Glanbia plc (GL9) Earnings Call Transcript & Summary

Good morning, and welcome to the Glanbia plc Q3 Interim Management Statement Call with Siobhan Talbot, Group Managing Director; and Mark Garvey, Group Finance Director. Today's conference call 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.

Thank you, operator. Good morning, everyone, and welcome to the Glanbia Q3 2022 Interim Management Statements Analyst Call and Presentation. During today's call, the directors may make forward-looking statements. These statements have been made by the directors in good faith based on the information available to them up to the time of their approval of the Glanbia plc Q3 interim management statement. 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. The directors undertake no obligation to update any forward-looking statements made on today's call, whether as a result of new information, future events or otherwise. I'm now handing over to Siobhan Talbot, Group Managing Director of Glanbia plc.

Good morning, everyone, and welcome to the Glanbia Q3 '22 Results Call and Presentation. On today's call, I'm going to provide a summary of our performance for the first 9 months of the year and our outlook for the remainder. I'm joined by my colleague, Mark, and he'll cover the financial results. And at the end then, we would be very happy to take any of your questions. So overall, I'm pleased to report that post our Q3 performance, we are today upgrading or updating our guidance for full year growth in adjusted EPS to between 10% and 13% on a constant currency basis. If the dollar-euro relativity stays as it is currently, this will be a reported full year growth rate in adjusted EPS of between 26% and 29%. I'll speak in more detail later on further aspects of our full year outlook. Operational performance across the group remains strong. As you know, mitigation of inflation has been the really key theme for all of the teams in '22, and all of our planned '22 pricing action is now complete with our customers. Pricing has clearly been a very strong factor in the 23.1% revenue growth year-to-date, and we've been closely monitoring the volume impact of the significant pricing actions. As I noted at the half year, it remains the case that elasticity in our key performance in lifestyle brands is better than we might have expected earlier in the year, even in the context of more pricing action than was originally envisaged. This strong consumption trend has really been a feature of our largest brand, ON and GPN, where our focus on driving global reach for this brand and continued investments and indeed innovation is delivering results. I'll speak further to the GPN and to GN NS trends specifically later. While driving financial performance, of course, we also continue to progress our ESG agenda across many areas. We have increased our ambition for carbon emissions reduction… [Technical Difficulty]

Apologies. We have lost connection with the speaker line. Please stand by while we try to reconnect them. The call will resume shortly.

