Good morning, everyone. Welcome, and thank you for joining our interim results presentation. I'm joined today by Oliver Tandt, our Chief Financial Officer and Peter Duhrman, our Investor Relations Director. Lucas Parivicini, our incoming Chief Financial Officer, He's also with us. Lucas joined Imperial and the Board on the 1st May.
He will be formally appointed CFO tomorrow and we'll work with Oliver to ensure a smooth and orderly handover. Now before getting into the results, Let me hand over to Lukas for a few brief words.
Thank you, Stefan, and good morning, everyone. I'm delighted to be able to join the team this morning and to have this opportunity to introduce myself. Perhaps a little bit of my background. I've spent 20 years in the consumer goods industry, working in a range of senior finance and operational roles in large international companies. I was at Nestle for 22 years and worked across a range of parts of the business in Switzerland and in several Latin American markets.
I also spent 6 years at Fontera, the world's largest dairy cooperative and responsible for some well known leading dairy brands, joining first as the CFO and then becoming Chief Operating Officer of its Global Consumer and Foodservice Business. So I bring a blend of strong financial and commercial expertise and have specific experience of driving significant change programs, including implementing Global Shared Services in Large International Organizations, all of which should be relevant for Imperium. I'm really pleased to be joining the company at such a great time as we begin to implement the new strategy and drive the changes necessary to strengthen performance and to deliver sustainable shareholder value. I'm eager to get to grips with the business and to a time where we can meet in person. I'm looking forward to establishing a transparent engagement with all investors.
Thank you. I'll now hand back to Stefan.
Thank you, Lucas. Today, I will start by providing some performance highlights, and then Oliver will take you through the financial results in more detail. I will then give you more color on how we're implementing the new strategy and some of the operational actions to strengthen performance. I will conclude with our outlook and priorities for 2021, and we'll look forward to taking your questions after that. I'm pleased with the progress we've made on implementing the new strategy we announced in January.
The one thing I'm most encouraged by in these results is the progress we've made on stabilizing the aggregate market share performance in our top 5 priority markets following several years of consecutive decline. It reflects an improving momentum from an increased focus on collaboration and performance management with these markets, which are all part of the important changes we've made over the past year. In NGP, The actions we have taken over the past year to focus our investments and improve returns have delivered a further reduction in losses. This is about resetting the business and creating a sound foundation so we can make a meaningful contribution to harm reduction over time. It has been a good start to the year as we start to build momentum with growth in net revenue, operating profit and strong cash flow.
And I would like to thank all of our people for their great work in ensuring the business continues to move forward in a COVID-nineteen environment. So I'm pleased with the start of the year, and we remain on track to deliver our full year results in line with guidance. As I touched on earlier, our market share in the 5 priority markets increased modestly by 6 basis points compared to a 37 basis points decline in the same period last year. Share gains in the U. S, U.
K. And Spain partially offset by share declines in Germany and Australia, which will take time to turn around. We grew net revenue by 3.5%, driven by strong pricing in tobacco and better NGP sales against a relatively weak comparator period. The business has performed well in spite of The coronavirus continuing to influence consumer and customer buying patterns. The lack of international travel has impacted our duty free sales and also affected demand across markets.
Oliver will provide more details later. Our gross and operating profit of 8.1% was driven by a better performance in NGP against the period affected by write downs and a sharper focus on investment, prioritizing the markets with the best prospects for growth. Our stronger performance at Logisto also contributed to profit growth. Also Tobacco Revenue Group, tobacco profitability was affected by some temporary factors that Oliver will take you through in a moment. The good news is underlying tobacco profitability, excluding these factors, grew almost 5%, reflecting our strategic focus on driving performance from our 5 most important and most profitable markets.
Who also delivered another strong cash performance on a 12 month basis with net cash flow of £2,500,000,000 supporting our debt reduction priorities. Since unveiling the new strategy in January, I've been focused on implementation and taking actions to improve my performance. It will take time to get to where we need to be as a business, but I believe we are making the right choices to create value for our shareholders. A key element of the right choices is the clear market prioritization we've now put in place, and we're beginning to realign investments to support the strategic initiatives in our 5 priority markets. In NGP, we're taking steps to reset our approach, and we're managing operations in a much more measured and disciplined manner.
I wanted to see this part of Imperial flourish to enable us to make a meaningful contribution to harm reduction. Our plans for market trials in heated tobacco and vapor are on track. This means investing in markets where we believe we can succeed and withdrawing from markets we don't think we can create shareholder value with our NUP portfolio. Another key priority that has been to assemble the right leadership team with the necessary leadership qualities to deliver the new strategy. The team brings together new capabilities, skills and expertise from outside the industry and blends them with the existing valuable experience we have in tobacco at the senior executive level as well as more widely in the business.
I'm pleased that alongside our new strategy, we have been able to attract some very high caliber individuals with blue chip FMCG experiences like Nestle, Unilever or PepsiCo to the tobacco industry. Beyond this, we're also beginning to implement the organizational changes and adopt the new ways of working we highlighted in the strategy update. I will outline later the changes we're already making to our sales and marketing organization to streamline and simplify our operations. Before I hand over to Oliver for his financial review, this is Oliver's last results presentation from Peel, and I would like to take this opportunity to thank Oliver for his 7.5 years of service to Imperial. On a personal note, I also want to thank him for the very warm welcome he extended to me when I joined the group and for the help and support he gave me with my induction.
I wish you all the best for your retirement. Oliver, over to you.
Thanks, Stefan, and good morning, everyone. First, let me say I'm pleased to be able to report a stronger set of numbers for my last set of financial results. I'd also like to take the opportunity to thank all of you for the interactions we have had during my tenure and also to say how very much I have enjoyed working with Stefan and the refreshed executive team over the past year, and I wish them and Imperial every success for the future. As Stefan has outlined earlier, our business is performing well with growth in revenue and profits, albeit against a weaker comparison period and with strong continued cash delivery. Total tobacco volumes declined by 3.3%, including a 1.3% reduction from our global duty free business as restrictions have continued to affect travel.
