Hilton Food Group plc (HFG) Earnings Call Transcript & Summary

Okay. Good morning, everyone, and thank you for joining us. Matt and I are pleased to present our '26 interim results today. As usual, there will be a chance to ask questions at the end of the presentation of both of us and maybe even Sami, our Chief Operating Officer, who's with us today, I'll pass the difficult questions to him. Over the next 25 minutes or so, we'll take you through our financial performance and the progress we've made since announcing our updated strategy 5 months ago. It's early days, but I'm encouraged. I'm pleased by our colleagues across the organization have supported the strategy and I'm working on its delivery. Let me start with the first half summary. We're getting on with doing what we said. There's always much more to do, but I'm pleased with what we achieved so far. Profit was up in our core meat businesses. This includes further strong growth in the East region particularly in Australia and our fresh prepared foods business serving Central Europe. We're also realizing initial benefits from improvement plans in the U.K. at [indiscernible]. These can't be seen in the numbers yet, but we expect to see visibility in the second half. The challenges of -- will continue into the second half. And against this backdrop, we will assess all options for the future of this business. Despite this, group adjusted profit before tax from continuing operations of GBP 32.8 million was ahead of expectations. And on the back of this, the Board maintained our dividend in line with our progressive dividend policy. This first half performance gives us confidence in the full year outlook. We now expect PBT from continuing operations to be in the range GBP 66 million to GBP 71 million. This is despite the ongoing [indiscernible] challenges. This compares to our previous range of GBP 60 million to GBP 65 million. It includes the removal of expected losses from [ Darko ] and a foreign currency tailwind. We're also making good commercial and strategic progress. Importantly, in the first half, we extended our commercial partnership with Tesco in the U.K. This follows previously announced contract extensions in both the Netherlands and Denmark in late '25. The Acronym, SVV short for seafood, vegetarian and vegan will be short-lived. At the end of July, we announced the disposal of our vegetarian and vegan business, Delco. This is expected to complete in quarter 4 '26. It's a step towards simplifying the organization and a move towards our core strengths in meat and fresh preferred foods. We continue to invest in projects and develop platforms that will drive the future growth of Hilton Foods and deliver attractive returns. We're updating our plans to further increase capacity in Poland to meet the rapidly growing demand for fresh prepared food products in Central Europe. Canada is set for launch in January '27. Bacon is also planned for later in the year. Our joint venture facility in Saudi Arabia is set to go live in quarter 4 this year. I'm excited by the opportunity that these new projects and partnerships bring for Hilton Foods. I'll come back to this, but now I'll hand over to Matt, who will take you through our first half performance.

