Bid Corporation Limited (BID) Earnings Call Transcript & Summary

This meeting is being recorded.

31st December Half Year Results Presentation. I think this will be one of the easier results presentations that I've ever had to attend. And I think that it's been a great half year, a great performance from management, Bernard, Dave and the whole management team and all the staff at Bid Corp. And again, demonstrating since the franchise having come out of quite a difficult few years. I think management and staff have ought to be congratulated on the effort they made in keeping the business on a solid footing, and we're able to take advantage of the strong bounce back that we've seen post the COVID era. I'd also like to thank some of our Board members, all our Board members, specifically, our founder Brian Joffe, continues to make a contribution. Helen Wiseman, the Chair our Audit Committee, that's always been a very tough task. And all the members of the Audit Committee play a significant role in ensuring that our results always are in line with the reality. And then also our Senior Independent Director, Nigel Payne, for contribution that he makes, as well as all the other Directors and Chair of the various committees. So without further ado, I'm going to hand you straight over to our CEO, Bernard Berson, who will take you through the results presentation followed on by Dave Cleasby. Thank you. And again, well done to Bernard, Dave and the team and all the management and staff of Bid Corp. Thank you.

Thank you, Stephen, and good morning, good afternoon, and good evening everybody. It's wonderful to talk to you again after a few months. We gave you an update in November. And fortunately, we're just updating the update on a very positive basis. Upfront, I'd just like to say that Stephen acknowledge David and my contribution, I'd like to say we do very little, and it's actually our fantastic team around the world of MDs, CEOs, whoever else, 26,000 Bid foodies around the world who do a fantastic job. We are a very diverse business operating in 35 countries, I think it might be 36 now. And it really isn't run from the center. It's really run from the core businesses, each business is an important contributor. So it's a huge thank you to our leadership team around the world. They've done an amazing job once again they continue to do an amazing job, and they continue to fortunately show myself and David in a very good light, long may that continue, but full credit to them, and that's where the credit is due. Before we kick off, it just acknowledge the difficulties that our people in Turkey are going through and the Turkish people in general. The earthquake certainly was very devastating for the country. Certain members of our staff have practically lost their family members in the earthquake and it's really a terrible tragedy. And we're doing our bit to help. We are supplying some mobile kitchen, some foods and emergency aid. Also to our colleagues in New Zealand, who are hit by floods, and then a massive tropical cyclone a week or so ago, which has had quite a disastrous effect on certain areas of the country, our thoughts are with them. And once again, we are proud to say that we are part of the recovery effort and certainly assisting in getting food to those -- food and water to those most in desperate need and we're working very closely with military authorities, the government, civil defense authorities. And it's times like that, that you realize the scale, the scope and the importance of our business in terms of the national infrastructures of the countries in which we operate. Not just some small little tepid business that has no role to play in the larger society. You're realizing times of need and crisis like this, how important businesses like us are, who can respond very quickly to meet the needs of a very desperate situation where you have to get through to places very quickly, have to get water to places very quickly. And we're very, very proud of our people and the way they are through the challenge to ensure that we can play our part in assisting wherever possible. Moving on to the results. As always, I'll ramble on. I'll go from slide to slide, actually I will try keep up with and probably you won't be confused. I'll try keeping according to the schedule. And afterwards, David will give you an update, the financial update. And after that, we'll go through our normal Q&A routine, where David and I have got the questions that you're submitting, we'll read them out loud and answer them the best we can. As Stephen says, this should probably be the quickest earnings update and call that we've had. The results are fantastic. People have done a phenomenal job. Almost every single business in the portfolio is trading at an all-time high in terms of operating profit. Things are going exceptionally well in business. There are challenges out there, but our teams have navigated them brilliantly. There continues to be challenges in the world, some more global challenges, some micro challengers, each geography has its own need it to compare with as well. And our teams have done a remarkable job in navigating that, and we'll talk a little bit more about that on a country-by-country basis. I will be using a lot of superlatives because I don't know how to describe these results other than using superlatives like amazing and fantastic. And I actually think that you need to take a step back and look how strong they actually are to appreciate how fantastic they are. Yes, it's not just a COVID bounce back. These numbers blow out anything blow anything we've done before, and I think we are pretty good before. So these numbers really are strong and a fantastic testament to our teams around the world. The one thing I want to stress is this isn't an overnight success, it absolutely isn't a pretty attributable to any one factor, a bounce back. Obviously, those things make a difference. I believe our real strength is in the strategies and the strategic direction and the path we've embarked upon many years ago, and we are stuck to that core part. Obviously, we've made a few refinements along the way. But fundamentally, we're stuck to the path that we chose. We've executed, I think, very well, notwithstanding the challenges at the throne at us with COVID and then everything after that. And the results we're seeing now are very much the result of things that were put in place 5 years ago, 3 years ago, during COVID, now -- and there really hasn't been much change in what we've done. We've always told you we'll invest ahead of the curve. We're at an optimistic, confident business that knows we're going to grow. We're comfortable with what we do. We understand what our customer -- who our customer base is, who our customer base needs to be. What our product range is, what it needs to be. What our procurement looks like, what it needs to look like, and we're very much on that path. And it's a continual journey, and we remain very optimistic and upbeat about the product in our business, both in the shorter term and the longer term. We only worry about things we can control. I