Zoetis Inc. (ZTS) Earnings Call Transcript & Summary

Heading towards the end of the day, panel 15 of 16. I love all my companies equally, but maybe we're saving the best for last. So next up, I'm happy to introduce Wetteny Joseph, the CFO and Head of Business Development at Zoetis, the world's biggest #1 animal health company. I'm going to lead the charge again with Q&A. I encourage all you guys to feel free to chime in and ask any questions.

Wetteny, I'll just start on -- I've started with trends for most of the companies, and let's get after maybe the livestock recovery, not this year in '22, but '23 and beyond. And Kristin has mentioned the market recapturing historical sort of normalized mid-single-digit growth rates as early as next year, 2023. And I think for a lot of investors, I mean, clearly, livestock has gone through a lot, right? ASF, and then that was followed by COVID. What gets us to those normalized growth rates? And I guess my question is, is it just easy comps, DRAXXIN, headwinds abating? Or is there some innovation that's going to come out from Zoetis that helps the company recapture those normalized growth rates to mid-single digits as early as next year?

Yes, Jon, maybe if I just briefly step back and just sort of recap how we got here. We delivered a really strong year last year, a 15% operational growth in revenue, 19% operational growth at the bottom line and came into this year with expectations to grow top line 9% to 11%, 10% to 13% at the bottom line and posted a 9% operational growth in the first quarter. And reiterated our operational guidance, of course, we did adjust for FX, which has moved pretty significantly since we issued guidance. We're very, very pleased with how we started the year as well. In terms of your question on livestock, I think all of those factors you mentioned are going to play into this. Let's face it, while the pandemic arguably has been positive for companion animal trends, it's been on the other side for livestock that we've seen shutdowns and lockdowns in a number of different markets. We still have been seeing those across China and other places, and it has had an impact and sort of consumer dynamics and some input costs and other things as well. So we think as you get on the other side of a pandemic, that would be a factor. Your point around DRAXXIN, for us, specifically, will be certainly a factor. We expected coming into the competitive situation for generic DRAXXIN and to some extent, Zoamix. But DRAXXIN, we expected about 20% impact in the first year and 20% in the second year. We did a little bit better than what we thought in the first year, but we continue to track as we go into our second year here. Getting on the other side of that will certainly be helpful. And the last point I will say is we have actually been introducing innovation in livestock. They're not of the size of an Apoquel on companion animal, as I've talked a little bit today, but there certainly have been. If you look across swine, we've been introducing vaccines in swine that we've launched in certain markets in Europe, and in certain markets like in China, et cetera. We have certain vaccines on the vector side for poultry that we're launching. DRAXXIN KP has been helpful, but they get muted a bit by the overhang on DRAXXIN from a price perspective. But as you get on the other side, cycling through the first 2 years of competition, I think some of those will start to be more noticeable on the positive side from a livestock perspective. So I think there are a number of factors. I won't go any longer than that.

Okay. But to your point, market normalizing, DRAXXIN headwinds mostly behind you and some innovation. When we think about DRAXXIN headwinds, I know you said 20% year 1, 20% year 2, what is year 3? I mean is that like the big step down where you have rebased and therefore, the year-over-year decline in year 3 is 0 or 5%? It steps down notably from what you experienced in year 1 and year 2 from a generic perspective?

Yes. We're not expecting a notable drop after the first 2 years. And we think -- what we expect in terms of generic performance on a livestock product, which you don't see at all in companion animal, but what we expect is about a 40% to 50% impact. We think it will be more front loaded here in the first 2 years. And what we've been able to do is actually see an ability to maintain volume, which is very important here. This is a product that's certainly a little bit more on the complex side to make. And so if you can maintain volumes, you're going to be ahead of the game on this one for the long term and still pretty attractive margins. But as we expected, and we're seeing really an expansion of macrolides as a class, as a premium class into areas where perhaps producers would not have used macrolides because of the prices haven't come down. And so we're seeing a bit of an expansion in that, and we're keeping the volume which will help us sort of weather through the competition that we're seeing here. And so we're not expecting a meaningful step down after the first 2.

And in terms of innovation, you talked about innovation a little bit within livestock. You said that you guys have been introducing new products. What about methane-reducing products? One of your competitors, it's very front and center. They talk a lot about it. They've got product lines today, additional ones coming mid-decade. Where is Zoetis with methane-reducing products? And when can we see some of those initiatives come to market?

