Q4 20/21

May 20, 2021

Please note that this conference is being recorded. I now hand the conference over to Mr. Ankit Gaur from Systematics Institutional Equity. Thank you and over to you, sir. Thank you, Ayesha. Good evening, everyone. On behalf of Systematics, I welcome everyone on the call of EPL Limited, formerly known as Estill ProPak Limited, to discuss Q4 F5 'twenty and F5 'twenty performance. From the management side, we are joined by Mr. Sudhanshu Wats, MD and CEO Mr. MR Ramaswamy, COO Mr. Parak Shah, CFO Amit Jain, Head Corporate Finance Mr. Suresh, Head Legal and Company Secretary Mr. Deepak Gendu, Regional Vice President of Amritsar Region. I would like to hand over the call to Sudanshu now who can take us through the major highlights of Q4 FY 2021 and FY 2021. After that, we can have a floor open for Q and A. Over to you, Sudanshu. Thank you. Thank you, Ankit. Thank you, Ayesha. Good evening, ladies and gentlemen. Welcome to EPL Limited full year FY 2021 and quarter 4 FY 2021 earnings presentation. 1st and foremost, here wishing all of you safe safety and health. I hope you and your families are staying safe and are navigating these tough times well. Let me start with our EPL 2.0 mission. And as many of you around this conference call will recollect, we defined our mission as market leading revenue growth and capital efficient consistent earnings growth. I am very happy to share with you that in the 1st full year of our new mission and ownership of Blackstone, we have made a strong start and delivered strong results for FY 2021. With that, let me talk to you about FY 2021. FY 2021 is a year when we've transformed EPL to deliver market leading double digit revenue growth. We've demonstrated resilience in business performance. Despite the tough conditions, which we all are aware of, we've delivered business growth of 12%, double digit as I told you, coupled with high teens EPS growth coming in at about 18%. With our focus on cost and capital efficiency, our return on capital employed has improved by 2.90 EPS and now stands at a very healthy 21.3 percent. I think the second big highlight of FY 2021 has been our ability to strengthen our competitive position across markets. We have either held to our wallet share with customers, in many cases we've grown our wallet share with our customers and in multiple cases we've added new customers to our roster in this year. We've seen some of the results this year, but we will continue to see a lot of the results of this work in FY 2022 years to come. This is also a year when we've acquired Creative Silopax in India. This is the beginning of our journey on M and A. And you will see that our acquisition of Creative Silopax is strategic as it strengthens our position in Beauty and Cosmetics. It is also revenue and a bit decorative, which is a key criteria for any acquisition as we look forward. And last message, the 3rd big message I want to give you on FY 2021 is we delivered all round strong progress across our identified levers. And let me quickly recap them, we will talk about them a bit more in detail. But the first lever as you remember was strengthening our portfolio, but which is accelerating growth in Personal Care and we've added over 120 bps in this space. We now have our Personal Care contributes 46% to our portfolio. The second one was continued leadership in Oral Care. We've delivered 9 point 8% growth in this year in our Oral Care business. So where we are the leaders, we've managed to grow that segment even faster. The third one was improved performance in Europe. And I think one of the key measures we put ourselves and we'll talk a bit more about it is the improvement in margin. And we've actually improved our margin by close to 200 bps, taking the margin in Europe to about 14.8% in FY 2021. And the last lever, but a very important lever is around sustainability. We basically made a lot of progress on sustainability. We are driving leadership in this zone and I will talk to you more about this as well. So FY 2021, we've transformed EPL to deliver market leading double digit growth, demonstrated resilience in business performance, strengthened our committed our competitive position and delivered strong progress across all our identified levers. Let me now talk to you about what we've done in managing the business in this pandemic. I've spoken to you about this in the past as well. But just to quickly recap, I think we've ensured that all our plants are operational. So supply enablement, OTIF and customer service has been paramount. And I think we've given it total importance, something that I think we should and we've that been the most important piece. The second area we spoke about briefly is about demand generation, it's about looking at new customers, new categories. And I think we've done a lot of work in this space as well. We started the year with launch of hand sanitization category. But as we've ended the year and as we are entering FY 2022, we are doing work on many other innovative projects. We are also doing a lot of work around hand wash and innovative options for people to handle the entire pandemic situation as they go forward. The 3rd important pillar is around people and around employee wellness. I think we've given safety of our people paramount importance. We've actually managed we've actually put strong protocols in place across our plants everywhere in the world. We've actually made sure that we have we are responsive, we