Ascendis Health Limited (ASC) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to the 30 June '21 Annual Results Presentation. CJ and I are observing the appropriate COVID protocol distance. And we've just removed our mask because I think it's a lot easier to hear if the mask is off than on. Today's presentation is going to be slightly different to what we've done in the past. And I'd like to just probably take you on a journey that showcases the past, the last sort of 2 years, 2019 to '21; certainly, the period that I've been involved in the business, look at the operational scorecard and then we'll do a quick check-in on strategy to see whether the stabilize, optimize, monetize is still relevant in the current circumstances. We'll do what I call a quick recap on the recaps just to remind everybody what is going to be voted on, on Monday. And then I'm going to go into an operational review. And this is where I'm going to try and demystify some of the numbers that sit in the underlying business units and perhaps talk to it in a way that I would as a potential buyer or certainly as a seller of these businesses. Financial numbers are, by their very nature, backward looking. And so I'm going to give you some, I think, insights as to how I see the business, how COVID and certain optimization initiatives may have an impact on the current results and perhaps the future. Then CJ will go through the numbers. The numbers are obviously fundamentally important because you're going to contrast the strong operational profit result with a very strong balance sheet loss, the interest and the transaction costs and just underscoring the need to permanently reset the balance sheet. And then we're going to tip back into strategy at the end, so what does strategy look like for New Ascendis on the 5th of October. And there, I think we'll talk to the input we've got from a number of shareholders, and then we'll go into Q&A. So if I go very quickly into some of the performance highlights. Just to remind everybody, the business that we've been custodian of even until -- as of today, generated ZAR 8.2 billion worth of turnover and delivered just under ZAR 1.5 billion of EBITDA. Now I understand why it's impossible to pick that up because the way we disclose our numbers is all about the continuing operations. So in that ZAR 8.2 billion and the ZAR 1.446 billion that's on the screen below are all the assets, the 8 assets. On the right, the second 2 blocks are the 3 remaining assets and some operating metrics for the 3 remaining assets. Just a couple of points on Block 1. In 2019, the EBITDA for the collective 8 businesses was ZAR 827 million. So that's grown to ZAR 1.446 billion. That's a 32% compound annual growth rate. Just -- I suppose just to pause there and to thank my teams deeply for that performance. Had the businesses not collectively performed that well, I think we would have been in a very different conversation with lenders. And there's a world in which the value could have broken in the debt. So a deep debt of gratitude from me and CJ to all our teams across the world for a formidable performance over the last 2 years. Blocks 2 and 3 are there just to highlight a couple of things that I look at when I look at a business. One is gross profit. It goes to quality of the business. The GP moves up in either sales or margin moves up. In the businesses that are remaining, that trend is positive. And there's a normalized EBITDA number. I have to put it there because that is the accounting number, but you'll see when I go through the underlying businesses, hopefully, I can paint a picture on an individual level, which would be a bit more easy to understand and inform the way that you would think about valuation. Perhaps just before I tip off that normalized EBITDA number of ZAR 1.446 billion, you'll see, when CJ talks to the business, the catastrophic impact of an overly indebted balance sheet. We've got ZAR 1.1 billion of debt interest costs and another ZAR 270-odd million of transaction costs, which wipes out that EBITDA. So you are doing the usual Usain Bolt under 10 seconds 100 meters just to stand still. And I think just underscores the reason for a permanent reset of the balance sheet. Strategy. This is the strategy we set out back in 2019, and I'm talking in October, I think October the 14th. We set out a 3-pronged strategy: stabilize, optimize monetize. Stabilize is simply just fix the balance sheet. And we tried a host of things to do that. So in those 2 years, we looked at a take-private of the entire entity with 7 potential partners, couldn't solve for the quantum of debt. We looked at OpCo gearing. So we looked at leveraging Remedica and Sun Wave taking those proceeds to pay back the debt at the top; insufficient to pay back the quantum of the debt. We looked at merging [ Remedica and Ferros ] combining the joint entity, gearing up that entity and leaving ourselves an equity stuck in the merged entity, a much more simpler version of the Remedica that is today, not enough money to satisfy the debt. And then right at the end, we looked at a combination of a convertible bond plus some OpCo gearing alternatives. None of those came to pass for reasons which I'll explain a bit later. But that operating momentum, that ZAR 827 million to the ZAR 1.446 billion gave us the optionality to look at those options as potential solutions. To stabilize is what we're going to do by the recap. You've got 1/2 of the house that's bleeding to death. So you got to grab that [indiscernible] and cauterize the bleed. That's the balance sheet piece. And in the other half of the house, you've got 3 remaining businesses, which you've got to get to Olympic fitness. It is quite a complex set of management tools that you need to manage in both circumstances. But I think the scorecard will demonstrate that certainly the trend is our friend when we talk to some of those optimization initiatives in the remaining businesses. And then monetize is I think where the large feedback from shareholders is coming. Right, where to from here? Where is the strategic pivot from where we are now? And I think we're in a place now where we've set up the underlying businesses to either be the best version of themselves or to be on a path to become the best version of themselves. But more about that a bit later. The -- this number just sets out what I've just cited, just what I've spoken to previously. We had 32% CAGR in earnings. So that gave us optionality and value optionality with those 5 or 6 things that we looked at to try and sell for the debt, but it also allowed us to keep certain things that we wouldn't have in the previous recaps. We've got all 3 of the Medical Devices businesses, TSG, SI and Ortho-Xact. And we've got an invaluable pipeline in Farmalider, molecules that can be registered going forward. And for any potential buyer or suitor of the Pharma business, that has a value you won't see in EBITDA, it will emerge over time. A quick recap on the recap. I think the timeline there is quite important. So on the 25th of January, you can see there 1/3 of the lender consortium changed hands. By the 2nd of February, 75% of the lender consortium comprised Letterone and Blantyre. And that's when lenders engaged with us and said, look, this path that you run to sell all the assets is suboptimal. What we want you to do now is focus on a once-and-for-all recap of the business, and that's where your time and attention needs to be spent, and we will not approve the sale of these other businesses. Between the 2nd of Feb and the 10th of May, we then entered into a forbearance agreement. We just stopped the cash feed on the interest. On the 12th of May, we announced, what I would call, a term sheet, the broad parameters of the transaction. So swapping the European assets into the debt quantum and then selling RCA and Animal Health to discharge the obligations under the debt. During that period, it was quite interesting. To be able to pivot to the monetize part of the 3-pronged strategy was enabled by, I think, with the terms that we managed to achieve with the lenders. On the 12th of May, we announced Biosciences in that period between May and September, there was a cumulative ZAR 1.4 billion worth of transactions we got away. When you take that forced seller mantra away and you start to engage with buyers of your business in a more commanding position, you get to a point where value optimization becomes much more of a real prospect than you are when you are fundamentally over in debt. And then the 3rd of September is the posting of the circular and this is where I have a lot of sympathy readers of the document. It's a 140-page masterpiece, which is technically correct, but unfortunately, it doesn't give you anything decision-useful about the future. It sets out all the correct numbers, but I think, in a way