Earnings Call: H1 2021

Mar 4, 2021

Good morning, ladies and gentlemen, and welcome to the Origin Enterprises Plc Interim Results Call. Just a reminder that this call is being webcast live on the Internet and I will now pass over to Sean Coyle, CEO of Origin Enterprises Plc. Please go ahead, sir. Thank you, Shanice. Good morning, everybody, and welcome to the is on page 1 2021 origin results call. I'm joined this morning by our new CFO, TJ Kelly and also by our Head of Investor Relations, Brendan Cochrane. The traditional Safe Harbor statement applies at this stage, which you can see on screen now, and we'll move through the presentation. So overall, we're pleased with the performance in the first half of the year. Obviously, 2020 was an extremely challenging year, and the weather conditions and in particular the present autumn winter planting in a UK context was very challenging for the group in 2020. And I'm pleased to say that there's been a significant rebound in planting levels Across U. K, we're seeing good prospects in terms of available crop to service, both from a winter wheat, a winter barley and indeed an oilseed rape crop perspective in the UK. And in our other markets, We're continuing to expect underlying growth across Continental Europe and in LatAm. Revenue in the half was down by about 5.4%, but at an underlying level was flat. And the And operating profit in the period was €1,200,000 about €4,000,000 growth on a reported basis compared to 2020, the present But the underlying increase was more significant than that at about €5,700,000 the present The business obviously experienced some challenging conditions from an EBITDA perspective over the last 12 months. And We put significant work into reducing working capital. For the last 18 months now, we've been Working very hard at extracting working capital, in particular from our CE region. And working capital reduction in the half was €88,000,000 year on year. But that is, I suppose, an extension of the very good work that was done throughout much of 2020 as well. So we're very pleased with the results from a cash management perspective. Net bank debt was down by over €100,000,000 and our leverage at the end of the period, net debt to EBITDA was 2.76 times compared to 3.24 times at this time last year. And our adjusted loss per share at $0.153 was an improvement of presentation is by €0.0427 on the previous year. And I'm pleased to say this morning that we are resuming the payment of dividends and intend to pay an interim dividend of €0.035 per share, which is in line with previous years. As I said, from an operational perspective, cropping is back to more normalized levels, particularly in the UK, which was the most challenged part of our market in 2020. And in addition to that, then we have improved on farm sentiment due to global increases in crop prices. So we do expect that farmers right around the globe will be more willing to spend on inputs as a result of that. We continue to see improvement in our gross margin in the context of our CE business. And as you know, we've pointed to several initiatives that we've undertaken to improve gross margin across the CE businesses, and they are progressing well. And in our LatAm business, what we've decided to do is invest further in controlled release fertilizer manufacturing plant In Minas Gerais, just north of Sao Paulo, which will allow us to expand into a more bulk market In the context of servicing farmers and distributors in that part of the country rather than incur significant freight costs distributing both the product from our existing facility in Parana. We also launched our B2B and B2C sustainability manifestos across the fertilizer businesses and our Agri business in the U. K, and we'll extend that across to our CE businesses over the next 6 months. And in addition to that, significant measures have been put in place to improve our ESG ratings. We've become a signatory to the UN Global Compact, we've got a good first time rating from CDP. And indeed, we've improved our Sustainalytics Ratings year on year. So significant effort has gone in from the team to try and improve our ESG ratings through increased engagement, but also formalization of many of the group policies that have been in place for a period of time. And as I mentioned at the outset of the call, TJ has joined as CFO and we're delighted to have him here as an extra pair of hands to person gets stuck into delivering on growth over the next couple of years. So from a business perspective, underlying group Revenue was down by 2.6% when you exclude the crop marketing figures. And the mix from an overall volume and price basis was that Volume was up by about 6.8%, principally in the areas of feed and fertilizer in our B2B segment And price down by about 4% overall. And again, that's principally driven by our fertilizer segment. In particular, prices for fertilizer for most of the first half of the year were significantly lower than the first half of the previous year, although towards the back end of the period, they have been on the increase in line with Looking at the individual segments, Ireland, UK posted a loss of €2,700,000 relative of the €9,100,000 loss in the first half of twenty twenty and the underlying performance improved by €6,100,000 as I said, we've seen a return to a more normalized cropping profile. And in particular, our fertilizer and feed segments drove significant volume increases versus the previous year. And we had some challenges within our agri business, In particular, oilseed rate planted area declined and as a result of that, crop protection sales We're down. And in particular, the autumn seed volumes were also quite challenged due to a carryover of stock on farm from autumn 2019 when farmers bought expecting to be able to plant, But because of the weather conditions in 2019, did not