are listening, we basically help people wherever the help is needed. We have a full fledged crisis committee, which has worked round the clock in these times and is actually constituting senior people in our company. And lastly, like we showed and we always have, we've managed to keep a very strong eye on cost and manage cost through our ongoing project Phoenix. There are many initiatives which have already been taken, but there are more and I'm going to talk about them as we progress further. With that, let me share with you the numbers. So our revenue growth, our revenue for FY 2021 has come in at INR 30.916 billion, which is a 12% growth over previous year. So and our adjusted EBITDA has come in at INR6472 billion, which is a 13.4% growth over the previous year. Our adjusted earnings per share has come in at 8.89 percent that is 34.6 percent growth over the previous year. With all our focus on capital efficiency, our return on capital employed has come in at 21.3, which is a 2 90 bps improvement. Our business continues to generate cash and I think that is making our position stronger. So our net debt has come in at INR 3,140,000,000 but this number actually is lower than last year if we were to take out the one time cash proceeds paid for Creative acquisition of INR 1.675 billion. Dollars Adjusted for that, our net debt is at now $1,474,000,000 or $1,474,000,000 and that is almost half of last year number of 2.76 Our CapEx continues to be prudent. But as you would gather, I think with COVID being around, our CapEx momentum has started. We have so the full year FY 2021 has come in at INR1.76 billion as CapEx. If I want to deep dive into these numbers and share with you, I think our EBITDA adjusted EBITDA has come in at 30.4%, but our EBITDA for the year has come in at a 9.9% growth, which is an EBITDA margin of 19.9%. Our EBIT and EBIT margin, EBIT has grown at 15.4% and EBIT margins are at 12.3 percent to 20.3 percent, which is a 30 bps improvement over previous year. Our tariffs have grown at 17.8%. Our adjusted earnings, of course, as I told you, if you were to take like for like, it has grown at a very handsome mid-30s in this period. Our net debt to EBITDA ratio now continues to remain very healthy at approximately 0.5 number. So overall, if you look at it, very strong performance in FY 2021, robust revenue and FAD growth. Organic revenue growth in this period is at 11.3 percent because you know, we've the Creative acquisition happened effective February 1, 2021. EBITDA margins have been maintained despite very steep price increase and COVID-nineteen situation. Our net debt to EBITDA stayed strong and our focus on capital efficiency continues to grow our ROCE. With that, let me quickly talk to you about quarter 4 FY 2021. So quarter 4 FY 2021, our consolidated growth has come in at 17.5%. So we've delivered INR8.1 billion, which is a growth of 17.5% in the commensurate period last year. On this, I also want to share with you that our stand alone quarter 4 growth has come in at 34.6%. Having seen some of the results published by consumer companies recently, our stand alone quarter 4 growth is comparable, if not better, to almost any numbers I have seen up to now. Our adjusted EPS growth has come in at 29.6% for the quarter. Our EBITDA growth has come in at a more muted 5.3%. This is because of the increase in raw material costs and we will dive deep into this as we go forward. So if we were to look at our EBITDA, which is absolute EBITDA, adjusted EBITDA growth is 5.3%, but our adjusted EBITDA has come in at INR1.4 billion. It is about 0.4% higher than last year, so nearly flat. So what has been the reason for our EBITDA growth to be where it is? I think there are 3 key things I want to highlight to you as the reason on this. 1 is the increase in raw material, which we spoke about and I will dwell a bit on this as we go forward. The second is the time lag in recovery because we have a 3 month contractual pass through with majority of our customers and this time lag in a very sharp price increase scenario puts pressure on the margin in the interim period. And lastly, the COVID-nineteen related expenses continue to be there in this period. And I think it's the combination of these three things, fee price in raw material prices, time lag in our recoveries based on all our contracts and the COVID-nineteen related expenses. With that, if some of you have our investor presentation, I want to draw your attention to Page 10 and talk to you about unprecedented price increase in key raw materials. As you will see this chart, the thing which stands out and which I want to share with you is that the price increase which we have seen in this period is something we've seen we've not seen in many, many years. We are seeing the 25% quarter on quarter increase, whereas the historical movement has been in the broadband of plusminus5%. So this very sharp increase of 25% as I was telling you puts a lot of pressure in the interim on us. So this indeed is our challenge. But as there is challenge, there are opportunities. And I think I treat this challenge both as a challenge, but more as an opportunity. So as I move forward and if I could draw your attention to Page 11, if some of you have our investor presentation, I want to share with you what we are doing and that's why I wanted to call this an opportunity. Because it's such a strong challenge, we've been drawn up a very holistic EBITDA margin improvement plan