Clicks Group Limited (CLS) Earnings Call Transcript & Summary

Good afternoon. Welcome to the webcast of our annual results for the year ended August 2022. I am Bertina Engelbrecht, the Chief Executive Officer of the Clicks Group. Joining me here today is Michael Fleming, our Chief Financial Officer. Together, we will take you through today's presentation. This is the outline of the presentation. I will start with a review of the past year. Michael will then follow with an overview of our financial results. Hereafter, I will take you through our trading performance for the Clicks business, followed by UPD. I will then close with the outlook for the group. Please feel free to submit your questions via the webcast during and after the presentation. Sue Hemp from our Investor Relations team will read out your questions, to which Michael and I will respond. And now for the review of the year. The group, which celebrated its 54th birthday in early August, has once again delivered a strong performance with continuing adjusted diluted HEPS up 11.9%, which is comfortably at the upper end of our guidance of between 8% and 13%. This performance must be seen in the context of the continuing impacts of COVID-19, the July 2021 civil unrest and the much higher levels of load shedding in the second half of the year. The group's strong performance despite these challenges demonstrates the resilience of our business model, capability of our people, defensiveness of our core retail categories and strengths of our partnerships. We were unwavering in our support of the national vaccination program and administered over 2.9 million vaccines this year, making us the largest private sector vaccinator in the country. Our beauty category recovered strongly post the lifting of the COVID-19 restrictions. This is positive given our strong and growing market shares, supported by the contribution of our margin-enhancing private label and exclusive brands to this category. The growth in our UPD wholesale business was impacted by muted demand in the private hospitals channel relative to the prior year. Pleasingly, though, UBD improved its total income margin by 50 basis points as it onboarded 3 new distribution clients. The group remains strongly cash generative with a healthy balance sheet and a track record of stringent cost control. These factors facilitate our investments for growth and innovation. In this year, we accelerated the expansion of our store and pharmacy network, and we continue to invest in our IT and supply chain capabilities to enable our growth aspirations and respond to changing consumer preferences. ESG is fully integrated into our strategic planning and operational processes. The validation here of is our consistent inclusion in the FTSE4Good Index, or AA ESG rating from MSCI and recognition as the top employer within the retail sector. At the interim, we advised that we would be investing in solar as a source of renewable energy. This project has been completed. I now hand over to Michael to take you through the group's financial results.

Thank you, Bertina. Good afternoon. By way of introduction, you will note both in this presentation and in the SENS announcement that we provide certain financial information adjusted for the significant financial impact related to the civil unrest last year as well as the subsequent insurance recoveries. Where any such one-off adjustments are made in respect to the civil unrest and insurance recoveries from SASRIA, we clearly note this in the presentation by means of an asterisk and a footnote in order to present a more normalized view of the underlying business performance. In light of what I've just said, if we consider the group financial highlights, group turnover increased by 6% for the year. Retail turnover grew strongly at 11.7%, which was supported by COVID-19 vaccinations contributing 3.5% to sales growth. On the other hand, UPD had a much tougher year with turnover declining by 2.6% as the wholesale business experienced a reduction in sales to private hospitals and independent pharmacies. The group operating margin at 8.4% increased by 20 basis points due to the faster growth of retail as the economy recovered from the impact of COVID-19. Continuing diluted HEPS adjusted for the direct financial impact of the civil unrest and insurance proceeds was up 11.9%. Diluted headline earnings per share for the group increased to ZAR 0.1033 per share, up 33.5% on last year. Both of these diluted HEPS figures are within the earnings guidance range we have provided to the market. The group's operations generated strong cash inflows of ZAR 4.3 billion. During the year, we returned over ZAR 1.7 billion to shareholders in dividends and share buybacks. The group's return on equity has increased to 48%, which is at the upper end of our targeted range. The dividend declared for the year has been increased by 30% to ZAR 0.637 per share. As you know, the group was insured against the risk of political violence and civil unrest through SASRIA. During this financial year, SASRIA paid out further amounts to us, specifically ZAR 325 million in respect of the loss of inventory and other costs incurred, which is recorded in other income and ZAR 167 million in respect of damage fixed assets, which is recorded as proceeds received on capital items. And this has been utilized to restore the damaged store, so they can trade again. Our claim has been fully settled. If one simply takes the 2022 and the 2021 reported figures and adjust them by reversing the