Bubs Australia Limited ($BUB)

Good morning, ladies and gentlemen. And look, I'd like to thank you for joining us here today. I'd like to welcome our shareholders, analysts, partners and guests to the Bubs Australia Strategy Update Day. I'd like to begin by acknowledging the Wurundjeri people, the Wurrung people of the Kulin Nation, the Traditional Custodians of the land on which we meet today. We pay our respects to the Elders, past and present, and extend that respect to all Aboriginal and Torres Strait Islanders Peoples. For those that don't know me, I am Paul Jensen, the Chair of Bubs Australia Limited. I've served on the Bubs Board for 3 years, and it's an absolute pleasure today to introduce today's Bubs strategy update. Much has been achieved over recent years from the introduction of a robust governance framework, a major strategy reset and perhaps the most importantly, the engagement of a highly experienced executive leadership team. Today, you will have the opportunity to meet this team and ask questions of them. With strong governance, a strategic reset and financial discipline, Bubs has more than doubled its revenue over the last 3 years, and the company delivered its inaugural profit at 30 June 2025 and also delivered its second period profit in 31 December last year. And it is is now with confidence that we look forward to building on these achievements. I would now like to turn to the company's future strategy. Today is about demonstrating our clarity of direction, the strong credibility of our leadership team and the confidence we have in the pathway forward. Today, you will gain insight into a sequenced execution plan, the attractive economics of our global markets, the strength of our global brand equity, the experience and quality of our leadership team, and you will see our strengthening financial position. There are 3 takeaways we want to leave you with. First, we will clearly articulate our value proposition. Secondly, we will introduce the Bubs executive leadership team. And thirdly, we will outline how we will build shareholder value. At the conclusion of the presentation, I'll open the floor for discussion, and we welcome your questions. We have recently upgraded our financial forecast for the 30 June '26 financial year with revenue expected to be in the region of $120 million to $125 million and with an underlying EBIT of $9 million to $11 million. Our United States business has now meaningful scale. It has taken us longer than anticipated to reset our China business, but we are now confident in the solid sales growth as we look forward. In Australia, we continue to look forward to maintaining our leadership position in the premium infant formula market. The Board has been deeply engaged throughout this strategic review, rigorously testing assumptions, challenging downside scenarios and assessing our execution risk. Our confidence is grounded not only in the opportunity ahead but importantly in how the business is now being managed. The business is now operating with a unified cadence, clear priorities and a disciplined process of allocating our human and financial capital. Investment discipline is tested and the link between strategy and financial performance is clear. It is this discipline that underpins our confidence in Bubs' ambition to materially grow and to generate strong cash flows in future years. Today is about showing you how the pieces fit together and about setting the tone for the next chapter of Bubs' evolution. One, defined by focus, execution excellence and sustained value creation for our shareholders. I would like to encourage you to use today fully, ask questions challenge assumptions and engage with the team. And with that, it is my pleasure to introduce Bubs's Managing Director and Chief Executive Officer, Joe Coote. Joe has led the development of the strategy with his team and is now firmly focused on its execution. He brings clarity, energy, a deep operational dairy experience to the role, and I'm confident you'll hear all of this from him this morning. Thank you very much.