Thanks, Mark. Good morning, everyone. It's great to see you all. I'll walk you through our 2026 1st half financials, as usual, highlighting the main drivers of volume, revenue, profit, cash flow and net debt, and I'll cover the 2026 full year outlook. The results were underpinned by good performance from our meat and fresh prepared food businesses. This is where our core strengths lie with our experts, committed teams utilizing scalable and automated facilities to produce high-quality products for our retail partners. Whilst our seafood, vegetarian and vegan businesses continue to face challenges, we're taking action. We've agreed the sale of Dalco and we're starting to see the results of our performance improvement plans in Seachill. Moving now to the numbers. I'll focus on continuing operations, so excluding Dalco and of course, Fairfax Meadow, which as you know, we sold in September last year. Volumes were up 2.1% and with prices still at high levels than 12 months ago, revenue was up 11.5% on a constant currency basis. Operating profit of GBP 45.8 million was 3.4% lower or 6.6% on a constant currency basis with higher core profit more than offset by the impact of the challenges in Foppen. I'll go through a profit bridge shortly. The resulting operating profit margin was 2% compared to 2.4% last year. Profit before tax of GBP 32.8 million and adjusted earnings per share of 25.7p were both down compared to last year, consistent with our lower operating profit but ahead of expectations. As Mark said, we've declared a flat interim dividend of 10.1p and net debt was slightly improved compared to the end of the first half last year. This chart shows volume and constant currency revenue growth in our new regional structure, specifically East, which includes Australia, New Zealand, Central Europe and will include Saudi Arabia; West, which includes the U.K., Ireland, Netherlands, Sweden, Denmark and Portugal and will include Canada; and seafood, which includes Seachill and Foppen. We've also provided a slide in the appendix of the packs bridging last year's revenue and operating profit comparatives from the old segments to these new ones. In the East, volumes were up in all markets. Growth was particularly strong in Central Europe, where fresh prepared food volumes were up 26%. Higher Australian beef prices were the key driver of revenue growth of 15.3% with mix relatively stable between categories. In the West, volumes were slightly up. We saw good performance from the Nordics and our JV in Portugal, which offset lower volumes in the U.K. and the Netherlands. Although raw material inflation has largely slowed in Europe, prices remain at historically high levels. The impact this had on revenue was partially offset by negative mix movements as we saw some customers trading down within beef categories. Overall revenue was up 9%. Seafood volumes were up 6%. Inflation continued to weigh on demand for whitefish and Seachill, but sales of salmon and prawns were up. Foppen volumes were also up as we met customer demand from our facility in the Netherlands. However, we experienced pressure on margins. Moving on to profit. On a constant currency basis, overall core meat and fresh prepared food profit was up compared to last year, with growth in the East region more than offsetting lower profit from the West. In the East, we drove materially increased profit in Central Europe from Fresh Prepared Foods, while Australia and New Zealand again delivered good volume growth. In the West, core profit was down, reflecting competitive pressures in Ireland and unfavorable mix movements in the U.K. In response, we are working with our customers to deliver targeted promotions in half 2 while constantly reviewing our cost base against current volumes. As expected, seafood operating profit was down. This almost entirely relates to squeeze margins in Foppen, resulting from unfavorable movements in salmon pricing and FX, whilst improvement plans in Seachill are starting to take effect. Central costs were down with lower costs relating to share-based incentive plans. And with interest charges similar to last year, group PBT on a constant currency basis was down 8.9%. However, translational FX movements were positive for us in the period, particularly from the strengthening of the Australian dollar and adjusted PBT on a reported basis was down 5.2%. Our updated full year guidance reflects the anticipated positive impact of FX rates over the second half of the year. Now moving on to