DFI Retail Group Holdings Limited (D01) Earnings Call Transcript & Summary

Well, good morning, everyone. This is Ian. Thanks again for joining us for our presentation for our full year results. We'll go through the normal routine, where I'll actually talk through the highlights from last year. I'll hand over to Clem, and he'll walk through the numbers in a bit more detail, and then it'll come back to me for a bit more granularity on where we are with our transformation plan. Okay. So moving on, the usual presentation disclaimer, and this is the plan for the agenda. Okay. So from the highlights point of view, one of the things we really want to kind of stress here is that we believe that the business is strongly supported by its portfolio diversity. Sales were up 2% in very, very difficult times. It's been a very challenging year for many, many businesses, and we were no exception. And the benefit that we have is because we have different businesses in different parts of Asia and in different sectors as well, it does give us opportunities to kind of have some businesses perform well and, therefore, opportunities to have -- that opportunity to develop those businesses, while others might having a bit more of a challenging time. And we definitely saw that coming through during the course of this year. So sales up overall 2%. Our profit was underpinned by the changes that I've just made. I mentioned, which is, in particular, we had a stronger performance coming out of our grocery retail year-on-year with good significant sales and profit growth, and that largely offset a more adverse impact that we unfortunately had within our Health and Beauty business, and we're going to talk about that in a bit more detail. We had a solid trading performance coming out of home furnishes with IKEA doing well, both in terms of bricks-and-mortar and also in e-commerce, and that offsets some footfall traffic challenges that we had within our convenience business. So overall, we're pretty encouraged by the way things have gone in very difficult circumstances, and it's also worth mentioning the transformation program remains on track. Again, we've had situations as we've gone through the year, where we've had to respond very quickly to changes that are taking place in terms of government policy and actions on the ground in different markets. But nonetheless, we remain resolute in terms of driving our transformation program forward. We're therefore confident only in what we've done this year, but also, whilst we still got time to go in our transformation plan, we are confident in delivering a final total dividend of $0.115 and $0.165 per share, respectively. So that's a broad-brush view of where we are in terms of the year. As I said, I'll come back with a bit more detail later, but I'd now like to hand over to Clem, our CFO, to walk you through the numbers in a bit more detail.

Thank you, Ian, and good morning, everyone. I'll take you through the numbers for 2020. Total sales, including sales of our associates and JVs, were up 2%, as Ian mentioned, up to $28.1 billion. And here, they were supported by good sales in Yonghui and Robinsons for the year to September 2020. Our subsidiary sales were 8% down at $10.3 billion. And here, what you see is a strong underlying food number, offset by lower Health and Beauty number. Now it's worth mentioning here that the reported food sales were impacted by the execution of our space optimization program. Our subsidiaries underlying operating profit was $412 million, down 6% on the year. But if you were to adjust for IFRS 16, our subsidiary profit is actually slightly ahead of the year, and I'll come back to that in a few minutes. Our share of profit of our associates and JVs were $76 million, down from $115 million last year, and this was driven essentially by Maxim's, which was impacted by movement restrictions throughout the year. Our underlying profit attributable to shareholders was $276 million, down 14% on the year. And it's worth making the point here that this number includes government support, which helps us maintain employment in our businesses, but it also includes COVID-related costs, which have been substantial. Our reported profit, after non-trading items was $271 million, down 16%. And our underlying EPS $0.2038 thus leaving us with a total