that perhaps may be confusing and perhaps undermines the equity story of Ascendis going forward. The middle block is just there to remind everybody what we're keeping. The green is what we're keeping. The blue or purple is what we're swapping and the red is what we're selling in order to discharge our obligations under the debt. The right-hand column just says what the benefits of the recapitalization are. And so that ZAR 444 million, less the ZAR 15 million reinstated debt is the ZAR 429 million you see at the top. Importantly, we've got EUR 20 million of liquidity, which allows us to continue to feed the working capital of those remaining businesses and keep them in a position to optimize value during the next 6, 12, 18 months of the Ascendis strategy, but a bit more on that later. I've spoken about the pipeline. I've spoken about Medical Devices. And in fact, just the other thing is that this transaction does provide certainty. You draw a line under an overly indebted business. You move from an ZAR 8.2 billion business to a ZAR 2 billion business. You need to rightsize accordingly, but there is certainty around the past. What I'm going to tip into now is the operational review. Let me go sort of top down first, and then we'll go bottom up for each of the underlying businesses. What the slide talks to and what I often look at when I'm analyzing a business is quality of earnings. And the way you determine quality of earnings is margin. I know I'm often schizophrenic with our management team because you want both topline and you want margin. But if you look at the left-hand side, where we talk to revenue from the continuing operations, remember this is the smaller part of the business that remains, the ZAR 2 billion turnover versus the ZAR 8.2 billion that we've been custodian of up until the 3rd of October. The CAGR on revenue is around 3%. CAGR is compound annual growth rate. So it just works out the growth rate between the 2 years. That's at or below inflation. So you could say, well, pedestrian performance, that is COVID. There was a whole lot of mixed issues along the way. How are we catered for this in the underlying businesses? Well, simply, you pivot across to the normalized EBITDA from continuing operations, and you see a very different picture. So you'll see the CAGR or the compound annual growth rate in EBITDA for each of Pharma, Medical and Consumer Health, when you put them all together, is 84%. That talks to the quality of earnings and the way you generate quality of earnings is setting strategic priorities and going after those with assiduous focus to make sure they end up in the results that we have today. That's top down. I think it's more important to go bottom up because I think you'll also realize that each of these businesses has a different business model, different valuation parameters and also perhaps different things that have impacted the results that I just want to highlight. Right, let's start with Pharma. So Pharma, we have to make the announcement that excludes Dezzo. We have to include Dezzo in the results because it wasn't determined as a CGU, which is a 3-letter acronym of battle to understand. Anyway, we put Dezzo back in to make it more easy to understand. The first point to note is the sale of Dezzo is fundamental to reducing complexity in this business. So what Dezzo did is consumed a lot of capital about ZAR 110 million, ZAR 115 million worth of capital, was profitable every other year and consumed a lot of management time and bandwidth. The topline was marginally impacted by COVID. But what I will say for each of the important brands, each of Sinucon, Sinuend, Reuterina, all increased market share during that period. We also sold a long outstanding legal case at ZAR 0.40. Why that's important is it tears off a contingent liability. When you're looking to potentially exit or create value for an asset, you don't want lingering liabilities, particularly when you're buying the shares. So clearing up the balance sheet is fundamentally important to reinstating the keenness of the business that you're looking to sell. We also brought some additional manufacturing capacity. When you have brands that are as strong as ours in the market categories in which they play, it's important to know that you can go elsewhere if there is a production glitch. And if there's one thing that COVID taught us is that the diversifying of your supply base and making sure that you have a reliable alternative is fundamental to keeping market share and keeping the topline going. And I think probably the last 2 things is, one, we completed a restructure in the business within Pharma itself. We restructured the business to create a more flexible and stronger platform for the business. And then you've got the Farmalider pipeline. In there, there is a drug called ibuprofen. It's an intravenous drug. The beauty of intravenous is it avoids the stomach. Ibuprofen often hurts the tummy when you take it orally. We think that has very strong potential and there's a number of niche pain management molecules as well as some sildenafil, which are very important for us in scoping the value for Pharma. So if I have to look at Pharma, I would say it's Dezzo, starts to paint a picture of a business emerging towards what I would call steady-state margin capability. And there, I would expect a 10% EBITDA margin for a business like Pharma, particularly the trajectory that it's on. And you have this platform of new molecules or pipeline, which is key to unlocking further value in any potential disposal process. If I move on to Medical. Medical is a slightly different business model, whereas Pharma, you're selling your own brands to doctors, pharmacists into the hospitals. This is a business where you're selling other people's brands. So you are a custodian of a number of medical technologies, but you don't own anything, you are the distributor. That has an impact on how you value the business. You look at the remaining term on the various contracts and you will say, well, your EBITDA marks can never be more than a certain number. And that's why your Devices businesses from a value extraction point of view, while the EBITDA might be higher, multiple might be different from a Pharma or a Consumer business. Importantly, in these numbers, so if you look at the June '20 or June '21 number, it's probably the more appropriate one to look at, the ZAR 60 million EBITDA there includes a ZAR 23 million write-off of PPE. Now PPE is that personal protective equipment, which we looked at sourcing locally. We teamed up with a local supply when China was looking to shut down supply because we obviously service the hospitals, and this was another addition. For reasons that I think are widely cataloged, we never got to sell a single cent of it. And that ZAR 60 million should reflect a closer to ZAR 83 million number. And then you've got to look at the underlying businesses to see what the impact of COVID was. So in those 3 businesses, you've got TSG, The Scientific Group, which does what we call in vitro diagnostics, the CSI part of the business. So you take a blood sample, you send it off to a laboratory, that laboratory then runs a set of tests and in those tests determines the remedy that the doctor can prescribe. I think it's the future of medicine. That business was likely COVID-positive because a lot of PCR testing ran through that business. We got contracts with Anglo-American and a number of others to do on-site PCR testing. So that business, I would say, strong COVID-positive. The remaining 2 businesses, Surgical Innovations and Ortho-Xact, either rely on trauma in the case of Ortho-Xact because it's external fixation, if you've broken a leg or shoulder or your spine. In Surgical Innovations, stuff goes into you, so laser or a scope. The docs will fix you or cauterize whatever the problem is. Those 2 businesses, because of the elective and trauma focus were negatively impacted by COVID. So when you look at a normalized set of numbers, the ZAR 60 million you need to add back to ZAR 23 million in the way I would look at it. And then you have to come to some view on what a post-COVID normalized environment would be for those businesses. That, again, if I was going to go top down, I would say that should trend towards a 10% EBITDA margin business, if you're looking for a top-down guide over a period of time. The last piece to note here is the way you solve for being an agency to something that is more sort of hardwired and permanent is to engage in joint venture discussions with your licensed partners. And this, I think, is the fundamental next step of the strategy, picking the top 5 that account for just over 40% of revenue. And instead of having a license arrangement, what you do is you collectively own the business, you collectively decide on strategy, the markets you