An inventory reduction in the U. S. Contributed a 0.8% decline following strong wholesaler purchases in March last year. Excluding these impacts, underlying volumes declined by 1.2%, better than the level we've been used to over recent years. Our volume performance benefited from a 30 basis point share gain across our footprint as well as better market size performances, particularly in Northern Europe.
Let's take a closer look How COVID has continued to influence market size. For example, in Spain, the Canaries and in the duty free channel, We have continued to suffer from the impact of border closures and reduced travel. In contrast, Northern European markets have benefited from higher domestic sales and lower levels of illicit trade. The rate of U. S.
Market size decline has also slowed from its recent historic trend where consumer spending has been boosted by stimulus payments. The COVID impact on market size is likely to be less pronounced in the second half as we cycle against comparator already affected by the pandemic. Overall net revenue grew by 3.5% at constant currency. Despite the U. S.
Wholesaler inventory movements On reduction in duty free sales, we grew tobacco net revenue by 3.2%. Tobacco price mix of 6.5% Benefited from strong pricing and a return to growth in our U. S. Mass market cigar business, which benefited product mix. Geography mix was neutral.
Our NGP revenues were up 16% against a weak comparator, which was impacted by destocking of the supply chain. Looking at tobacco price mix in more detail, We have seen continued strong pricing in both Europe and the U. S. In Europe, positive market mix from sales growth And the higher margin European markets of the U. K, Germany and the Nordics benefited tobacco price mix.
Our total net revenue performance, however, was held back by the volume reductions in Southern European markets and lower duty free channel sales, which are reported within Europe. U. S. Price mix was up by 12.7% driven by 2 cigarette price increases in the first half as well as the carryover from last year's pricing. Pricemix further benefited from an exceptionally strong performance from our mass market cigar business.
Revenue performance in AAA benefited from improved pricing in Russia and Saudi. However, it was negatively impacted by adverse market mix as volume declines in the high margin Australian market as well as the prior year stock profit of around £40,000,000 which benefited Revenue and profit in that year. The Australian government has announced there will be no 12.5% duty accelerator this year and thereby limiting the industry's ability to make stock profit this year. This will create a further €50,000,000 headwind to revenue and profit in the second half. We also expect further market size and share declines, which will impact on profitability, although we can absorb these factors within our existing guidance.
Adjusted operating profit was up 8.1%. There are 3 factors in the first half of last year that have affected Our operating profit performance. These are the U. S. Wholesaler inventory pull of €49,000,000 the timing of Australia's stock profit and the NGP write downs of €95,000,000 These net out to a €5,000,000 upside.
In this half year, we've made progress in reducing our contingent liability as we reached a settlement for U. S. State litigation in Minnesota. This is a good result. Resolving this issue reduces Imperial's overall risk and the slightly higher ongoing costs are manageable.
We expect to do the same shortly in Texas, and we've made a $42,000,000 charge for the settlement, and we retain our guidance for the full year nonetheless. Outside of these items, our underlying tobacco performance was up £76,000,000 or 4.8%. Underlying NGP operating income improved by £46,000,000 driven by our more targeted investment approach and cost cutting. The other key driver of our year on year profit performance was distribution, which was supported by better first half trading, particularly in the pharma category as well as recognizing the reduction in inventory levels held by LaHista. This follows stock increases last year to reinforce supply contingencies because of COVID-nineteen.
The Premium Cigar divestment was a 3% dilution to EPS. Organic EPS performance is up 6 0.9% at constant currency benefiting from the higher adjusted operating profit, which was partly offset by increased tax rate as previously guided. We expect the full year adjusted tax rate also to be around 23%. Net cash flow generation remains strong and in line with expectations. However, net cash flow in the first half was impacted by adverse working capital from the unwind of the temporary excise benefit at the end of last year, largely due to LaHista.
Our 12 month rolling net cash flow increased by £2,400,000,000 to £2,500,000,000 This reflects working capital improvements driven by size and VAT timings in La Hista and the U. K, the rebased dividend and the premium cigar divestment proceeds. This net cash flow has been used to accelerate deleverage, supporting progress to the lower end of our target gearing range. As a reminder, we continue to operate a centralized cash pooling arrangement with our entities, including La Hista. Whilst the daily cash balance will fluctuate over the last 12 months, the average LaHista benefit was CHF2.1 billion.
Our 12 month rolling cash conversion of 122% remains high. However, as previously guided, we Expect full year cash conversion to be around 80%. This reflects the unwind of La Hisa excise and duty deferment benefits bestowed by governments in the second half of last year. As highlighted, net cash flow of €2,500,000,000 who's been used to support a reduction in our adjusted net debt, which at the half year was £10,300,000,000 Adjusted net debt to EBITDA was 2.6 times, down from 2.7 times at the end of September and from 3.5 times at the end of March last year. We remain focused on reducing leverage towards the lower end of our 2 to 2.5 Tant.
These were a solid set of results and the business continues to perform well Despite some short term COVID related changes to buying patterns, the business benefits from high margins and a strong track record in managing cost inflation, further supported by its ability to take pricing. We are well placed to fund investments in the new strategy, whilst also strengthening the balance sheet and reducing leverage, which will underpin our investment grade rating. The cash fundamentals of the business remain strong, supporting the delivery of attractive and reliable future cash returns. I will now hand you back to Stefan.
Thank you, Oliver. It is less than 4 months since we set out our new strategy. And while it is still early days, we've made some good initial progress on implementation, and I'm pleased with the way employees are embracing change. I will cover our progress here and touch on our operational performance before summarizing priorities for the second half and the outlook. As a reminder, our strategy is built around 3 strategic pillars and 3 critical enablers.
