Redox Limited (RDX) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Redox Limited FY '24 Results Call. [Operator Instructions]. I'd now like to hand the conference over to Mr. Raimond Coneliano, CEO.

Thank you. Good morning, and welcome to Redox Limited Full Year 2024 Results Briefing. Moving to Slide 2. I'm Raimond Coneliano, CEO and Managing Director of Redox and presenting with me today is our Chief Financial Officer, Kim Yap. Turning to Slide 3. As per the agenda on Slide 3, I will open the presentation with some of the year's performance highlights and talk through some current issues that have impacted the operating environment and our results. I'll then pass you to Kim to take you through the financials before I come back and add some comments on our strategy and outlook. We'll then be happy to finish with some Q&A. Moving straight to Slide 5, the 2024 highlights. Despite the geopolitical and macroeconomic headwinds that impacted the industry over the past year, Redox was able to achieve volume growth in line with historical average and successfully improved gross profit margins in FY '24. While price discovery continued across the chemical distribution industry in 2024, we steadfastly focused on executing on our strategy and controlling factors within our influence to provide customers compelling value and drive future revenue. As a result, we recorded an uplift in underlying net profit after tax and FX to $94.8 million, up 11.4% versus PCP and a 2.6 percentage point increase to our gross profit margins to 23.4%. Underlying EBITDA FX margins also improved 0.8 percentage points above PCP to 12.2%. The business continued to generate strong cash flow in 2024. Cash flow from operations was $115.9 million, representing a free cash flow conversion of 87.6%. Overall, our net cash position at the end of the year was a healthy $177 million, providing us with significant capital for M&A when the opportunities arise. So, for our shareholders in 2024, we produced pro forma earnings per share growth of 11.8% and an after-tax ROIC of 19.1%. The Board has declared a final dividend of $0.065 per share, which takes the full year dividend to $0.125 per share, equating to a payout ratio of 73% of net profit after tax and in the middle of our target payout ratio range. Turning to Slide 7. Key drivers of revenue in 2024. As all investors will be aware, operating revenue trends will be influenced and impacted by factors, some of which are in our control and some of which are not. On Slide 7, I've tried to provide some of the macro things, which have impacted on revenues in the chemical distribution sector and on Redox. In FY '24, the sector was buffeted by global price discovery, industry destocking, geopolitical uncertainty, which affected trade flows and shipping times and reduced customer demand from ongoing macroeconomic weakness. At Redox, we are focused on controlling factors within our influence to drive future revenue. We have continued to invest in our sales team, which has expanded to 181 representatives. We have sought out new business opportunities, increasing our active customer list by 20% in North America. Our product portfolio also expanded in FY '24 as we consolidated exciting new products from our acquired businesses alongside new product launches, successfully expanding our product offering by over 71 active product groups. Our unique in-house developed CRM ready bids continue to facilitate growth with more than 3,500 new sales opportunities being tracked. Moving to Slide 8. Performance by segment. On this slide, we have laid out the volume and revenue outcomes across our various industry sectors. You can see on the right-hand side the volume growth was evident in most sectors despite softer trading conditions and a volatile pricing environment. Animal Health & Nutrition benefited from supplemental feeding opportunities, while Crop Production and Protection volumes rose as sales environment improved and fertilizer prices stabilized. Plastics, Rubber and Foam volumes continue to outperform boosted by the integration of the Element Raw Materials acquisition and the onboarding of new suppliers and customers. Water Care volumes and revenue increased on the back of upgraded technical support. Turning to Slide 9. Performance by region. While volume growth was robust in the first half of the year across APAC, it slowed somewhat in the second half as customers demand eased off the back of a challenging economy. Pleasingly, North American volumes grew strongly throughout 2024, while revenue grew a modest 2.6%, impacted by pricing headwinds. The U.S. team recorded a 36% increase in the number of invoice sales customers. This compared to a 9.6% increase in invoices to customers across the broader group. Turning to Slide 10. Delivering on our M&A strategy. Redox completed 2 acquisitions in FY '24, Optigen Ingredients and Element Raw Materials. Post financial year, we then completed the Oleum acquisition. Oleum specializes in surfactants and specialty chemicals and pleasingly was fully integrated into the business in July. All acquisitions are in line with our stated acquisition strategy and have added new products, customers, suppliers, expertise and capabilities to Redox, which we believe will drive stronger growth in the future. We continue to review several strategic acquisition opportunities in APAC and North America. Moving to Slide 11. Sea freight update. As you know, the vast majority of Redox's products are imported with containerized freight rates being a key driver of price for our customers. As you can see from the chart on Slide 11, the China Containerized Freight Index has lifted noticeably in recent quarters as geopolitical events result in longer ocean transit and capacity good constraints. These costs will flow to higher customer prices in FY '25. We continue to monitor this situation closely, and we will ensure that we provide value to our customers during this period of disruption. Turning to Slide 12. Gross profit. Despite the challenges of FY '24, I've been very pleased that our gross margins have held up so well. They jumped 2.6 percentage points in FY '24 to 23.4%, well above the historical average. We believe that margins are variable, we can manage well and the improvement in 2024 should be attributed to improvements in our product portfolio mix, the fact that our sales team saw a larger proportion of smaller and therefore, more profitable sales throughout the year. And ultimately, the value that Redox creates for clients being rewarded appropriately. It is important to note that as the global chemical prices stabilized in 2024, gross margins did moderate during the second half of the year, albeit at levels above their long-term average. I would like to now pass to Kim, who will take you through the financial results in more detail. Turning to Slide 13.

