H2 20/21

Jun 30, 2021

Thanks, Vasily. Good morning, everybody. Usual format, we'll give you I'll give you a quick run through upfront and then Johnny and I will be happy to take your questions. We're pleased with a strong performance and this is now a stronger business. Obviously, good sales, profit, free cash flow growth, A net cash business now on the balance sheet and with continuing strong trading, we're in a good place. How we've done that? First of all, we think we've seen a structural shift in the technology market and second, We are making the most of it. So the shift in the technology market, the market is now about a quarter bigger than it was 2 years ago, and we expect a big chunk of that growth to stick. Over 3 quarters of our customers are telling us that technology is playing a bigger role in their lives now, whether it's staying connected, productive, healthy or entertained. And some of the trends driving that are here to stay, whether it's half of UK office workers heading into hybrid working or whether it's in home entertainment, gaming Now being a bigger industry, the movie and music combined. So in short, a structurally larger market. 2nd, we should be able to make the most of it and we are. We should be able to as the growing number 1 in all of our markets But with the winning omnichannel business model and the strategy to make the most of that is working. On omnichannel, we first of all, we have I've grown a big online arm with online more than doubling in size to nearly £5,000,000,000 We have invested in our stores, notably our store colleagues, and we are getting better and better at bringing online and stores together to do things for customers that nobody else can do, whether it's getting their product to them right now with ever faster order and collect or whether it's Offering them help 20 fourseven via 20 fourseven live video shopping service, ShopLive. So a lot of progress probably ahead of our plans on omnichannel. On credit and services, the important Components are bringing customers building customers for life. We've seen more disruption due to the pandemic, but we're still confident of the future there. I can't take any of your questions and we're building on some very strong foundations and we've seen some good results, whether it's credit customers growing by 20%, whether it's the startling success of our customer club that we launched first in the Nordics. And the upside to come is quite exciting given the Greater number of customers that we have, 25% more than 3 years ago and our ability to stimulate trade with those customers better than ever through data and CRM We can come back to that. Finally, the legacy mobile issue, which has obviously been a big feature for this business, this is the year when we put that behind us. And the transformation, despite all the bumps from COVID, is on track. Stronger cash flow on track to breakeven during the course of this financial year, now free of all the legacy constraints and going after some upside, some upside that we haven't promised, but we're going for anyway. And that's our future mobile offer, which may be late, but it will land during the course of this year and has got important support from hardware manufacturers and networks alike. So finally, I mean, in summary, I'd say that we've had a good year and that we're on the right path, but there is a lot more in the tank. We believe that we're on the path to being a much more valuable business as the growing market leader in a bigger essential category with the winning business model, A strategy that's working with legacy issues resolved with a strong balance sheet now and strong cash flow generation and upside to come in our cash flow generation. From the underlying business itself, from the fact that this FY 'twenty two is the peak investment year and CapEx We'll go down from this point and this is the peak year for exceptionals as well. We anticipate no further large scale restructuring from this point forward. So all of that points to sustainably larger cash generation to come. And with that, I will pause and we can go to your questions. Thank We will now take our first question from Simon Bolas from Numis. Please go ahead. Hi, thank you. Good morning, Don. Good morning. Three quick ones, if it would be okay. First one, you kind of Speaking of presentation to the kind of market share headwind from channel shift, which obviously is expected to kind of partially reverse, If it does settle at 50% as it looks to be in your business at the moment, on that basis, do you think you can recover total market share to pre pandemic levels? And if not, what would be the tools to get you towards those levels? And second one is there's a bit of reference around the kind of next generation Retail platform and improved web experience. Just wondering what are, to your mind, are the most significant changes that we should be thinking of and customers will be seeing? And then thirdly, it's just on CapEx. Is there any can you give a rough split of this year's €190,000,000 And how fast Should we think about that dropping away in our peers? Okay. I'll take the first two and Johnny Can take the 3rd one. And so the first, as you say, given that this was a business in UK Electrical, 78% geared to stores pre pandemic and we're now settling