dividend per share of $0.165, down $0.045 on the year. Now turning to sales. As Ian has mentioned, this page actually begins to demonstrate the importance of having a diverse portfolio. Our Food sales overall were up plus 1%. But if you look at grocery retail, our sales were plus 3%, up to $5.3 billion for the year. And this is after factoring out our space optimization program, the average LFLs across the businesses is in double digits for most of our businesses. Our convenience sales were at $2.1 billion, down 4% on the year. And this is after, for example, in China, we had 500 stores closed at the height of the pandemic. We still, in China, though, managed to open over 200 stores. In terms of Health and Beauty, our sales were slightly below $2 billion, down 35% on the year. And as we mentioned, they've been impacted by border closures and lockdowns. So what we've done is refocus our business on to local customers. Mannings, for example, have been running their price investment program. In terms of IKEA. IKEA had good performance in terms of sales, up to $832 million, plus 9%. And this reflects the annualization of new stores, strong e-commerce sales, which have been partly offset by trading disruptions, particularly in Indonesia, where we actually lost over 60 days trade. In terms of Maxim's, the business managed to get to just over $2 billion in turnover, down 24%. And it has been impacted by movement restrictions in all markets, but we're very confident that the business will recover and Yonghui and Robinsons were up 16% and 11%, respectively. Now moving on to profit. Again, this slide demonstrates the importance of a diversified portfolio. If you look at the numbers for 2020 and those for 2021. 2020, we saw strong grocery retail performance, setting off weaker Health and Beauty performance and strong IKEA performance, setting off slightly weaker convenience performance. And actually, if you look at 2019, you almost see the reverse. Now just taking you through this in a little detail, our grocery retail business managed to attain $267 million in PBIT, up $204 million on the year, and again, reflects the double-digit growth and it was supported by early panic buying. But what we've also seen is Wellcome fresh campaigns kicking in, in the second half. Here in Hong Kong, the rollout of Meadows across the business, and the rollout of our new Giant concept in Singapore, all supporting a very strong food number. In terms of convenience stores, we got $57 million in profit, down from $82 million last year, but we had a much better second half and the second half performance was actually up year-on-year. In terms of Health and Beauty, the impact of lockdowns and the lack of tourists meant that our profit was down to $66 million, down $230 million on the year. And as for IKEA, IKEA, supported by new store growth and strong e-commerce growth, managed to attain $71 million in profit, up $28 million on the year. Our SG&A costs remain tightly controlled and as despite additional investments in IT and COVID-related costs. So what you see here is the underlying operating profit before IFRS 16, we were at $341 million this year as against $340 million last year. Moving on to cash flow. I just want to call out a number of things here. When you look at the bottom here, in terms of our net debt, our net debt is broadly in line with last year. So we're at $817 million this year as opposed to $821 million last year. And I just want to call out 4 lines here really. In terms of working capital, our working capital was partially impacted by the Singapore Government's request to ensure that we have significant stocks of essential items. Secondly, other operating cash flow in this year, we've actually paid 2019's tax, which should have been paid in 2019, but was actually paid early in 2021. CapEx remains well controlled at $248 million, down from $305 million, and you can see the investment line of $160 million here, which includes the proceeds from the sale of Wellcome Taiwan and Rose Pharmacy. So in summary, this has been a really good performance under extremely challenging circumstances. It's clear that having a diverse portfolio is an advantage. Our balance sheet and liquidity position remains strong, and we're well positioned for a post-COVID world. And with that, I'll hand you back to Ian.

