Bid Corporation Limited (BID) Earnings Call Transcript & Summary

Good morning, good afternoon, good evening, everybody. I hope I've got my timing right and everybody's connected. I can see that there are a lot of participants joining the conference. So hopefully, you're all dialed in now. Like I say, good evening. I'm talking to you from Sydney, so it's 7:00 at night here. And it really is my pleasure to give you an update on our Bidcorp business for the 4 months to the end of October. And just to give you a little bit of a feel for how we see conditions, how they have been, and what our feeling is for conditions moving forward as we stand at this point in time. The format will be the same as it usually is. I'm sorry about that. I'll talk for about half an hour, and then we'll hand over to David to take you through some of the financial issues, and then we'll have a Q&A session. [Operator Instructions] As always, please don't ask us too many detailed technical questions like exact percentages of inflation, et cetera, in various different geographies and all those complicated questions that you know I'm just not going to answer anyway. Let's try to keep it at a relatively high level and, hopefully, give you as much clarity and transparency into the business that we can at this point in time. So we're talking about the 4 months to the end of October, July to October, which is an interesting -- it's an interesting trading period in our calendar because it includes the Northern Hemisphere summer season. It includes the Southern Hemisphere winter season. From a seasonality point of view, it's normally -- that's relatively important. There's not a huge amount of difference in our seasonality, but there is a degree. So the fact that we had a satisfactory performance in the first 4 months, I think, puts us in a reasonably good stead for the remainder of the year as we stand at the moment. So the numbers are the numbers, like we said. Revenue in constant currency is up around 7%. That 7%, we believe, includes an element of inflation. We estimate maybe it's around 2%. It's possibly even less than that on a weighted basket basis and are still tracking lower. There's also a little bit of acquisition in there, which is probably less than 1%. There's only one sizable acquisition for the full 4 months, which was the Turner Price acquisition in the U.K. The Belgian acquisition only came online towards the end of September. And the acquisition in Latvia wouldn't really shift the needle. So from a revenue point of view, we're pretty happy with a 7% overall increase in sales because the environment is tough out there. I don't, for one moment, want to say that it's not tough. It really is tough out there. It's probably not getting tougher, but it's probably not getting too much easier either. As I did mention, when you read the retailers' -- the food retailers' announcements around the world, and so it's generally a consistent message, they all talk about the fact that their data, their trends show people are eating more at home than eating out. And I don't think you have to be a rocket scientist to understand that or to see that that's true because around the world, there are cost of living pressures. It's tough out there. People have struggled in the high inflation, high interest rate environments. Mortgages have become expensive. Inflation has pushed the price of food up. Although there has been wage inflation, it possibly hasn't kept up with those other increases that people have been feeling, that the consumer has been feeling. So the consumer generally across our markets isn't in the most buoyant space. And we feel that across our business. And therefore, we find from a trading point of view, we are fighting exceptionally hard and doing a whole lot of things to grow at a relatively -- we think it's a great rate. But based on history, it's not the -- it's not at the rate that maybe we were accustomed to previously when things were good. Now I guess that's a positive because things will turn. And we are seeing interest rates come down in various different geographies at various different rates. And those all have a time lag before they have an impact. And so in the U.K., Europe, New Zealand, South Africa, many other markets, we have seen interest rate declines. And we're pretty sure that at some point in time, that will translate into increased consumer confidence, which will translate into customers -- into consumers spending money out of the home again. We absolutely don't believe this is a permanent shift in consumer behavior. It's absolutely a temporary issue. And we have seen before, we are absolutely a leading indicator in the economy that one of the first things people do when they're starting to feel a little bit more secure and financially safe and better off is they'll go carry on eating out and do what they do. Once again, I do need to mention that maybe 40% of our business is nondiscretionary, where we sell to nursing homes, hospitals, military, educational, institutional, government type of customers. And the economic environment has less of an impact than in the discretionary spend in hotels, restaurants, travel, leisure, et cetera. So we do have the 2 components, which basically work together. But the one is far more consistent, and we have seen that happening. There has -- we -- talking about constant currency numbers. So the 10% trading profit increase that we're talking about is in constant currency. The rand has strengthened against the basket of currencies that we deal in. I think that's around 3%. David can talk more to that. When