Apologies to everybody. I think we actually lost voice. So my sincere apologies. I'm going to start actually again as the year-to-date Q3 highlights. Apologies again. So just to restate, post our Q3 performance, we have updated our guidance for full year growth in adjusted EPS to between 10% and 13% constant currency. If the U.S. dollar-euro relativity stays as it is currently, that will be a reported full year growth rate and adjusted EPS of between 26% and 29%. I'll speak in more detail to various aspects of our outlook shortly. Operational performance across the group remains strong. As you know, the mitigation of inflation has been a really key theme for all of our teams in '22. And all of our planned '22 pricing action is now complete with our customers. Pricing has clearly been a strong factor in the 23.1% revenue growth year-to-date and we've been closely monitoring the volume impact of these pricing actions. As I noted at the half year, it remains the case that elasticity in our key performance and lifestyle brands is better than we might have anticipated earlier in the year even in the context of more pricing action than was originally thought. This strong consumption trend has really been a feature of our largest GPN brand ON, where our focus on driving global reach for this brand, continued investment and innovation is driving results. I'll speak further specifically to GPN and GN NS trends later. While driving financial performance has been a key focus, we've also continued to progress our ESG agenda. We have increased our ambition for carbon emissions reduction to a 50% reduction in Scope 1 and 2 emissions by 2030 from the previously communicated 31% reduction. This revised addition is consistent with an SBTi 1.5-degree pathway and our 2022 long-term incentive plans will now reflect the ESG targets consistent with this higher ambition. Turning then to revenue for year-to-date. As noted earlier, pricing was a key factor with strong pricing action across all aspects of our business, driving the overall 20.9% pricing growth for the year-to-date. Pricing action accelerated in Q3, particularly in GPN. While our overall group volumes are positive year-to-date, both GPN and GN NS year-to-date volumes are marginally back. This trend in Q3 was not unexpected in the context of the scale of the pricing action and the prior year comparison. In GPN, both our largest ON brand and the healthy lifestyle portfolio continued to have positive volume metrics year-to-date. With the overall GPN year-to-date decline on branded, driven by the challenges of the Diet and SlimFast brands, the refresh of which I'll speak to later and is on track. In NS, we sustained positive year-to-date volumes in the premix segment of the business. In dairy ingredients, we did see some customers reduce inventory levels in Q3 where we expect Q4 volumes to recover in dairy. In terms of the outlook, as I noted earlier, we've updated our full year guidance that our '22 full year group adjusted earnings per share is now expected to grow between 10% and 13% constant currency with a reported potentially 26% to 29%. More specifically on '22 guidance, GPN expects to deliver full year revenue growth of low teen percent constant currency driven by strong pricing, which accelerated in Q3. Consumption remains very resilient for our key brands. And while we have planned some elasticity to Q4 in response to the most recent price increases, we expect to deliver positive volume growth for our performance and healthy lifestyle portfolios for the full year. I'll speak shortly to progress on the SlimFast brand refresh, where we expect the volume decline in SlimFast to drive a minus 1% to 2% overall volume decline for GPN for the year. In GN NS, we expect strong double-digit revenue percentage growth, again in constant currency and again driven by pricing. For the full year, we expect volume growth in premix with the reduction in dairy volumes as markets normalize from the prior highs. So overall NS volumes will probably be broadly in line with the prior year for the full year '22. We expect earnings growth across GPN across GN NS and indeed USG. Our joint venture performance is unchanged from previously with some expected to decline year-on-year. We have really focused in on GPN margins this year. We expect to deliver the targeted 12% EBITA margin for GPN in the fourth quarter and full year margins now broadly in line with the prior year levels. In NS, as we stated previously, there is an expected full year margin contraction of up to 100 basis points driven by the mathematical dilution of the significant pricing changes, particularly in dairy. Our operating cash flow conversion rate of 80% continues to be expected for full year '22. Turning then to GPN. When we last spoke at the half year, I noted the following focus areas for GPN for '22: sustaining brand momentum across ON and the healthy lifestyle brand portfolio and, of course, delivering the brand refresh for SlimFast. I'm pleased to confirm that both of these objectives remain very much on track. Pricing action has been taken by GPN across all brands in all regions with further pricing taken in Q3. The team delivered strong year-to-date revenue growth in both regions with a very good year-to-date of 13.4% and international 14.5%. We stay close to our consumers and continued our investment levels in the brands this year, and this has resulted in the brands being very resilient, particularly the largest brand in the context of pricing actions. I'll talk more specifically to each of the brands shortly. Importantly, as we previously said, the work on the transformation program in GPN really provides a structural underpin to GPN EBITA margins. We continue to drive further efficiencies to [indiscernible] as we moved through '22. We are on track to deliver that 12% EBITA margin for Q4 and full year margins, as I said earlier, broadly in line with the '21 levels. Turning then to the performance of our key brands. With work reiterating that the strategy of GPN continues to be to increase consumer reach and broaden our access to addressable markets by evolving a range of product formats that meet consumer needs across a range of motivations, from maximizing performance to looking and feeling better, nutritional support and a porterage management. Optimum Nutrition is our #1 brand and is the #1 brand in the Performance Nutrition category. Optimal Nutrition was over 54% of GPN revenues in the first 9 months. ON like-for-like revenue growth continued strongly at 23%, driven by continued very strong consumption trends. The ON brand continues to have volume and price growth across both the Americas and in the international regions. In the U.S., we saw continued strong consumption a 32% growth in the last 12 weeks with growth across all key accounts, particularly in line and the FDMC channels. We continue to broaden the reach for ON. With an existing very strong proposition in dairy protein and energy, our innovation launches this year extends into plant powders, dairy ready-to-drink, functional energy ready-to-drink and hydration. It's very early, but these innovations are in market with a good response to date. And of course, all of our ON portfolio continues to be supported by the very successful proven marketing campaign. Our healthy lifestyle brands, as you know, are think!, Isopure and Amazing Grass. They make up 17% of the GPN revenues and again delivered an excellent performance, growing like-for-like revenues by 26%, with strong pricing sustained and volume sustained year-to-date. Consumption trends were also very good with the recent 12-week U.S. consumption growth of almost 16%, reflecting continued distribution gains. SlimFast, as you know, participates in weight management and was 16% of GPN revenues in the period. The category continued to have headwinds as consumer trends have shifted post COVID and as expected, the brand did see decline of 13% in the period on the back of a decline in consumption of 18%. As I've said at the half year, we remain very positive on the future SlimFast. Weight management remains a key focus for a lot of consumers and post our refresh, SlimFast will appeal to a broader set of consumers, will have a refreshed modern look and feel, and will appeal to a range of usage occasions. More specifically, on the brand refresh, which is on track, our new creative is now on air. For Q4, we're focusing on the new master brand creative and we will support our intermittent fasting innovation launch, and then we will do more creative around our high protein shakes in December. This creative is also broadening our mix of media from TV to other areas. Our packaging refresh has started shipping to customers and will be on shelf in late December and the first quarter of '23. And of course, our intermittent fasting innovations are in market now with key retailers in the U.S. It's clearly very early, but we're pleased with the points of distribution that we've gained for the intermittent fasting range. Finally, in our D2C business, which as you know is European based, it makes up 6% of GPN revenues, and it delivered 11% growth in the 9-month period. We continue to focus on increasing penetration of new and existing markets, and of course are integrating the level of brand that we acquired last year. Turning then to GN. Overall, Glanbia Nutritionals delivered strong revenue growth of 27.4%, which was up 2.2% in volume, 23.5% in price and 1.7% from acquisitions. U.S. Cheese had good volumes and pricing in the period. Turning more specifically to Glanbia Nutritionals' Nutritional Solutions, our overall revenue was up 20.3%, volume was back 3.2% and pricing of 17.7%. As with other segments of the group, NS also continued to take significant pricing actions with customers in the period to date to mitigate inflation. Volumes in our premix business were up year-to-date with good momentum, specifically in the EMEA and APAC regions. This volume momentum is expected to sustain into Q4. The overall NS volume decline year-to-date was driven by dairy, reflecting a higher level of internal sales to GPN as we previously referenced and some timing of shipments in Q3 that are expected to recover in Q4. Our '22 focus areas for NS continued to be driven around building momentum of the business, underpinned by strong customer relationships and a focused approach to innovation. In '22, this approach has driven focus on progression across driving premix, bioactive solutions and applications, extending our protein healthy snacking solutions where we can leverage our technologies and the recent acquisition of PacMoore. And, of course, leveraging our flavors and the recent acquisition of Foodarom across key global and regional customers. I'll hand to Mark now to speak to the numbers.