Thank you, Mr. Chairman. Look, great to be here this morning. I'm really excited for me. It's been 8 months at Bubs, excited to share the strategy with you this morning, as Paul highlighted, but to be honest, I'm more excited to showcase the team. We had a great team at Bubs when I arrived, but we've built the team further. And I believe now we have a great team that's worked together over the last few months to build the strategy, and this team now will stay together to deliver the strategy. And so I'm just going to take a moment to introduce the team. I'm going to start with Yasmin Manner, Yasmin is our new President of the U.S. region. She comes with a huge amount of experience and passion for the baby category, huge multinational experience, but also a deep experience in the U.S. market. Moving across to Naomi, our CFO, Naomi has a deep -- many years of experience in finance, started off in chartered firm, worked in Europe, back in Australia in the ag sector, and she does a great job managing our numbers. Moving around to Richard Paine. He's one of the Bubs veterans. Richard has over 30 years of experience in dairy. He's a real expert. He keeps us very focused on our quality processes, and it's great to have Richard and the team. Moving around to the amazing Annie Chen also from the U.S., Annie has many years of experience in the baby category. She's worked in multinational businesses like Nike. Just most recently, she's worked in the baby category in the West Coast of the U.S., and she's taken on the role of the Global Marketing Officer based out of the U.S. But with that global remit he deeply understands China, and she'll demonstrate that today by actually talking through the China slides in the absence of Jackie. Moving along to Kat, our GM of Corporate Services very broad experience, worked with some global businesses like BASF and also some iconic Australian businesses like Qantas. A broad remit, she looks after our people and culture, looks after our comms and also our transformation and strategy. So great to have you on the team as well, Kat. Chris Lotsaris, also a Bubs veteran, someone who has just come back from 3 years in the U.S. where he led the initial growth up there, did a stellar job, built the team and then set the foundation, which now Yasmin is driving. And so Chris, great to have you back in Australia, leading the business and also taking on the accountability for rest of world. Rounded out with Jackie Lin, unfortunately, Jackie couldn't be with us today, an exceptional character worked for many years in the baby category in Alibaba and has been running our business very successfully up in China for the past few years. So that's our team of 8. We're experienced, well rounded, great diversity, and we're really passionate to showcase today our strategy. So the way the agenda is set up is really to deliver that outcome to allow you to hear from me initially just on some of the high-level elements of the strategy. And then I'll pass it to my team. They'll take you through the key elements. So I'll start with strategy overview. We'll then hand to Annie, who will take us through brand and consumer. [ Lin ] cover the 3 markets of U.S., China and Australia Rest of World, recognizing that Annie will back up again with China in Jackie's absence. We'll take a break. Then we'll have Richard, Kat and Naomi to round out, and then we'll get into about 45 minutes of questions at the end. So we'll make sure we leave that time to hear from the folks here and the online folks as well. So in terms of who we are, we're a globally trusted premium infant nutrition business with strong growth and healthy margins. And for me as a person who's been in the industry for a number of years, I admired Bubs as an outsider looking in, and I was very aware as a proud Australian living offshore that Bubs were doing great things. And in this category that we operate in, the brand is such a critical thing. It's for a mother to give sole source of nutrition accountability to her little 2-week old baby is what the brand calls for. And in the grocery store, there's not a category that calls for higher levels of trust, and Bubs and our brand has consistently delivered that. And so we're very proud of that, and that's why consumers pay more for our product because of our strong brand the quality of the product and the trust they have in us as Bubs. So that sits at the peak. I'm just going to layer through now. So our product portfolio, we have a focused portfolio, but there's also some nice breadth and it provides opportunity to go into some adjacencies. So if we start on the left there with infant formula, we have an amazing cow or bovine formula range, we do that in organic and 365 grass fed claims that are premium claims. Additionally, we're 1 of the leaders in the goat category. Now goat has been in diets around the world for thousands of years and in Asia, in Latin America and in Europe. And what we're seeing is got is mainstreaming and it provides a special solution for moms who are looking for a solution for babies that don't settle. And so we're 1 of the leaders in the goat category. If you think about the next product, toddler, a little bit of a later stage in life, taking the infant through years 2 to 4. We have a growing presence in that sector. And then moving across, we have this amazing opportunity in the adult category. We have a separate brand that's in Australia and China called Caprilac, and as we know, with everybody living longer, wanting to live healthy and strong, there's a massive opportunity in that adult category as well. So that's an area of growth that we'll talk about later this morning. If we go into markets, I know there's a graveyard of Aussie businesses that have tried to take their consumer brands outside of Australia. But what we've done at Bubs, we've built a scale business in Australia. And now we've proven that we can take it not only to China, which is a bigger business than Australia and culturally, very diverse, very dynamic, but we've also shown that our brand can travel up to the U.S. And from a 0 start, we now have a brand that's scaling rapidly. It's loved by our consumers. The retailers are very happy with the progress we're making. And Yasmin will share just the ranging increases we've seen in the last few months. So that Australian heritage is great, but we've shown that we can grow it at bigger scale, not just in 1 market in Asia but also in the massive U.S. market. So now we're ready to scale, and we're very excited about that. Finally, our consumers. We aren't a mass market infant brand. We have a very targeted consumer base. We know who they are, we know how to connect with them. We've coined the term Zillennials, which is the millennials with a little bit of Gen Z, typically, obviously, females, age 25 to 40. These consumers are typically living in urban locations, they're typically higher education, higher income, they're very large consumers of digital content. So when Annie talks we were chatting yesterday, it's not about TVCs and billboards. This is all about the digital experience. And so we have this ability to connect and build intimacy with these consumers. And what we find the final point there is when they try our products, we have extremely high repeat purchase and habitual purchase and then that drives advocacy. So then they're on social media, telling their friends about how great we are. So we have a platform that we're very confident we can scale from proven in not just Australia but at scale in these large high-value markets of the U.S. and China. Just going to take a moment now to step back and really share with you why we exist. So we've captured this in our purpose and our mission. So our purpose is to provide clean nutrition products that offer peace of mind for parents and lifelong well-being for Bubs. Our mission is to make gentle, clean nutrition, the first choice for modern parents but recognizably Australian and trusted globally. So I just want to break it down a little bit and just pull on a couple of the key themes there. So the first 1 is clean nutrition. In Australia, our infant formula has always been relatively clean, particularly against some of the other global standards. So we are known for that like the Europeans are, and it's a very appealing attribute that we naturally have in our formulation. We offer peace of mind to parents, parents make the choice to feed Bubs. They're very comfortable and happy that that's going to be a good choice for their infant. And then we're setting these infants up for lifelong well-being. So our formulas have attributes that help with cognition, help with digestion, help with growth. And so that's setting the infant up for a lifelong well-being journey. We're also known for being gentle and this is a key differentiator for our products. So a lot of babies, those new parents like I am, they don't always quite settle. Our formulas, particularly our goat formula, has a really clear reputation, a lot of moms will try us when baby is unsettling and they have a great solution. And then they continue to use us and they tell their friends about us. And then the final 1 is recognizably Australian. So in China and the U.S. as the major markets, we positively draft off our Australia is. It's not a big headline, but it sits site underneath our brand, and it's about our quality, it's about our reputation, and it's a real additional positive attribute that we feel sits underneath our brand. And when you put all that together, that's why we're here, and we're proudly taking those attributes to the world. If you think back to where Bubs started, I'll just take a little bit of time to go through the key elements we started in 2006 with a promise to provide better food for babies. There was a period there to our ASX listing in 2017. And then from that point, there was about 6 years of, I think, what I would characterize as volatile expansion. There's a lot of great things, but we really got to a point in 2023 where my predecessor [indiscernible] , sorry, Reg Weine stepped in. I think [ Ridge Rowe ] a super retail guy. So definitely not regrow, edge weren't. And Reg did a great job. So from '23 to when I arrived in '25, there was a real focus on discipline there was a real reset in the business. And if you look at the revenue pathway from '23 to what we're guiding for you've got a steady growth of $60 million, $80 million, $103 million and $120 million to $125 million. Now that equates to a 26% cumulative CAGR over that 3-year period. And that's really the basis that gives us confidence now to accelerate the growth and invest and take the brand to a global scale. I do want to headline this bottom point there around U.S. market access. I know for all investors, it's a very significant point, we understand that. I want to acknowledge the efforts the team have put in. Particularly Richard, who's here today. He's done an amazing job to do very extensive work with the network of partners working with the U.S. FDA. We've done the largest growth study ever undertaken in the U.S. That growth study has been accepted. We're now in the final stages of review, we're actively engaged with the FDA. We're making progress, and we're very confident that we'll get there. Recently, 1 of our competitors out of the U.K. received their permanency, that set a precedent, which we believe helps us as well. So we feel very confident, and we're proceeding on the basis that, that will be received in the coming weeks and months. And so when you look at all that, we're in this strategic growth phase now, and we're really at what I would call an inflection point. And so as we sat down with the team to think about the strategy, it was with that inflection point in mind. And my writing orders from the Board when I arrived was we're at an inflection point. Let's take this business to the next level. Reg has done a great job to build a platform. Now that's really scale. Let's drive profitability, let's expand and let's get some leverage into the business and see some great profit fall through to the bottom line. So we've done the work now on the strategy. We've looked at our current context. We've looked at the market dynamics. I've spoken about fair elements around the current context. But I would just draw reference to the brand equity that we've built. That brand is trusted in our key markets. That's a huge asset. To build a business like we have in the U.S. from 0 to USD 60 million over 4 years as a stellar performance. The consumers, the retailers, they want more. So there's a massive opportunity there. We have rigorous quality standards and food safety standards. It's a point in our sector that's always a key risk. In my 15 years in dairy, I've seen over the number of years, different quality issues. There are quality issues in our industry at the moment, but we are safe. We have great systems and processes and great people. And every day, we turn up to do a great job for the moms who trust us with their infant nutrition. So if you look at the market dynamics, clearly, we're a business we've been thriving, but it has been a volatile world. And if you look at the events of the past few months, with the conflict in the Middle East, particularly and the second order consequences of that, both operationally and financial. We don't think that's going to change anytime soon. So as we have set out our 5-year journey and our strategy, we have assumed a certain level of volatility will continue. And we're confident we can continue to thrive in that environment. I'll just call out a couple of key things on the macro demographic side. You will hear -- well, infant formula that birth rates are dropping. That's true. But we play in the premium subsegment where parents are choosing to pay more for premium formulas and there's growth in that subsegment in the key markets that we participate in. On the consumer and competitive dynamics, it's true, there is a lot of innovation. There's some big players, but people really love where we are as a new brand that's fresh and different, and we believe it gives us a real differentiated positioning. Finally, on regulatory and geopolitical apart from the obvious with the conflict in the Middle East. We are dealing with some of the uncertainties around tariffs, importing to the U.S. has been challenging. We do have an unstable landscape with tariffs, but we're managing that very effectively and product is flowing across the border, and we're fully provisioned in our accounts for the consequences of the tariff scenarios. So this is the strategy. It's not the first time you've seen it. I have showcased this before, but today is about going into a bit more detail. And so what I wanted to start was at the bottom and build up because really, it's like building a high-rise tower, if you don't have a solid base, if you don't have the base solid, you can't really think about building high and think about the penthouse and the great stuff you can do as you grow above ground. So for us, it's our values. So Bubs has always had a great set of values. We, as a team, aspire to live those values -- we have 100 team members around the world, and we work very hard to be very collaborative and to inspire not just ourselves internally, but our consumers and our retail partners. The enablers are also important before we get to the commercial strategies, it's really important that we have great enablers. And so we've done a lot of work in the strategy and Kat will talk about this, but we're building on what is already a high-performing culture within Bubs. All 100 people will be impacted by this. And as we grow beyond the 100 people, we want to be a team that's getting better every day, setting high standards and delivering those standards. Our business transformation is how we will deliver this strategy. All the changes that you will note in the strategy will require an element of business change. We have stood up a formal business transformation process for that, and that's 1 of Kat's key accountabilities. Innovation is a key driver for us as well. We have great products, but if you don't innovate, you very quickly get left behind. So we will renovate and innovate our core products. We will innovate into adjacencies, and we'll also adopt innovative practices from outside our business. An example would be AI where we're working with a business called [indiscernible] and we're innovating with AI in our procurement space. So we want to be a fast follower, not on the bleeding edge, but we really see also with our marketing, Annie will talk to this, but there's some great opportunities to be really at the front of a lot of the innovations and how we can connect with our consumers digitally, and that will also be quite innovative. So quite a large theme on that. And finally, our strategic partners, we run a long thin supply chain. We have to work with regulators. We work with got farmers in Australia. We work with different retailers around the world. We work with the shipping lines. So for us, a core competency is being great strategic partners. And so the team does a great job at that, and it's something that we aspire to get even better at. Moving up now to the strategic pillars. So this is where we make the money. So there's 3 key areas. We want to activate this amazing brand that we have. We want to build a winning portfolio. And what I mean by portfolio is products, markets, channels and customers. So our commercial teams when Chris, when Yasmin and Annie for Jackie talk today, they'll be talking about building a portfolio of products, markets, channels, customers that allow us to profitably grow. And then finally, Richard will talk about connecting our farms to our customers. So ultimately, as you'd appreciate in our business, it starts with God farmers in Western Victoria. Each morning, they're up milking their goats. We collect that milk, it pushes all the way through very long thin supply chain. So ultimately, mom in Santa Monica can go to Target and that product is there. She needs it, baby needs it. We have to make sure it's there. Richard will talk more to that when he shares his strategy later. So you put that together, that's, in essence, our strategy. A little bit more here. Again, I think I've shared most of these in previous ASX releases. So I'm not going to talk too much about these because I don't want to steal the thunder of the team and they'll do a better job than me anyway. But essentially, Annie will talk about activating our brand. Our 3 commercial leaders will talk about the building the winning portfolio. Richard will talk about the farm to formula, and there's a lot of work that we're doing on the enablers. And in essence, when we come back and talk to you moving forward, we'll be reporting progress against these 4 areas. And as we go on the journey now to 2031, we'll keep coming back to the same and will demonstrate that we are progressing, and we'll share that as we make progress on our strategy. So what's our investment proposition? Why do we believe we're an interesting proposition for investors to look at. I believe it's a very powerful inflection point for our business, and I believe we are currently very interesting business to look at. Why do I believe that? Well, apart from the bottom point about the lead team, there's 4 elements. We operate in a highly attractive category with huge barriers to entry. So the infant formula category is such a critical core element of a grocery basket for a family who's using infant formula. It's a key traffic driver for the store. It can be the key determinant for which store the family shops at. It's also a regulated market. So there's an element of achieving regulatory status that is a barrier to entry. Now we have put a number of years and many millions of dollars into almost at the point of securing our permanency in the U.S. Other people to follow behind us and do that very, very difficult. So we have great positions in China, we have great positions in U.S. and Australia, and we'll grow from there. We're in diversified global markets. As I said, we've shown that a great Aussie brand that has scaled successfully locally has been taken offshore into multiple geographies. These geographies are large, profitable scale geographies, and we believe there's more to come. Example would be Canada as an adjacency to the U.S. One of our priorities that Chris will talk about is to launch into Canada. And we believe Canada can become a large and profitable market for Bubs. We have a resilient asset-light supply chain. So we don't own the farms. We work with the farmers. We work with a number of partners along the supply chain. So we can draw on high-quality dairy solids. We work with the packaging companies we can draw on high-quality packaging. We don't own the vessels that take our products up to the U.S. We work with the global shipping lines. What we do own is a key step in the process, which Richard will talk about, which is core, which is the blending and canning. So we have a really world-class facility down here in Dandenong in Melbourne. And we're very proud of that facility. I know a lot of you have visited that facility. FDA have recently inspected the facility, very positive feedback about that facility being world-class. And so that's 1 area that we will continue to drive our core competency, but we will remain asset-light which Naomi keeps reminding me, is great for our balance sheet. And so we really want to continue that focus moving forward. But I guess a lot of the [indiscernible] today, it's about the financial momentum. So if you look at sort of couple of elements there. I mentioned earlier the revenue growth. So we have had that 26% revenue CAGR over 3 periods. 3 data points is a trend. So we want to build from there. We do have operating leverage. So as we scale now, we believe that the money that drops through the revenue line into EBITDA and NPAT, there is some leverage there that we hope to bring to the market. And then finally, we have a capital balance sheet. So our balance sheet is tight. Look, our working capital, sending product up to the U.S. is 1 thing we focus on. You will see when Richard talks later, we do have plans to take some production up to the U.S. to shift the working capital, but also additionally and probably more so to provide a more responsive supply chain for our customers and consumers. So we're closer to market. So I'd characterize it like this. We're really a business that's done the heavy lifting, if you think of it, if we've built the train tracks, we've cut through the jungle, we've laid the tracks, we've done the hard work now. It's about putting carriages on the tracks, and it's about loading the passengers into the carriages and selling the tickets. So really, what drives us forward now is to get more passengers on the train. A lot of that is down to a great execution in market and also very much what Annie will talk about, which is activating the brand. So that's sort of why we believe we're a great proposition for investors to consider at this point on our journey. And just to drive that home, final point for me, we operate in our 3 markets, huge total addressable markets in those categories. Across those areas, we're picking up most stages of life, megatrends at the moment around healthy living, healthy aging People want to see the infants getting a great start in life. So there's a number of trends beyond our core that we will be innovating into over the next few years, but it does all start back at infant formula where we still have a massive opportunity. And that's what Annie and the market folks will talk about. We're only just getting started. If we can grow share as we will in these big markets of U.S., China, there's a huge upside in that category. And we're very excited about that, and we'll share that as we go through. If we move out from the core into basket expansion, we believe that we can provide solutions for parents around supplementation for their infants, which is an additional opportunity to utilize the Bubs products. There's lifestyle extension initially into toddler going from that first critical year of life into the total phase of year 2 to 4. And we're already in that category, and it's growing rapidly. And then additionally, I've mentioned a number of times the adult category where we have the Caprilac brand with a goat offer. And like a lot of other businesses, you see, there's a huge addressable market in that adult category, and we'll be excited to showcase some of those innovations as we land on them in the coming months and years. So with that said, I'm going to hand over to the amazing Annie Chan, and she's going to take us through our brand and our consumer.