want to penetrate, you can also manage your balance sheet better. Not a case of salespeople in other parts of the world just wanting to make a budget and sending you the stuff and saying, go sell. This is a far more strategic and I think a much longer-term way of hardwiring the earnings base in the Medical and securing the upside. That is I suppose the next sort of a strategic evolution in this business. And the last slide operationally that I want to talk to you before I hand over to CJ is Consumer Health. Now Consumer, unlike the other 2 businesses, I don't think there are any further normalization adjustments. This business has, from 2019, continued to improve year-on-year. A couple of things just to talk about in Consumer, when I would look at it from outside and, one, it's got a very defensive vitamins, minerals and supplements portfolio, VMS. Now I think that is a structural change as opposed to cyclical which goes up and down in a market where courtesy of COVID, the whole concept of consumer healthcare, looking after yourself, I think, is going to be a permanent trend. So as long as you've got brands like Solal, Bettaway, Vitaforce, Chelafer, et cetera, you are well positioned to play in that space. So I think that creates a walled garden around the VMS part of the business, which is the largest part of Consumer. If we go to Skin, COVID did have an impact there because our -- I think, what I would call our most exciting product is Nimue. Nimue is analogous to Dermalogica for those that use salon products. It's between something you buy over-the-counter and something that gets administered in hospital. But it's typically only dispensed in salons. 25% of salon base closed during COVID for obvious reasons, it's a high-touch environment. That business, courtesy of the brand, I think, has great international expansion capability. We're in Australia, we're in Sweden, we're in Denmark, we're in the U.K., we're looking to go into the Middle East. And then the U.S. is obviously a very big but very complex market. The beauty about this model is unlike Medical Devices where you have to use your own money to grow the business. You can use somebody else's money. You can use your distributor on the other end to grow market presence for you in a capital-light manner. So I think that business for me is a very strong niche business with very strong growth potential. And the 2 remaining businesses, Compound Pharmacies, where you would have gone to get your ivermectin or your IV drip, small niche business, good margins, stable business. And then the fourth one is Chempure. Chempure is a strategic sourcing business. So what Chempure does, it buys a whole lot of branch [indiscernible] assets, proteins and other things that go into not only our products, but other people's products. That gives us the benefit of cost of goods and the scale. It's also cash flow generative. It's quite a nice cash cow to feed the remaining businesses. So all I would say there is we're going to continue to execute against the strategic priorities that we've set, which is further SKU rationalization. You cannot believe the benefit of being focused as opposed to being too widely spread. The skin internationalization strategy and then improving infill rates in the factory. But I think that business at 12.8%, 12.5% EBITDA margin is probably where it's at. There's probably a bit more that you could eke out with some optimization initiatives. But I think the 3-year ride in this business has been phenomenally sound. I will come back to these key businesses again because I have gone through it at some kind of whistlestop speed, just to check in again when I speak to strategy and the way forward. But let me hand over to CJ now to take you through the numbers.

Thank you, Mark, and good morning, everyone. A number of shareholders have asked us questions around the circular. We appreciate, as Mark has said, that the circular information is not in itself structured in a manner that provides information for people wanting to understand the group and its current structure as well as the New Ascendis Health Group. So what we've attempted to do in this presentation is find a way of providing you with a benchmark for what a cleaner New Ascendis Health Group will look like. The way I've structured my presentation is, I will, first of all, talk to our results for the whole Group as well as continuing operations. And then I'll spend a lot more time on the continuing operations, really presenting a clean view of the income segment. And then I think it's important, given the Group recapitalization to spend time talking to the debt, both the current debt that we've got as well as the facilities that will be instated post the Group recapitalization. Just starting with the total Group. What the Group recapitalization has enabled us to do is to crystallize exactly those operations that are part of the disposal groups or discontinued operations in terms of IFRS. What you see on this slide is effectively an analysis of the total Group as well as our continuing operation and the impact of the shift in transition that we are going through. So in the FY '20 column, the continuing operations have been restated to take into account the fact that our European operations as well as RCA and Animal Health are now disclosed as discontinued. Historically, we've always had Biosciences, Scitec and Direct Selling disclosed as discontinued. Effectively, the way to think about the business is that we are transitioning from a business that is circa ZAR 8 billion in revenue to one in the New Ascendis Health that has a base revenue of about ZAR 2 billion. If you look at our continuing operations, the revenue in those -- both for last year and this year has remained relatively flat at ZAR 2.2 billion compared to our total operations, where our total operations revenue has come down approximately 3%, and that's really because of the tough trading macro conditions that we are facing. Just looking at the same view, but focusing now on normalized EBITDA. Once again, what this slide represents is the fact that the business is transitioning from a business that was a ZAR 1.4 billion operation business. If you look at our normalized EBITDA for FY 2021, that ZAR 1.4 billion has increased by 17% from the prior year number of ZAR 1.2 billion, really driven by very strong performance in Sun Wave and RCA, which continues to benefit from the -- its positioning to support the country's efforts to fight COVID-19. We've also had very strong performance in our Animal Health business, Consumer and, as Mark has indicated, the Pharma business has started to turn around. This performance was tempered by performance in Remedica. Remedica has had a tough trading second half, and it's closed at an EBITDA of EUR 32 million compared to EUR 41 million in the year before that. Once again, if you then take the total operations and we scale down to the continuing operations, which is the New Ascendis Health, the 3 operations that Mark spoke to, in the prior year, these operations had a normalized loss of ZAR 70 million, and this has improved to ZAR 14 million earnings positive in the current year. The FY '20 numbers also include an adjustment relating to a prior period adjustment, and that's explained fully in the financial statements. Just transitioning now to the income statement. I think it's important just to spend a bit of time on this particular slide and explain it and contextualize it. The Dezzo operations were disposed of at the end of February this year. However, because Dezzo is -- because of its size, Dezzo did not form a separate cash-generating unit. It also was not seen as a major line of business at a total Group level. It is not treated in the same manner as we treat all the other discontinued operations. What that means is that our current year continuing operation results include the results of Dezzo up until the point of disposal. So what we've endeavored to do is to reflect the reported numbers and those you see in the first 2 columns, so that's your June 2021 and your June 2020 as reported continuing operations. And then what we've done is we've then stripped out the impact of Dezzo so that you can see the base value of the New Ascendis Health. So we stripped out the impact of Dezzo. We've also reflected what the base 2021 numbers would look like, assuming that we had hit our targeted head office costs. And we've assumed a world where we don't have transaction and restructuring costs as well as the levels of impairment that we've traditionally had in this business. And that is in the third column. So the third column effectively provides you with a cleaner adjusted version and way to look at the 2021 results. Just circling back to the reported results. As I indicated, revenue from continuing operations, relatively flat year-on-year, but