Glanbia plc (GL9) Earnings Call Transcript & Summary

Good morning, and welcome to the Glanbia plc Half Year 202 Results Call with Siobhan Talbot, Group Managing Director; and Mark Garvey, Group Finance Director. Today's conference is being recorded. At this time, I would like to turn the conference over to Liam Hennigan, Group Secretary and Head of Investor Relations. Please go ahead, sir.

Thank you, operator. Good morning, and welcome to the Glanbia Half Year 2022 earnings results presentation. During today's call, the directors may make forward-looking statements. These statements have been made by the directors and quoted based on the information available to them up to the time of their approval of these results statement and the presentation this morning. Due to the inherent uncertainties, including both economic and business risk factors underlying such forward-looking information, actual results may differ materially from those expressed or implied by those statements. Directors undertake no obligation to update any forward-looking statements made on today's call, either as a result of new information, future events or otherwise. I'll now hand the call over to Siobhan Talbot, Group Managing Director of Glanbia plc.

Good morning, everyone, and welcome to the Glanbia Half year '22 results call and presentation. On today's call, I'm going to provide a summary of our performance for the first half of '22, our outlook for the remainder of the year and the key areas that we will focus on to deliver that outlook. I'm joined by my colleague, Mark Garvey, and Mark will cover the financial results. At the end of our presentation, we'll turn the call over to you for questions. I'm pleased to report that the performance of the group was ahead of our expectations for the first half of '22. We delivered an adjusted earnings per share results of EUR 0.5231, which really positions us well to deliver a strong earnings performance in the second half of the year, which I'll cover a little more in detail later on. This first half momentum gives us the confidence to upgrade full year adjusted EPS guidance from the 5% to 10% constant currency to 9% to 13% constant currency growth. If the U.S. dollar euro relativity stays as it is currently, that would be a reported full year growth rate in adjusted EPS of between 21% and 25%. The reason for the better-than-expected results was a stronger operating performance in GPN as we grew volumes in key segments against an environment of significant pricing actions. In fact, as you can see here, both GPN and GN implemented price increases in the teens and both delivered volume growth. Together with other efficiency measures, the pricing decisions to date and indeed planned will enable us to counteract the impact of inflation through the second half of the year. We also remain firmly focused on shareholder returns. And in the first 6 months of the year, we returned EUR 127 million to shareholders via buybacks, which are ongoing today, and we've announced a 10% increase in our interim dividend, reflecting our confidence in the underlying earnings progression of the business. Strategically, as you all know, we completed the disposal of the group's 40% stake in Glanbia Ireland in April, and we are now a more focused, purpose-driven global nutrition organization. We continue to add to our growth platforms. And in March, we acquired Sterling Technologies, a bioactive ingredient company, which complements our Nutritional Solutions immunity offerings. Finally, we continue to progress our whole renewal program and are really pleased to add 2 highly experienced female nonexecutive directors to our Board in recent weeks. As I mentioned in these remarks earlier, I'm very pleased with the operations delivery across the group in the first half, particularly in the key growth areas of GPN and Glanbia Nutritionals' Nutritional Solutions. The teams did a really great job delivering volume growth and implementing very significant price increases. We stay close to our customers and consumers on our journey of pricing through the latter part of '21 and into '22. And we feel that the first half volume growth is a real demonstration of the overall strength of our business in this inflationary environment. The strength of our brand equity in GPN and the value our customers place on our radiant offerings, all of which reflects the investment we've made in marketing, innovation and technology development. Breaking that growth down for you, the branded portfolio of GPN, which makes almost -- up almost all of the business now, grew 1.9% in volume and 13.9% in price. Our Nutritional Solutions business grew by 1.6% in volume and 17.9% in price. And our US Cheese business delivered 6.6% volume growth and 28.8% price growth. Of course, the world continues to be a volatile place this year. And as a team, while we're very mindful of those externalities and their impact on our business, we really focus heavily on the things that we can control. While we anticipated inflation this time last year, we didn't anticipate the ultimate scale. The tragic events of Ukraine and the ongoing impact of COVID challenges, as like many businesses led to some supply chain and cost challenges in our business. We've previously spoken to many of our mitigation actions. Pricing has been a big factor with the scale of price increases implemented since mid-'21. We -- we strategically procured raw materials that ensured we had both certainty of supply and price for our customers and consumers. And of course, we deepened our cost management and efficiency programs. We will contain our focus on all these actions through the second half of the year. We stay close to our customers and consumers and continue to invest behind our brands, and drive innovation across the business. There is, of course, that clear nutrition thread that runs through Glanbia's proposition to consumers and customers. And that is for that leverages a deep expertise and capability and [ property ]. And of course, in recent times, that has extended to other areas of nutrition in response to evolving consumer trends. We service that, as you know, through GPN and Nutritional Solutions, in particular. GPN has a broad brand portfolio across performance, healthy lifestyle and weight management needs, anchored