Thank you for being here. I'm Annie Chen, the new Chief Marketing Officer of Bubs. Thank you. Yes. I've been brought in to build the marketing infrastructure that turns what is already a genuinely loved consumer brand into a globally scaled one. Over the next few minutes, I'm going to share with you 3 things. If there's only 3 things you walk away from today when it comes to marketing globally, I want to think about, one, the time has never been better. from a market standpoint for Bubs. Two, the marketing engine that we're building is designed to scale and generate return and compound over time. And three, why parents who find Bubs stay with Bubs. And why is that important? Because that allows us that gives us a permission to extend her lifetime value beyond infant formula, as Joe just mentioned. So I want to start with the market because I think the tailwind behind this business is actually stronger than many people realize, right? Let's get started. So globally, in key markets, the premium segment, which is where Bubs plays is actually driving overall category growth. This is actually not a blip. It's a trend that we see consistently across the key markets. So it's to various degrees, but in Australia, the premium segment has been growing 6.2% and whereas the mass here has been down 8%. In China, the premium imports have been growing 3%, whereas the overall category is down 3%. And that trend is most pronounced in the U.S. where you see that the premium segment has been growing 44% when the overall category has only been growing 3%. That's a lot of tailwind that we're writing. And in Australia, what we're seeing is that there's an infrastructure shift and you're seeing that across the globe, right? It's what is driving that? It's the new generation of parents. They won't settle, they do a lot of research. And when they do that research, they understand the difference. They understand why some infant formula deserves a premium pricing and they're willing to pay for it. So what is that parent looking for? She's looking for ingredient transparency, clean ingredients. She wants something that she can believe in, a brand that she can believe in, and she wants digestive comfort for her children. And guess what? Bubs was built from day 1 to meet those needs. This is the moment for Bubs to shine. Bubs was built to be gentle on the stomach. Bubs was built to be transparent and clean. We are the first brand as Yasmin will talk about to win that clean label in the U.S. So the data actually shows this is already working for us. Across the globe in our key markets, you can see the consumer reviews. We have average rating of 4.7 on Amazon in the U.S., a key channel for us. We've been able to achieve #1 brand on Amazon in such a short time. And that's because we have strong consumer reviews, 4.7 on average. That's the same in Australia. And in China, in our seat-back market, Tmall, we have an average rating of 4.8, so it's already proving out that we are the brand for the moment. So that is the market. Now let me tell you how we're going to accelerate our growth. This is marketing flywheel. I'm sure many of you have heard this term. I prefer that over the term marketing funnel because of Flywheel, once it start spinning, you don't need to keep putting in more energy. And that's my job here to get our marketing flywheel going in every single market, so that we're compounding our returns over time. This flywheel starts with the first thing, knowing our consumer knowing who to target. And we know this consumer. Over the last 18 months, the previous team has done a phenomenal job gathering that insight. As we did a lot of AB testing, we did segmentation study, we know who this consumer is. So we know where to target her. And we know what content is working. In U.S. and Australia, it's a lot of user-generated content. In China, it's KOLs that we partner with. So once we engage her, guess in this digitally connected world, guess where she goes? She goes to Tmall to check out review. She goes to Amazon. That's where our #1 position on those platforms feeds further into this flight wheel because now she goes there and she's seen the validation that she's looking for. That means it costs us less to convert that consumer. And then we bring more moms into the flywheel. We learn even more about her. We discover new segments we can go after, and we're more and more efficient with every dollar we spend as this flywheel gets going. So this is an example of TikTok screenshot. These are the types of content that you'll see a lot in the U.S. and Australia, where new Zillenial moms are telling your peers, why Bubs is better? Why goat is better. And these are types of content that drive huge returns for us. As excited as I am by all of that data, this is a slide that actually makes me most excited because as Joe says, out of all the CPG categories that you guys probably cover, there's probably not 1 category that requires consumer trust more than infant formula. So it was actually really hard for me to go through all the reviews that we've had recently and find the ones that really reflect the brand because there's just been so many, but I want to call out a few that are super critical, right? One is, "Love this formula. My Bub has had no problems." Think about how important that is. Every parent is nervous that they're going to -- that their baby is going to have digestive issues, and there are parents out there that are telling other parents. This formula brings me comfort. We've had a bet in the U.S. that says there is 2 kids were on this formula for 2 years. And in China, I won't read it in Chinese for you, but I've translated for you. It is absolutely worth it. Again, our premium positioning is being validated by parents that says, this is worth paying for. So how does this come alive in all the markets, right? We have the marketing foundation. So we just need more parents that actually know about this. That's the challenge ahead of us and 1 that we're really excited to embark on. So it's 1 brand platform, a trusted partner for the full feeding journey, but it has to be executed differently in different markets. In the U.S., it is about moving up the Bubs brand higher up in the decision funnel. We don't want to be just a brand for when you have problems, we can absolutely be a brand from day 1 when you want to start formula feeding. It is about getting into that consideration set, not only being there for discovery when your child is a problem. That's actually similar in Australia as well. We want to go after the combo feeding mom, right? Most moms don't start, don't go from breast feeding to formula overnight, she goes through several months of actually combo feeding, and we could absolutely be there for her during that time. So we want to start messaging around that and move the brand up so that we can extend the amount of time we're actually in her house. And in China, whole other [indiscernible] , which I'll dive into a little bit later, right? But there, it is about KOLs. It is above our Australian provenance and why we deserve that premium spot. So we have the brand foundation. We know our consumers. And we have the measurement capabilities that Yasmin would dive further into in a bit with marketing mix modeling. With all these 3 things in place, what we're building now is a marketing engine that scales, that spins. And things have never looked better for us. I'm so excited about how we're shaping up. And now I'm going to pass it to GM.

All right. Good morning, everyone. I'm Yasmin Manner, President of Bubs in the United States, based out of Los Angeles and before you're guessing, I have a German accent, I've been decades in the U.S. but originally German, and I can't get over this. You reached a little bit of [indiscernible] , but I didn't want you to guess and not pay attention here. So I'm excited today to walk you through how we are positioning the business to win in the U.S. infant formula market. And if there's 1 thing I want you to take away from this market is growth in the U.S. infant formula market is coming out of the premium natural segment. That is exactly where we play. And we have a clear, scalable plan to capture a disproportionate share of that growth. So let me start with the market itself. At a high level, the U.S. infant formula market is about EUR 7.3 billion and has been expanding at roughly 3% CAGR. Euromonitor expects this trajectory to continue over the next few years. But the key point is that this growth isn't evenly distributed in this category. What we are seeing is a continuous shift toward premium and natural, and that's where the vast majority of the growth is, Annie mentioned it's 44%. Within that, however, and that's the exciting part, gold milk formula is the standout segment. accelerating at around 70% year-over-year, which is pretty remarkable. And when you look at what's driving this it makes sense. We just heard it. Parents are increasingly focused on clean label ingredients, products that are easier to digest and options supported by pediatricians. Factors that strongly build trust. And these are areas that we are focusing on is our marketing initiatives, but then also from a consumer perspective, I'm looking at consumer and customer how can I best reach them, and I'll get to that in a minute. Overall, a clear premiumization trend in infant nutrition, driven by more health-conscious consumers. And as I said, the good news is that is exactly where we play and we have already established a solid position in the premium natural segment. This month, we are at 9.3% market share. And importantly, this shift is still in its early stages, and that is also something that gives us so much confidence. It's a category with significant runway ahead. So in simple terms, we are not chasing the market. I've done that a lot in my career. So we are not sailing against the wind, we are actually sailing with it. And so the next question is really how do we capitalize and scale in a meaningful way? Our approach here is simple. So it comes down to 2 things: expanding distribution and getting more out of the doors where we already have distribution. So starting with existing accounts, you still have significant runway to grow within them. So by May, I started, I think, about 6 months ago and really started focusing on the heavy weights in the U.S., Walmart target. By May, we are expecting to increase our store count now from 5,500 to 8,900 doors, which is a 60% increase in doors, almost entirely adding these doors with current customers. And then by the end of the fiscal year, we are on track to reach around 10,000 doors. We also see strong upside improving our in-store execution more SKUs, more facings, better visibility through displays, all of which help drive velocity. We are already making progress here as we speak, Target is going through a much modular reset right now, and we are quadrupling our [indiscernible] target. And this really great for me to see. I remember when I was investigating Bubs. I go, of course, first walk all these doors and you see 1 phasing in most of our retail outlets. And many of them were on the upper shelf. Now coming this month, March and May, we are moving down on [indiscernible] side, and we have a proper real estate in front of you, like 4, 5, 6 SKUs. Really, really great progress. At the same time, there's still meaningful white space regionally. We are targeting higher income areas, households with over USD 75,000 income. The demand for premium is highest. And then I did some analysis around the states and just looked at where is the premium segment really growing most. This is where you want to play. Commonly, the United States are kind of divided into 6 different regions. And you can see that in the planes, the premium segment is about 5% of the total IMF market when you look at California, that segment already is 20% of total IMF. So very, very significant difference. And what we are doing, we are prioritizing key states now like California, New York, Florida and Texas. We haven't done it before. We're already stronger in those states, but there's so much runway in those states. If you think of it, California alone has just surpassed Germany as the fourth largest economy in the world. If I would just focus on California itself, there's humongous potential just in this 1 state. But there's more to get. And I'm looking at where are we very active right now, I truly have a gap in the Northeast. So the strategy here is how do we tackle the Northeast really work with grocery partners that are in the premium segment and win them over one by one. Very often in the U.S., you have like local grocery stores on in chain in New Jersey, a chain in New York, the chain in Connecticut, et cetera. Those are the partners you need to win over. And the last piece is channel expansion. Over the last couple of years, we have built a quite good base, I would say, in grocery and mass so far but we do have opportunity to expand into club, into drug and specialty retail. We just won over 1 club channel when drug channel, and we are expanding in specialty. These are those natural often organic chains, and this builds brand equity. So also something that I have an eye on. Put together, it's a very repeatable playbook, more stores. better execution per store and then a clear focus on the right consumer. Now as we scale that, 1 thing that's really important to us is making sure we are doing it efficiently. So I'm originally coming out of marketing. I had a couple of years -- started my career in marketing and then became a commercial leader. And it's really obvious we want to grow in a smart way. So to increase velocity that goes over to Annie and marketing where I play and where my role is, how can we do this marketing approach in the most efficient way. We heard from Annie that we have exciting initiatives underway. But what I'm focusing on behind this initiative is very deliberately, maximize my ROI. I talked about my past a little bit. attribution has always been the biggest challenge. Investors are asking what is my ROI when you're investing in marketing, and there were very limited tools available nowadays, and you're probably aware of that, that has changed. So today, we are working with a media partner using an effective marketing mix modeling or MMM framework, for those who are not familiar with it, I give you a little bit of an intro. It allows us to measure, analyze and forecast the incremental impact of both online and off-line campaigns. So in simple terms, it helps us understand what's actually driving sales across the channels. The engine brings together our investment data. So you see that here on the left-hand side across digital and social platforms like Meta, Google and TikTok as well as our retail investments into Amazon, Walmart Connect or Target Roundel. And that is then being put together and combined with output data, Scan Data from Circana. Importantly, MMM distinguishes what's truly incremental and what would have happened anyways. The result is a clear view of true channel ROI, and I plugged in an example here with 1 of our retail channels. where we are seeing returns of 14%. And the model now shows me exactly how each platform has contributed to those 14%. So when I look at it, platform by platform, I would know next time where to best invest. We have to focus my money and where to get the maximum return by dollar invested. That's powerful. It allows me to allocate capital much more effectively and scaling media channels that deliver real impact. So as we continue to expand, this ensures we are doing it in a way that's both efficient and predictable, which is critical at scale. We sometimes talk about fortressing. I talked to you about regions. So while we do invest in marketing, do it very intentional geographically? And then also, again, by ZIP code really where are consumers that I want to reach. So all of that feeds then directly into how we think of our priorities moving forward. Our ambition is clear. We want to strengthen our position as a top 3 player in premium natural outpaced the market as competition increases and become the go-to gold brand for consumers. To get there, we are focused on 4 key priorities: first, continuing to expand accessibility and shelf presence; and second, accelerate the brand awareness and sell-through and that is what I've been talking about last couple of minutes, I've outlined, we're already building really great momentum there. What I want to focus on now are the areas 3 and 4, which is, one, innovation, which includes shelf a packaging refresh. We do want to work with our packaging. If you look at the U.S. and these big shelves, you need to make sure that you have shelf impact that you're focusing on your clear messages, clear claims, and that's what we had intending to do and then expanding into adjacent categories such as supplements and ready-to-drinks because those will allow us to extend our LTV. We also see clear opportunity to move further into the super premium area. Super premium is currently growing about 14% in the U.S. So also an interesting area that has our attention. And definitely a subcategory that we have an eye on for the coming years. And lastly, strengthening our omnichannel capabilities. That is a whole chapter in itself. E-commerce already plays a very important role for my business. It's about 40% of sales. But we are relaunching now our own e-commerce platform and building a more robust CRM and content ecosystem, so that we can engage directly with our consumers and get much more data from them and work with consumers directly. Simply, we are scaling distribution, sharpening the brand, building the capabilities to win and position us to capture more than our fair share of growth in this market. So just to wrap up, and I'm sorry I talked fast, I believe, but it's not very difficult. If we are operating in the fastest-growing part of the market, which is exciting. We have a very clear scalable path to expand distribution. We have already proven over the last 6 months that we can do that very effectively. We also are building a strong data-driven growth engine. And lastly, we have a focused plan to become a leading player in premium infant formula for the next couple of years. Thank you.

