Mpac Group plc (MPAC) Earnings Call Transcript & Summary

Good morning, everybody, and thank you for joining us today for Mpac's webinar. As we wait for people to join the call, just some general housekeeping: This webinar is being recorded and will be available in due course on Equity Development's website. Also as a reminder, you can have a look at our analyst research and forecast, and that is available on Equity Development's website and is also on Mpac's website. Just in terms of the format today, Adam Holland, Mpac's Chief Exec, will give an overview of the recent trading update, and we will then move into questions. [Operator Instructions] So moving on to the webinar. Adam, Will, thank you very much for joining us. Adam, as we note from your recent trading update, external factors, particularly geopolitical unrest and obviously, Trump's trade tariffs seems to have caused global uncertainty, and this seems to have really impacted capital goods companies, especially with regard to capital projects and spend. If I could ask you, Adam, to give an overview of the trading update and talk us through what you've seen in the first half.

Yes. Thank you, Rachel, and good morning, everybody. It's Adam Holland, Chief Executive of the Mpac Group. I think there are just 4 or 5 points I want to make before we open up to Q&A. And the whole aim of today's communication is to make sure we give all of our investors a chance to ask questions and to be heard. The announcement that we released earlier this week really made 5 points. The first is that the impact of U.S. tariffs and the uncertainty, particularly in the U.S. market, has caused a number of our customers to move decision points to the right, deferring CapEx or in some cases, cutting CapEx in the U.S. in 2025 altogether. And I think in that, there are probably 3 trends that are important to bring out. The first is that to date, we've seen this in the U.S. This has affected U.S. and not the rest of the world for Mpac. The rest of the world has been soft, but not had the same impact that we've seen in the U.S. market. The second trend is the -- this has affected our Original Equipment business. It hasn't affected our services business. Services is where we would expect it to be at this point in the year, but our Original Equipment business has been impacted. And I think the third trend is almost a kind of nontrend, which is that our food and beverage and our health care markets have both been affected in the same way. So it hasn't been distinct to one particular type of market. And as a result, it's affected our -- the core businesses of the Mpac Group prior to the acquisitions that we made last year. The acquired businesses have been much less affected, particularly CSi. So that's the first piece, which is a tariff uncertainty impact on the group. It's not one that we forecast at the start of the year, and it has resulted in the change of guidance that we've issued earlier this week. The second piece is the direct impact on the group. So we started this year with an order book of GBP 118 million. As of 30th of June, our order book was down to GBP 90 million. That's a drop of GBP 28.5 million reduction in our order book. And that obviously has an impact on the revenue coverage that we have going into the second half of this year. We're also anticipating to finish this year with a lower order book than we would previously have guided to. And that means that revenues next year will be impacted. We'll start next year with a lower order coverage. So although this is -- it's a pause in U.S. spending, we don't believe this is the end of investments in the U.S. The markets will recover. The impact on Mpac is likely to extend beyond the end of 2025. The third piece I'd like to just draw out of the RNS that we released is the impact on net debt. Net debt is marginally higher at the end of June, and we will end the year in about the same place that we started the year, GBP 37.5 million of net debt. That's about 1.6x, 1.7x EBITDA. We're comfortably within covenants, but we are obviously managing cash carefully. The reaction to what we've seen in the markets is important for us to bring out too. With demand low in the U.S., we've taken the opportunity to accelerate cost synergies in the U.S. And earlier this week, we announced the closure of our Cleveland facility. We're going to consolidate the Switchback business into our facility in Boston, that's the business that we acquired last year. There are some cash aspects to that. There are also a noncash impairment charges of around GBP 11 million associated with the closure of Cleveland and annualized cost savings of about GBP 1 million that come out as a result of those changes. So quite significant changes. And the result of all those management actions is that we'll emerge from this with a much simpler operating footprint in the U.S., more efficient operations to build from when markets recover, and they will. The fifth point, and it largely, I think, overshadowed some of the comments we've seen on the Boards recently this week, and that's a shame because it's a very positive story for the group. The pension buy-in was also announced this week after many, many years of working towards taking the pension contributions into -- or the pension scheme into surplus that the change in moving to buy-in significantly simplifies the balance sheet. It's a very good news story for the Mpac Group. And I think it's important that it is not lost in amongst all the other more challenging market conditions that we've talked about in the U.S. So I think those are the 5 points I really wanted to bring out. U.S. tariff uncertainties, the impact on the order book, where we are on net debt, the actions that we've taken and the pension scheme.