in scale in North America, but of course, extending into other key growth markets. For '22, the GPN key focus areas are, number one, about sustaining the brand momentum across ON and healthy lifestyle brand portfolio. We were on track for this objective, and we'll speak more to it later on. We had good revenue growth and momentum in the first half, and we expect that to continue into H2 supported by incremental innovation in areas such as plant protein, ready-to-drink protein and energy and hydration. We will deliver the brand refresh of SlimFast. This is a real priority and remains so for the team. Our key focus is to have all of the deliverables across pack design, creative and innovation in place for the key 2023 diet season and again, all of those initiatives are on track. Importantly, as we've previously noted, the recent work on the transformation program in GPN provides a structural underpin to future margins. As inflation scale increase this year, we continue to stretch the teams to deliver further efficiencies to counteract that inflation. For Nutritional Solutions, our '22 focus is to continue to build on the momentum of the business. This business has been very resilient in recent years in a volatile market environment. That business resilience continues to be underpinned by really strong customer relationships and a focused approach to innovation. So the focus areas have to continue to drive the micronutrient bioactive solutions business and applications. We've seen continued great momentum in this area over the year with volume growth of almost 6%. We continue to develop technologies in areas, for example, in premix, where, for example, we developed a number of technologies supporting vitamin functionality across areas such as uniformity, protection from degradation, solubility. Our second priority of our Nutritional Solutions is to extend our healthy snacking solutions where we can leverage existing technologies and align those with the PacMoore acquisition supporting new product launches. We also leverage our flavor capability across key global and regional customers. The acquisition of Foodarom significantly strengthened our capabilities in the flavor area. And again, that allows us to incorporate these into other Glanbia Nutritionals ingredient solutions offerings. Turning now to our outlook for the remainder of '22. We're very conscious of the current scale of various global headwinds, but our current assessment of the external landscape and the momentum delivered in the first half of the year gives us the confidence to upgrade guidance for the full year. We expect to deliver strong revenue growth across the business in full year '22, largely driven by pricing. In GPN, we now expect revenue to grow by a low-teen percentage. In Nutritional Solutions, we expect strong full year revenue growth, which is probably likely to have a similar profile to the first half. We will translate this top line growth to earnings growth across the key aspects of the business, both GPN and Nutritional Solutions. In GPN, we expect strong earnings and margin momentum in the second half versus the prior year. As we move on from our most challenging H1 trump and progressively execute further inflation mitigating actions that will improve margin. Our outlook for GPN margin has improved with GPN now expected to deliver its 12% EBITA margin ambition in the fourth quarter. And full year margins are expected to be up to 50 basis points behind '21 levels. Nutritional Solutions will continue its earnings momentum for the second half also with ultimately a full year margin reduction of around 100 basis points, reflecting the mathematical impact of significant pricing that we passed through this year. We expect our conversion of our listed cash to be good and reach the targeted level of 80% for the full year. Our increased expectations for operating income gives us the confidence to upgrade our full guidance then for the year. And as noted earlier, we expect adjusted earnings per share growth to now be in the range of 9% to 13% constant currency. Factoring in the stronger dollar and using current exchange rates, that would be a reported result of 21% to 25% growth in adjusted EPS. Turning then to the operating review for the first half and speaking firstly about the GPN business. As I mentioned earlier, we had strong like-for-like branded revenue growth at 15.8%. We had positive pricing across all of our brands, which delivered pricing growth of 13.9% and strong demand and consumption trends, particularly in Performance Nutrition, healthy lifestyle and our direct-to-consumer brands. Overall, delivering volume growth of 1.9%, with consumer elasticity lower than we originally expected, again demonstrating the brand equity of our brand portfolio. EBITA at the half year was EUR 82.3 million, and while this was lower than the prior year, as you know, we had a particularly strong comparative in the first half of last year when EBITA was up over 400%. This performance was driven by pricing actions as well as further cost efficiencies from the transformation program. EBITA margin was back as expected versus the prior year to 10.4%, again, a function of a strong prior year comparator and the lag effect of pricing actions taken against inflation. We have good visibility on our cost base for the end of the year and with further pricing to be implemented, as I mentioned, we are confident of delivering a GPN EBITA margin of the target of 12% in the fourth quarter. I mentioned already the strong brand equity of the portfolio, and I'd like to give you an update now on the performance of our key brands as well as some strategic highlights. It's worth reiterating that the core strategy of GPN continues to be to broaden its brand addressable market by evolving a range of product formats to meet consumer wellness motivations in a range of areas, strength and endurance, feeling and looking better, energy, health and nutritional support and, of course, rate management. Optimum Nutrition is our #1 brand and is the #1 brand in the Performance Nutrition category. ON was almost 53% of our GPN revenues in the first half. Our like-for-like revenue growth was 23% in the period, driven by very strong consumption trends. In the U.S., we saw consumption grow by 32% in the 12 