and this plan is already in place. And this will help us navigate FY 2022 successfully. The 3 pronged approach is the first one, it is judicial price increases. So I talked to you about contractual pass through, which has a 3 month lag. We have actually been talking to some of our big global customers and we are asking for a spot correction if possible, but a 3 month lag as part of our contract is a given. We are also looking at price corrections being negotiated across geographies And I can share with you that we have managed to do this with a very large set of customers as I speak to you. So I think very good progress on judicious price increases and I think that is going to be one very, very important lever. The second important lever, which we've talked about in the past, but I needed to dwell a little deeper on cost productivity initiatives of Project Scenic. Phase 2 is we are stepping up on Project Scenic. And when I say we are stepping up and that's what I keep saying, every challenge is an opportunity and we've actually made the most of this one as well. If we are looking at 1st and foremost accelerating modern time project, which is basically improving our manufacturing efficiency through automation. So this pilot, which is actually being it will be done in the U. S. Will be accelerated. And as we learn there, we will keep on implementing it everywhere in different places and we will do it almost parallel. And so therefore improving manufacturing efficiency through automation is going to be very important. This will help us in improving our productivity. It will also help us navigate costs. And in an environment like the current environment, it will also help us stabilize our operations and manage any absenteeism and those things better. The second thing which we are looking at and I wanted to share with all of you is we are dialing up and increasing our in house manufacturing of caps and closures. As many of you know, for the number of tubes that we make, our caps and closures is almost is at a different level. And therefore, we do make caps and closures in different geographies, but there is hope for us to increase the in house manufacturing. Now this will be margin accretive. It will also make us more nimble and agile and this will be important as we pivot towards beauty and cosmetics as a category where caps and closures, dispensing becomes one of the items which is a differentiator. It allows us to innovate and to be able to deliver faster. So I think that's the 2nd piece. The 3rd and 4th pieces are more regular, but that is where we are working harder than what we've ever done in the past. The third is around scrap and waste reduction. And 4th is around rationalization of energy consumption and looking at alternate sources wherever possible. So I think this then is the 2nd big strategy in terms of improving our margins. And the 3rd and equally important one is our focus on high profit segments and value added offerings as we continue to improve our mix. We will continue to improve our category mix, which you will hear from me. That itself will offer us some tailwinds, but we will do more of this as we go forward in some of the other specific segments, specific diameters and specific value added offering. So with this, we are very confident of converting this challenge into an opportunity. And lastly, a piece of some good news if I could leave you with or a small silver lining in these clouds is that we are beginning to see first signs of flattening or stabilization of the raw material price increase in our in the first data which is coming in for June. So I think the first set of discussions and the data which is coming in for June gives us confidence that even the steep price increase which we were seeing is now beginning to stabilize and hold on. With that, let me focus back on our capital efficiency agenda, which we've talked off in the past. But let me again reiterate the 4 key pillars. So prudent CapEx spend, so this year we came in at about at INR1760 million for FY 2021. We will continue to look at prudent CapEx spend. But at the same time, the fact that we have our operations in different geographies, we will also look at continue to evaluate operating expenditure versus capital expenditure, particularly in low interest cost of capital and low cost of capital and capital abundant geographies, some of them which we work in. So I think that's the piece. And you also heard me talk about Modern Times as a project. I think the second thing is our journey on reduction in net debt will continue and we spoke about that. So net of our one time expense for the acquisition, which we just did in quarter 4 of FY 2021 of Credit Stylopax, our net debt continues to come down. As a matter of fact, that number is almost half previous year's number and has steadily come down as you can see on Slide 12, if you are looking at our presentation. This all of this continues to lead to continue to improvement in ROCE. We spoke about that at 21.3 percent. And lastly, as we generate more of EBITDA, as we generate more of profit, we are confident of sharing it with our shareholders and our dividends are continuing to grow. So I'm also happy to share with you that the Board has approved and announced, subject to shareholder approval, the final dividend of 2.05. So for the year FY 2021, we had announced an interim dividend of 2.05. We've now announced a final dividend of 2.05. This puts our dividend payout at