get the opportunity to do so. We don't expect that problem of carryover stock on farm to Into the spring period. And the rationale for that is that the knowledge about the planted area Certainly existed in advance of the buying season for crop protection products in spring 2020. And therefore, there was no overbuying of the crop protection products coming into that spring period. So we would not expect as challenging situation in relation to Stockholm Farm coming into the second half of the year. We've already spoken to the growth in planted area and that's approximately a 50% increase year on year taking barley, wheat and oilseed rate together. And our amenity business Has had a rather bumpy last 12 months from a COVID perspective, being closed for Significant periods reopening and experiencing catch up activity and then closing again or operating under restricted conditions. And in particular, the customer base operating under restricted conditions through significant periods. So We're a little more cautious about the reopening of golf courses, amenity areas, football pitches, etcetera, Across the U. K. And therefore, we're cautious about the performance of AminoC in the second half of the year. But when it reopens, it does appear to have significant catch up activity. So we're reasonably hopeful that we will see some bounce back if In our Continental European segment, the underlying operating profit decreased by about €700,000 Obviously, it's a very small part of the year from an operating profit perspective and the substantial profits are delivered in the spring. There is limited challenge, I would say, within this business. We are significantly happier with the performance of the business and all of the activity that we've been undertaking to improve our investment in working capital, to drive gross margin performance Within the business and to reduce stocking levels and better exposure, I think have been doing well. So We're confident of growth in this segment for the year as a whole, and we're not overly concerned about the performance in the first half. I think overall cropping is also pointing to some growth there. So we're reasonably happy that the performance of the CE business In Latin America, obviously, our Brazilian business has We've seen some significant depreciation of the reais versus the euro. That's been up to 40% in the period relative to last year. And that has had a very significant impact on reported profitability in the period. You can see on the right hand side of the slide, There was growth in operating profit in the period at an underlying level to about 6,000,000 euros, but currency has taken €2,100,000 off that number from a reported perspective. There's been significant growth in volumes and these are represented in tonnage, I guess, with significant growth, particularly in the controlled segment of the business. That particular product range is at a lower margin level than our standard or our traditional product range mix within the FourGreen business. However, it is a growing market and a positive market from an EBIT and return on capital employed perspective. And there's a relatively modest capital investment in that second present CRS plant in Brazil, which should yield good returns. So we're reasonably happy that although CRS is a lower margin segment than the balance of the portfolio within the Latin American division, that it's the right thing to do to expand sales in An area where we have good competency, particularly in the buildings and origin for U. K. Businesses already, and it's a growing segment of the market in a LatAm context. From a cropping perspective, both soy and corn Are expected to grow year on year as well. So the overall planted area allows for natural growth in the market as well. So I would say that overall, we're extremely happy with how Latin America is performing, present value of the reported number is down from a currency perspective. So I'll pass over to T. J, who will run through the financials. Thanks, John. Moving to Page 10. Here, I'll just focus on some of the highlights, focusing on net bank debt and dividend. Overall, we're very pleased with the level of net bank debt reduction in the period, which reduced by just under €106,000,000 to €158,300,000 period end and that in turn converted to a net debt to EBITDA ratio of 2.76 times, well within our covenant limit of 3.5 and well ahead of last year's 2.2. The key driver of that net bank debt reduction was a strong working capital performance, as Sean has said, where in absolute terms, working capital reduced by €88,000,000 at the end of million at the end of Jan 21 compared to the end of Jan 2020. I'll come back to the drivers of our working capital reduction in a little bit more detail later. Moving to dividend. As you recall, due to the market challenges and uncertainty caused by COVID last year, The Board determined that it was prudent to spend the final dividend for FY 2020. That said, the Board continues to be the dividend payment as an important part of our capital allocation strategy As we balance the need to optimize shareholder returns, while also ensuring appropriate capital is retained within the business to drive growth. I said we're pleased today to announce an interim dividend of $0.035 per share. Moving to Page 11. Group revenue was €572,400,000 for the first half, a decline of 5.4% on a reported basis and in line with the corresponding period on a constant currency basis. Operating profit for the period was €1,200,000 which compared favorably to a loss 2.8 in H1 2020, largely as a result of a more normalized cropping profile across the group and set against last year from clearly the present The highly unseasonal weather conditions materially impacted business performance. Origin's share of profit after interest and tax from associated JVs amount to €800,000 