I wrote -- when we wrote this a few days ago, we put in the comment that the rand could possibly strengthen. It so happens that over the last day or so, the rand has weakened. But who knows what's going to happen? We're not currency speculators. The rand might go up. The rand might go down. The rand might stay at the same. Not necessarily in that order though. And therefore, that's of no relevance to us. What is of relevance is how Poland is trading in zloty and how New Zealand is trading in New Zealand dollars and how Brazil is trading in reals. And that's how we measure the business, and we convert these things at constant currency. And for us, that's the most important measurement of the business. And the rand will be what the rand will be, and the rand will do whatever the rand does. Our headline earnings are slightly lower than the 10% because we are experiencing a higher tax rate, which David will talk to, which is probably structural, mainly because of the increase in the rate in the U.K. a year ago. And we also have slightly higher interest costs because of the acquisitions we've made. We have borrowed a little bit of money, a little bit more, and we continue to invest. Therefore, our net debt has gone out a little bit, not a whole lot, so we are seeing a little bit of increase on the interest line. So are we satisfied with the 7% increase in revenue? We absolutely are, particularly when you break it down to the various constituents. So if we maybe start off in Australasia, which has been the star performing division for many, many years or a very consistently strong performer, we're seeing New Zealand really come off very quickly, the New Zealand economy. And we are running at 1 million miles an hour there to stand still. And the team are doing an absolutely fantastic job of that. And the way the economy has performed and the way the hospitality industry has performed there, the way the tourism industry has performed there, we think that to be flat is absolutely incredible. Bearing in mind, they are coming off an exceptionally high base and 20 years of sustained growth. The team are very enthused about the prospects. We are still succeeding at what we do. There have been some interest -- some quite big interest rate cuts. I think they've reduced interest rates by 0.75%, and there's more coming. So the team are quietly confident that probably the worst is behind us in New Zealand, and we'll see some more positive growth come out of that. So once again, to have held our road in that very negative environment, I think, bodes exceptionally well for the future when that demand gets let loose. I think we're in for a strong performance when that eventuates. Australia has continued to perform well. Revenue growth is up 3%. That's a real 3%. There's still some exit of business that goes on perpetually. You're going to ask me exactly how much we exited and how much we gained. We're very happy with our mix, and we continue to get that mix even better. And the 3% increase in revenue has dropped down to bigger than that increase in profitability, as both Australia and New Zealand continue to refine the various wheels of the flywheel that give us the growth, not just purely in customer trading, but the other issues we talk about like a house brand strategy and import strategy and a value-add manufacturing type strategy. So we're very satisfied that the Australasian segment has shown growth overall in the 4 months and continues to perform at world-beating levels, and we're really proud of what the team have done. Europe has been a standout performer again, notwithstanding the fact that the weather wasn't great through the European summer, and it's a very important trading period. So notwithstanding the fact that the weather was very average, cold, wet, we've still seen 10% revenue growth, of which almost all of that is organic. And we've seen a very satisfactory increase in profitability across the portfolio. We did have an issue in September in the flooding. You would have seen the terrible floods that happened in Eastern Europe, in the Czech Republic and Poland. We did lose one of our manufacturing facilities for about 2 weeks through water inundation. Fortunately, we did have contingency plans, but we did lose a little bit of inventory. Obviously, there's some insurance proceeds, et cetera. But I think it's really a testament to our robust processes that we have in place and the ability of our management to adapt to these things that we did have enough inventory to see us through, and we could get our manufacturing up and going relatively quickly. And our distribution was redistributed to other distribution centers so customers weren't let down. But what we did see in both Czech Republic and Poland is very subdued customer demand. Whilst these floods were going on for the 2, 3 weeks of the flooding period, there was obviously a great decrease in customer demand and customer activity. But notwithstanding that, we've performed admirably across the European portfolio. The one notable exception to that was Germany, where we are struggling. Germany, as an economy, seems to be maybe in a little bit worse shape than other markets. Our position in Germany also is probably less substantial than it is in any other market, where we are a distant #15, 20 or 30, whatever our size is. So we're a very small player in a large market, and we continue to assess our options with regard to the German business. But the rest of the European portfolio, by and large, is operating according to plan and expectations. Some of them, we are putting investment