weeks to mid-June. We continue to broaden the reach for the ON brand with an existing very strong proposition in dairy protein and energy powders, our innovation launches this year extend into areas such as plant powders, dairy ready-to-drink, functional energy ready-to-drink and hydration. While it's very early in the launch of those innovations, our dairy ready-to-drink is just in market with a good response to date. And of course, all of our ON portfolio, as you know, is supported by the very successful PROVEN marketing campaign. Our healthy lifestyle brands, think!, Isopure and Amazing Grass, they make up 17% of our revenues at the half year and delivered again an excellent performance, growing revenues by 28% on the back of very strong consumption trends. Again, in the U.S., we saw consumption growth of almost 47%. We've expanded distribution for these brands and think! is now the #5 wellness brand in the U.S. SlimFast participates in the weight management category and was 16% of GPN revenues in the first half. This category continues to have headwinds as consumer trends have shifted. And as expected, we saw a brand decline of 12% in the first half on the back of a decline of consumption of 17%. We remain very positive and optimistic on the future of SlimFast. Weight management, no doubt, remains a key focus for consumers and our brand evolution is positioned to respond to a number of consumer insights. In particular, consumer stated desire to move their weight management support beyond strict plans and more to products that reinforce in everyday behavior. Post our refresh, SlimFast will appeal with a broader set of consumers will have a refreshed modern look and feel and appeal to a range of usage occasions. A refresh of the SlimFast brand positioning and the new packaging design is on track to be launched this autumn. In terms of innovation, we're responding to consumer insights that intermittent fasting is on the rise and more than 12 million households in the U.S. currently use intermittent fasting for weight loss and management. SlimFast is launching a new intermittent fasting line complete with protein shakes, complete meal bars and energizing hydration sticks. This new line is launching with Walmart in September, and we'll be supporting the launch with a 360 marketing campaign in Q3 to drive awareness and trial. Finally, our D2C business, which is European-based, making up 6% of our revenues delivered 18% growth in the first half. We continue to focus on increasing penetration within new and existing markets and integrating the LevlUp brand, which we acquired last year. The GPN business is the only global player in the performance nutrition category and has a diverse footprint across channels and formats. The GPN team delivered broad-based growth across all regions, channels and formats in the first half of '22. By region, about 68% of our GPN revenues are in Americas and 32% international. Both regions delivered strong growth in the period with pricing actions taken to mitigate inflation in all regions. The America's total revenue was up 12% with like-for-like branded revenue up 13.8% as we've exited the North American contract business. By channel, our largest channel now is food, drug, mass and club at 34% of our sales followed close to online at 32%. The distributors, 22% of revenues and specialty making up the remaining 12%. We saw good growth across FDMC online and distributor channels in the first half. Specialty was flat, representing a very strong prior year comp. Our key formats, as you know, are powders, ready-to-eat and ready-to-drink with all formats delivering growth in the period. Turning now to our other growth platform of Glanbia Nutritionals. Overall, the segment delivered very strong revenue growth of 30.5%, 5.1% volume, 25.4% price and 1.6% from acquisitions. Speaking firstly to Nutritional Solutions, our ingredients business. Nutritional Solutions delivered a very strong performance with a 19.5% increase in revenues in the period. made up of 1.6% volume growth, 17.9% pricing and 5.4% from acquisitions. Volume growth largely came from our micronutrient business as demand trends remain strong across our key customer base. We increased internal sales of whey-based dairy ingredients to ensure security of supply for GPN. And of course, this reduced reported volumes in dairy. Our Nutritional Solutions also saw inflation across the business with pricing action taken with customers to mitigate inflation. We have strong earnings performance in Nutritional Solutions, with EBITDA growing by 14.4% to almost EUR 72 million. Margin was down 80 basis points to 12.2% due entirely to the mathematical impact of those substantial price increases. As we previously noted, the largest component of Nutritional Solutions now is nondairy and volumes grew strongly at 5.8%. As I noted earlier, dairy volumes declined largely due to higher internal sales to GPN and some supply challenges an aspect where COVID restrictions and logistics did impede our delivery. As noted earlier, the overall strategy of Nutritional Solutions continues to be to broaden the execution of our global capability in protein and micronutrients but also broadening our propositions, both organically and by acquisition. The business has a really long history of innovation. We've had really good progress this year to date in leveraging our new Singapore R&D center with our Asia Pacific customers, our overall approach to Nutritional Solutions of one face to the customer allows us to leverage existing technologies and new capabilities. That's been really evident since we acquired PacMoore, the healthy snacking arena, the integration of Foodarom flavors, as I've referenced, and the extension of some of our micronutrient technologies acquired with the Watson acquisition. Turning then to US Cheese. It continued to demonstrate the stability of the business model we have in place. Revenue was up 35.4% driven by volume, up 6.6% and pricing of 28.8%. Volume was driven by the impact of the new capacity we brought online in '21 and pricing reflected higher markets, which the model allows us to pass on that to play. EBITA was up to EUR 17.7 million, reflecting the volume growth and operating efficiencies with margins slightly back. With that, now I'd like to hand over to Mark.