Today, I will give an update on some of the key actions we're taking to deliver the strategy. I will start by outlining our focus and initial progress on the operational levers in tobacco. The tobacco business has the potential to deliver a strong performance, and my view of the value creation opportunities in tobacco remain Clear. We've also continued to take important steps to reset our NGP investment by focusing on our existing market strongholds and preparing for the market triumphs later this year. This is about building a successful NGP business, supporting our commitment to harm reduction.
To support delivery of the new strategy, we also need to make some changes to the way we operate, improve our culture and strengthen our capabilities, and we've made some important early progress in these areas too. So let me start with our combustible tobacco business, where greater focus and better execution creates the greatest opportunity for value creation over the next 5 years. From a tobacco market perspective, At our Capital Markets Day event in January, we outlined our detailed plans with clear operational levers for each of our 5 priority markets, the U. S. A, Germany, U.
K, Australia and Spain. These markets deliver most of our profit and will therefore receive the highest level of focus and support. Also it is early days, I am encouraged we've begun to stabilize the aggregated market share performance in these markets with 6 basis points of share growth, driven by 3 of the 5 markets. This follows several years of serial decline and a 37 basis point for last year. I should stress this has been driven only to a limited extent by investments in the strategy as this is only just getting underway.
It is primarily a reflection of the increased focus combined with changes we've made to our performance management approach, especially targeted towards these 5 markets. We're now dedicating a greater focus from the executive team through detailed performance reviews meetings with the 5 management teams informed by data and consumer insight. This is creating a faster, more agile business, better able to meet changing consumer needs and market dynamics over time. Of course, Market share is only one measure of progress, and we're not necessarily expecting to achieve growth in all 5 markets each year. Initially, our focus is on arresting the declines, particularly in markets like Germany, as well as achieving and long term performance.
In the U. S. A, we've continued to build on our recent share growth in cigarettes. This has been achieved by maintaining our share in the premium value segment with Winston and Co, while continuing to grow our share of the deep discounts through Sonoma and Moncler. This reflects the momentum the team have established over the past year, and we're looking to build on this with additional investment aligned with the new strategy.
Our recruitment of additional salespeople is underway, and we've undertaken a detailed assessment of our sales force coverage by geography and by store, which is informing how our salespeople will be deployed. We've also started designing the new technology and sales tools required to improve the effectiveness of our field folks and have begun to work on longer term brand equity initiatives to revitalize the performance of our focused U. S. Brands. I look forward to sharing details on this in the future.
We have a great portfolio of mass market cigars, and we've achieved an excellent set of results with volumes up around 60% against the relatively weak prior year period affected by supply shortages. Growth has been driven primarily by the fast growing natural leaf segment. We have invested to improve the sustainability of leaf supply and to improve quality, particularly in the natural leaf wrappers. Backward is a good example of what can be achieved through great execution and a tried and tested engagement program, which has enhanced equity and awareness with the target consumer. It shows what can be possible in this industry.
We We also identified a gap in the natural leaf segment and launched Dutch Leaf in the period to extend our presence across the price ladder. These initiatives have delivered strong share gains in Backward and Dutch, helping us become the number 2 in Mass Markets Cigars compared with being number 4 a year ago. We further opportunities for growth as we extend the geographic reach and engage with consumers once life events become more commonplace. Overall, a very encouraging performance, and I believe we are well placed for further growth in the mass market cigar segment. The recent proposals to ban menstrual cigarettes and flavored cigars are likely to take several years to implement.
We do not believe the science or evidence supports a ban, but we will engage with the FDA in what we expect to be a lengthy multistage process. While the German and Australian market remains highly profitable for us, We have lost market share in BOSS over the period. In Germany, we've lost share for the last 10 years, and it will take time for our initiatives to take effect. Also encouragingly, the rate of decline reduced in the last 6 months. Our focus is implementing our market strategy, and we've begun by recruiting additional salespeople as our sales force is under indexed versus peers.
This is part of a broader initiative to optimize our sales force coverage to ensure We have the right representation across sales channels and geographies while strengthening our key account management capabilities. Working on the brand equities initiatives has started, and we look forward to updating you on progress in due course. In the meantime, we've launched a new Duo Pack for John Player Special to meet consumer demand for different formats, and we've raised awareness through a campaign to celebrate the 50th anniversary of JPS. We're confident that as we invest behind the operational levers, our share performance will improve over time. Also, I'm expecting German share will still record a decline at the full year.
In Australia, we deliberately prioritized financial delivery and put through price increases early in the year. Also, this impacted on our market share. It is a market affected by down training with strong growth in the 5th price tier at the bottom of the market. Parker and Simpson has grown well in this price segment, but has been more than offset by share declines with JPS. We've launched crushed pour formats to meet consumer demand shifts, and our Riverstone brand has grown share in the fine cut segment.
Work is underway on our operational levers, but like Germany, it will take time for these to take effect. We achieved better share performance in the U. K. And Spain, which have both been supported by a focus on local Jewell brands. This is an important change in strategy where we are now focusing on these local brands, which have been neglected in recent years in favor of the international counterparts, contributing to our share losses.
In the U. K, We're focused on Embassy with the launch of Embassy Signature, coupled with an approach to fill regional gaps in brand presence. This has been supported by leveraging our existing trade incentive programs, which have been independently recognized as best in class. In Spain, our share have been supported by gains with several brands from across the portfolio, including Noble and Fortuna, where we are beginning to leverage their potential. Noble has strong equity in Spain with national coverage, and we've built on this through a successful program of limited edition packs over the past year with artwork commissioned from a well known local artist.
We've also invested in new pack formats with Fortuna, which have performed well. On the new strategy, we will increasingly raise our investments in these operational levers to strengthen our tobacco performance and build on this initial good progress. Turning now to MGP. I believe we have an important opportunity to build a successful MGP business over time, one that plays to our strengths and is centered on meeting consumer needs. Our approach will be more measured and disciplined, also as it should not be interpreted as a lack of conviction in NGP, quite the reverse.