in. So we do expect to see them go backward in order to go forward, but that's absolutely planned as we reposition, refocus the businesses -- business. There's actually only one business that's in that position, which is Portugal, which we've sacrificed some short-term profitability to basically grow the footprint, grow the capacity, and enable us to take the next level of growth that we think that Portugal can offer. The U.K. has been a very nice success story in the 4 months. Revenue is up 8%. The market is exceptionally tough in the U.K. The environment is not great. There was a change of government. So I think there was a whole lot of optimism that maybe it would be better, and I don't think it has got better. In fact, I think it's got worse. So the sentiment is not great in the U.K., and it really is a battle. However, we are winning accounts. We do seem to be winning market share. And we are working through the issues that we said we're working through, and we're getting high levels of profitability of that 8% revenue growth. So we're happy with where we are in a market that might be a little bit negative. And I am a little bit more negative about the U.K. market because I just don't know. And if you look at the recent budget that was announced, there was an increase in national insurance announced, an increase to minimum wage. Those 2 items will have an annualized impact on our business of about GBP 10 million a year. And it's very easy, simplistic to say we'll pass that on. I'm not so sure every business in the U.K. has the ability to pass it on. And I'm not sure the end consumer has the ability to absorb the cost increases from all their suppliers through the chain. So at the end of the day, I think everybody is going to wear some of that pain in the U.K. and the pain is going to be felt through the whole economy. So we are a little bit, I guess, the word is nervous about the U.K. economy. Hopefully, we're wrong and they ride through it, and it does stimulate the economy and the spending measures do filter through to people who spend more money. But we do just want to highlight that there is a GBP 10 million impost. Obviously, we will be able to pass some of that on. There's no doubt about that. But can we pass all of it on? Absolutely, I don't know. Because we operate in a competitive environment, we have to maintain our market share and continue to be competitive. Emerging market segment has performed very admirably across most segments, 5% overall revenue increase. South Africa has continued to perform exceptionally well. We definitely believe that market sentiment in South Africa has improved. And post the election, there seems to be a more stable electricity supply. There seems to be a renewed confidence, and our businesses have continued to perform exceptionally well. South America is improving. All 3 businesses are showing growth. It's interesting that we have increased our stake in Argentina. We were below 50%, and we've recently increased it to over 60%. We really do believe we've got a very good footprint of a business there in an economy that does seem to be going the right way. There's some radical changes happening, some radical structural changes happening in the Argentinian economy. And hopefully, at the end of it, we'll have a very strong business to take advantage of, of the upside that might come out of Argentina. Middle East continues to perform nicely and grow. Turkey, we're absolutely on target. That's one of those. Basically, it's a greenfield startup for us, although it's not a greenfield, but it's a start-up, which is profitable and is growing the way we want it to grow. In Asia, China is a tough place and Hong Kong. They're just a tough place to do business. You don't have to read too much of the financial press to understand how tough it is there. The consumer is under severe stress. Tourism hasn't happened. Stimulus measures haven't worked. So it's just really tough doing business in China. We've simplified our business a little bit. We've sold one business that was non-core, which wasn't profitable, so it didn't really make any difference. We've taken out a few minorities. We've cleaned up some things. We are looking to exit some second-tier cities that maybe don't make sense and rather focus on the first-tier and second-tier cities that are going to shift the dial. Hong Kong, the business is very stable, very well run, very nicely managed. And in a very ordinary market, it's doing fine. But there really is very little excitement coming out of Greater China. Malaysia continues to grow very nicely. We're looking at a few bolt-on acquisitions there. We've got a very profitable business that's growing strongly. Singapore, we made a management change about a year ago. We've spoken about that. We've been through the worst of it. They're definitely coming through that. And we have a business that's far more sustainable now and far better structured than it was before. We're far less dependent on a few principal brands. We've extended the portfolio. We're going down the house brand portfolio strategy path. Technology is being rolled through the business. So it's -- yes, we're on that path to making our Singapore business far more similar to the bulk of our food service businesses around the world, which is clearly a model that works. And we can say it works because once again, we -- across the world, we've delivered consistent growth in good times and in not such good times. So I think our teams have done a phenomenal job. We've continued to be very boring and do what we do. There's nothing different