Good morning, everyone. Welcome to the BNP Paribas Exane 25th European CEO Conference, and today's presentation with Haleon. This presentation will take a format of a fireside chat, so after around 25 minutes of questions from me, we will open up the Q&A to you in the audience. To ask questions, please do so by submitting it in the fireside chat section of the Qube website. I'm now delighted to introduce Brian McNamara, CEO of Haleon. Brian, thank you very much for joining us today.
Great to be here.
Right. I'm gonna start, with the topic of, split from GSK. It's been almost a year since Haleon has become an independent company. In what ways do you think the organization has changed since?
Yeah, a great question, and I'll touch on four areas which I think have really helped in us focus in driving the business. You know, first, I'd say GSK was a great owner of the business, but they were a pharma company, and we're not a pharma company, we're a consumer company. You know, as we look at simplifying systems, processes, decision-making and those kind of things, taking out a layer of decision-making, I think has really helped speed up, how we run the business and how we make decisions. You know, decisions still on Centrum in India or parodontax in India and South Africa. Decisions on resource allocation and how much quicker we can do that as we're, you know, really focused on delivering growth in the consumer health business, and Haleon has made a real difference.
You know, secondly, I'd say around focus is, one, having our own resource allocation priorities. You know, for us, it's number one, investment in growth; number two, strengthen the balance sheet; three, explore M&A, you know, potential bolt-on M&A, and then fourth, return cash to shareholders. Again, GSK's resource allocation number one priority was investment in pharma and R&D. Now we have that completely in our control. You know, second around focus is, we have a board that's 100% dedicated on the Haleon business, and it's an excellent board. Dave Lewis, our chairman. We have people with excellent consumer backgrounds and also governance backgrounds, and we're having quite a bit of discussion with the board on strategy and where to take the business in the future.
We just spent two days in our R&D facility in Richmond, Virginia, with the board. I think that focus has been great. Third is around performance management system. You know, while under GSK, for instance, the long-term incentive of people in the business were linked to pharma R&D performance, you know, shareholder returns on the GSK stock, now it's completely lined up the performance management system to all our external commitments. Short term is about sales growth, profit growth, and cash flow. Our LTIs are now three-year cash flow and net debt reduction with an ESG underpin. I think it's created a real dynamic of crystal clear focus on what we're trying to do as a business, and now with the decision-making and the resource allocation to go after that.
Very clear. Thank you. Maybe to continue the same topic, what has been the biggest challenge, and achievement personally for you-?
Yeah.
for the whole management team since the spin-off?
I have to say that if I, if I think back to the spin-off, which obviously now happened, just over 10 months ago, July 18, 2022, that was an unbelievable heavy lift. You have to remember, we integrated the Pfizer deal and delivered the GBP 600 million of synergies. Then what we did is we basically cloned and copied all the systems and processes from GSK. We shut down our SAP system across the entire company over Easter weekend. Five days later, started it up across 24 manufacturing plants in over 100 countries, moving into the cloud to give us total control of the new systems and processes. That went extremely well. I think we were able to separate the business. No business interruption, obviously business continuity.
Feel great about the growth in year one of 9% organic sales growth, and that continued into Q1 of this year. I just feel great about the whole process of standing up the company, continuing to deliver for our consumers and customers, continuing to deliver growth. I think the challenge is the downside of doing it that way is you cloned and copied all the systems and processes and policies from where we were at GSK. I see it as a challenge, but also a massive opportunity for us. I talk about it as the unquantified upside in this business, as we streamline and simplify the org structure and the decision-making and the policies and processes, I see that as a massive opportunity.
And that's part of what we. You know, announced in our full year results, that we saw about GBP 300 million of savings that we'd see over the next few years, those savings are real, and that gives us tremendous flexibility on where we want to invest in the business and how much to margin, how much to growth. Bigger than that, to me, that's all about simplifying, streamlining this business, creating a more agile, consumer-centric business as we go forward.
Very clear. Thank you. I would like now to focus on the consumer environment in your geographies. Are you still seeing relatively favorable elasticities on the back of your pricing actions?
Again, to take a step back, if you look at our how pricing evolved in 2022, and then what happened through Q1 of 2023. Last year, we were 4.3% price, 4.7% volume mix. That pricing evolved through the year, 2.5% pricing in Q1, 4% in Q2, 5.5%, and 5%+ in Q3 and Q4. Versus some other consumer staple companies, that pricing is actually less than you might have seen elsewhere. Part of that is we are less exposed to those commodity and commodity-related costs, and we take pricing to make sure we're covering those incremental costs, and we did that. We're very focused on trying to find that balance between price and price and volume, and we think that's very important. In Q1, 7% price, 2.9%, you know, volume mix growth.