Thanks, Siobhan, and good morning to everyone on the call. Here you can see the group's income statement for the half year. Wholly-owned revenues were EUR 2.8 billion, up 26.8% constant currency, representing price and volume growth in Performance Nutrition, Nutritional Solutions and US Cheese. Fully owned EBITA was EUR 171.7 million, down 3.5% constant currency on last year as a result of EBITDA growth in Nutritional Solutions and US Cheese being more than offset by a decline in Performance Nutrition due to inflation and a strong prior year comparator. Wholly-owned margins were 6.1%, a decrease of 170 basis points as margins were impacted by inflation not being fully offset by price increases in Performance Nutrition and the dilutive impact on margin of a significant pricing pass-through. Net finance costs were EUR 9.7 million compared to EUR 10.8 million in the prior year, reflecting lower average interest rates on debt refinanced in 2021. The group share of joint ventures profit after tax for continuing operations was EUR 11.4 million compared to EUR 18.8 million last year, which was in line with our expectations. The results and plans of Ireland for last year has been included in discontinued operations. The effective tax rate for the half year was 12.5%. Adjusted earnings per share for continuing operations was EUR 0.5231, down 3.8% on a constant currency basis and up 7.1% on a reported basis compared to the same period in '21. Basic EPS post exceptional items for continuing and discontinued operations of EUR 0.6613 compared to EUR 0.279 last year. The first half resulted in an operating cash outflow of EUR 28.6 million as a result of an increase in working capital investment of EUR 225 million in the period. This has been driven by increases in receivables and inventories, which excluded the impact of exchange rates of approximately EUR 160 million and EUR 80 million, respectively. There will be no changes to average customer terms impacting receivables in the first half and the movements driven by higher pricing as well as increased business activity. On inventory, approximately 60% of this increase has been due to higher pricing compared to prior year, with the remainder arising due to decisions made to ensure we had appropriate inventories to meet customer demands in a somewhat challenging supply chain environment. We expect this inventory buildup to substantially unwind by the end of the year and along with our normal working capital cycle in the second half, we continue to target an operating cash flow conversion of 80% for the full year. The group has ended the half year with a strong balance sheet. Net debt was EUR 648 million compared to EUR 550 million at the same time last year. We are well within our banking covenants with net debt-to-EBITDA of 1.83x and at year-end, the group expects the net debt-to-EBITDA ratio to be below 1.5x as we expect to see some of the first half working capital buildup to reverse. The group has committed facilities over EUR 1.2 billion with a weighted average maturity of 3.5 years and no facilities due for renewal in the coming 12 months. During the first half, the group sold its 40% stake in Glanbia Ireland to Glanbia Co-op for EUR 307 million. And an additional Sterling Technology was added to the Nutritional Solutions portfolio at a cost of $59 million. Strategic capital expenditure for the half was EUR 22 million, which included spending and manufacturing equipment and Nutritional Solutions, IT systems implementations and some development costs. Today, we announced a 10% increase of the interim dividend to EUR 0.1293. We remain committed to a dividend payout for the full year of between 25% and 35% of adjusted earnings per share. At the Annual General Meeting, the group again received strong shareholder approval to implement a share buyback program. The technical resolution on the Rule 37 waiver, although approved, did not achieve the 80% level. And as a result, the group followed up with a shareholder consultation process, which resulted in feedback from investors, which was supportive of the Group's capital allocation strategy. Following the completion of this consultation, the group commenced a EUR 50 million share buyback program on June 23. As of today, approximately 50% of this program has been completed. During the first half, a total of EUR 127 million with returned via share buybacks, repurchasing approximately 11 million shares at an average price of EUR 11.62. In the first half, it was an approximately 4% accretive impact on EPS from the share buyback program. And for the full year, this is expected to be approximately 5%. For the half year, the average euro-dollar rate was 1.09 compared to 1.20 for the prior year, resulting in a tailwind to the reported results compared to constant currency. At the end of the half year, the euro dollar rate was 1.04. If the euro-dollar exchange rate remains at current levels for the full year, we would expect the reported results to be an approximate 12% tailwind to the constant currency results. In the first half, the Group including joint ventures, reported an exceptional gain of EUR 62.8 million net of tax. This was primarily related to a gain of EUR 55.9 million, arising on the completion of disposal of the Group's 40% interest in Glanbia Ireland, representing the difference between the proceeds received net of transaction-related costs and the carrying value of the Group's investment in Glanbia Ireland. In addition, there was an exceptional credit related to contingent payments associated with the 2021 level of acquisition amounted to EUR 7 million, which have now reduced following an assessment of the conditions that gave rise to the additional payments. The Group's average interest cost in the first half was 2.2% and 95% of projected debt for 2022 is contracted at fixed interest rates. The effective tax rate for the year is expected to be between 12% and 13%. And total strategic and sustaining capital expenditure is expected to be between EUR 70 million and EUR 80 million for the full year. To conclude then, we expect the strong revenue momentum to continue into the second half. For the full year, we now expect Performance Nutrition to report low teen revenue growth, primarily driven by pricing. Nutritional Solutions will have strong double-digit revenue growth with a similar profile to the first half. EBITA will also be strong in the second half, particularly in GPN as margins improved following the impact of price increases. For the full year, we now expect GPN EBITA margins to contract up to 50 basis points compared to last year, and we expect to have 12% EBITA margins in GPN in the fourth quarter. In Nutritional Solutions, we expect full year margin contraction of up to 100 basis points primarily due to the dilutive impact of significant pass-through pricing on the margin and also some business mix. US Cheese EBITA is now expected to be ahead of prior year following a good first half, and joint ventures profit after tax are expected to be marginally behind the prior year. Our increased expectations for operating income has given us the confidence to upgrade our full year guidance for adjusted EPS for continuing operations to a range of 9% to 13% on a constant currency basis. This would translate to our reported range of 21% to 25% if the current euro-dollar rate was sustained for the remainder of the year. We will be holding a Capital Markets event on November 9, where we will have the opportunity to provide an update to the market on our growth agenda as well as an opportunity to meet divisional management. And with that, let me hand it back to the operator for questions.

