Baby Bunting Group Limited (BBN) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to Baby Bunting's FY '23 Results Call. [Operator Instructions] And finally, I would like to advise all participants that this call is being recorded. Thank you. I'd now like to welcome Darin Hoekman, CFO and Acting CEO, to begin the conference. Darin, over to you.

Good morning, everyone. Thank you for joining us, and welcome to our investor presentation and review of the FY '23 financial year. My name is Darin Hoekman, acting Chief Executive Officer of Baby Bunting. This year has had some particularly challenging elements to it. We've seen cost of doing business pressures on the rise, consumer behavior normalizing to pre-COVID patterns, and we have seen consumers increasingly impacted by the rising inflation and increases in mortgage rates. We have responded to these challenges through the year, making adjustments in the face of some gross margin challenges in the first half and then sales volatility in the second. Looking forward, our mindset now is to continue to identify opportunities to help lower the cost of parenting for our customers and at the same time, managing our costs down to build profitability in the business. Through all this, we've also continued to invest in growth. There's encouraging signs in our New Zealand business, and we've recently launched our very own baby and kids marketplace available at babybunting.com.au. Before we speak about those elements further, I'll discuss our FY '23 pro forma financial results. Turning to Slide 4. First, a point to note is that as Baby Bunting operates a retail financial calendar, FY '23 was a 53-week financial year. The numbers presented here are pro forma and exclude sales and expenses from week 53 to enable comparisons with prior 52-week periods. Disappointingly, our FY '23 earnings results have fallen well short of the growth numbers we have been delivering year in, year out since IPO-ing in 2016. However, the business continues to be in a sound competitive and financial position with a market-leading store network and first to mind brand awareness, far above anyone else in our industry. To summarize our financial results, below expected sales growth, coupled with margin compression, labor cost inflation and cost investment for future growth has seen a significant contraction in year-on-year profitability. EBITDA margin under the old measure has now dropped back to 6% of sales, a decline of 4% from the 10% achieved in the prior year. Our pro forma NPAT is down by 51%. In light of this and as the consumer outlook continues to appear challenging in the near term, management has activated a number of initiatives across the business aimed at offsetting the impacts of inflation, improving operating cash flow and delivering more efficient operations in FY '24. The balance sheet is in a healthy position with low net debt and plenty of clearance in our banking covenants. There will be a final dividend of $0.048 per share, in line with the Board's policy of paying out around 70% of pro forma NPAT. Turning to Slide 5, operating summary. We opened 7 new stores during the year, including our first store in New Zealand. It has seen strong improvement through the year as we establish our brand in that market. Store in Christchurch was scheduled to open in FY '23. However, we now expect this store to open around Christmas time. In June, we launched the Baby Bunting Marketplace, and we now have an additional 5,000 SKUs available for sale on our website with a plan to build this out to over 20,000 SKUs by the end of the year. 2023 was the first full year of our new loyalty program being available across all channels. The take-up and usage of this program was well above expectations. It's providing valuable insights and will help to evolve our offer with our loyal customers. During the year, we made some changes to the program to significantly improve the margin on our redemption transactions as well as the financial performance of the program overall. Slide 6. While 2023 has been a tough year financially for the business, we continue to be confident in the strategy overall, our defense stability within the category and the future earnings growth potential of the business. Our confidence is based on a few factors. There are around 300,000 births a year in Australia. There are no specialty retail competitors with a national presence, and we have 45% product exclusivity. With 50% of sales revenue coming from 10% of our customers, we have the potential to grow wallet share in a large proportion of our customer base, loyalty and further personalization of offers. We are committed to our core purpose, and we're focused on delivering value every day. Additionally, Marketplace provides us an opportunity to expand our offer and grow lifetime spend with new product lines and we're only starting with our journey into New Zealand. Slide 7. Slide 7 shows that we are the only national specialty baby retailer with a clear omnichannel advantage over our competitors. Slide 9. Looking now at sales in further detail on Slide 9. At $515.8 million of sales for the year, we have delivered a total sales growth of 1.7%, but with comparable store sales down 3.6% for the year. Unpacking that a little further, in terms of channel performance, our stores grew sales by 4.6% year-on-year or measured on a comparable basis, a negative 0.8%. Online delivery sales grew 5.5% and 6.6% in the second half as we