John.
Speaker Change: We obviously, it's regaining market share it will be choppy is feeling a little bit that we're gaining market share versus private label, which is good because the magnitude of price stabilized, which is which is the good news is well go back to your question and correct me if I'm wrong or are we doing this as you know other categories like fresh.
Dan: Dan wanting with D. J S Securities. Please go ahead.
Dan: Hi, Good morning, Thank you for taking my questions and congrats on a nice quarter.
Dan: First thought Theyre just small on for Ruben are there any repurchases assumed in the AR and the EPS guidance for the year.
Dan: Or are the capital allocation.
Speaker Change: Well center store, well I think overall, there's always thinking.
Dan: No debt, we have no issue that only to defend what we have shown is that our share count will stay flat. So there's always a bit of shares issued for share program, we have internally and for that we assumed so much on buyback for the rest of this assumed flat so no additional share buyback could be.
Speaker Change: It's more than that brew frozen has proven to be a very resilient and goods category and.
Speaker Change: I would say with all the things we have ahead of us in terms of long term trends in terms of a good foods and obviously also waste and all these things I think is going to only and define the future.
Dan: A tailwind on the other hand, you also noted an EPS it might be a bit of headwind, depending what patent on the floating interest rate will doing all of that.
Speaker Change: Thank you.
Dan: So that's that's the assumption.
Speaker Change: Youre welcome John.
Speaker Change: Got it and then second have you thought about the potential for tariffs from the U S and how that might impact of European markets and the ability to procure seafood Denominating U S dollars.
Speaker Change: And the next question comes from John.
Speaker Change: Dan wanting with C. J S Securities. Please go ahead.
Speaker Change: What the knock on impact might be to you and how you might change your strategy to mitigate anything that they might have.
Speaker Change: Hi, Good morning, Thank you for taking my questions and congrats on a nice quarter.
Speaker Change: First just small and for <unk> are there any repurchases assumed in the AR and the EPS guidance for the year.
Speaker Change: So through their U.
Yeah. So just because I heard you, saying denominated in U S. Dollars also can be parent potentially use dollar moves.
Speaker Change: Or are the capital allocation.
Speaker Change: Our hedging strategy is such that we don't see a big impact into this year of the strengthening of the dollar but you know the strengthening of the dollar which we've seen over the last one or two months. So just to make that point clear.
Speaker Change: No we have not issued that only to defend what we showed is that our share count will stay flat. So there's always a bit of shares issued for sure program, we have internally and for that we assumed so much on buyback for the rest of this assumed flat so no additional share buyback could be.
Speaker Change: Secondly, just to be clear, we don't export into the U S and if you look at our our buy side outside fish, which I'll come to we don't import ingredients from from the U S. So we don't see overall big impact from tariffs now if you do look at fish.
Speaker Change: <unk>, a tailwind or the other and you also noted an EPS it might be a bit of a headwind depending what pete the floating interest rate while doing all of that.
Speaker Change: And maybe the U S. A Russian fish Theres, an executive order that Russian fish is mobilized into into the U S. We think if you look at it also bit the population base from a U S perspective, where a lot of that is in Alaska. We don't think that will change, but again normal margin niche a niche times.
Speaker Change: So that's that's the assumption.
Speaker Change: Got it and then second have you thought about the potential for tariffs from the U S and how that might impact of European markets and the ability to procure seafood Denominating U S dollars.
Speaker Change: What the knock on impacts might be to you and how you might change your strategy to mitigate anything that might.
Speaker Change: What we then see darrington at tariffs in Europe in the UK on fish.
Speaker Change: Flow through there.
Speaker Change: Yeah. So just because I heard you, saying denominated in US dollars also to be clear potential viewers dollar moves.
Speaker Change: On that one for you in UK, where we're an important U S ratio Millennium Trust.
Speaker Change: Our hedging strategy is such that we don't see a big impact into this year of the strengthening of the dollar strengthening of the dollar which we've seen over the last one or two months, so just to make that quite clear.
Speaker Change: It could be that there is additional tariffs also in Europe, but at this moment, we're not foreseeing. There's also because you have to look at the overall fish supply, where we would run out of fish tariff would go up too much on the sanction would go up too much. So actually we don't see that as a as a major risk that doesn't mean, we're complacent about it. So I think there is a more strategic.
Secondly, just to be clear, we don't export into the U S and if you look at our our buy side I'll, just finish which I'll come to we don't import ingredients from the U S. So we don't see overall big impact from tariffs now if you do look at fish.
Speaker Change: Work, which we've done and looking at their first application of our fish sourcing that we are assured that in five to 10 years, we have the right fish sourcing. So I think that's one element the impact, which the element, which could have an impact but again. This is also a bit hypothetical or not no. One knows what will happen is an impact on the gas prices.
Speaker Change: And maybe the U S. A Russian fish there is an executive order that Russian fish is not allowed into into the U S. We think if you look at also bit the population base from a U S perspective, where a lot of that is in the Alaska. We don't think that will change, but again no emotion niche in these times.
Speaker Change: But again, that's not the biggest spender outside a item in our P&L, where are we three staff instead of a heating stuff, but that could have an impact you've seen what happened today with it with the gas prices.
Speaker Change: What we then see darrington tariffs in Europe in the UK on fish.
Speaker Change: On that one.
Speaker Change: U K, we're an important U S ratio impact cross.
Speaker Change: But again a lot of San Francisco. The main point is we don't see a major impact of Alpha and beta aviation in Central Paris.