Great. So if I move on to questions, and there have been a number that have been put to us already. So I'll just work my way through those. First up, is it the financing of projects that is causing concern to your clients or are they more concerned about consumer demand?

I think what I'd say, Rachel, is this is really the impact of uncertainty in the U.S. It's hard to generalize for every customer in a single soundbite and get it right and accurate. But if I was to take away the key themes that we've seen in our customer base, it's uncertainty that's causing customers to delay decision-making and that's causing projects to move to the right.

Okay. And how did the U.S. order postponements come through? Was this within a short space of time? And how many customers canceled orders?

Okay. I guess there's 2 questions in there. I'll take the second one first. I think in terms of cancellations, we haven't seen any cancellations as a result of the tariffs in the U.S. And that's important. I mean, I think to generalize from that, committed CapEx in our customer base is committed and they've continued to follow through on those projects that they've already launched. What we've seen is that new projects aren't being launched. And your point about timing, I think what I'd like to do is just sort of step through how things progressed during half 1. And if I go back to the end of quarter 1, and we released a trading update alongside our full year guidance for -- or full year results for 2024 just after the end of quarter 1, what we were seeing at that point in the year was that the U.S. have been slow, but orders in the rest of the world were where we expected them to be at that point. And so broadly speaking, we were on guidance for order intake at that point in the year. That's not an unusual place to be at the end of quarter 1 because quarter 1 is always a slow quarter for us. We don't tend to see significant capital equipment projects launched in the first quarter of the year anyway. And the first kind of normal quarter of trading for order intake for the Mpac Group tends to be quarter 2, and we see performance continuing through the rest of the year. Through April, order intake in the rest of the world continued to be exactly where we thought it should be, no surprises. The U.S. was slow, but what we saw was that orders in April were being pushed to May. So no change to the overall shape for the whole of quarter 2, but just a deferral of orders by a month-or-so. That is not unusual at all. For us to have a quiet month, it happens. In May, we saw a repeat of that same performance. So by the end of May, we could see the orders that we'd expected to close in April and shifted to May had then been pushed to June. So June was looking like an absolute bumper month. We were starting to get fairly interested in the data at that point because if June doesn't close with that bumper month, we don't catch up, that's a whole quarter, and that really would be unusual. Through June, that kind of month by month by month deferral of project decisions by customers started to change. And we started to see the first customers talking about not just moving by a month or by a quarter, but cutting CapEx for the rest of 2025 and pushing all of their decision-making for the U.S. market into 2026. In some cases, customers were really specific about the date in 2026 that they'd be back and talking about those investments. None of those projects that were planned were shelved. They were all postponed. So the pipeline of prospects that we were looking at for future orders didn't get smaller, but it did get pushed to the right. And it kept being filled up as well. We also saw the kind of pipeline of new qualified prospects continuing to fill up. But if the orders are not coming through to the decision point and it's affecting not just the actuals in quarter 2, but also our forecast for quarter 3 and quarter 4, and that really is a point at which we have to pause and say, this is not panning out the way we expected it to. And that led to the announcement that you saw on Tuesday morning this week, where we've revised guidance for the rest of the year. So it's been a series of observations and changes in customer behavior through quarter 2 that led us to this point today.