[Operator Instructions] We will now take our first question from Cathal Kenny from Davy, Research.

I have 3 questions. Firstly, on the consumption data on Page 9 for Optimum and healthy lifestyle portfolio. Perhaps you can give a little bit more color on the drivers there, i.e., distribution versus market share. That's my first question. Second question relates to GPN. The margin reference of 12% for Q4. The question is, is that a fair margin assumption or target for 2023? And finally, what's the volume outlook for Nutritional Solutions for the second half of the year? They are my 3 questions.

Thank you for your questions. In terms of the consumption, yes, we're really pleased with that consumption overall. I think what you're really seeing in the Optimum Nutrition actually is a number of factors. Firstly, we invested significantly behind the brand through the latter part of last year, as you'll remember, recognizing that we were coming into a period of putting through significant pricing. I think that has served us really well. What we're now seeing is that across a number of channels, as you will have seen in a latter chart, we're getting really good growth. So Optimal Nutrition as a brand is gaining share and is growing across those key channels of online, FDMC and that's delivering a lot of that growth. We're pleased actually with the momentum across both volume and price, I think that really speaks to the brand equity that the team have developed, in the brand, staying very close to consumers on this journey, driving that core that we have over many years and then building out with the exciting innovations as well. So the shape of the growth and the shape of the consumption coupled for GPN pleases us very much in the first half of the year. On the healthy lifestyle, too, a few factors to mention there. We gained distribution, for example, in the Isopure brand we significantly gained distribution in some of the mass channels [ that role ], both really nice volume and price. Likewise, you'll remember, the refresh of think! we did some time ago, again, grown volume and price -- significant pricing put through on think! in recent times, but again, sustained volume growth and gaining share with the think! brand also. So overall, pleased with the trends on consumption. You're seeing that come through clearly in shipments, and that's been the big factor that has driven our upgrade. Pleased to see that in the face of that pricing, we sustained volume growth across those key brands. I'll hand to Mark, who'll take the GPN and the NS point.