Look, I won't speak to what others may be discussing here, but one thing I will -- to point out the obvious, Zoetis has demonstrated an ability to make an impact on this industry and our customers' needs through innovation. That's no different in this spectrum. So we will continue to invest in innovation. We believe a healthy and productive animal is good for sustainability. And we have made significant strides as an industry, quite -- mind you, and Zoetis is contributing to that over the years. If you look at the productivity of dairy cattle, for example. But there we're innovating. If you look at work we're doing on the genetics and other spectrum, we're able to help producers through genomic data, understand how best to manage the dairy cattle, even feed programs, et cetera, based on the genetic predisposition. So again, a healthier animal, we believe is going to be more productive, and the more productive is better for sustainability. If you look at pork on the swine side and IMPROVAC, which is, again, sustainable production of swine, I can go on and on. So we are approaching this similar to what we've done in other spectrums here in terms of meeting customer needs on innovation, and we'll see how, as those come out over the years.

Okay. So maybe just to try to push you a little bit there. It may not mean, hey, Zoetis is going to enter that space specifically. There might be some areas in and around which help what keep the animal healthy, productive, where you guys sort of push the envelope, but we might not be seeing a methane-reducing like-for-like competing product in the near term. Can you say anything about it?

I won't say that. Look, we spent over $500 million in R&D last year. I think you can imagine that we're involved in a lot of things, fairly broad spectrum. I won't narrow it to a specific method in terms of approach. But needless to say, we're fairly broad in terms of our approach around these. I'll just give you a couple of examples in terms of where innovation might come in that's already existing, and we'll continue to pursue those.

Okay. Great. One last one on livestock, and then I want to shift to companion animal. Swine in China, and that was a notable headwind for the company in the first quarter and [indiscernible] as well in the space. It seems like prices have bounced back or stabilized intra-quarter in 2Q. So would love just any updated thoughts on the China swine market. It was supposed to be another big headwind in the second quarter of 2022. But has price stabilization come into that market where it's actually trending a little bit better than what you would have thought a couple of months ago?

Yes. So look, we're watching those trends and certainly are encouraged by an uptick in price. If you compare to over a year ago, we're just now lapping when we saw prices come down pretty significantly a year ago about the June time frame. And so it's very encouraging as we've now exited our second quarter internationally. As you know, we closed international a month in advance of the U.S. As we're exiting, we're seeing prices elevate for swine, which is a good start. I think, certainly, we look at other factors in terms of input cost for producers, et cetera. Look, long term, what's transitioned in China is favorable. We're seeing less backyard farming and more larger, better biosecurity, et cetera, and those tend to invest more in terms of what products to drive their herd and productivity and so on. And so we believe that will bode well for us long term. We have had to go through a period with respect to prices having coming down significantly from what was really historic highs a year ago, but now they're starting to pick up, which, again, is a good factor going as we look ahead.

Okay. I think after some livestock, I'm going to shift over to companion animal. Believe it or not, there was some noise on vet clinic growth in the first quarter here in the U.S. So just maybe just talk to us about vet clinic market fundamentals in the U.S. and in the EU. And how do you guys explain sort of those weak clinic visit growth numbers that we saw in the first quarter? And do you expect it to sort of unwind as we work our way throughout the year?

Look, we look at this as well. And there are a couple of things I would point out. First of all, we delivered 20% growth in companion animal in our first quarter. So as the company drove about 3 points of price overall, for companion animal, it was closer to 6 points. So we're really talking about a 13% increase in volume in our first quarter. And you saw that across U.S. and international. So we're not seeing a demand issue across companion animal. Look, we expected -- if you look back over the last few years in terms of what's happened with vet visit trends, you've seen year after year in the first quarter, about 1 million sort of increase in visits each year as you look out. Last year, we certainly saw an uptick to that. It was more than double that increase in Q1, and then repeated in the second quarter. That also translated to a much faster revenue growth for clinics into the -- well into the double digits in terms of revenue growth. And we said, look, this is not sustainable. We expect to be above where we were on a pre-pandemic basis, but the levels as well in the first half of last year were not...

You had a more moderate view on how was going to play out?