really great performance at a gross profit level with our continuing operations reflecting a 10% increase to close at ZAR 931 million. You also see quite clearly the improvement in gross profit margin, closing at a 42% growth -- a 42% margin compared to 38% in the previous year. We have taken a very constrained view to controllable operating expenses over the course of the year. What we've seen is, at an operational level, this has been built into all the optimization programs. And team Ascendis has really rallied and come to the fore. And what you -- what we've closed off with is a muted increase in operating expenses at 3% year-on-year, closing at ZAR 957 million versus ZAR 982 million. And I really think that's a testament to our ability and continued focus around managing our cash burn and reducing our controllable costs. Operating -- the normalized EBITDA for continuing operations closed at positive earnings of ZAR 14 million, again reflecting the improvements from last year where we were sitting in a loss position. If you just stand still on that number for a little bit and you look and you compare it to the adjusted column, you see that, that number translates to ZAR 153 million. I think that's just an important marker for someone who's wanting to understand and unpack the business and think about what base the business is starting from going forward. Just circling back again to the reported results. Unfortunately, the business does still continue to incur costs as a result of all these debt restructuring and the historical disposals. Included in continuing operations is ZAR 274 million relating to these debt restructuring. It does not quite include the costs related to the Group recapitalization as those have been included under the discontinued operations. If we then strip out depreciation, amortization and impairments of ZAR 190 million, the Group is closing at an operating loss of ZAR 450 million, half of that, which was incurred last year. Now in the circular, we flagged that our estimated costs for the Group recapitalization would be in the region of ZAR 258 million. As of 30 June, approximately ZAR 143 million had been incurred relating to that. And we will continue to provide updates to the shareholders whenever we come out with the results as to the final position where we land. As I've indicated, these costs are sitting and situated under the discontinued operations. Now if I take the ZAR 450 million of operating loss and normalize it, so I take out these once-off costs, we're now sitting on this slide, and we're talking to the second column, which is reflecting an operating loss of ZAR 176 million. It's effectively the ZAR 450 million that I've spoken to, adjusted for the ZAR 274 million worth of once-off costs. That number is completely eroded by our cost of funding. Our net financing costs for the period is ZAR 1,081 million. And that really arises as a result of the significant -- significantly punitive costs that are sitting in our debt structure. I've got a slide coming up, and I'll talk to the composition of that debt structure. But included in that ZAR 1,081 million is ZAR 674 million related to the PIK. Now we've explained the PIK in the past. It's a payment-in-kind element and effectively has a compounding effect on the debt. And so if you look at that number, what it means is that in whichever world, you can never outperform or outgrow it, and it will continue to increase unless you find a way to permanently reset it. Our taxation in the current year is sitting in the tax expense as opposed to a tax credit situation, and that's really a reflection on performance in some of the underlying entities as well as a view that we've taken to be fairly conservative around the level of deferred tax assets that are recognized in the Group. We do have unrecognized assessed losses of approximately ZAR 1 billion in the underlying operations. And this serves as a potential or provide us with a potential opportunity for tax optimization in the future. Just closing off on this slide, what all of this translates to in terms of our reported numbers is that we close off on a loss after tax of ZAR 1.4 billion normalized, which is similar to the prior year. Again, if I pivot to the adjusted column that we've presented to you, what we've tried to do in there is to provide a hypothetical situation where the new facilities are fully drawn on day 1 for a full year. So the ZAR 67 million net financing costs in there represent this hypothetical situation. And then we've represented and we've assumed a base tax rate. Effectively, I think the key takeaway from this adjusted column is that in whichever world, the reset provided by the recapitalization provides you with a digestible Group where you can actually affect a turnaround and start to see shareholder value creation. I mentioned that I would spend a bit of time on the financing costs. Our gross financing costs are ZAR 1,085 million. The composition of that is predominantly as a result of our Senior Facilities Agreement. And that's made up of the base interest of ZAR 364 million as well as ZAR 654 million, as I indicated, of this PIK interest. Now included in the PIK interest is ZAR 71 million relating to a PIK strike that came into effect from February. Now if you recall, the current structure of the debt is such that if we didn't meet certain milestones, we would incur these penalties and we would continue to incur these penalties into the future if these milestones were not met. The forbearance agreement and the restructuring agreements have enabled us to almost put a standstill to that and enabled us to focus effectively on the restructure required on the debt. Included in the debt is quarter 3 and quarter 4 interest. If you recall, we have not paid this interest. What the forbearance agreement allowed us to do was to preserve liquidity in the Group over the last few months; much needed liquidity, particularly as we were gearing up for COVID-19 requirements. And this forms quite a significant portion of the EUR 15 million of reinstated debt. The next 2 slides talk to our balance sheet. Now once again, if you look at IFRS reporting and you look at the balance sheet in the sense, what you'll see is that ZAR 8.5 billion worth of assets and about ZAR 2.3 billion worth of liabilities have been transferred into assets and liabilities held for sale. We don't have the similar treatment in 2021. And so doing a like-for-like comparison and analysis of our balance sheet is quite difficult. So what we've endeavored to do on these slides is to provide you with that -- with a side-by-side analysis that allows you to do it in a more manageable way. So the first column talks to the reported number, which is our continuing operations. The second column talks to the assets that are held for sale, effectively provides a category-by-category analysis, and the total then presents the total Group and provides you with a comparator for June 2020. Just looking at our balance sheet and working through the numbers, our intangible assets and goodwill, the movement there is predominantly as a result of amortization. Historically, we've had huge impairment amounts. I think last year, the impairments were ZAR 477 million. In the current year, in continued operations, we've got impairment of goodwill of ZAR 85 million. And under the discontinued operations we've got, intangible assets inform a lead of ZAR 33 million that were impaired. If you look at our trade and other receivables as well as inventory, improvements in both and really reflecting the focus around working capital management that we've had over the last year. In trade and other receivables from continuing operations, we've seen a marked improvement in debtor days. We closed the year at 71 days compared to 77 days in the previous year. In our inventories, we've also seen a significant improvement in our inventory days, closing the year at 153 days compared to 174 days. Now that trajectory, it is -- as we continue it, will enable us to improve our cash conversion ability as a stand-alone group. We closed the business -- the year with net cash on hand at a total operations level of ZAR 542 million compared -- and at a continuing operations level of ZAR 366 million. If I just pivot and talk to the liabilities. In the current year, both the borrowings and the deferred vendor liabilities have been disclosed as current, in line with the repayment terms. What's the result of that is, is that our current liabilities exceed our current assets as of 30 June by ZAR 40 million. I'll talk and unpack the borrowings and the SFA-related borrowings on the next slide. Just touching on the deferred vendor liabilities, you'll see that we've managed to reduce this over the current year due to the repayment of the Sun Wave and the KlubM5 deferred vendor liabilities. The 2 deferred