Thank you, Raimond, and good morning, everyone. I will now take you through the financials, so we are moving straight to Slide 14. This slide tells out some of the key P&L numbers for 2024 comparing number gains the performance of the business in 2023. I will talk to some of the highlights. Not restating the revenue challenges already discussed, we are pleased to report an uplift in gross profit margin in 2024. The 2.6 percentage point increase can be achieved due to our disciplined focus on margin management, which also will help to drive higher profit to $266 million. We also demonstrated a strong profit update in EBITDA margins to 12.2%, an improvement of 0.8 percentage points. Pleasingly, we achieved an underlying net PAT FX of $94.8 million, up $11.4 million against FY '23, which we think was a good performance given the challenging environment. NPATFX was largely driven by higher profit margin and a $7 million contribution from the interest income. While our EPS growth in 2024 was an impressive 11.8%, the return on invested capital is 2.5 percentage points, but remained strong at 19.1%. Turning to Slide 15. The net profit bridge. Slide 15 shows our net profit before tax bridge for 2024. You can see the net profit before tax increased by $13 million to $129 million versus last year. Higher operating costs were mainly due to strong volume growth and the decline in sales revenue was more than offset by the higher profit margins. And the contribution for the net financing costs -- in summary, the improvement in net working capital and the cash position provided a positive contribution to the FY '24 results, favorable mark-to-market on the outstanding focusing contract movement also provides a small positive contribution to the net profit before tax over the period. Turning to Slide 16. Revenue and gross profit. As we have done previously, we have split our total revenue regionally. Australia, New Zealand and sales of level $1.05 million was 10% lower than last year. We have already discussed the key drivers of this decline. But to some extent, we did see some decline offset by some of the share of water gains and some of our large customers and product portfolio expansion in some specialty products and some in customer wings. Meanwhile, growth momentum in North America sales continued in 2024, driven by new customer wings, strong volume growth and geographical expansion. The small growth decline in other markets was due to a relocation of a point of sales from one large Malaysian customer the sales just moved regionally and was not lost to the group. Moving to Slide 17. Cash flow. You will see the strong one position in that Redox is in. In 2024, we generated $160 million in cash flow operation down $19 million from last year, representing a free cash flow of 87.6%. The small decline in cash flow in 2024 is mostly attributed to now complete unwind of our [indiscernible] position last year. Net working capital fell to $350 million in 2024, equating to 30.8% of revenue, which is within our normal historical range of 30% to 32%. The 1.5 percentage point from last year was due to the significant unwinding of working capital post the global supply chain crunching FY '23. Our net cash position remains very strong at $170 million. And net 0 debt on our balance sheet, we have the flexibility to take advantage of organic and inorganic growth opportunity. Turning to Slide 18. Our dividend & dividend policy. As Raimond has noted earlier, our Board has declared a final dividend for FY '24 of $0.065 per share. This takes the full year dividend to $0.125 per share, representing a payout ratio of 73% of the after-tax profit, close to the middle of our stated target policy of 60% to 80%. The final dividend we paid on the 20th of September 2024. I will now pass back to Raimond to cover our outlook and strategy. Moving to Slide 19.

