Codan Limited (CDA) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to Codan's Full Year FY '24 Results Webinar. I'm Sam Wells from NWR. And joining me from the company today is Managing Director and CEO, Alf Ianniello, as well as CFO and Company Secretary, Michael Barton. Following a brief summary of the results released to the ASX this morning, investors and research analysts will have the opportunity to ask questions. There'll be a choice with 2 options. First, you can submit a written question via the Q&A function at the bottom of your Zoom screen throughout the call. Alternatively, research analysts may raise your hands during the call, should you wish to ask a verbal question of the management team. We clearly ask that you limit your verbal questions to 2 per person, and we will endeavor to get to the majority of questions asked in some cases, consolidating questions on the same or similar topic. Thank you, and over to you, Alf.

Thanks, Sam. Good morning, and welcome to the FY '24 full year results investor presentation for Codan. Thank you all for joining. My name is Alf Ianniello, and on the -- I'm Codan's Managing Director and Chief Executive Officer. I'm pleased to be now presenting my second full year results as CEO. Joining me today is Codan's Chief Financial Officer and Company Secretary, Michael Barton. Before we proceed, please take note of our standard notice and disclaimer. The plan for today's presentation is for Michael and I to provide some key highlights on our FY '24 results, touching on each of Codan's 3 business units, Tactical Communications, Zetron and Minelab. Following the results specific detail, I would like to take some time to illustrate some of our key environment, social and governance initiatives, all of which are an important element of our business today. Following this, we'll run through our current strategy touching on some focus areas within each of our business units. Finally, we'll aim to tie it all together and provide some high-level commentary on the company's outlook for FY '25. I'm pleased to report Codan has delivered a strong FY '24, building on some of our hard work and success throughout FY '23. Group revenue came in at approximately $550 million, up 21% on last year, while EBIT grew 29% to $114 million. Pleasingly, the business delivered organic EBIT growth of $22 million, up 24%. As described previously, our primary focus remains on strengthening the business to achieve sustainable, profitable growth for the future, reinforcing a stronger Codan. The group delivered NPAT of $81 million, up 24% versus last year, primarily as a result of strong organic growth supplemented by the businesses we acquired throughout the year being Zetron U.K. and Wave Central. Both businesses are performing well with integration activities now completed. Investment throughout the year was also directed towards strengthening our people, key processes and systems required to deliver our future strategic growth initiatives. Lastly, our annual fully franked dividend has grown year-on-year, now totaling $0.225 per share for FY '24. I'll now pass you over to Michael to run through our P&L and balance sheet.

Thanks, Alf. Good morning, everyone. Thanks, again for taking the time to join our results call today, and apologies for the post man-flu voice that I'm using this morning. This slide highlights our continued strength in performance across our Communications segment, reinforcing it as a core for our future growth. Communications revenues were up 19% versus the prior corresponding period and reached $327 million. As Communications continues to strengthen its position in the market, as a solutions provider, a forward order book has also observed a year-on-year growth of over 20% and reached $197 million at June '24. Our metal detection business also delivered a strong FY '24 with each of Minelab's divisions delivering increased revenues. Collectively, are up 25% versus FY '23. During the year, expenses increased primarily due to acquisitions, some higher variable remuneration linked to the improved financial performance of the organization, as well as integration costs that were incurred on the acquisitions we made. Specifically, the group's integration and acquisition-related expenses were approximately $2 million in the FY '24 year. Pleasingly, the business has continued to deliver sustainable growth across the last 3 consecutive reporting periods with our second half NPAT of approximately $43 million, up 13% versus the first half and up 23% versus the prior corresponding half. Turning now to our balance sheet, net debt increased by just under $24 million during the year to reach $75 million at June '24. As noted on this slide, there are 3 key components relating to this change, specifically the payment of $37 million cash consideration for the 2 acquisitions; we invested close to $40 million into product development; and we funded $36 million of dividends during the year. Another notable change during the year was increasing the group's existing bank certainly to $170 million, up from $140 million with a further additional capacity available of $150 million subject to bank approval. These facilities provide the company with the financial flexibility to support future inorganic growth opportunities. Codan continues to seek acquisition opportunities, which enhance the quality of the group's revenues. Specifically, our focus is in the key communications growth markets, which will provide Codan with increased future earnings visibility over time. Lastly, and we touched on this last year, we have successfully reduced inventory by a further $11 million driven by the sell-down of African gold detectors. As outlined, this slide just visually illustrates the changes to our net debt position throughout the year, and I've already noted the key changes on the slide. So during FY '24, we have continued our engineering investment across our business units, investing a total of $57 million or approximately 10% of revenues. Our engineering investment is weighted towards communications and their key growth markets. The recent acquisitions have contributed to this growing engineering spend and the weighting towards communications, and this is consistent with our future growth strategy. We have a global team of highly skilled engineers and research scientists and through product development, we ensure our competitive position continues to be further enhanced. I'm going to hand back to you, Alf, to take a closer look at the 3 business units.