vendor liabilities that remain outstanding related to Kyron, part of the Animal Health Group of ZAR 117 million, and those related to Remedica sitting at ZAR 724 million. These will be repaid out of the proceeds from the Animal Health disposal as well as the Group recapitalization, respectively. Another significant number to take note of on this liability section is our trade and other payables. You will see, once again, our trade and other payables number has come down year-on-year, which is really a reflection of the negative consequences that we faced due to the gearing in the business. So our credit risk ratings in the business are significantly high. And what that does is it means that we pay our suppliers and creditors at a faster pace than we would traditionally have liked to do. It has a significant impact on our liquidity, and it is something that we continue to monitor. Again, as a management team, we believe that the reset provided by the Group recapitalization will enable us to go back and renegotiate some of these prepayments and accelerated payment terms that we face. Just looking at the borrowings. I think, given the Group recapitalization, I really want to spend the next couple of slides unpacking the borrowings in more detail. And if we start with our current borrowings, now our total senior debt as of June 2021 is ZAR 7.6 billion. ZAR 6.7 billion of that relates to this SFA, Senior Facilities Agreement-related debt, and the balance is the deferred vendor liability. That SFA debt comprises both euro- and rand-denominated facilities. We've already talked to the punitive funding costs in these facilities that are linked to both EUR IBOR and JIBAR and carry PIK at a range of between 7.5% and 12.5%. The debt itself is held in South Africa, Luxembourg, Malta and Cyprus, which talks to the complexity of the debt restructure that we have just been through. And I think it's important to note that the operating entities in the Group are specifically identified as guarantors under the SFA. Our own calculations reflect that in the event of a nonconsensual path being followed, there is a probability that the value breaks in the debt. And why do we say this? This is because, in the event of an enforcement, firstly, the lenders can take ownership of the European assets. Secondly, they would still be entitled to the proceeds from the RCA and Animal Health disposals. And lastly, in an accelerated business rescue-driven disposal process for the remaining South Africa assets, we don't believe that we would get full value for them. And it is unlikely that, given all 3 of these factors, that we would fully settle the debt. There is also a risk of material tax leakage in this process. Just providing another data point in terms of thinking about how the current debt as well as how we've solved for the debt is this analysis of the net asset value of the discontinued operations versus the debt. And this is an accounting evaluation that is not necessarily a reflection of market value. But I believe it is quite telling. Because if you look at this slide, your total value of the assets that are identified as up for disposal is ZAR 6.2 billion compared to your debt of ZAR 7.6 billion as of the end of June. Now we anticipate that the closing debt balance will be closer to ZAR 7.7 billion. We've provided a number in the circular of EUR 444 million. But what this does, it's again another data point that reflects that in a distressed situation, we really run the risk that enforcement may take place at a discount to market value or even to net asset value. The current covenants in the debt require that we meet a net debt to normalized EBITDA ratio. Performance by the total operations over the last 2 years have been very positive and beneficial to enabling us to meet these covenants. You'll see both in last year and this year, we met the covenants. And in this particular year, we're sitting at 4.8x, well within our 6.6x target requirement. I think it's also important to just spend time unpacking the post-recap facilities. We've received a number of questions around the facilities. And what I'll do is use this slide just to talk to those facilities. And certainly, if there are any residual questions, we'll take them up in the Q&A. But post the recap, we will have 3 facilities. Two midterm facilities and one effectively being a bridging facility, a short-term 6-month facility that is put in place to act as a conduit for the RCA and Animal Health disposal proceeds. Just talking to that first facility being the EUR 15 million in reinstated debt. It's a 2-year facility. It has been sized to accommodate the unpaid interest. Now I spoke earlier about the fact that quarter 3 and quarter 4 interest was unpaid. You also recall -- you also think of the quarter 1 FY '22 interest and October interest. So this facility has been sized to accommodate all the unpaid interest up until the point of disposal. It is a South African equivalent of EUR 15 million. It's effectively reinstated debt, so there's no cash movement as a result of this facility. The second facility is a drawdown facility of EUR 20 million. And this facility has been sized on a number of basis. We've taken into account the fact that the remaining operations require working capital. They require CapEx. We've also taken into account transaction costs, both -- some of the transactions that are being incurred, transaction costs that are being incurred as well as upcoming transaction costs to enable us to close and implement the recapitalization as well as the costs that are related to the head office scale down. If we look at the head office scale down, the costs have been taken -- have been set aside acknowledging that there is a delta between the time it takes to reduce the size of the Group and the actual time it will take to reduce the head office overhead structure. And so the cost to run head office are incorporated into this facility. If I pause on transaction costs that are included in here, what we've done and agreed with the lenders is that we have access to a certain amount of cash related to the RCA and Animal Health businesses and any cost -- any cash above a certain amount that we utilize for transaction costs effectively translate to a day 1 drawdown on this facility. Our analysis on this facility is based on a number of strategic scenarios. And we've also asked and gotten third parties to come in and unpack and look at the analysis that we've provided as well. The actual quantum of this drawdown is going to be dependent on the phasing and ability to execute on the second part of the strategy, and Mark will talk to that shortly. The 6-month bridging facility is precisely that. It is a bridging facility. We anticipate that this facility will be fully paid by half year. What I've done on this slide is this really unpack how we anticipate that, that payment would come through. In the circular, we provided the net disposal proceeds for RCA and Animal Health being ZAR 482 million and ZAR 738 million. And then we would take the deferred vendor liability payments out of those disposal proceeds, and that takes us to ZAR 1.1 billion. I think it's important to note, though, that the net disposal proceeds are really impacted by the closing net working capital adjustments. And so this is something that we remain close to. It's also important to note that this facility was sized at a point in time when the discussions and negotiations on these disposals were at a fairly advanced stage. And therefore, we do not anticipate that there will be any excess in this facility post the payment of the proceeds. The agreements also cater for a situation where we do not meet the disposal proceeds. We believe it's unlikely, but in the event that we are not able to fully pay the [ ZAR 1,010 million ], what happens is that the new drawdown facility is just increased in size. As I've indicated, we believe that, that will not be the case. Then just in conclusion, I just wanted to reiterate that the Board appreciates that we find ourselves at a very critical strategic juncture. And that in as much as the financial statements for this year have been prepared on a going concern basis, that going concern basis assumes that we have a successful recapitalization. The analysis and the assumptions that the Board have taken in this regard have been fully articulated in the financial statements. But we've also, on this slide, just indicated the factors that mitigates the uncertainty. The first is the completion of a successful recapitalization, the disposal process of RCA and Animal Health and the availability of liquidity post the recapitalization. All these 3 are linked to the shareholder approval at next meeting, and then the ability to execute on the next phase of the strategy, which Mark will talk to as I hand over to him. Thank you.

