EBOS Group Limited (EBO) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the EBOS Group Limited FY '25 First Half Year Results Conference Call. [Operator Instructions]. I must advise you that this conference is being recorded today, the 19th of February 2025. I would now like to hand the conference over to your speaker today, Mr. John Cullity, CEO, EBOS Group. Please go ahead, Mr. John.

Thank you, Maggie, and welcome, everyone, to EBOS Group's first half results presentation for the first half 2025. My name is John Cullity, CEO of EBOS Group, and I'm joined this morning by both Alistair Gray, our CFO; and Martin Krauskopf, our EGM for Strategy, M&A and Investor Relations. There are several pleasing highlights of our first half results, including strong revenue growth for the group, excluding the Chemist Warehouse Australia contract, reflecting the successful execution of our strategies. We are also realizing the benefits of our focus on efficiency and cost savings. The cash result was very strong, and we have maintained our interim dividend at the prior year level. We continued our disciplined capital allocation, which included 3 investments to support future growth. And the first pharmacy wholesale agreement has been executed, providing a far more sustainable remuneration model for our pharmacy business in Australia. In terms of the financial summary, I'm pleased to report that EBOS has achieved solid underlying revenue and EBITDA growth, and we are on track to achieve our full year guidance for underlying EBITDA of between $575 million to $600 million. The statutory results are, however, down on the prior corresponding period, reflecting the loss of the CWA distribution contract effective 1 July 2024. And before we go through this morning's presentation, I should point out that my commentary this morning is predominantly based on our underlying results with comparisons to the prior period, excluding the contribution from the Chemist Warehouse contract and certain one-off costs. We have included in the appendix a reconciliation between the statutory and underlying numbers. The key financial headlines for the first half of FY '25 our revenue increased by 9.5% to just under $6 billion. Underlying EBITDA increased by just over 7% to $291 million. Underlying earnings per share was $0.675. Our leverage ratio of just under 2.1x is consistent with the prior period, and the Board has declared an interim dividend of $0.57 per share, being the same amount as last year's dividend, reflecting the Board's confidence in the future growth of the group. Slide 5 provides further details on the group's financial performance on both a statutory and underlying basis. This slide is included for information purposes, and I won't comment on it in any detail. EBOS has a long-term track record of growth, and we are again very well placed to continue to deliver future growth due to a number of factors, including our exposure to the health care and animal care sectors, which have defensive growth characteristics, our scale and leading positions within those sectors and the diverse nature of our group as well as our multiple growth drivers. Over the last decade, we have generated compound annual growth of 11% in gross operating revenue. Last year, we communicated our near-term growth strategies, and I'm pleased to report that we've made really strong progress with all initiatives tracking either in line or ahead of expectations. Specifically, we have demonstrated base business growth with our Healthcare and Animal Care segments, growing underlying EBITDA by 7% and 7.2%, respectively. We have now won more than $450 million of annualized sales from new pharmacy wholesale customers with approximately $100 million of this recorded in the first half, well over our $300 million target. We've realized cost savings of $15 million in the first half, and we are on track to achieve our target of $25 million to $50 million per annum by FY '26. And we have completed a further 3 investments with aggregate consideration of approximately $70 million, which I'll expand upon later, and we continue to explore an active pipeline of further M&A opportunities. Those 3 investments just mentioned all relate to our Southeast Asian medical technology business and include the acquisition of 2 distributors specializing in orthopedic products, one operating in Malaysia and the other in the Philippines, thereby strengthening our presence in those countries. And we also increased our shareholding in our TransMedic business to 100% from 90%. The Southeast Asian health care market continues to represent an attractive growth opportunity for the group due to a number of factors, including its large population and increasing wealth and demand for improved health care services, global suppliers seeking access to the region via strong independent distributors such as ourselves to provide on-the-ground knowledge and customer relationships. And the market is still very fragmented, which lends itself to our bolt-on M&A strategy. And in TransMedic, we own one of only a small number of independent distributors with both scale and a multi-country presence. The group saw strong performances from both our Healthcare and Animal Care segments with several highlights across our divisions. In Community Pharmacy, the first pharmacy wholesale agreement was signed, and we are pleased that this agreement will provide the industry with a far more sustainable funding platform. We have also outperformed our expectations regarding new pharmacy wholesale customer wins and the TWC store network continued its strong growth, and we now have 616 stores in the network. Institutional Health care continued to be one of the group's major growth drivers with our hospital medicines and Southeast Asian MedTech businesses