Yes. I mean -- that leads on to another question, which you may have already answered. Have clients given you any time scales regarding their decision-making process? I mean you gave an example there where someone said it's going to be next year.

Yes. I mean the answer is yes. We speak very closely with all of our customers, and they vary. So there are customers who are continuing to push decisions to the right by just a few weeks or a few months, and we'll continue to work with them. There are customers who, as I've said, have pushed all of their U.S. capital investments into 2026. There are other customers who've reallocated capital around the world, so who've taken the decision to pause in the U.S. and to divert those spends to other regions of the world. And we're working with those customers on those projects. Obviously, they take a time to create the project and bring them to a point where orders can be placed from a standing start in quarter 2. So it really varies quite significantly, but we're close to each customer on a case-by-case basis.

Are the health care and food and beverage markets as defensive as the company believed?

Yes. Look, I think at the heart of this question is whether the pause in capital investments in the U.S. is a pause or something more fundamental? And I just don't believe that investment in FMCG production in the U.S. is finished. I was in the U.S. earlier this week, and it doesn't seem that way to me. What we're seeing is a pause. I think these are I think these really are exceptional circumstances. I don't think any of us were expecting the Liberation Day announcements and the impact that, that has had on U.S. markets. And I think over the longer time horizon, I would expect the investment in FMCG production to resume. The fundamental drivers of population growth, urbanization, those all remain. The longer-term impacts of the trade tariffs, the intended reshoring of domestic production into the U.S., I think, is a positive driver for Mpac for the long term. I think also operating cost pressures, which are very high on FMCG producers at the moment, the price and cost pressures squeezing operating costs, automation is a way of addressing that, improving efficiency of production lines. Those trends are all there. Markets will recover. The key question is when, and that is why it is a challenging position for Mpac to be facing today. It's not where we wanted to be. It is not.

Okay. Is Mpac losing market share to larger competitors?

No. Now I can be relatively sure on that. What we've seen is not that we're hitting decision points and we're losing to competition. We're not hitting decision points and winning either in the U.S. There's just nothing to swing at. That's the issue that we've seen in the U.S. markets. And as a result, we can be fairly confident that we're not losing share. I've met with many of our U.S. customers myself personally. And they are facing tremendously difficult situations with how to judge what to do with investments in the U.S. They're not easy decisions for them to make, and they're pushing decisions to the right for, I think, for very sensible reasons, and we have to respect our customers in that.

Okay. And I think you touched on this earlier, but U.S. tariff policy has caused disruption in other markets. What are your customers in Europe saying about their plans?

Yes, I have touched on it. I mean look, markets have been softer outside the U.S. It's not true to say that the markets outside the U.S. have been unaffected. The effect has been notable outside the U.S. But if we were seeing that same non-U.S. behavior all over the world, we wouldn't have issued new guidance earlier this week. The difference in magnitude in the U.S. is very significant. It's a completely different scale of effect inside the U.S. And if I was to kind of, I guess, to draw an anecdotal observation of what we've seen outside the U.S., the organizations that have pushed decision-making to the right in non-U.S. countries tend to have been the multinational companies that operate everywhere, and they're taking decisions that are influenced by the U.S. market, even though we're describing other territories as well. So I mean, that's not true in a kind of global sense and there's no counter example, but an observation of the general trends, that's what I'm seeing from my chair. So yes, softer outside the U.S., but the real effect is inside the U.S.

Okay. How are your recently acquired businesses performing?

I think probably that's a good time to bring Will in. So Will, can I turn to you?

Sure. I'll take this one up. So I'll start with CSi. So in the first half, as with the rest of our group, CSi saw anticipated orders from U.S. customers being deferred, but they were able to compensate orders from that region with customer orders from other regions. So in the first half, they've traded well. They closed June with a strong order book. As in prior years, CSi order intake profile is typically second half weighted. So that's factored into our forecast, but it's supported by a very strong pipeline and with limited exposure to the U.S. market. Moving on to BCA, where they started the year with a good order book and revenue and profit in the first half was in line with our expectations. Quarter 3 will be critical for BCA order intake. There's a strong pipeline again, and we're confident they can convert that pipeline during quarter 3 to orders. So overall, order intake, revenue, profit and cash generation from the 2024 acquired businesses has been positive and in line with our expectations.