Thank you, CJ. Yes, it's a complex business to understand. It's even more complex when you try to understand the financials. So maybe just reminding everybody where we are at the moment. So until the 4th of October, we are still custodians for a business that as at the 30th of June 2021 generated ZAR 8.2 billion of turnover and just over ZAR 1.44 billion worth of EBITDA. That transitions into the businesses that you see in front of you now, the 3 remaining businesses, ZAR 2 billion of EBITDA. And I put the sum of the normalized EBITDA there just as a reference point. And I just wanted to bring this home because it's just fundamental to how you or a third party would look to value the 3 businesses, either individually or the company in aggregate. So in Medical Devices, you recall, there's a ZAR 60 million EBITDA number. I said in there is a ZAR 23 million write-off of PPE. We will never sell PPE again in this business. So that immediately adds ZAR 23 million on to the ZAR 60 million. You then have to, I suppose, interpolate what a post-COVID reflation might look like in both SI and Ortho-Xact. And there, it becomes a little more tricky to know what the steady-state EBITDA number is. But if I told you we target to get the businesses to a 10% aggregate EBITDA margin, that will give you a sense of my expectations in the next 6, 12 months. Consumer Health, I think there's potentially some more optimization initiatives as we execute on those strategic priorities of SKU rationalization, internationalizing skin and improving infill rates through the factory. But I don't think there's a hell of a lot more one can do there on our platform. And then Pharma, in that ZAR 20 million, you've got a couple of months of the restructuring, but you also don't have the fundamental impact of the Farmalider pipeline; 40 products and royalty-free. Now that's very important. A lot of pharmaceutical companies will do in-licensing transactions where you've got to pay a royalty for the stuff you sell. We've managed, in the sale of Farmalider, to get this perpetual evergreen license for all their molecules to register and own the brands in South Africa and to launch these molecules in the local market. That won't be reflected in the numbers. But again, I think if you benchmark pharmaceutical companies, certainly locally, with the exception of 1 or 2, have very different growth vectors, a 10% EBITDA margin is not something that I would find as overly aggressive for that business. You run those numbers and you will get to a normalized EBITDA number. Okay? You'll have to put a multiple -- a range of multiples on each of those underlying businesses because the Medical Devices is other people's stuff, Consumer and Pharma are businesses that have different benchmarks or comparable companies. You'll then get to a number. The trick then is decide what to do with head office costs because that's the next big thing in EBITDA in order to form the valuation before you subtract the debt. So there are a couple of options and I will be engaging with shareholders over the course of today, tomorrow and perhaps over the weekend to decide which is the better of the 2 because option 1 is by June, depending on what happens to the underlying businesses, there are 0 head office costs. In that world, there's nothing to subtract because the office costs are effectively covered in the debt. So you would take that, whatever your enterprise value, subtract the debt, get to an equity value. If head office costs go for a longer period, 6, 9, 12 months, then I think the benchmark guidance we've given is around 2.5% of sales, so ZAR 40 million or ZAR 50 million. The trick is when you're doing your valuation, you can't put a multiple on those costs because they will only last for a finite period. So the bookenders in my world is either 0 or a multiple of 50. If it's half a year, it's 25. If it's a full year, it's 50. Just bear that in mind when you're looking to do the add up. I think that brings us naturally on to a good segue, which is what are the remaining options for the business. In all worlds, we are going hard at head office costs. We have started a voluntary retrenchment process in April. We still remain listed. There are certain obligations we have under the regulator that we have to discharge. But in a different world, it could look different. We haven't got to that position yet, but it is 1 of the 2 options. Option 1 is simply staying listed. The problems with remaining listed is you still have the head office cost and the head office cost and remaining listed relative to the remaining profit, it's just too high. There's no world in which you can justify that burn to shareholders over a prolonged period of time. Remember, this machine was built for the ZAR 8.2 billion business, not the ZAR 2 billion business. So there's a fundamental understanding that there needs to be a rightsizing to this new reality. Yes, you'll have a Farmalider pipeline, but it takes time to register products through SAHPRA. So I don't see the emergence of near-term improvement in EBITDA in Pharma through that pipeline. But I do see in somebody else's hands, it being phenomenally valuable. And the ZAR 20 million has been fixed on a 12-month view. So it says what costs do you have to incur, what working capital do you have to give to the businesses to keep them going? It's what I call keeps the lights on, but doesn't shoot the lights out. So it's an option. But I think certainly, given some of the feedback we've received to date, maybe the lesser of the 2 options. Option 2 is how do we get a path to liquidity for shareholders sooner rather than later. So just a couple of things. As part of this reorganized or the recapitalization process, what we have to do is test the market to see what the underlying businesses would be worth. These are nonbinding expressions of interest. We cannot put out any announcements to the market. It falls part of the regulatory environment. But there is conviction that, that optimization graph that I showed you right in the beginning with the quality of the earnings is starting to change. The trend is your friend. And when the trend is your friend, it's not a bad time to potentially look to exit the individual assets or the conglomerate of assets. The only nuance with the conglomerate is not everybody wants everything inside the house. Some people like Pharma, some people like Consumer, some people like the Medical Devices. It's unusual to get one entity that would look at order; not impossible, but unusual. The option here will require a accelerated move into, what I would call, engagements with these various parties. Now assuming we get through the vote on the 4th, and it's positive and certainly, all the interactions I've had with investors have given me, what I would call, negative assurance that they're all going to vote in favor of the transaction, but we will, on accelerated basis, get started into engaging with people that can, on their platform, potentially pay numbers that would be attractive to Ascendis shareholders. We won't take our foot off the gas, much in the same way as we had our hand on the [indiscernible] trying to fix the gargantuan bleed from the balance sheet and training the sort of Olympic athletes in the other room, big Pharma, Consumer and Medical Devices. We will continue with the optimization initiatives. Management is assiduously focused on executing against those various initiatives. And in all worlds, we will look to materially reduce head office costs. Ladies and gentlemen, I think what's -- what we'll pivot into now is Q&A. And before I start, I just want to say, I think for me, it's been a phenomenal journey with shareholders. I've had the pleasure of interacting with institutional investors, both here in South Africa, abroad. I've got to meet the Ascendis Activist Investors, Harry Smit, Riaz. I've endured brutal honesty, which I thank you for, transparency and openness. And perhaps the one thing that's been underestimated in our journey is a bit of humor. So before I get to the list of questions that were put to us by the Activist Investors, this is my favorite part of what appeared on Twitter. Now I've been reliably informed by my children that as you were born before 1970, you haven't a clue what this movie is all about. It's a movie called When Harry Met Sally, Meg Ryan and Billy Crystal. Now for the avoidance of that, I'm the guy on the right. The individual on the left is Harry Smit, and I think it's a striking