Thank you, Michael. As a reminder, for those perhaps newer to our story, our Communications business designs and manufactures mission-critical communication solutions for global military, public safety and commercial applications. These solutions allow customers to save lives, enhance security and productivity and support peacekeeping activities worldwide. Our Communications business had another strong year with communication revenues increasing 19% to $327 million versus FY '23. The growth achieved throughout the year was primarily attributed to Zetron's strong organic performance, bolstered by the acquisition of 2 high-quality businesses during the period, Zetron U.K. and Wave Central. Collectively, the acquisitions contributed revenues of $31 million and the businesses remain on track to achieve their year 2 investment objectives. Pleasingly, Communications delivered organic revenue growth of 16%, exceeding the target range of 10% to 15% after normalizing for revenues from the large communications project delivered in FY '23, approximately $20 million. Communications segment profit grew 19% and totaled $80.5 million, which reflects a 25% segment profit margin. Operating leverage in FY '24 was impacted by several factors. Firstly, HF revenues were affected by geopolitical issues in Africa, and we were normalizing out the large communications project delivered in FY '23, both at high gross margins. We have also invested in strengthening business development and engineering teams to deliver on our strategic growth initiatives. This positively positions the business to deliver future growth. The company remains committed to achieving additional operating leverage, targeting a 30% segment profit margin in the Communications segment over the next 2 years to 3 years. Tactical Comms delivered a solid result in FY '24. Strong growth in the unmanned systems and broadcast markets more than offset softness this experienced in our HF business due to geopolitical factors within Africa. Tactical continues to benefit from its leading MESH radio technology, which demonstrates exceptional performance in harsh and contested environments. Specifically, the business excels in providing compact, lightweight and efficient solutions, optimizing size, weight and power for a diverse set of customers. Some notable wins during the year, as listed on the slide, include an $8.5 million European-funded unmanned military program, a 7.1 million South Korean military MESH communications contract and several contract awards in broadcast for live event news coverage, college and professional sport. Following Codan's acquisition of Wave Central in December 2023, the business integrated well and delivered results in line with expectations during the first 7 months of ownership. Zetron outperformed expectations during the year, as the business continues to deliver revenue growth from its expanded footprint. Zetron's growth continues to be driven by customers seeking to benefit from the integrated and complete command and control solution, which is offered across the public safety, utilities and transport markets. Zetron continues to be recognized, as a dependable solution with commitment to quality, customer service and responsiveness demonstrated by some recent business wins illustrated on this slide. Specifically, some notable wins during the year include a $10 million contract with one of the largest utility providers in the Midwest region of the U.S., a $3.5 million upgrade with Kitsap County and a $2 million Queensland Rail project upgrade. Beyond this, we've also renewed the London underground reoccurring services contract, as well as multiple awards throughout the year across North Carolina, Arizona, Missouri, West Virginia and New Jersey, strengthening our North American position. During the year, Zetron successfully completed the integration of Zetron U.K., with the business exceeding our year 1 acquisition expectations. With the business now successfully integrated, Zetron has shifted its focus towards executing its FY '25 growth plans consistent with previously announced investment objectives. Again, for anyone new to the story on the call, Minelab is the world leader in the handheld metal detection industry for recreational, gold prospecting, demining and military markets. Over the last 30 years, Minelab has led the category in innovation and has driven metal detection performance to new levels of technological excellence. Minelab's revenue of $220 million for FY '24 reflects a 25% increase versus FY '23, all achieved organically. As a result of enhanced operating leverage, Minelab's segment profit margin also increased to 35% during the year versus 32% in the prior year. During FY '24, rest of the world performance benefited from full year revenues driven by the release of the Manticore, Equinox 700 and 900 and X-Terra Pro products, alongside an expansion of retail channel points of distribution across North America and Europe. While sales softened in specific regions, such as Australia, which meant we achieved 4% growth in rest of the world sales. It was pleasing to see double-digit growth in key markets such as Europe and North America. Notably, growing sales via expansion of storefronts with leading retailers, along with enhancing market position using platforms such as Amazon and Minelab eCommerce channels. These efforts are expected to support further growth in FY '25 and beyond. Therefore, Minelab maintains its target of achieving high single-digit growth for the rest of the world revenues. Within our African business, despite the Sudan region in North Africa still being largely disrupted, it was pleasing to observe an improvement in revenues in West Africa, which has generally returned to pre-COVID levels. As a result, Minelab Africa delivered an improved FY '24 result with revenues of approximately $70 million, increasing half-on-half, as well as versus FY '23. Additionally, as supply chains have normalized, Minelab has successfully reduced inventory holdings by approximately $15 million over the course of FY '24. Lastly, Countermine continues to generate strong performance following the delivery of several government contracts to support humanitarian demining efforts in Ukraine. Countermine's established relationships with global NGOs supporting this effort is underpinned by its proven track record of detector performance. As the market lead leader in handheld metal detectors, Minelab continues to invest in new product technologies along with maintaining a significant