focus on evolving the functionality of the site through the year with improving search and content to better engage our customers. The largest impact in terms of sales fall had occurred through Click & Collect, which previously more than doubled through COVID. In the year, this channel contracted by 24.5%, reducing from 10.4% of sales back to 7.7% of sales. Specifically, the fallout was in the consumer staples categories that were more broadly available across the retail market. As customer channel behavior reverted to pre-COVID patterns, these sales dispersed back into general retail, including shopping centers. Slide 10, gross margin. After facing into some significant cost of sales pressures in the first half, gross margin did improve through the year as management responded. Our second half margin is usually lower than the first half as we had a higher indexation of promotional sales in the second half of each year. Therefore, a 50 basis point improvement half-on-half with the outcome. Cost increases experienced during the year included international container shipping rates, which peaked through calendar 2022 and have now moderated back to pre-COVID levels, diesel fuel levy increases and higher-than-anticipated reward redemptions within our loyalty program. Another area of challenge was in the play gear category, a high-margin category, which doubled in size through COVID and which is now all but normalized back to pre-COVID levels. Key changes made include adding a minimum spend on loyalty redemptions, which improved the margin achieved on these sales by 7% from December 2022 onwards. Looking to FY '24, we will continue to cycle down from higher shipping costs and cycle the benefits of the changes made to the loyalty program made late in the first half last year. But I want to emphasize that our focus will be on maximizing market share and keeping prices low to help our customers lower cost of parenting. Slide 11, cost of doing business. We continue to invest in the business as we progress our store rollout and drive market share growth. We are at around 60% of our store rollout and investment is critical to supporting our growth. The increase in store costs have been driven by the new store rollout with 7 new stores opened this year and 4 stores opened in the prior year, annualizing their first full year of trade in FY '23. On a store-by-store basis, average store running costs were maintained at around $1.5 million year-on-year despite the inflationary environment, in particular around wages. In the area of overheads, we managed warehousing variable costs in line with lower transactional volumes and our marketing cost line saw the benefit of further progression in the reduction of printed paper catalogs. To achieve further productivity and overall efficiency in the business, we have activated a number of cost-out initiatives that will deliver between $6 million to $8 million in reductions through FY '24. Specifically, these are in the areas of administrative overhead and to a lesser extent in warehousing and marketing. Slide 12, store economics. Our stores continue to deliver strong financial results with many of the gains made through COVID still present today. Our stores on average takes plus 4 years to mature, although this occurs more quickly in some markets, in particular, those located regionally. Currently, still 1/3 of our store fleet is less than 5 years old and still in their growth phase. 47 of our 64 stores that have traded a full year are mature. On average, our mature stores delivered plus 100% returns on invested capital with only 3 of the 47 mature stores doing less than 50%. Slide 13. We opened our first store in New Zealand 1 year ago today. We have made some terrific progress in this catchment, which is informing our approach to the New Zealand market. Our strategy is broadly consistent with Australia in that we aim to sell the widest range of products backed by great service at low prices every day. In the [ second half ], we ramped up our promotions to help drive brand awareness and foot traffic, which has seen a marked improvement in our sales performance in the second half. This year, we are well progressed towards opening a further 3 stores in New Zealand. We have one further lease secured for our fifth New Zealand store that will open in Auckland earlier in FY '25. Slide 14. Slide 14 shows the relative spend of the 750,000 customers that shop with Baby Bunting in FY '23. A considerable proportion of our revenue around 50% comes from 10% of our customers, who love to shop our brand. This demonstrates the significant opportunity for market share growth in subsequent deciles. The focus will be around offer, including broadening our online offer through Marketplace, reducing lead times for online delivery around the country and the continued expansion of the store network to ensure better proximity to the customer. Slide 15, which provides an overview of our transformation program. With the majority of this program complete, the intention was to complete the integration of the UKG time and attendance system in FY '23, which has been done and to complete the implementation of a new ERP and point-of-sale systems in FY '24. We have now elected to progress these significant programs of work being the ERP and point-of-sale systems implementations, a slower pace through the initial phases of these projects. We will complete the RFP by the end of Q1 this year, and at this stage, envisage