I wanted to build a business that is better at attracting adult smokers and is therefore successful, enabling Imperial to make a meaningful contribution to harm reduction. Who've carefully assessed our market positions, the carry opportunities and the effectiveness of our investment, resulting in a better targeting of our investments behind our strongholds in the U. S. And Europe. At our Strategy Update in January, we set out how we would prioritize investments in certain category market combinations.
In Vapor, we're focused investments even more tightly in line with our strategy on the U. S. And key European markets, where we have already established a strong market position by leveraging our route to market. Our investment has been more targeted in marketing and point of sales activities with a proven track record, enabling us to retain our strong positions in markets such as Germany and Spain. However, in markets like the U.
S, we've also chosen not to participate in some of the more aggressive discounting that is common in the sector, causing some share pressure. 1 of the other notable changes in our approach is our increased focus on performance management and collaboration to drive improved results. This disciplined approach as well as our negotiations for better trade terms of retailers have significantly reduced losses, even leading to some markets becoming profitable on a local basis. However, there are some markets where the business case is hard to justify. And so we have chosen to withdraw from several markets, such as Japan and Russia, where we lacked the route to market scale to make it work.
This is about resetting to create a solid foundation to rebuild a better business. As part of this, we're working on a revised consumer proposition for Blue. Who have often focused too much on the product and its features, and we can do better with the brand building and the way we connect with our target consumers. This is a top priority for Andy Des Gupta, who joined us recently in the newly created Chief Consumer Officer position. Our plans are on track to test these new propositions with consumers in a targeted geographic area in the U.
S. Later this year, all within the U. S. PMTA rules. In Heated Tobacco, we have a clear plan to offer consumers greater choice in selected European markets where the category is well established and where we can leverage our existing route to market and local insight.
As a result, we've decided to exit from Japan, where we lack the scale to make a success with Pulse. However, we have gained some useful insights from this extended trial. I'm pleased with the progress we're making towards launching the pilot trials of a revised consumer proposition in 2 European markets later this year. This work is already benefiting from the insight and involvement of Andy, who started getting engaged in this work over the last couple of months, even ahead of joining us. With chosen markets where there is already good penetration and understanding of the heated category among adult smokers.
I look forward to providing more details once the trials are underway. In modern oral, our efforts are focused on Scandinavia and certain markets in Europe, whereas there's a history of oral nicotine products. Demand for modern oral is increasing rapidly, particularly in Scandinavia. Our overall volumes are up 50% against last year, driven by strong growth in Norway and Australia to meet growing consumer demand in the category with our new product launches planned for the second half. In summary, it is still early days on our new MGP's journey.
We've made good progress in resetting our investment, and I look forward to updating you as we move forward with the trials later this year. Our new strategy is underpinned by 3 critical enablers: putting the consumer at the center of the business, embedding performance based culture and capabilities and ensuring our operations are simplified and Efficient. Having spent time working with our people and observing past behaviors and processes, I'm more convinced than ever that driving change in this area is really critical to the successful execution of our 5 year plan. One of the key changes is to place the consumer at the center of the business and to Sure, all our key decisions are grounded in consumer insights and data. The voice of the consumer has not been present at the executive level for the last 4 years.
As I mentioned, I'm delighted Andy Des Gupta has joined us as Chief Consumer Officer at the beginning of May. Andy will lead our focus on consumer by try ensuring that we have the right marketing, brand and portfolio management capabilities to support both our tobacco and NGP Businesses. He will also oversee the company's strive to bring a far more coordinated approach to how we collect and Hugh's Consumer Insights and Data. Andy brings extensive experience in these areas, having held senior roles in significant international consumer goods companies such as Pepsi, Frontera and GSK. Andy will be accountable for a newly defined innovation program, making sure we have a pipeline of both combustible and NGP products.
The consumer will dictate everything and will be central to our culture. And culture is critical to how we operate and how we'll deliver our strategy. Who wanted to create a performance based culture centered around teamwork, collaboration and accountability. Who have already made 2 important changes to the incentives framework to reinforce these behaviors. First is to create a greater alignment to group objectives, so 80% of the annual bonus is now dependent on group metrics.
This is important to create integration and breakdown silos. 2nd is to change the market share metrics for the bonus to a weighted average of 5 priority markets. This will ensure we are growing share in the markets that drive profit and value. We're also changing our LTIP metrics to reinforce the delivery of sustainable earnings growth, a strong balance sheet, improving returns on capital and total shareholder return. I continue to encourage open employee feedback.
This year, we've embraced technology and continued to hold town halls and attend manufacturing sites, albeit virtually. We'll be building on these over the next few months with an employee engagement roadshow to work with our people on our new purpose, vision and values. We're simplifying our ways of working, and our initial focus has been on the customer and consumer facing areas. We recently announced plans to simplify our sales and marketing organization by reducing the number of market clusters from 13 to 10. Each of our markets will have an organization structure tailored to its strategic role that allocates the resources in line with our market prioritization.
This will ensure each market has the right consumer insight and capabilities to deliver on its plan. We've also strengthened the cluster leadership through several key appointments. In NGP, we've unified our operations under the leadership of our new Chief Consumer Officer with a clear category led structure aligned to the new strategy with new heads for each of the category areas, paper, Heated and Modern Oral. Elsewhere, we're progressing design work on the enabling functions to ensure the efficient allocation of resource and service. These are the first steps towards transforming the business and unlocking value for our stakeholders.
So to conclude, I believe we've made a good start to the year. The tighter focus on performance management in our priority markets is supporting our stronger operational and financial performance. We'll begin to step up investments behind the strategy in the second half in line with our plans. Even so, our full year guidance remains unchanged with low to middle single digit adjusted operating profit growth at constant currency, excluding the impact of the premium cigar sale. Let me give you some details on the moving parts.