Thank you, Siobhan, and good morning to everyone on the call. At the end of the quarter, the group's net debt was EUR 749 million compared to EUR 589 million at the end of Q3 last year. This represents a net debt-to-EBITDA ratio of approximately 2x, well within our competence. The group is in a strong financial position for committed facilities of EUR 1.3 billion with a weighted average maturity of over 3 years with the earliest maturity date of January 2024. On the EUR 160 million increase in net debt, approximately EUR 90 million is due to the stronger dollar compared to last year, impacting the group's dollar-denominated debt when translated into euros. As discussed in previous calls, there has been an increase in working capital investment this year, primarily driven by inflation rate pricing as well as higher inventory levels to manage customer service levels and to provide buffer against supply chain disruptions. For the full year, we expect a working capital outflow between EUR 50 million and EUR 70 million, and we continue to target an operating cash flow conversion of 80%. And at year-end, we expect the group's net debt-to-EBITA ratio to be below 1.5x. For the full year, we now expect capital expenditure to be in the range of EUR 65 million to EUR 70 million with key projects, including the completion of the manufacturing consolidation on GPN, additional manufacturing equipment to expand capacity in attritional solutions and IT integration projects across both divisions. The group concluded the most recent share buyback program on September 30. This program was for EUR 50 million and resulted in the purchase of 4.3 million shares at an average price of 11.62%. Year-to-date, the group has deployed EUR 173 million in share buyback activity, purchasing 14.9 million shares at an average price of EUR 11.65. We expect share buyback activity to be approximately 5% accretive to adjusted earnings per share for the full year. The Board will continue to assess the opportunity to share buybacks as part of the broader capital allocation policy. And with that, let me hand it back to Siobhan.

So in conclusion then, [indiscernible] capabilities and involved our organization over many [indiscernible] to drive growth in key categories of better nutrition through our global reach across a range of innovative ingredient solutions and, of course, our leading brands. The categories we play into are large and growing. And while economic conditions are currently volatile, the core consumer motivations of sustaining health through better nutrition was in truth never more relevant. The strength and focus on our customer and consumer franchise balanced with the drive for operational efficiency and performance will deliver a strong group performance in '22 against an unprecedented inflationary backdrop. This focused approach to '22 gives us the confidence to update our guidance to a constant currency growth rate of between 10% and 13%. And as I referenced earlier, if FX rates stay at current rate, that would be a reported rate of between 26% and 29%. The strength in our platforms in the growing global better nutrition category will enable sustained future growth for Glanbia. As a team, we're really very excited by the opportunity to showcase our capabilities across GPN and GN to showcase our teams and their ambitions at our planned Capital Markets event in Chicago on the 9th of November, and we look forward to meeting you either personally or indeed virtually at that event. So with that, I'd like to hand over to questions.