progression toward product build and integration to take place later this financial year or potentially in FY '25. The decision to change the timing of these very large projects will change the phasing of spend we have previously communicated but not the expected value. Slide 16. Presented here is the 52-week pro forma P&L. There is a reconciliation explaining the differences between the pro forma profit and the statutory profit in the appendix and also in the full year accounts. But in summary, the current and prior year differences relate to the exclusion of employee equity expenses and significant business transformation program costs. In terms of the impact to net profit, the key drivers of the decline have been gross margin, which impacted NPAT by $4 million year-on-year. Comparable store sales decline impact of around $4 million year-on-year. The inflationary cost effects $4 million. The New Zealand launch was around a $2 million impact year-on-year. And then the investment in Marketplace around $1 million. As a reminder, of the $16.5 million increase in cost of doing business, over $10 million of this was growth from investment for new stores, New Zealand and Marketplace. Looking to the balance sheet on Slide 17. We continue to run our balance sheet with plenty of headroom in our debt facility and good clearance with regard to banking covenants. In relation to inventory, during COVID, we invested an additional 2 weeks of safety stock to mitigate timing risk around international shipments. We have now unwound this investment in Q4. As a result, year-on-year inventory was only $1.3 million higher despite 7 new stores plus the New Zealand DC stock build. Regarding leases, the change balances primarily relate to the new store leases in Australia and the lease renewals that were made during the year. Moving to the cash flow statement on Slide 18. Management of working capital through the second half has seen our operating cash conversion ratio improved from 71% in the prior year to around 82% in the current year. Our capital investment program was lower year-on-year, but noting around $1.5 million of CapEx incurred in FY '22 related to stores opened early in FY '23. Sustenance CapEx of $5 million was consistent year-on-year, and we saw lower CapEx from transformational projects in FY '23. Next year's capital investments will moderate further again as system transformation slows and we reduce our new store openings of 7 down to 5. I will now discuss one of our growth investments from FY '23 in more detail. Slide 20, Baby Bunting Marketplace. As the #1 specialty baby retailer in Australia, we have built significant brand awareness and trust with 750,000 active loyalty customers and 30 million website visitations per annum. However, in context of raising a child, we are still only servicing a fraction of the needs and believe there is a -- of parents that is, and believe there is a significant headroom to grow customer lifetime value and retention through range extension. Our customers have a relatively linear journey unlike other categories and most customers experienced similar needs at similar times, which make it easy to inform our range strategy to meet these additional needs. Marketplace presents as the most capital efficient and agile response to this opportunity via a seamless integration of third-party products and sellers into our existing online experience. It doesn't disrupt existing supply chains [ already into risk ] and allows us to curate the range without cannibalizing existing range. So in effect, Marketplace, we work hand-in-hand with our 1P range strategy, where we do see great results. And where we do see great results in 3P products, it will help shape our future in-store range and offer. By offering more brands, more products and more choice to our customers and meeting more moments of need every day for their growing families, it will further cement our market-leading position, and we are confident it will make a positive contribution to customer lifetime value in coming years. Our Marketplace has been operational for just over a month in which time we've added over 5,000 SKUs, which we'll -- with a plan to finish the year with 20,000 SKUs, 3P SKUs available through Marketplace. We believe we have a compelling offer for our customers and also for our third-party sellers as we can offer a unique proposition for access to committed consumers in the category. Slide 21. Looking to our FY '24 priorities, we will continue to progress our growth agenda through store rollout Marketplace expansion with a heavy accent and focus on sustainable cost reductions across the business. Additionally, and as highlighted earlier, the leveraging of customer data through the loyalty program is also a big focus on informing our approach towards direct marketing and personalization. Slide 22, a brief trading update. For the last 6 weeks of trade, comparable store sales growth is around negative 9%, cycling 15.3% in the prior year. We expect this metric to improve over the course of the year as we begin to cycle flat to negative prior year growth, particularly through the second half. Watch point is, of course, the consumer and the impacts around cost of living. Given the continuing economic uncertainty, FY '23 guidance cannot be given at this point in time. Thank you for your attendance today. I will now open the floor to questions. Please remember to state your name and where you're calling from.