Thank you, Kim. So, I hope you can see the business remains in good shape despite the challenges that the industry faced through 2024. Let's move to Slide 20. Leading distributor accounting calls. For those of you who are still unfamiliar with Redox, Slide 20 provides a snapshot of our business, which highlights some of our key operational strengths and differentiators, many of which we've built over almost 60 years. Today, we link over 1,000 active suppliers with over 7,000 active customers. We've carefully chosen our supplier partners to ensure Redox customers have access to the widest range of compelling quality products. We currently offer over 1,200 product groups, capturing over 5,000 SKUs. Supporting our operations, we have a dedicated team of over 400 employees, including more than 180 salespeople across APAC and North America and more than 100 stock locations. We are a highly diversified freight business with minimal reliance on any single supplier industry segment or customer. And due to our leading position, we have strong purchasing power which ultimately benefits our customers. We have an excellent sales team that was supported by our innovative internally developed CRM/ERP rebids, taking 10 years to develop. Every aspect of our business is enabled by this technology, which provides real-time high visibility into operations and helps us identify and take advantage of opportunities. Furthermore, our team are highly skilled and experienced with strong technical know-how. This is particularly important in the complex regulatory environment we operate in. All these features together have identified and delivered consistent growth for our business, achieving a 30-year compound annual growth rate of close to 11%. Redox is a truly robust and profitable business, and we continue to focus on growth opportunities globally. Turning to Slide 21. Slide 21 demonstrates the diversification of our business. The pie chart on the bottom right demonstrates diverse nature of industry sectors in which Redox operate. Human Health and Nutrition represents our largest sector by sales and in 2024 Redox source products from 53 individual countries. Importantly, there's no single customer or supply risk to Redox. Indeed, our largest customer represents only 1.8% of the year sales, while our largest supplier accounted for 3.1% of 2024 sales. Moving to Slide 22. During FY '25, Redox will continue to expand our geographic footprint in North America, bolstered our product portfolio, increase our share of wallet and grow our client base. We remain focused on driving organic revenue growth and anticipate strong volume growth at or above historical average in FY '25. We continue to review strategic M&A opportunities which will contribute to positive momentum. Due to uncertain geopolitical and macroeconomic conditions, the company has chosen not to give specific guidance at this time. However, the company believes that price deflation and destocking to be largely complete. Gross profit margins are expected to ease towards the longer-term average in the medium term as a result of expected expansion in the U.S. and commodity sales volume increase. Redox strategy and resilient business model has delivered consistent long-term growth and business expansion. The fundamentals of the business are strong and remains well placed to grow in the future. Turn to Slide 23. So, to finish up before we move to Q&A, a brief summary. I'm proud that despite the geopolitical macroeconomic headwinds that impacted the industry in FY '24, Redox was able to achieve volume growth in line with historical average and successfully improved gross profit margins. I believe this reflects the growing importance of chemical distributors and the value that we deliver. Redox has performed very well, which illustrates our strategically sound and highly resilient business model. Redox is highly cash generative, reported strong operating margins and return on invested capital, while it has maintained its leading position in APAC and with the growing North American presence. Redox retains a strong flexible balance sheet, which provides the company with the ability to drive future growth, both organically and through strategic acquisitions. Despite the various challenges in 2024, we were proud to lift the final dividend to $0.065 per share or $0.06 per share in the first half. On that note, I would like to thank you for your interest in Redox. Kim and I will now be happy to take any questions you have.