to fifty-fifty as you'd expect. That has created some aggregate market share headwinds. In the medium term, we expect market share gains. That's the headline. And the reason for that is increasingly over time, the customers On the channel customers, over 60% of our customers prefer to shop with both and it's through both that we serve them and we'll serve them over time. And all of the initiatives that we've got to continue to do the basics well on the online basics of range, price, Availability, an easier experience, we're going to continue with that. All the investments in our colleagues to give the customers in store a better experience, we're going to continue with that. And then there are big growth drivers on omni channel of the customers never needs to be told that we're out of stock, that we can get The product to them ever faster and we can help them 20 fourseven whether they're online or in store via live video shopping, all of these things we're getting heavily behind. When you add in the stickiness and the greater value that comes from credit and services, we see significant upside to come from all of that as well. And we're not talking much about this at this stage, but we're quite excited by the advances that we're making on data and on CRM to be able to stay more relevantly in touch with more customers more of the time. And we have, of course, many more customers now to stay in touch with. So all of those things points are good growth drivers for the business, and we expect expect them to contribute towards share gains. Now one in particular you touched on, which is the next generation retail platform, which is itself going to be an important further How that shows up in the P and L is we're constrained from filling the basket with customers, from selling up to premium products and from selling credit and services as we would like to. Going forward, it's not just a richer, easier, more inspiring shopping experience with a new platform, although it will be all of those things. It will also be easier for us to introduce the right bundle to customers, so to cross sell, to upsell to premium products and to sell more credit and more services. All of those things are Not only good growth drivers, but good gross margin improvement as well. And this is happening during the course of this financial year in the UK and in the Nordics. So we're pretty excited about the fueling of growth in both markets. Johnny, do you want to take the CapEx question? Seems to have lost Johnny momentarily. Yes. So coming back on the exact idea, just coming back on the CapEx question in terms of that 190, As Alex pointed out, a lot of it is geared towards the technology platform. So that's both in the Nordics And in the UK and Ireland, and you start to see some of that land, particularly in terms of the customer facing stuff as we go through the course of this year. As Alex pointed out, we expect the $190,000,000 to be the peak of this year's investment. We've obviously talked So about the maintenance CapEx being a lot lower than that. So at the moment, we're not giving detailed guidance that we expect to see that fade and coming down particularly from FY 'twenty three onwards cash generation. Simon, does that answer your question? Yes, that's great. Thank you. Thanks, Asad. We will now take our next question from Warwick Onken from Exane BNP Paribas. Please go ahead. Good morning, Warrick. Thanks and good morning all. I've got three questions as well please. The first is, could you just give us an update on Supply chain availability, input pressure, those sorts of topics And be thinking about in terms of disruption? And the second question is in your slides, You say you've got 18,000 SKUs now in the UK and a lot more in the Nordics. Could you just sort of explain The gap between those numbers and flesh out the ambition for the UK in terms of range. And then the third question is on gross margin dilution from online. I think in the prepared remarks, you said you don't expect dilution from online From now on, I wasn't clear whether that's because sort of theoretically you've totally closed the gap or is it more a case that it's because you expect the online mix Following this year. Thanks, Roy. Johnny can take the third of those. Let me go to the first two. We've seen some quite big challenges for the whole past for most of the past financial year, mine going forward on availability. And that's rooted in the well publicized chipset shortage as well as some shortages in capacity on freight. And we're expecting that to continue through calendar 'twenty two. And you'll know that Sectors like automotive are increasingly consuming more silicon and that's placing pressure on supply and there are bottlenecks particularly amongst 2nd and third tier suppliers in China. But that's been with us for some time. And I think The fact that we've been able to cope with that to maintain market leading levels of availability and to fuel the growth that we've seen, for example, over 100% growth in the UK in online. I think that's the best Testaments to the power that being number 1 gives us and the weight that, that gives us with our suppliers so that we can be first in the queue for scarce stock. And we've worked hard to make that happen during the course of the past year. We'll continue