I promise this is the last time you'll hear from me today. Sorry, Jackie isn't here. I am going to try to do his slides justice. Here's what I can tell you. My second week in a job, which was a couple of months ago, I went over to Shanghai, which was an eye-opening experience, obviously. And Jackie was able to take me through his thoughts, his experience, in this category and how he's going to grow China. So what I can tell you is I have a lot of confidence in the playbook that he's come up with. And I will try to explain as much of it as I can today. Let's start with the market. The Chinese market shouldn't shock anybody here, is massive, right? I stands at $28.7 billion, that's actually bigger than U.S. and Australia combined multiple times over. So think about that. And that market moves so fast in terms of trend. The consumer sophistication is astounding, and the digital platforms on which we do our marketing, Douyin, which is TikTok and Xiaohongshu, which is red note is incredibly fast moving as well. So that is the 1 team that has to move even faster than all our other markets. So on top of being a large market, we get asked a lot. What's happening with the declining birth rate. Yes, that is definitely happening in China. But what's interesting about the infant formula market is that it's decoupling from that growth rate, how? Because of the premiumization, right? With fewer birth rates and with all the digital information available at the fingertips of the new generation of parents, she's doing all her research and more and more of them want the import premium product. So even though the overall birth rate is declining, the basket, the amount of dollars that these parents are spending on baby products is actually growing. So we have that working in our favor. In the e-commerce strength, is unparalleled in China. [indiscernible] , at, those are all channels that we are really strong in and we will continue to grow. How we're executing this playbook on the ground by Jackie and his amazing team is in 3 prongs. One, we've actually been able to expand into some of the biggest retailer premium, mom and child baby retailers. So we've talked about e-commerce, but with all that information, a lot of them still want to touch and feel. So it's kudos to Jackie's team that he's able to actually gain physical distribution, so that more moms can actually touch the product. The second thing is Yasmin alluded to in the U.S., in China as well. We will be expanding beyond infant formula. Baby supplements is actually a trendy growing area, and we're actually actively developing really exciting products to jump into that adjacent category. It helps with moms that are supplementing and it helps to extend that lifetime value and grow the basket with the moms that already know us. And last but not the least, it is going hard on digital. We partner with KOLs and we will continue to do so. If you look us up on those big digital channels, you will see that we're constantly putting out educational content to tell parents how good we are. And that is actually really interesting part of China. If you think about where premium used to be, you think of Beijing, you think of Shanghai. This part of the strategy is actually really exciting because Jackie is extending into Tier 2 and Tier 3 cities. Now in our countries, Tier 2 and Tier 3, you think of really low population, not very exciting, in China, their Tier 2 and Tier 3 is like tens of millions of consumers. So think about that. And those consumers with the information at their fingertips, they also want premium imports. So it's phenomenal that Jackie is already staying ahead of this trend and extending into Tier 2 and Tier 3 cities. And digitally, we're targeting those parents. So hopefully, that gives you a quick overview of how we're building our momentum in China and actually rebuilding our brand awareness in that country. And now I'm going to hand over mic to Chris.

Good morning, everyone. I'm Chris Lotsaris, General Manager for Australia and Rest of World. I've been with Bubs for 8 years starting in 2018. So I think my first year was a $4.5 million revenue year, and then we took it up to $17 million the following year. So we've come a long way and excited to be part of the team. As Joe mentioned, I've just come back in 3 years in the U.S. hoping to start up our Bubs in the U.S. and get the -- I guess, the roots. Now since [indiscernible] you could hand over to Yasmin. And before anybody asks, the reason I came back was, I couldn't found good coffee after 3 years. So hence, I'm in Melbourne, okay. So I've been back for about 5 months now. And a key observation I've had is around the evolving shopping behavior we're seeing in Australia. And we're basically seeing the definition of value shift -- so consumers are not a [indiscernible] value and dollars, they're looking for quality, ease and choice across every channel. So currently, we have a 5.1% share of the Australian market and we are the #1 goat market in Australia. And year-to-date, goat is growing and outpacing the category at 10.8% versus 3.1%. And similar to the U.S., premiumization is driving value in Australia, and we're seeing growth in high concentrated brand-led segments. However, as I mentioned, value doesn't only equal price anymore, apparently now prioritizing quality and a shift to an affordable premium segment in the market. So with these emerging trends, we are seeing the category grow in dollars but not in units. So traditional retail is still king with over 80% of sales coming from bricks and mortar. Coles is outperforming everyone at 5.3% in the category. Worths is lying at 3% and pharmacy has slowed to us 0.8% growth. However, it is shifting. Outside of bricks and mortar, e-commerce is accelerating, and it is the fastest-growing channel. Online is growing at 13% and is expected to account for 17% of sales in the next 3 years. We're also seeing convenience, shape consumers' purchasing decisions and platforms such as Amazon are offering subscription models, which offer ease and a discount and also auto replenishment. And it's ease above insights that are driving our future strategy. So our priorities in Australia are clear: continue to drive investment and as growth will come from consistent brand messaging. Our goal is to have a disciplined marketing funnel. Trial would lead to trust, which then leads to lifetime value, and we need to get them at that initial stage. Market penetration will come first and then premium push second. So we'll recruit new users and households and then will lead them into either got or organic depending on their Bubs needs. We will look to expand share in premium segments of goat and organic through targeted brand and product strategies. And simultaneously, we'll drive the velocity in our stores and channels through stronger conversion and better in-store execution and online trade execution. Finally, as with the U.S. and China, innovation will help lift the mix Andy mentioned a brand refresh coming up soon, which we're pleased to be a part of. But also, there will be product driving innovation as well, which will not only help meet our growth objectives would also help capture share in the premium market as it continues to grow in Australia. So again, consumer behaviors are changing. And in a world where value is no longer just price, Bubs will win in Australia by building trust at scale and premiumizing where it accounts. So looking around the globe, the 3 countries listed there. We're also doing some disciplined high-value growth in a few priority markets in order to advance our long-term global strategy. So what's our criteria for investigating new markets? Well, we have 3. The first is premium led markets that along with our premium positioning. The second is a scalable market size. And the third is channel accessibility and route to market. So if you look at Vietnam, there is a strong preference for imported trusted brands. Their premium segment is accelerating in an already fast-growing category. And there is a strong opportunity to own goat and the clean label niche that we have. So how do we win in Vietnam. So we'll win by a differentiated brand message and channel expansion. We will localize the messaging by reinforcing pardon, our premium Australian origin. We'll leverage digital KOLs and HCPs to advocate for the brand, and for those of you that were at the half year update, I think you saw a video of Joe doing a TikTok live. He can't walk down the street in Ho Chi Minh City anymore because it's so popular. So more of that to come, should have played it for today. And then we'll also have prioritized mother and baby stores, which are 30% of the market and also eCom, which is 12% of the market in order to drive trial and remove barriers to entry. In addition, channel expansion in addition to the channel expansion, sorry, we'll continue to drive innovation to capture premium growth. We want to continue to build the science-led pipeline in Vietnam, but also want to adapt pack sizes and pricing strategies to drive accessibility and drive and trial into the brand. Over to North America. So Canada is another market of interest, which we've discussed previously. It's a market that's highly dependent on imports. There is only 1 local brand. They also value trusted global brands across all categories, not just formula. And the market is actually seeing some really strong double-digit growth, and that's at 14%. So in order to us successfully launch in Canada, we need a disciplined retail-led entry. So we'll prioritize top-tier partners such as Amazon [indiscernible] and Walmart will win with a focused goat launch, and we need to drive velocity early to secure future expansion. We'll also need to educate and build trust in goat as it's relatively unknown. So not only is Canada under penetrated in goat. There is an opportunity to really lean into gentle digestion and our clean label credentials. And finally, we'll leverage HCPs, which are health care professionals, digital education and current ad efficacy, as we know word of mouth is 1 of the strongest marketing tools you can have. Finally, similar to our U.S. launch path that we took, we'll execute an omnichannel strategy from day 1. So that's a sense integration across not only bricks and mortar, but also Amazon, it's using e-commerce to drive that trial subscription and repeat purchase. And also, we're going to invest in trade spend and brand investment with our key retailers. So we're looking to launch in FY '27, the Canadian market. So Mexico is the last market I'll talk you through today. And it is the largest market in Latin America, it is strong retail infrastructure and has established premium segments. It is growing at between 12% and 15% year-on-year. And a lot of that growth is actually coming from people trading up as consumers are more willing to pay for perceived value, quality, safety and traditional benefits, sells what we're seeing in Australia and the U.S. There is a high category participation, and interestingly, it's a highly concentrated market with 3 key players making up 85% of the category. That being said, there's the opportunity for retailers to be open to a differentiated premium products that not only bring innovation but also some margin expansion for them as well. So within Mexico, we need to scale through the channels an anchor launch in some high-traffic retailers such as Walmart and also leverage our [indiscernible] relationship that's in the U.S. go for an immediate reach versus a phased rollout and also you scale to build awareness quickly around goat and clean label. We want to disrupt with clear differentiation, and we want to position ourselves as a cleaner, gentler option for the Mexican market. We want to also simplify the messaging and cut through the brand-heavy market that exists there at the moment. Once again, as with Vietnam, we're going to localize messaging. We'll tailor pricing, pack sizes to mixing consumers. There is a strong Spanish-first approach that needs to be taken in terms of education and marketing. And we'll also partner with local distributors and pharmacy networks for credibility as pharmacy is 1 of the main channels in Mexico. So we want to scale fast, disrupt early and localized to win in Mexico. So for those 3 markets that I mentioned, the disciplined expansion, premium mix and execution excellence equals sustainable growth. And with that, happy to let you guys have a break for 20 minutes. There are refreshments straight through the doors on the left-hand side in the function room. [Break]