stock written off and other costs incurred as well as the insurance proceeds received, you can see that diluted HEPS was up 11.9%. The significant reduction in the severity of COVID-19 cases in South Africa had a positive effect on retail trading as we progress through the course of our 2022 year. The opposite was also true for UPD. Retail sales grew by 11.7%, with same stores growing 8.4%, which in turn was driven by providing COVID-19 vaccinations in many of our conveniently located pharmacies. New stores and pharmacies added 3.3% to the top line, while selling price inflation increased to 4% for the year. The distribution business experienced low selling price inflation of 1.5% and saw declining volumes in the wholesale business as the impact of COVID-19 began to wane in South Africa. In the prior year, sales to hospitals have increased by over 37%, driven by the supply of drugs required for patients fighting COVID-19. So the decline in UPD's turnover should primarily be viewed in that light. I'd also add that in H2, we saw retail turnover excluding vaccines, increased by 9.4%, up from 7.1% in H1 as all COVID restrictions were lifted and the economy began to normalize. Bertina will elaborate on the detail of each business' performance later in the presentation. This slide reflects our total income earned, which has increased by 9.8% for the year. You can see the total income margin in retail was 30 basis points lower than last year. This was mainly due to the very low margin made on the 2.9 million COVID-19 vaccinations we administered this year compared to around 600,000 vaccinations we did last year. In addition, pharmacy sales also have a lower margin. Although, we don't rejoice when people get sick, we were very pleased that the return of an extended cold and the flu winter season in South Africa, brought many customers to our Clicks pharmacies to purchase OTC and prescription medicines. This is the first time in 3 years we have experienced a normal cold and flu season now that COVID restrictions have been lifted. On the other hand, UPD's total margin was up 50 basis points to 9.1%. UPD has continued to benefit from the addition of bulk distribution contracts gained both during the previous year as well as in the current year, which has helped alleviate some of the pressure on UPD. Overall, the faster growth of the retail business at 10.5% has resulted in the group's total income margin being 90 basis points higher than last year. Our cost base in retail remains efficient with retail expenditure as a proportion of sales reducing to 23.4%. The administration of COVID-19 vaccines added significant amounts to our employment and our other operating cost lines. These were, however, recovered through the fees paid to Clicks by the Department of Health and medical aid schemes. We have also reduced these variable costs as demand for COVID-19 vaccinations declined. Retail costs grew 10.5%, driven by the COVID-related costs I just mentioned as well as new stores, pharmacies and depreciation on capital expenditure. In this regard, we've added 58 Click stores and 52 pharmacies to the chain during the year. Comparable retail cost growth, excluding new stores and COVID-19 vaccination costs was up only 5%, reflecting the tight management of costs. UPD has continued to win a number of new wholesale and distribution clients, which has resulted in leasing additional warehouses that also come with additional variable labor, transport, insurance and other costs. Overall, UPD's total managed turnover was up 7.6%, while costs were up only 6.2% for the year. Retail grew operating profit by 10.3% with the margin declining by 10 basis points to 9.4%. As I said earlier, this was as a consequence of the high number of COVID-19 vaccinations Clicks administered during the year, which equated to turnover of ZAR 1.1 billion at a very low margin. UPD's operating profit declined by 1.2%, with the operating margin being in line with last year. This was due to ongoing cost pressure, combined with lower wholesale sales, particularly in hospital and independent pharmacy channels. Overall, the group's operating profit increased by 9.2% to over ZAR 3.3 billion for the year. Inventory levels for the group are higher at 72 days. Retail stock days are 3 days lower than last year as a result of the COVID-19 vaccine stock on hand last year as we increased the number of pharmacies responding to demand of COVID-19 vaccines. Both local and global disruptions to the supply chain continue to persist, and we therefore brought in certain imported Christmas stock earlier this year to ensure supply of the key festive trading period, which has added about 1 day to current retail inventory days. UPD stock days at 48 days are 13 days higher than last year, and this is expected to normalize towards the end of October as the hospital channel occupancy rates begin to improve further. This slide shows the movement of cash during the year. As you can see, we started the year with cash of ZAR 2.2 billion, reflected in dark blue on the left-hand side and ended the year with ZAR 2 billion on the right-hand side of the slide. The group has generated cash of ZAR 5 billion, highlighted in green, before the repayment of lease liabilities amounting to ZAR 880 million, working capital outflows of ZAR 744 million and tax payments of ZAR 938 million. Last year, we had arranged temporary extended creditor terms on stock looted during the civil unrest as well as obtained additional banking facilities to assist with working capital