to work hard. We're expecting further challenges. We're not flagging material risk to our top line progress. I think the second point on range is an interesting one. You've rightly picked up that even though we've made some good progress increasing the range by 50% in the UK, There's still a long way to go before we get to anywhere close to the 104,000 SKUs that we have in Sweden at the moment, for example. What's behind that, we're further advanced in our Nordics part of our business at the moment on experimenting with things like drop ship and with marketplace that allow us to put a greater range in front of customers without taking the stock risk or the logistics cost. And so we've chosen to experiment with it there first. We quite liked the results and that obviously Leads quite a lot of headroom for greater assortments in the UK. And if you later on in the presentation, we talk about one of the exciting bits of ups for this business is we've got many more customers to talk to now. And when you put together things like 25% more customers, When you put together the fact that we are contact rights have left forward with those customers, we've got better data and CRM to get in touch with them, And we have a bigger assortment over time, we will have a bigger and bigger assortment to put in front of them. And these are obviously good reasons to believe in further growth. Johnny, do you want to take the gross margin question? Yes. And on the margin, Warrick, hi. Yes, There's 2 pieces to it. One is, as you've alluded to in your question, the mix isn't expected to deteriorate, in fact, To come back. So we're not expecting any further channel shift towards online as We experienced last year. And in fact, it's the omnichannel sales, which are growing fastest of all. But the other important reason, As we alluded to last year is that the gap in gross margin between the channels, we have started to close that gap. It's a multiyear exercise, but we've seen efficiencies in distribution costs, Which we expect to continue and we've also seen improvements in online customer journeys helping services adoption and that too is expected to continue. Warren, one thing I'd add to that and one way to think about this if you want to look forward, some reasons to believe in improving margins for customers who are shopping online. Well, one of those is this new technology platform that we're landing and both in the UK and in the Nordics. And one effect of that is to significantly, to radically improve our ability to sell credit and to sell services to customers online. And The second, Johnny points to omni channel sales being our biggest single growth driver as they are. The more often that we can have a conversation with the customer, the more often we can introduce them to the merits of our services, which are in turn a big driver of margin. And that's obviously been difficult historically online. Online hasn't for anybody, online hasn't traditionally been very good at a good means of selling services. Well, initiatives like ShopLive are doing something about that. And as we scale up Shopify, so we will see the margin differential between those online sales and store sales narrow further. Thanks, Alex. Thanks, Tony. We will now take our next question from Richard Chamberlain From RBC London, please go ahead. Hi, Richard. Thank you. Good morning, Alex. Yes, morning. So I've got 3, if that's all right. So I wonder if you can just give us an update on how you're thinking about Sort of size and shape of the store estate in the UK given the higher digital penetration that you've seen and I guess also because Profits are presumably not that far behind where they would have been had stores been able to Fully appreciate that. It was a headwind. And so, yes, update on the sort of store estate plans. Maybe, Johnny, you could just Touch on these sort of working capital year end timings. Just sort of talk through what you expect In terms of sort of shape of inventory and payables going forward, how that might sort of reverse on a net basis? And then just on current trading, I think you say in the same U. K. Electrical sales are up on last year, but can Can you give a little bit of color on sort of what the base was from last year for that comment? Because I guess the comps probably a bit all over the place at the moment with the lockdown and so on from last year. Yes, that would be helpful. Thank you. So Richard, I'll leave Johnny to take the working capital question as as you suggested. I mean, just on current trading, I mean, what we're flagging at the moment is strong a strong start to the year. And but we're not seeing significant Any significant evidence that last year's sales will pull forward. And in fact, what we're seeing the very latest up to date Market information shows a market that's 25% larger year on 2 years. More than that, we're not going to get into today. Obviously, there's a further update to come later in November. But it's been a good start to the year. We're pretty pleased. I think Going back to your question on the store estate, I mean, obviously, we took some tough decisions last year on the smaller stores, whether it would be mobile or only small high street stores. But we believe in the store estate that we've got. We believe in a big national network of