focus on distribution channel expansion. Collectively, all these efforts position Minelab well for future growth. In this section, we'll take the time to highlight some of our key focus areas across environment, social and governance. Similar to last year, over the last 12 months across the organization, we have taken significant strides in embedding our environment, social and governance framework. Codan is committed to ensuring that each of our initiatives align with the guiding principles of the ESG framework. A key component of this, as laid out in this slide are our priority areas around climate change. Firstly, partnered with external environmental consultants, we have engaged key stakeholders through the entire business globally to both build capacity and to understand our current carbon footprint. This has then allowed us to explore our emissions reduction of risks and opportunities, which forms a key component of transition to a net zero. We have identified opportunities to reduce Scope 1 and 2 emissions and are well on track to meet current Australian legislative requirements with respect to mandatory climate-related disclosures. We'll continue to invest in our climate journey and seek practices to ensure we are reporting our position as accurately as possible and that any published reduction targets are achievable. Secondly, as we strive for a more resilient infrastructure and operations, we continue to develop and implement capacity building across Codan's Board, executives and key stakeholders. Utilizing internal and external resources, we aim to accurately evaluate the relevant risks and opportunities across our entire value chain businesses and strategy. This element will also involve advanced scenario analysis, quantifying the effects of certain outcomes and the relevant steps to mitigate the severity of damages should they arise. We look forward to updating you on our ongoing progress here, as we continue to integrate, improve processes across our organization. Within our ESG framework is our social pillar. We remain dedicated to being a responsible corporate entity with a structured and thoughtful approach to the social pursuits we support. We invest in and support community programs that assist disadvantaged groups in the communities we -- where we operate. We aim to support programs that encourage and develop students of all genders, ages, family status and cultural backgrounds to pursue careers in STEM. Additionally, we support industry science and innovation initiatives to nurture the next generation of innovators. Finally, we are committed to promoting and supporting the world being in development of our people. Throughout the year, we've sustained our efforts with some pleasing outcomes delivered. Some notable examples include the official launch of the Codan Founders Scholarship program in collaboration with the University of Adelaide; Codan's continued support of the undergraduate STEM scholarship for women with the University of South Australia; Codan's sponsorship of youth opportunities supporting young people to develop lifelong skills, habits and confidence to thrive; Zetron annual Shoot for the Stars golf tournament benefiting behind the Badge Foundation, which is now in its 11th year running; our 36th year of gold sponsorship of the Variety Bash, Australia's largest and longest-running charity motoring event throughout Australia's Outback. Our entire team are incredibly proud of these contributions and look forward to growing on this in future years. From here, we'll now move into the strategy overview portion of the presentation. For those of you that have heard me present this previously, you'll be familiar with this slide. In summary, our values, organizational culture and positive outlook is the foundation that enables us to continue to build a stronger Codan. I would like to recap a couple of key points highlighted within today's presentation, particularly as we continue to strive to become a stronger Codan and generate sustainable value for shareholders. We are a global business operating within developed market economies, as we seek to diversify our earnings across large global addressable markets. We are committed to innovative product development, invest in considerable engineering resources to enhance our future suite of products and solutions. We target sustainable cash revenue and profitability growth across our entire business. We foster collaboration and inclusivity, inspiring individuals to excel and achieve their full potential, helping drive an exceptional culture. We are guided by our organizational core values, which we recently relaunched, and I will discuss this in greater detail in the next slide. And lastly, we believe in genuine leadership and accountability, fostering an environment where everyone is empowered to make a meaningful impact. Codan is a community that has evolved over time and continues to evolve. Codan has always been committed to excellence and continuous improvement, and we recognize the importance of embracing a strong set of values that guide our actions and shape our future. At Codan, our customers are at the heart of everything we do. We understand that without their trust and loyalty, we will not be where we are today. That is why our first value is a customer-driven approach. We are dedicated to understanding their needs, exceeding their expectations and building long-lasting relationships. Trust and integrity are the cornerstones of our business. We are committed to doing the right thing even when faced with difficult choices. By upholding the highest ethical standards, we earn the trust of our customers, partners, employees and in the communities that we operate in. High performance is ingrained in our DNA. We strive for excellence for everything we do, pushing ourselves to constantly improve and surpass expectations. Our commitment to high performance is reflected in the quality of our products, efficiency of our processes and dedication of our employees. By setting ambitious goals and fostering a culture of continuous learning, we can achieve remarkable results. Lastly, we embrace a can-do attitude at Codan. We believe with the right mindset and determination, anything is possible. We encourage our employees to think creatively, take calculated risks and embrace challenges for opportunities for growth. As we relaunch these core values, we recognize the vital importance of shaping the future of Codan. They are not just words on the wall. They are the guiding principles that