Speaker Change: It could be that there is additional tariffs also in Europe, but at this moment, we're not foreseeing. This also because you have to look at the overall fish supply where we were.
Speaker Change: Great. Thank you.
Speaker Change: Rather auto fish tariff will go up too much of a sanction will go up too much. So actually we don't see that as a major risk that doesn't mean, we're complacent about it. So I think there is a more strategic.
Speaker Change: And the next question comes from Peter Saleh with <unk>. Please go ahead.
Peter Saleh: Great. Thanks for taking the question and congrats on a nice quarter.
Speaker Change: Which we've done and looking at their first location of a fish sourcing that we are assured that in five to 10 years, we have the right fee sourcing. So I think thats one element the impact there.
Peter Saleh: I just wanted to ask if you guys could provide a little bit more color on you know.
Peter Saleh: The overall consumer environment.
Peter Saleh: In Western Europe, and just given the inflation that you're seeing the incremental has have you seen any change in behavior at all and some of your core markets given that you're starting to see a little bit more inflation has that flowed through to the consumer already or are we still a little early on that front. Thank you.
Speaker Change: The element, which could have an impact but again. This is also a bit hypothetical or no. One knows what will happen is an impact on the gas prices.
Speaker Change: But again, that's not the biggest spender outside item in our P&L, we solve it.
Peter Saleh: What I would put it that way I think it's it's it's easing little by little is improving but it remains you know, it's it's not where it was before the crisis.
Speaker Change: He can stop but that could have any impact you've seen what happened today with the gas prices.
Speaker Change: But again a lot of San Francis the main point is we don't see a major impact on.
Peter Saleh: But what's it little by little I think a good but because when the when the Reuben is talking about increased inflation. It's it's nothing comparable to what we had in 2022. So it's a it's.
Speaker Change: Conciliation and potential tariffs.
Speaker Change: Great. Thank you.
Peter Saleh: And the next question comes from Peter Saleh with <unk>. Please go ahead.
Peter Saleh: It's a bit of a price increase but nothing nothing nothing major so yes, I think overall, it's it remains.
Peter Saleh: Great. Thanks for taking the question and congrats on a nice quarter.
Peter Saleh: I just wanted to ask if you guys could provide a little bit more color on the overall consumer environment.
Peter Saleh: As I said slightly green proving but it takes a bit of time, what we see also see which is good as rapidly as it always is is losing a bit of market share, which says something about obviously people coming back to our two brands and you know.
In Western Europe.
Peter Saleh: Just given the inflation that you're seeing the incremental has have you seen any change in behavior at all and some of your core markets given that youre starting to see a little bit more inflation, how does that flow through to the consumer already or are we still a little early on that front. Thank you.
Peter Saleh: What they perceived rightly so and by the way in terms of quality. So that's that's good.
Peter Saleh: Well I would put it that way I think it's it's it's easing little by little is improving but it remains.
Peter Saleh: So but yeah.
Peter Saleh: That's the that's the way we see it in which is fully reflected in the guidance by the way.
Peter Saleh: It's not where it was before the crisis.
Speaker Change: Thank you very much.
Peter Saleh: But what's a little by little I think a good because when the when the Rubin is talking about increased inflation.
Peter Saleh: Youre welcome.
Speaker Change: This concludes our question and answer session I would like to turn the conference back over to Stephane desk maker for any closing remarks.
Peter Saleh: So nothing comparable to what we had in 2022.
Peter Saleh: It's a bit of a price increase but nothing nothing nothing major so yes, I think overall it's.
Peter Saleh: Thank you very much so.
Speaker Change: Drove the progress our company has made over the past year.
Peter Saleh: It remains.
Speaker Change: I'm confident in our growth outlook going forward.
Peter Saleh: As I said slightly improving but it takes a bit of time. Once we see also see which is good as rapidly as it always is is losing a bit of market share with system thinking about obviously people coming back to our two brands.
Speaker Change: Our strategy is working and our teams are executing our plans well.
Speaker Change: We have compelling innovation renovation advertising and the child that merchandising plans.
Speaker Change: <unk> for 2025, which when combined with our ongoing productivity programs.
Peter Saleh: What they perceived rightly so and by the way in terms of quality. So that's good.
Speaker Change: Give us good visibility to another year of top and bottom line growth.
So but yeah.
Speaker Change: We expect to keep our top and bottom line growth streak going again in 2025.
Peter Saleh: That's the that's the way we see it which is fully reflected in the guidance by the way.
Speaker Change: Extending the strength to 10 years as we Mark our 10 year anniversary of the public company.
Peter Saleh: Thank you very much.
Peter Saleh: Youre welcome.
Speaker Change: Thank you to all our employees and investors who have joined us on this journey.
Speaker Change: This concludes our question and answer session I would like to turn the conference back over to Stefan <unk> for any closing remarks.
Speaker Change: The best is yet to come.
Speaker Change: Thank you very much so.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Speaker Change: The progress our company has made over the past year.
Speaker Change: And confidence in our growth outlook going forward.
Speaker Change: Our strategy is working and our teams are executing our plan as well.
Speaker Change: We have compelling innovation renovation advertising and the merchandising plans.
Speaker Change: <unk> for 2025, which when combined with our ongoing productivity programs.
Speaker Change: Give us good visibility to another year of top and bottom line growth.
Speaker Change: We expect to keep our top and bottom line growth streak going again in 2025.
Speaker Change: Extending the street 10 years as we might go 10 year anniversary as a public company.
Speaker Change: Thank you to all of our employees and investors who have joined us on this journey.
Speaker Change: The best is yet to come.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.