resemblance to the gentleman that I've dealt with over the last 9 to 12 months. I want to thank them for their constructive engagement with us for their input on strategy. As an example, when we looked at deciding which way to go with this restructure, there were 2 options. The one was you take a very small sliver in each of the underlying assets or you take absolute control -- shareholder control over a suite of remaining assets. And let me unpack what it would mean to earn a sliver of the underlying assets. A couple of things emerged. One, you have no control of your right to come to your ability to affect an outcome or sell a business, 0. Two, you don't have alignment on time to delivering that money. So when you're reliant on somebody else who might have different views on the future, 5- or 10-year exit, your ability to exit in that environment is compromised. And three, the businesses that we have, particularly Remedica and even Sun Wave, will require capital in order to remove some of the complexities that emerge during the sale process. You will need to buy things. In order to buy things, you need money, to come back to a largely sort of retail shareholder base and ask for money about whatever rights issues [indiscernible]. So one, it helped us confirm conviction on rights issues and nonstarter, but importantly, how you structure this recapitalization. I think what we have today is a function of 2 things. One, the strong underlying performance of the businesses. And again, I take my hats off to my management teams in delivering that ZAR 1.44 billion worth of EBITDA. That's given us the optionality to keep Medical Devices and the Farmalider pipeline. And I think those 2 things will serve as a material unlock of value as we go forward. All right. Now that you've all taken your eyes off that very comical slide, some of the questions that we've had. So with your permission, I'll start with the questions we've got from the Ascendis Activist Group. These were sent to me -- Harry, Riaz and Harry, thank you, thank you both very much again.

Question one is institutional shareholders flooded the market with shares and were responsible for the setoff in 2020. One, how does management plan to attract big institutional investors again into Ascendis Health? I think we will probably pivot from going from institutional shareholders to strategic shareholders, people who want these assets. So I think that's where you're going to see a fundamental shift from, let's say, a financial investor to people who can say, well, Pharma on my platform has got to be something interesting; consumer on my platform, with this integrated factory in an NHI environment, probably better on my platform; Medical devices, if I put mine together with something else, I can create the single largest medical devices business in the country, run hard at doing the transition from licensed to joint ventures and set something up that way. So I think attracting institutional investors into the story will be challenging, but I do think there is scope to move us into the world or the realm of strategic investors. A survey recently conducted by AII pointed out that Shell is open to offers that results in a floor of ZAR 2. What's your personal opinion? So unfortunately, I'm just not allowed to give a view on valuation or price for the share. What I can give you is what I've tried to do in this presentation of the metrics that would inform a valuation that either a third party would look at when they're looking to value a suite of assets, either individually or in aggregate. The bit you have to figure out is what's the right multiple, what to do with head office costs and then the value of the debt that's attracted at the bottom. Question three. A survey recently conducted says that shareholders want value in the next 6 months. Is this feasible? So 6 months is probably quite tight, but what I will say is each of the businesses is down the following: each is on a 3-year strategic plan. So they know exactly what they have to go after over the next 3 years. That strategy or road map then requires you to set strategic priority. So it's great to say you're going to end up in Mauritius, but how are you going to get there? What is the plan to get there? And each of those businesses has a very clear road map on the things that are fundamentally important to getting there. Why is that important? Because when a third party looks to come in and diligence or view that business, they will want to know what the view of the future is as well as, is that tailwind that we demonstrated in the numbers sustainable going forward. So I think 6 months, to answer your question, might be a little tight, but the preparation work has been done. We also have a very good idea of who the potential buyers might be for the underlying assets. And so I think that is something, once we've got shareholder input on which of the 2 strategic options to pivot into, we will go after very meaningfully. The remaining Ascendis businesses were close to ZAR 500 million in 2017, '18. Do you think you can get there again? So I'd just be careful when you go back to '17 and '18, I wasn't there in '17, '18 or '19. Just to be careful, the Animal Health isn't in the numbers, be careful that RCA isn't in the numbers. And also just check the transition between 2018 and 2019 because I think there were a lot of stock write-offs that came in between '18 and '19. And there was also some ForEx that set, from memory, in the '18 numbers, but as I said, pre-me, because my diligence before I came to Ascendis. But I think the view that I've set out now hopefully gives you a bit more color as to the earnings profile and potentially what the go-forward might look like. Can you advise how many expressions of interest Ascendis received to acquire all the company? So we definitely had that one expression of interest. But just remember that was the one that we tried to put a sense announcement out on Monday. It wasn't a firm offer. It can only be a firm offer before the company is obliged to put out an announcement. There have been interest for the underlying businesses, but nothing in aggregate at the top, not discounting that. I think on the 5th of October, the phone will be bringing off the hook, and I suspect we'll get a lot of inbound interest either at the top or for the remaining underlying assets. I mean you can see a world in which this business becomes a national champion again into an empowerment -- into an NHI environment where you have strong sort of Anchor Black shareholder, the ability to deliver meaningfully into NHI. And I think a little bit of topic here a bit -- what COVID did is to show you that NHI can work, government and private working together in a manner that we just haven't seen before. You've had this accelerated test case, if you will. And I think the collection of our businesses in that sort of go-forward environment or that space could play very well. Competitors trade at much higher key multiples. We're trading at a disastrously low one. That is true. What criteria are considered when evaluating office? That's absolutely right. Where you have a fundamental disconnect between the price or the value inherent in your business or your share price and someone else has a different view of that. that then puts you into the realm of either a take private or a sale of the underlying assets. It's the only way to try and close that gap between where we are now and what fair value is for the underlying businesses. So I think that question is fundamentally important because it tips into, let's call it, option 2 of those 2 strategic alternatives I gave. And then number 8, effectively, an offerer will need to settle EUR 15 million. Shareholders don't want you to use the EUR 20 million. Can you comment on the sentiment? So look, the EUR 20 million, I think, that CJ set out has been sculpted to keep the working capital momentum and the underlying earnings momentum in these businesses as well as settle all the remaining costs and the head office wind down. So it is fundamentally important to provide the lifeblood to that eventual end point. So I think we will probably need a good chunk of that EUR 20 million. Obviously, to the extent the businesses outperform, it will be different. But it is important to preserving value for the underlying or the remaining businesses. Those are the 8 that I've got from AII. I know CJ we've got a number of others that have come in on the web. Do you want to just see what we've got?