about what we're doing other than we're adapting and we continue to adapt to changing circumstances. A year ago, food inflation was running at, who knows, 15%, 20% in some markets. Now it's running close to 0, negative, maybe even more than negative, and there's deflation. We're managing that. And we're managing it to the extent that our gross margins have actually improved a little bit, which I think is phenomenal in the environment of rapidly shrinking inflation, which is basically gone. Our teams manage the cost base, and that's very, very difficult because we do have labor costs outstripping -- the inflation in labor is fundamentally higher than the inflation in food at this point in time. And that's just a reality. For some reason, and it's a dichotomy that exists in the developed economies, there's still very, very strong employment and there's very strong wage pressure. And we are continually finding it very difficult to fulfill the bulk of our roles, which are warehouse and drivers, warehouse operators and drivers. That's the largest number of roles that we have in our business. And those are very, very difficult to continually fill and maintain a very, very tight lid on costs. And for us, the most important issue is we can continue to grow with high levels of service. And what you don't want to do is pull back on your levels of service because you think things are getting tough and because you think wages are going up, so you pull back on your wages, which will actually be a self-fulfilling prophecy, and you will see your revenue go backwards. So we are investing. We are investing in people. We are doing what's necessary to keep our service levels exceptionally strong, which we think gives us the ability to grow our market share and continue to grow our market share. Three acquisitions that we've completed so far, one in the U.K., which was the largest one. Belgium, which is a cash-and-carry hybrid model, about 70% of their business is cash-and-carry. It's a different type of cash-and-carry to some of our competitors in Europe. It's more about protein center of the plate. It's a very profitable model, which we will be looking at to see if it has relevance to other places around the world. So obviously, for us, that's a learning experience. If it can work in a place like Belgium, theoretically, it can work in many other countries. But that's down the track path, and it's just a way of addressing a market segment that maybe our traditional delivered business isn't all that strong in. So I think that gives us an interesting perspective. And one in Latvia in the Baltics. We are looking at many, many other bolt-on acquisitions. None of them are large at this point in time. But they all add up, and they're all part of exactly what we do. And I'm sure we will complete on quite a few of them, and it's across all of our -- we're not looking at any, at this point in time in the U.K., for completion this year. There are a couple that are a little bit further out than that. But in Europe, there's certainly some on the agenda. In the emerging markets segment, there's some on the agenda. And in Australasia, there are a couple on the agenda as well. So we continue to look at those. They're very important to us in our DNA. They don't necessarily shift the needle right up front. But 1 year, 2 years, 3 years later, once we've extracted the synergy, done what we need to do, moved things around, these acquisitions generally are very, very accretive in our model. I don't think there's anything else I really want to talk about at this stage. Obviously, we're concerned -- not concerned, but we have an eye open for what the rest of the calendar year looks like. November, December are very important trading periods in the lead up to Christmas. And as long as the trend holds up okay, the trend that we've seen up until now, we're relatively confident of continued growth. But it is an important trading period. And hopefully, there's nothing that derails that momentum in the short term, which won't be a self-inflicted issue. It will be a macro type issue in consumer confidence, weather-related, who knows what else. The world is a volatile place. We're not seeing any sign of the trend not happening, and we look at those sales pretty closely. And I have made the comment that we actually think things probably are improving. Now they're not improving in leaps and bounds, but it does seem -- and this is a gut feel, don't ask me for any empirical evidence. The gut feel is it's getting slightly better and it's not getting worse. So that for us is a positive that we'll take. And then who knows what the rest of the year looks like? But all we can do is look where we are now, 4 months in. There's nothing on our horizon that overly concerns us that's out of the norm that we haven't spoken about. I've spoken about the tax change, the national insurance change, which is essentially a tax in the U.K. That's the only major issue that we're confronted with at the moment. But once again, that's out of our control, and we just have to see how we can mitigate that as best as possible. So once again, I just want to give a big shout out to our teams around the world. They continue to do a fantastic job in an environment that's not all that great. And we look forward to sunnier days ahead. We have no doubt that they will come. And notwithstanding the fact that it's not fantastic out there, we're very proud of what they have delivered and will continue to deliver. So I'm going to hand over to David now to take you through some financial issues, and then we'll come back to Q&A.