[Operator Instructions] And your first question comes from the line of Sam Teeger from Citi.

The first question for me would be, what must be the company move away from printed catalogs and to what extent do you think this might have impacted sales, because we see a bunch of other retailers are still using the printed catalogs.

Yes. Thanks, Sam. It was up through the first half of the year. And we've been monitoring and tracking this, and we've actually done a sample test of reintroducing printed catalogs through the second half as well, just to sort of check that it wasn't impacting the consumer, and that's what it's proven. So we don't attribute any reduction in sales towards printed catalogs. I think every industry is different. We -- having a baby is a highly costly experience and so search -- and is a high component of the purchasing decision. And so we haven't seen any contraction in the number of visitations on our website, and that's the key element of the initial phases of the customer research.

And after the investment and the optimization in the loyalty program, when would you expect to see some of those benefits starting to flow through into like-for-like sales?

I think the compounding issue here is really around what's occurring to the consumer's wallet. And the consumer is undoubtedly economizing. So interest rates have had a pretty significant impact across broader retail. And we -- and our customers are not immune from that either. So it's a little bit difficult to unpack the performance of loyalty relative to what's happening on a more macro level. We've got great insights. We are marketing directly where we market directly. We are seeing consumer uptake in those offers. So I think more broadly, we're very happy with how it's working. And don't forget, whilst the pretty catalog has gone, this has actually given us an avenue to for direct marketing straight into our customers, which we didn't have 18 months ago.

Got it. Makes sense. And just in recent months where the comps have been negative, can you talk about how variable as your store sales being compared to what it normally is, and at the moment are there other stores loss-making?

Yes. We had one loss-making store this year, which was a new store. So if you look at the 7 stores that we opened last year and even just look at the most recent month of July, 6 of those all made positive contributions with the remainder of the network and one was -- the same one was negative. So from that perspective, things are still in good shape. Where we saw the biggest fallout in sales for the year was around Click & Collect and Click & Collect was a channel that tripled through COVID and then it's -- went back around 25% during the course of the year. If what has happened and what we saw really was consumer staples that were more broadly available across the retail -- across retail with the categories that wear and bed, and we saw -- we continue to see good growth in our Baby Essentials category over the course of the year. In the more recent couple of months, what we've seen is those baby essential categories also being impacted. We're talking about car seats and prams there. And what we're sort of seeing in there is this is where the consumer is economizing. These are the most expensive items of purchase. And so there's been a moderate reduction in sort of average spend on those items.

And then that's happening, are you seeing trade down to some of your private label brands or just not spending at all?

Yes. No. So it's a combination, right, trading down. But if you're a multicar family, then maybe you might be not buying 2 car seats, you might be going down to 1, but it's a mixture. But the largest impact has been a reduction in the average item spend.

Your next question comes from the line of Alexander Mees from Morgans.

Just a few, just on exclusive, national brand exclusive went down a little bit in terms of percentage of sales from I think, 37% to 36%. Is there any particular reason for that? And what should we expect in the year to come?

The decline was more due to the success of the private label products that we launched over the last 18 months. In particular, there's a mid-price point pram called the Jengo Strand. We had another Panorama. They've been extraordinarily successful, very strong margins in those categories for us. So that's really been the flip is that they're growing so well. In addition to that, we've just -- and as an extension of our lowering the cost of parenting strategy, we've just recently launched the Jengo Kali and Zuri entry price point costs. And so we're looking forward to seeing what they will do over the course of the current year.

Then just on gross margin. You made the point that you are going to be committed to giving customers a decent price in the current environment. The Aussie dollar is also weaker, but there are some tailwinds of both. When I'm thinking about the gross margin for the next year or for '24 rather, should I be thinking that the second half of '23 is a reasonable template?

Look, I'm not going to provide margin forecasts, Alex. But what we do know is we know that international shipping is in our favor this year. We've improved the margin on our loyalty redemptions. And we've also seen -- and so whilst the FX is off currently, we've got most of our purchases covered at $0.68 for the first half. So that's encouraging. And these are opportunities to continue to invest in price where need be without actually compromising the margin profile that we're experiencing in the second half. But the question still remains is will the consumer experience further pain. Retail 101 in a tight economic environment is be really sharp on your pricing and manage your costs really tightly and that's what we're going to be doing.

And then just finally, on the balance sheet on Slide 17. You talk about your covenant ratio. I'm just wondering, I'm sure it's available somewhere else. But what is the banking limits for those covenant ratios, please?

Yes. Well, unfortunately, they're kind of commercial in confidence, so we can't call those out, but you can assume that ours are sort of broadly consistent with the retail market.

Your next question comes from the line of Tom Camilleri from Wilsons.

The slide on the customer decile is quite interesting. So your top 10% customer shops with you over 15 times a year. Is this a customer that a strong user of both in-store and online? Or do they have a strong preference for in-store? And then how does the business think about accessing the other 90% of your customers and lifting that over the next year?