We continue to see elasticities hold up really well and continue to see the consumer hold up pretty well. I would say broadly across the business, we haven't seen any down trading that would have a impact on our overall growth of the business. That doesn't mean everywhere in every category, country combination, there isn't ups and downs in there. We've said, you know, for instance, an example in our U.S. PPI business, which would be Nexium, we took pricing, and we didn't see private label follow in many competitors, and we were under share pressure, and now we're kind of clawing that back. Across, broadly across the categories, we've seen, very little down trading and, really good elasticities.
To follow up on the point you made about private label, with Nexium, how would you characterize broader competitive environment? Are you seeing any players, actually going for volume share, by sacrificing near-term profitability?
You know, again, it varies, market by market. Maybe to take a step back, if you look at our market in the U.S., you know, we tend to be a lower promoted business than in generally in some of the categories we're in, and then specifically in our strategy, where we compete in categories. For example, in oral health, we're a much more lower promoted business than many of our competitors, and that's because we fundamentally believe, given we're in therapeutic oral health, in the premium segment, solving real therapeutic issues, that the investment in that dental detailing and that sampling and the advertising, and in really engaging the consumer and expert, is where we wanna put our money.
The promotion game is not one that is advantageous to the equity of the brand and what we do. When we see more promotion happening, let's say in oral health, we continue to do well and kind of stay above that because it's just not our business model. Then, in the OTC side of the business, again, tends to be less promoted. Obviously, in cold and flu seasons, you'll see more end aisle displays and things like that, so it will be top of mind for consumers to buy a product. Overall, you know, I think it's a very good competitive environment. In the sense that we compete in competitive categories, to be clear. We don't take any of those competitors lightly, but we feel like we're really well positioned to compete. Maybe just one comment geographically.
In Europe, where, you know, it's a pharmacy-driven market, on the OTC sides, the same thing applies to oral health, where we're less promoted than we're in the premium segment. In OTCs, in pharmacies, you just, again, see much less promotion as these products tend to be behind the counter, tend to be related to pharmacist recommendation, which is another key focus for us.
Thank you. My last question, focused on more near-term dynamics, would be around your full year guidance of upper end of +4% to +6%. Assuming a normal cold and flu season.
Yeah.
Would you describe this guidance as somewhat conservative? What categories do you think may surprise positively or negatively?
Yeah. Listen, you know, we felt really good about our Q1 results and 9.9% organic sales growth. It's worth. Let me touch on cold and flu a little bit and the impact that had on last year and this year. Obviously, we've seen tremendous growth in the cold and flu side of the portfolio. Now, part of that is, remember at Capital Markets Day, before we came public, we talked about 2020 and 2021, and how the cold and flu business was actually quite negative and down because of COVID, because of social distancing and mask wearing and those kind of things. A bit of that is a bounce back, and a bit of that is also COVID and Omicron becoming more endemic and acting a lot more like cold and flu.
Overall, cold and flu category versus 2019 is up about 19% in 2023 in Q1. That's not hugely surprising because it's four years later and you would expect to see some growth, but maybe a little bit higher. If you look at our 9% growth last year, if you were to exclude cold and flu, we grew 6%. You look at our 9.9% growth in Q1, if you exclude cold and flu, take it out of our portfolio, we grew 7%. We feel good about the overall portfolio and where it's growing. Coming out of Q1 with 9.9% growth, we got into the upper end of the guidance. It's still early in the year.
We do wanna see what happens with cold and flu as the year goes on, because that is a bit of a seasonal business. We did assume an average cold and flu season, but if I'm honest with you, I don't know if anyone can really define what an average cold and flu season is anymore because of, you know, what's happened on the marketplace. So we'll have to see where that plays out. We also know that we're gonna see some volatility in the VMS category. If you really pare that down to what that is, it's really about Emergen-C, which are our immunity brand in the U.S.