have no control of other economies of the country and consumer confidence. And all we can do is to adapt and adjust our course as we go. But we look past that, we look at the medium to long term and make our decisions accordingly. And I think when you look at what we do and how we allocate capital, that bears testimony to that. You know who we are. If you don't know who we are, you're probably in the wrong meeting at the moment. So I won't go through what our core values and beliefs are and just head straight into some of the border detail. At 25% constant currency top-line growth, primarily organic, now it's very difficult to make accurate comparisons because bear in mind, we're comparing to July '22 -- sorry, July '21 to December '21 in the prior comparative period, where there's still COVID impacts in multiple geographies. So although we're 25% up, is that a true reflection? We need to go back to FY '20, which wasn't COVID impacted at December 2019 or before -- and our volumes up, our revenues are up, all the methods that we look at are positive. Our estimate of inflation compared to volume is around 60% of the 25% relates to inflationary increases in food and related products and 40% is volume growth. Now I know I'm going to get lots of analytical questions about that and what inflation looks like. Bear in mind, we operate across 35 geographies, across hundreds of thousands of different products. There's no simple answer to what the real inflation number is. Fair to say food inflation is running hotter than general inflation. And I think we're seeing that around the world. Although we are seeing the rate of increase of inflation is coming off, both in food and in our general expenditure base. So we're not in deflation, let's be clear about that, but the rate of cost of inflation is certainly declining. And the other thing that I want to just speak a little bit about, which is not a negative, please don't construe as a negative. It is we are now cycling for the rest of this financial year against a month that were reasonably strong last year as the world -- most of the world started coming out of COVID. And the rate of growth might slow down a bit. So the 45% growth in the first 6 months. We would be doing fantastic, amazing stupendous job if we achieve 45% for the full year, and we'll certainly be doing wherever we can. But please bear in mind, we are cycling against some stronger months. Having said that, our January and February trading has remained with the same momentum so far. Having said that, the bounce back really started in March towards Easter last year. So I'm just putting that a little bit of a reality check in that, which is by no means negative. All I'm doing is asking you to be realistic in your expectations looking forward. The business is still incredibly positive, and we will absolutely show substantial real growth for the rest of the year. We have very much continued along the strategic path that we've spoken about before. There's very little talk about. We continue to rebalance our customer portfolio. We've exited those pockets of business that we told you we were going to exit in Belgium, New Zealand, Australia. And as you'll see in the results, it's at the desired impact, notwithstanding the fact that it only has happened in the last 6 months in the case of Belgium and in the last 2 or 3 months in the case of Australia and New Zealand. We continue to invest in infrastructure, and that's critical. Our infrastructure is warehouses with distribution capability. When you're growing at a real volume growth rate of, call it, 10% of real volume growth, you need warehouses to cope with that. So we'll continue to invest in warehouses in real estate which achieves our next strategy of being closer to the customer and having more distribution centers being able to cater to the desired target market that we're looking for. We've continued to make some small bolt-on acquisitions. We've made 6 in the first 6 months, relatively small. None of them are going to shift the needle in isolation. We've also made 2 subsequent to that in January, both were in the U.K. One is a little bit bigger than the other. And like with all these acquisitions, they're very small in isolation that purchased at an accretive value proposition. It takes us a little bit of time to integrate to get the synergistic benefits and bring them up to Group standards and public company standards, et cetera. But after a year or 2 or 3, you start getting the benefit. And it's a consistent process that every year, you're getting the benefit of acquisitions made a year or 2 or 3 ago. So we'll continue to do that. On larger acquisitions, there is nothing that we have looked at or on the horizon at the moment. We remain very alert for any M&A opportunity. And should it arise, we'll certainly be at the table looking at it. Technology continues to be an important part of our business. And it's not technology for technology's sake. And I think that's important. We actually are a technology business, but we use technology to run a business and to make money, and I think we do that relatively successfully as opposed to technology for the sake of maybe burning through some equity. So a lot of our business is underpinned by technology, and that will continue to evolve and get more sophisticated. We've been talking about data analytics and AI for a while now. I know the likes of ChatGPT, et cetera, are getting more talk now. But we're doing -- it's not something new to us that we say, what's this all about. What we're doing in data analytics and AI to a degree is adding to the value proposition of what we do. So overall, we've got a very stable management team. People have been with us a long time. We've been around a lot of time. Some people would say that's a bad thing. I think you're getting a 45% increase in HEPS. Some of that are such a terrible thing. And that's coming from people who've been in the business a long time. They understand what they're doing. They're on the journey. We're all headed down the path together in the same way. And we're just -- we're excited about where we are and where we see the future. So from our point of view, the -- we are in a great industry, fundamentally, people are going to eat more out of the home. And as long as people are eating more out of the home or even eating more takeaways in the home, that's market share for us, and that's opportunity for us. As we've always said, we're relatively agnostic to what people's tastes are because we sell a broad range of products, and we are not with any one particular concept. So if there's a trend towards something that's fine, we'll follow the trends. If there's a shortage of seafood. We'll follow the trend in poultry. If there's a poultry outbreak, we'll move to different products. And we have the ability to do that very quickly and satisfy the market requirements accordingly. So let's just very quickly run through each of the geographies. First, we look at Australasia, which is Australia and New Zealand, 7.1% trading margin, ZAR 1.5 billion trading profit, I don't know what more to say. So just a phenomenal