Yes. So our highest value customers are omnichannel customers and they -- we had some metrics in the half year with regards to that. So they are shopping across both channels. And in terms of how are we going to grow wallet share with those guys, I mean, loyalty is a very important part. It enables us to access a direct line of communication with those guys and where we are continuing to sort of evolve our personalization offers. Marketplace is a great opportunity to unlock value with our loyalty customers as we broaden our range out, rolling out stores around the country will give us proximity to customers, and they will shop with us. Now we might have consumers that are travelling too so they shop with us at the moment from regional areas where we don't have a store presence. But they'll only be visiting once but they're not coming back into store. And we know that we've got really strong lifetime value with those regional customers. And the other one is we're going to continue to evolve our online offer, particularly around things like fulfillment.

And then just quickly on New Zealand. So 3 stores signal some real confidence in what the business is doing over there and you've reap profitability in the first store. What have you learned from all this store rollout that you can now apply over there in terms of store format? Like is it a shopping center focus or a homemaker style? And then can we expect similar store metric and profitability over time? And then in terms of gross margins, I guess, can we think about similar gross margins in the New Zealand business near term? Or do you have to kind of go sharper on price in order to win sales?

Okay. So if I miss any of those questions in answering just happy for you to sort of restate those. In terms of margin, in terms of margin, I can answer that very quickly. So we've got one store rolling there at the moment. That means that we've got a lot of the product in that store that is actually going through Australia as part of the supply chain. So as you add stores into that market, you will add value, and therefore, that will enable minimum order quantities to be met so you can actually start sort of moving containers directly into that country and also -- so will give us scale. I'm not too focused on margins in that economy at the moment. I mean, at the moment, the differential broadly reflects the additional freight lead into that country being by our Australian DC. In terms of what's informing our strategy into the New Zealand, we are, I think very sensitive to what are the products of the New Zealand that consumer loves and making sure that we're arranging those. And so in particular, that has met some tailoring of our offer in the car seat category. So the New Zealand market has got a mandatory standards that pick up both the Australian and American environment. So that meant that we added same range in there. The cost of doing business is lower in New Zealand than it is in Australia. So what we might drop in margin, we sort of make up in terms of cost of doing business. However, I mean, I think really that's it. What we're sort of seeing at the moment is a fragmented sort of retail environment, much what was evident in Australia way back in 2017, 2018. So as we grow scale, particularly in the Auckland market by the end -- by the sort of first quarter of 2025, we will have stores to each point of the compass in that market. It is a bit of a market that's difficult to get around due to the water lines there. So that's going to really help our brand awareness and its performance overall. And then we get to scale things like marketing spend in that catchment.

And then just on store preference, so your preference to be our largest format or smaller format stores. And then are you seeing as a result of the store rollout a material uplift in your online business that you're do in New Zealand from awareness?

Right. So it will be a consistent format. That format is not present in that market at the moment. And so that's an important part of the opportunity. So we're bringing really a range that the New Zealand consumer hasn't previously experienced. And so that's the format strategy. It's held us in good stead in Australia. And what we saw in Australia is particularly when we got insights from the -- from our competition is that we would do a 3x of revenue relative to them because of the range that we offer. It is a one-stop baby shop. And it really resonates with the customer. And then when you overlay that with an investment in service, I mean the service and advice, it's a really strong combination.

Your next question comes from the line of James Casey from Ord Minnett.

Just on New Zealand, you've provided a bit of information there. With the additional 3 stores in New Zealand coming onstream in '24, would the losses be of similar magnitude to those of FY '23?

No, no, they should improve. We should definitely see an improvement in that.

Lower losses?

Lower losses.

Yes, okay. The marketplace opportunity in kind of year 1 or year 2, would that be as much as a single store contribution initially? Is that how you're thinking about it? Trying to get a feel for what sort of sales can be generated from that?

Yes, potentially. I mean it's a commission model, right? So it's third-party products. So the commission is a 100% return on sales. So whatever the commission is you earned, that's what you booked, but that's also the contribution to the sales line. So it will look a little bit different. The fixed costs in terms of the team that will be working in our marketplace channel is around $900,000 a year. And so really, our ability to deliver a positive contribution through that channel will be the number of SKUs multiplied by the average spend per SKU. So that's really what that looks like. So it won't have this contribution to the top line, but it will be margin in reaching.