Thanks, Bernard, and good morning to all or evening to all, wherever you are. Not much to add, just maybe a few more technical issues, I guess, from the market's perspective. Bernard has spoken about the sales. Gross margins are up. Some of that improvements come through the U.K. And I think importantly, I think if you look into the businesses, the businesses are trading. So some of them, a number of them are growing top line by sacrificing some margin to grow volume. And I think the benefits of that is showing that gross margins have held up and the top line has grown. I think with that improvement in the gross margins, our cost of doing business has gone up. But I think on a net-net basis, we are seeing a slight improvement both in EBITDA and in trading profit margins. So the businesses are trading well in terms of managing the higher cost base. And Bernard has spoken about the primary reason being labor as a key driver of that increase in cost base. Tax rate is, as we've sort of indicated, slightly higher. Some of those are issues that are -- both of them largely are beyond our control, being the increased rate in the U.K., which went up in April '24 -- '23 and some of the post-Brexit issues, where we're extracting dividends out of the businesses, but withholding taxes, which we can't alleviate in any form. From a working capital perspective, it's all basically in line with our expectations. The days are in line with the previous periods. And certainly, our working capital as a percentage of revenue is in line with our through the period trading ranges. So we -- there are no issues there. Like everything, there are some specific issues in terms of the Red Sea crisis, and that's having some impacts on the imports that the businesses are doing. It's coming at a higher cost. Obviously, longer lead times. But in the broad mix of the group, that's net-net. We were in a similar position to the prior trading period. The capital investments, which are principally expansion related, have gone up a little bit compared to the prior year. But I think we alluded to that in terms of the continued investment to create the capacity for future growth, and that continues. That obviously comes at a cost, which we highlighted previously. We don't adjust for it or try and make excuses for it. But our estimation, that's probably cost us about 1.5% in trading profit growth in the period. So it does come at a cost, but it's part and parcel of ensuring the sustainability of the group. Ben has spoken about the bolt-on acquisitions. I think just to say on an annualized basis, those will generate around about ZAR 3.5 billion of rand revenue for the group. And in this period, around about 1%, maybe slightly less than 1% benefit to the top line. There are no issues from a liquidity covenants and [ debt ] perspective. We do have a few refinancings, which we're working on. The markets are generally supportive, notwithstanding the political and geopolitical issues that, I guess, the world has been through in the last little while. So we don't believe we'll have any issues in terms of refinancing a few of the bilateral and RCF loans we've got rolling over in the next 6 months. So I guess, really from my perspective, I'll take questions if need be. But I hand back to Bernard.

Thanks, David. And we do have some questions. I do encourage you to send any questions that you do have through electronically, and we'll try to get through them quickly as we can. How big is the acquisition pipeline? Are you looking to enter any new geographies? And if so, which ones? So we're not pretty sure how big the pipeline is because -- yes, maybe we have a 50%, 60%, 70% success rate in conversion. There's nothing large at the moment. The large one we did was in the U.K. Second largest was in Belgium. And all the others that we're looking at now are relatively small, and they are all bolt-on in countries we currently operate in. We remain alert for opportunities in new geographies, but we need to find the correct entry point into a new geography. I think we've learned that you need to have a substantial entry point. You can't have a small entry point. It's very difficult to conquer a new market -- wrong word, conquer -- to successfully enter a new market with a small -- with a very small acquisition. So those opportunities are few and far between. I don't want to go into any more detail because we do look at things, and some of them come off, and some of them may come off, and some of them might not come off. So there's no firm view we can give you other than when we do something, you'll be the first to know. And the rest of the pipeline at this point in the year, we'll -- all things being equal, we'll spend less for the remainder of the year than we've already spent, and I think quite a lot less. The GBP 10 million increase in national insurance costs in the U.K., is it material, especially to U.K. profits? Can you pass this on? And does it change your 5% trading margin forecast for the U.K.? Well, the first issue on that, let me just clarify, is that change only takes effect in April '25. So the impact isn't an annual impact this year. It only starts from April '25. Obviously, it does have an impact. It's a tax. It's a -- the government is raising revenue. That's all they're doing. And what are they doing? They're going to businesses and saying, we're going to slug you with -- I think it was GBP 25 billion. They're slugging business with a GBP 25 billion cost. Now every business is going to have the view of, we're going to pass it on. And once again, I don't know how much we can pass and I don't know how much the consumer