fantastic result, well done to Rachel in Australia, Phil in New Zealand and their teams. Everything about those results is good. And by no means our other business, I'll get into trouble for this, totally perfect either. And both of those teams, their teams are constantly looking for new avenues of growth for new markets, for new products, for new opportunities in value add. And these really are 2 fantastic businesses who are once again leading the charge in the Group. So I don't have anything more to say about Australia and New Zealand. They're doing an absolutely awesome job, and I believe they're outperforming their competitors. In the U.K., it's an interesting -- it's an interesting set of numbers, and I do need to put a little bit of a caution here. On the face of it, the numbers are very good at ZAR 910 million of trading profit, a trading margin of 3.9%, which is lower than we achieved in '19 and the numerous reasons for that, the most important reason for it is the structure of the market and the fact that a larger proportion of the U.K. business is with the larger type of customer. And that's a legacy issue, which gives you less opportunity on the margin side as to when inflation comes in and how you manage the inflation equation. So you can be -- it's a far more contractually based business. That's reflected in the results. I think we are going to see a little bit of difficulty in getting back to the margins we expected. We had expected before until this inflationary period washes through. The core business in the U.K. is doing phenomenally well. We're picking up market share. We're winning great contracts. The business is really performing well, and Andrew and the team have done a phenomenal job. Fish is doing awesome. I think they're operating at an all-time and they've really been that business up. The wholesale business, which is the core of the business, the largest component is picking up market share, but is struggling a little bit on the passing on of the margin as quickly as we are in other countries. They have adopted the same manufacturing strategy, those businesses are performing well. And the specialist businesses, which gives us a different route to market for the independent market is doing phenomenally well, and that's where our acquisitions have been. So we've bolted that up with 3 acquisitions, 1 in July and 2 in January, which gives a lot more balance to the business between the independent channel going through the specialist KW Group and the larger type of business going through the wholesale business. But I think this is a great performance all the way through COVID, they were profitable, which I think their peers, I don't believe, achieved the same level of success. And it's just -- it's a very positive situation. We just do need to be mindful that margins might be under pressure for a while until the inflationary environment settles down a bit. So the U.K. is a great set of numbers. Europe, you all doom and gloom about Europe or most of you would doom and gloom about Europe. And firstly, there was the theory that the war -- the terrible war in the Ukraine was going to cause a collapse in Europe. Fortunately, that didn't happen. Then we were told that after summer, come 1st of September, the whole thing is going to fall in the pile. That didn't happen. Then we were told that probably when it gets cold in November, December, October, it's going to fall in a heat, fortunately, that didn't happen. Then we were told definitely after Christmas, it's all going to come to end. And all I can tell you is our sales in Europe up until last week have maintained the same rate and pace of increase as historical. So there's certainly no falling in the heap. Obviously, there is seasonal fluctuations. It is winter in the Northern Hemisphere. We expect that, but they're tracking exactly on trend as to where they have been tracking for the last probably 10 months. So once again, long may that continue, but we certainly aren't seeing any signs of a slowdown. Europe has made up a lot of pieces. The Netherlands bearing in mind had some COVID lockdowns, which was the only country in Europe, I believe, from November to, I think, late January, November '21 -- sorry I get confused, November '21 to January '22, they had lockdowns. So obviously, we're cycling through that. But our Dutch business is really doing well. It's at Group acceptable levels. It was always a problem business for us, but now it's one of the shining stars and they're doing fantastically, primarily because of the change in customer mix and adopting the same strategy that we have adopted everywhere else and have adopted it with great big success and that bearing the fruits of that and have done phenomenally well. Belgium, as we said, we exited a large catering customer in July, and our trading margin is higher. Our profitability is substantially higher, and we will continue to go down the path of rebalancing the customer portfolio in Belgium. That's probably the business that has the least optimal mix -- it does have some very large QSR customers that we are actively in discussion with. Yes, you can't fix these things overnight. You have very long-term relationships. You've got complicated structural issues in the business. But we do understand we need to get a return out to what we're doing, and we are working very hard on that. The Czech and Slovakia business had a great year. Let's bear in mind the year before, we had a phenomenally great year, and now we are having even a better year. They are at a little bit of margin pressure in the -- that they sell quite a lot of manufactured products into the retail segment. And it's fair to say that the retail segment is doing it much tougher than the out of home segment at the moment. And therefore, with a pricing pressure, and we feel we'd rather maintain volume and sacrifice a little bit of margin at all the retail foodservice equilibrium maybe swings a little bit the other way. But they had a record year doing fantastically. Poland, one of those businesses we spoke for years about how we were investing ahead of the curve, and we're ahead of the curve. We're -- they're just doing amazingly. That business is a world-class margins, growing exceptionally strongly. Their ratios are all good. Their customer mix is fantastic. And what we're seeing there is, we need to invest ahead of the curve. So we've got to go through the next phase of investment to perpetuate this very strong growth. Sales up 30% in the 6 months. Trust me, food inflation is not running at 3%. Italy continues to perform very strongly, and I think we're performing stronger than our peers. We have one listed company as a peer that will be releasing results in the next few weeks. They're a very, very good competitor, a very solid business. But I certainly think we are holding our own or maybe inching a little bit ahead. And that business continues to do very, very well. The Baltics, a small business that's growing very well, we made a large [ Fish ] acquisition, which is a small acquisition in global terms, but for them double the size of their business. In Estonia in