Yes. And what we've seen so far is really, coming back to that trend line, which is a nice increase over time versus anything that we were not expecting. And again, we saw really solid growth. What's really is more indicative for us as well is really the revenue per visit and total revenue growth numbers. So if you look at those over the last 9 or 10 quarters, you see a higher correlation between those and our growth. You're seeing about an 8% or 9% increase in those over the last, call it, 10 quarters. And you've seen us grow somewhere north of 11% or 12% during that time. So we think that's more indicative for us as well.

20% companion growth in the quarter, you broke it down, 3% price overall for the company, 6% for companion. Can that even improve further for the rest of the year? I mean, talk to us about the pricing strategy at Zoetis, right? We've run into several companies throughout the day, where they instituted price on Jan 1, only to say, hey, we're going to you with another price increase in July 1. So how do we think about price for you guys this year? And with a highly differentiated product portfolio, could that lend itself to additional pricing opportunities in the not-too-distant future?

Well, the short answer to the last part of your question is, yes. We have an innovative portfolio. We have strong a demand. Where we saw -- we see opportunity and we look at market-by-market, product-by-product to drive price, and we're still able to see good volume growth as well as we do that. Now we have demonstrated an ability to push price to at least meet inflation, if not better. And we've done it in different markets, too. I mean, there are markets we've been operating in for years that have been higher inflation. If you look at Brazil, if you look at Turkey, if you look at Argentina, et cetera, we've done that. We've demonstrated that. So we'll continue to pull that lever, and we continue to be innovative in terms of products that we're bringing out that have a good, solid demand.

Maybe, Wetteny, if you could talk a little bit about trends in the international markets for companion animal versus that of the U.S. And I bring that up because on a competitor's call in the past quarter, they did call out capacity constraints in the U.S., but also mentioned some macro variables in the international markets. What are you guys seeing between the 2? Are you seeing any signs of a weakening consumer in the international markets, right? I mean you've got these great innovative products, but they're also somewhat expensive like an atopic derm for the pet. Or are you seeing any frame for the underlying demand for some of those offerings?

So it has been very interesting in terms of what I've seen in my 1 year now with Zoetis is just amazing, the growth that we've seen in emerging markets on companion animal. Companion animal used to be in many markets, substantially smaller than livestock. You take China, for example. We're now about 50-50 companion animal and livestock in China. Despite the lockdowns in China, we've seen growth over the last 2 quarters in companion animal in China, high single-digit growth. This first quarter, because of the swine dynamics in Q1, companion animal was actually more than 50% of the China business. So we continue to see robust growth across our emerging markets, across international markets. There are some areas where you might have seen on livestock, DRAXXIN impacts or what have you. But overall, we've really seen solid growth, and we're not seeing a slowdown -- a notable slowdown as we look across those markets. And companion animal is becoming a bigger proportion. This first quarter was the first quarter that companion animal was more than 50% of the international business. It has been significantly more than 50% in the U.S., but it was the first quarter.

Surpassed 50% of international. And maybe just to play off that a little bit. Just talk to us about the runway for atopic derm overall, but international. I'm going to round for sanity purposes. But when I look at 2021 atopic derm revenue, it was almost $1.2 billion. U.S. was $800 million. International was $400 million. Again, I'm rounding. U.S. is 2 to 1. But we all know, from just a pet population standpoint, how many more pets are internationally versus the U.S. Should that make us feel very good about the durability? And we want to keep on expecting atopic derm to run into sort of a little bit of a brick wall, but there is this massive international runway that still is in front of the company for atopic derm?

Again, I would say it's a resounding yes on that. We do think there's more headroom to grow, both U.S. but especially international. And we've seen derm grow about 25% per year over the last few years. We grew derm 28% in the first quarter. International was up 38%. So we do think there is significant more room in the U.S. We think there's about 6 million dogs that suffer from itchiness that should be treated, that are not. In addition to that, there's a portion of those that are being treated that are undertreated with antihistamines or what have you, steroids. And so we do think there are some that are undertreated, and then those that are not treated at all. And we think it's similar, if not higher number, outside the U.S. So we do think there's more room. Markets outside the U.S. tend to take longer to get to peak sales. We have been investing behind our derm franchise across both DTC where we can do branded campaigns. And in some markets where we do sort of unbranded awareness campaigns to send more pet owners to the clinic to the vet to ask questions about their pets, if they're seeing them itch, et cetera. That's driving the performance that you're seeing. We do think there's substantially more room to expand that market.