[Operator Instructions] Our first question comes from James Targett from Berenberg.

Just a couple for me. Firstly, just thinking on, I guess, volumes in GPN. So you think -- is it right to say that excluding SlimFast, the full year volumes would be positive? And I guess, I appreciate it's early days on the relaunch or the new innovations on the fasting. But any data points you can give for kind of sell out of these new ranges to sort of see how the early response has been? And the 18% consumption decline in SlimFast that you flagged, how does that compare to the overall weight management market? That's my first question. And then on -- I guess, on pricing, I'm just trying to think of going forward, are you -- in GPN, are you expecting to take additional or do you need to take additional pricing from here to cover the cost outlook? Or are you planning to make perhaps having to adjust prices down following some of the volume declines that you've seen? So any comments you can give on the pricing outlook from here would be very helpful.

Thanks, James. In the volumes for GPN, yes, it is fair to say that excluding SlimFast, we expect volume growth in the rest of the portfolio. And that's really underpinned by the continued volume growth in ON, our large brand, which is really driving forward very positively in consumption and both volume and indeed very significant pricing taken on that brand as well. So the brand refresh from SlimFast is on track. I think as I said, James, at the half year, we wouldn't have had significant expectations for momentum at this time of the year. It's really going to be a diet season of 23%. So I think the category continues to be struggling at this point, but we believe strongly in the brand, and we see that momentum coming back next year. I think it's also other context I would put on SlimFast is that the largest element of the decline, as we referenced before, is the keto range. That was a particularly strong growth aspect of SlimFast, particularly around that '19 early '20 period, and we've seen keto come back. So the rate of decline in the core brands isn't anything that you're seeing overall. And that too gives us confidence as does the consumer research that we're doing. I think the particular decline of keto is meaning that we are, at this point in time, probably declining somewhat faster than the category. We're very confident that with the creative, with the brand refresh and with the intermittent fasting range that we will actually see brand momentum coming back. And as you referenced, the overall portfolio, excluding that, even in the context of pricing that is magnified through the year doing very well. On pricing, pricing accelerated, as I said, through the third quarter. The pricing action has been very significant. So I think the overall volume piece in the context of that has been very resilient, particularly as I said, again in ON and the healthy lifestyle branded portfolio. We don't expect to be moving pricing. Actually, at this point of time and you can see it in the margin we've achieved in Q4, we've achieved the pricing that we needed to do to get to that target margin, a journey that we started actually at the back end of '21. So we've had a very measured approach to pricing as we move through this inflationary period. And I think that measured approach has actually stood us very well indeed on the volume side as well across those key brands. We don't expect at this point in time to be reducing pricing. Clearly, input cost is moving in our favor. We probably see that more through the mid to latter part of '23, but the direction of trend is in our favor. But again, our focus overall for GPN for '22 has been to get that margin to 12% to deliver margins broadly in line with the prior year in the context of very high inflation to sustain volume and drive those pricing, as I've mentioned.

Our next question comes from Jason Molins from Goodbody.

Just firstly, and again, just on the volume base. And I'm just trying to understand the difference between the volume trends that you've seen in the recent quarter and then mapping that out against the consumption data. I was just wondering have you seen any destocking or changing in consumer and customer order patterns across your main channels? That's the first question. And then just on whey prices, which one you just alluded a bit in terms of the outlook there. So maybe just if you can clarify where prices are at the moment compared to where you've hedged, that is influence your decision on hedging for that cost base for next year?