big stores And we've reopened all 300 of them as a result. And still in our category, we have to start with the customer and Over 60% of customers in our category prefer to shop through a mix of online and in store. So it's important that we can deal with the customers who want Shop online only and we've shown we can do that with 6 points of market share gain online in UK Electricals on last year and the Total online business that's more than doubling, we're showing we can do that. But when it comes to the stores and we've seen the stores reopen well post restrictions. We're seeing continuing demand for what stores do best, which is face to face advice from trusted experts and the ability to discover new product and to have the product demonstrated. So all of that, we're committed to. And we're also committed, Importantly, to other ways of what you might call sustaining the economics of a large national store network. And take ShopLive as an example. What we're basically doing with ShopLive from an economic standpoint It's making more money than we otherwise would have done online because there's significantly higher conversion and transaction value versus unassisted online when we have a colleague talking to the customer when they're shopping online. And what we're doing is using Spare capacity of in store colleagues when the stores are quieter to sell and that store cost Colleague cost is already substantially paid for. So you put those two things together, we like this because the customers like it, the colleagues like it, The business likes it, the economics and have further to go. So and that's one example of how Stores and online together, 1 plus 1 can equal 3. And there are others, whether it's using the full online range to sell in store, which was up 76% last year, a big growth driver, using the stores to get the product to customers super fast. Again, order and collect 30% of the total in the UK, and we expect that to be another growth driver as we get that time down. So we're not backing away from our commitment to a large store network and we're confident that we can achieve the 4% margin targets and the over £1,000,000,000 of free cash flow even with this changed channel mix. Got it. Yes. Okay. Thank you. Should I go on to working capital then? Just one comment first though. You suggested that Our profit wasn't impacted by store closures or at least I think you did. And that's not our View at all. We've alluded in the statement to the fact that it was nearly £500,000,000 of sales we think we lost because our stores were forced to close. And our estimates clearly show that if our stores had been open, we'd have done much better Than we did in fact finish last year. Sure. Yes. I appreciate that. So yes. And then on working capital, we are Not pointing to anything unusual in working capital in the year ahead. In the year finished, there were some unusual movements Because of the COVID impact at the end of FY 2020. At the year end we've just gone through. There were some relatively small timing effects in the Nordics, but they were offset by timing In the UK as well. So overall, I think our working capital position at the end of FY 2021 was pretty balanced at group level. Wouldn't expect anything particularly special in the year ahead. Okay. That's great. Thank you very much. And then if maybe I just pick up quickly on your third question, which was you asked about trading comps. Yes. Yes. So the comps In the UK, at this time last year, of course, the stores were closed. But we've also comped against 2 years ago When the stores were open and in both cases, what we're seeing is continuing strong trading And that's what sits behind Alex's comment that we believe the market has become structurally bigger. And we've seen no softening of that since the year end. Okay. Thank you. We will now take our next question from Amy Currey from Morgan Stanley. Please go ahead. Hi, Amy. Hi, there. Good morning. Thanks for taking my questions. A couple for me. First of all, related to some of the Questions earlier. Where are you at in the process of scaling up Shopify? Could you provide any early color on the attachment rate On Shop Live versus unassisted online sales as well, please? So I'll tell you what we can tell you, Amy, at this stage about ShopLive. The first thing is we've got every interest in scaling it up hard. I mean, when you look at the Customer being like 4 times as likely to buy something versus unassisted ShopLive. When you're looking at an average order value that's 55% higher And customer satisfaction, as we measure it, 10 double digit points better. Clearly, it's driving better sales. The second thing we are seeing, even though we're not quantifying it to this stage, Is a better adoption rate of credit and of services than unassisted online? The third thing So what we're seeing is that the colleagues who are manning the ShopLive are doing so using downtime in the stores. And obviously, the bigger this gets, the better it gets all around. And this is why we're so focused on scaling it up. We think this is one of those the tech companies love to talk about network effects, don't Well, this is an example of that in action for us because the more colleagues and customers we get on to Shop Live, So the likelihood it is that the customer is going