It is clear that COVID continues to impose restrictions across our markets, affecting travel and consumer buying patterns. We expect these restrictions to ease, The duty free channel is likely to remain significantly depressed for the rest of the year. Similarly, who've benefited from better volumes in certain markets due to border closures. We anticipate a return to more normal decline rates gradually over time. To tobacco revenue in the second half is expected to be affected by mix headwinds as some of last year's COVID related benefits unwind in the second half, for example, the UK stock profit and the German VAT benefit.
And as Oliver mentioned, there will also be a headwind of around £50,000,000 from lower stock profit in Australia. Despite these headwinds and increased investments behind our strategy, 2nd half tobacco profitability is anticipated to grow modestly against the same period last year. Our disciplined approach to MGP will support investments behind the new market trials in heated tobacco and vapor while maintaining investment levels and therefore losses at a similar level to the first half. As previously guided, A higher tax rate will have a circa 2% impact on earnings, both organic adjusted earnings per share expected to be slightly ahead of the prior year at constant currency. At Vers, Foreign exchange translation is expected to be a headwind of almost 3% on full year earnings.
As you can imagine, we have a full agenda and we're continuing our relentless focus on embedding our new strategy that we started in the first half of the year. In our priority tobacco markets, we're maintaining our rigorous performance management and will implement investment in our key operational levers. In NGP, we plan to begin the trial market launches of our new customer propositions in both vapor and heated tobacco. Who will be rolling out the new organizational sign for sales and marketing and continue to adopt New Working Practices. Our focus on strong cash flow will remain a key priority.
From a capital allocation perspective. We're clearly set on the path to deleverage and to strengthen the balance sheet. This will also enable us to deliver the enhanced cash returns to shareholders, which we fully recognize as an important part of the investment proposition. We've made a good start, and I'm excited about the future and truly believe that over time, we will deliver a stronger and more consistent performance and unlock long term value for shareholders. Thank you for joining us today and giving us the opportunity to take you through our results.
We now would like to take your questions. I will hand back to the operator to start the Q and A session. Thank you for
listening. Thank Your first question today comes from the line of Gaurav Jain from Barclays.
Tant. I have 3 questions. One is on the leverage. So clearly, you have benefited in 1H from because of foreign exchange of almost £700,000,000 which is on Slide 15. The leverage is coming in lower than what we thought.
So how does that impact Your view on when share repurchases could happen and how are rating agencies looking at your leverage right now?
Gaurav, good morning. It's Stefan. Number 1, we're pleased with the progress we're clearly making on Develeverage, but I give it over to Oliver to walk you through the details. Yes. Thank you, Gaurav.
You're right, Sam.
I mean, we're obviously very pleased with the deleverage progress in the first half, but I think we shouldn't lose track of the fact that part of that's been a Tant. What's happened from a currency perspective? So over 25% of the impact on our net debt balance About €700,000,000 has been because of the strengthening of Sterling and the impact that's had in the context of the value of that debt. The underlying level, of course, has also benefited in terms of levels of cash generation from The proceeds that have come from the sale of our premium star business, which benefited the period as well. If If we look at the underlying momentum, it's very much in line with the trajectory that we set and talked about at Tant.
And I think as a group of analysts, one should sort of take comfort in the fact that we're delivering Tant.
Tant. And I think I would just emphasize that last point from Oliver is about what you should see now in this half year is the deleverage Being delivered that we talked about at the Capital Markets Day.
Sure. Thank you. My second question is on Pulse and the launch which is happening later this year. So now we are seeing some patent litigation between some of the companies in the sector around heat not burn Tant. How are you approaching those sort of issues?
And what if they happen? And how would you handle that when you launch Pulse?
Yes. I think one thing which is good, I mean, we One thing we which is important to know that our Pulse product in its basic form has been in the marketplace in Japan, yet without Tant. So I think that gives us comfort that to our best knowledge, our launch in Europe shouldn't be impacted by any litigation on this front.
Okay. And on heat not burn, so look, there are tax gap between cigarettes and heat not burn products currently everywhere in the world, including in Europe. And in a market like U. K, which you are really not prioritizing for your heat not burn launch, You know, one can argue that tax difference actually negatively impacts your cigarette business. So Do you think the tax gaps are too wide in certain markets and should close?
Sorry, Gurv, I think I was just I was trying to understand the question is about the attractiveness of certain markets for heated Tobacco, correct?
No. What I'm trying to understand is that in some markets like the U. K, these tax gap between eat not burn products Tant. They actually negatively impact you if consumers keep moving to heat not one products in the UK, where you are not present. So would you be arguing for the closure of these tax gaps over the long term?
Okay. I got it. Sorry. Reality is, I think, one of the things. Our strategy around our NGP strategy overall, like with the rest of the industry, is built around the fact that Governments across the world will incentivize in their tax regime for consumers to switch over to NGB products.
Yes. I think there is a level of robustness to the strategy that it isn't built around some specific exact position of a government to take. So I feel and to be clear, I think there will continue to be movements around tax rates around NGP products across the world in the years to come, yes? Overall, what we're seeing is the direction is in line with what we expected, yes? And I when we formulated in January our strategic plan, Yes.
We did foresee an increase in tax rates related to NGP products. So we have seen nothing in the last couple of months that would worry us in this context.
Okay, sure. Thanks a lot.
Thank you. And your next question comes from the line of Adam Spielman from Citi. Please go ahead. Your line is open.
Thank you. Three quick questions from me. Just returning to share buybacks, can you just really make it simple for us? When should we expect Share buybacks. And also, have the rating agencies put more pressure on you in any way Tant.
That's the first question.
Yes. Adam, let me answer it, and Oliver will jump in with more details. I mean in principle, in the Capital Markets Day, I think we outlined very clear what is our capital allocation policy, Yes. And I think what you should look at the results today, we are delivering against the deleverage step performance at this point in time. I think in Oliver's answer to Gurav, I think one is to think, I would just be mindful about there can always be moving pieces around it.