will take. I don't know how much our suppliers are going to be able to pass on to us. I think my comment was we don't operate in a vacuum. We certainly will be passing on some of it where we can, and we're perfectly entitled to where we have a cost to serve and the cost is directly measurable. But where we trade, we trade in a competitive environment, so I actually can't answer that. I think the one thing I will say though is we have successfully, in the past, navigated these challenges, which is no guarantee of -- past performance is no guarantee of future success. I think you financial people are very good at using that caveat on everything. So yes, we -- possibly, we can pass on some of it, most of it. And that 5% target is still a very achievable target because this is only a portion. There's many other levers we have to pull in the business, which we are pulling and changing, which will take time to come through. And we're very pleased with where the progress is so far, notwithstanding the fact that the weather was lousy and the environment is lousy. Are you seeing any food deflation in any markets at present? If so, can you still maintain margins in this scenario? We're absolutely seeing food deflation in various categories in various markets. In China -- Greater China, overall, there's been deflation. And it's a struggle, but we've done okay. I think our Greater China business at the end of October was relatively flat year-on-year, which is quite incredible. It is a challenge, but food deflation won't last for too long either. I think all that's happening there is there's a little bit of a knee-jerk reaction to a 20% inflation. You're going to get a bit of deflation, then you're going to get back to an inflation, particularly as demand picks up and particularly as you have these climatic events -- climate-related events, climatic events, shipping disruptions, et cetera. So we are relatively confident that food deflation won't be a long-term phenomenon and that we're going to see, hopefully, a moderated inflation going forward. And we always said that the sweet spot is 2% to 3%. That seems to work. But we're not macroeconomists. We don't know what's going to happen. Constant currency revenue is up 7% with inflation up 2%, implies decent volume growth. Can you comment on new business wins and market share gains? Are there any notable wins expected to impact into the second half? There's nothing significant across our businesses that will have an impact. There's lots of little things, which is absolutely our core focus of getting the correct customer, and that's what we've done. We've continued to focus on the correct customer. I think it would have been a negative if I could have said to you, well, we picked up, I don't know, XYZ pizza shop and that's had a 4% increase on our sales, because that would be opposed to anything we've said in the past. So those increases have come from hard-fought gains in each market individually. There's nothing significant in any of them that's enough to shift the needle. So like I said, we're very proud of what the teams have done. We really don't know what our market share has done. As I've said before, it's a very difficult issue. It's very hard to measure. In quite a few markets, our competitors seem to be doing reasonably well as well. Some markets are doing particularly poorly, by the way. So I don't think things are terrible out there. I don't think they're as bad as maybe the retailers like to publish that they are for their own self-serving purposes. But we are certainly very happy with where our share is and our take. And we still feel we have relatively small market shares in most geographies that we can extend. We can extend our product range penetration. We can extend our customer reach. There's still a whole lot of things we have to do. I think we've answered this one. You have completed [ ZAR ] 2 billion in acquisitions year-to-date. If you look at pipeline for balance of year, how would you expect to spend this year? Like I said, we'll spend less than what we have spent, but we will spend more. Great update in a tough environment. That's cool. I'll stop the question there. That's a great question. How much is Greater China exposure in group revenues? Just to get the sense, how much of a decline did you see in revenues in Mainland China? I actually can't answer that question. But Greater China now is most probably -- and somebody will give me the answer here from our team. I think China contributes about 1% or 2% to our group now, so it really isn't a major -- it's not a major contributor anymore. And maybe one day it will be again. But you've got a business that just hasn't performed for a few years, and its peers around the world have performed plus 10%, 20%, 30% over the last few years. So they used to be at 5% in the good days, and I'm sure they're down to 1% or 2% now. I'm sure somebody will give me that answer. Can you give us a sense of losses on the non-core disposal? At this stage, it's nothing. So we haven't lost anything on these disposals. We've got out of them okay, so there's nothing of any consequence. The other one, for David. At your AGM, you had a resolution looking at convertibles. Is that you are looking at? Why consider such an instrument, given that the ample balance sheet cut could be -- so I assume that's balance sheet, not b******* capacity you have. Are there some interesting opportunities that you see from a refinancing perspective? Or are you just being proactive with upcoming maturities? By the way, well done, an incredible performance given the givens. Good question, [ Irene ]. David, that's yours.