That's the one that had tremendous spikes in demand, behind COVID, and we saw that negative in Q1. We wanna see how that plays out in the year. The balance of our VMS portfolio is up mid-single digits in Q1, so we feel overall, we're gonna be in good place in the medium term. I have to say, I feel really good about our oral health business this year, and specifically, the innovation that's gone out on Sensodyne, which is performing really well. Overall, I'm quite positive and quite bullish on the year, but I, at the end of Q1, I think that was the right guidance, given there's so much of the year to come.
Very clear. Thank you. Now moving to your medium-term growth algorithm of +4% to +6%, has your thinking behind the building blocks of this algorithm changed at all in the past year?
Great question. You know, we laid those out, obviously, in our Capital Markets Day, a little over a year ago, and some of those building blocks were, you know, seeing VMS as mid to high single digit growth, seeing, oral health as mid to high single digit growth, emerging market growth, e-commerce. I think all those building blocks still hold. I think maybe the difference for me is I'm more optimistic about the OTC side of the portfolio. You know, we saw quite a bit of volatility, especially obviously in cold and flu during COVID. Prior to that, the OTC business had done well, but, you know, there was some challenges in certain emerging markets. We said 2% to 3% growth as a category. We expect to grow above the category.
I think we're seeing more potential growth going forward in those areas. You know, pain relief, we've seen really good growth. Some of that is linked to seasonality, but not nearly as much as cold and flu, to be clear. We have a really great portfolio with systemic analgesics, you know, pills, which are, you know, Advil and Panadol, and then topical analgesics, which is Voltaren. What we see is when cold and flu impacts that category, people tend to take more systemics and they use less of the topical. We have a little bit of a hedge in our portfolio depending on what happens going forward. Fundamentally underpinning all of that is just innovation and the innovation we have and the innovation that we feel really good about as we look forward.
Very clear. Thank you. Maybe to zoom in on oral care in particular, do you think that Sensodyne will continue being the major driver of growth within this business, or parodontax and other brands will become more important?
First of all, Sensodyne being the biggest brand in that category will continue to be a key, absolute growth driver. Sensodyne, as we've talked about, had grown double digits over a 10-year period, and frankly, you could go back further, 15 years. It's just been a tremendous, growth-driven business. We don't need Sensodyne to continue to grow double digits in the future and to deliver on our aspirations for this category, but I still expect it to be a really good growth business, in that mid to high single digit, in the mid to high single digit range. But you're right to point out that oral health is just not about Sensodyne. We tend to talk about that a lot.
The things that have made Sensodyne extremely successful really apply to parodontax, which is our gum health business. You know, what we talk about on Sensodyne is 40% of people now, in our latest data, suffer from sensitive teeth. Just over a 1/3 have a sensitivity toothpaste. We are 100% focused on sensitivity plus additional benefits, but we always start with sensitivity. We come out with products that deliver needs that haven't been, you know, unmet needs on the market. An example would be Sensodyne Sensitivity & Gum, where we see 50% of people that suffer from sensitivity also suffer from bleeding gums. We develop a product that delivers on that benefit. We do the clinicals, we secure the claims, we have the science, we go to dentists, we secure the recommendation.
70% of the trial comes from dental recommendation, you know, Sensodyne Rapid Relief or now Pronamel Active Enamel Shield. That model holds. That model really applies to parodontax, too, where gum health is actually quite a big unmet need out there. We have the same model. On parodontax, the difference is that we haven't had really the capacity, investment capacity to go out after parodontax as big as we think it could be. I see that as a real growth opportunity as we go forward, and we're seeing double-digit growth on parodontax. Then the third pillar is Denture Care, and Denture Care is a great business. We're the number one player on a global basis.
We see innovation really having an impact there. You know, last year, we launched an innovation that was frankly about a stronger hold, but also the way you apply Poligrip to the denture, which helps it. So a packaging innovation that helps it apply in a more correct way, which a big issue for consumers on dentures is what you would call food occlusion. When food gets caught in between the denture and the gum, it's extremely painful. What this product did, is really helped and improved that benefit of food occlusion. We see opportunities across the portfolio, and I feel really good about the categories, the innovation that's coming, and what I'm currently seeing in the market.
Very interesting. Thank you. Maybe to return to the point that you made about VMS, where we are clearly seeing some normalization, at least for Emergen-C. When do you expect to return to your mid to high single-digit growth trajectory?