late December, so it hasn't contributed to the numbers yet. But you can see what we're doing there. We've established a base, we established a profitable base. We've invested in infrastructure, we're investing in acquisitions, and we will have a business of scale and significant size in the very near future. Spain remains a work in progress. We've got 2 businesses there. The business in Basque Country and around about San Sebastian is doing very well. It's a nice food service business. We made a small acquisition there in complementary bakery type products to bulk that up and add on. But that business performed exceptionally well. The legacy Guzman business has been very challenging for us. We by no means giving up, we will fix it. But we're not miracle workers. Sometimes, we don't get it right the first time, but we'll certainly get back in there, we are in there, and we are making progress. Portugal, a great business. We only made one stake. We should have invested way more capital way early to get way ahead of the curve. We're operating at 120% capacity. This business would be a lot bigger had we acted sooner a few years ago and built the infrastructure necessary to cope with the growth. So we believe in the medium term in a few years' time because you can't build facilities in 3 months, in the medium term we'll have a very solid, highly profitable business in Portugal. Germany is steady as she goes. It's profitable. We have had a change in management there. The previous owner was exited from the business not so long ago. That was relatively seamless and the new management team is in there. They're doing -- under the circumstances, they're doing very well. They're growing the top line, they're controlling their expense base, they're profitable. And the challenge for us now is where do we go from here? How do we bulk this business up. But at least when you're making profits, they have a small way might be, that's a lot more palatable than making losses. The emerging markets portfolio, the operating margins are consistent at 5.8%. There are a lot of moving parts in emerging markets. There are a lot of very different economies. And let me just go through them very quickly. South Africa is a very challenging environment. Notwithstanding that, our profits are at an all-time high and our businesses, particularly the Bidfood foodservice business is doing very well. The Crown Food business had an absolutely phenomenal year last year, and it was highly unlikely that they were going to be able to surpass that by any significant degree. They're still highly profitable, although slightly behind the prior year. South Africa does face lots of challenges, I don't need to tell you, the load-shedding is a great course for concern, particularly in Crown. Crown sells a lot of product into large plant manufacturers, people are making processed food type products, process poultry, processed meat, et cetera. Those factories generally need electricity. Generally, they can't rely on generators. They're just too big to run on generators, it's too costly or just to energy consuming. So what we've seen is quite a slowdown in the manufacturing segment. They are only producing when they have assurance of a reliable electricity supply. It's not a great thing when you're cooking meat and halfway through the process, you lose electricity and can't finish cooking the meat. So we are seeing some volume declines in the Crown business as a result of that. And hopefully, that situation gets rectified, I'm not sure how, but in due course. But overall, an exceptionally difficult circumstances, our management in South Africa have done a phenomenally good job. So well done to the whole team there that's amazing under the circumstances that they are trading at record levels. Let's talk a little bit about Greater China. There are a few issues to talk about this, firstly Hong Kong and China were close to the world for the full period under review. Not only were they close to the world, they were close to themselves. And there were major lockdowns, major restrictions, travel restrictions, et cetera. So they operate the full period under lockdown conditions. Notwithstanding that, we operated at levels which I think are at record levels of profitability. So our revenue was down. We managed to take cost out. We managed to rationalize the product range a little bit and take some opportunities through the retail channel and trade a little bit. And the team really reacted fantastically to those circumstances and performed very well. So they actually achieved good levels of profitability under very difficult circumstances and unpredictable circumstances and did fantastically well. China announced the reopening at some time in December. Although they flicked the switch, not everything changes straight away. So there's quite a lot of PTSD going on in the area. Bearing in mind, they were under a COVID Zero story for 3 years. There's a little bit of expectation that maybe they're going to go back into some type of lock down or something, which won't happen, I don't believe, but there is an element of nervousness. So it's opening up, it's opening up a little bit slowly. In hindsight, when we look at the rest of our businesses a year ago, that's no different. They opened up, they had massive waves of infections, a bit of nervousness and after a month or 2, that settled down and reality kicked back in again. And Hong Kong and China will do exactly that, they're just 1 year behind the rest of the world in that. We actually can get back into Hong Kong, China, so I visited there last week for the first time in 3 years, which was great to see. And the people are really glad to be part of the world again and to see some type of normality. Now there was a Bloomberg article from an unnamed source a few weeks ago that says we are considering the sale of the Greater China business. And I'll just give you a very quick background for that. During the COVID lockdown and during the little bit of the latter part of last year, when maybe the China sentiment was a bit negative, we had a couple of unsolicited expressions of interest in our Greater China business. It was absolutely only the Greater China business or that I'm sure people would like to buy many more parts of our business, but this is purely around the Greater China business. So we've got these expression of interest. And I think it's good corporate citizens. We retained the services of a bank to give us some advice, and they had to look at these and they ran some numbers. And we think that the market thought we are doing a lot worse than we were doing. I think there was a perception that we were in trouble. The business wasn't profitable. It was all just becoming difficult to do business in China and would be a soft touch and would be looking to apply this thing. That's absolutely not true. We are not selling the business. We have not entertained any offers. We're absolutely running the business. It's part of the Group and we are -- I'm not saying we have never ever be sellers of any business. But fundamentally, we're not a private equity shop. We're building