roughly 50% of our profit. And therefore, this in some ways is what will be the rhythm you will continue to see, a steady dividend payout guided by a policy which basically based on the percentage of what our profits are. And the other thing which I also wanted to tell you is our unlevered cash flow now comes in almost at 53% of EBITDA. And this is best in class in our industry for sure. With that, let me talk you through the 4 identified levers and the strong progress that we've made in FY 2021 across this. So the first one is accelerated growth in Personal Care. We've actually been delivering a 15% CAGR in this year again, despite a lot of headwind on Beauty and Cosmetics, particularly in geographies like India. We've delivered a 50% growth on our Personal Care category. We basically and we now have it basically constitutes 46% of our overall business. So our business is now 46% Personal Care, 54% Oral Care. If you remember, this number used to be like 40, 60 about 3 odd years, 3, 4 years back in FY 2018. So from 41% to 43% to 45% and now to 46%. And with the investment we made in Cated Salopax and all the work which we've done in Beauty and Cosmetics and Pharma, particularly in the MISA region, in the region we are in now, I think we will continue to accelerate this and this will be a number you will watch out for in FY 2022 as well. I think our growth is across geographies. The only place where you see it very muted is EMEA, which got very badly impacted by Eugene's aesthetics in FY 2021. But you will now see a growth momentum coming in, Emesa. It has actually started from quarter 4 itself, but you will see this momentum picking up as we go forward. Our growth in other areas on First to Care, in AAP, in Americas, in Europe remains very, very strong. I then now want to move on to the 2nd pillar or you know of our second lever, which is continued leadership in oral care. I'm happy to share with you that we've delivered 9.9% growth in FY 2021. We've actually over a 10 year period delivered about a 10% CAGR. But if you were to look at last 5 years, we were actually delivering more like mid single digit. So this is a step jump in FY 2021 in a COVID year and a reflection of our share of wallet our wallet share growth with existing customers and our addition of certain new customers in geographies. I also want to absolutely single out once we've added another global major in Europe. So that's a journey which has started actually from March of April 2021 and you will continue to see Europe therefore as you know getting advantage of 1 more global major added in oral care. Moving on to the 3rd pillar, which is improved performance in Europe. If you look at our performance in Europe, basically, 1, 1st and foremost, we continue to deliver robust growth in a region which does not grow from a CPG point of view. We've delivered a 13.5% growth coming largely about from competitive growth. The 13.5% total growth in Europe is composed of 9.2% growth in Oral Care, very strong for Europe and 14.7% growth in Personal Care. So once we continue to accelerate our growth, accelerate our growth across categories and we are confident with recent customer acquisitions and wins that we will continue this journey of growth in Europe. And that's important and the growth is equally important in margin delivery. I think the second important piece is all the work which we've been doing from the point of view of costs. And in FY 2021, we've delivered an EBITDA growth of 31.3 percent in Europe. But more importantly, we've delivered a margin of 14.8% in FY 2021. So now reaching about the 18, this number was 10%, 10 odd percent in FY 2019. So in 24 months, a rapid scale up from about 10% to 15% and we are confident of dialing this up to high teens in the years ahead as we grow in Europe. We've also taken measures, which I would say are tough measures. We've taken measures to operationalize to streamline our operations and we have optimized our presence in Russia by manufacturing by closing down our Russia manufacturing facility. We will continue to operate in Russia. We will continue to trade in Russia, but we have closed down our Russia manufacturing facility effective 31st March 2021. Then the last but one of the most important pillars of our EPL 2.0 mission is industry leadership in eco friendly solutions. And let me spend a couple of minutes on this. So first and foremost, Latina tubes have now been qualified by APR, recyclos and cyclos. We now have a range of Latina which is available in different thicknesses from 220 microns to 350 microns. We have a greater than 50% green sustainability sourced PE as well. We have also designed in a for certain customers in Europe, PCR tubes with greater than 30% PCR ratings. So these have already been commercialized. If I was to talk to you about some of the things which we've achieved in this year is I think, 1, we started building a portfolio around PLEPTENA. So not only do we have PLEPTENA, we've got PLEPTENA PRO, which is, as the name suggests, an upgrade on PLEPTENA. These are we've also done fully recyclable tubes in this. It has better haptics enhanced haptics, chemical resistance flavor barriers. For our PCR tube, which we've done in Europe, we've actually also won Accolade. So basically we won the ECMA Tube of the Year 2020 award. And the portfolio as I was telling you today now consists of Platina, Platina Pro, Platina Metallic called, Platina Me, Platina Clear which is the work which we