performing particularly well. Contract Logistics experienced strong organic growth in Australia and through our investments in new facilities is well positioned for further growth. And in Animal Care, our Black Hawk and Vitapet brands continue to perform strongly, and our Australian vet wholesale business has returned to growth. On this page, you can see that both our Healthcare and Animal Care segments reported strong underlying EBITDA growth of 7% and 7.2%, respectively. Our Community Pharmacy, Institutional Healthcare and Animal Care divisions all contributed to an uplift in GOR, while Contract Logistics was broadly flat. We also continue to make good progress on our key sustainability initiatives. In respect of environmental matters in Australia, we are on track to self-generate solar power equivalent to our forecast electricity consumption by FY '27. And our Animal Care business has begun transitioning its Vitapet snacks and treats ranges into 100% recyclable packaging. In respect of our people, we have recently introduced executive safety leadership walks in all of our distribution centers to drive further focus on all of our safety initiatives. And there are many other sustainability initiatives that the group is progressing, which will be detailed in our next sustainability report issued at the end of the financial year. I'll now move to our segment performance. Healthcare generated strong revenue growth of 9.7% and underlying EBITDA growth of 7%. This performance was driven by organic growth across each of our Community Pharmacy, TWC and Institutional Healthcare businesses. In terms of our geographic regions, our Australian Healthcare business grew revenues and underlying EBITDA by just under 12% and 6.6%, respectively. And our New Zealand and Southeast Asian business grew underlying EBITDA by 8.5%. Moving now to Community Pharmacy. Naturally, the results in Community Pharmacy are down on the prior corresponding period due to the loss of the CW contract. However, excluding this, underlying performance of the division has been strong with revenue of $3.1 billion, up 12% and GOR of $288 million, up 4.6%. There were several drivers of the result, including, as mentioned earlier, approximately $100 million of wholesale revenue in the half from new customers, which represents more than $450 million annualized business. We also reported growth from our existing wholesale customer base. We saw an acceleration in sales of GLP-1 medicines and TWC continued on its path of strong growth. The GOR margin increased to 9.2% reflects a shift in our product and customer mix. And future profitability in this division will be assisted by the recent signing of the first pharmacy wholesale agreement. TerryWhite Chemmart continued its strong performance and further strengthened its position as Australia's largest health advice-focused community pharmacy network. The TWC network recorded strong store growth and total sales growth of 11% with like-for-like sales growth of 9.3%. This performance is a result of the many initiatives undertaken to provide outstanding care to our customers such as care clinics, which are now operating in 90% of the network and offer core health services to patients. In addition, we have a strong focus on our TWC catalog and promotional programs, expansion of our consumer brands products and continued uptake of our TWC app and Rewards program. Institutional Healthcare was again our largest growth driver, increasing revenue by $191 million, up 9.7% and GOR by $25 million, up 8.3%. Key drivers of this performance were continued growth in our Symbion Hospitals business, largely due to sales of oncology drugs. The MedTech business delivered mid-single-digit revenue growth due to growth in our allograft and implant products. Our spine channel was impacted by supply constraints for certain new products. However, this has now been rectified, and we expect a stronger second half in this particular segment. As mentioned earlier, our Southeast Asian MedTech business continued its impressive performance with double-digit growth and will further benefit from the recent investments referred to earlier. Contract Logistics performance was stable overall with GOR of $75 million for the half. Underlying this was continued strong growth in the Australian business with 16% core growth driven by new and existing principles. The strong performance in Australia, however, was largely offset by the New Zealand business, which was primarily due to a legacy contract or a fall in the legacy contract for COVID-19 products that is winding down. Turning now to Animal Care. Animal Care delivered revenue growth of $18 million, up 6.3% and EBITDA growth of $4 million, up 7.2%. And this was again driven by strong performances from our branded business as well as a return to growth in our Vet wholesale business. Branded business growth was a result of continued strength in our flagship Black Hawk and Vitapet brands, assisted by the release of new products launched last year. as well as our superior pet food business continues to perform very well in the New Zealand dog rolls and bulk treat segment. Our revenue growth was partially offset again by continued softness in discretionary categories in light of the slower consumer spending environment. Margin improvements in the segment reflect product mix and production efficiencies. In line with our Animal Care growth strategy and as communicated previously, we launched several new products under our Black Hawk and Vitapet brands, including our healthy benefits range for dogs and Vitapet Dry food within the grocery channel. These product launches are strongly resonating with consumers and additional category expansion is planned for the future. I'll now hand over to Alistair to run through the financial information.