Welcome back, and good morning. Richard Paine is my name, Chief Operating Officer with Bubs. And I've had the pleasure of working for Bubs for, I think, just 1 year less than Chris, and I think that's 7 years at this point in time. And I've never been more excited and energized to talk about Bubs. So I love talking about Bubs at the best of times, but I think Joe referred to coming towards the back end of the FDA process, and with the exciting growth that we've got in front of us in terms of the markets, there's never been a better time to talk about supply chain and strategy. So I look forward to sharing some of my thoughts and our strategic thinking with you over the next few minutes. What I'd like to do is present in 3 parts essentially. First of all, I'd like to just talk about the supply chain and some of the different nodes throughout the supply chain, and touch upon some of the aspects that have levels of criticality and importance throughout it. I will then move on to talk about some of the strategic foundational pillars on which we see a transformed supply chain being based upon. And then finally, I'd like to touch on what that new supply chain strategy looks like in a little bit more detail and add some color to that for you. I'll start off by working through a little bit systematically these various supply chain nodes and touching on the relevant areas of the core areas of focus. But I'm going to actually, instead of starting on the left of screen at the farm, I'm actually going to start with the consumer because I think you've heard already, and I'd like to reiterate just the criticality and importance of us having the consumer and the level of confidence that the consumer needs to have in our product at the forefront of all of our thinking. And certainly, when my supply chain team are administering the supply chain, as we know it, very much in the forefront of their mind and thinking is the trust and confidence that the consumer needs to have in the product, and that means Bubs levels of quality throughout all of these supply chain nodes. The fact that the infant formula is the single source of nutrition for infants really can't be understated enough. And whilst it's a while since I was opening tins of formula at midnight to do feeding for my kids. I know that, that really was brought into stark contrast for all of us in the 2022 infant formula crisis in the U.S. But then I'd now like to just touch on some of the challenges within the distribution node. And for Bubs, some of these challenges have been almost unique in the category with our competitors set not only, well, particularly within the U.S. as a reference point. And I'd like to -- it might be a reminder for some, it might be new news for others. But I just want to touch on some of the unique challenges that Bubs has had to navigate over the last couple of years. So the supply chain is very long. It could be easily 6 to 9 months between where the milk is on farm and in the hands of the consumer. And international shipping plays a role in that. You might recall a couple of years ago, the Baltimore bridge collapsed in the U.S., which whilst a catastrophic event, it actually had a ripple effect and did impact Bubs in minor way, but it's a reminder of our global reach now and that ripples within the supply chain on a global basis certainly can happen. Not only did that have some impact upon Bubs at the time, but that was followed up reasonably quickly by the U.S. port strike of a couple of years ago, which you're funny the things that you find yourself doing. But at 1 point, I was on a daily basis, tracking the number of ships held up in the Port of Long Beach at in California, in Los Angeles and watching the international container shipping prices increase on a daily basis. That was an area certainly outside of Bubs direct control. We talked about, I think, Joe referenced tariffs before Obviously, tariffs another aspect that side of control and 1 which also contributes to a level of uncertainty and risk, which also translates into ultimately cost. Another challenge within the supply chain, particularly with the U.S. lens is actually the customs and the periodic holding up and testing impounding of shipments that Again, we don't have -- that's not predictable. That happens in an ad hoc randomized fashion and needs to be taken into account as we work through our supply chain. We then move to the canning blending and indeed, spray dry nodes. And this is where of the areas of focus, food safety quality play an incredibly important role. At the forefront of this pubs, we obviously own and operate our canning facility at Deloraine. And this is where pathogen management control is absolutely fundamental. And when I think of the Deloraine canning site that we control, I really do have operating ethos where it's 1 really more of a pharmaceutical lens than a traditional dairy manufacturing lens. And I think that then pervades further up and down the supply chain, and that's really how we think of servicing the consumers and ensuring that this is effectively brand insurance that money cannot buy. In the blending phase and the spray drying phase in the spray drying phase in particular, this is a fundamental change to the raw milk that we procure. And whilst the raw milk product quality is very important and farmers are held to account and financially penalized if the milk is not at the Bubs level of quality required. The spray drying phase is very, very critical with many, many critical control points that need to be actively managed. We're incredibly fortunate to have high-quality trusted partners, and we work together to make sure that the product quality is of the Bubs level. I'll move now to discuss some of the fundamental pillars that underpin our thinking when it comes to a bigger and more fit-for-purpose supply network. These pillars are really about providing scale and a level of resilience in order to support thoughtful expansion. One of the first and most critical is operational excellence, which for those who don't know, can really be summarized effectively as being a continuous improvement philosophy, that then becomes translated into business systems and ways of managing your business, typically, OH&S and food safety prime areas and principally where operational excellence comes into play. We think that this is foundational and very important, and we would see a global Bubs global standard for food safety as being part of a bigger supply chain. Business planning, IBP, integrated business planning. This is another fundamental area where operations excellence comes into play. And I think this is are going to be an ongoing focus for bugs. I think this leads to better decision-making, quicker decisions, the right decisions and better business outcomes for shareholders and consumers alike. Capacity expansion. I want to just make a couple of comments around capacity expansion. We do clearly see that with the with the strong growth that we're experiencing that we will exceed the capacity of the Deloraine facility within, let's say, a 5-year time horizon or sooner. We do have a strong desire to have a build-out under a capital-light philosophy. We don't want to build the biggest, most expensive anything, but I think it would be fair to say that we will take a thoughtful and considered approach to where we do invest funds and we would look to invest funds where it makes sense where we think we need a high degree of control. But I do want to emphasize that it is a capital-light lens and approach that we will take. I do want to touch on also that we have an ambition to access the China market by the [indiscernible] channel. And this is something that we'll take into consideration in our thoughtful execution. I would also say that we're going to take a very thoughtful and considered approach to scaling with the right partners. We want to see that we've got strong value alignment with the partners that we choose. We're incredibly fortunate with the partners that we have today, and we want to make sure that we maintain that and build upon that as we grow. I want to touch on technology for a moment. I do want -- I do believe that Bubs has been a successful early adopter of QR code technology underpinning product traceability. The U.S. FDA, USDA has outlined an ambition for the infant formula segment to improve its current performance in the area of product traceability, and I think I'm very excited because I think Bubs has an opportunity to be a class leader in this area. I haven't got anything more that I want to talk about in terms of that. But I think that is something that we should be -- well, I'm very excited about and I think that we have an opportunity to provide additional engagement for retailers and consumers in this really, really important area. In terms of AI, I think Joe might have mentioned briefly earlier that we've -- we have actually been -- we want to be a fast follower. We don't want to be the class leader, but we want to be a fast follower. Obviously, many of us are utilizing AI and aspects of our daily work at the moment. We see that continuing and that facilitating better business decision outcomes. And we have engaged with a company [indiscernible], which will allow us to do some noncore streamlining in the area of contract administration. So in summary, the sustainability being the last aspect that I wanted to touch on -- we were going to work not only with ourselves improving our areas and credentials within the sustainability area, but we will choose partners thoughtfully and carefully whose values align from a sustainability perspective also. It's with these fundamental pillars that we then look to build out a supply chain that is more of a global supply network than a supply chain. We will move from a -- and transition from a single source supplier to a global supplier network, and you can see there that, that moves from really 1 hub to a dual hub approach where we'll have a presence -- a meaningful presence in the U.S.A. This will allow Bubs to service Australia domestically, China and the rest of the world from an Australian base and allow supply to the U.S. -- important U.S. market and adjacent markets, Chris spoke of Canada and Mexico and a U.S. manufacturing base or hub will allow us to do that in that hemisphere. By doing so, we see that this will address some of the risk that I spoke about on the earlier slide. And I think I would perhaps offer the comment that I think Bubs has done an incredible job in navigating some of those challenges associated with the various risks that I outlined. I think we've done that in a in a way that's been very resilient and meaningful and allowed us to get the market penetration that we've got in the U.S. today. I think this will also not only addressing the risk, but we will have -- it will allow efficient OpEx. We want to be close to the milk. We want to be in close proximity to the goat and also in close proximity to our consumers in a big market. We think that this will increase the product security and responsiveness, with a shorter supply chain. This is really critical. And we can't have -- it's hard to be responsive when you're 6 or 9 months away in what's a long and thin supply chain. This will also provide this dual hub approach will also provide a level of redundancy and back up, and we'll give consideration to how we do that as we go. I think it does also really play into a heightened level of resilience within the market, particularly the U.S. where I think there's 4 areas where we can be more resilient. That's with a physical presence. This is with suppliers, with the U.S. FDA and leveraging off the incredible work that we've done as a company to date, with retailers. We heard from Yasmin about the retailers and the further build out that she has for the U.S. And also, the fourth area is with technology enablers, and I touched on QR code and product traceability earlier. So I'm personally highly confident that this is the logical and optimized platform to deliver product from -- in terms of a global supply network really to enable Bubs to deliver on its growth strategy overall. So I've been happy to share this with you today. Thank you.

Thanks, Richard. Good morning, everyone. My name is Kathryn O'Hehir, and my role is GM of Corporate Services. So I joined Bubs about 5 months ago in this newly created position. And within the remit of my role is people and culture, business transformation and strategy execution as well. So I want to talk about some of those things with you today. So we operate as a 1 globally interconnected business with a single cadence, and that really enables us to execute our strategy at pace. Now that sounds like a really great thing in theory, but what does it mean practically for us? Firstly, we think globally and we act locally. So we are extremely agile and flexible in the way that we operate and innovate across our global markets. We can go from concept to Board approval to implementation in weeks rather than months or years like some other organizations. Our learnings are deployed in real time across our global markets. And this agility, it's not just a competitive advantage, it's also a hugely motivating and empowering aspect of building a high-performance culture. Time zones and geography and distance really are not barriers to collaboration and achievement. And I think you probably can get a sense of that from the way that we engage and collaborate with each other as a team. Secondly, Bubs has proven execution capability, especially in recent years to meet increased demand and take advantage of opportunities that others can't. So if you cast your mind back to 2022, which I think has been mentioned a few times here, operation [ fly formula ] was an ability of Bubs to showcase its manufacturing and logistics capabilities and established our reputation as an agile and responsive supplier. Bubs manufactured and shipped over 500,000 tins of formula to the U.S. in just 3 months. So execution capability is in our DNA. We have the right team and the right capabilities. And as many have mentioned, strategic trusted partners to further transform and scale the business at pace. This really speaks to the execution engine element of our strategy and this model. And that's why we have confidence that we can step up to the plate and meet the growing demand in the U.S. that Yasmin and the team are creating for us. And we will do this without compromising our other markets. This links back to some of our core values around courage and collaboration, which I think you've seen demonstrated here today. And lastly, we have invested in some key appointments to bolster our execution and governance around our business transformation agenda. So the appointment of our U.S. President, Yasmin; our Global CMO, Annie; and indeed my own role in Corporate Services, will bolster our execution, our global marketing and risk and governance capabilities to ensure that every dollar of capital allocated delivers value. I'll now go into a bit more detail about our high-level transformation priorities. So our business transformation agenda is linked directly back to the 3 strategic pillars that Joe started the day with of brand and consumer, portfolio optimization and connecting farm to formula. Underpinning that, there are also some transformation priorities here that you see around project management office establishment and capability, integrated business planning, digital and AI and operating model. These are enterprise projects that will strengthen our foundations to then enable us to deliver on some of the other perhaps some would say more exciting projects around brand refresh, product innovation, customer and consumer engagement. These areas of focus are interconnected and they're phased to ensure on-time and on-budget delivery. Our newly established PMO function will lead and oversee all strategic projects. Together with Annie, our CMO; and Naomi, our CFO, who looks after the technology stream and Annie looks after the new product development stream, together, we will work hand-in-hand to ensure project prioritization, capital allocation, phasing and execution. As I touched on earlier, we have global agility and disciplined processes to deliver transformation at pace, leveraging the learnings across each of the markets. One of the reasons that we can execute at pace is because we are not constrained by fragmented expensive legacy systems. This means we can take advantage of things like AI-enabled solutions and managed services that speed up greater functionality and connectivity across the business. However, like most businesses, we do have a lot of manual transactional processes that occur in our business that really are ripe for automation, and that will be a focus as well as we speed up the efficiency of our business operations. Getting the right balance of in-house capability and outsourced service delivery will ensure the lowest cost to serve. Business transformation will be a continuous journey for us over the 5-year horizon and likely beyond. But today, we are investing in people, processes and systems to ensure that we deliver on the strategy. We look forward to regularly updating you on the progress of our transformation and our strategy execution as we progress. And now I'd like to hand over to Naomi, our CFO.