And just finally, I think your longer-term aspirational target was 10% EBITDA margin. Obviously, it's fallen back this year, and you did achieve that in FY '22. Is that where you think the business can get back to?

Absolutely. That's the focus. So we need to work through the current trading environment. And the Australian business did 10.4% from an EBITDA margin perspective. So to leverage our cost base in New Zealand, that needs all stores to be rolled out there. We're targeting 10 stores in that market. And if I sort of reflect back over the last 4 years, whilst our margin peaked at 38.6% in FY '22, within that, we were still actually experiencing not peak FOB, but at that point, the FOB import rates containers was 3x the historical average. And so within that margin performance that year, there was opportunity to -- there's opportunity for further growth over time. And then you've got things like Marketplace will add further peak towards margin. So yes, we're confident we can certainly get back to those levels, but it needs all elements working together. We need to make sure that we continue to introduce efficiency into our operating model. That will enable scaling our current cost profile. And then as we roll out our stores, we get leverage and then while focusing on customer value over time, there are certainly opportunities, particularly through the supply chain to improve our margins.

[Operator Instructions] And your next question comes from the line of James Bales from Morgan Stanley.

Firstly, on cost of doing business, that was $162 million in FY '23. So is the guidance of a $6 million to $8 million improvement, does that imply $154 million to $156 million for FY '24?

No. What you've got coming through, James, is we'll open 5 stores this year, and we're annualizing the 7 stores that we've opened this year. So what you'll see is you'll see a reduction in the overhead to the administration line of around $5 million to $6 million. And then there's work on marketing, warehousing. And so that's really where we are. And we also focused on store efficiency such that we're defraying the impacts of inflation through that cost line.

So just so I'm clear, the term net was used there. What does that refer to?

That refers to the existing cost base. What you -- but what you're doing is you're adding new stores. So whatever our new stores add to our cost base, that is the increment. So for example…

And then just on CapEx -- sorry.

So for example, we added 7 new stores this year. We opened about 4 in the preceding year. That added $7.5 million to our cost base in FY '23. Is that helps?

Okay. So $7.5 million cost base increase from the 7 stores that you added in FY '23 is a pretty good guide in terms of annualization.

And the 4 stores is annualized, yes.

And then CapEx, you sort of talked to the store CapEx basically being proportional to how many stores you're rolling out 5 versus last year's 7. And for the remaining CapEx budget, should we expect that to be flat year-on-year?

Yes. So it will be. The investment that will go down this year will be the one-off project, transformation project costs. So that's going to be around $1 million. It was around -- was it $4.5 million to $5 million in FY '23? So from [ 2020 ] perspective, that's really the changing variable.

And the transformation cost will -- for this year will be capitalized?

No, no. It's not about that. But we've referencing back to the presentation is that the -- I mean, our investment in payroll and time and attendance, those people systems have broadly done. And what we were planning on doing was being going full project team investing heavily in ERP point of sale. That's going to be a slower rollout over the course of the year. So that will reduce the one-off transformational spend this year relative to last year.

And then one last one. I know it's hard to sort of give a forecast for marketplace GMV or sort of revenue contribution for FY '24. But you guys must have a longer-term view of how much of sort of group GMV marketplace could produce on a sort of 5-year or maybe longer-term view. Could you sort of share some thoughts on that and how we should think about how it should scale relative to the existing business?

I actually look at it a little bit differently than you. We've spent $1.5 million to stand up a platform that will allow us to 1 year increase our SKU range online by 400%. So we've got around, I think it's around 5,000 SKUs of 1 peak, 5 to 7, 1 peak product at the moment, we're adding 20,000 SKUs to that. I think it's a pretty low risk investment given the scale of the opportunity, there's a $1.5 billion market for online baby goods in Australia. We're currently around $100 million, $110 million, I think, of sales within that market. So it's a huge opportunity for us to say, grow our market share, but without taking on to risk. We really need to let this roll through for 12 months and let's look at what the profile of performance does to really sort of get a good read on what the potential is for the investment marketplace.

As there are no further questions, that does conclude today's Q&A session. And I'd like to hand back to Darin for any closing remarks.

Thank you, Pauli. I just want to say thank you for everybody that's joined the call this morning.

This concludes today's conference call. You may now disconnect.