a portfolio of global food businesses, and we'll continue to do so. We are going through a management change in Greater China. So Johnny has been with us since we bought the business in 2007, and he's done a great job of getting us to where we are. But a couple of years ago, in fact, it was 3 years ago, Johnny expressed a desire to retire. And the timing wasn't correct during COVID, and he kindly agreed to stay on and he is staying on until June this year. So we still got another few months. We are going through a management transition plan. There are -- there is a candidate that we are far advanced with and we're very confident he'll continue the trajectory of growth in the Greater China market. And we are seeing a rebound in revenue and in sales and activity there, although it's a little bit slow. I've never seen the Hong Kong airport as quite as it was. Most of the retail shops and the concourse are still closed, with very few planes and very few gates operational. But that's only a matter of time. That will bounce back pretty quickly. And people talk about the brain drain out of Hong Kong, if you read any of the articles, I spoke to an investment bank, I spoke to a law firm, I spoke to the mechanic firm, and also they've got large numbers of expats who are coming back. So I don't think that a lot of that brain drain is permanent and it will find its equilibrium. Moving on to Singapore, and I know Nigel has got the team listening to this in Singapore, so hello to KJ, Angel Beatrice, Remy, whoever else might be there. Nice to have you listening in on this. Singapore performed exceptionally well during the period, strong sales growth, strong profitability growth. And we are moving that business more into the Bid Corp. Obviously, we don't want to take any rapid changes, but there are some great components of that business, which co-exist with each other. We need to extract the synergies accordingly and attack the market in the most effective way. But Singapore is a country that's -- I think it's about 6 million people and I think 30 million international visitors who spend a lot of money. So it's a very good market for us, and we're very excited about the prospects and we've got a great team in place there to get us to where we need to get to. Vietnam is tiny, that's operating basically at a break-even-ish type of situation. That's one of those questions, can we scale up in that market in a timely way? We'll have a look at it. We'll see what we can do. It's probably a little bit too early to comment and not big enough to talk too much about. Malaysia was a -- basically was a greenfields operation, maybe 10, 15 years or 12 years ago, and then we've bolted that up and added on. And we now have a self-standing business in Malaysia, which is doing very, very well, growing a lot, big market, big eating out culture, a lot of potential. We made another acquisition in East Malaysia in September to give us a geographic coverage. There's a lot more to come. We're very excited about our prospects in Malaysia. Chile has had a tough 6 months. They've had some growing pains. That business has done phenomenally well at the top-line. And maybe we struggled a little bit with some indigestion along the way. We're well and truly through that, the results we've seen coming through in the latter part of the period are very, very strong and at acceptable levels. And now we're going to be cycling through months which were tougher last year. So I think in Chile, the prospects are good and the business is a large national business that's out of the #1 or the #2 player in Chile, depending how you define the market. Brazil is tough, is a tough game. It's a tough economy. It's a tough political environment. We must -- probably be a little bit below our expectation, but which is still at an all-time high. We are primarily Sao Paulo state based, and we see the opportunity to expand that further around. Brazil is a big country, a lot of spend. And I think we've done a reasonable job there. We've always made money. It's tightly controlled, well managed, and we're excited about Brazil. The Middle East has had a phenomenal performance. Once again, this was a greenfields operation made in in about 2005. We're now going to turn over more than $200 million in the market. And it's a reasonably -- it's a very profitable business. It is an import business. So maybe it has a little bit more invested in inventory, but that's the nature of the beast. They've done exceptionally well. We've seen very strong economic growth out of both, primarily Saudi as well as the UAE. They're -- economically they're doing well. Activity levels are high. Tourism has bounced back. There are a lot of big dream projects going on in the region, which will be very good for us in the future. Turkey, very nice for us as well. Once again, a very small startup, which is now an established national business, profitable. It's got some type of scale. The country has challenges as the most, but we are profitable, and we'll continue to invest. That's probably a business that will require a disproportionate amount of CapEx to grow into, so we can keep growing and scaling up. Argentina is the last one, we've got slightly under 50%. Our business is doing phenomenally there. Don't ask me how. Obviously, we've got a hugely talented management team. In Argentinean money, inflation adjusted, they are doing exceptionally well, highly profitable, well managed, tightly run. And we're very confident about the future of the Argentinean market for us. Obviously, it carries a level of geopolitical risk, but I think you can look at quite a few businesses in our portfolio that maybe have a similar risk profile and some of them are closer than others. So we're happy with Argentina. The outlook is positive. We're not seeing any clouds on the horizon. We're seeing inflation come off its peaks. We are seeing the supply chain shortages ease. The disruptions are easing up a little bit. Labor availability is becoming easier, easier, not easy, probably wage expectations are coming down a little bit. So conditions are easing up. We're not seeing a taper off in consumer demand yet. Hopefully, you don't see that. And hopefully, we can adjust it accordingly and move our segments and our focus as that happens. So we are very confident of continued real growth for the rest of the year. David will take you through the numbers and talk about the balance sheet and the cash and the working capital and all that other exciting stuff. And then we'll come back and answer questions. I do just want to conclude with what I started off with. That's a huge thank you. And if I haven't mentioned anybody who's on the call as part of the team, you can send me a WhatsApp and abuse me like you always do. But you've all done a fantastic job, each and every one of you, you truly are -- you're doing an amazing job, if the shareholders don't thank you, they should thank you because you're the women and the men who make this happen. So to you and your teams, I can only just extend my gratitude and appreciation for another phenomenal performance. Well done. And David it's yours.