Thank you, John. Now turning to cash flow. The group generated strong cash flows with underlying cash from operations of $205 million, up $90 million compared to the prior corresponding period, reflecting an improvement in net working capital. Capital expenditure for the period was $64 million, consistent with half 1 in the prior year. This includes both sustaining CapEx and investments in new distribution centers, including new sites in Auckland to support the growth of the contract logistics, pharmacy wholesale and medical consumables distribution businesses. Net working capital of $384 million is down $89 million from the prior corresponding period, reflecting the full release of working capital from the conclusion of the CW contract. This was partly offset by the investment required to support the strong underlying revenue growth of 9.5%. As previously announced, return on capital employed has been reset with the conclusion of the CW contract. On a like-for-like basis, return on capital employed grew slightly to 13.3%. And in the medium term, we expect return on capital employed to continue to improve and return towards 15%. Net debt for the group was just over $1 billion, which is materially consistent with the equivalent period last year. The net debt-to-EBITDA ratio was 2.07, also largely unchanged from H1 last year. This leverage ratio remains conservative and within our target range, providing capacity for further acquisitions and growth investments. During the period, the majority of corporate debt facilities were refinanced, extending the weighted average maturity to 3.3 years and increasing available funds by approximately $150 million. As John previously stated, cost reduction initiatives delivered savings of $15 million in the half, and the group remains on track to deliver $25 million to $50 million per annum of cost savings by FY '26. These savings were delivered across the entire cost base, including freight, cost of goods sold, labor and administrative costs. This primarily benefited operating expenses in the period, although there was also some improvement to go. As previously communicated, in dollar terms, underlying operating expenses increased compared to the prior corresponding period. The primary drivers of this increase are underlying organic revenue growth, incorporating the expenses of acquired businesses, normal levels of inflation and investments in marketing and IT, partly offset by cost reduction initiatives and productivity, which improved throughout H1. On a like-for-like basis, excluding CW, underlying operating expenses as a percentage of revenue improved by 20 basis points. Underlying earnings per share were $0.675, down $0.12 when compared to the prior corresponding period, reflecting the conclusion of the CW contract, partly offset by the successful implementation of the group's near-term strategic priorities. Reflecting the Board's confidence in the future growth prospects of the group, the EBOS Board have declared an interim dividend of NZD 0.57 per share, consistent with H1 last year. This represents an underlying payout ratio of 77.3% and will be imputed to 25% for New Zealand tax resident shareholders and fully franked for Australian tax resident shareholders. The group's dividend reinvestment plan, which has been strongly supported by shareholders previously, will be available for the FY '25 interim dividend. Shareholders can elect to take shares in lieu of dividends at a discount of 2.5% to the volume weighted average share price. I will now hand back to John to conclude today's presentation.

Thanks, Alistair. With respect to the group's long-term strategy, we will continue to aim to deliver long-term sustainable growth and shareholder returns through organic growth with a focus on growing our core businesses and striving for operational excellence as well as growing and diversifying the group through M&A. Each of our core operating segments are pursuing clear initiatives to drive this growth, which are set out on this slide. As stated at the beginning of the presentation, we are pleased with the group's first half performance, and we reiterate our FY '25 guidance that we expect to generate underlying EBITDA between $575 million to $600 million. This full year guidance represents approximately 5% to 10% underlying growth on the prior year, excluding the CWA contract. Therefore, the 7.1% growth recorded in the first half is supportive of this full year guidance. And that concludes the formal part of today's presentation. However, on a personal note, I'd like to take this opportunity to thank our investors for your support over the years. As many of you will have seen, it was separately announced this morning that I will retire as CEO effective 30 June and that the Board has appointed Mr. Adam Hall as my successor. Adam is an accomplished global executive, and I trust that the group will be in safe hands under his leadership well into the future. My time at EBOS has been an incredible journey, and I've had the privilege of working with many exceptional people to grow the group into what it is today. I want to extend my gratitude to our Chair, Liz Coutts, the Board, the executive leadership team and all our 5,200 employees across New Zealand, Australia and Southeast Asia. Their dedication and professionalism to serving our communities is inspiring, and I'm really proud of what we have all achieved together. So with that, I'll hand back to the operator, Maggie, to facilitate any questions.