funding while we waited for the insurers to pay out the balance of our claim. Those extra credit amounts on hand at the end of last year were settled during this year. ZAR 838 million was reinvested in capital expenditure across the group. Of this amount, ZAR 470 million was invested in new stores as well as 84 Click store refurbishments, which included restoring the stores damaged during the civil unrest. ZAR 122 million was spent on distribution centers and ZAR 246 million was spent on IT and other retail infrastructure. We also installed solar panels on all of our distribution centers in the second half, which will improve our contribution to renewable energy and result in significant savings in the group's electricity costs going forward. As I mentioned earlier, we returned over ZAR 1.7 billion to shareholders this year. This was in the form of dividends of almost ZAR 1.3 billion and share buybacks of ZAR 446 million. The final cash dividend of ZAR 1.1 billion will be paid out to shareholders in January. CapEx of ZAR 936 million is planned for the year ahead. This amount includes ZAR 32 million carried forward from 2022 due to the delays caused by the impact of the civil unrest and COVID-19. ZAR 477 million will be invested in our store and pharmacy network. This will include 40 to 50 new Clicks stores and pharmacies, 60 retail store refurbishments to ensure they remain modern and relevant to our customers. And we expect the remaining 4 stores damaged in the civil unrest to open during 2023 once the malls have been adequately restored. ZAR 459 million will be spent on IT systems and infrastructure. ZAR 189 million of this amount will be invested on UPD IT and warehouse equipment, including the rollout of the new ERP and WMS systems to our 2 largest distribution centers, and we'll invest the balance of ZAR 270 million in retail IT systems and infrastructure. We will continue to grow our retail footprint and plan to support the increased scale of the group by improving efficiency in our distribution centers and by implementing appropriate IT tools and systems. This slide reflects our medium-term financial targets. You will note, we are in the range of all of our medium-term financial targets, the exception being working capital due to UPD's inventory, but we're confident that this will soon drop back within the targeted range. Importantly, the group has continuing headroom for growth, particularly in expanding the retail store base. In retail, health and beauty, we see the sustainable operating margin being between 9% and 10%. On the other hand, distribution is targeted at an operating margin of between 2.8% and 3.3%, which is an excellent margin. The wholesale business faces the impact of generic medicines declining in value, placing pressure on the margin, while the bulk distribution business with this large portfolio of distribution clients supports the operating margin and is working capital light. It's worth emphasizing, we do expect retail to continue to grow faster than the more mature distribution business, which therefore allows the group margin to continue to expand to between 8% and 9%. In framing these medium-term targets, we continue to seek to optimize the balance sheet, improve working capital efficiency, enhance cash returns to shareholders, maintain the dividend payout ratio between 60% and 65% and ultimately continue delivering a high-quality return on equity of between 40% and 50%. The group has had to deal with a global pandemic as well as difficult economic headwinds in South Africa over a number of years. Understanding the ability of a company to sustain its performance through various economic cycles is important to all stakeholders. This is particularly true for shareholders who objectively evaluate how our company performs. This slide reflects the growth in turnover, operating profit and margin of the group over the past 5 years. Low selling price inflation has been a consistent characteristic during this period. Bear in mind, the group adopted IFRS 16 on a full retrospective basis back in 2020, and therefore, we stated the 2019 comparative. This has increased the EBIT margin by approximately 100 basis points as a portion of the lease costs are now shown as finance costs below the EBIT line. What is important to note, regardless of the IFRS 16 restatement is how the group has been able to evolve the operating margin over the past 5 years despite operating in these difficult economic conditions. Likewise, this slide demonstrates how the group has sustained its financial performance over the past decade. This is reflected in the 10-year compound annual growth rates achieved in diluted headline earnings per share of 14.2% per annum and dividend per share growth of 15.4% per annum. The compound annual total shareholder return over the past 10 years equates to 20.9% per annum. These excellent growth rates have been driven by strong organic growth, particularly in our health and beauty business, which has been supported by an efficient supply chain. This has in turn translated into strong cash returns, which have not only been reinvested in the business but also allowed us to progressively increase our dividend payout ratio to our targeted payout ratio of between 60% and 65%. I'd also like to emphasize that in the past 10 years, the group has returned over ZAR 11 billion to shareholders in the form of dividends and share buybacks, underpinning the quality of the stock. I'll now hand back to Bertina to take you through the trading performance.