Okay. I want to stick with a little bit of the international and the I'm going to go over to parasiticides and Simparica Trio. I mean, that market going to show a heavy U.S. for a whole bunch of reasons. But you guys did call out, I think, on the most recent earnings call about the launch of Trio in Japan. I think that's a solid parasiticide market, is there a way to size that market opportunity, and what it might mean for Zoetis as you launch into Japan?

Yes, Japan is a very attractive market from a combination perspective. We just launched, I believe, in April. And so still early days. And certainly, we are investing behind that brand there as well to drive growth. It is an important market for us from a triple combination perspective. There are some markets outside the U.S. that are meaningful, but certainly, the U.S. is the most -- is the biggest market from a heartworm standpoint. Heartworm is in every state across the U.S. And so there's more room. We grew Simparica Trio about 83% in the quarter. But Simparica also is growing for us, of course, in international markets. So we're very pleased with what we're seeing across parasiticide.

And maybe just bring us up to date on the competitive landscape for both Trio and atopic derm. And maybe let's just start with Trio. You guys are -- seemed to have a high level of conviction nothing before 2023. That leaves a very small window for what might be brought to market before the parasiticide season, right? So why the conviction, I think, before 2023? And then there's nothing there for the season. I mean there's nothing there for the first 3 or 4 months. Obviously, that means a lot when we think about the seasonality behind the product?

Yes. Look, I think, as you know, compared to what I'm used to in the human health side of the spectrum, we don't get a ton of detailed specifics in terms of where pipelines are across this market. So we tend to get into conferences and other discussions with customers to get a sense, and it gives us a good 6 months of visibility, I would say, give or take. And we're confident that we won't see competition here in 2022. But we continue to innovate and invest behind these products and these key franchises for us. Parasiticides is about a $5 billion market. And as new products come into this space, certainly, first to market is important. But what happens after other products come in is a tendency to continue to expand. That, and, the oral market continues to grow and expand out and we see brands that came in second or third, and the first brand continues to grow over time.

Sure. NexGard is still growing today despite how much success you guys have had with Simparica Trio. But where are you guys vulnerable? And what I mean by that is like NexGard was out there. They were the first mover in oral flea and tick and then BRAVECTO came along. But BRAVECTO came to market, and they had a decent selling strategy, right? One was a 30-day, one was a 90-day. When you think about future competition for the triple, the Trio, where are you guys most vulnerable? Is it a particular label, or puppies, or worm coverage, or duration? How do you think those competitors are going to best try to attack the market?

Look, I think we're well positioned. If you'll see the growth that we've been driving in this market, the expansion that we're seeing, the adoption rates, the penetration rates, as we look ahead, we're not anticipating any particular differentiation coming to market versus what we have...

Not like a 90-day versus 30-day or anything like that?

Yes. Look, I think if you look at what we cover from a speed to action with respect to ticks, et cetera, and spectrum that we cover, I believe we're well positioned there. And by the way, we have the biggest innovation engine, and we're not stopping in terms of innovation. I won't speak to any specifics in these areas, but this is a big market. It's a $5 billion market. And we've been gaining really strong traction. We were behind in this market. And clearly, we've done some great things with Trio and other products. And we like the growth that we're seeing. I mean in the first quarter, yes, Trio grew 83%, but our entire fleas tick heartworm [indiscernible] products across the spectrum grew 25% in the quarter. So we like what we have in terms of the breadth of offerings that we have, and we're not done innovating behind them.

And in terms of atopic derm, I think what we say from Zoetis is also a 2023 at the earliest. Where is there more noise? Where is it more of a signal to pull out of in terms of what's coming next from a competitive standpoint, one versus the other, atopic derm versus the Trio?

I won't -- look, again, we look out another 6 months, and we can see -- and have confidence in terms of what could happen this year or what won't happen this year. We're focused on our innovation and what we're doing across the products. So if you look at derm, for example, we've got an approval in Europe for Apoquel chewable. We're launching that product. And so we'll continue to drive the needs at the end market and further penetrate where we see opportunity to expand those. We've been expecting competition, so it's nothing new, but that's not stopping us in terms of innovation and driving our own business.

Is chewable a pricing mechanism? In other words, is that a premium product?

It's a premium product. We'll play it in different markets differently, depending on where we see the opportunity is.