[Operator Instructions]. Our first question comes from Saul Hadassin from Barrenjoey.

John, just looking at the first half Community Pharmacy results in particular, and the gross operating revenue margin. If we back out Chemist Warehouse from the previous period, it looks like the margin went down about 60 basis points to that 9.2%. And you called out shift in product and customer mix and new business wins. Can you talk to particularly that new business win, is that coming at a lower margin versus that divisional margin? Just some comments on that would be great.

Yes. No problem, Saul. No, I think if you look at the margins, et cetera, then first thing I'd point out is the EBITDA margin for the group is relatively stable with the prior year, right? You will see the impact on the GOR margin, et cetera. It's really due to the product mix, right? So the -- and this is in both the Community Pharmacy and also in the Institutional Healthcare business, right? So we have basically what's driving that is really strong sales in community pharmacy by high-value drugs and also GLP-1 medicines, which come at a lower margin than the overall margin in community pharmacy. That's the key driver.

And just a follow-up. As we think about second half this year and the commencement of that CSO with a bit of the top-up, you've called out some modest benefit. Any quantification that we can look at in terms of the quantum of gross operating revenue or EBITDA that you think that CSO top-up will contribute for you guys in 2H '25.

I think what we'd probably refer you to, saul which is probably not that helpful for you, but we're probably just referring it to the overall reiteration of full year guidance, right, between the $575 million to $600 million, right, rather than specifically point out or try and quantify what that amount represents.

Our next question comes from Stephen Ridgewell from Craig.

First of all, congratulations on a great tenure. He had Joined first as CFO and then the last 7 years as CEO. So I'm sure the shareholders are very happy with -- it's been a great performance. And then just in terms of following up on Saul's questioning, I guess, looking at the guide, we're seeing an incremental positive outcome perhaps to -- from the CWA. There's more cost out presumably to come in the second half compared to what was realized in the first half and you're getting a full benefit from the market share wins in the core business. I guess, should we not be expecting earnings to track a little bit better or at least higher within the range in the second half? And if not, I'm just wondering if there are parts of the business where perhaps growth is weakening a little bit to offset the drivers I mentioned. Any sort of color would be quite helpful in terms of what you're seeing and expecting.

Yes. No, I think, Stephen, the way I'd answer that is, yes, there are some tailwinds into the second half that we pointed out in the presentation. But I think at the overall macro level, we're comfortable with that EBITDA guidance, $575 million to $600 million, right? And that's where we're comfortable positioning it today.

No, fair enough. And then just with the -- obviously, the change at the top. I'm just -- there's been there's been sort of focus areas for the group in terms of M&A by kind of industry segments and geographies. I'm just wondering, is there any thoughts around that changing just given Adam's background? Or is there any change to the -- either the focus or also potentially the criteria which the company has kind of communicated to investors around M&A. Is there any change in that strategy signaled by perhaps the change in leadership?

No, Stephen, I don't expect any change in strategy. I mean we've been very consistent, of course, about our growth plans in health care and animal care. And I think the opportunities that the group has in front of it still within its various segments, whether that's medtech or animal care or Southeast Asia, et cetera, that's all. There's plenty of runway for growth there. I think what was important from the Board's decision in appointing Adam is that he has a growth mindset, right? And that's for EBOS Group, growth is in our DNA, as you know. And it's important that we have a leader that contributes and continues on that journey and that we can capture all that growth and that value for our shareholders going forward. So that was -- I believe that was the biggest determinant in Adam's appointment. And you've also got -- really strong experience in the Southeast Asian markets, right? And that's where we see -- we've been quite public about that. That's where we see some really nice opportunities for the group going forward.

Our next question comes from Adrian Allbon from Jarden.