are doing on, Platina Double Wide, letina PCR Max, letina Biomax, so a whole range of sustainability solutions. And lastly, what gives me a lot of confidence and pride as I share with you is while we've got accreditation, while we won accolades, but we've also been acknowledged. And acknowledgment from global customers is nothing gives us more joy than being acknowledged as partners of choice with global customers. Unilever, one I have shared on slide 26, if you guys are looking at it, but we've also been working closely and have been acknowledged by the other global majors, GSK, Procter and Gamble. I also wanted to share with you that we are the 1st tube supplier in the world to get the APR approval for full tube, which is not only the laminates, which we talk about through Platina, but also the shoulder, the barrier and cap. So I think this with this, I think we've made a very promising start on sustainability. We've actually commercialized close to 100,000,000 units of tubes in FY 2021 itself. And this number will continue to grow as we move forward. We are also very conscious of our social responsibility. And I think we've used FY 2021 as a year in defining and taking our first steps around the strategy for social and corporate social responsibility. And we've defined our strategy in 2 words, Greening Lives. Greening Lives actually is about green communities. It's about waste management, but it's also about Greening Live as in making life better for people and therefore there will be programs around that, especially around scale. So the 2 key platforms we will work under Greening Live on, these are multi year platforms will be on waste management and on scaling. In a year like COVID, we've actually been very proactive in helping healthcare workers and now more recently helping people out through Akshayapatra to navigate this crisis for the people who need all that help. So we've gone out of the way. We've actually have the right partnerships in place. We are in conversations with startups to be able to do meaningful stuff in the area of waste management And we are also building a very strong governance when we do this, please. I've spoken to you earlier about Creative, which is now a subsidiary of PPM effective February 1, 2021. The transaction was consummated at an enterprise value of INR2.53 billion. The deal structure, this is an outright purchase in cash of 72.46 percent and the balance around 27.5% will be through a share swap, which will be pursuant to the merger, which is actually being applied for. Creative founders are now part of the EPL's senior management. The thing I wanted to share with you on EPL, early days, but the 2 months which we have seen and the quarter which is going on, we are basically the hypothesis with which we acquired Creative. I think all levers are playing out well and we are confident of this acquisition delivering to our strategy as we go forward. Lastly, I would like to conclude by sharing with you how do we look ahead more specifically into FY 2022. First and foremost, we are very confident of sustaining double digit revenue growth. The reason I say that is, I've talked to you in the past about business development pipeline. And I just wanted to give you an indication that the pipeline we've entered FY 2022 with is 29% higher than the pipeline we had entered FY 2021. So just to give you an indication how robust our pipeline is, all the work which we've done in this year and up until now is in order to get basically higher share of wallet or new customers or new categories actually is giving up very strong pipeline. We spoke about this, but I just want to reiterate that we have plan in place for quarter on quarter improvement in EBITDA margin. And I think moving on from here, we will deliver quarter on quarter improvement through judicious price increases, cost productivity initiatives and mix improvement, which I talked about in quite some detail. We've converted the challenge of these raw material prices into an opportunity, which in the longer period, you will see EPL reaping very rich dividends. And as we deliver this quarter on quarter improvement, we are confident of our journey of double digit growth and basically incremental improvement in EBITDA, which is what we set out for ourselves in the medium term. I spoke about sustainability. That will be a key driver and EPL is already leading the way for the industry. We will continue to dial up our efforts in this space, partner with our customers to basically come through or deliver ahead of their plans on their SDG goals. Lastly, once again, let me sign off by saying we are committed to delivering market leading revenue growth and capital efficient consistent earnings growth secure and in the medium term. One thing we will need to continue to watch out for like many other businesses is CVR COVID Wave 3 remains a concern and we need to continue to watch out for that. Here again, the good news I wanted to share with you is the protocols we've developed, what all we've learned in this period of about 14 to 15 months will come in, in good stead as we both manage operations and manage costs. And we are confident of doing that better than what we've done up to now. Thank you. With this, thank you for your time and thank you for your patience. And we will be as a management team, we are open to questions. So please go ahead and ask your questions. Thank you once again. Thank you very much. We will now begin the question