decrease in the prior year, principally due to the disposal of the group's interest in Ferrari Segato. Finally, on this page, I'll draw your attention to the reduction in net finance cost of €1,000,000 in the period, reflecting reduced average net debt levels across the period, Including in higher geography in such as Ukraine and Brazil, net finance costs overall amounted to €4,500,000 compared to €5,500,000 in the corresponding period last year. Moving to Page 12, looking into more detail at group revenue. Underlying revenue was flat in the period with volumes plus 2% and pricing minus 2%. When excluding crop marketing revenues, underlying volumes were up 6.8% and pricing adverse 3.9 percent. Volume performance reflected underlying volume growth in fertilizer tonnage with pricing adverse due to lower fertilizer prices. And as presentation that Sean outlined, that's a function of lower average prices through the period of these fertilizer prices were increasing at the back end of page 1. Otherwise other prop input pricing remained broadly stable, it was slightly increasing in the period. As you will see, foreign currency had a significant headwind impact of 5.3% negative in period, driven primarily by the Brasil Real depreciation of approximately 41% and the Ukrainian Horebna depreciation of approximately 24% in the period. Group operating profit on Page 13 then. Underlying operating profit grew €5,700,000 to €2,900,000 before currency translation negative headwind of €1,700,000 those currency translation impacts driven by the same factors as I just outlined. Just looking into more detail then on Page 14 at the cash flows. You will note there's a positive inflow in working capital in the 12 months to January 21 of €70,000,000 in the right hand column. Just to note that the difference between this movement and the €88,000,000 reduction in the balance sheet position that I referenced earlier is due to closing versus average foreign currency change rates used to convert working capital on the balance sheet and on the cash flow. Behind the €88,000,000 or €70,000,000 cash flow reduction, there are a number of drivers I'm going to categorize these improvements into 2 broad buckets, which we see as those that are one off in nature and those that are more sustainable in nature. Looking at those items that are more one off in nature, I'll include there the positive impact of COVID-nineteen VAT deferrals in the UK of approximately CHF 14,000,000 And then the impact of lower fertilizer pricing through most of page 1 combined with lower sales in certain product categories that Sean outlined earlier in Agri U. K. Due to the carryover of Bonn Farm inventory from last season and lower obviously rate planting areas in H1, rough approximation of the quantum there is about €15,000,000 the presence of the movement then are items that we would expect to retain benefit of as we go forward. In our UK fertilizer business, inventory levels normalized FY 2021 when compared to what was in our officially high level in H1 FY 2020, Primarily as a result of preparation for Brexit. Across the Central European Business has been, as Sean has said, we've made significant progress in working capital. In addition, we've seen the benefit of improved stocking arrangements with certain of our key suppliers in the CE market, which effectively allows us to take any unused inventory that we hold at season end to be effectively credited and rebuilt for the following period. Also across CE, we have seen improved collections overall with a higher proportion of cash sales in certain markets. And when we look at the working capital performance in the CE context in a 2 year period, We've taken out approximately €50,000,000 of working capital across the last 2 years. Moving then to Page 15, again, just to recap on the net debt to EBITDA. Again, we're very pleased with the results reduction of the metric to 2.6 times compared to our covenant of 3.5 times. So with that, I'll turn it back to Sean. Thanks, Tighe. So we'll run very quickly through some of the key aspects of the business from a B2C and The perspective just for those investors who are new to the story. I mean, the the present A key part of our B2C business is access on farm. And you can see there that we have the number one Market share position in the UK with access to about 19,000 direct farm customers and across the CE geographies, we're either number 2 or number 3 player in the market with varyingly access To customers ranging from about 3000 to 7000 customers across each of those geographies. And that route to market is and continues to be important not just for the major R and D manufacturers, but a whole host of secondary players in the market who would like to get access for their product ranges onto the farm customer base. And the agri model does a very good job of promoting technically advanced products, Which have advantages for the farmers in terms of yield output. From a B2B the perspective we continue to enhance and have desire to acquire more in this area Our product capability and our in house capability. We've always had that with our origin fertilizer range. And as you know, we have been Enhancing the capability of our origin fertilizer businesses, both Gouldings in Ireland, origin fert In the UK and the smaller seaweed fertilizer businesses that we operate, by continuing to invest in new product development, Enhanced product offerings and more environmentally friendly fertilizers, and that continues to happen. In addition to that, then we have specialty ranges within our 4th Green business in LatAm and our Folic business, Which is manufactured in Poland, but which is distributed across our own network, our B2C network and also through other distributors in markets outside of the markets that we currently serve. We're continuing to enhance the performance of our CE