Thanks, Jason. In terms of the volume trends, yes, there's a few things happening within Q3. And so firstly, again, I addressed that SlimFast in particular is the largest driver of the volume decline in the quarter. We did see some elasticity in the international markets in Q3 also. Obviously, there's some FX headwinds there. But we expect that actually to recover in Q4. So I think the important piece is if you actually look at the run of the full year '22, with significant pricing taken right across all our regions and all of our brands, we expect overall volumes to be back maybe 1% to 2%, and that is after absorbing a significant volume decline, relatively speaking, in SlimFast. So overall for our non SlimFast portfolio, if I can use that language, we expect volumes to be ahead. And that is going to be driven by volumes particularly being ahead on the sports nutrition piece. Specifically, if you take a brand like ON, our volumes year-to-date actually are probably up about mid-single digits and very strong pricing on ON globally. So again, I think that's what gives us confidence as we look forward. We obviously always have full visibility on customer inventories. At this point in time, we probably think market inventory is light, if the need thing actually, and we continue to track that as we go forward. On whey pricing, yes, it's fair to say that the direction of travel is in our favor from a GPN perspective, and that pricing is trending down. Clearly, there's a lag in GPN seeing that through its P&L account. So I think for the early part of '22, we will still be lapping what was a rising market of '22. So we'll have a year-on-year increase there. But we do see that direction of travel coming back and we'll probably expect to see that crystallizing in our P&L as we move through the latter part of the first half and into the second half of '23. Calling magnitude of that, Jason, at this point is too early. We're very focused, obviously, on our brand. We'll achieve that 12% in the fourth quarter now and we'll be aiming to sustain that as we move forward, and we monitor all of the pricing. On the hedging, we have fixed quarter 1 to '23 at this point and some of quarter 2, and we'd be measured in our approach to procurement in the context of anticipated pricing potentially coming on.

Our next question comes from Lauren Molyneux from Citi.

I just had 3 please actually. The first one is a bit of a clarification. And Siobhan, you mentioned that internationally, you're seeing some elasticity. I was just wondering if you could maybe talk a bit more about what you're seeing there and what you think is driving that. And then I know you also mentioned that you're expecting these to recover slightly in Q4. So I guess kind of what trends are you seeing that's giving you some confidence that these elasticities might lessen or recover in Q4? So that's the first one. And the second one, this 12% margin for GPN. Can you just talk a bit more about the levers to get to this 12% for Q4 in a bit more detail? So how much is going to be pricing offsetting your cost inflation? What level of cost inflation you're seeing? And then the cost of efficiencies you might be getting offset obviously by some marketing spend to support this SlimFast brand relaunch as well? And then the third question is on NS. So I was wondering if you could talk more about the destocking. It sounds like you're seeing a bit of destocking when you talk about this timing impact in dairies. Maybe you can just confirm whether that is destocking that you're seeing there. And then also do you have much of a view on the level of inventories in the channel as well? And how confident really are you that you can recapture any lost volumes in Q4?

Thanks, Lauren. I'll take the first 2 and I'll hand to Mark then to speak to NS. On the international side, a few comments. Firstly, I would say international can be lumpy. It's a distributor-led model through specific quarters. There is a comp point on international. Q3 was particularly strong last year. We have a weaker comp coming into Q4, so that will help. We have put through a series of pricing across different markets in international right through '22, and the teams have been monitoring that. So there'll be different rhythms playing out slightly differently across different markets. But as we look through the trajectory, we would be confident in getting good volume year-on-year growth for Q4, as I've referenced. In terms of the overall margin, Lauren, really is a factor of all of the pieces that you mentioned. If I go back to 12 months ago, we really started our journey of recovering inflation in the latter part of '21. We started to take pricing then. Our plan was to do it very mindfully in a series of steps that would take our consumers with us as we moved through that so that we would be tracking volume as we went on that journey. As we hit Q4 now, we're largely cut off because we have the cumulative effect of pricing, balancing the cumulative effect, obviously, of our cost of goods inflation. Efficiency has been a factor of that too. And indeed we continue to invest behind the brand. So I would say at Q4, we're feeling good about that relative balance across all of the variables that ultimately drive that 12%. And that has been, as I said, a very mindful journey. I think we were particularly pleased too in this quarter to be able to say that overall for the year, we would have margins in line with '21 because in the context of that gain of the inflation trends we've seen, I think as an outturn for the year, that was very good for GPN. On NS specifically, I'll hand it to Mark.

Lauren, just on the dairy ingredients business that we have with Nutritional Solutions, a number of things affecting volume this year. You might recall at the half year, we did talk about having more sales into GPN, which is one of the things that did impact our comparative volume. And then in the third quarter, we did see some of the staffing that some of our customers, that they managed their own inventory levels. And of course, some lucrative pricing going on as well, which probably had some impact on that. And we have very good visibility and then we have very good relationships with our customers as you can imagine. So we have pretty good visibility. That gives us the confidence to have a view that we see some of that bounce back actually in the fourth quarter. So you will see a positive coming through on the dairy-driven side in the fourth quarter. And importantly, of course, within Nutritional Solutions, you're seeing strong volumes coming through on the premix side. So between the premix volumes, which are positive year-to-date, it will be positive for the year. And although [indiscernible] somewhat back somewhat due to the company sales as well, overall we're probably in line year-on-year on the volume side.