[Operator Instructions] Your first question today comes from Tim Piper from UBS.

Just first one, you've done well on volume growth over the last little while and you've called out FY '25. You'll continue to see strong organic volume growth. Is that going to translate into strong organic revenue growth as well in FY '25?

Yes. Look, I think with the price deflation largely behind us into FY '25, you can expect strong volume growth will result in strong revenue growth. But look, we haven't given specific guidance about revenue growth. Just to say that there is the restocking effect, I think, now coming into play in areas like in Crop, which I think we're seeing a lot of green shoots already. And just to give you a flavor of July, we had a volume growth of around 13%. So, 13.5% in volume. So, if that's maintained and improved over the year, I think we're in a very good place for growing revenues in FY '25.

Yes. Great. And that pricing headwind from a year-on-year basis, does that get easier or harder in the second half of '24 versus the first half of '24?

Well, pricing is hard to talk about as you know, Tim, with so many products and some are still going up and others are still going down. But if you want to talk generally, prices have moved within a band of -- if you take the whole basket together, 5% since September, October last year, sort of thing, so up a couple of percent on average, down a couple of percent by average month-to-month. So, it wasn't as big a deal in the second half. I guess, second half was more a question about fluctuations in demand and volume.

Yes. So, has that kind of normalized now as you exit the second half, you did call out some sort of destocking, what's customer activity looking like in the first couple of months so far of 1H '25?

Well, like I said, July was very strong. And just talking regionally, I think we had an outstanding result in Adelaide recently, and that was mostly into crop in July, which is very positive. And I think in New Zealand, there's a big turnaround coming. So yes, look, I think there's a lot coming down the pipe now especially infer, which has had the toughest time, I guess, from the destocking perspective.

Understand. And just to clarify your comments around gross margin. You sort of talked to moderating gross margin I mean that it is higher in the second half versus the first half. To understand that, you mean it's moderated through the course of the second half? And if so, sort of what kind of gross margin are you entering the first half of '25 as compared to that sort of second half number of 23.7%?

We haven't given those numbers. But well, I think the point that I should leave you here with Tim, is remember, each product category has a structurally different ability to extract margin and specialty products, generally higher margins, commodities, lower margins. if you do indent business without warehousing goods and those are lower margins. So, it's about the mix of -- and that's quite a complex answer, as you can appreciate. But the U.S. margins are structurally lower, but we do want to grow sales there strongly and we think there's a lot of good stuff coming there. And the third business is generally at probably a slightly lower margin as well. So, if you start thinking about plastics increasing for U.S. business, a lot of volume coming back in some of those lower-priced commodities, and the margin can drift lower, but it will be a good news story, Tim, because revenues will be a lot higher, and it will all be dancing down the street.

I want to squeeze one last one, and if I can. Just what you're seeing in sea freight container rates at the moment, obviously, going up, my understanding is very much price pass-through style industry around that as well. What kind of materiality, if any, do you have sort of late in the second half of '24? And is it going to provide a notable tailwind for revenue heading into FY '25? I know we're not sort of back to where it sort of rocketed to in the COVID conditions, but it has gone up?

Yes. I think if you assume during the supply chain crunch, the container freight was making up about 10% of the selling price back then. We're heading back towards that again after a pretty much lower rate in FY '24 for most of the year. So, look, those prices are passed through to customers. There's no way we can absorb those. So -- and yes, the impact doesn't happen quite instantaneously. I mean, you see on Slide 11, the uptick starts in January '24, and that takes months and months to months, maybe 6 months to start being evident. So, I expect it start being a notable factor anyway, in August and onwards.

Your next question comes from Rushil Paiva from Ord Minnett.