Okay. So Mark, I'll answer 2 of them. And then I'm going to hand over to you. The first is from Harry -- Harry Smit. He asks, did you even request discounts or settlement discounts on advisor fees or have accounts taxed and scrutinized? So I'll respond to that one. I think the first thing to note is that the cost cover that we are operating under is something that was already set in the Senior Facilities Agreement. And therefore, we almost had no choice but to cover the costs that are required as part of this transaction. Having said that, as part of the discussions that we had with the lenders, we had very robust negotiations around the types of costs that we would be covering and the timing of payments. I think it's important to just take a step back and think about the complexity of the debt restructuring. We managed, for example, to make sure that the lenders don't have an adviser. We've only got one adviser on the transaction. And I appreciate that while the legal costs may seem high, when you look at the total costs of the transaction in relation to the debt, you're sitting at a much lower than 5% value or same thing if you look at it in terms of the enterprise value of the business. And it is something that discussions with the lenders is still ongoing. So as we close off on the costs and pay off the final invoices, we're still engaging with the lenders wherever possible to negotiate discounts and final settlement discounts. Mark, there's a question here from Carsten. There are 2 questions from Carsten. I'll take the first one, and then I will read the second one to you. The first one is a question around cash conversion. So he asks, if we can elaborate on the cash conversion rate of the remaining business for the reported 12 months and its change to the reporting period before? I think the best way of responding to that, Carsten, is 2 parts. One is, as I indicated when I went through the balance sheet is certainly we're seeing an improvement in working capital efficiencies in terms of receivables and our inventory. So just recapping, our receivables days have gone down to 71 days from 77 days. Our inventory days have gone down to 153 days from 174 days. Unfortunately, until you solve the issue around your credit risk, what you will be sitting with is a situation where it's difficult to optimize for cash conversion. So at the moment, we have a significant number of prepayments in the business and areas where we have to pay a lot faster than we would have traditionally liked to do. So improved cash conversion, when you look at it on one metric, but effectively standing still because you still have the accelerated payments on the trade payable side.

Thank you. Okay, there's a question on the exchange. Just to echo what CJ is saying, the really good work done in collections and managing our stocks, the tightening of the working capital cycle was undone by the impact on creditors. Now that is an unintended consequence, again, of being overly in gear. A number of our customers require credit insurance. When you go to one of the big credit insurers around the world, they will ensure our risk. When they say they can't ensure our risk, then our customers have to effectively fund us. And that's why you see the shortening of the tightening of credit days. In a sort of post-recap world, we're hoping to have those working capital measures reinstated because the fundamentals of the balance sheet will be materially different to where we are today. Yes, there's 2 questions. First one is, I think, from Harry. It's around how can you justify your remuneration when you're a ZAR 1.5 billion company versus a ZAR 12 billion company? So maybe the first thing, and I know this is where the numbers can really throw things off, it looks like we're a ZAR 2 billion company. But until the 3rd of October, we've been an ZAR 8.2 billion company and an enterprise value, if you take the market cap plus the debt of around ZAR 8 billion. So I think the relative benchmark there on size is certainly that. Complexity is the other thing you need to take into account in determining whether execs are paid appropriately or not. And I think thirdly, CJ and I absolutely acknowledge that if we do a good enough job, we need to effectively wind down to a position where those 3 underlying businesses are independently separable. And a great job means we have no job. So I do think that is fundamental to resetting the cost base as we go forward, and it's a very valid question. Carsten's asked, have you looked at your strategic options with the strong remaining businesses at a hybrid staying listed but move to another exchange? So, Carsten, ordinarily, I would say, yes, in my experience in doing this and having listed companies here and did the breweries listing back in '99, 2000, we did Sanlam. As soon as you move from one exchange to another, you split the liquidity. So the tradability that institutions need parts. You also incur additional costs. Is there a world in which the business is taken private and then relisted on another exchange? I don't discount that option. But my experience with dual-listed structures, they're neither kind of fish nor found. You're either underrepresented or unappreciated in the one market or overrepresented in the one that doesn't suit the needs of the business. But I think in all worlds, I think what you're saying is, will we consider all manner of financial and operational alternatives in returning value to shareholders? Absolutely, we will. What else, CJ?

There's a question from Marcelo. Do you know if the 2 major shareholders, IFC and Kefolile, will vote in favor of the recapitalization?

So all I can say is the way -- I haven't been through one of these things before, so what happens, votes get lodged with the custodian. The custodian then sends the votes to the -- to Computershare, the transfer secretaries. And that normally happens the day before the vote. What I can say unequivocally, I haven't had any investors say they're going to vote against the recap. I just don't see a world in which that is commercially sensible, given what we've outlined as the prospects for the remaining businesses. And the next actionable alternative, which is business risk, I just don't see a world in which a no-vote makes sense in light of what I believe the potential prospects are for the business.

There is a question from Arshad. What is the new head office cost structure? And Mark, what I'll do is I'll respond to that, and then you can add to it. So I think it's important to remind everyone, we started the head office restructure program at the end of March this year. As we stand today, we've rightsized -- we've done the first phase of rightsizing our head office. So we've got a team in place that we believe provides the capability required to enable us to get through the Group recapitalization and for the requirements of a listed business. So we've halved our headcount. We've provided notice and put notice on our building, and we've certainly significantly reduced our cash burn rate at a head office level. The final and target head office structure is really dependent on where you pivot from a strategic perspective. As Mark has highlighted earlier, it could be, as you dispose of each business, you eventually end up with no head office or alternatively, you end up with a head office but tailored to potentially an unlisted business. And that's something that we will be exploring as we go down the strategic path.

I've got nothing to add. I think that's very well answered. And I think that's it.

We don't have a lot of questions today. I'm...

Well, no, no, look, I have to say that our friends at AII have been outstanding at making sure that we remain alive to shareholder sentiment, the questions. And as I say, I'll go back to the beginning, I have great sympathy with trying to figure out what the value of these businesses are, armed with the circular giving the trading statement. So I'm hoping that today we've given you some color as to how certainly we would look at it outside in, and how the preparation has been for making sure these businesses are independently monetizable or in aggregate being attractive to a third party. I think all that's left for me is just to thank you all for your continued support through what has been an excruciating process over the last 2 years. But equally to thank my teams for the phenomenal job they've done in a 1-in- a-100-year event with limited liquidity to deliver the results that we have. And that CJ and I will be engaging with you over the course of today and tomorrow, and we will see each other all again on Monday for the vote on the recap. Thank you very much, everyone.