Thank you, Michael. As noted, I will now take you through our trading performance. Starting with the Clicks business. This is the breakdown of the retail sales by category. In the period, total turnover grew 11.7% with volume uplift of 3.5% attributable to COVID-19 vaccines. Our comparable existing stores grew 8.4% with volume uplift of 4.4%. Selling price inflation was contained to 4%, and we maintained our price competitiveness. First, let me provide some context to our sales performance. The impact of the KZN civil unrest extended well beyond the temporary closure of 53 of our stores. The glut of looted stock in that province depressed demand and the local economy struggled to recover, compounded by the floods. To date, 4 stores remain closed. The Omicron variant created panic, resulting in tourists exiting the country from early December and subdued sales over the peak trading period. The COVID-19 restrictions continue to curtail the transmission of acute infections well into our third quarter. Once restrictions were lifted, consumers returned to shopping centers, and we experienced, as Michael noted, our first real cold and flu season since 2019. The high levels of intermittent load shedding had a significant impact on sales, especially during the last quarter of the financial year. The higher levels of load shedding impacted 34,000 trading hours, up from 13,000 in the prior year, which we partially mitigated with battery packs, inverters and generators. Despite these challenges, retail turnover, excluding vaccines, gained momentum and grew much faster in the second half, up 9.4% versus 7.1% in the first half. Pharmacy sales, excluding vaccinations, increased by 7.7% in value and 9.1% in volume. We administered, as noted earlier, over 2.9 million vaccines in the period and as signaled at the half year, vaccinations declined in the second half of the year. Front shop health grew by 3.9% despite the high base of the prior year and some supplier out of stocks. The star performance were medicinal, up 14%; and sports supplements, up 16.2%. Despite the adverse impact of the civil unrest on the sale of diapers, baby food and clothing in our KZN stores, we nevertheless maintained double-digit sales growths in baby accessories, baby toiletries and exceptional growth in baby hardware, driven by our Clicks Baby stand-alone stores and online offering. The Beauty and Personal Care category delivered a strong performance, up 13.1%, reflecting the trend for self-care. Standout performances were recorded in dermal skin care, up 25.2%; sun care, up 29.3%; and luxury bath, up 24.3%. Buoyed by the opening up of the economy, color cosmetics also grew strongly, up 20.8%. General merchandise continues to perform well. It increased its turnover in the second half by 10% with the full year up 8.2%. Our snack deal benefited from the normalizing of shopper activity, post the lifting of the COVID-19 restrictions with convenience categories such as beverages, up 23.4%; impulse confectionery, up 15.3%; and snacks, up 10.8%. Sales of small household appliances supported by our online offering, delivered double-digit growth. Turning now to our market shares. We continued to entrench our market share gains of prior years in our core retail pharmacy, beauty, personal care and general merchandise categories. I will now take you through each of these core categories, starting with health. We gained 50 basis points in retail pharmacy. Our accessible and convenient network continues to enable us to grow and to extend our higher share of the Schedule 1 and 2 markets. We maintained our share of front shop health despite the high base in the prior year, attributed to the Beta and Delta COVID variants and some supply out of stocks. At the sub-category level, market share gains were recorded in sports supplements, foot care, sunscreen and incontinence. The market share decline of 70 basis points in baby was mainly due to the impact of the civil unrest on our KZN stores and some supplier out of stocks. Next, turning to beauty and personal care. In front shop beauty, all categories gained market share. Skincare gained 130 basis points, fueled by strong performances in acne preparation, lip care, facial wash and facial care. Hair care gained 110 basis points, driven by gains in shampoo, hair conditioners and hair colorants. Personal care also gained 10 basis points with strong gains in eye care, luxury baths, sanitary protection, soaps and body freshness. Finally, general merchandise. Standout market share gains in our general merchandise category came from reading, home accessories and paper ware. In our heritage category of small household appliances, we gained 140 basis points, driven by food makers, seasonal appliances and indoor cooking appliances. This year, we sold just over 42,000 air fryers, up from 18,000 in the prior year. I will now provide greater detail on the key drivers that support our growth. Rising inflation and sustained high levels of load shedding continue to adversely impact the economy, highlighting the importance of delivering value to consumers. The Clicks brand positioning is rooted in value, exemplified by our signature Feel Good, Pay Less at Clicks. We have, as reflected on this slide, maintained great everyday prices and remain price competitive with all national retailers based on a volume-weighted price index that excludes our renowned 3 for 2 promotions. To put this into perspective, you would have paid 9.7% less for your