Okay. Will, and I think this is another one for you. Analysts have forecasted an increase in net debt at year-end over that previously forecasted. Are your lenders comfortable and supportive still?

Sure. So yes, correct. The analysts are guiding to net debt at the end of the year, GBP 37.5 million, and that equates to 1.6x EBITDA. So that's comfortably within the covenant of 2.5x EBITDA. And in respect of interest covenants, the full year covenant or full year forecast suggests 5.1x cover against the covenant of 4x. So again, comfortably above the covenant. And we remain in contact with our lenders. They're very supportive. They see that despite the news this week, Mpac is forecasting to generate in excess of GBP 23 million of EBITDA, and they see that as a sound financial performance despite the challenges that we announced this week.

Are there any additional measures or actions that Mpac can take to drive further efficiencies should they be required?

I think I'll take this one, Will. So it's a very broad question. And I think the way I'm going to answer it is I'm just going to refer back to a statement that we made in the RNS this week. I've just got here. So look, what we said at the time we released on Tuesday was, given the difficulties in industrial markets, the Board continues to evaluate further options to simplify global operations, and that really is the case. So there are always things that we can do in response to the market conditions we find ourselves in, and we're going to continue to evaluate them as we face changes in the months to come.

Okay. And then what's the plan to always consolidate the North American operational footprint and originally, over what time scale?

This is a strategic decision, I think I have to say that from the outset. If I take a step back and we ignore the conditions that we're facing that led to the timing of the decision and just think about what we're trying to do, we've taken a really strong look at the operating footprint of the group. And the structure we had in the U.S. with 2 relatively small sites supporting the U.S. market perhaps wasn't the right structure for years to come. And if we think about the -- putting in place a really efficient structure that we want to build from as that market develops and grows in the future, that isn't the place we want to start it. So we have taken time to think through what is the right operating structure for the group. I think the other piece of this, though, is I would much rather be spending 2025 driving sales synergies. When we made the acquisitions last year, we talked about where we could see upsides above guidance for 2025 and future years. Our focus was on sales synergies and driving top line growth. I'd much rather be running full factories today, and that very sadly is not the case. We have a situation where the U.S. markets are not performing the way we expected them to. And so it's absolutely right that we switch our focus to the cost synergies that we'd already identified in the strategy and accelerate those plans. So I really do want to emphasize, I know these are long-term strategic decisions that will have an impact, not just this year, but for many, many years to come. And the closure of the facility has to be taken very seriously. It affects the people in our business, the families and the communities around us. And if we get it right, it has a positive impact on customers. If we don't, it doesn't. So we take these decisions very seriously. And I want to emphasize it was a strategic decision that we've taken to set ourselves up for a better future.

I think that leads nicely on to the next question that we've received. What percentage of U.S. capacity is the company closing? And importantly, have you left enough capacity to accommodate growth as and when things return to normal?