to be served by exactly the right specialist to help them, which will be good for the customer and good for sales. And also, it's likelier it is that we'll be able to hoover up any spare capacity of our colleagues nationwide and deploy any quiet time in stores on Shopline. So the marginal cost to serve for us is very low. So all of this points to the better economics of this channel and the bigger it gets, as I say, the better it gets. It is also, by the way, very hard for anyone else to copy. Nobody else has paid for the 15,000 experts that we've got installed. No one else has got the 300 well invested stage sets for these video calls. And as I say, the bigger it gets, the harder it gets for anyone else to get close to. So we are going to scale this up. In terms of quantifying that, all we'll say at this stage is we expect this to become a major channel in its own right and we wouldn't be talking So much if we weren't confident of it. But it's already a noticeable proportion of our online sales and we intend to scale it up significantly further. Sure. Got it. Thank you. My second question relates to the announcement earlier this week around the new multiyear partnership with Vodafone. Could you talk through the implications of this agreement? And could you also provide any insights to the new mobile proposition that will be launched later this year as well? So I think the so the big picture, zooming out for a second, I'll come to your specific question in a moment, Vaini. But zooming out, the story on mobile is clearly what we want To do this, take this away as a source of downside. And that's what we've committed to shareholders to do. And clearly, this business as part of the business has been Significantly loss making and we committed to deal with that and this is the year when we do. So when You can see that in the strong free cash flow generation better than we previously flagged. We are recommitting to getting to breakeven during the course of this financial year on a P and L basis. And we are, as of now, out from underneath all of the legacy constraints. We're out from all of the legacy contracts with ugly volume commitments. And that means that we can now integrate the business and get after the legacy cost base. So for all of those reasons, the broader transformation, what we promised to do, is on track. Now the upside beyond that, and we haven't promised anything for this outside, but that doesn't stop us going after it and believing in it. The upside beyond that is what you're referring to with the Vodafone contract. And that's our future mobile offer, which is a bit late, which is frustrating, but COVID has impacted some of the transformation programs and this is one. It is a bit late, but it will launch during this financial year. And in terms of what it is, it offers customers the widest choice of handsets of connectivity and of ways to pay in the market. And it offers them more flexibility, transparency and value Then they can get anywhere else in the market. And it's obviously not just us who believe in this. We've got material support from the likes of Apple, Samsung and Google are our hardware partners. And we've got support from networks like Virgin, 3, and now Vodafone. And without going into the details of the commercial agreement, we're really pleased with the Vodafone agreement. It's a big multiyear Commitments on both sides and we've got some quite high hopes for it. Very clear. Thank you. Thank you. Sorry, so I just Just to add to that, I mean, what the big picture of where we're headed then in mobile is, as I say, we've dealt with the legacy issue, But we're heading towards it being a normal category. We're joining it up with the rest of the business under the Currys banner, As we announced, it will be an integrated category without its legacy cost base. It will be significantly smaller than it's been in the past, But it will be profitable and cash generative. And that's and so we're doing what we said we'd do on UK mobile. We will now take our next question from Simon Bauer from Numis. Please go ahead. Hi, thank you. Just want to follow-up on a couple of bits, if that's all right. Firstly, it sounds like the SKU range piece in the Nordics is largely kind of drop ship model you've got over that. Who you drop shipping? Who is doing the drop shipping, I. E. Where is that product held? Is that held in country by manufacturers? Or Who is it that's got the Handelmat products? And can you give a sense of what portion of sales that kind of extended range is accounting for in the Nordic region? And then secondly, can you just come back to the piece on kind of upselling kind of credit and services Through the new platform that you've got. The checkout process at the moment on your website, there are several moments at which You do see Credit and Services put forward. Is the proposition itself going to change? Or is it just the presentation of how that comes across on the new platform? Okay, Simon, some big questions in there. So let me give you a proper answer. So on the range point, we haven't broken out the level of detail that you're specifically asking for. But what we can say is that this is a reason to believe in further growth, and it's been A significant contributor to the record growth and market share that we've seen in