and answer first question is from the line of Harish Kapoor from Investec. Please go ahead. Hello, sir. Thank you for the detailed presentation. My first question was, Colgate's management also spoke about the sustainable tube for ActiveSalt. Are we the suppliers for that tube? And then a follow-up on that was, with the transition to sustainable packaging, how much growth do you expect coming from this new lever for next 1 or 2 years? And also, is this margin accretive for us? And also that do our competitors also provide these sustainable products or it is just purely innovative and hence would lead to our market share gains? Yes. So lots of questions there. Thank you for asking them. Yes, we are a leading supplier for sustainable solutions. And in the specific case of the customer you talked about, I'm assuming you talked about Colgate in India. We are working very closely with them in this sustainable journey. So that is one part of the question. I think sustainability is a very important strategic lever as we go forward. It has it played 3 roles. I think one, it basically it is your license to operate in the future. So I think that we should remember. I think that in many ways sustainability future proofs you as an organization and future proofs therefore EPL and therefore our packaging solution. Depending on the brand and depending on the solution we provide, it could be margin accretive. There will also be instances as sustainability becomes mainstream that it will there will be places where it is neutral. In terms of our preparedness and where we are on sustainability, we continue to believe with all our knowledge that we remain ahead of the curve, while there are other global players who are working on it as well. And from a planet point of view, you need more hands on deck. So that is good news. I think with our innovation, our R and D and all the work which we've done, we remain very positive and in our assessment remain ahead of the curve. Thank you for the detailed answer. My second question was around Americas business. You've seen a lower growth this quarter, lower revenue growth. What would be the reason for this? So I will ask my colleague Ram to comment and then I'll add on to it. Ram, over to you for this question, please. You are able to hear me? Yes, we can hear you now. I can't hear you before. We can hear you. Yes. Over to you. Most U. S. Companies are facing labor shortage. This is one of the reasons. It's not just for us, for most companies. But the demand is really good. We will going forward, I think once we are able to overcome that, that's why we talk about project modernization. There are lots of side activities, which will reduce number of people. Demand is also being done. At the same time, we are also recruiting more number of people. So combined with all that, going forward, it will be good. The demand is soft. Yes. So you mentioned the demand is strong? Yes, demand is strong. Yes. Thank you, Ram. Let me quickly add, I think if you look at quarter 4, which has gone by, I think, one, America saw a very strong COVID wave into beginning of the quarter. And therefore, they were, as Ram said, many of the people were experiencing shortages of labor because people were either down with COVID or in quarantine or sort of because of contract tracing being sort of as quarantining for precaution. And I think that was not true only for us. It was also true for our customers. And I have also in the past narrated this that we are actually facing for the very first time in America a few cancellations at the last minute. So even for this quarter, I think towards the end, 1 or 2 of our leading customers had to close down their plant and stop it abruptly. So I think these are things which were there. But as you now know, as Ram was telling me, telling you, the situation of COVID in America is much, much better. The macro for United States particularly is looking very strong from the point of view of GDP growth. The demand is looking very strong, which we know from the orders which are coming in. And therefore, in the period ahead, we are very confident of improvement in America as well. Okay. Got the answer. But just a quick follow-up, does that mean that the labor shortage problem has also been resolved? Yes. Partly yes, because it was dependent on the pandemic as well. So to that extent, yes. Okay. Got it. Thank you so much. Thank you. The next question is from the line of Bharat Shah from ASG Investment Managers. Please go ahead. Yes. Thank you, Sudanshu. I just had one structural issue to talk about. Given the fact that our order case is a category is a mature business globally. And personal care, relatively greater opportunity to grow. So that is that may have a greater growth potential. But when I add up the 2, on a sustainable basis, what is the kind of a long term actual business volume growth would you ascribe? I mean, profits maybe function also of the operating leverage and some amount of financial leverage or profit growth for some time may grow at a rate faster than our volumes and the top line. But I want to understand on a long term structural basis, what kind of growth would you assume, a, for your lowercase and b, for your personal care activity? Yes. So thank you, Bharat. We've spoken about this a bit in the past as well. I think the fact that we are strengthening both the pillars and both in a way if I could look at it, this is like our double engine. I think we are