Hi, everyone. It's great to be with you all today, and thank you for your attendance. It's my job, I guess, today to make sure I sum up what everyone else has spoken about and try and convert that into how you would perceive shareholder value and extra returns for investors. Before we get into that, I'd like to actually reaffirm what we went through when we did our half year guidance at the end of Feb, our half year presentation, I should say. What we did was we actually upgraded our outlook. And you can see the numbers over there that we actually had a really positive first half of the year. Revenues hitting at $55.5 million, gross profit coming in at 48% and EBITDA was well above what we thought we were going to achieve for the first half at $3 million. And on an underlying basis, that was $4.4 million. As we look to the full year guidance, we're still on track at this point, a month later from the update we provided in February. So we are still targeting the $120 million to $125 million on revenues. We are looking at around 40% to 45% on gross margin, and we are seeing some headwinds there with tariffs and a lot of changes to the tariff landscape. So as you might have heard, Donald Trump has come out with his latest round of new tariffs, and that was in response to the recent Supreme Court ruling where the initial reciprocal tariffs were deemed illegal. It now looks like there's going to be a 15% tariff in place. That's going to impact us probably up until the end of June. We are still reviewing at the moment how those tariffs would impact us going forward. Another item impacting the landscape at the moment is just overall changes to the regulatory environment. Joe did touch on this earlier, where we all know there's been some recent product recalls, and there has been some new testing limits put in place on cereulide testing limits. At this point, we believe our products are safe. We will continue to review these testing requirements and make sure we're in compliance with any new regulations or laws that come into effect. So at the end of it, we're still on EBITDA guidance at this point of $4 million to and $6 million, and we are still anticipating underlying EBITDA to come in at $9 million to $11 million. If we flip over to the next slide, what I really wanted to do here was give you a bit of an idea of the growth journey that we've been on. So you can see the CAGR there over the 3-year period from FY '23 to FY '26, where we went from $60 million to $80 million to just over $102 million and then $120 million to $125 million, which is the guidance for this year. That reflected a CAGR of 26%, and we do have an ambition over the 5-year period that we will continue to achieve double-digit growth over the outlook. You would have heard today a lot of the team talk about those 4 strategic areas that I've listed over there, and those are the areas that are going to continue to drive growth for Bubs. So if we look at the first one, which is market penetration, that's really about how we activate in our markets and how we build market share and make sure we're generating revenues to the best degree possible. If we look at the U.S.A. market, Yasmin did mention that the premium sector is growing at approximately 44%. Goat, which is a part of that premium sector is growing at 70%. And both these things mean that Bubs has a significant opportunity to grow our revenues in that space. If we look at China as well, we can see that the China market is also growing probably on an overall basis, actually, I should say, not growing. We're seeing a lot of changing impacts in the infant formula space there. But when we drill it down into premium, we see that the premium side of the market is growing significantly. Cross-border e-commerce, which represents about 10% of the market, is valued at $3.4 billion. A lot of the English label products sit in this space. And that market is growing at a CAGR of approximately 14%, which represents a significant opportunity for Bubs. If we look at the second strategic focus area, which is customer acquisition, that really talks about how we're acquiring new customers, how we're expanding store ranging with all of our key retailers and how are we marketing -- how we're activating our marketing effectively. And Annie and Yasmin both spoke about this a lot in their presentations. One of our key focus areas is to make sure we're continuing to use the right content to drive awareness and ultimately bring more customers into our brand. For Bubs, how we activate our marketing is extremely important. We know that we operate in a product segment where we only have the consumer for approximately 6 to 12 months. Therefore, it is extremely important that we make use of our marketing and activate effectively. Another area of growth for us is regional expansion. In terms of regional expansion, Chris Lotsaris did touch on Canada and how we have an opportunity to enter the Canadian market in FY '27. This is a sizable opportunity for Bubs. It's a market valued at about $700 million. The premium market is about $200 million of that. And the strong CAGR that we're seeing within the whole segment of 14% is mainly driven by premium. If we also look to Mexico, that also represents a significant opportunity for Bubs. It's a $1 billion market with the premium segment growing at about 12% to 15%. It is also the largest market in Latin America, and it has a high category participation rate. There's only approximately 1 in 3 women in Mexico who look to breastfeed. But the last pillar that we have there is core and adjacent innovation, and Joe did touch on this in his initial slides. And it's all about leveraging off those adjacencies that we can have product development in those areas to activate more revenues for Bubs. These are things like toddler nutrition as well as infant supplements. If we look to the next slide, I really want to talk about our focus on capital-light, and Richard did touch on this in his section. Joe also mentioned that at the moment, we are a very capital-light business. Our balance sheet is mainly made up of working capital items, trade and other receivables, inventory and trade and other payables. Our aim is to make sure that we continue to grow our revenues and margins, but we do this with operational leverage and in a capital-light basis. However, the strategic opportunities, we will look to fund based off appropriate capital allocations. These could potentially be debt or an equity raise. However, we don't anticipate to raise any capital to fund working cap. Our objective to building out our supply chain capability in the U.S.A. will be reviewing buy, build and rent scenarios and assessing the relevant capital requirements against those. We know that the U.S. opportunity is big for us, and getting closer to our customers in one of our largest markets is going to represent a significant opportunity for Bubs. As we continue to grow and expand our revenues, we also want to make sure we do this in a capital responsible way, and we are operating cash flow positive. We did a very large inventory build this year. We closed out inventory with approximately $20 million of inventory on the books at the end of FY '25. We anticipate we will be much closer to the $40 million mark by the time we get to the end of this financial year. So that represents a $20 million uplift in 1 year. Over the past half, we have been OCF negative, which we did flag to the market back at the end of June. We still expect to be OCF negative in Q3. However, there is a possibility that we could be breakeven in Q4, and we anticipate that moving forward into FY '27, we will be OCF positive. Our main aim is to make sure we take a disciplined approach to working capital, and we make sure that any increases in revenue and margin that we make will be done in a capital-light manner with an efficient use of all of our resources. That brings me to the end of my slides. I will hand back now to Joe to give us a strategy update.

Thanks, Naomi. And look, great job. It's been great just to listen to the team, go through the strategy, and you can see consistently the passion and I think the clarity that we have. And the fact we're only a little bit ahead of time might give us more time for questions as well. So what I'll do is just very quickly now summarize what we have covered this morning and then turn it over to questions. But I guess you can see this morning where we started. We brought a new team together. We've got a new strategy. We've shared that this morning. It sets a path over 5 years. It's based on strong values and then the enablers as the foundations. We are privileged to have a business that's in good shape today. We believe it's a great platform from which we can build. And so our commercial strategies are to activate our brand, to build a winning portfolio, which is going into the key markets, working with customers, enhancing our product portfolio, working with great retailers in different channels and then do some further work to connect farmers in Australia and other parts of the world through the supply chain that Richard set out. So ultimately, when those moms turn up in the supermarkets or when they want the product delivered to their front door on direct-to-consumer channel, the product is there and available and then they can have a great experience for their infant. So that's essentially our strategy. It's not a complicated strategy. It's fairly clear. We feel very passionate about it, but we also feel very confident that we can deliver this strategy. And we do believe it's a strategy when delivered that will be highly accretive to the financials. And Naomi has set out the guidance for this year and some of the directional drivers that we see into the future. So as we move forward, we'll give more guidance. We want to be a team that sets our goals and then comes back to the market and delivers those goals. So today is not about setting big, very audacious numbers in precision in year 5. But I think if you put all this together, you can see we feel very confident about our future, and we look forward to doing the hard work to deliver what we commit and then to come back and share the delivery of the commitments that we've made to the market. If I had to just summarize before I hand over to questions, I guess, our investment proposition and why we believe, at the moment, Bubs is a great business to look at. So we've got this attractive category with high barriers to entry and strong margins. I think you heard consistently today from our commercial leaders that while there's a macro trend for lower birth rate, we, as Bubs, play in the subcategory of premium. It's called different things in different markets, but it means that our exposure is to where there's high value growth in the subcategory. And that's a very nice place to be. Financial momentum, Naomi covered this very well. Our balance sheet is really around working cap. We have strong cash flow generation. We have been through the large lift in terms of the inventory rebuild from the 20 that we opened the year with, which was too low to offer the service level we needed, partly why we've had to airfreight into the U.S. to maintain the service level, but we have built significantly back that inventory to what we think is a healthy level to enter '27 with high service levels and then to manage our cash flow mindfully. We're in diversified markets. As I said at the start, there is a graveyard of Australian consumer products that have had global ambition and failed. We believe we're well on the way. Our business has scaled in Australia, but we've now got 2 markets that are bigger than Australia and rapidly growing, China being one, but then very exciting to look at the growth that we've achieved in the U.S., which is now 3x bigger than our Australian market. So we have a core Australian brand that resonates with consumers. They like the clean label. They like the Australianness of our brand, and we believe we're well positioned to grow and scale. And we can take that brand to adjacencies like Chris spoke about Canada and Mexico from potentially a production source up in the U.S., but also in Asia as well. Vietnam was another market that Chris spoke about. And we believe in other markets selectively around the world, we can grow the Bubs brand. We know it works. We know we've got a playbook that can be deployed to other markets. That's largely about our brand equity and our premium positioning. There's a lot of consumers out there in that segment, most notably in the U.S., but we are seeing it in different markets as well. We have a highly experienced lead team. It's been great to see everybody present. I think everybody has done a great job, and we're a passionate team. We're really focused on delivering for our consumers and our shareholders. And then finally, again, just that point on the asset-light supply chain. So with that said, I will hand over to questions. And Sophie will be moderating, and then she will pass on to who is the most appropriate person in the team to take the question.

Good morning, everyone. My name is Sophie Hulme, Head of Corporate Affairs at Bubs, and I'll be moderating our Q&A today. So as Joe mentioned, we will take questions from the audience, and time permitting, we will also take questions online. You can submit the question via the Q&A function on the webcast. We will also then move to some questions that were pre-submitted upon registration. For those in the room, please raise your hand, and our colleague, James will bring a microphone over to you. Please speak clearly into the microphone so our virtual audience members can hear. And if needed, I can help direct your question to the relevant executive. Questions in the room?

Philip Pepe, Shaw and Partners, very impressive set of presentations. Thank you for all the industry data. It makes my job easier. Just curious, you're pushing into -- you focus on the premium end of the market, which is still growing despite birth rate declines. What's the selling point versus the other premium brands? How do you distinguish yourself versus the others who are also chasing the same growth?

Yes. Thanks, Phil. There's a couple of key things. Firstly, the real unique attribute that we have globally is our Australian. And while that's not a headline, that's something that we absolutely own, and we're very proud of that. And it does draft exceptionally well in both the China and U.S. market and other markets such as Vietnam, Canada and also Mexico. The other thing that's a little bit unique, and it depends on the market is just our participation in the goat subcategory. So what we're seeing in different markets is what I would characterize as a mainstreaming of goat. And so that addressable market in goat, if that rises, there aren't many players in that sector. So in the U.S., there's only 2 other players. And together with us, we're the 3 that make up the subcategory, and we're all imported. So what we would love to do, and Richard alluded to this, is bring on some goat milk from U.S. farms and be the first business to bring that to market. And then finally, the other attribute we have, which is interesting in the bovine space, is that naturally, our Australian milk is grass-fed milk. Now we do have some organic attributes as well, but we feel we can draft in foreign markets of the grass-fed dimension of our milk and some of the attributes of the milk like the CLAs and the beta carotene are differentiators for the consumers of that milk as well. So there'll be the 3 things, our Australianness, our goat product and then also our bovine product, which, in addition to our brand equity, means that consumers are preferring our products.

First question is just in terms of how you're drilling down to the China market with Stage 1, Stage 2, Stage 3 products. How do you think about that in terms of where you're at and that growth over the infants to the 2-year olds in terms of the way the market sort of -- are you concentrating that Stage 1 at this point in time? Or -- and can you give us an understanding of how the U.S. works in that regard as well?

Yes, I'll start with China. I might draw on my phone a friend here or call a friend, Annie and Yasmin. So I'll start with China. So look, moms typically will come into the Bubs world at Stage 1 infant. There are some products in our future innovation that may pick up mom before birth, but we don't have anything on the market in that space at the moment. But it's all about building trust and confidence by the primary caregiver who's typically mom. And then the first phase of the infant cycle, 0 to 6 months, is Phase 1, as you say. So that's where we acquire. So in terms of Annie's flywheel, that's where we want to bring mom in. We wanted to have a great experience. We want her baby to be settled and comfortable and growing, all the things that we love to see as parents. And then what we feel is there's a great opportunity to stay with Bubs through Stage 2. And we know our retention rates through the surveys we do are very high. They're higher than our competitors actually. And then from there, you get beyond the first year and then into Stage 3 and into toddler. And so that's the extension of lifetime value. So a lot of things we look at is the ratio of acquisition cost to lifetime value. If we acquire mom and she only stays for Phase 1, it's a very short payback on the ROI side. So what we're trying to do and what Annie laid out quite nicely is we want to take mom through. And then ultimately, we want to get into growing up milks, which some -- in some markets, there's a preference for children to consume growing up milks through to the age of 10 and 12, then there's supplements, and then ultimately want mom to make choices for herself and maybe her parents. So that's how we grow that lifetime value. And that will take us time to grow out the portfolio of products. But it absolutely starts with Phase 1, which is the new infant. And that's where we've done great work. We have a reputation for doing that. Once you build trust at that sort of very early stage of life, you tend to be able to then take it down to further other stages. Now in the U.S., it's a little bit different in the sense there's not a Phase 1, Phase 2, it's a standard formula for the first 12 months. So -- but it's otherwise a very similar process. I might -- Yasmin or any, do you want to add anything to that or I missed anything?

And then secondly, in terms of swing back to English label, it seems to be happening in China at the moment. So I just wonder, are you benefiting from it? Or how do we read that trend and longevity of that trend now?

Yes. I mean China, as Annie said, is a very dynamic market. There is some tailwinds at the moment that we've seen ourselves and some of our competitors are enjoying that as well with English label. It was only a few years ago then it was premium China label. So what we want to do is build out our portfolio. So we did talk about SAMR. So we want to come to market with a China label product as well. We want to cover all bases. We want to be CBC. We want to be in the general trade. We're in general trade at the moment through O2O, but we want to get into general trade with the China label. And we believe our brand will present well in all those channels. And so as the consumers shift, we can travel with them, we can renovate, we can innovate. And with such a large dynamic market, we want to be in China at scale, and we want to also take that same lifestyle -- lifetime extension into China as well, so into toddler and growing up milk and then supplementation as well. And ultimately, we do already have the adult product in China, CapriLac, and we believe we can do a lot to extend in the adult space as well. So we're excited by that.