the Nordics this year. As you'll know from other retail categories, everything else being Paul. If you put a bigger relevant range in front of customers, the more they tend to buy. And that and we've seen that with the 50% increase the range that we've got in we've got through the UK, but there's obviously a lot of headroom still to come. As to where the product sits, that varies, but the main point is it doesn't sit with us. So whether it's dropship or marketplace, the stock risk And the logistics and distribution costs burden sits with typically with the supplier, but it doesn't sit with us. And clearly, you accept lower margin on that extended range, but you always have the option to bring it into own stock and own served to accept The stock risk, if you believe in how well it's selling, and then get the higher margins for doing it end to end yourself. So So it's a way of experimenting, if you like, with a bigger range of products and seeing what's done. This is something that we're going to stay focused on because, as I say, there's a lot of headroom, particularly in the UK, for significantly further relevant range growth to put in front of the larger number of customers that we now have. That's on the range side. On Credit and Services, I mean, I'd give a summary upfront, but The short answer is the proposition changes as well as the selling experience changes. But I don't want to underplay the importance of the online platform changes because they the online platform upgrade because they will have a significant effect. You rightly observed that you can find credit and services on the website as it stands. It's not the easiest customer experience. And what we're designing now is going to make it significantly easier for customers to see the merits of our credit and services and we are confident that it's going to see a significant uptick in adoption rates. But it's not just all about the selling experience. There are improvements in proposition coming as well. So on credit, for example, The proposition will improve by bringing in another lender and bringing in risk based pricing, both of which We'll drive further growth and we continue to innovate with the proposition itself as we're doing right now with a paying 3 proposition, for example. So we can see more opportunity to build the sticky and the valuable customers that you get from credit. On services, And it hasn't it wasn't our best year on services last year with the stores closed. I mean, we flagged that The percentage of sales for the service in the UK went down by 10 points. But there are reasons that we're confident for this year. Firstly, of course, the stores are open again. And second, as I've talked about, we're getting better at selling services online. The perhaps harder to put your finger on, but definitely something to be interested in is us tapping into the zeitgeist on sustainability in a bigger way. And when we talk about longer life for tech, Well, obviously, we're all about selling new technology to customers. Increasingly, we want to be famous for extending the life of the technology they've already got. And as we've got the repairs and the recycling at a scale that no one else can get close to, we are particularly well equipped to do that. So you should expect to see Some big plays this year in all of our markets on helping the customer have longer life for the technologies they've already got, which will be good for us commercially as well as obviously good for the customers' pocket and for the planet. And as increasing numbers of customers make their purchase decisions in part of the sustainability of the retailer. That's only going to be good for us. I could go on. I mean, there's more to come on Club. We've launched that successfully in the Nordics, as you've seen. There's more to come on making more of the data that we've got. But the short answer is not that short actually, but the medium length answer anyway that I've just given you Is there is proposition improvements to come as well as the selling experience improvements to come. Okay, great. Is there anything about the way that suppliers Hold or distribute stock into the UK or Nordics that would make that kind of drop ship model harder or different in terms of Okay. So in the UK, why would you not be embracing that quicker if that was something that could be embraced? And then sorry, separately one final one. Is there any update on the contingent liabilities that we should be aware of? I'll let Johnny take the question on contingent liabilities. But the short answer to your first question, Simon, is no. There are no such constraints. What we're trying to do is to stay focused on not trying to do too many things at once. This is already Quite a busy transformation. What we're focused on is landing the things really well that we're setting out to land. You can expect to see a significantly larger range in the UK over time. Johnny, do you want to take the one on contingent liabilities? Yes. There's no update on the historic contingent liabilities. We continue to think they are not probable To arise and that's why we haven't provided for them. For the eagle eyed among you and when you get into the annual report, there is a new one. This is a potential tax risk relating to a discontinued business from a long time