Our next question comes from Alex Sloane from Barclays.

A few questions from my side, if that's okay. Just maybe starting with SlimFast and the refresh there. I think I'm right that you kind of initially have done some of this refresh work in the U.K. where you had called out kind of improved performance on the back of it. Has that continued to hold in terms of better relative performance of SlimFast in the U.K. versus the U.S.? That would be the first one. Just secondly, just on GPN margin reaching 12% in Q4. Is that a run rate you feel is sustainable for 2023 overall, when you're talking about input costs also moving in your favor potentially in the second half? And then just finally, just in terms of with all the pricing that has been taken in GPN, how Optimum Nutrition and other key brands price levels sitting versus competition? Is there any material change versus sort of historical ranges?

Alex, thank you. Yes, it's fair to say that the performance of SlimFast in the U.K. is relatively better than in the U.S. post the work that we've done there. And again, I would just point to the consumer research that we did in the U.S. through a lot of '22 really pointing to the fundamental strength of the brand that did need a modernization. It did need some work around the creative to broaden that reach. That will give us a reaching for a lot more consumers in the U.S. So we remain positive about the brand. So the job of what continues to be done, it is being done and is on track. So we'll be [indiscernible] seeing that progress through '23. On the GPN margin, yes, we believe that the work that we've done through the transformation program, which was a lot of driving efficiencies, driving revenue growth management, driving demand initiatives will underpin those margins. We're pleased to achieve it in Q4, which was our ambition and that that will be an underpin to our sustainable rates going forward. On the pricing, clearly the inflation across a lot of the sports nutrition space, Alex, has been very high for all players. So I would say there hasn't been -- probably isn't a dramatic movement in the relativities. I think the category needed to move pricing forward and it did. I think we've been particularly pleased on a relative basis with our consumption relative to others in the space. I think Optimum Nutrition has really consolidated its position as the leading brand. I think our elasticity has been good in a lot of the channels and we probably gained share, therefore, on a relative basis, and you're seeing that obviously in the consumption trends that will continue to be very strong and near-term ones continue to be. So no major shift in relative pricing, Alex, overall.

[Operator Instructions] We will now take our next question from Cathal Kenny from Davy.

One question from my side on ON and the consumption data. Can you provide some color as to the drivers by format? Is it still powders driving most of that growth? Are some of the new innovations starting to kick in? And maybe just a follow-up on ON as well, maybe a little bit of color by channel in North America in terms of where you're seeing most growth there.

Yes, powders continue to drive very strongly. I think for lots of reasons, powders as we previously mentioned, momentum continues very well on a price per serving. It's a very good product, very high-quality. ON stands for authenticity. I think the work that we've done in investing behind the brand and really, really consolidating our consumer franchise with ON continued to deliver very well for us. So powders driving on. Yes, the innovations are in market. It's very early days. We're pleased with the distribution that we have. And I think, again, that will be an underpin to future growth as we broaden the consumer reach, broaden the amount of motivations for consumers that we can reach into. And we look forward to getting an opportunity to showcase ON more indeed at our upcoming Capital Markets Day when we have a real opportunity to see that, I think, coming very [indiscernible]. In terms of the channel piece for ON, I think what was really excellent to see, Karl, is that it was across all those key channels. ON momentum really across all -- I recon I think area growing very strongly online, growing very strongly food club. So that again, that channel we -- that we've spoken to for the overall portfolio, I think, is a real advantage for GPN and an advantage specifically then with ON. We're broadening our distribution, we're broadening our channel reach, and we have a very nice mix, all of which are growing currently.

We currently have no further questions. So I'll now hand you back to Siobhan Talbot for closing remarks.

Again, thank you all for your time. Apologies again for that slight disruption on the audio earlier. As I've referenced, really looking forward to meeting you in person and virtually at our upcoming Capital Markets Day where we'll be giving a lot more color around our growth opportunities, specifically our brands in GPN and Nutritional Solutions, and look forward to chatting with you again soon. Take care. Bye-bye.

This concludes today's call. Thank you for joining. You may now disconnect your lines.