Thank you, Clem. I'd now just like to go through our business performance in a little bit more detail on our market-by-market, business-by-business basis to run through where we are in terms of our progress against our strategic priorities and also recognition of the importance of our improvement programs that we put in place. This particular slide you've probably seen before outlining the key areas where we want to try and drive change. And I'll come on to each of them, building capability, growth in China, maintaining our strength in Hong Kong, revitalizing Southeast Asia and driving our digital innovation. I'll come on to each of them in a bit more detail in a moment. I think it's worth just dwelling a second on our improvement programs. What's been really important to us as we change the direction and operational practice within Dairy Farm is to operate as a more centralized business. One we could learn from each of our businesses and learn from each of our operations in order to make sure we ensure we got strong consistency in terms of our execution. And we've seen some real benefits of that coming through. Our fresh supply chain is far more effective. We're sourcing better. 90% of the products that we source through Southeast Asia and into North Asia is done collectively now rather than individually. That means if we've got a strong source of good quality product coming through, we've changed our systems and processes in our food stores to ensure that we manage the waste and markdowns more effectively. And that's given fresher product to our customers and, importantly, a better return and improved profitability from our fresh food as well. We have got instigation of changes in terms of labor productivity, better tools for our stores to manage the labor to make sure we've got good service to our customers but efficient operations as well. We've worked hard to improve our assortments and leverage our scale across our businesses to ensure that we get the best opportunity for cost reductions where we can and, therefore, use that money to reinvest back in lower prices for our customers. So we've leveraged our scale in terms of our position with our go-to-market suppliers, but also goods not for resale suppliers through centralizing our procurement operations. The combination of all these programs have been running in the background for the best part of 2 years, has actually had a significant bearing on our ability to maintain the sort of strength of our profit position in very difficult times during the course of COVID this year. So it demonstrates the importance of having them underpinning the business changes that we've had in order to make sure that we can affect those changes and get the benefits of them, not just now but also in future years. Moving on to building capability as one of the key strategic priorities, we wanted to try and make sure that through the course of the transformation, we offer the opportunity to think differently about what we've been doing before, and that meant it was important to bring in external expertise to help support that. But it's also important to recognize that there's a rich team of talent within the organization as well. And therefore, we sought to try and identify people that we could seek to change their portfolios, given better levels of career development and use their understanding to get the great balance that we now believe we have between external expertise and internal knowledge. We're also looking to try and drive that harder in areas of digital and CRM. We've got plans to improve our digital capability and our personalization plans through the Yuu program, particularly in Hong Kong. And therefore, we need to make sure that we get greater levels of analytical capability to ensure we can actually understand each of the individual markets better, each of individual sectors better demographically and also evolve and develop personalization programs for our customers. We're looking to try and grow our through graduate recruitment programs as well. But in addition to that, it's not just about essential development, it's also about local development at a store level. And we've introduced a new program, which enables us to show shop in-store training to our team members in an engaging way through mobile technology, which -- and actually enhances the training and enhances the recall the trainer has provided and that's gone down extremely well and has been rolled out to over 50,000 team members. A combination of all these factors plus a good improvement and encouraging improvement in terms of cultural shift with higher levels of cross-functional support that we've seen moving away from silo-managed processes to one where we're having central support and encouragement is all parts of the factors that we're looking in terms of developing our people and developing our capability. Looking at growing in China, there are 3 key areas. As you'll be aware, we have 7-Eleven. We have Mannings in China, and we have our partnership with Yonghui, where we have a 20% interest. 