inform our decisions and shape our interactions. By embracing these values, we create a culture of excellence, collaboration and integrity that sets us apart from the industry. Our strategy is focused on these 3 core pillars to drive long-term sustainable value for shareholders. The first; investing in ourselves. This is what I term doing everything right internally. Here, we seek to focus across people, processes and systems, driving improvements in core metrics, as well as investing in technology, innovation and new product development across segments. We continue to invest in our employees to ensure we have the right structure, people and roles to deliver on Codan's strategic growth plan and build a stronger Codan. Secondly; strength in our core business. This is where we seek to improve the quality of our top line, pursuing geographic and business unit diversification, while seeking to expand our suite of products and services to our growing addressable market. A key component of this is building more stable and predictable revenue streams. The third circle; disciplined capital allocation. This is our inorganic growth strategy around pursuing strategically aligned and accretive acquisitions, specifically targeting opportunities that fill a technology gap, offer enhanced scale or increased market penetration. As per our recent, Zetron U.K. and Wave Central acquisitions, we'll often execute bolt-on opportunities, complementing existing technologies that strengthen our differentiated product pipeline. The next 3 slides will lay out the key strategic initiatives within FY '24, as well as the near-term objectives across each business unit. Firstly, with respect to Tactical Communications, some notable strategic achievements are listed, which include strong growth in unmanned systems, appointment of several key personnel to drive leadership and regional focus, successful delivery of our first MANET soldier system, enhanced military radio market presence, as well as the successful acquisition and integration of Wave Central. Beyond these achievements, our near-term objectives include commercialization of a multi-waveform radio solutions under our TrellisWare partnership, successful field trials of our Sentry 6161 MESH radio, continuing to invest in the next-generation waveforms and products, leveraging key U.S. government partnerships, as well as continuing to pursue inorganic opportunities to target large and growing addressable markets, which will enhance predictability of earnings. Overall, Tactical Communications is focused on enhancing their offering as a full solutions provider. Within Zetron, our key objective is to expand systems, support contracts and enhance predictability of reoccurring services revenue. Pleasingly, during FY '24, we have achieved significant year-on-year growth of our order book. Through an underlying focus on systems, the business has received several large system wins and major service renewals. In conjunction with continued channel growth within North America, Zetron continues to strengthen its position in its market. As touched upon in previous disclosures, our successful acquisition of Zetron U.K. has exceeded our year 1 expectations. As we think about near-term objectives for Zetron, we are seeking to continue to grow our public safety market share globally, while launching next-generation technology platforms. Consistent with our Communications growth strategy, we continue to explore inorganic opportunities that expand our Zetron product portfolio, capability gaps or achieving geographic expansion. Lastly, in Minelab, we continue to promote and introduce new products and focus on expanding our channels to market. Some notable FY '24 achievements within Minelab include the successful launch of a new X-TERRA range of products, continued direct-to-consumer channel development, including launch of a USA website, African gold detector sales into countries outside of Sudan returning to pre-COVID levels, as well as additional customer-facing initiatives to grow our user experience and engagement. Looking forward, we are continuing to invest in next-generation detectors across recreational, gold and Countermine segments. Additionally, we are focused on growing our recreational market share by increased retail distribution, primarily across the U.S. and Europe, leveraging our growing e-commerce channels. Further capability expansion will also help in reinforcing Minelab's brand's presence and reputational strength over time. Building on the 3 core pillars slide earlier in creating long-term value, our inorganic growth strategy specifically targets opportunities that fill a technology gap, offer enhanced scale or increase market penetration. The 3 bolt-on acquisitions executed in FY '23 demonstrate our appetite for acquiring businesses that enhance our technology offering or expand our market reach. Our ability to quickly integrate bolt-on acquisitions is a key competitive advantage. These acquisitions highlight our successful acquisition strategy, and our now proven framework for effective acquisition and integration. Now for our outlook summary. When considering the outlook for FY '25, we take into account the following considerations as listed on this slide. Firstly, communication continues to target a 10% to 15% organic revenue growth. We remain confident in our ability to grow, especially with a strong start to our order book with approximately $120 million of FY '25 revenues secured. With our secured order book revenue, a strong pipeline and ongoing strategic initiatives, we are well positioned to sustain steady growth and continue building on the successes of FY '24. Minelab continues to target Rest of the World revenues to grow at high single digits. Secondly, Codan is seeking acquisition opportunities, which will enhance the quality of the group's revenues. Codan will continue to deliver on its strategic growth plan, with investment into developing the next-generation of products and solutions, expanding into new geographic markets and strengthening our global distribution channels and enhancing our operating leverage. Collectively, these efforts aim to position Codan strongly for a sustained growth in FY '25 and beyond, ensuring Codan is well positioned to capitalize on emerging opportunities. The Board will provide a further business update at the Annual General Meeting on the 23rd of October 2024. And with that, this draws us to the end of our presentation today. And now, I'll pass back to Sam for Q&A. Thank you very much.