On the margin points, yes, I think, Cathal, we're very pleased that as we've gone through this year, we've had to put significant pricing through to match what the inflationary pressures we're seeing that will get to that 12% in the fourth quarter. And we would, of course, be targeting that now for '23 as well. I'm not going to give a specific guidance for '23 at this point. But the important goal for us was to get to that 12% as soon as we could base on that inflationary pressure we had to manage. We will be there for sure in the fourth quarter, and we would expect to be targeting that in '23 as well. On Nutritional Solutions, what I'd say is the profile we expect in the second half to be quite similar to what we saw in the first half. We're seeing good momentum in that business, particularly in the nondairy side, and that continues into the second half. So again, I'd expect we see a similar profile in the second half that we saw for the first.

We will now take our next question from Jason Molins from Goodbody.

Well done on a good set of results. A couple of questions, if you don't mind. Firstly, the consumer elasticity, you mentioned being better than expected given the strong brand equity of your portfolio. Just wondering how you think the overall market has performed in the period. And then second question is really around the pricing dynamic of whey. Can you maybe talk a bit more about the market backdrop here? Where is pricing at the moment? How do you expect that to evolve? The supply/demand dynamics that you've discussed before in the past? Just a bit of color on that and any impact on your hedging strategy as a result.

Thanks, Jason. I feel with the elasticity and Mark will pick up on the whey pricing question. On the category overall, we're actually gaining share. I think, again, it comes back to that journey. We've traveled through '20 and '21. We were very mindful and not at all complacent, obviously, about the pricing decisions that we're making. We invested behind the brands on that journey. We have more pricing than we will do in the latter part of this year. So again, very mindful that there will be more pricing going through. So I think the category has been resilient, and we've gained share within that overall resilience. A comment I would make about the category, sometimes we're never quite sure what history be the entire dictator of the future. But we have found the category quite resilient historically, particularly in recessionary times. We have products, particularly in the powders that have a good value proposition for consumers. We're very conscious of that. And again, for us, it's about the obvious physical and mental availability of our brands and making sure that we're there to be the brand of choice. So not complacent about more pricing going through, but very pleased to see that volume momentum that we're sustaining. Mark?

Jason, good morning.

Yes, Jason?

Sorry, just on the market share comment, was that then -- would that be true for SlimFast in the weight management category or no?

No. We've lost some points on the SlimFast brand, as you would expect with the decline in performance in the first half. For SlimFast now, it is all about the brand refresh, as I said, Jason, very optimistic about the potential for the brand. We're broadening the category. We're going to move our proposition for SlimFast to -- from maybe 10 million households to over 30 million households that are in that weight management space. So again, very much on track across those 3 areas that I've mentioned, really nice fresh pack design going in market. Intermittent fasting ready as an innovation. The #3 diets that a lot of consumers in the U.S. participate in and, of course, the creation that supports that. So lost a little bit of share there, but very positive about the brands.

So I'll take the question on whey, Jason. I mean managing the whey complex has been very important for us to do, right. And I think it's led to some of the success you've seen in the first half results as we saw whey move significantly up over the last year, basically, we took decisions in terms of making sure we were covered for the full year, and that I think has enabled us to make sure, A, that we had better pricing in our COGS than maybe would have if we've stayed on the spot market. And secondly, I think the decision we made to make sure that we had intercompany supply of whey, make sure that GPN, we're not letting customers down in terms of any of their deliveries as well, which has been complemented by a number of them, including Costco, I would say, and Walmart. As we now look forward, we are beginning to see, I would say, that whey costs begin to top out and come back down. Actually, there's quite a number of anecdotal points we're seeing in that regard. So as we look into '23, we haven't made all yet as to whether to go longer at this point. We're covered for this year and we'll determine over the next number of months what we want to do for '23. But feeling better than we did the last time we had a call with you on this.

We will now take our next question from Martin Deboo from Jefferies.