And when can chewable make its way to the U.S. in terms of -- from a time line perspective?

We haven't given a time line on that, but certainly, it's something we're working on.

Okay. So actually something like a chewable could, from a timing perspective, align well with future competition in that space?

Depending on when, hypothetically speaking.

Hypothetically. Yes. Okay. Librela blockbuster status expected this year in Europe alone. And usually, from what we see from an innovation standpoint, the U.S. well outstrips the international market. So how do we think about growth specific to Librela in Europe into 2023? And then are you guys going to have supply able to go ahead and handle that?

So look, we couldn't be more pleased with the start that we've had in Europe on Librela, and it's running above our expectations. If you look at every dimension of this, we have pets that are coming on to Librela. They have never been treated before for OA pain. About 40% of the pets coming on. Clearly, this is priced at a premium. So that's expanding the market as well. Pets are on it longer. The compliance rates, et cetera. Every aspect that we look at is pointing in a direction above what we're thinking. And so that's driving demand at a level that we're a little bit behind from a supply perspective. And so we'll continue to be on allocation through the rest of this year, but we're actively driving capacity to get to this demand and beyond. I'll make one more point. You have to appreciate monoclonal antibodies or long lead time items. So compared to a small molecule or solid that you could manufacture, start to finish, in 3 or 4 months, you're looking at double that for a monoclone antibody. So your ability to sort of sprint to that demand is a little bit longer. And that's what you're seeing playing out here, but we're very confident in the expansions and everything else that we're doing across the network that will meet customer demands and expectations across these products.

And with that longer lead time, I mean, do you think you can rectify any supply related issues into '23? Because arguably in '23, you would have the growth in Europe and you'd also have launched in the U.S. Are you going to be able to pursue both of those full steam ahead? Or would there be any supply constraints?

Yes, that's right. And look, if you look at -- the other part of your question was, look, if you look at the ramp to the blockbuster in Europe this year, we did $21 million in Q1. We're expecting it to be north of $100 million for the year. So clearly, we're going to continue to ramp through this year, which certainly infers the capacity that's ramping with it and delivering higher volumes as we go. So certainly, those are part of our plans, and we'll continue to execute on those.

Any analogs, when we think about a $100 million product or north of that for blockbuster status in year 1, I don't know, Cytopoint, right, another map. Like what $100 million goes to in year 2 just in terms of how that curve -- what that curve looks like?

Look, I won't give any specifics in terms of what to expect for '23. But certainly, as we ramp through this year, you can envision, and my point about the fact that we'll continue to be on allocation, demand is outstripping supply. Certainly, there's an appetite out there to grow this meaningfully.

Arguably there's some pent-up demand. Those were my words, not yours. But arguably, there's some pent-up demand still to serve in that European market in '23 that you might not have been able to get to in '22?

That's right.

Okay, okay. And maybe just let's quickly hit on Solensia, and then we'll head it over to companion animal diagnostics. If I'm missing any questions, just yell out or flag me down. Minimal revenue to date in the international markets. Do we see that inflecting 2023? Or just talk to us about what it takes to build this market. It's higher for the pet owner to diagnose. They're bringing in felines a lot less frequently than canines. I mean those numbers still have been small, right? We hear in our survey work it lit up so well, the want for this product is adamant, any sort of solution for feline pain, but yet Librela is doing $21 million, this is doing $3 million to $4 million. So how long does it take to really inflect that market?

Look, we expected this to take longer to develop. It's not an existing market today for feline. Like you said, they're harder to get them into the clinic. You see more churn in the clinic for feline as well as a result of the difficulty. So they need more innovation to convince them to come in. And when you have a therapeutic that is for chronic condition, then you have a reason to bring them in on a regular basis, and that's going to have implications for other services for the vets and other products as well. So vets, as you said, are extremely excited about innovation for feline and what that means for their practice, and they're very much supportive. But we know it's going to take longer to develop that market, get pet owners to recognize where their cats may have OA pain, et cetera, and educate them to get them into the clinic, et cetera. So those are happening as we expected. So while it's lower than Librela, it's as we expected.

And still a 2H launch here in the U.S.?

That's right.

Okay. Companion animal diagnostics, you gave us a percentage, but I'd like some absolute. So I think Kristin mentioned on the most recent call, you're building a dedicated field force for the diagnostics portfolio. I think this is going to increase the U.S. companion animal field force by 40%. Can you give us a starting point or ended point so we can figure out what 40% means?