Just want to maybe just circle back to some of your comments on pricing and volume, particularly in the second half of FY '24. It did look like your revenue did fall at, I guess, an accelerating pace in the second half. I'm just trying to piece together some of the volume pricing comments. It sounded like you said that pricing has been relatively consistent since September of last year, sort of down that 5%, give or take, but volumes seem to have exited the year pretty strongly. You mentioned July, up 13.5%. But I guess can you provide just maybe a little bit of color on how pricing and volume dynamics have progressed sequentially in the second half of the year, just to, I guess, make that a little bit clearer in terms of what you've seen.

Yes. Well, I mean, let's pick one industry to talk about specifically. Let's talk about Animal Health & Nutrition. So, first half, very, very strong volumes, a lot of strong revenue, second half complete reversal, and that was just down to weather conditions. So -- but each industry has a story like that. I'd say just generally, what we were sort of taking what's sort of been the thing that we didn't count on was yet, just a general hesitancy a bit of holding back orders, trimming back the customers' regular orders. So, I assume and I'm not sure, but I assume that's because of the economy and interest rates biting in and it's tough for economic conditions that they're feeling. So outside of some specific ones like the Animal Health & Nutrition, which I think is pretty clear, and there are a few of those. Otherwise, it just seems to be down to general malaise. But there are areas where the volume has just continued to grow like water, for example, water treatment that's been a strong line.

Understood. Just wondering, just again on revenue development in the second half. You've noted some of the shipping issues that are affecting the industry. So, were there -- I guess, were there any events like the shipping issues or related that have impacted your revenue development in the second half, I guess, I meant that they were unexpected at the start of the second half that potentially push revenue into FY '25, anything abnormal like that to point to?

Look, there may be shipments that are stuck in Singapore. There's a lot of shipping -- transshipment problems in Singapore presently. And so maybe there's some revenue that may have created into FY '25 that otherwise, if everything was a bit more normalized, it would have came in, in FY '24, but nothing material. I don't think -- yes, I don't think so.

Understood. And I just wanted to circle back as well to, I guess, Tim's question on the gross profit margin. So, it did increase in the second half of the year. I guess, have you seen -- you have noted that there are smaller, more profitable orders that have been going through your book in FY '24. Did the -- I guess, frequency of those types of orders increase in the second half, and that's what pushed your gross margin higher? Or I guess what what's push it higher versus the first half? And I guess you talked about that normalization. And if you could provide a little bit of color as to how the gross margin has progressed sequentially again in the second half of the year?

Yes. Look, I think what we're doing is concentrating on those products with outflowing margins. There's something special about them. They are unique products or they've got a great future and we've got some advantages intrinsic to them. I mean the small -- the larger proportion of small orders is a Redox special strategic initiative. We don't discriminate against smaller customers, we love them, and that's been paying good dividends. And I think our sales people seeing that times of tap all around reaching further into their smaller customers and trying to help them save money too. And those smaller orders are always going to be more profitable. So, I'm excited and happy to see that dynamic at play as our KPIs and our incentive is working as they should.

Okay. Great. Maybe just one last question, just on pricing. I understand it's obviously hard to talk about forward pricing, given your large products suite. But maybe if you do have any expectations regarding pricing or even any commentary regarding what you're hearing from your manufacturers and their expectations for pricing in FY '25?

Yes. I think the talk of deflation is talking is now sort of swinging around now. But yes, I'm always careful not to turn anecdotes into anecdotes data because you can go down the wrong road down. But certainly, there's less talk about price decreases there's more talk about price increase. I think that would be fair to say not too controversial.

[Operator Instructions] Your next question comes from Pierre Prantice from Asymmetric Asset Management.

Raimond and Kim, congratulations on a solid result in cap circumstances. I just had a couple of questions. One was another question on volumes, which are reported, given the price deflation for volumes. So, you seem to be using invoice numbers as a proxy for volume. And you said that overall, they were up 9.6% in FY '24. And so, my question is, are they a reasonable proxy for volumes? And if so, could you split that into what happened in the first half and what happened in the second half?