It's a nicely phrased positive question. I think I'll answer the question in about sort of 4 different ways, and you can pick your -- the piece that gives you the most insight. We had 2 factories in the U.S., roughly equal size, and we've closed Cleveland and consolidated with Boston. So that is 50%. If I look at it in a slightly different lens, the headcount changes that we've made in closing Cleveland and in reducing the capacity in Mississauga and so on, represents about 10% to 15% of the overall group or 20% to 25% of the pre-acquisition group, the group before we made the acquisitions last year. So there are significant changes that we've made, primarily in Cleveland and Mississauga plus some reductions in other sites as well. And perhaps it's worth just mentioning what those are because I don't think they've come out clearly in the communications to date. We -- as we saw this developing through quarter 2, we didn't sit and do nothing and wait. We've been reducing our contractor headcount across the group to really drive utilization in our factories, not just in the U.S. but worldwide, really push margins hard, drive utilization. We tend to carry about 10% to 20% of our headcount in contractors at any one time, and that gives us the flex that we need to manage and start of new projects and completion of old projects and so on. And that also gives us flexibility to manage downturns to a degree. So that has really helped us to sort of flex the capacity. What about recovery, that was the other part of your question? I want to turn back to 2023. In 2023, we started the year with about 500 people in the group. We recruited 100 people that year. We're now about 1,000 people in the group. Could we, in the event of an upturn, recruit a couple of hundred people in the course of the year? I think we could. We've proven it in 2023. And if you add contractor flex on top of that, I think we're well placed to be able to recover. I think the key point to this is that we're recovering from a much more efficient starting point than we had prior to this restructuring in the U.S. So yes, I feel very positive about what it means when markets recover, but we're not going to plan the business around that and sort of hope for the best. That's not a way of running the group. So we'll respond when markets recover. We're well placed to do so.

Moving on, I'm not sure how much you can comment on this, but we've had a question. What has institutional investors' response been following your conversations with them this week regarding the trading update?

Yes. We had a lot of interaction with our investors, but I will not speak for them. That's for them to comment. What I -- I think I can give you a kind of a generalization of the kinds of response we've had. And I'd say, broadly speaking, our investors understand the market dynamics that we're facing. I think they're seeing the same external conditions of trade tariffs and uncertainty in the U.S. affecting quite a number of other companies and indeed, we're seeing the same in our competitor base also affected. And I think the most important thing to say that's come out from the vast majority of our conversations, the level of supportiveness for the swift actions that the management team have taken is really encouraging. I think we can't choose the environment. We can choose how we respond to the environment. And I'm encouraged by the way that the Mpac leadership team have responded to the environment and taken action quickly.

Okay. You highlight that Q2 is an important period for order intake, what are you guiding for Q3 and Q4?

You've probably heard quite enough from me for a couple of minutes. So Will, can I bring you in at that point?

Sure. Okay. Yes, quarter 2 is always an important quarter for Mpac. The reason being a good percentage of the value of orders that we take in that quarter converts and trades to revenue and margin in the year. So yes, it's an important quarter. With respect to quarter 3 and 4, our pipeline and internal forecast for quarter 3 and 4 are strong, and they include a higher value of the orders from quarter 2 that were deferred. However, based on the experience in the first half, we have applied greater sensitivities to those internal forecasts to help generate the guidance for the full year. So our revised guidance assumes approximately GBP 80 million of order intake in the second half of the year, and that leaves us with a closing order book at the end of '25 of around GBP 100 million.

And another question for you, Will. Analyst forecasts show a reduction in revenue, but an increase in margin. Is this all driven by site consolidation?

No, not all of it. I mean there are 2 factors here. There's the strategic footprint change, which does reduce cost in the year, and that's a recurring cost saving. But it also will improve efficiency and productivity by combining those sites. So that's a factor. Alongside that, there is tactical nonrecurring cost savings that we have implemented this year to help shore up the result. So there are 2 factors there. I think it's worth also saying in addition to that, there's the mix of revenue that's coming through in the year. One part of that is a mix between OE and Service, but also the year now will have a higher percentage of revenue generated from CSi, our acquisition last year. And 6, 7 months into that acquisition, we're seeing stronger margins come through from that business. So it's a combination of those factors. It's better margins from the mix, some tactical cost savings and then the strategic change that Adam has already referred to.

Okay. And leading on from that, a couple of other questions. I'm not sure how you can respond to this. But is your new guidance a worst case or a best guess?

Want me to continue with that, Adam?

Yes. Go for it.