I think, therefore, We do not want to give a forecast when we'll get to that deleverage level that we have targeted, and I hope for your understanding on this one, yes? On your second question on the rating agencies, to be clear, we are in constant discussion with the rating agencies. What we have outlined Our strategy is very much in line with the discussions we had them to protect our credit rating in this context.
And I mean, Adam, just to the point about You'll see that all three rating agencies are now stable outlook. So we've actually improved the position over the past
For a
few months or so where we were on negative watch, I think partly as a result of the uncertainty around our future, given the arrival of new Chief Executive and a new Tant. A new strategy, but that has now been addressed in their ratings, and we are on stable outlook on All three rating agencies who formally assess us.
Okay. My second question is talking about Innovation of Next Generation Products. I noticed that you're very much talking about that you need to connect, have more an emotional Connection with consumers. You don't talk anywhere about product upgrades. And I'm really aware that PM and JT and BAT are investing and Jewel actually are investing a lot of money, 100 of 1,000,000 in upgrading their products.
And so I'm just wondering, in this category, do you really believe that emotional connection is enough? Or Because as a hydro business, I think, your products just need to be really substantially better and that's going to be very expensive.
Sure. Adam, I think you're absolutely right. I mean, to be clear, the emissions is not it's just an emotional connection. Tant. Being a marketeer by training, yes, it's a combination of your product offering with your marketing program and your emotional connection and To be clear, also your route to market, where can my consumers buy my product at what price?
Yes. So it's the whole marketing mix. Yes. So I think what we wanted to highlight is that historically, we have very much relied on our product offering being carrying our message. And I think with the arrival of Andy and really having a marketeer sit at the top team of Imperial, we want to up dial our mark of the quality of marketing communication with our consumers.
But to be clear, product and product innovation will continue to play an important role. The second point I would want to make here, and I think it's an important one to keep in mind, is we as the number 4 player in the world, our ambition is not to be the market leader in NGP, Yes. And our strategy now really focuses on NGP countries where there is a sizable NGP segment, where consumers are increasingly looking for choices, yes? So in principle, our assessment is, we can compete for the market share that we are looking for as part of our strategic plan in these markets with what we have to offer. But to be clear, Part of our market tests, the trials that we're planning for NGP, meaning specifically our vaping product in the U.
S. And now 2 European heated tobacco markets, It's to validate our proposition.
Okay. And then finally, Okay. Well, finally, sort of I want to hear about your brand strategy in tobacco. And it seems to be very much focusing on local And in the context of the history of the last 20 years in tobacco, that's a very unusual strategy. The growth has all been in and the move has all been towards international brands.
Obviously, you have some strong local heritage brands. Do you think you can continue like that? Is this a sort of perpetual strategy that now where everybody else is swinging towards international brands and focusing more and more on that? You will be pretty much the sole player who's focusing on local heritage brands. Is that how you see it going forward for many years?
Thank you for the question because I think it allows me to clarify one point is it is a combination of focus on Global Brands and Local Brands, Yes. The difference is and therefore, we do not drive a strategy that is focused solely on local brands, Yes. The strategy is and this is the strategic change. We have completely neglected local brands In the last couple of years, our level of investments in local jewels has been negligible. They were excluded from any receiving any support from an innovation side, for example, and major marketing spend.
And that, we think, is a mistake if you're really consumer centric. Given the history of our company, we actually have a disproportionate share of strong local Jewell brands given our acquisition history. And what the strategy has corrected. Instead of giving no money to them and trying to migrate them as hard as possible into Global Brands, we'll put the consumer first in saying we will continue to absolutely priority number 1 is our global brands, yes, but we are now supplementing that with selected bets on local Jewell Brands, and you can see in these set of results, if I may, in the market share performance. 2 markets in our top 5 markets have grown share in U.
K. And Spain. A very substantial part of that share growth has been our reinvestment in local brands in Spain in Noble and in Fortuna and in the U. K. Into the launch of Embassy.
So actually, we can see in this set of results the first green shoots of actually starting to reinvest in some selected local brands, but that is not that we will not Stop that we'll not invest our global brands. So it's a combination of the 2.
Okay. Thank you very much. That was my last question.
Thank you, Adam.
Thank you. Your next question comes from the line of Alicia Fori from Investec.
Tant. Hi. Good morning, everyone. Thanks for the question. Two questions.
The first one is on Australia, which has, I guess, struggled to turn around as quickly as some of the Market for the reasons you identified. My question is, do you think that you have the correct pricing architecture for that market longer term? And then secondly, on the U. S, can you talk a bit more about what gives you confidence in the U. S.
Vapor turnaround after competitors have obviously made a big push there in recent months. Just would appreciate a bit more color on how you think you can regain some of that lost share. Thank you. Yes.
Very good questions. On pricing architecture Australia, I have the confidence that we have the product lineup and the pricing Tant. And let me explain that better. The share loss You see reported in the half year results for Australia is primarily driven by our decision to increase prices and pass on duty excise to consumers and to customers. However, some of our competitors have Tant.
We've chosen not to do that and especially at the lowest entry, the 5th price here in the market, we became uncompetitive. So all our share losses related to that specific price tier. We have now in the last couple of months taken corrective steps to actually and we have very quickly started to recover that share. So I feel quite confident that there's nothing problematic from a The perspective behind our brand architecture or pricing objective was a very clear choice that hopefully will fill you with confidence that we're not here buying our shares yet. We're actually here when pricing more than our competitors at the beginning of this fiscal year.
Yes. So that hopefully gives you some confidence, have the right product, we have the right product hierarchy, we have the right pricing architecture to actually compete in the Australian marketplace. To your second question about the U. S. On NGP and specifically Blue.
We will have our market test in the United States and in one area of the U. S, where we'll test the whole proposition, yes, which is primarily a reset of our marketing and routes to market capabilities. Yes. So we do believe that with these 2 key marketing elements being reset, We absolutely have an opportunity to compete in the U. S.