Yes. I guess because it's clear that we're not giving out the actual volumes that we're trying to give you other points of interest that might sort of get across to you the increase in activity and just give you another sort of point of comparison. And so yes, look, I don't have the numbers [indiscernible]. But I think the 9.6% is a good sign. It's a sign that we're still growing. The business as usual as it has been for the last 60 years. And I think especially the volume increase in the U.S., has been very heartening to see. So yes, look, I don't have a specific half-on-half, but the number of invoices is a good measure. I think it's the side of a healthy company. But of course, if we made fewer invoices but invoice a large dollar figure, that would be great as well, wouldn't it? So -- but yes, look, I think it's a nice dynamic and something interesting that we follow anyway.

Okay. We'll take whatever one you throw over the fence. And so if that's our best indicator of volumes. You seem to be saying that or suggesting that in the second half, the volumes were up call it volumes or invoices, nowhere near as good as the first half, but that was still up in the second half. Is that correct?

Yes, that's correct. Yes, that's right. It's just -- you've got to remember that there's still this right price deflation that's sort of really holding back. That's why it's -- yes, but there is still volume growth. I mean volumes are growing, and we're satisfied the business is going along as it always has there's been some areas of weaker volume growth and stronger volume growth, which is why I try to give you some sort of indicators on Slide 8 to sort of see the relative areas. And they're not all growing as well as others certainly industrial has been especially subdued from a volume perspective with negative volumes actually in FY '24.

Understood. My second question relates to the differential in the margin improvement between the gross profit line and the EBITDA line. So, a 2.6 percentage point improvement in gross profit margin had been whittled away to 0.8% at the EBITDA line. And that 1.6% differential equates to about $16 million of costs on your revenue base of $1 billion. So, I'm just trying to understand why would selling general and admin costs have to increase by that much?

Kim?

As you can see, because with the strong volume growth, our distribution costs will continue to grow. Even though there's a price inflation because most of the costs are based on volume. In addition to that, in the other areas, we have a strong expense growth in insurance premium in the outgoing social impact and counsel rates. Another being in the first year of this companies, it was increase in the compliance costs as well compared to FY '23.

And also maybe, worth adding, when you're talking about the EBIT, you exclude interest, right?

Yes, sort of [indiscernible] finance.

I'm just looking at the difference between gross margin and EBITDA, I said just not EBIT, EBITDA. So here, the difference between those 2 is selling general and admin costs. And we all know what's happening in terms of compliance, insurance and so on. So, you certainly expect a lot of upward cost pressure there, but that's growing at something like 2x your volume growth.

Maybe I'm not sure I follow up a bit. But if you go to Slide 15, you'll see the net profit before tax bridge. And yes, look, I don't see a large increase in cost in anyway, perhaps you can add.

You can go to Slide 28, where we have split up in terms of where the cost pressure are where we have the distribution cost has increased by $2 million. Some of the main cost has increased by $1 million. As I said, the majority of costs are in the increase is in the insurance cost, the outgoing cost in terms of land tax and then in the compliance cost in terms of being in the recent environment.

Okay. Good. I'll study that table.

As there are no more fine questions at this time, we'll pause brief moment and then take questions from webcast. The first question from the webcast today comes from Christian Angelis from Blue Ocean Equities. Christian says the outlook summary says the gross profit margins are expected to ease in the medium term. Can you define what you mean by medium term and talk a bit about what the drivers of margin decline are? Also, you mentioned that the margin increases are due to product mix. Will this lead to a higher than historically normal margin for the business going forward?

I thank him for his question. The medium term, I understand to be within a couple of years. Now I won't sort of give any further color to that other than to sort of say medium term is pretty well stay up it was realized in to me for 2 to 3 years. Now I don't remember the second part of that question.

The second half of that question there. Christian asks, you mentioned that the margin increases are due to product mix, will this lead to a higher than historically normal margin business going forward?