basket of overlapping products if you shop at a Click store rather than at Retailer C. We grew our promotional sales by 8.5% to 42.3% of sales on the back of strong promotional sales growth in Bath & Body, cotton, confectionery and branded supplements. Our value offering, though, extends beyond price. By offering patients the choice of generic medicines at our pharmacies, we assist them to extend their medical aid benefits. Our Clicks ClubCard loyalty program delivers great rewards with over ZAR 600 million in cash back returned to our customers over the period. The tiering of our extensive range of private label products provides us with the opportunity to offer appropriately priced private label products for customers who trade down. Our range of private label and exclusive brands increases consumers' choice and is a key driver of growth based on differentiation. Private label contributed 24.2% of sales, that would be 29.6% in front shop and 10.2% in pharmacy. The decline of 50 basis points in front shop was due to the exit of exclusive beauty brands from the country as well as the impact of closed KZN stores on our baby category. We continue to invest in improving on our beauty execution. In the past quarter, we have elevated the look and feel of the beauty halls in 4 of our flagship stores, and we are pleased with the early results. We currently have 4 stand-alone Clicks baby showroom stores, having recently opened our fourth baby store in Menlyn. These stores offer expanded baby ranges supported by our online baby offering. The Clicks ClubCard is an enabler of our personalization strategy and a key contributor to our sustained performance. The value of the Clicks ClubCard loyalty program is keenly appreciated by consumers. We have grown our membership to 9.7 million active members, contributing 80.2% sales. This is an increase of 0.5 million new active ClubCard members. The investment in digital enablement spurred the growth in our Clicks App downloads, which have now reached 3 million. Whilst we have the building blocks in place to enhance the quality of our customer engagement and their participation in personalized promotions, we will continue to invest in enhanced digital engagement. ClubCard was once again voted by customers as the best loyalty program. It is one of the most generous programs in the country and easy to understand. Clicks was also voted as the coolest health and beauty retailer in the Sunday Times GenNext Awards. This is encouraging as it reflects the choices of the next generation of shoppers who will fuel the growth of the brand. In the 2022 Kantar BrandZ Awards, Clicks was awarded for best in both experience and function. These awards recognize the brand's capability to offer a superior experience across all touch points and to create a range of well-designed products and services. In line with our convenient strategy, we accelerated our store opening program, increasing our footprint to 837 Click stores. We are showing steady progress on our objective of a pharmacy in every Click store with a total of 673 pharmacies. Strategically, stores in our convenience format now account for 75% of all stores. Our convenient footprint improves our proximity to consumers with 50% of the population living within a 5.3 kilometer radius of a Clicks pharmacy. We have completed the transfer of the remaining 14 Pick n Pay pharmacies, and we are pleased with the results. As anticipated, the growth in online sales has stabilized, contributing 1.3% of front shop sales. Positive mix changes benefited the home and electrical and baby categories. Our online-only ranges continue to outperform, driven by range extensions, new ranges and enhanced marketing communication. That completes the review of the Clicks business, and I will now turn to UPD's trading performance. This slide sets out the breakdown of UPD's fine wholesale turnover, which excludes bulk distribution and preferred supplier contracts. The lower turnover in wholesale, down 5.2%, is attributed to 2 channels: independent pharmacy and private hospitals. The prior year was characterized by strong demand for pharmaceutical products in the fine wholesale business. This was owing to 2 strong COVID-19 waves, Beta and Delta, which led to extended stays in hospital and the postponement of elective surgeries. The decline in sales to the hospital channel in the current year must therefore be seen in the context of the growth of 37.5% in the prior year. What is reassuring is that this channel's 3-year CAGR is 22%. Importantly, UPD maintained its share of private hospitals and acquired new customers in the private hospitals channel. The decline within the independent pharmacy channel accelerated sharply to 32.4%. This trend is facilitating the consolidation of the independent pharmacy market. Clicks remains UPD's largest customer, now accounting for 50.8% of its wholesale turnover. The operational teams in both business units continue to work together to achieve purchasing compliance above our internal target of 98%. UPD's total managed turnover, which includes fine wholesale as well as the turnover managed on behalf of its bulk distribution clients, increased by 7.6% to ZAR 30.6 billion. The bulk distribution business delivered strong sales growth of 19% despite subdued market activity and some supply out of stocks. The business onboarded 3 new distribution clients and continues to grow its market share. An additional distribution client has been secured and