Maybe John, could you just provide a little bit more color or detail around, I guess, some of the weakness in the Australian MedTech business? Like I think you called out the supply issues in spinal but also like the capital sales. Is that one of the -- one of the issues that's sort of slightly behind plan as you sort of complete through the current year and obviously, reference to those previous questions around the guidance.

Yes, I think that's fair enough. Adrian. There's been -- as we know in the hospital sector, there's been a reluctance from public private hospitals to spend capital. So that has acted as a bit of a headwind into the growth of that particular segment. And then there was one particular product that was out of -- basically out of stock for regulatory reasons, and that's now back in stock and back in market from January, right? So that were probably the 2 bigger factors in the MedTech business that were impacting on the Australia and New Zealand business, not impacting on the MedTech Southeast Asian business.

And are you able to kind of give us a little bit like what sort of quantification is that? Like is it -- are we talking $50 million revenues, $100 million of revenues?

No, we're not quantifying that, Adrian, for you sorry. We're thinking [indiscernible].

All right. I understand. Just in terms of like just I noticed there's a bit more restructuring and site transition costs sneaking into like some of the stuff you adjust. Can you just kind of outline what the $10 million was regarding in the period?

Yes, I might take that one, Adrian. So yes, you're right. There was $15 million in total, $10 million of which were in relation to site transition and restructuring costs. As you can imagine, there was a significant change required to the operations of the business on the exit of the CW contract to ensure that they are rightsized and we continue to deliver the productivity that we expect to deliver and the right cost to serve. So that's really the primary driver of that. There is also some costs associated with further restructuring to deliver the $15 million of cost reductions in the half. But I would say the largest part of that is really rightsizing the business to the new volumes.

Okay. And should we assume that that's kind of -- could that contain to the first half? Or is there more to kind of sort of second half?

Yes. I mean productivity, in particular, has improved throughout half 1, we really expect that the vast majority of these costs have now been in cost, there likely will be some into the second half, but it's materially done.

Okay. And then maybe we'll look at you, just in terms of -- I think you called out in terms of the acquisitions, like $70 million of capital deployed, I'm presuming the TransMedics sort of like circa $20 million paid in sort of January. What would be the sort of overall level of sort of capital expenditure plus acquisitions that we should run with for the full year? Like [indiscernible] might be buying.

No, that's okay. So I'll try and answer the question. So in terms of CapEx, we spent, I think, $64 million roughly in half 1, which was largely to support future growth and sites in particular. We would expect H2 to continue at a similar level. we're probably at a point where we're at peak CapEx, and we would expect that to reduce as we look forward into future years. But I would expect for half 2, we're at a similar level. In terms of acquisitions, you're right, about half of the capital we deployed of the M&A $70 million was in relation to the uplift in TransMedic from 90% to 100%. It's -- I won't comment or try and speculate on what the equivalent number might be for half 2. But needless to say, we continue to explore inorganic opportunities that make sense for shareholders.

But just to be clear, the Transmedic was paid in general, right? And so the interest line also disappear for the second half.

That's absolutely right, Adrian.

Okay. Cool. And just staying with the cash flows. In terms of the Chemist Warehouse working capital release, did that prove to be higher than what you expected? Because I think originally, we all sort of thought around $100 million, and then I think it was sort of reduced to sort of more like $50 million or $60 million. And like what did it actually end up being like within the mix?

Yes. Look, like we are definitely pleased with the cash flow performance that we've been able to deliver our net working capital, as noted, improved by circa $90 million compared to the previous period. And that reflects the cessation of the CW contract and also the further investment that was necessary to support the 9.5% underlying base business growth. I guess what I'm seeing is the result in half 1 reflects the full benefit of that exit, and we are pleased with the way that that's been done. It's been our significant focus along with rightsizing the cost base. to equally rightsize the net working capital position and pleased with our results.

Okay. But obviously, the portion is greater than the net right because -- coming to support growth in the basis?

That's correct. Yes. Yes. I mean the sales on a statutory basis fields are down, so that stuff reflected in the net working capital.

Our next question comes from Tom Godfrey from Ord Minnett.

Congratulations on the 10 year, John. First one for me was just around market share in Community Pharmacy and is clearly still generating some good gains there and new customer wins. I'm just sort of wondering if you can give us any color around, I suppose, the exit rate or the cadence, that $100 million in the first half, is that slowing? And has there been any change in trends as your former customer and competitor have completed their merger.