7-Eleven had a particularly challenging time early on in the COVID crisis of 2020. And we had -- and as Clem mentioned, at some point in time, in the first quarter, we had up to 500 stores closed due to lockdown restrictions. And even when the stores reopened, there were restrictions in terms of foot traffic, where still people working from home and also we had restrictions on selling ready-to-eat hot food, which is a significant proportion of category sales in that business. But despite the challenges that we faced in terms of operational practice day to day, we still managed to open 200 new stores during the course of the year and indeed introduced a new distribution center to underpin our future growth with significant headroom in terms of additional capacity. We've also developed, behind the scenes, a new IT system, which is badly needed in terms of helping support and underpin the systems and infrastructure to support our growth to 7-Eleven for the future. And therefore, we're very encouraged about what that might do to help our business overall, not just behind the scenes, but also customer facing as well. When it comes to Mannings in China, we've executed a strong store optimization plan, consolidating our business, primarily into the Greater Bay Area, where similar to 7-Eleven, we believe is a strong opportunity for future growth. We are seeing during the course of the year that we've seen an improving like-for-like sales trend out of Mannings China as they, too, have been impacted by the footfall changes and changes in people's behavior during the course of the year. That has actually shifted people more to e-commerce, as we're no doubt aware. And we've actually got double-digit e-commerce penetration and very strong growth in Mannings' e-commerce during the course of the year. With regard to Yonghui, they had a really strong start to the year as COVID hit in China. And they are a strong operator and continue to grow their store base too. They've also invested in driving hard on online and now have around about 10% e-commerce penetration. So they've grown their business from low single digits to double-digit on e-commerce, and they want to advance that further and have been fortunate enough to recruit a new Chief Technology Officer directly from jd.com. When it comes to maintaining our Hong Kong strength, Maxim's has had to bear the brunt of very significant challenges in relation to government COVID controls. And whilst they've done a good job in terms of diversifying their portfolio outside of Hong Kong, encouragingly with acquiring franchise of Starbucks in Thailand last year. Nonetheless, it has still been an impact in terms of their overall performance given the heavy restrictions with restaurants having to close before 6:00 p.m. on a number of occasions. And even when they are open and having heavy capacity restrictions, both in terms of numbers per table and overall customers allowed within a restaurant at any given moment in time. Their strength is coming through their international expansion, and they also aim to grow and build and develop a greater level of food manufacturing capability over time with new manufacturing plants being developed as we speak. Moon cakes is a very significant part of the Maxim's portfolio. And despite the COVID constraints on celebration, that held up extremely well during the course of the 2020 year. Moving on to Health and Beauty. Our Mannings business has had perhaps the greatest level of challenge during the course of the year. During the course of 2019, in an average month, there might have been 2.5 million Chinese tourists coming over the border, and Mannings had a significant benefit from the trust that, that brand has with those particular customers. The average numbers now are around about 2,000 to 3,000 a month. So effectively, a 99% plus reduction in overall tourist trade, and that has had a bearing on the Mannings business, as you can see in the numbers. What we've done is make sure that we don't forget our Hong Kong customers, and we've looked very carefully at our price position here and our ranges. So optimizing our ranges demographically across Hong Kong, and we've also looked to invest in price through our big price drop campaign on over 1,100 items in order to make sure we offered even better value, and that has been extremely successful both in terms of volume pickup on products and also giving us improvements in terms of overall foot traffic. There are plans that are put to enhance our Own Brand. And building on the success that we've had in food, we'd anticipate in the coming months to have relaunches in our Health and Beauty business focused on volume and value with our Own Brand offer. On retail through North Asia food, we've had a very strong performance from Wellcome and an even stronger performance from Marketplace as our upscale brand. We've had double-digit like-for-like sales growth overall, and the team did a great job in terms of securing initial supplies early, prioritizing product and to try and maintain as best we could, a strong supply chain. And that was particularly true of product brought in from overseas, but also strength through our fresh supply chain through good availability, price investment and driving very strong sales growth during the course of the year as a result. Our 7-Eleven business in Hong Kong was impacted by working from home directives and other lockdown constraints, and that's had a bearing on its business. But as those lockdowns have eased, so we've seen the benefit of that come through in terms of improvement in overall performance when that's occurred. They stayed resolute to their task in terms of driving change in that business with over 300 new products developed in the past couple of years. So strong innovation, strong development. I'm confident that it will still remain a strong business going forward. We took the decision during the course of the year to divest our Wellcome business in Taiwan. We felt that consolidation is likely to happen in that marketplace. And therefore, we've now integrated that business into the Carrefour business in Taiwan. The other point worth mentioning is the drive that we've had in terms of the Meadows launch. That has been an extremely successful launch from us. And I'd just like to go into that in a bit more detail. Prior to the Meadows launch, we had about 30 owned brands in