I mean, listen, the reality is we've had that authorization in place for the last 7, 8 years, so it's nothing new. We always have a struggle with some of the shareholders to get it through because they believe that for any issue of shares, we need to go back to them for permission. But it's really any issue of shares or convertibles is limited to 5% of the outstanding shares in issue. So it's nothing new. It obviously gives us some sort of optionality and flexibility to be able to do something if we wanted to. But it's nothing new, and I don't think anything has changed in terms of utilizing our balance sheet capacity.

Okay. Thanks, David. The answer on Greater China is it contributes 2% of group revenue at the moment, and it's about 15% lower than it was a year ago. Of which, a big chunk of that is business that we've exited. The trading business that specialized in cranberries and some other pulses out of America that we got out of, it was a high-intensity revenue business that didn't really contribute. So it's not a whole lot of exposure that we have out of Greater China anymore. And I suppose there's always a positive in that, that there's upside. There are no more questions that have come in, which means we've obviously answered everything. Once again, I do just want to give a shout out to our teams around the world. It's very easy for David and I to report the numbers. And it's really nice when you can report good numbers in a not such great environment, but we do very little. And it's the 29,000 people out there led by an exceptionally competent team who make it happen in each individual country. And the amount of cooperation that's going on in the business, the amount of information sharing, the amount of technology sharing that's going on is phenomenal. And there's way more synergy being extracted than we thought was possible a few years ago. So there's no doubt that although we run a decentralized business, we're absolutely seeing the benefits of this combined experience of 35 countries, different markets, different maturities, different economic environments. And the small contribute. The big contribute. Some of the ideas we get out of the small businesses are phenomenal. They're like start-ups. They come up with these ideas that are quick, easy, cheap and have a very big impact, which the big businesses have a look at and say, wow, we could never have done that in our environment. But they take what has happened and adopt it. So there is a whole lot more cooperation going on from a group point of view. The business is working well together. Technology continues to play an important role in what we do. I don't want to talk about the AI buzzword that everybody talks about and then their share price pops by 40%. But there are things that technology will enable in our business. We have a huge volume of data, and that data is only really useful if you can understand that data. And the only way you can understand that data is with technology. And that will give us some benefit. At some point in time, it already has. It's not a binary issue that you're going to get to the endpoint and then you've got to the endpoint. You're constantly refining and finding new opportunities and ideas. But the amount of data we have, the amount of understanding we have of what consumers buy, when they buy, how they buy, what they buy for, what alternatives there are, what they don't buy, is absolutely huge. And there's a lot of value in that data, and that will be monetized in some way for the benefit of our business going forward. And we're actively working on many interesting and exciting projects that AI will have a role to play going forward. But we don't want to overplay that because I think everybody has overplayed that hand in terms of AI and all the wonderful benefits they're going to -- that it will bring. But I do want to highlight that there is absolutely a benefit in a business like ours, where you're dealing with hundreds of thousands of customers buying tens of thousands of different products, all at different price points with different behavioral characteristics. So we're very pleased with where we are at the end of October, 4 months down, 8 months to go. An important trading period ahead of us. Hopefully, nothing sideswipes the world and it's more of the same. Hopefully, we can give you a boring update again in February. We look forward to being boring. It seems to come so naturally to me. And yes, we're pretty happy with where our teams have got the business at this point in time, and look forward to talking to you all in a few months' time. So thank you all very much. Thanks for attending.