Well, no, that was in the paragraph there that said that we expect margins to ease to their long-term average as we increase sales in the U.S. and as we get more commodity sales as well, of course, we'll go try to keep margins at this level, but I want to be upfront and that's why the outlook statement specifically says that the longer-term average is going to be closer to the accurate gross profit margin over the medium term. So, as we grow sales, as we go commodity sales as we grow in the U.S., which is a structurally lower margin we will head back towards that longer-term average.

The next question from the webcast comes from Matt Ryland from Greencape. Matt Ryland asks were there any loss-making trades made during the FY '24 that might be repeated?

Look, with the number of transactions that we do, I have to assume there are some loss-making trades in there, but I don't have that information to hand. Certainly, nothing that would be material or significant. So, I don't think that's much of a factor.

Your next question comes from Gordon Livingstone from Reunion Capital Partners. Gordon states, "Congratulation on a solid result. You mentioned M&A in the opening remarks and highlighted the 3 small transactions you've completed over the last 12 months. How should investors think about timing, size and location of future acquisitions? And more broadly, what characteristics would the business have to make it an attractive opportunity?"

Yes. Good question. Look, I think we're looking at a wide variety of businesses, some hundreds of millions of dollars of revenue in some quite small. But how I would sort of try to guide people here is that we think there's a lot of bolt-on size acquisitions, so not transformational size acquisitions that we can do. But certainly, maybe there'll be a larger number of small acquisitions in Australia. But in the U.S., if we carried out an acquisition there, perhaps would be necessary for it to be larger for it to be worthwhile because so much of the management team are here in Australia, of course. And so yes, we are looking at to grow, especially in North America by acquisition. What I will say is we won't make any acquisitions where we can't improve the business, whether it's not a strategic fit and where it's not providing value to shareholders. So, we're going to be very disciplined as we always have been with this, but we're working very hard on it.

Your next question comes from Louis Bannon from Berkholts Investments. Louis asks, can you give some details on your purchasing power relative to peers as you've grown. Do you track your peers' prices? What are your prices relative to your competition broadly?

Yes. I would say maybe that we have great relationships with suppliers around the world, manufacturers and products, those friendships. And the business we're doing with them gives us a very warm reception if we say, look, we'd like to expand that relationship and sell new products into the United States or Mexico or Singapore. I think we had almost $1 million worth of sales into Singapore this year. So those relationships are very strong because of the volumes that we buy into Australia. But our prices are competitive. They have to be. Sometimes they're very competitive and sometimes they're close to our peers. I would say we caution anyone to say that we have some sort of outsized loans just it is -- because of our Australian volumes going into the U.S., we're not-- we have some experience, relationships and throughput with producers, and they recognize our strengths and abilities.

The next question is a follow-up from Louis. Louis asks, can you discuss the competitive advantage you gained from ready biz, how difficult is this to replicate? And why can't a capitalized business like Brenntag or others replicate this advantage?

Yes, it's a good question. It's incredibly difficult. If you think about our business, Redox's business, we're really leveraging data. And so, data about every manufacturer in the world, data about the logistics chain, the data about the regulatory environment, all the data that goes into all the paperwork and documentation, all our customer information and about what they use and which grade and all that sort of thing. So ready-business is certainly a key enabler for us. And I can only -- I don't want us to talk about any specific competitors, but I -- we've hired ex-employees of other companies. And to 100% of them, that told me that our system is leaps and bounds above what they used to use at some leading firms, so I'll take it from them. I haven't used anyone else's system, but my people love it. And anyone coming into the business is excited and refreshed to see a system that's custom built for what we do. It's not off-the-shelf made to sell refrigerators or computer software or something else. This is specifically designed for what we do, and people are using it. That's why it's a powerful tool.

As there are no further questions at this time. I'll now hand back to Mr. Coneliano for any closing remarks.

Great. Well, thank you, everyone, for joining us today. I really enjoyed the chat. And hopefully, we'll talk soon. Thank you.

That does conclude our conference for today. Thank you for participating. You may now disconnect.