our portfolio. So it's kind of 30 brands that you can't remember, and what we've endeavored to do with Meadows is change it into 1 brand, you can't forget. We now have a very significant performance coming out of our Meadows portfolio of products. We have over 600 SKUs launched across 3 major markets. We've got the brand represented in our grocery business, our convenience business and our Health and Beauty business as well, demonstrating the opportunity to take 1 brand and represent it not just in our grocery stores, but where relevant in other sectors that we have interest in as well. The SKUs are available through our grocery sector, our chilled sector and our fresh food categories and also our frozen food categories. So we're giving you scale across the business with a strong emphasis on quality, a strong emphasis on pack representation on shelf and good presentation in terms of exposure to the customer and the quality, and the value elements of the particular brand development have gone down extremely well with the consumer. And in a relatively short space of time, we're now in a position where Meadows' own brand is now the #1 brand across Dairy Farm. This is a win-win as far as we are concerned. It wins for the customer because it gives them better value of good quality product. It also means that the more they buy, the more they lower the price of the overall basket. And for us, it improves our underlying profitability. So it improves our mix and also gives an exclusive reason to come and shop in the Dairy Farm banners. So encouraging start for Meadows if you see their expectation and there's more to come. Moving on to IKEA. IKEA has proved to be an extremely successful brand for years, but we've accelerated our growth in IKEA. And we've seen it evolve and develop into a really strong brand. Looking at North Asia, we've had successful store openings in Macau and Taiwan in the year despite the complications that are obvious for everyone. In fact, with Macau, it's the only new market that's been opened up in IKEA globally during the course of 2020. So credit to the team for doing that. Our North Asia sales still grew despite the COVID-19 disruptions that I've mentioned previously, and that was through a combination of strong sales coming into the stores. But any shortfalls we might have incurred were offset by a very strong e-commerce performance that underpin their overall business growth. And what we've actually seen as things have evolved and developed and improved in Hong Kong and Taiwan is, we've seen a growing improving sales trend. In Indonesia, similarly, we've seen adverse impacts of COVID-19, perhaps more so there than in North Asia, where we've had over 60 days of closures imposed upon us as a result of lockdown restrictions. But what we have seen is one of the fastest rates of growth and the highest levels of e-commerce penetration coming out of our Indonesia business than any of our IKEA businesses. And that, combined with annualization of our new store that we opened in Sentul has meant that we largely mitigated a lot of the more significant sales compromise we had as a result of those store closures. So encouraging performances coming out of IKEA, both in North Asia and Indonesia through a combination of new space growth and e-commerce sales. We haven't stopped there. We're looking at further developing another 2 new stores in Indonesia and they are scheduled to open in 2021. In fact, the store in Guangdong is due to open literally within days rather than weeks. And we had a resite in Taiwan as well, so we took an older store and built a newer one. And the newer store is trading at about 50% higher than the one that it replaced. So again, good, strong sales growth there and good annualization of previous stores that we've opened in Taiwan as well. So overall, a pretty good result from IKEA, good control of costs and a better margin result coming through as a result of better cost of goods year-on-year. When it's come to revitalizing Southeast Asia, we've had real challenges in Southeast Asia in grocery retail, and I'll come on to that in a moment in terms of the progress that we're making. We also integrated our Rustan's business into Robinson's a couple of years ago now. And more lately, during the course of 2020, at the tail end of 2020, we also integrated our Rose Pharmacy business into Robinson's too, where we have a 20% share. The integration of Rustan's has gone very well, and that's allowed them to improve their overall margins. But their discretionary businesses, where they have businesses in convenience as we do and also DIY and specialty stores and department stores, have had a material impact in terms of their foot traffic and ability to grow sales, albeit they've seen the benefit of improved sales in their grocery business. And we also put in place an Own Brand supply agreement, so we are able to supply Meadows and to Robinson's as well. Moving on to Health and Beauty. We've got a new format for Health and Beauty; as indeed, we've got new formats coming through in grocery, and we've rolled that out to about 20 locations so far with more planned. We do believe there's opportunities to grow e-commerce and health and beauty, but also bricks-and-mortar, too, and we've got plans to do both during the course of 2021. We've also like recognized that in each of the markets that I mentioned, with regard to Mannings, in each of the Guardian markets, we also recognized that we've got to look very carefully at ensuring that we've got a very strong value proposition as well as aspirational range selection. And therefore, we put in place everyday low price value propositions in each and every market in order to make sure that we attract customers