Yes. Great. Thank you, Alf and thank you, Mike. [Operator Instructions] The first question coming through is from Evan Karatzas at UBS.

Sorry, just had to unmute myself. Hopefully, you can hear me okay. So, really interested to just go through the Zetron performance a bit. Sounds like that's grown well above the overall comms business. If you can just go through how you're seeing that Zetron positioning through both the U.S. and the U.K., and I guess what's enabling you to grow well above your competitors there and what the market's probably growing at as well?

Yes. Our understanding of the market growth -- market growth is probably high single digits and at the top tier. One of the reasons we are winning is we provide a full command and control solution. There's only probably one other organization being Motorola that provides that command and control solution. A lot of the bottom end of the market is quite fragmented in the elements of command and control. So, that competitive advantage of having one solution, that competitive advantage of it being interoperable with other solutions, if required, our responsiveness in market. So, public safety in the U.S., very well positioned. In Zetron U.K., we have acquired, we have integrated well. I think our view as an organization is there is an addressable market there for us to go at. And being year 1, the growth pipeline will be probably focused on just converting some of the opportunities coming through. So, we're very well entrenched in the U.S. So, we understand the market better. So the U.K., we'll see it grow. And we're still trying to sort of get this technology swap between our current suite of products and the Zetron U.K. So in summary, I think us having an end-to-end solution, being a fragmented market at the lower end, which actually caters for our usage case has helped us a lot with Zetron.

Okay. All right. Maybe just a quick follow-on to that. So, you're seeing customers wanting that full solution suite rather than like a modular piecemeal. Is that the way to think about it?

Yes, that's right. Because, yes, command and control is probably -- is split into like 6 subsystems and our ability just to provide 1 subsystem, it's just a far more convenient solution moving into the future. And there's a lot of changes happening at the front end, so you need to have systems that are up to date. So, you're also seeing some legacy businesses rolling off and our Zetron systems rolling in.

Yes. Okay. Good. I'll just ask one more, if I can. Just, I guess, following on to that with that U.K. business. Now, you've fully integrated to the Codan systems and platforms, is it fair to assume the margins in that U.K. should start to really increased closer to, I guess, the overall comms segment? I think they were like 14% or so when you bought it. And then maybe also any other drivers or factors within comms we should be thinking about in terms of puts and takes on that margin expansion in FY '25?

Yes. I think the margin expansion really is a growth story, Evan. So it really will come from us growing the top revenue line. We would expect the businesses that we've acquired to earn margins around our target range. We recorded 25% contribution margin in FY '24. We've got our ambition to get that to 30%, and we would expect all of our acquisitions to fall within that range once we get past the initial year of integration.

Okay. Thanks, Evan. A couple of submitted questions from Jason Palmer at Taylor Collison. In terms of outlook, any comments or observations on Africa and/or Countermine?