Yes, good morning to everyone. Let me start with these presentations. The numbers are up here in terms of risk, and no changes, there can be quite a few and that's played out consistently. So just to note that, I think Bernard used to say, people create growth and companies report it, and just from our side, my side, obviously a great appreciation to the businesses and the people who delivered the results and also to the people that correct them and prepare them and deliver them to you, as well as they do. Just in the latest call there is a change in terminology, which is we refer to new capital investment, not capital expenditures, that's -- it's more of a -- there's a greater conversation to what we're doing and how we see the future and the growth of the business. And we referred to and we are obviously talking to these numbers of the period to December 2019, 6 months and '18, so just for reference. I'll talk a little bit about returns later on. In terms of the highlights for you to see the revenue up 28% in rands and 25% in constant currency. That Bernard indicated, margins have come off a little bit, but overall, it developed pretty well. Product inflation has accelerated over the last 3, 4 quarters. There's a disconnect between, I guess, produced food inflation and what we're seeing in the community space, totally there is a lag, but apart from that, going forward with that, it's certainly -- the product inflation to moderate going forward. Cost inflations will be driven by a labor, fuel and energy at this particular point in time. Cash generation from operations, strong at $6.1 billion versus a year ago of $4.5 billion. Working capital is up, but I think if you compare it against the pre-COVID periods, we slightly mess up, mostly in line. I'll talk a little bit about that later. Receivables provisioning from our perspective is conservative and obvious estimate of how we see the market going forward. Net investments, as Bernard indicated, is required and maintain the growth and certainly, it takes time to come onstream. So we do that in the best outcome. I think what's said in that, there comes a lot of the e-benefits, environmental benefits through efficiency in energy efficiency and overall reducing our carbon footprint. Net debt is up a little bit at 4.6 billion, but taking the context of investments that we made in working capital, capital investments, dividends well within the group covenants and I think in the context of the Group, the size of the Group, we've really seen no change in the relative covenants or percentage in terms of covenants. Headline income up 45%, and HEPS 45.5%, declared an interim dividend of $0.440 per share. And under our dividend policy of round about 2x, 2.5x covered and therefore for Bid Corp, so we are currently hedging for that. In terms of the P&L, I think we've given you in back of the focus, how we're tracking. And you can see that as we've gone forward sales of how that every business other than currently in China, where as we indicated they were due to COVID restrictions. Gross margins, we see a little bit of additional sacrificing Czech and the krone. And there is a bit of a lag in some of the businesses and it's indicated where we have national exposure to take some time for those increases to go through, and that does have a bit of an impact on margins. Operating expense is being very well managed. We're still getting some leverage with constant currency operating costs only up 19%-odd and revenues up 25%. That has been a little dissipated by cost inflation as we've seen across all categories. Trading margins is 5.3% is the record for the Group. And if we take that against pre-COVID, it's the only U.K. segment that is behind that. And just as a fair amount and I think if you take in the context of the capital implications to working capital, capital investment, shareholder returns, I think the other thing is obviously a much higher difference interest rate environment that we have at the moment compared to I guess a year ago, and rates, interest rates and central bank rates have started to go up. What's interesting is that, if you look at the credit sales that we progressed in the market, they haven't really changed from the year ago, but it's really just impacts the base rates, which are up 2x, 3x compared to last year, so that has an impact, particularly where we have exposures to the shortage or the variability of the markets. The effective tax rate hasn't really changed, largely in line with our guidance. In terms of the cash flows, cash from operations up 37% or ZAR 6.1 billion. No real issues and surprises in the non-cash movements. Working capital, I guess, from our perspective, as I have talked yesterday, there's not really one correct way of looking at and measuring working capital. A lot of the measures and most of the measures are backward looking and are forward looking, which is how they should be. But we look at it in terms of days, and we measure relatively consistently to trade over the last 2 to 3 to 4 months. And our working capital as a percentage of annualized revenues is up. So on those bases, in some days we are up a little bit, but I think largely in the line and slightly better than the pre-COVID period, so the working capital cycle I guess is normalized. Working capital as a percentage of annualized revenue is 4.5%. We've guided for some time that we take the norm to somewhere between 4% and 5% and let's take for instance, working capital for pre-COVID periods of up to December 2019 and December 2018. Receivables have been well managed. They are better by 3 basis points for the pre-COVID period. As I said, our provisioning is conservative and energy components is about 6.1% of the book compared to 5.8% at the end of June '22. Inventory days are up a little bit, that's understandable in the context of us basically lesser activities and more important thing that we're doing now than we were doing in the pre-COVID periods and also the intentional buying in ahead of the price increases, which obviously assists in an inflationary environment. Payable terms had normalized compared to pre-COVID and it's obviously they're slightly shorter in terms of the benefits we had through COVID. And certainly, what we are seeing is that suppliers are the leniency granted through the COVID periods has waved a little bit and they are obviously with the high interest rate environment are also under pressure in terms of profitability and cash flow. And therefore, we are seeing some shortening of those days. But other than that, no real change. Investing activities, mostly going into I suppose 50-50 split between maintenance and expansionary CapEx. And a large portion of that in Australia, where it's going to capacity expansion and obviously, some of that into improving ESG and, obviously, I mean, typically, these -- the business into soda as an example have a 4 to 5 payback, so economically that simply makes sense to do so. [indiscernible] 4.6 billion and is up a little bit and understandable in terms of the context as to where we've invested the capital. In terms of the balance