Market, but I would come back to 1.4 prior. We are the number 4 or number 3 player in the U. S. Market where you look at it, 4 in NGP, 3 in tobacco. Our ambition doesn't have to be to be number 1 or number 2 to make money in this marketplace.
So that's an important piece to keep in mind. When you look at our ambition, It is linked back to what is the right ambition for this company. And the last point I would make here on NGP is
Some of
the market share movements, as you when you look very closely, are driven by very heavy discounting of devices down to $0.99 And you have to question yourself, I believe. You will get good initial trial. I think you will see whether consumers stick with these brands Once pricing moves up and what kind of loyalty you're buying with deep discounting of devices, which is a technique we, as Ampeo, have not engaged in And I've deliberately accepted some market share loss because we're not sure this is good market share.
Thank you. Your next question comes from the line of Patrick Follin from Redburn. Please go ahead. Your line is open.
Hi, yes. Good morning. Two questions, please. First on Germany, I was hoping to give more detail on what is happening from a portfolio perspective Tant. That is causing the current headwinds is a more branding focus or portfolio that needs to be moved towards value formats?
And has there been any improvement in East Germany where prices are a bit more competitive? Or is that really dependent on your Sales improvement that is ongoing.
Patrick, good morning. If you look at the Germany, I'm very happy about your question. If you look at it one thing, we still lose share in Germany very clearly, but we lose less shares than we used to do last year. So We've lost chair in Germany for 10 years in a row. So what I take as an encouraging signal, we're slowing the level of decline.
Now it's very clear that's not where we want to be mid term, but it at least shows some first green shoots that the initial actions are starting to show some Benefit. Now just a specific part of your question. What we are seeing is our sales efforts are starting to make I'll start to begin to make a difference, but we're at the relatively early stages here. Yes, our brand renovations, Reinvestment in brand equity in JPS and in West and in GOLOISE are at the early stages. So the arrival of Andy, who is now deeply involved reviewing Tant.
The next question is from the line of the question. Yes. To the question of East Germany, where we historically hold a lower share Tant. Now one thing that has hurt us with the border closures towards the Czech Republic and Poland because of COVID, The East German market has actually become more important. Therefore, it actually has a negative impact on our overall market share because suddenly, East Germany is a higher weighting of the total German share because consumers do not travel into Poland and Czech Republic at this point in time.
There, it's primarily about rejigging our sales force. Yes, we are building a better coverage of Eastern East German outlets, but that is just work in progress. So in summary, you can see the very early signs of our new strategy being put in place in Germany, but it's probably the place where we'll take the longest. But when I look at it, the steps we've taken, they are starting to show the results We're looking for, but there is a lot more to come, especially on the brand side.
Okay. That makes sense. Tant. And just with regard to the The current mental situation, does that make sense? Or are the cigars more geared towards pure tobacco flavors, sports flavors that could be at risk of being banned?
Sure. Good question. The key motivation for us, and I'm very happy about the question, is if you look at it, We have, for a long period of time, a very good position in the mass market cigar segment with Backwoods. But it's very clear, backwards is a very premium priced product, priced at double the typical price of the market. And We have good consumer insights.
The decision as we outlined in the Capital Markets Day, we really see mass market cigars as a very attractive segment. It's a growing segment in the U. S, But we have only played the premium end. So the decision we have made of really serving all our consumer needs to position a new product offering under the Dutch brand name in the price segment below. So it's meeting a consumer need that we as Mpairo I haven't served in the past, and the initial success with the quality we can offer has been very strong to consumers.
So we haven't linked it really to any potential bans on flavored cigars. It's just us going into a price segment Well, we as Imperial really haven't played and the initial reaction has been quite strong.
Okay. Thank you.
Thank you. Your next question comes from the line of Sanath Subhasan from Morgan Stanley.
Two questions from me, please. The first one, you have called out about share gains in combustibles across 3 of your strategic Markets, U. S, U. K. And Spain.
Can you perhaps give us more sense about your performance in these markets across the overall nicotine user base just to calibrate how the movements of NGP is working in these key markets. And then secondly, Stefan, you have announced your intentions A few times today on meaningful harm reduction. Could I press you a bit on what in your view is meaningful here, please? Thank you. Sure.
On total nicotine market shares, happy to look at the top markets. Now The easy ones are simple. If you look at Spain, for example, I mean, there's a relatively small NGP segment. And actually, we hold the leading market share in vaping, which is the largest category here. So actually, I'm very encouraged when I look at total nicotine share because we shouldn't forget, we lost share in Spain for a long period of time.
And the refocus on Noble and Fortuna as local jewels, complementing our global brands like West and JPS, actually striving share forwards, very happy with that. If you go to Germany, our reality is here, we are holding our share in the NGP segment behind our vape behind Blug in a very good way. And I think we need to see what happens if oral nicotine with the legislation on this front, yes? So overall the challenge Total nicotine in Germany is clearly on the tobacco side, yes? Dealing with the U.
S, morality is, as you know, when you look at it, The NUP share overall of total nicotine consumption is just progressing as it would have done in the past. And therefore, our U. S. Test to get more of our fair share in the vaping segment is the key thing that we're working on. So I see I feel Our what we're doing behind our new strategy to get to the right share position in the U.
S. Is absolutely right because we're now starting to Grow faster on our tobacco share and at the same time we're addressing with the market trial, how do we compete in the vaping segment, yes? And then to round it off, U. K, you've seen a very strong performance. Also, our vaping proposition is doing quite well.
And the heated tobacco segment tends to be quite small at this point in time. So I think also happy about our total nicotine proposition there. And I'm just trying Australia, as you will know, there is no legal NGP offer, so we're really talking about the tobacco position there, yes? So hopefully, that gives you an idea where we are at. Thank you.
And just remind me of the second question, please.
No, sure. So I wanted to understand is your definition of meaningful harm reduction. What does meaningful quantify as?