Yeah, you know, my expectation is that we were negative in Q1. It was primarily driven by Emergen-C and the spikes in demand that happened, you know, the previous year. I'd expect to see that business strengthen as the year, you know, goes on. I am still very confident in that medium-term outlook. I think these are categories that really matter to consumers. They were, you know, VMS was an area that grew 4%-5%, pretty much pre-COVID, as an overall category. I expect we'd get back to that. We feel good about our ability to deliver ahead of that, based on the portfolio we have, the geographic footprint, the expansion opportunities.
Thank you. You also target to grow high single digits in emerging markets, right? Keeping in mind that India and China together account for about half of your EM exposure, can you please talk a bit about your strategy for these markets, and maybe elaborate a bit on establishing your own distribution in India?
Yeah. A couple things. China is at 9% of our business. India, we've never really disclosed what it was, so it's a bit less than half. I wouldn't say it's quite half of our emerging market footprint. We feel good about China. You know, we're seeing strong Coming out of COVID lockdown, we're seeing strong tailwinds in China, basically linked to our OTC portfolio, where we had two brands, Fenbid and Contac, where Fenbid being an ibuprofen brand like Advil, but local Chinese, and then Contac cold and flu business. Those were under sales restrictions during COVID zero COVID policy because they were linked to treating the symptoms of COVID. In the zero COVID world, people didn't want the government didn't want people buying products to mask symptoms.
Restrictions were let up, COVID actually, you know, ran through the country, which created the symptoms which we could treat. We see really good growth in China, where we are now. Very optimistic about India in the short and medium and long term. We have announced that we are ending our distribution agreement with Hindustan Unilever in India. That was part of the deal when we did the divestment of Horlicks there. What that was, is that was an agreement with them that they would be a distribution partner, and we played a flat % of sales to get that service. That percentage was higher than we believed we could do it, but we have a business that's growing double digits, and the percentage of sales continued to track what that was spent. It didn't give us leverage in the P&L.
We needed the time, by the way, and Unilever has been a great partner in that, so absolutely no issues there. It's absolutely time that we build that capability ourself. The team that was running that full capability before the Horlicks divestment is still in place in India, and the GM is still the person that ran the business there. I believe we have the capability to build that out. The other piece is, you know, frankly, with Hindustan Unilever, we are competing with them in a number of areas. On sensitivity and toothpaste, potentially on VMS, as [neat], now we've launched in India. They may have plans to do that. I think it was the right time to separate and build our own capability.
Maybe the last thing I'd say on emerging markets, while I'd say China and India are very important to us in those markets, great business in Southeast Asia, Middle East, Africa, you know, excluding Russia, Central Eastern Europe is a good business, good business in Latin America. I feel good about our broad footprint, and specifically, we've seen some real strong growth in Middle East Africa, when we really have the opportunity now to activate, for instance, Centrum, which was in many of those markets, but under Pfizer ownership, they didn't really have the resources and commercial organization to drive it.
Thank you. If I'm not mistaken, you are aiming to grow e-commerce double digits as well. Can you please update us on your digital journey?
You know, first of all, I think digital commerce from a from any company perspective, is very related to the portfolio you have. If you look at our digital commerce in 2019 pre-COVID, it was only 4% of our business. As of 2022, it was 9% of our business. Depending, if you look at other companies, that would feel like a low percentage of the business, but that's really related to the categories we compete in, because OTC products are quite low penetrated overall on e-commerce. The difference also exists by market. The U.S. is 12% of our sales in e-commerce.
Germany and the UK are in the mid-teens, and in China, we're up over 20%. Those four markets represent over 80% of the e-commerce sales in the categories that we compete in. I think what's most important, and, you know, in a U.S. review earlier this week, and this was a big discussion, is if you look at our top 20 brands in the U.S., which make up more than 80% of our sales on e-commerce. 18 of those 20 brands have higher shares online than offline. To me, that's the bigger, you know, way that we look at it, which is it's less about the percentages sales. The question is, are we doing better online than offline?
As we see it as a faster growing channel, that's critical, 'cause as the channel shift happens, it means we're moving into a new channel where we have higher shares. Just as an example, you know, Sensodyne is about a 20 share in bricks and mortars in the U.S. It's about a 28 share, you know, on Amazon. As that channel shift happens, we're moving to places with more disproportionate share. Feel good about, you know, where we're at, and we'll see. You know, we saw an acceleration of digital commerce within COVID, and when COVID happened, that looks like it has, for the most part, has stuck in going forward.