sheet, let's just go through very quickly. I mean no real change from liquidity, no change to the risk management. We don't really have any refinancing in the short term. We did quite a lot of that last year. There is some opportunity potentially to do some amount of short-term rates and long-term rates, aren't materially different. And so there's obviously this availability of supply of capital to turn these up, but certainly from our perspective makes sense. I think that the reality of the interest rate environment has changed. And I think of anyone who is thinking of going back to the 1%, 2% and the very cheap funding. That definitely isn't the case. And certainly from my perspective, it's going to be like this for some time to come. So rates and funding costs are funding costs for that. I think from a -- we do get a little bit of criticism of saying we are too late here, we are too conservative, I think from our perspective, we are pretty good in -- is really in the returns and I think we've looked at the corporate terms. They are certainly have improved over the last year, and I think our superior -- and to us, it doesn't really matter with the 30% a year to 40% a year or 50% a year. As long as we are getting superior returns in terms of how the business is managed, we think that's probably more important than the level of [indiscernible]. We have been conservative. And as we've indicated, we will continue to do so. And you can see from the sales, they're tracking well, but into the third quarter of the financial year. We have posted in the back of the presentation in the book, and one can see the impacts, the comparative impacts. I think just to note that, if you look at those numbers, you may get a little concerned about the emerging markets. But just bear in mind that Chinese New Year, which impacts along in Asia, this was in February of last year and this in January of this year. So we get a little bit of a mismatch. In terms of our financial position, we've maintained that, it's a competitive advantage. Inflation, we think will remain elevated, but the rates will moderate and we see that in product pricing coming off the remediation of stock shortages and energy prices coming down, that related change will come off. We retain adequate headroom to fund our organic and acquisitive opportunities. We do think we'll do some working capital in the second half of the year. But we do think that if you look at it, there is a percentage of working capital to revenue that's staying to sort of relatively similar to the current levels that we have at the moment. That's not just to say that's perfect and there certainly are areas of inefficiencies, and hopefully, we can make some impact in those areas in the next 6 months. As I said no material debt maturities in the period ahead. And the interest rate environment is with us as we see it for some time to come. We should see some capital investments moderate in Australia, but there's still quite a lot of plan for other parts of the world. Then we did mention Turkey alike, but also in the U.K., Europe and South Africa. ESG, this is focused on E and S. That doesn't mean to say we are not focusing on G to some range and how we operate. But they'll certainly getting a lot of attention and as I said, it makes commercial sense to invest into. Just to recap on the Miumi fraud. With all these things, the process is a long and hard road, it does get drawn out in terms of certainly going through the legal processes. We haven't yet really recouped anything material, but we are going to go the high yards to recoup as much as the losses that we can, and that's from all parties, the arbitrators, as well as from insurers. Our core philosophy hedging hasn't changed going on an actual basis. In the case of volatility, obviously, we'll play some part in terms of the rand conversion. I think if we look at the current rates of rand versus what we had in the 6 months is a number of percentage points weakness. So you can work it out as to the likely impact on the sales for the full year. International shareholder base changed a little bit and does rotate a few percentage points here and there, depending on the business epitome for major markets and the like, but it's still around 50%, actually only 46%. And so the simple equation, the quarter started off well and you can see that in the trading and in the sales we generated in February and then we indicated we are budgeting for real growth into the 7.5, but just once again to reiterate, the rates have increased that you see in the first half will moderate and into the second. So that's all for me. Back to you Bernard for Q&A.

Okay. Thank you. I think I'm back. We don't have a heap of questions, so I'll just go through them. Some of them have been answered, so I'll run through them relatively quickly. There was some press speculation that Bid was looking to sell Angliss in China. Is this correct? And if so, why? We've answered that. Can you talk to the revenue growth trends in January and February in the regions in constant FX terms? We only look at it in constant FX terms and it's tracking at the same trend that we saw in the previous 6 months. As David said, Chinese New Year was a few weeks earlier that had a small impact on it. But overall, the revenue trend is consistent and the growth levels we've seen for January and the first 3 weeks of February, have been very consistent. What is the outlook for gross margins in second half '23? Could it be a bit better given the lag between price increases and cost pressures? Not really, because in the bulk of our geographies, we're actually quite agile and you buy ahead of the price increases and you actually get the benefit upfront as opposed to later. It's only on the larger contracts where we've booked the delay and the larger contracts are a smaller proportion of our overall global portfolio. So we are fundamentally traders and inflation is good for us, and it has been good for us and has assisted the margins. So I don't think there's a whole lot of upside in the margin. I'm not saying margins aren't going to go up. I think it's a challenge, which we're not shy of to maintain margins. Do you see more M&A in second half, any sizable deals in the pipeline? What are acquisition prices like at present? So there's nothing major. There are some smaller ones we're looking at. We're very proud that we're not known as big payers, and that works for us. So we don't like to pay huge multiples. We pay in mid-ish single-digit EBITDA multiples. We're happy with that strategy. It works for us. Obviously, if there's a strategic reason to pay more, we'll look at that. But generally, yes, we're at that level and that works for us and has worked in the past and will continue to, but there is nothing big on the table at the moment. Let me just make sure, with longer-dated contracts repricing in the U.K., do you expect an improvement in trading margins, previously saw 5.1% trading profit margin as achievable in the U.K. Is this still the case with '23? No, we won't get to 5.1% in '23. Bearing in mind, we're at 3.8% for the first -- or 3.9%, I'm not sure what the number was. For the first 6 months, in order to get to 5 point something, we could imply that you got to be at 6.5% or something for the second 6 months, which is just not going to happen. So I don't think that the margins in the U.K. are going to change much from where we are at the moment in the short-term for the next year or so. But you are going to see top-line growth. Could you talk about how much of the ZAR 3 billion working capital you see as seasonal versus permanent price related? In fact, if you don't have inventory, you can sell it. It's as simple as that, and we sell on credit. So as your business grows, you're going to have more inventory, you're going to have more receivables and you're going to have higher payables. We have seen some structural shortening in our payables, which is probably permanent. Inventory is -- our working capital positions at its worst level that can be at the 31st of December. You've got factory shutdowns in the Southern Hemisphere, you've got Christmas breaks in the Northern Hemisphere, you've got Chinese New Year, which basically China closes down for 2 weeks, which this year was in the middle of January, which means a whole lot of stock purchasing around the world from China had to be brought forward. So the very worst snapshot you get of working capital is on the 31st of December, and a lot of that unwinds by the 30th of June. Obviously, our working capital will remain between 4% and 5% of recent revenue, when I say recent revenue, we're only carrying 7, 10 days net working capital. So you actually have to look at your revenue in the last month or to understand how that relates to the absolute working capital. So there will be some seasonal decline in working capital and with the working capital is better in June, I'm just keeping our sales, because we've got an idea what activity it will look like. If activity goes up by 30% from where we are now. And I'm not saying it will, obviously, your working capital is going to increase on a similar basis. But there are some inefficiencies at the end of December and is at the worst level it can be, sorry. Okay. There was a question that, it says, this has been answered, what do you expect capital spending to be in 2023 for the year as a whole? Look, we don't think of it as capital spending, as David said, we are changing the wording. We'll take the accounting profession on. We call it capital investment, but certainly not expenditure. If you don't make the investment, you don't grow. So we're making these capital investments to ensure future growth that we make no apologies about it. We're investing in infrastructure, and that's absolutely been a key enabler for us to grow our business. And once again, the vast majority of our capital investment is into real estate, into land and buildings in the right location, which are often in irreplaceable areas close to the customer and key to our strategy of being close to the customer with multiple touch points. So we'll continue to spend the CapEx that's required. Some of it you don't see a return for a few years. As we say, we invest ahead of the curve. What is the impact of the earthquake in the New Zealand business? I think there's a bit of confusion there. The earthquake was in Turkey, there was a cyclone in New Zealand. There will be no material impact to the New Zealand business as a result of the cyclone. Fortunately, as devastating as it is, it's limited to one area, one geography and yes, that's it, that will equalize itself relatively soon. What actually happens with these natural disasters, is there's a huge amount of infrastructural investment that goes into those areas post the disaster there. And we saw that in Australia with the floods and we've seen it elsewhere. And we actually see a long-term benefit of that money getting spent. So we're not -- while it's a tragic event, we don't anticipate that it will have any significant impact in the medium term and the short term. Turkey is a little bit of a different issue, because I think the country is very somber and sad and reflective and we're seeing that in the sales numbers. But time helps heal that and hopefully that will happen. Now there's just one other issue for all of you, wonderful computer look for people there and analytical people, is in terms of the JSE, we have to give you something in core revenue, just aggregation, which splits the revenue up into the product type, the customer type and the revenue per country. The revenue per country is 100% accurate. They split between the different types of products is 99.9% accurate. It's really difficult to profuse something in the freezer, but something in a dry goods warehouse. So that's correct. When you come to the customer type, Don't take this as 100% cost, well because there's a lot of definitions that move around a little bit. And your understanding, for example, a quick service restaurant might differ to somebody else's understanding of a quick service restaurant, who might call themselves a restaurant or a cafe. So there's a little bit of fluidity in these numbers, and it's a little bit of definition, and that 12% doesn't necessarily represent your idea or possibly your idea of what a QSR is, where it's purely a cotton moving exercise. And some of those QSRs are actually great customers for us and will be part of the portfolio and are -- that's a core part of what we do. So I'm just urging you to be a little bit cautious when you look at this. And when you look at it in 6 months' time, let's not be too quick to try and analyze why there's been a 1% movement away from caterers into health care. That's going to be a very difficult road for us to go down and try to explain, because it's giving you an overall idea as to where the business is split. Let's not get down to the pedantic absolute detail of it. I don't believe there are any more questions, let me just check. No, that's it. So once again, thank you, everybody. I know we've gone a little bit over time. Thank you for your attention and your continued support. If anybody does have any more questions that we can answer. I'm sure David would be thrilled to hear from you. We remain very optimistic, upbeat about our business and that's because we've got a fantastic team in place. Once again, I now go on about it, now carry on going on about it. They really are just an amazing bunch of people. We've continued to perform fantastically well. And these numbers truly are a testament to them and a great outcome. Thank you to Ashley for organizing all of this, to Charlie and the accountants all over the place, put the numbers together very quickly, very accurately that enable us to give you the detail that we do in a short period of time. And for everybody else. So if I've left anybody else, once again, I apologize. We look forward to giving you an update in May. And hopefully, it's more of the same, but I'm not a fortune teller. We'll try our best. We do remain exceptionally positive and optimistic about the outlook. So thank you, everybody. Have a wonderful day, and see you all soon. Take care. Bye-bye.