will be onboarded before the end of this calendar year. UPD faced significant cost pressures due to higher delivery, insurance and security costs as well as the cost associated with mitigating the impact of load shedding. Generic Medicines, up 11.2%, continued to grow ahead of originated medicines and accounted for 73% of UPD's wholesale volume. In accordance with our phased ERP and WMS systems implementation plan, we proceeded with the Gqeberha DC roll out in July. The Cape Town DC is due for completion by the end of November. The installation of solar panels at all of our own distribution centers has been completed, increasing our use of renewable energy sources and providing some mitigation against rising energy costs. The license for the secondary distribution facility in Cape Town has been granted and should be operational by the end of November. This completes the review of our trading performance for the year. This performance is due to the resilience, capability and passionate commitment of our people to our brand. I saw firsthand how our people rallied to operationalize our UPD and Clicks DCs and restore the looted KZN stores after the July civil unrest. I see that same level of commitment, pride and cross-functional teamwork every time we open a new store or pharmacy, launch a new product or onboard a new client. Our team's commitment to the National COVID-19 vaccination program as they administered 3.5 million vaccines since the program's inception is a source of pride. On behalf of our Board and our management team to our people, thank you. I will now conclude the presentation with our strategy and outlook. This slide sets out our group strategic objectives, which remain relevant. Over the past 2 years, we have elevated sustainability as a key enabler of enterprise value creation. This was done to sharpen our focus on embedding ESG practices in our medium-term planning process and our ways of working. Our talent development practice has consistently produced an exceptional talent pool, enabling internal succession, retention and the advancement of our transformation agenda. Our strategic objectives create alignment and focused discipline throughout the group, enabling us to grow sustainably. I believe that by staying true to our heritage as a value retailer that prioritizes customer care, our strategy of creating sustainable long-term shareholder value through a retail-led health, beauty and wellness offering, premised on convenience, differentiation and personalization will grow our market shares in accordance with our aspirations. Turning now to the outlook. As evidenced by our results, we continue to trade well, acquire new customers and gain market share in our core categories. Globally, demand-driven inflation post the lifting of COVID-19 restrictions has been aggravated by the impact of the Russia-Ukraine war on food and fuel prices. Locally, the impact of the pandemic on economic activity still lingers, while the higher levels of load shedding is adding costs, dampening consumer confidence and stifling our economic recovery. The consumer environment is therefore expected to remain extremely constrained. Over the past 3 years, we opened an average of 40 new stores per year. We have now updated our long-term target from 900 to 1,200 Click stores across the group. This should see us opening 40 to 50 new stores and 40 to 50 pharmacies each year. The sustained sales contribution of ClubCard members justifies our continued investment in digital engagement. This should enhance customer loyalty and enable us to personalize our customer marketing communication. Changes in consumer consumption patterns and shopper behavior is also spurring our focus on innovation in technology, products and our service offerings. These investments for growth and innovation are made possible by our strong cash generation and stringent cost management. In response to the growing threat posed by climate change, we are increasing our use of renewable energy, facilitated by our recently completed solar installation project. The Board has approved our environmental management policy, which includes a commitment to carbon neutrality. ESG modifiers have also now been included in both our long and short-term incentive schemes. Our key drivers of sustained volume growth, namely value, convenience and differentiation positions us well to respond to the needs of consumers, particularly in a constrained economic environment. Our strength in our core retail markets, coupled with our proven capability to adapt to changing market dynamics and maintain tight cost control supports our growth aspirations. We expect the fine wholesale business to regain its market share due to an increase in elective surgeries, the acquisition of new clients and the continued growth in the Clicks business. The distribution business is strong and growing its market share. I therefore remain confident in our group's ability to deliver on our medium-term targets. Thank you for listening. We will now take your questions, and so I'm handing over to Sue Hemp to manage that process.

Bertina, unfortunately, the server that's hosting the questions is having internet issues. So we're unable to get any questions at this point. But all of the questions will be sent on to me, and I will reply personally to each of them.

Thank you very much, Sue. Given the impact of technology. Thank you very much, everyone, for joining us and may you have a wonderful day and week ahead.