And then just lastly, just in terms of the sort of corporate structure and overhead you've added now, just -- can you -- is it appropriate to the sort of revenue? Or can you tell us about the leverage and the sort of revenue you need to achieve to perhaps justify the sort of current cost base you've got in place?

Yes. I mean we've selectively invested in capability. And as we've scaled that 26% revenue CAGR over the last 3 years, if you look at our ratios, they're healthy. If you look at year-over-year OpEx, SG&A, A&P percentages, they're healthy. In some areas, we've reinvested. So in the Australian market, when Chris came in, I think we're investing less than 8% of A&P on net sales. We've upped that to north of 10%. And we'll continue to do that because we're very confident in our brand. Similarly, in the U.S., I'd say an industry metric of 12% to 14% A&P to net sales. We look at that carefully and then we selectively go south or north of there. I think in the U.S., we've got opportunity to really grow while the category is resetting in premium natural, and we may selectively choose to go north of there. But we look at that very, very carefully. And so we are very responsible with our OpEx spend on that basis.

Sean from CLSA. That was an excellent presentation. I've got a specific question for Naomi. I think you mentioned about the recent change to the regulatory environment. Can we be a bit more specific? Is that responding to the increasing testing on AIA oil issue? What's the new testing requirement?

Maybe it's better for Joe to add to this one, but I will just say there's just a changing regulatory landscape at the moment that we're seeing, and that means that different countries are starting to now come out with different rates of testing on the cereulide. It's not across the board at this point, and that's why I just said it's something that's up for review, and we're going to continuously assess what those impacts are. But Joe can share a bit more light on that.

I offer some comments on that. I think in our industry, the standards of quality need to be the highest. And Richard said, and this is the way we think about it, we're aiming for pharmaceutical standards. And so what we've seen in my years in the industry is a number of events where there has been a discovery of some quality challenges and the industry tends to use that as an opportunity to reset and to extend testing methods and to become better and evolve. And essentially, the food chain has done that over 100 years. But it's a little bit of hyper focus at the moment in certain geographies. There has recently been an issue in the U.S., and there's been a global issue with some of the majors. So there are 2 separate issues. At the moment, we're very confident our products are safe. But what we're finding as we're speaking to different regulators, because it's new, a lot of the test methods didn't exist 3 months ago. The industry is in a rapid catch-up phase. So what we're saying is we are rapidly catching up as the whole industry is, and we are establishing test methods as quick as we can. And we will continue to service our markets on the basis of the requirements that the markets have stipulated. In particular, the cereulide issue, we've had the Europeans come out with one level. We've got other markets that have got different levels, and it's at the moment in a state of flux. So what we're doing is we've been quite conservative in how we look at that. And we're absolutely focused on it every day to keep our products safe for our moms so they can confidently come and take our product off shelf and feed it to their infants.

Does that mean that will be impact your working capital? Are you able to share if that's extended the product release batch cycle going forward?

At the moment, I mean, our macro working capital focus is to build. I think as Naomi said, we started last year with $20 million, which on an inventory turn basis was lower than what we needed even for the sales at $100 million. We're growing sales up to north of $120 million. So we are continuing to invest in working capital, and that's our focus in terms of working capital at the moment.

Any further questions from the room? Yes?

Joe, you've commented in the past around the ability to source goat milk product in the U.S. But just given this shift to the global supply network, is there any further comments that you would add now in terms of the volumes and time scale to actually be able to source the U.S., I guess, predominantly or solely from U.S. farming?

Yes. It's interesting like the goat milk trend is driven by goat cheese. And for those who know the dairy sector, like goat cheese has always been a big thing in Europe. So a lot of the goat solids were traditionally coming out of Europe. And New Zealand is another geography with a lot of goats. So there is goat milk out there. And in Australia, we have some great goat farmers as well. So in terms of the U.S., they've been a little bit slower to pick up the goat trend, but it is rapidly rising. So currently, one of the ingredients that does come from the U.S. is goat whey protein at a 55% standard. So we already do use some goat-based ingredients from the U.S. So in the discussions that Rich and I are having with some of the goat farmers in the U.S., we are indicating to them that we'd like to see them not just use the substream from the cheese process, which is the whey, we'd like them to produce whole goat milk for the purposes of our infant formula. Now we're not the only people in the U.S. asking for that because in the U.S. at the moment, there's 3 people selling infant goat milk, one from the U.K., one from Europe and us from Australia. So we're not the only game in town. So we believe that we can do well working with the U.S. goat farmers. I'd be hesitant to give any commitment on how fast they can scale up. And the challenge for them is not just the volume and how they scale, it's the quality because the quality of the milk you need for cheese is very different for the quality of the milk you need for infant formula. So what Richard will set up is essentially the ability to flex between the high-quality Australian goat milk that we enjoy currently, top up from New Zealand and Europe. And then as the Americans come on board at the right quality and the right volume, we will absolutely bring that into our system. We don't yet have a view whether that's a 1-, 3-, 5-year process. We hope it's on the shorter time horizon, but it's quite a challenging thing for them to work through. So -- but we're very keen to encourage them to do that. And we do believe commercially, it will be a great differentiator for our product if we can be one of the first to get to market with some U.S. goat in an infant formula product.

That's useful. And then I think we're familiar with the squeeze quinoa products and the squares and things that you have on sale in Australia. I noted the comment around ready-to-drinks. Could you just expand on what those are? And with all of the, I guess, noncore tinned powdered products, what are your ambitions and perhaps expectations in terms of percentage of sales and growth various regions over the next -- and I appreciate that it will probably take a while for that to really sort of become very meaningful, so perhaps over a medium time frame.

Yes. So a couple of comments there. I think the food sector, we've exited recently for a number of reasons. We did have some great products there. We just found the volume and the margins and the supply chain, a lot of that product was coming in from Europe. So we took, I think, a rational -- economically rational decision to exit there, so we could double down on our core. So typically, when you look at these types of products, and even as you go beyond the infant stage, there tends to be an early adoption through powder. And so a lot of our products have been powder. As the markets develop, they do tend to go into a liquid form. And then ultimately, in its fullest form, they can be fresh and chilled. Now I don't think we're going to get fresh chilled infant formula. But if you follow that progression from powder to liquid, that's what we're seeing. Now even in the U.S. market, there is quite a premium space for ready-to-drink bottles. So some parents would have ready-to-drink bottles that they would take and they would feed. But it's very expensive. It's a super premium product. I don't think we're going to see that. It's -- I think the powder is the accepted format, at least in the horizon that we are planning to. So where we see the liquids, Connor, is more in the growing up stage, so toddler and then into growing up particularly, where essentially the bigger macro trend we're seeing is protein supplementation. And if you look even in Australia, some of the fresh milk that are put out by a lot of the dairy companies now, there are other high-protein milk beverages. And so we would see for our brand, having an opportunity to bring those types of products with relevancy to kids. So in the U.S., they call it a kids shake, but a kids shake in the U.S. so maybe kids were drinking juice boxes loaded with sugar, moms are making decisions now to say, hey, have a nice chocolate milk that's got some protein, maybe some vitamins and minerals. And so there's a nice little space in there that we want to get into, and we want to bring those moms from infant, toddler and then into that growing up milk. If you get that sort of trust built, you can bring a child from the age of 4 right through to 8, 10 or 12. And then as Annie said, your lifetime value extends all with that Bubs brand. So that's a huge opportunity. We're not the only people chasing that space. But we do believe with the trust we've built with mom, that's the differentiator. So if she trusts us from infancy, we supplement, we go into toddler if we can then get relevance in those products through. And the U.S. is there's water-based products, there's juice-based products, but the milky beverages with high protein and vitamins and minerals, that's where we see the opportunity.

I might take the time to go through some of our pre-submitted questions, and then I'll move back to the room to see if there's any final questions.

There's a lot of other people here looking for questions as well.

I know. I know. I do encourage you to ask a variety of questions because it is rare that we have all of our ELT members in the same room. I would kindly ask Richard, our Chief Operating Officer, who is sitting at the back of the room to come to the front because this next question, I will direct to you first, and then I'll pass to Joe for any final remarks on this topic. Will the current Middle East conflict affect Bubs logistically? And what are the contingencies?

Yes, great question. We don't anticipate that, that's going to have a material or significant impact upon us. Any impact is probably likely to be indirect and transient in nature. Obviously, we're reliant on shipping to the U.S. for products. So I think any increase in oil price will see translated through to a moderate increase in shipping costs, but probably not of a material nature would be my thought.

I concur, Rich. I mean, I think if the conflict extends or expands, obviously, there's different outcomes, but we would all -- everybody in the room hope that it's short and it sort of deescalates. So that would -- I'd concur on that basis.

This one will be for Joe and then perhaps followed by Annie, if required.

Amazing Annie.

The Amazing Annie. When will we see the market start to pick up in China and Greater Asia?

So in terms of the Bubs business, I assume that's a question because I mean, we've spoken about the macros in those markets. So as Annie highlighted, the macro birth trend is down, premium English label is up. Question from Mark, then there's a little bit of English label, China label trade-off in premium. In our business, as you may be aware, in H1, we had a slowdown on our comps in China. That was largely because we had a little bit of extra inventory in the trade, so we needed to rebalance our inventory. So Jackie, our amazing GM up there, sold through that excess inventory, and we were in balance at the half, and now coming into H2, we're in sync. So the inbound inventory is making its way through. And I think our inventory days have reduced quite substantially. Naomi, haven't they, and we're quite happy with the synchronization of the inbound and the offtake at point of sale in the trade in China. That will be my summary.

Richard, of course, you have spoken in detail about this topic today, but I will pass to you to make any final remarks. Is management looking to secure a production facility in the U.S. that will cater specifically to the U.S. market rather than shipping or air freighting finished product from Australia?

Yes. Well, yes, I guess I did touch on that in a bit of detail. But I would say that we're having a thoughtful and timely approach to how we do that, whether that's build, rent or buy. But again, through the capital-light perspective. So I think that we're having the right conversations, the right thought processes. It's early on. We're not imminently about to announce anything. So I think we're in the right place at the right time, having the right conversations.

Yes. Rich and the team, there's a lot of discipline they're putting into this. And we say all the time, we want the right answer, not the fast answer. So we are taking time to speak with industry contacts and really explore different geographies, different partner models. And we'll share when we've got something to share on that basis.

Naomi, given Bubs a small market capitalization, how well positioned is the company to manage or defend against potential legal claims?

That's a good question. I think when we consider risk in our business, we've got to be conscious of risk and building into all of our processes and make sure we've got the right processes in place to make sure we're avoiding that risk or mitigating it to the best degree possible. So that is always the mandate of Bubs. I think we're a growing business at the moment. You've seen we've come out with guidance today, [ 120 to 125, reported at 4 to 6 and underlying 9 to 11. ] The business is growing. It's generating cash. We can see improvements in the way our working capital cycle is operating. It's just not prevalent in the OCF numbers at the moment because of the large inventory rebuild that we've had to do this year. But going forward, I don't anticipate those things being an issue. Obviously, no one wants large legal claims coming about. We always need to manage that through our process and make sure we have the right processes in place.

Thank you, Naomi. We have touched on this topic today, Joe. But again, I will pass this one on to you for any final remarks. Is there any update or insight on the FDA approval time line?

Yes. Look, I covered that at the start. I don't have a lot more to add. I'd be happy to take any second level questions. But essentially, as I've said to a number of the folks in the room in one-on-one meetings, it's a government agency. So it's difficult to hold them to account on a time line. What I can say is we observe diligence and progress. And the largest component of the submission has been concluded, which is the infant growth study. So the focus now is on the manufacturing side. And Rich and I speak very regularly on it. There's a number of questions. The level of detail has been interesting to observe. For those who know the dairy sector, they're right down to the detail of how you do dryer washes and what type of chemicals and what processes you use, and they have an opinion on that at that level. So this is a very, very thorough review that they undertake. And I started my career in pharmaceutical. And Rich and I have been tending to use the term, this category is really getting to a pharmaceutical level. And so with infants and with the sole source of nutrition. We understand that. And what I would observe from the FDA is high diligence, high focus, but we remain very confident, and we hope that it's imminent. Phil?