So maybe I can try and pick that one up. So just in terms of explaining the new customer wins. So we've delivered $100 million of incremental sales in half 1. These are from new customers that started treating this year which would be the equivalent of a full year FY '25 number of $325 million and then on an annualized basis, $450 million. So certainly through the half, we continue to -- when new customers, hence that uplift across the 3 metrics. And these wins have come from a mixture of segment API largely. I'm not sure if that answers your question, Tom.

Yes. No, that's really helpful. And maybe just a follow-up just on the cost out. I mean, we've still got a range of $25 million to $50 million by FY '26. I'm just sort of keen to understand what the remaining swing factors are across those call-outs being freight, packaging, labor, COGS, admin?

Yes. I mean it's right to recognize that while the majority of the benefit was realized in operating expenses this half, that mix between operating expenses and GOR will vary depending on the balance of entities that are delivered. But we continue to target $25 million for the full year and are obviously pushing to get us close to the $50 million in FY '26. They'll come from a lot of places, Tom. So the scope of this is all addressable spend. So we have quite rigorously interrogated the entire cost base, whether it's COGS, whether it's freight, whether it's distribution centers, whether it's labor, whether it's the administrative costs at corporate levels and across the division. So it's a holistic review of cost and natural plated and where the savings are being delivered.

Our next question comes from Marcus Curley from UBS.

I just wondered if I could just follow up on the new customer wins. Could you just clarify whether that includes the TerryWhite expansion?

They know it doesn't.

Okay. Great. And then secondly, just on the community core margin in the first half, would you say that forms the base to think about the business going forward, I hear you in terms of potential cost savings coming on top of that. But what we saw in the first half, is that a reasonable assumption as sort of the ex Chemist Warehouse level for the business?

Yes, we believe so, Marcus.

Okay. And then just finally, on Contract Logistics. Obviously, you talked about the tail of cover business in New Zealand coming out. Is that fully out John? Or is it all more to go?

There's still probably more to go in the second half Marcus and maybe a fraction more into FY '26, but nothing significant in FY '26, we don't believe.

Okay. So we should probably assume sort of a similar start revenue headwind that we saw in the first half repeating the second half. Would that be the right style of assumption?

Yes. Correct.

Our next question comes from David Low from JPMorgan.

Just on the Community Pharmacy and the $450 million of annualized revenues. What are you targeting now? I mean my understanding was your expectation was $300 million. It's now $450 million. Is there still more potential?

I think overall, Dave, there is, but that will largely depend on market. We've been a bit surprised on the upside. So there's been a bit of disruption, as you would appreciate, in the market. And it continues, then there should be some upside to that number.

All right. Just on the cost savings, excuse my ignorance. Can I just get you to explain how we should think about that. So the $15 million achieved, is that annualized? Is the $25 million to $50 million, your exit run rate in '26. So apologies, I'm sure you've covered this, but hold just my sec, please.

No, that's okay. So the $15 million was the half 1 benefit that we achieved from the cost savings. What we're looking to do is deliver an annualized cost reduction of $25 million to $50 million by FY '26. So by the end of FY '26, we would expect to have ideally a $50 million reduction in our cost base ongoing.

So $15 million in the first half presumably annualizes to $30 million or am I missing something?

It's some of it's -- I mean, your math is sound. There's some puts and takes in there, but we're certainly pleased with the progress against our target, I think, would be the message I'd leave. As I said, it's been a significant focus for the team, and we're pleased with where we've landed for the first half and progress into future periods.

All right. So just the bottom end of that range is probably unlikely. Look, Mike, just a last quick question, I hope. The M&A or the acquisitions in the period, can I get you to talk a little bit about the expected contribution? Was there any in the half? Will there be anything noticeable or material in the second half, please?

David, it added about 1% to the EBITDA growth rate, the acquisitions in the first half at the growth level.

Our next question comes from Lyanne Harrison from Bank of America.

Can I talk about the TerryWhite pharmacy rollout? So 52 new stores for the last year. Obviously, that's quite a high cadence. What are your expectations for second half?

Lyanne, we have a target, which we're on the record for, we have an overall target that we can grow TerryWhite to, say, 700 stores. I think typically, in a period, we typically generate new stores around 30 annually. It's been a stronger last 12 months, obviously. But I think you could expect if we're adding another 15 stores in the second half, that's a reasonable expectation.