Look, I think no matter what your starting point or ending point is it's a pretty big number, right? 40%.

Yes.

And look -- I think when we look at the field force across Rx and diagnostics, by the way. So this is not just diagnostics that we're doing, we are separating and having a dedicated field force for diagnostics, support behind them in terms of the technical folks as well. And we're confident in diagnostics' ability to grow faster in overall animal health. We're seeing that. We grew 12% in the first quarter. Very pleased with what we've seen there. But if you look at our broad sort of products that we have in terms of portfolio in the clinic and what our sales folks have to go in and talk to vets about, and as we innovate, we bring Trio, we run promotions for these products, et cetera, their ability to consistently spend the amount of time on diagnostics is a little bit more limited than we would like. So we do believe there's an opportunity here to drive not only our Rx portfolio that's existing today, not only products like the derm products, but our in-line products that have been in the portfolio for some time, driving those and maximizing those. We think there's an opportunity here, and we're confident in the returns that we'll get from this investment across Rx and diagnostics, and we'll see that play out as we get into the back half of the year as we've implemented that this quarter.

And where are you anyway with bundling the 2? Like right now, if I'm a customer and I'm using Zoetis diagnostics, and I wanted to go ahead and also purchase Apoquel or Simparica Trio, are you guys proactively out there with that bundled strategy as an attempt to win market share?

So look, I think, certainly, we leverage our portfolio given all the innovation and all the products that we're bearing out. And that's more -- the doors are wide open for us to come in and talk to them because of what we continue to put out there. Now in terms of bundling, there are markets where we can do that, and we do. And there are markets that you cannot, and obviously, we don't. So certainly, again, innovation opens the door. And being able to really leverage the portfolio in delivering strong end-to-end solutions to our customers is important. Diagnostics plays a factor in that. We're also investing in diagnostics in our reference labs, which is important for the larger corporate accounts to be able to service them across their network of clinics in terms of where we have reference labs. So we are investing in that as well, which is going to be important in terms of leveraging that overall corporate portfolio across Rx as well.

Okay. I think I've only got about one minute left. I just want to maybe tick through a couple of things. I've been trying to ask every company here today on the supply chain, how you're navigating the inflationary cost challenges? In any -- if things are so fluid with so many companies out there that we've been hearing from, any component supply shortages or how you guys have been navigating that to date?

Yes, we have seen some component supply shortages. We saw those last year throughout. We've seen them throughout the pandemic. We grew volumes to the tune of 14% last year despite those, and we've seen some of those this year as well. We've seen them in China, with respect to getting products into Shanghai, which is a key port for us to distribute to the whole country. We've seen them in terms of some of our 2 supply for some of our products. So we've seen issues, and we've been able to navigate through those. They may have some timing impacts. But overall, we've been able to navigate through them last year, and we're confident in doing that this year as well. From an inflation perspective, we really have flex on price, given our innovation in our broad portfolio. We demonstrated that in the first quarter and we...

And one last one. I know you've only been there for around a year, but maybe just talk about the share repo. You're sitting at the stocks well off highs. The balance sheet is in fantastic shape. You guys spit off a ton of cash. I think, Kristin, when she came in said that you guys weren't going to do anything very transformative, right, wildly transformative. So is there an opportunity here to really flex the balance sheet when you think about where you guys are and where the stock has come in and where you can take that over the next 3 to 6 months in terms of getting more aggressive from that perspective?

Yes. Look, in terms of large transformative moves, Kristin is right. When we look at the landscape out there, we are able to really invest in the business. We're doing it with our field force, R&D, CapEx, given the products that we're launching and the demand that we're seeing. We're certainly meaningfully investing in CapEx. And despite that, we're still generating significant cash. So the Board authorized 3.5 billion of share repurchases in December last year, on top of what was remaining in our prior authorization. And it gives us the flexibility, and we've increased our dividend 30% last year -- from last year to this year. And so we see -- when we see opportunities, we're able to execute on those, but have the flexibility to turn the dial. So I won't preface what we will do going forward. But certainly, if you saw what we did in the first quarter...

You got the dried powder.

Yes, we do [indiscernible].

Okay. Perfect. Wetteny, thanks very much for your time.

Appreciate it, Jon.

Thank you.

Thanks for having us.