confident of balancing and moving forward as we go. So while when we say oral is mature, the point is that there is still considerable room for growth. We've been demonstrating it year on year. Even in last year, we delivered a 9% 9.9% growth in oral. So we continue to believe that there is room for growth in oral. And on another day, I can get into various levers, which give us the growth potential. But you are right that Beauty and Cosmetics has a much higher growth potential, both the market growth and our own share perspective, pharma, Beauty and Cosmetics. And we continue to work a lot on that. So I think in across the region, we've done and we are growing that segment faster and therefore that share is continuously growing. So we are working on that piece and we are getting ourselves geared up to increase the velocity of growth further on the personal care end, specifically beauty and cosmetics and pharma. So I think we see growth potential in both areas. We continue to see high single digit kind of numbers for oral as well in the medium term and we would like to see mid to high double digit numbers for what you call personal care, especially beauty and cosmetics and pharma? Yes. Thank you so much. Thank you. The next question is from the line of Praman Kumar from Motala Luttwal. Please go ahead. Yes. Hi, sir. So my question is regarding the America. We have in the Q3, we have discussed about the travel tube lower sales. So with the opening of the market, can we expect that segment is going to have a will be a driver for America? And can you talk about the how what was the total percentage of the business of the travel tube? So Travel Tubes contribute a large part, I would not like to share, but yes, in case of America, they contribute a large portion of our business and therefore America had a bigger headwind with travel and tourism taking a beating. You are right that with the opening up of U. S. Now, there is already we can see demand coming in. And we've got to navigate this as we go forward because this pandemic has weighed, as you know. So I think as I speak to you today, yes, the situation is opening up and the demand is improving and demand is better and so that part should be good. But what gives us confidence for America is the work which we've done across in strengthening our pipeline. And Ram was speaking to it in response to the earlier question, but we've opened up on West Coast. We've actually now have more customers who have come in. We have got more beauty and cosmetics orders. So the work which is there, we have some high end oral tubes. So the work which we have done overall continues to give us confidence for growth in America. And I think if the situation on COVID improves and becomes near normal or the new normal in future and travel comes in, that will be an added benefit on top of it. So the second question is regarding America. We have mentioned in the PPT the new customer wins across category and conversion from bottle to tubes, conversion and cross selling of personal products also. So assuming these factor and recovery in tube segment, we can see in coming quarter is going to be a robust for America business? [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Yes. You will continue to see very good growth as we go forward. Talking about the overall margin profile of Europe Business, we have seen a significant improvement. So can you talk about the margin trajectory for Europe Business in next 2 to 3 years? I have already spoken about it in the past. As I told you, we have rapidly increased it to about mid teens now. I think our journey in the medium term now, as you described, the 3 odd years, will be we will continue to incrementally grow it from mid teens to high teens. And I think that is something which we have always said and we continue to believe in that. Okay. Sorry to interrupt. Your audio was ringing me. I couldn't hear you. Can you hear me now? Yes, sir. You can go ahead. Yes. So on the Europe question, what I was saying is that I have shared this in the past as well. As a team, we have shared this. We have made very rapid progress from the in the first phase from 10%, 10% to now mid teens, 14.8%. In the medium term now, as you described 3 to 5 years, we will continue to incrementally grow our margin and improve them. And we want to be in high teens as we go forward. So the audio was breaking again. You are? The last So we would like to deliver in the medium term high teens in Europe. Thank you. That was the last question. I would now like to hand the conference over to the management for closing comments. So thank you very much. I think thank you for your time. And I just want to once again sign off by letting you know that as we look into the future, we remain confident, we remain positive and optimistic with continuing to strengthen our position as a company and driving our leadership on sustainability. So double digit revenue growth, plan in place for quarter on quarter improvement in EBITDA and sustainability being the driver as we go forward. The one area we would need to continue to watch out for is if there are further waves and especially a severe COVID wave in the future. So and we remain committed to delivering market leading revenue growth and capital efficient consistent earnings growth. Thank you. Thank you for your time. Thank you, guys. Thank you. On behalf of Systematics Institution Equity, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.