business, which has been the segment which we've been most disappointed in from a perspective by leveraging some of the group capabilities to try and drive margin and operational performance. And that ranges from changing the product mix within the portfolio, continuing to focus, as T. J. Said earlier, on negotiations with suppliers to improve our terms and relationships and continuing to distribute our own proprietary product range through the channel. In addition to that, then we're working on other areas of commercial excellence, whether it's Finding the value proposition within those markets, segmenting the customer bases to dial down sales, which are of Low margin and low quality and longer credit terms and dial up sales, which are better quality sales at higher margin levels and at lower credit terms. So that is strongly contributing to the better performance within the CE businesses. And finally then, continuing to bring our sales team and agronomists on the ground up the curve from an agronomic knowledge perspective with ongoing training and education. Operationally, we've enhanced our CE businesses by consolidating warehouses and reducing the number of facilities and taking out Excess stock where possible and that work continues. Obviously, we have gone through and are going through the merger of our Romanian operations in that context and that's been an important driver of improved performance. We're seeing greater working capital efficiency across the business, the present Principally through that customer segmentation piece that we talked about earlier. And we continue to coordinate trials in an improved way across the present European landscape to drive new product adoption and get exclusive access to products Higher margins rather than continue to try and operate in the area of commodity products, which are being distributed by all players in the market. So the approach to CEE has been very much to try and mirror many of the good things that we're doing within our Agri U. K. Business. And all of that work, I think, is paying dividend. From a capital allocation perspective, there continues to be Financial discipline and we do intend to maintain the balance sheet strength that we've had in the business. Certainly, occasional weather events do occur and do have a very significant impact on the business From time to time. And I think we will continue to run the business on a fairly tight leash from a capital allocation perspective. We don't see ourselves doing anything too well from an M and A perspective, and we continue to Review the portfolio to try and deliver increased returns over time. And in time, that may well involve disposals are parts of the business that continue to underperform. We are seeing improvements to segments of the business that have under performed historically and we'll continue improving those businesses. But if there are parts of the portfolio that don't perform, we are open to disposing of those. From a dividend perspective, we're delighted, as TJ said, to resume the dividend payout this year. And we continue to invest in people. We continue to invest in opportunities for organic growth with capital investment, such as the investments we've made in Lat and in other segments of the market in the past. We're investing in our digital platform to continue to be relevant in that space. And we continue to invest in product capabilities. So we have an intention, for example, to expand our in a Polish context and increase the capacity of that business, which is showing significant growth at the moment. As we mentioned on the first slide, Origin continues to work on improving its sustainability ratings. But more importantly, we continue to work on promoting sustainable food production systems, which has always been at the heart of our engagement the With the customer. So whether it's improvement of soil health through our fertilizer division, and that's Combining and blending the right nutrients together with the right technologies To improve soil health and leave the soil in a condition that it is sustainably used for farming in the longer term Or whether it's the types of products that we promote and sell within our B2C businesses, we've always advocated and advise farmers in relation to sustainable food production and the best practices on farm. The presentation. The engagement and partnership with industry bodies and government and the And regulatory bodies, I suppose, in relation to the promotion of sustainable food production systems is an important part of that journey. And obviously, we're seeing significant regulatory change at a European level with the new EU farm to And being in the room to shape the legislation and to try and involve our own farming partners In that discussion and advising in the best way is key to what we do. In addition to that, then we are hugely involved in conducting all of the work that we do with integrity and using best practices. So whether it's Anti bribery and corruption policy, whether it's our own health and safety actions, whether it's activity in relation to Our supply chain inbound and the advice that we give on farm, all of those now are being documented more broadly at a group level and turned into clear articulate policies, which the ESG ratings agencies are in a position to then digest and understand. And the And all of that decision making engagement is feeding into improved DSG ratings. So whether it's Global Compact and the Sustainable Development Goals that are already out there. So lots of positive activity in this space. From a grower perspective, the Agri 5 Point Plan is not new to many of you, We're taking all of the industry challenges that we face from a regulatory perspective, From a farm profitability perspective, the pest, weed and disease resistance and losses of products and new chemistries coming to