At some point, I believe that e-commerce will open up more for OTC products, but it's gonna be slow in places like Europe, where, you know, there's a pharmacy, you know, within a couple blocks of wherever you are. The pharmacist still plays a key role in the relationship with the with the consumer on, you know, choices and that discussion. It's been, it's been less quick to move in certain geographies.
Thank you. Now, Brian, I know you love to talk about innovation, so could you please elaborate a bit on some innovations that you're particularly proud of?
Yeah, great. Let me maybe talk about a couple. One is, I see one we have laid out here on the table. One of the things in vitamins, mineral, supplements is delivery forms are really important. As you may have seen over the years, this gummy form has become a real growth driver for the VMS category. We have a brand, Emergen-C, in the U.S. Emergen-C is an immunity brand. The way Emergen-C works is, it's a powder that you would put, let's say, in a bottle of water, shake it up and drink it. It's got a unique flavor profile and a unique, let's say, experience, 'cause it's a just a lightly carbonated drink. We've launched now in the U.S., just in the last few weeks, a new product called Emergen-C Crystals.
What this is a waterless form of Emergen-C. You just open this up, and you pop it in, and it has a very unique sensation of low carbonation that you might experience when you use Emergen-C. It's early days, but we see this as a key growth driver and potentially a platform for new, as a new form of innovation across other, you know, VMS categories. If I stick with VMS, you know, we announced in October that we finished a clinical study, and it was among consumers over the age of 65 with Centrum Silver, which is our brand, which is focused on an older consumer.
It was 2,000 consumers, men and women, and the output of that two-year study was that taking Centrum Silver daily helps improves cognitive function by 60% among that population. Cognitive function is a very top-of-mind thing for consumers as they age. We executed that claim in the U.S. market. Centrum Silver is growing healthy double digits off of that, and it's more than 50% of our Centrum franchise. We also see the opportunity in innovation to think about how we bring what we brought to oral health, which is bringing science to a category where maybe it was less focused on the science, to a category like VMS, where we can bring claims that... You know, we've done that study on Centrum, so, you know, that's ours, and we own that claim going forward.
The other is on a couple other innovations, a brand I see here, too, which is PanaNatra. We launched this in Australia recently. You know, naturals is a huge trend among consumers, and we see it as a faster growing area than, let's say, medicated OTC in some places. The challenge is, how do you create naturals that delivers the real benefits? As we are a company which is focused on ensuring we're delivering on the consumer promise and the benefits. We have three versions of PanaNatra, which are natural ingredients. The difference is they're clinically studied, and we have claims of the real benefits that go behind it. This is something we're launching first in Australia, and as we see how it does, we see the opportunity to roll that out in additional markets.
On Sensodyne, we continue to see great innovation. I probably feel as positive as I ever had if I look out the next three years and what we're doing on Sensodyne. We launched a new enamel product in the in the U.S. under the Pronamel sub-brand of Sensodyne called Active Enamel Shield, which acts active enamel protection and some very strong claims that we're seeing very again, early days, launched in January, but doing really well. A lot of positive, you know, customer support behind it, but most importantly, consumer take-up. Innovation across the portfolio is gonna be a key driver across all of these categories.
Very interesting. Thank you. Before we move to the questions from the audience, Brian, imagine we are sitting in this hall, one year from now, and I very much hope it will be the case. What would be the question that you would love to start our fireside chat with?
Oh, that's a really great question. Brian, you look amazing. How do you keep yourself in such great shape? Second question would be on the business. I think it would be just around, you know, the continued momentum in the business, the continued strength in the business, and how we see the outlook, the update on our, you know, our productivity program and what we're seeing coming out of that, 'cause I'm quite optimistic in the ability for us to not only drive the savings that we've committed, but for me, more importantly, how we can streamline and simplify, you know, the way we operate, which should, in my view, help unlock even more growth going forward.
Thank you. Now we would like to open to the questions from the audience. If anyone in the audience has a question, please raise your hand. Over here. They will bring it.
Thank you. Just first, I'd like to know whether you think the balance sheet situation is any sort of a constraint in any way at this point? Secondly, you've talked a lot earlier about some of the things that have changed in the post-Glaxo world. You haven't talked a lot about, if you like, your strategy around brand building or your marketing or your advertising profile. I'd be really interested to know whether you feel that... It seems to me like Glaxo was good at that, but I might be wrong. They seem to do a lot of, if you like, category building.