Okay. And then on to acquisitions. So obviously, the acquisitions focused on in this half were as Asia and Medtech. I mean in terms of your pipeline, is it safe to say that the focus in the near term is in that geographic area as well as in that segment?

I'll need over to Martin Krauskopf for that one, Lyanne.

Hi, Lyanne. Look, it's fair to say that the Southeast Asian region has been a focus of the group in the last 6 months, and we've had some success there. I think as John mentioned earlier, it's a region that we will continue to focus on. We like the growth opportunities that are present up there. And there is a level of fragmentation in that market. So it does lend itself to bolt-ons in the MedTech division. And more broadly, we can consider whether it makes sense for other divisions in the group to expand into Southeast Asia as well. There certainly continues to be a focus on other areas as we've communicated before. So we still see opportunities in Australia, New Zealand, Southeast Asia and across our divisions, the main focus of deploying capital into certain segments has been in -- within the Healthcare division. We're looking at the medical consumables space. We do look at certain retail pharmacy management opportunities. MedTech, as we've outlined. And then in Animal Care, we still continue to see opportunities in both brands and wholesale. So really, there's a wide variety of opportunities that we see in the pipeline across the group and across regions.

Okay. And just one last question. Can you comment on trading to date for this half?

Lyanne, we really just want to -- we can't really comment on what we've -- on material, but we've released. So we can really only comment on the material we've released. And I think as I've tried to reemphasize during this morning's call that we are reiterating the guidance for underlying EBITDA between $575 million to $600 million.

Next, we have Mathieu Chevrier from Citi.

John, thanks for all your help over the years, and congrats on your well-deserved retirement. Just wanted to ask about the TerryWhite 9.3% like-for-like sales growth. Can you help us understand in that growth in terms of volume, pricing, mix?

It's largely being driven by dispensary sales, Mathieu., right? So that's the large driver of the growth. And it's typically, of course, that relates to ethical volumes and sales. And we're in a period where there's very strong PBS growth at the moment, which is, of course, assisting that growth. So of course, there's a like-for-like number that we published as well as an overall number. So it's -- if you look at the PBS data, they're very -- it's like double-digit growth in terms of the PBS data. But in terms of the number of scripts that have been issued, they're sort of like, I think, even down on the prior period. So a lot of it is being driven by these high-value medicines, Mathieu.

Okay. And so you think that TerryWhite, it's growing roughly in line with the market. What do you think is the market growth at the moment?

We think TerryWhite is growing above market. So if you said the market is growing about 11%. This is on like on dispensary. If you say the market is growing about 11%, right? And we're growing just under 12%. Part of those high-value medicines, of course, Mathieu, also there's an increasing up GLP-1 medicines now being coming through the system, right, and being dispensed.

Yes. Yes, makes sense. And then you spoke to some disruptions in the market. I mean you all know about what's going on with Chemist Warehouse in Sigma. Is there anything else that you think is worth flagging that's happening in the pharmacy area?

Nothing else that we haven't highlighted today, Mathieu. I think we're very pleased with the performance of both our wholesale business and our TerryWhite Chemmart business. I think our TerryWhite Chemmart business really offers a point of differentiation for customers, and I think that's resonating well with the pharmacy community, and it's got a particular point of focus on this increased scope of practice that's gathering steam amongst the state government. So TerryWhite Chemmart is really well positioned in that whole field. And the initiative we had with care clinic rooms for consumers, that all lends itself very well to the growth that we're generating within the TWC network. So are the key points.

Thanks for the key point. And then if I can, just one last one on animal care. Could you remind us what kind of exposure does that business have to poultry prices and if you think that what's going on with Avian have an impact on the input costs?

In terms of pricing, largely the pricing is sort of locked in for 12 months. right on AV type products. So we don't expect any significant impact there as a result of the Avian flu, but that can all depend on how it all plays out, of course. But at this point in time, we're not seeing any impact.

Thank you for all the questions. This concludes the Q&A so. I will now pass back to John for closing remarks.

I'd just like to say thank you, everyone, for your support of the business and for your interest in the company, and we've talked to a few of you know that in one-on-one session. So thanks, everyone, and that concludes today's call. Goodbye.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.