exceptional items, which are excluded from our underlying results. We incurred exceptional costs of GBP 7 million relating to Foppen in the first half. Around half of this relates to the relocation of production from Greece to the Netherlands to ensure continuity of supply to our customers in the U.S. We remain focused on minimizing the impact and expect to stop exceptionalizing these operational costs in the second half of this year. The remainder of the Foppen cost relates to the additional cost of air freight, which we stopped in April and a one-off loss of inventory due to a fire in a third-party warehouse in the U.S. Across the group, we incurred exceptional reorganization and restructuring costs of GBP 3.2 million, largely related to redundancy. We also incurred transformation costs of GBP 4.6 million as activity ramps up to drive efficiency, strengthen our operational capability and drive growth. We expect exceptional cash transformation costs of around GBP 10 million per year over the next few years. In addition, there was a GBP 16.7 million noncash impairment relating to Dalco, which is now classified as held for sale. Moving to cash flow and net debt. EBITDA was down in line with total profit with typical seasonality in working capital resulting in outflows in the period. We didn't repeat the last year's first half investment in inventory. However, we have taken the decision to purchase additional inventory in the U.K. in half 2 to ensure supply for Christmas 2026 and Easter 2027. We remain disciplined on capital investment in our existing facilities with fewer new projects, net core capital expenditure of GBP 15.4 million was lower than last year. As a result, adjusted free cash flow was positive. We're into the last year of major investment in our new Canada facility. In total, we've now spent GBP 80 million with operations due to commence in January 2027. We expect to spend around GBP 25 million in the second half of the year to complete the core project with CapEx relating to bacon being spent in 2027. Total CapEx will be higher than originally assumed a year ago, which includes both changes in scope and incremental inflationary pressures on building materials and automation equipment. We expect the project will generate significant value for the group and it provides an important platform for future growth and long-term returns. We also paid GBP 3.6 million towards the joint venture project in Saudi Arabia in half 1, with remaining payments expected in the second half. Net bank debt was a little under GBP 200 million at the half year, lower than at the same time last year. This equates to leverage of 1.4x. Our balance sheet remains strong. As we said in March, we've strengthened our access to funding with GBP 450 million of revolving credit facilities for at least the next 5 years, providing flexibility to deliver future growth. In addition, these bank facilities are enhanced by the ongoing benefits of our lease and customer supply chain financing with margins typically 0.5 to 1.5 percentage points lower than our bank facility. Before I hand back to Mark, let me cover the outlook. Overall, trading from our core meat and fresh prepared food businesses were strong in the first half of the year. In addition, improvement plans are starting to deliver in Seachill. However, significant challenges continue in Foppen. As Mark said earlier, we now expect to achieve full year adjusted PBT from continuing operations in the range of GBP 66 million to GBP 71 million. This is higher than our previous range of GBP 60 million to GBP 65 million despite the ongoing challenges in Foppen and reflects the removal of Dalco losses from continuing operations and the favorable FX movements I talked about earlier. As previously guided, we expect net bank debt to increase over 2026, it will also now include the impact of the additional second half investment inventory, though we expect to remain comfortably within our targeted 1 to 2x leverage range. Full year CapEx is still expected to be around GBP 100 million. Core CapEx is trending to be at or below the lower end of our GBP 50 million to GBP 55 million guidance alongside further CapEx in Canada as the project nears completion. Looking at 2026. We expect first positive earnings contributions for our investments in Canada and Saudi Arabia next year, alongside the resilience and growth potential of our existing core business, this provides a good platform for the future. Thanks for listening. I'll now hand back to Mark.