Certainly in the UK, they talk a lot about, you know, some of the diseases, and they try and build awareness and so forth, not just around products, but around the need to address things. I'd be really interested to know whether you feel that there's scope to do a better job around brand building, not least of what you say now, around, you know, there being claims and real benefits. If you highlight more of the scientific aspects of some of your product categories, does that bring with it a different type of educational marketing challenge? Sorry, it's a bit of a rambling question.
No, no, fantastic. First, on the balance sheet, you know, if you look at our capital allocations, priorities, invest in growth, strengthen the balance sheet. I don't think the balance sheet is holding us back from doing anything we need to do to drive this business organically. Obviously, our objective is to get that leverage down below three as quick as possible. You know, we started, like, 4x lever, 3.6 at the end of the year. We've announced that we see opportunities in the portfolio between some divest and some bolt-on M&A. As you expect any consumer company to proactively manage their portfolio, expect to see divestments before you would see any bolt-on M&A, but it's not constraining us from doing anything we need to do to drive growth in the business.
You know, remember, this is a very strong cash flow business, and that has continued along the way. Listen, we are a company of brands, so brand building is fundamental to what we do. Frankly, I've... You know, GSK Consumer Healthcare and the team that was running that is obviously now Haleon, so that's a continuation. I'd bring out a few examples. I think Sensodyne is an excellent example of brand building over many, many years. I think one of the pieces that I think is unique to us. We are very much a consumer-facing company, we're not a pharma company. The unique thing we've been able to do with the oral health category is bring a bit of that science lens into it and the more therapeutic, because we are a health business.
We're a consumer health business. Brands are critically important. Strategically, where we focus, for instance, our strategy on oral health is very clear. It's therapeutic oral health. It's in those benefits of gum health and sensitivity, because that's where we see the consumer need is, and that's where we see we can differentiate. We made a strategic choice many years ago, pre my time, to not fight some of our competitors on just base toothpaste every day, which is a different promotion game and requires scale, and this is where we can be differentiated. I take that across, you know, across the portfolio.
You know, in pain relief in Voltaren, which is a brand that was built through Rx-to-OTC switches in close to 100 count countries over a 20-year period, and launched only in the U.S. in 2020. Investment in A&P, investment, frankly, in partnerships with agencies and great creative, makes a difference. If you look at ROI on advertising investment across all mediums, 70% is driven by the creativity, the content, as opposed to just the spending per se. We're very focused on ROI. We're very focused on brand building. We measure brand equities across the business. We know what we wanna own from a brand equity perspective across these brands. We have global category teams that partner with the local markets to really drive that into execution.
Yes. My question is about, with this amazing business, you see returns on capital employed, and they don't look that appealing. Maybe is it because of a lack of focus when the company, you know, was made independent? There's a room for improvement, a lot of improvement. Do you have any targets or a clear path in order to achieve better returns as the business should be?
You're talking about returns on invested capital?
Yes.
Is that what you said?
Okay.
Yeah, yeah. I think, you know, part of that becomes the, you know, doing two deals over a couple of years period, which was quite heavy investment is, you know, so what you see in the balance sheet and what you see is, you know, tends to be elevated because of those investments. Listen, I think refer, return on investment, return on investment capital, all of this is a very big focus on the business. We believe that, you know, the growth algorithm we have will deliver a lot of value, and that growth algorithm being that 4%-6% growth. With the growth margins we have, the ability to drive a moderate margin expansion, with the ability to invest in R&D and A&P ahead of sales.
We believe that over time, this will be extremely attractive business. We're very focused on that shift, frankly, from a business that in 2015, the year of the Novartis joint venture, had an 11.5% margin, 22.8% margin at the end of 2022. GBP 1 billion of synergies delivered, offsetting currency headwinds and divestments that had some negative impact. Shifting from a business that's more focused on growth and driving that growth opportunity, and frankly, the best way to improve margin and profitability on the business' growth when you have 63% growth margins.
Okay. That's in terms of the numerator, but in terms of the denominator, the invested capital, there's also with the deleveraging and a capital allocation room for improvement?
Yeah, of course. As I said earlier, deleveraging and strengthening the balance sheet is our number two capital allocation priority beyond the investment in growth, and that's a very big focus for us and the team. We realize that four times leverage was quite unattractive and held back quite a bit of investors. We know we need to get below three as quickly as possible. It's a big focus for us.
Thank you. We've run out of time for today's presentation. I'd like to thank Brian and investors in the audience for joining us today.
Thank you, Michelle. It was great to spend time with you.