Well, as I mentioned, we have applied greater sensitivities based on the experience in the first half. So it's not a best guess. It's taken a very comprehensive prospect pipeline and factoring that down, we've removed the majority of prospects from customers in the region where we've seen the most challenges to derisk the forecast. And it feels now like we have a profile that's balanced. It's not dependent upon a return to growth from orders in the U.S., and it gives us a balanced profile for the rest of the year.

Okay. And I think maybe, Adam, you've partially answered this or fully answered anyway. But what more -- is there more that you can do if markets fall further?

Yes. I'll answer the question. I also want to add to Will's answer to the previous question. And it's a difficult question to -- I've answered in a week where we've issued new guidance. And I think we have to acknowledge we didn't get the guidance right for this year. When we set out this year in January, we thought the year would pan out a certain way. We didn't anticipate Liberation Day tariffs. We didn't, at the time that they were announced, understand all of the impacts that, that was going to have on customer decision-making, quite how widespread that was going to be across the U.S. And so we've had to take a different view of the year this year. And the question you asked previously is have we got that right? We believe so. I mean, absolutely, we believe so. We've taken time during quarter 2 to really understand what's going on and not just sort of knee-jerk react to a month of deferrals from April to May or something or from May to June, but really see the trends and explore every opportunity to still maintain guidance before getting the point where we have to reissue. So that's what's led to the point we're at this week. Will conditions change in the future? Of course, they will. Things will continue to evolve through the rest of this year. We've got so many more levers around us now as a result of the acquisitions we made last year and the changes in the group and ways in which we can respond to what we see, it's those levers that we're going to be pulling. And that's our jobs, Will, myself, the Board, our job is to find ways to beat guidance, okay? So I'm going to spend the rest of this year looking at how we can use all of those levers to meet and beat guidance. That's the job. So that's going to be our focus.

I'm not sure whether you'll be able to answer this one, but what are the specific conditions your U.S. customers need to change, to renew the placement of orders?

I can't speak on behalf of my customers. And I think what I will just point back to is the kind of comments at the very start of the webinar today. What we see driving this behavior across the U.S. is uncertainty. And I think what will change that is a return to certainty. And I don't want to be misunderstood in that statement. We've seen a number of changes in U.S. policy, a relatively quick succession, and it's very hard to judge when the last change happens. So I'm not going to sort of pin it down to a particular moment in the future. I don't think our customers could either. What we'll do is respond to the facts in front of us. And we'll know that this is coming back and the markets are recovering at the point where we really start to see a few months in a row of overperformance from the sales team in winning orders, when perhaps some of the projects that have been pushed to future months come forwards and get placed a bit earlier than expected. That will be, I think, the first sign that we're really starting to see a change in U.S. behavior.

Yes. I mean there are a number of questions around Trump and tariffs, but I think you've answered that element clearly. Will, we've got another question for you. Mpac's pension liability has historically been a concern for investors. Can you give us an overview of the announcement and the implications for Mpac?

Sure. Yes. Again, right, it's been a concern for many years. It's a very large scheme relative to the size of the company. And it wasn't that long ago, it was in a significant deficit with an extremely long repayment period to recover the deficit. So we are really pleased to be able to announced this week that we've signed a contract with Aviva, and that takes the risk from the pension scheme off our balance sheet. We're now -- that announcement confirms the buy-in phase. So period between buy-in and buyout is 2 years. But important to note that from the point we signed that contract, we have derisked the scheme. We will continue to make contributions to the scheme until we achieve buyout. Those contributions since the start of the year have been going into escrow, and we fully expect that the total value in that escrow account after the 2-year period will be returned to the company. And because of the mechanism that we set up by paying the contributions to escrow, they will be returned free of tax. So it's really positive news. It's derisked now. There is a period where we will continue to pay into escrow, but that will be returned. And we will work with the trustees to, one, minimize the time frame to get to buyout and ensure it's completed in the most cost-effective manner as possible. But it's a really good news story amongst what's been probably a challenging update.