Thanks, Matt. So an encouraging first half. I'm pleased with our performance. Let me now touch upon our strategic progress. Our vision is to be the global partner of choice built on our world-class red meat capabilities. We believe this is an apt description of what Hilton Foods is, particularly with the high growth potential from fresh prepared foods. Our competitive advantage comes from our strong capabilities and positions in red meat, moves into adjacent categories with good margins will be aligned to these. Let me remind you of the 3 growth levers we laid out earlier this year. These will be the cornerstones of our growth plans. The first is maximizing the core, essentially continuing to utilize our existing structural advantages as well as driving continuous improvement. The second lever is enhancing the mix. We are focused on increasing our exposure to sustainably higher margin and growing segments. We'll do this through scaling in areas where we already have existing relationships and capabilities. For example, in value-added meat and fresh prepared foods. Enhancing the mix is also about ensuring our portfolio is optimized. This includes resolving challenges in our seafood businesses, particularly in Foppen. The third lever is geographic expansion, replicating our partnership model in new underdeveloped markets. We'll do this through differentiated quality, efficiency and innovation. We've made good initial progress against each of these growth levers. It's important we continue to focus on maximizing the performance of our core meat businesses. This is our Heartland and where our inherent strength lies. In March, we said we drive further manufacturing excellence throughout the group. We continue to invest in automation to improve efficiency. A good example is the use of our line control technology in our factory in Huntington. We've materially reduced [indiscernible] waste by utilizing machine learning to continuously optimize pack weights. This is being rolled out across our product lines and factories. We also said we continue to focus on product innovation and category leadership. This is increasingly a feature of the food supply chain. Food and innovation has always been core to what we do. We continue to develop new targeted product ranges for our customers. These respond to the wider economic environment and changing consumer trends. In the first half, we introduced mixed protein mince in Denmark and the Netherlands. This comes with a lower price point. We also introduced a new flavored mince product in the U.K. This provides customers with a differentiated value-add product. We're expanding into adjacent categories. This includes slow cook products, which are increasingly popular with customers. Although still a relatively small percentage of the U.K. sales, so volumes were up 6% in the first half. This remains an area of potential growth for us. Our focus on quality, efficiency and innovation is the reason why our retail customers choose us. I've already mentioned that we extended our meat partnership with Tesco in the U.K. in the first half. We also continue to seek new commercial opportunities. We plan to roll out the supply of products to our partners, New Zealand, South Island stores in the second half. This is in addition to our existing supply to North Island stores. We're now supplying Burger King Sweden. This follows our investment in frozen burger lines in '25 for our retail partner, ICA. This is an example of how we can use existing capacity to add profitable volume with new customers. These are just some examples of how we're maximizing the value of our existing core operations. This helps us deliver volume growth against the backdrop of continued high raw material prices. Moving on to enhancing the mix. A key component of this is optimizing our portfolio. We said in March, we'd look for solutions to resolve challenges in our seafood and vegan and vegetarian businesses. Our overarching objective is to reduce earnings volatility and improve group returns. That means creating greater flexibility and optionality for future value realization from these businesses. In July, we announced we had agreed to sell Dalco to live kindly for GBP 5.4 million. The transaction is expected to complete in quarter 4. Dalco has good facilities, but the market requires consolidation. I'm pleased that Dalco is going to a buyer whose vision is aligned with this. For our seafood businesses, we're taking a very focused and disciplined approach to investment and performance. In the U.K. at Seachill, we've been implementing a range of initiatives. These include improvements focused on increasing yields. We've also restructured some departments to rightsize the business. There's more to do, but I'm pleased with the progress made to drive this business back to profitability. In Foppen, we continue our efforts to improve commercial performance. This is key given the poor financial results in the first half of the year. We're also driving operational efficiencies. However, we still await clarity from the FDA on the restart of exports to the United States from our facility in Greece. The outlook for Foppen continues to look challenging. We recognize the current situation cannot continue indefinitely. As a result, we'll assess all options for the future of the business. Now turning to fresh prepared food. We're also looking to enhance our mix by moving more materially into fresh prepared food categories. These are traditionally higher margin. They also have higher growth rates. The market in Central Europe is forecast to grow at 8% per annum. We continue to develop plans to materially increase capacity and upgrade facilities in Poland. We estimated back in March that investment of around GBP 30 million would roughly double the capacity of our facility. However, we are assessing opportunities with our partners to materially increase the scale of this expansion. This would future-proof our long-term growth ambitions. This may result in higher capital expenditure but also higher profit expectations. Full scoping of the longer-term project is expected to be completed around the end of '26. Subject to suitable returns we could start spending CapEx in '27 and operation could commence as early as the back end of '28. In the meantime, we've implemented capital light plans to meet growing near-term demand. Geographical expansion is the third growth lever. As you know, we have 2 current projects in Canada and Saudi Arabia. Both are expected to generate earnings in '27. I recently visited our new state-of-the-art facility in Canada. Fit Out is newly complete, and it looks impressive. Once operational, it will be our most automated facility. We said it will be operational in '27. And I'm pleased to say we're on track to launch right at the start of the year, with production ramping up over the first half. At the same time, we will work on installing the bacon production lines and they will come on stream later in '27. The facility in Saudi Arabia built by our partners, NADEC, is expected to commence operations in late quarter 4 '26. It's an important milestone for the group and this is for a period of at least 10 years. More broadly, we see further opportunity through our retail partners, international footprint and network. So as I said at the start, we're doing exactly what we said. Let me close by outlining my confidence in the future. We have a resilient and cash-generative core business. This is supported by structural advantages and a strong record of execution. The first half performance of our core meat and fresh prepared food businesses helps demonstrate this. We have well-invested sites. We estimate it would cost well over GBP 1 billion to replicate our manufacturing capability. This strong platform gives us an envious position. We have a clear strategy to drive growth. This is built around maximizing the core, enhancing the mix and expanding geographically. I provided you with some examples of how we're delivering against this growth agenda. We will apply a disciplined approach to capital allocation. We will only invest in opportunities that generate attractive returns and underpin our group return on capital employed target of at least 20%. This positions us to deliver sustainable profit growth, strong cash generation and reduced volatility. We believe this will deliver compelling value for our shareholders as we focus on being the global partner of choice built on world-class red meat capabilities. That concludes the presentation. Thanks for your time and listening. I'll now chair the Q&A. As usual, can you ask questions via me and I will allocate appropriately, as I said before, the difficult ones to Samy. And can I also ask that you introduce yourselves and your institution, particularly for the benefit of those listening to the call. Thank you.