across the demographic spectrum, and we have something for everyone. And there's some encouraging results coming through from that particular initiative in terms of growing foot traffic. And similar to what we've done with Robinson's, we put in place an Own Brand supply agreement with CP ALL in Thailand in order to ensure that they have the opportunity to sell Guardian own brand products through the 7-Eleven chain. So again, encouraging development is good for them, but actually, it's good in terms of volume growth for us. Moving on to Southeast Asia. We've actually seen a significant profit turnaround in Southeast Asia grocery. And when you consider the challenges that we faced in Southeast Asia grocery over the last sort of 3 to 5 years, it's really encouraging to see the solid efforts for the team over there beginning to bear fruit. We're not finished yet. We've still got a lot of work to be done. We still face a series of challenges, but it's really encouraging to see the progress that's been made. Upscale, we've launched new formats of our upscale stores in Singapore and Malaysia and actually in Hong Kong as well. But the most significant change we had during the year was a complete relaunch of the Giant brand in Singapore. The team will be looking very carefully about driving effective improvements in the supply chain, looking at how we can improve freshness of our fresh food and the quality to the customer and then value through our price initiative, but also looking at range optimization based upon what those customers were seeking from us. And the combination of those changes, including capital investment, has meant that we've managed to rebrand the store as well, refresh it and give it a much more effective look. And we relaunched over 50 stores in Singapore, literally on the one day with a major sort of campaign, not just about how it looked, but also the investment in price that we put in place as well. This is the entrance to one of our hypermarkets in Singapore with a really strong presence for the new branding, but also a strong presence for the value proposition that we're beginning to put in place as well through the Lower Prices That Last campaign. Strong impact in fresh produce. Good impact and volume displays of products selling at great value and strong impact across the department in terms of the market communications plan that we put in place as well and a refresh of the whole store, making it -- giving it a more contemporary feel but still maintaining a value proposition to the customer. So Lower Prices That Last campaign is an investment campaign across 600 SKUs, which has already improved our overall value proposition, but also our price perception with our customers. The full category range in space optimization plan is being implemented by individual store to make sure those stores are now ranged and spaced appropriate to their demographics in their areas. Enhanced capital investment program with some bad and needed capital and change into some of the infrastructure in each of these stores as well, which frankly have been neglected for too long. And the customers have responded extremely well not just as the results are cool, but also as a result of the initiatives that we've done. And we've seen the strongest like-for-like sales growth out at Giant, Singapore, that we've seen in the last 5 years. So more to do. We've got challenges that we face to try and make sure that we address them in our market still, but nonetheless, encouraging progress in terms of where we were to where we are now. In terms of the upscale formats, as I mentioned, we've launched 3 new format or formats in 3 markets -- 3 brands: Mercato, CS Fresh and Marketplace. Mercato being the Malaysian brand, CS Fresh in Singapore and Marketplace for Hong Kong. There's a very strong fresh food emphasis because that's what that customer is looking for. And our supply chain improvements have helped us make sure we've got credibility now in terms of consistent freshness every day for our customers and aligning to demographic ranging, not just in terms of affluence levels but shopping habits for individual customer base as well through their ethnicity or the food traffic flow during the course of the day. We've seen a 50% improvement in sales productivity in the test stores that we put in place, which is really encouraging. And we've actually seen a 60% improvement in fresh sales, so it demonstrates that our focus on fresh is working. We're now encouraged to kind of roll that with scale, and we've got plans in place to introduce circa 40 new upscale stores during the course of 2021. This is a picture of Mercato in Malaysia, CS Fresh in Singapore and also Marketplace in Hong Kong. And I think the point to try and note here is that while the name might be different in terms of branding, the interior of the stores are very, very similar. So we're trying to take the same degree sort of marketing approach in terms of the store ambience and aesthetics in order to make sure that we get one consistent brand look and feel across the market, but also more importantly, to try and ensure that we get consistency in economies of scale in how we source the infrastructure development that we put in place in terms of fixtures, fittings, marketing, et cetera, in order to make sure that we can drive procurement centralization that I mentioned earlier. Moving on to driving digital innovation, we've made some real progress here as well. The Yuu Rewards program was launched in the middle of 2020 with a high awareness campaign put in place, and we still retain about 98% brand awareness for Yuu Rewards, which is quite remarkable, something that only came into the market in August of last year. We