So, we'll take the African question. I think as the presentation stated, Sudan is still, from our perspective, 0 shut. But we're doing some good BD across the Northwest Africa and other regions. So, we believe we have a good steady state in Africa. And as everybody knows who's followed Codan for a long time, there's a level of opaqueness in Africa, but we are comfortable today that we're back to a normal run rate of business. So, that's the most positive aspect of it. And the second question on Countermine. With the geopolitical issues around the world, you would think there will be some tailwinds for Countermine. So, we just need to keep being present and active in those key geopolitical markets to sort of gain an opportunity. So, we've gained an opportunity last year, obviously. And we have got representatives in all these areas at the moment, trying to do some business development.

Great. A second question from Jason. How progressed are you on potential acquisitions? The upsizing of the facility suggests it could be larger versus the pure sort of bolt-on acquisition.

Yes. We have acquisitions in the pipeline, and we're very much convergent on what the acquisitions look like today than we were probably 12 months or 18 months ago. So, we are reviewing. We're in contact with all the right people globally in the Northern Hemisphere. We've been very, very clear. It's comms and it's Northern Hemisphere. So, that's where we're focusing our time at the moment.

Okay. Great. Just got one more submitted question. [Operator Instructions] Just on balance sheet. Given the enhanced scale of the business as a result of M&A, there appears to be an elevated cost base to go alongside that. How do you think about return on investment of this elevated spend? And how should we think about the cost base across future years, please?

Yes. I think the cost base and the change that we saw in the FY '24 numbers, really driven by acquisitions and the success of the business. So, most of that's been allowed for in the FY '24 numbers. So going forward, it should be a more normal outlook around the cost of the organization. We do continue to invest in parts of our business that we need to be successful in. So, some of that's been in back-office systems, but certainly, engineering teams and our go-to-market sales teams. We've continued to invest in FY '24. A lot of that activity is in the FY '24 numbers now.

Okay. Great. Next question is from Cameron Bell at Canaccord.

Just looking at your -- you've got that comms order book growth that you've mentioned of plus 21%. And then you also got your guidance, where you're saying 10% to 15% revenue growth in comms next year. Those 2 numbers, does that kind of imply that, I guess, the quality and maybe the longevity of your order book just continues to improve?

That's what it does imply. We're getting -- we're being very focused on -- we spoke about pipeline discipline and BD discipline to start with. But we've been very focused on larger, more long-term contracts coming into our order book. So, we've been very measured on getting these into the funnel and converting them to orders. So from my perspective, we're just getting better and better at the execution part of it and the execution outcome is a strong order book. So, that's the positive element.

Great. I just got another submitted question here. Can you please tell us, which geographical markets you're planning to expand to or which are priorities, please?

I think it's a different answer for the different 3 businesses. So, I'll go through Minelab first. I think with Minelab, we are heavily focused on sort of doubling down in Europe and the U.S. in that recreational element. A pleasing thing with Minelab last year, we've invested heavily on e-commerce and customer engagement programs in those 2 markets, and we saw double-digit growth. They are the largest markets. So, we will focus there. In DTC, the U.S. still remains the largest market. But DTC is creating a strong presence in -- obviously, in Europe, a strong presence in the Middle East and a strong presence in Asia. So it's a scattering of all of those. So we are present. And with Zetron, public safety in the U.S. is still the primary market. That's 70% of our pie, and we'll continue to focus on that, and then we'll continue to expand public safety into Europe, which is a large addressable market in its own right. That's what our research shows.

Okay. Great. I think that's it for questions today. Should you have any follow up questions or perhaps we didn't fully answer submitted questions today, please feel free to email them through to either Kayi Li or myself. And maybe I'll now pass it back to Alf and Michael for any closing comments, please.

Yes. Thanks, Sam. Firstly, I'd like to thank everybody for their interest in the FY '24 recap. From my perspective, as a CEO and the leadership team, we believe that Codan has got a really strong future. In FY '24, we continue to execute against our tactical and strategic plans in a very methodical manner, and that consistency and approach is a great strength of Codan. So for me, this approach will ensure that we'll continue to operate in the top quartile as an organization, either in terms of financial metrics, people, systems, processes and then embed a great culture. But secondly, we'll continue to push our organic growth rates and our inorganic strategy. So again, thank you very much, and we look forward to an update at the AGM in October. So thank you, and enjoy your day.

Great. Thank you. That completes Codan's FY '24 results webinar. Enjoy the rest of your day. Thank you, and goodbye.