Damian McNeela from Deutsche Numis. Okay. So could we talk a little bit about the competitive dynamics in Ireland, please, Mark? And I know this might be a tricky 1 for Samy, but also how we should think about the volume outlook for the second half and how the retailers are thinking about Christmas relative to last year, given where the consumer is? And then just -- can you remind us about how much the bacon investment is in Canada and what the incremental sort of volumes are attached with that, please?

Looks like you're going to be busy, Samy. Let me talk about the sort of the landscape and the run-up to Christmas. Actually, if I'm honest, it looks pretty positive for us. And I think we spend, if we're not careful, a lot of time in this room talking about the U.K. And I said in the presentation that the business isn't just about the U.K. -- it's effectively a global business. The U.K., I think, is probably about 1/4 of the overall. But if we focus on the U.K. specifically, we're pretty optimistic about the second half. We see evidence that there is a lot of activity around promotions coming that we are working with our customers to deliver against. We think the second half is going to be particularly strong. So if I hand over to Samy to talk a little bit about Ireland and the competitive dynamics over there and then maybe we'll both come back and talk about bacon at the end.

Yes. I think you raised the point, I mean, effectively in Ireland, which where we have had challenges and a lot of it is coming from volume a year ago. We've added actually volume we done, we increased capacity in that respect. And since then, volume have been under pressure, primarily from a competitive standpoint as our customers were effectively tendering opportunities, I mean, towards other options that they had. At this stage, I mean, it's a cost dynamic that we are trying to address, I mean, over there in order for us to be competitive and regain volume momentum I mean over there. We have a great facility. I mean let me put that in the perspective of the fact that Ireland more or less is about roughly, let's say, a bit of a 1/4 of the U.K., I mean, in terms of size. So it is important. I don't deny that. It is a market where effectively the meat consumption is high. But on the other side, effect in terms of a group impact, it is effectively manageable within the grand scheme of things that we have. The volume dynamic is currently being addressed by reviewing all of the opportunity we have from a cost savings standpoint. I think Mark alluded to that in his speech relating to all opportunities we have on effective giveaway or effective productivity and line speed and automation and so on, which we are addressing [indiscernible] to make our offer much more competitive and regain volume momentum. The expectation now is to effectively eradicate the impact of this volume dynamic that is hurting us, to be fair, and through effectively a stronger interventional cost, that's going to position us much more favorably in the future tender that are going to come across and so that we effectively regain volume momentum coming into the next year. And Christmas, of course, is going to be an integrated part of that extremely important to the overall business dynamic in Ireland.

Okay. So if we talk a little bit about Canada, and I'll start and if I miss anything, Samy can come in. I'm going to start by saying there's been a lot of debate around the investment in Canada over kind of the last 12 months. And it's been almost seen as a negative. I would come from the opposite end of the telescope and say, our investment in Canada is a huge positive. I was over there with Samy a few weeks ago. Samy was there last week. I'm no doubt that come '27, there will be invites going out for you to come and have a look at it. This is a world-class facility by anybody's definition. I think it's going to set the standard for the packing of meat globally. It's an impressive location. And yes, the costs have gone up. But ultimately, the costs get paid back through the model that we have. And if we want to go into the detail of that, Matt can probably articulate that better than anybody. In [ wrong ] terms, and this isn't absolutely specific. The incremental CapEx on bacon will be about GBP 20 million-ish. It will be there or thereabout. And the returns will be in line with our return on capital employed of kind of 20%. But let me just go back a while, and for those of you that have been involved in Hilton for longer than me, you'll remember that when we invested in Australia in the early days, there's a gradual buildup. So for this year, as an example, we'll start packing meat at the very beginning of January, and we'll ramp up production to get to about the half year before we hit anything like for production. So you don't get the returns while you're ramping up. They come in years 3, 4, 5 when the business is established. And that is a typical Hilton model. That's what happened on every investment of scale that we've made in the past, and this 1 is no different. And then the final bit that I would say, yes, the costs have gone up. But could you tell me any building project globally where in the last 12 months, costs haven't gone up given the world that we live in, I don't think there's any. And maybe sounds like I'm being a bit defensive of it. I'm not -- actually, I want to be able to start talking about the real positive things that are going to come from this. Because if we get this right, the opportunities with Walmart are never ending. And that's where we should be focusing our attention, getting the launch right, getting the ramp-up right and actually demonstrating to people like yourselves and our shareholders, just what a great facility we've got. Have I missed anything there, Samy? No. Thank you.

Charles Hall from Peel Hunt. You haven't said much about Australia in these sets of results. Is it just business as usual? And obviously, there's been quite a lot of price inflation for protein in Australia as well. It seems as though the consumer is more resilient in that market. And are there any more opportunities for future business or investment in Australia?

It sounds like we've been doing a lot of traveling recently because probably have. I've just recently been down to Australia as well. And Look, the Australian business is a great business. Got great facilities, and we've got a customer that really values what we do for them. I said in my speech presentation, that we are starting to supply in the South Island and New Zealand. That's happening as we speak. We're already doing some stores. We'll have all the stores under our remit, I think, by the end of October, November. So we're growing the business. We talk about inflation. One of the benefits of gray hairs and age is you've seen inflation and deflation lots of times over the years. We have to play the cards we're dealt, and wherever we operate, whatever country we operate in, you can only operate in that marketplace. And Australia is a good example where there is -- there has been inflation, but working with the customer, we've managed to grow volumes as well as have the raw material price increases. And it demonstrates, if you work hand in glove with your partner, you can in whatever dynamics that exist at a particular time, do a really good job of generating value for both. I know because when I was over there, effectively the #2 was just about as complementary to my team down there is I've ever at a retailer about any team. That's a great place to be, and the results are speaking for themselves. And results are very strong in Australia and New Zealand.