ago. It's very new news. It's a maximum potential liability of £10,000,000 We don't think it's at all probable, but we're disclosing that one as well for complete nurses. Great. Thank you. We will now take our next question from Nick Coulter from Citi. Please go ahead. Hi, good morning. Thank you for taking my questions. I do hope that the availability of large screen TVs It's holding up with the euros. Two questions, if I may, please. Firstly, could you talk about your confidence in the €1,000,000,000 cash Slow target. It seems like there could be some upwards pressure given some of the moving parts that you're seeing. And then more broadly, What does the Curry's rebrand mean for the P and L over the medium term, please? Thank you. Nick, I'm delighted to say that availability is holding up. So I suggest you get yourself to a site or store to upgrade whatever you're watching England on at the moment. So the short answer on the cash flow target is we're standing by and we believe it's very achievable. We're very confident of achieving that. And of course, we've already done a big chunk of it. So that's the short answer on that. The Curry's rebrand, I'm glad you asked about that because we're pretty excited about it as well. I mean, at the moment, we don't get full recognition from from customers to the scale that we already have. So we are very big in electrical and mobile, in products and services. And that's sometimes hard for customers to credit us for because we've got lots of different brands doing those different bits. As we bring all of those brands together under Curry, it becomes much easier to get recognized by customers for what we already do for As I said, electrical and mobile products and services, that's the first thing. And the second, as we invest behind the brand, which we're already doing, We will make sure that we are perceived as helping everybody not just choose, But of course, and enjoy for life, their technology and make sure that we've got Curry's perception for that, Good perceptions built for that. So in short, we see this as another growth, another growth enabler and another growth driver. But does that mean that you'll get a better ROI on your marketing? Does it mean that you'll get a lower marketing Scent, does that mean that you can push more into digital? What does that do to the shape of that line? You're getting into more details than we've broken out so far, Nick, but you're right to assume there are marketing efficiencies as well as top line benefits, yes. Johnny, do you want to add a little bit more on the cumulative free cash flow point? Yes, sure. Hi, Nick. Listen, We are increasingly confident of delivering that. You talk about upwards pressure. Well, what we said was it was going to be at least €1,000,000,000 Over 5 years. And we are increasingly confident of that. More than half of it has been delivered already after 2 years of the 5 year Plan. The key piece initially was the mobile network debtor funding that Transformation away from the loss making business. And as you've all seen and as we said, the working capital is more than funding The operating losses and the transformation costs to get us to the new world. And we've increased the estimate of the net positive cash through that transformation. So that's all really good. The key piece in the next few years is What Simon referred to in his first question that I missed because my line got chopped, but it's that this is a peak year For CapEx and for exceptional costs. And both of those two things are going to come down as we get through the peak year of transformation. The exceptional costs, which have been a big feature of the business over the last few years, That's more that's largely done after this year and that will decrease Substantially. And then we see CapEx coming down much more towards benchmark levels Like 1.5% of revenue or thereabouts as others in the sector achieve. And those are the things that make us really confident That we will deliver the free cash flow target in the designated time. Got it. Okay. So the math looks pretty encouraging. It certainly does on cash, yes. Okay. Thank you, sir. I would now like to turn the call back to Alex for any additional or closing remarks. Thanks, Cecilia, and thanks, everybody. If you've got a sense of the confidence that we've got on the path that we're on. What we've seen this year, I mean, obviously, we've seen a strong performance, which is pleasing, but But I think we've also seen the strategy that we set out 2.5 years ago coming good, whether it's growing A stronger online business, bringing online and stores together, building customers for life through credit and services, resolving the legacy mobile issue. We are on track despite all the bumps in the road from COVID on all of that. And what we're left with now is a growing market leader In a bigger, more essential category with a winning business model, with a strategy that's working, with legacy issues resolved, with strong underlying cash flow And with significant upside, further upside to come on cash flow, as Johnny has just set out from lower exceptionals and lower CapEx in FY2023 in FY 'twenty four. So I mean, we're confident of the path that we're on and we're confident of building value for Shell. Thank you all very much and have a great day.