If I may just ask a follow-up question for the Chairman. Obviously, impressive team, impressive presentations. Can you share with us some of the key performance indicators you put in place for the team over the next 5 years? Like what does success look like in 5 years' time? We've heard double-digit top line revenue growth, but what are some of the other KPIs you've set for the team?

Look, I think the main one for us is that as a Board, we want to get the fundamentals of this business correct. And building the right platforms, having the right people in place clearly identifying the drivers and the appropriate strategy that we've got addressing attractive markets. And so there's a real discipline that we have in place around that process. We've worked very hard, how does that translate? We've spent an enormous amount of effort and time over the last 12 months building in place and building financial models behind us, which we're not -- it's not appropriate for us to be disclosing those externally. But the discipline which has gone into that build has been enormous. And there's clearly some high-level market-driven performance KPIs, which sit around those. And then there's also performance financial KPIs that sit below it. Sitting around that, we're very clear as a company of respecting our shareholders. Creating shareholder value for us is absolutely top of mind. And so we have the KPIs, the financial KPIs, which underpin that business plan, which is in place.

Mark?

Joe, just in terms of your reference to the SAMR comments, I'm just wondering if you can -- I'm a little confused by that, just maybe explain a little bit better, obviously, in terms of accessing a trial or with SAMR in place, is it a very expensive process. So just trying to understand what you're talking about there and what you're thinking there might be.

Yes. I mean so the SAMR, just for other folks who might not be as familiar with the term, is the access to the general trade in China with a China label product. And so China being such a large market, we currently participate more in the imported sector of the market. So we aspire to be in that China-label general trade to access a large portion of the market. So that's why it's interesting. In terms of our options to secure the SAMR license, it is tied to an asset. And so each asset can have a certain -- there's a maximum number of SAMR licenses each asset can have. There are some assets in Australia with SAMR license, and it could be that we pursue that through an asset in Australia. There are other geographies. One of the ones that's potentially interesting also is New Zealand. There are SAMR licenses and there are facilities in New Zealand that were built a few years ago, and there's an excess of capacity in New Zealand, and there could be some opportunities over there as well. So at this point, similar to what Rich said in the U.S., we're taking a buy, build or rent approach, and we're doing diligence to understand what our options would be. We certainly have a preference to supply as much product as we can from Australia. But if we believe our shareholders will get a better outcome from securing SAMR from New Zealand, that would be an option that we would look at. And we would do that on a very thorough investigational study of the options available based on service, cost and security of supply.

And then lastly, just in terms of like going to countries like Vietnam and even Mexico, does it make sense to have partner with someone like -- I'm particularly thinking about Vietnam and the way they do business there. And I'm not familiar with Mexico, but I'm just kind of wondering, is it a retailer? Or is there another kind of arrangement you have in place with someone?

Yes. No, absolutely. So like fundamentally, there's a couple of different models. And so even how we look at our markets and particularly with Chris doing that analysis of entering new markets, we typically like a large-scale market like China and the U.S., we have our own team. So we call it a strategic market where we have all our own people. Now we don't do everything in those markets. So as an example, in the U.S., Mainfreight does our logistics. So we don't have a team running physical logistics, driving forklifts, packing trucks. But we have a team that does all the fulfillment. Yasmin has a full service team essentially in Los Angeles running that business. When we look at other geographies like Vietnam that Chris manages, we do have a distributor in Vietnam. And so that individual, they will typically be businesses with an established local presence. They'll have relationship with the trade. The distributor we have in Vietnam not only has a relationship with the general trade, with the modern trade, businesses like [ Conon, ] which is a big chain of mother and baby stores. She also has a relationship with the health care professionals around the hospital network. So their relationships as a new entrant, we couldn't ever aspire to realistically achieve or grow into fast enough or on an economic basis. So market like Vietnam, we call a distributor market or a partner market. So when we look at Canada and Mexico, Chris and I are doing this analysis at the moment, we believe that in Mexico, we'll most likely do a partner model where we work with distributors. You also mentioned retailers. Sometimes you can get a leg up with a large retailer. So one of the -- and it's similar to the buy, build or rent, like we just look at it objectively. There's a structured methodical process to go through, risk, capital, OpEx and then we will work with either a direct model or a model through a partner. But the option and particularly in Canada of partnering with one of the large retailers is also interesting to help us get started.

If I may ask a specific question to the U.S., please. With the midterm election coming soon, a lot of uncertainty around the world, I would love to know your view on U.S. consumer sentiment for the next 6 to 12 months? And how does that impact choice between premium or mass middle infant boomer products?

That is an interesting question. I don't think that the political landscape has so much impact on how moms or parents decide on how to feed their child. You see just overall is this big trend in transparency, clean products. This is why clean label is so important for us. So the consumer trend around transparency and what Richard mentioned before, right, can we communicate even better and provide more transparency is important. Politically, I think it's more an economic question and premiumness, what that impact will be. So what's happening with discretionary income right now in the U.S. And as you know, there's quite a bit of a difference, right? In the U.S., you have a high level of households, premium households who can afford us. They are often shopping more in retail landscapes like Target or specialty stores. And then you have consumers that are shopping -- they live more in the day-to-day. The interesting piece here is what I can observe at the moment, it does not slow down the premium segment. So it is just so important for a family to feed your child properly that people who might not have this very high discretionary income, they might go and buy smaller cans. So what we are looking at right now is to potentially go into the market with 2 different can sizes so that you have the opportunity to buy at a lower absolute price. And in the U.S., again, salaries are paid out generally on a biweekly basis and a product usually lasts for 2 weeks exactly, and that then helps them manage through that. I hope that answers the question.

I just would add there. I think it's largely the elasticities on these products. So I think as Yasmin said, parents are making that choice. They don't shortcut baby nutrition. In times of economic downturn, cigarettes and alcohol doesn't drop off either. So there's just consumer behavior that is sort of prevalent. And so I think the other thing I would call on is Annie mentioned the goat product, particularly as a solution for unsettled baby. So I haven't been a parent myself. I would pay a lot of money to get a night sleep with a gentle baby. And so again, there's a lot of drivers in our category to not sort of pull back when the economic cycle cuts in would be my view. I think mirror what Yasmin has already shared maybe, but...

Annie, I'd like to invite you up, please. If you could help us understand how you think about marketing and brand investment. How much of the business is reinvesting into brand and marketing globally? And how does that evolve as scale improves?

Well, the nice thing about the marketing flywheel is we get more efficient, right? But it does start with a basic level of investment. I will say when I first came on board, a quick observation I made is that in an effort to drive profitability, the last couple of years have been focused on performance marketing, and that's lower funnel, right, because we want to convert the consumers. We're getting distribution. We want to get that velocity going. But that is honestly not the best long-term strategy. Now we need to invest in brand awareness. We need to bring new moms into the franchise. And we have to -- we know from data that we have high retention rate. So that gives me comfort when I do invest in that customer acquisition. And so what you're going to see over the next couple of years is a shift toward upper funnel investment. We are going to be building out Bubs brand so that more moms earlier, during -- even during pregnancy, when she's actually doing research on baby formula, she is already aware of Bubs. So that on day 1, when she decides to formula feed, Bubs is already in her consideration. And we can't do that if we're only focused on that last click on Meta, on TikTok. We have to get in front of her during pregnancy on pregnancy apps and talk to her about Bubs. Does that make sense?

Thanks, Annie. I might just add, I think we sort of like to have discipline around industry benchmarks. So I mentioned earlier in the presentation, like we look at A&P as a percentage of net sales. And so we want to be in the industry benchmarks, which we see healthy growth businesses at sort of 12 to 14, 10 to 14 in that range. We have seen in Australia, we dropped down to below 8, and we did see a fair falloff. So we have tested the lower limit. I think we want to test a little bit of the upper limit in the U.S. where in the next few years, the category in premium natural is open. There's new entrants, and we want to make sure that with these amazing people like Annie and Yasmin, we give them the firepower to really chase the growth of that brand. So with what Annie was saying with going to top of funnel, we may push 14 and above potentially as a percent of net sales. But Naomi and I manage that very carefully. We look at global benchmarks. And then the final thing I'll say is Yasmin spoke about the MM that's something that didn't exist. I can remember in my early years in consumer products, seeing the marketing folks getting beaten up because there was no attribution to the spend. We do with digital and with the way consumers are consuming the marketing now, we have a fair short cycle feedback on attribution. And so if we are putting 12 or 14 or 16, we're making sure the ROI is there. It's not perfect, but these tools didn't exist even 5 years ago. So it's another benefit we have in our category because we know who our consumers are.

Thank you, Joe. Thank you, Annie. Any final questions from the room, yes?

Yes. Yes, just on the presentation on -- I'm not sure if this was covered in the half year. But I noticed in the first half, the differential between EBIT and underlying EBIT was about $1.4 million. Yet in the second half, that gap grows to like $5 million. Are we predicting a lot more one-off costs in the second half?

Just to clarify, are you talking about the second half of this year? Or are you talking about?

Yes, the second half guidance, you got EBIT of $4 million to $6 million and underlying EBITDA of $9 million to $11 million. So yes, the gap between EBITDA, underlying EBITDA -- that gap seems to have widened in the second half. I'm not -- is that [indiscernible] freight cost?

That's because of the air freight. So there is a significant amount of air freight that's going to be impacting us in the second half. We did flag that in the half year presentation. And on top of that, there's also tariffs on non-AU-sourced product. I did mention just before the changing landscape on the tariffs, and there's an extra 5% now that has to be absorbed on tariffs as well.

Okay. And just one other quick one. With the significant inventory build, I think you said from $20 million to $40 million, I think in the past, Bubs have had inventory issues and obsolescence issues where they've had to do big write-offs. How is that being managed so that's being prevented as a possible risk?

Yes. So Richard, in his presentation, did touch on operational excellence, and I've spoken about it a little bit before, and that's been really our main focus. Richard did talk about integrated business planning and how that's a very, very important process for us here at Bubs. That's all about aligning your demand with your supply. It's an imperative thing to do in manufacturing organizations, so you can make sure that you're either not overstocking or understocking. I think in the past, those processes weren't working really, really well, and that's why we then entered into large contracts or produced a lot of volume and then couldn't sell that volume down and had to be written off. So there's been a lot of work done on that over the last year. We're still continuing to refine and improve and make sure that we've got that demand and supply always lining up, so we don't have these potential large write-offs going forward.

I'll just pause and give anyone in person the final opportunity to ask any questions. No? Okay. Well, I will conclude our Q&A today. Thank you for your engagement. And I'd like to invite Bubs Chair, Paul, back up to the lectern to close out our session today.

Thank you very much, Sophie. At this stage, I'd really like to acknowledge and thank Joe and the leadership team. We've come a long way in the last -- sort of since Joe's appointment. It's been an intention of the company. You can see very clearly the value proposition, which is before us and the opportunity that we have as an organization. We're really excited about it. We're optimistic about it, and we're absolutely confident that we can realize it. As a company, we have invested heavily and our people and building a high-performance team and a high-performance culture at Bubs because that is how we will realize that value proposition, the value that is there. And I'd just like to acknowledge Joe and the team that have truly stepped up to the plate over the last sort of 9 months since Joe has been on board. I'd also like to acknowledge -- as a company, we acknowledge our shareholders. We're very clear about why we exist. And at the end of the day, hopefully, you get a real sense that we are committed to creating shareholder value here. If we realize the opportunities which are ahead of us with a high-performance team, a high-performance culture, shareholder value will be created. And that is something that we're also very confident about. Lastly, I'd like to thank you for your participation today. I really appreciate you taking time out of your day. It's been a morning to learn about Bubs and to ask questions. And I do open up the opportunity to you. Please reach out to either Joe or myself, come back through Sophie. If you do have any further or follow-up questions, we'd love to spend the time with you. So thank you very much, and thank you very much.