And then switching to Seachill. Do you think you've now put the measures in place to turn it back into profitability? And can you just explain a little bit more about what you're actually doing to increase yields and what the impact on the business is? Yes.

I'm going to -- a small one to say this because I think people have started this year before and said that they've they've sort of. Look, I think we're doing all the right things in the business in terms of getting into a good place. We are focused on cost in terms of people. We've dramatically reduced the number of agency staff that we have on site. That's direct on to the bottom line. We've had projects looking at yield out of fish. One of the challenges with any protein is maximizing the use of all the parts. You've heard other people that work in the protein world talk about those things. We perhaps haven't been as good at that as we should have ought to have been and we've worked quite hard on that. We're working hard on making sure we're sourcing in the right way as well. It's a business improvement plan that runs right across the [ Gamba. ] You haven't seen an impact in the numbers, but we are already into the second half. So whilst we're reporting in September, we've got 2 months of the second half, and we can see the benefits that are coming through from the work we're doing at Seachill already. So it's a business that we should be interested in getting into the right place. If you look at the world that we all operate in now and you don't need me to tell you this, pure protein is becoming a more important part of the diet, particularly as more people get into GLPs, whether they're injections or tablets. Tablets are coming, and so that means more people are going to be doing it. And if you do get involved in that, one of the things that the medical teams tell you, you you've got to consume more protein because it impacts muscles as well as fat. So if you said to me, what do you think about Seachill, I think we need to have a really good go at seeing if we can find a sustainable tangible business out of that business before we do anything else with it. And that's what we do and that's what our plans are focused on.

Matthew Webb from Investec. Sorry to be the one to ask some questions about Foppen. First, is there any update on getting regulatory approval for exports into the U.S. from Greece. Second, is there a route back to breakeven if you don't get that approval? And third, if you conclude that there's no way through here and decide that you have to close the business down, what would the practical implications of that be in terms of your contractual responsibilities and what do you think the cost of that would be?

So the first thing I'd say, Matthew, is that look, we are a bit like Seachill. We are looking at what the art of the possible is for this business. But we are doing it a little bit with hands tied behind our back. And in doing that, I'll answer the first part of your question. No, we haven't had any update. We had a -- I think I've probably said this to you before. We had a -- we submitted our response to the audit and then we got feedback with 4 other things that needed to be sorted. We resubmitted to dealing with those 4 things that would have been probably April time that we went that back around about [indiscernible] but don't hold me to that date. And we've heard nothing. And so -- in terms of your second part of the question, what can you do to improve matters? Really, we need that decision before we can fully roll our sleeves up and start to improve that is because what is absolutely clear, running [indiscernible] in Greece with little or no volume going through it and putting through the volume in [indiscernible] Holland is more expensive. You've seen that in our numbers, and it's part of the reasons that we've got challenges in the second half and -- we're taking those numbers on the chin rather than putting them through the exceptional lines. They're in nice -- there lies the challenge. Do we see those -- do we think there is a way through to get the business to lease break even? Yes, there is definitely the way through. And very simply, you look at your cost base, you look at your -- our cost basis, where you manufacture, how you manufacture, how efficient you are in that manufacturing, how you source your product, et cetera, et cetera. You do all of those things and also you work with your customers to make sure that you are providing them with the right products at the right margin. And in the U.S., we've got a couple of really very, very good customers that do give the reason give the business a reason to believe there is a route out of this. So we're focused on that, and we'll be focused on it in the coming months. Ultimately, we'll have to improve matters at Foppen. And what I would say very simply is during '27, Foppen will be dealt with.

Clive Black from Shore Capital. A number of sort of rather disparate questions. First of all, what's the components of the transformation ongoing transformation work? I think you talked about GBP 10 million ongoing. Secondly, there was a very big working capital movement year-on-year. In steady state, what would you see as a sensible expectation for working capital movement in the business? And then lastly, I think Central Europe has probably been 1 of the surprise features of this company in the last 5 years. What are the components driving Central Europe? And how do you see the prospects there? Have we traveled and arrived? Or -- is there more to go for?