market. And turning that into a 5 point plan where we can advise growers on the best practices to meet the landscape of changing regulation. There is huge change ahead for farmers in relation to their use of products on farm. And our B2C businesses are at the forefront of advising farmers In that transition, and we have some plans in place to deliver change in that area. And transitioning that theory into practice through our Green Horizons Sustainability Manifesto Involves some practical on the ground work, which will assist farmers in that regard. So whether it's establishing a field of the future, which will use substantially less plant protection products and a greater number of biological solutions, whether it's establishing sustainability ratings for all of our seed categories and moving the choice of seed that we have available within the mix to the higher sustainability trade levels our establishment of net 0I farms, which will look at the opportunity to reduce carbon footprint across the landscape, all of these practical solutions will be used to educate and train and advise our own And similarly from a B2B perspective, All of our fertilizer activity is now geared towards optimizing soil health with solutions That gives farmers a best possible outcome in the use of their fertilizer on farm from both a carbon perspective and a nutritional replacement perspective. So the NutriMatch product range, which we've always had there towards the bottom of the page, establishes prescription fertilizers which match the deficiencies in soil and the deficiencies Brought about by various crops and replenish only those areas that need replenishment. So it's all about stewardship of the land. It's all about improving the use and efficiency of products on land. And the And in addition to that, Spain, in the last 12 months, we've supplemented it with a carbon calculator tool called NutriCloo, Which is used to give any of our customers the carbon footprint of the products that they're buying. So presentation. For each of our fertilizer claims, we can advise farmers on the type of carbon footprint that they have with each of the products. So It's about applying the right rate of fertilizers, the right rate of nitrogen as part of the blame on farm. Person So we're pretty pleased with how the first half has gone. There are plenty of Potential challenges are held in terms of weather. There's always the opportunity that Things can go the wrong way, and therefore, we're cautious in that respect in relation to the second half. Cropping is much improved on last year and at least gives us the opportunity to perform strongly in the second half of the year. And sentiment broadly across the geographies is much improved on FY 2020 as well, supported by very strong global grain prices. There have been some challenges in the first half with the carryover of presentation. The business has done extremely well from a cash management perspective. We have delivered significant working capital reductions right around the group. It's not just an exclusive to the CE market, but significant work has gone into improving the investment of capital in the business. Present and we're working well towards our strategic goals of improving product mix, improving margins within the CE geographies, Delivering on sustainable solutions for our customers, improving the branding and merging our presence of operations in a Romanian context and investing in areas for organic growth as well as looking at the opportunities for M and A activity. There's been reasonably low level of disruption to the agribusiness From both Brexit and from COVID-nineteen. However, some risks remain in respect of our Aminazi business, we're a little bit cautious about the outlook for our Aminazi business for the remainder of the year. On the whole, I would say we're very happy with where the balance sheet has landed and how the business has performed from a cash perspective. And we see improvements in the business model and with TJ joining now, a good leadership team in place that will deliver on the group's this will only take a few moments. If you wish to cancel that request, please press the hash key. Once again, Your first question is from the line of person of Jason Rollins from Goodbody. Good morning, Jason and T. J. Call is very brief. I think the first question really is around the So sales of C0 product decibels will be happening at the moment And application will happen in the next 2 to 3 weeks. We certainly had a reasonable calling you the 2020 for 2020. It's going to start to roll very, very quickly. In the frame now and at this point presentation person It's pretty bloody obvious. I think we have to say that while there has been a good person as well. Sorry guys, I know that I've got a problem. In relation to M and A activity, maybe I'll take that one and hand over to T. J. On the dividend. The principal areas we would look to invest have not changed from those that we outlined in the last person will be also, we would be concentrating on B2B businesses. We would be very much focused on product John, as we begin working closely, we will work through our strategic planning and budgeting process over the next few months through spring. And the present And once we're through that then, that will obviously determine the capital needs for the business as we look out. And we'd obviously be able to take the market then as we payout policy at a little achievable over 35%. So that is our current policy. And the present And I'd say, once we've been through a planning cycle this year, we'll update the Board in due sorry, we'll update the market rather in due course at year end. Thanks very much. Okay. Thank you. Your next question comes from the line of Roland French from Davy. Please ask your question. Hi, everybody. Good morning, Sean, TJ and Brendan. Three questions