have over 3 million members in just 5 months. We had over 30 billion points earned by the end of the year, and that's now over 50 billion as I speak. It was the most downloaded app in 2020, so there's been a definite uptick in customers through that Yuu Rewards program. And just to remind you, one of the key components of the program is not just the points rewards in one banner, but the fact that those points can be earned and burned across multiple banners, not just our Dairy Farm banners, but our Jardine's banners as well. And we also have a very strong partnership that we've developed with the Hang Seng Bank in order to try and improve integration of not just the points for people buying grocery products, but also the opportunity to develop financial services through a joint credit card. And again, I've seen very strong growth from where it was previously. What we now want to do is to build out that program more effectively and think more about evolving and developing customer personalization programs in order to make sure that we can reward our customers well, but also giving them opportunity to get value at products that matter most to them. When it comes to digital progress, we are evolving and developing our e-commerce capability. We did that through the year. At the beginning of 2020, we had zero capability to deliver e-commerce in Hong Kong Health and Beauty and we developed that. We also put in additional capability in Singapore and Malaysia, in those markets, and have seen growth in our commerce business in our food markets as well. I mentioned previously about the e-commerce growth that we've seen in IKEA, there's still more to do. It's still a relatively low level in terms of its overall sales penetration. And therefore, we want to make further progress in that area as we move through to the second half of our overall transformation program and building out better in-store IT capabilities to underpin and provide additional support for much needed investment for IT infrastructure in our stores. So moving on to the outlook, just to remind you of our 3-phase multiyear transformation plan. Early on, it's all about building a strong base, kind of addressing some of the core issues that we had in place and building a solid foundation for the future. What we've focused on more recently is taking those changes and delivering them consistently well and at scale across all our markets, and we're making some encouraging progress there. But there are more changes that need to be made. There are more adaptations that need to be changing because we're not in a market, which is standing still. And therefore, we're pleased with the progress that we've made so more -- so far. But we are the first to recognize that there's still much more to do. So the transformation plan remains on track despite very significant external impacts during the course of this year, which nobody could have anticipated. We have confidence in online strength of our business, particularly in relation to our portfolio diversity, which we mentioned. The fact that we have a strong food business to support a Health and Beauty business, which has had a tough year. And yet last year, it was the other way around is a very strong indication of the portfolio approach that we've adopted and how that can benefit the business overall. The key improvement programs that we put in place have made real strong progress and that's been a strong benefit -- significant benefit underpinning our profit position this year. Our supply chain challenges that we faced have been well controlled. We try to get in front of it and focus very much on stronger approaches to demand planning and forecasting where we've invested in good quality people and also good quality systems in order to make sure we've got better line of sight of that. But this year, 2021, the COVID-19 approach still remains uncertain. I doubt that many people could have anticipated this challenge we've grown for as long as it has. It's encouraging to see vaccines beginning to be rolled out across a number of different countries. And therefore, I'm sure we will see a gradual improvement in progress and borders opening up during the course of the year. But when that might happen is frankly, anybody's guess at the moment. In the meantime, we'll focus very much on driving value for our customers in each of our markets. We are, at the end of the day, a value retailer. And our customers are finding a tough shopping on a budget with increasing levels of concern around what's going to happen to them economically and where they might be in terms of employment. We have to make sure that we step up and make sure that we get value reassurance in the core of what we do, both in terms of the prices that we charge and the quality that we represent. Competition is intensifying not just offline, but obviously, online too. And 2020 has done nothing to slow that down. In fact, it's accelerated, as we know. So we have to be alive to that additional challenge and respond accordingly. So overall, I think our view is that this has been a pretty, challenging year, a difficult year in 2020. I'm encouraged by the progress that we've made overall in terms of defending our position from previously. We still have a lot of work to do in terms of transformation plan, but we're confident we can achieve that. But nonetheless, if 2020 was challenging, 2021 is like to be challenging, too. But we remain confident that the business overall is one that can continue to respond to the changes that are facing us and continue to grow. Thank you very much. Hopefully, you've got some additional granularity of thoughts from our point of view throughout the presentation. But... [Technical Difficulty]