Rachel, I'd just like to take a moment before we move on to any other questions to say, a huge thank you to Will and his team and the trustees of the pension. What they've achieved together over many, many years to get the scheme to the point it is today, I think, really is worth celebrating. It's a huge moment for the group. And if you look back in time, any of our long-term holders will really understand how significant that is and what a large amount of work over such a long period has gone into this week's announcement. So well done to the trustees, well done to Will and his team. It's a significant moment.

Yes, absolutely. And from my perspective and my history with Mpac and my knowledge, a lot of investors would not look at Mpac because the first thing they said was about the pension liability. Moving on, your much larger competitor, Krones, appear to be growing in this environment. Granted they're only in food, but why is that? Is it scale and geographic diversification or do you think it's something else?

I don't think I'm going to comment on an individual competitor. I don't think it would be right for me to do so. I suppose one thing I will just draw as an observation would be that if I looked at Mpac's half 1 trading performance, our revenues were in line with our expectations. Our projects tend to be quite long. A short project for us might take 22, 23 weeks. A long project for us might take 18 months, 2 years. It can take quite a long time for a change in order intake, particularly in Original Equipment, to show through in terms of revenue and profit. And that duration depends on a huge number of different factors. And of course, we're offset as well by shorter cycle service performance, which has been on track. So we will see different timings from our competitors. And it's not to say that some competitors will -- who have more business outside the U.S. and less inside the U.S., will see different behaviors as well. We've seen that in our own group, as Will talked about, with the CSi business performing very well with much less exposure to the U.S. than the other parts of the group. It was, in some ways, very fortunate that we made that acquisition last year, and it's rebalanced our geographical revenues accordingly; otherwise, we would have been impacted much more significantly than we have been. So I think there's so many factors that affect individual performance and not overall alone, just timing as well. So let's see.

Okay. And a fitting question, I think, to end on. Are you still confident of your long-term growth strategy for Mpac?

Yes. Look, this has been a difficult week for Mpac, but the long-term fundamentals of the market remain absolutely solid. Those things that drive long-term growth in our sector are still true today, just as much as they were before this week's announcement. The growth strategy is good. What we're seeing is a short-term effect in the U.S., a pausing of U.S. investment. I don't believe that the U.S. market is finished and that nobody is going to be investing in the U.S. in the future. And we've taken short-term actions as a result to address that. The actions that we've taken for the short term have been picked from a list of strategic actions that we would always be intending to take to improve the way the group operates. We've chosen to take them now in response to the conditions that we find ourselves in. But they're strategic actions, and they're very much from the playbook. So look, the group strategy, I'm -- we do take time to pause and reflect and check that it's still appropriate. We have done. It is, and we remain absolutely focused on delivering that long-term strategy.

Great. Thank you. That concludes our Q&A session. There are a couple of comments in there, which I'm happy to feed back to management after this call. And if you do have any further questions, by all means, please feed those through to me, and I'm happy to pass those on. Adam, is there anything else that you would like to add at this point or to summarize?

We've covered quite a lot of ground, and I think it's really good that we've had so many questions in. Look, I suppose I want to -- I just want to reiterate some of the things we started with. This is not where we wanted to be. This has not been an easy week for us to work through. It's not where we wanted to be, but there are positives here. We will emerge from this with a simpler operational footprint, a more efficient footprint to grow from in the future. We'll emerge from pension changes with a simpler balance sheet. And we'll emerge from this whole process ready for growth when markets recover, and they will recover.

Thank you very much. That concludes the webinar. I'd like to thank Adam and Will for that helpful overview and also for your candor in responding to those questions. There will be a short feedback e-mail, which I will circulate shortly, and I know that management would really appreciate your comments if I could ask you to complete that. And thank you, guys, and I look forward to speaking to you again at your interims in September.

Very good. Thank you very much.

Thanks, everyone, for joining.

Thank you.