from me. Just following on from the last questions around capital allocation. So clearly, Lots of work has been done around working capital that will look to be a kind of a structural benefit going forward. Just want to parse out, do you envisage running Effectively, the group at a lower gearing level going forward? Or is this a recycling of that capital into bolt on organic investment opportunities? So the first question. And then I guess second question is just on inflation. So you've referenced clearly the pickup of inflation across the board. So I'm trying to think about it through the lens of input prices, how your pricing arrangements work. And then clearly, output prices are very strong, Kind of driving that propensity for applications and spend from the farmers perspective. So kind of net net, are you saying that kind of inflationary environment is positive Economic models, maybe just kind of tease that out a little bit. And then finally, on Brazil, clearly, that control remains first. Growth rate has been very strong through the first half. I'm just kind of wondering what are the products or expansion opportunities you see in the region. And maybe just remind us of what the split of kind of product sales is currently, including that CRS? Okay, Ron. So on Capital allocation and gearing, I guess, to answer your question, the recent past Probably as good a guide as anything as to the level of gearing we would want to sustain within the business. I mean, typically, we'll run the business reasonably conservatively with sub one Net debt to EBITDA at year end and so 2.5 times net debt to EBITDA and the on a half year basis. And ideally, that's where we'd like to keep the business in terms of leverage. And that gives us, I suppose, then the opportunity to withstand any shocks that we might have from a trading perspective. So clearly, a weather event such as we had in the U. K. Market In 2020 has a very significant impact on EBITDA, and we wouldn't want to be in a situation where the business was challenged in terms of meeting covenants just because of the weather event. So we'll have to run the business with a lower level of Leverage as a result. On product inflation and inflation generally, I mean, output prices are probably at as high a level as they've been since 2012. So this is a 9 year high in terms of grain prices globally. And Commodity prices have been in the doldrums are at fairly low levels for the intervening 8 years. So it does provide opportunity for some price inflation. We're not seeing significant price inflation from the major manufacturers in relation to crop protection products for the upcoming season. But you might imagine that you'll see some as time progresses. Now there's always an attempt to eke out 1% to 2% inflationary adjustments in product pricing on a year to year basis, and that has success to varying degrees Depending on the market that you're in. Fertilizer is a different animal. And the volatility of fertilizer prices can be quite significant, and you can see very substantial movements in raw material prices from a fertilizer perspective Globally on an annual intra year and intra month basis. So that's certainly the input that We'd expect the greatest volatility in. There's no doubt that the raw material producers have been Taking advantage of the output prices being higher, the grain prices being higher to drive some of the inflation in the current time. But that being said, they were and had dropped to significantly Lower levels in FY 2020 than they had been trading at through 2019, for example. So And as you know, energy prices, gas and oil and various other things Have an input and a strong bearing on fertilizer raw material prices in terms of use of products. So that's one which I don't think we'll be able to call in terms of direction of travel for the longer term, but certainly, we would expect to see higher fertilizer prices prevail in the short term and right throughout the balance of this year, Supported by higher grain prices at the farm level. That said, still relatively low. On the estimated half year, it's approximately 15% of revenues, albeit represents in volume terms and 20s terms quite a bit more. It's a good one target to this portfolio and obviously there is the recent investment, the investment we're talking about this morning. It's a set Thank you. Your next question comes from the line of Anne Craig from Edison. Please ask your question. Good morning. Thank you for taking my question. I just got one and that's going back to the discussion about sustainability and in the reference would you be sourcing these from 3rd parties? And if so, would you be able to indicate who they were? Yes, it's both and. So our Corgreen business in Brazil produces some biological products. So we do produce some products in house, which we will extend the cost of sales through our other B2C channels. But we also would trial extensively a large number of biological products from many different manufacturers. So We're agnostic as to what manufacturer we would use. It's about the efficiency and efficaciousness Of the product. So we would trial. And I think we've tried close on 200 products over the course of the last 18 months For use in the in this space. So biologicals and ecological products for use across the geographies have been trialed extensively. And if they've proven to work and have effectiveness, we will add them to our product portfolio. And if they don't, we don't add them to our product portfolio. So It's as simple as that. I wouldn't be au fait with the nature of which suppliers or manufacturers are They go through that rigorous R and D process in order to be selected for use. Presentation. Thank you. There are no further questions. So that does conclude our conference call for today. Thank you for participating. You may now disconnect your line.