Yes. I think to be clear, it's to would probably be better placed once these market tests Tant. I think what you should definitely read into it, we do believe we as one of the large players in our industry, we want to make Tant. Yes. I wouldn't Wanted to put a number at this point in time because we're talking about a market that is still highly volatile, still in development, yes, but it will make a meaningful difference to the harm reduction for our consumers.
It will also, over time, hopefully, make a meaningful difference to our financial situation as a company. Thank you.
Thank you. Your next question comes from the line of John Leinster from Societe Generale. Please go ahead. Your line is open.
Thank you and good morning. Yes, Tant. 3, if I can. First one, just on the sales force expansion in the U. S.
And Germany, is that Is that how already started within the U. S? And is that going to be something that's really coming into the second half of this year and therefore should Start to have an impact next year? Or what could you give perhaps a timeline on when you expect the results of that expansion, please? Absolutely, John.
Good morning. You got it. In principle, what's happened is in half 1, we have primarily prepared recruitment has happened. But as you will know, if you want to recruit people in the right way and they are going through training right now, so virtually these new colleagues will hit Tant. The road and customers, yes, in the half too in U.
S. And in Germany. Yes. Reality is when they go off the new territory, and we shouldn't forget these are customers that we haven't covered with face to face interactions. So probably, the financial, put it this way, the net revenue impact in the second half is going to be smaller, but it will be an investment in the second half because the salaries of our new colleagues are in there.
You will see the benefit from a market share perspective most likely more in fiscal year 'twenty 2 When they have found the right routes, they've built a relationship with the customers, they have put the right picture of success and shelving out there. So that's how I would see you being able to track the progress we're going to make. Okay. Thanks. Second question, Maybe I misheard you.
Did you say your mass market cigars in the U. S. Were up 60% six-zero? No, you haven't misheard us. It's actually up 61%, yes?
Now before we get too carried away, I think just to help you, John. Now number 1, the big brand in there is Backwoods. Backwoods in half one twenty twenty, so the like for like comparison period, We suffered supply chain issues because we really want to make sure the quality of the leaf is correct, yes, and we had seen such an increase. So actually, last year, we really struggled with supply. So the plus 61 is logically was helped by that fact that the base was quite low.
It also helped to be clear by the launch of Dutch that we touched Tant. One of the questions before where you have the pipeline filling effect of that as well as retail partners actually give us extra shelf space and stock the brand, yes? So Tant. Please do not expect a repeat of that in half 2. Yes, we still have a positive number.
And I think you should probably see the bigger picture is that there's a Segment that actually is in growth overall. Yes, also in volume. We as Imperial have the strongest brand in that segment. We're building out our portfolio. We're getting to a supply chain situation that actually will allow us over time to meet consumer demand.
So this should be one of the growth engines of our U. S. Business for the years to come, and it's clearly baked into our overall global strategy. Actually, apologies. The question was actually going to be, I mean, given that level of growth, do you actually have the capacity to maintain that sort of level of that sort of significant growth rate that you've seen?
Or is that something where you'll have to invest We have made the investments. And to be clear, The leaf supply is kind of independent pharma. So this isn't a CapEx investment from Imperial side. The manufacturing capabilities we absolutely have, Yes. So we will be able to actually grow the brands in the way we have forecasted.
The only thing, please do not expect it to grow 61% year on year. That would be the key thing. But expect to see good positive growth, Hopefully, over time, also double digit growth behind the brand proposition here. Thanks. And lastly, Obviously, you had a settlement with Minnesota and Texas.
Does the provision cover does is that all the outstanding disputes with the U. S. States? Or is there Tant. Potentially more to come in terms of that provision for the MSA disputes.
Well, the answer is it's just covering Texas and Minnesota. We do have litigation with Florida, which is ongoing, but we are extremely confident about our position with Florida, which is why we you will see there's no provision in the context of where we sit with that Tant. So it doesn't cover everything, but it covers the areas which we thought it was sensible to settle upon based upon where our position is at the moment.
Great. Okay. Thank you very much.
Thank you. We have one further question, And the question comes from the line of Faham Beygh from Credit Suisse. Please go ahead. Your line is open.
Good morning, guys. Following the trend, 3 from me as well, please. Can I start quickly with the mass market cigars business? Stefan, you mentioned It's in volume growth. What do you think is driving that performance?
That will be helpful. And just on that, has there been a price increase? I know one of your competitors announced a price increase at the Tant. Have you also taken a price increase there? That's the first question.
Yes, Absolutely. Good morning. Number 1, why is mass market cigar in growth for us? So 2 drivers. The biggest drivers is our market share gains.
Yes. I mean, we've gained very significantly market share in that category, yes? That's the number one driver. What A smaller effect is that it is when you look at total nicotine consumption in the U. S, it's actually the one segment that Tant.
Tant. We are the most premium priced product in the marketplace with backwards. We doubled the price of the next competitor. So actually, we have not taken some specific pricing on this, yes. So pricing has not been a key driver proportionally for contributing to the 61% growth.
Okay, perfect. And then moving on to modern oral on nicotine pouches. Could you remind us how big that business is for you guys now? And could you maybe help us with the strategy in Modern Oil, specifically, I know you mentioned you have some market trials in the other 2 NGP businesses, But what is the strategy here? And what could lead you to potentially changing your view on Taking, all nicotine in the U.
S. Where you would have a very good route to market and clearly, there is a potential benefit from a returns Standpoint as well in that market. Thank you.
Just to give you an idea, our model Tant. And these numbers are £15,000,000 business, okay? Just to give you a dimension. It's meaningful, but logically, it's walked by the EVP business. Now to be clear, one thing we've it's a very fair question about the U.
S, but I think we should step back Tant. We have a very strong position in our European markets where the brands are well established, and there is a consumer habit for that. So you're very right to point out the only market where there is a well established oral nicotine segment where we're not present in the U. S. Jan?
Absolutely right. But you will know well, To launch a new brand into the U. S, you will have to go through a very lengthy PMTA process unless you are going to buy a competitor in the U. S, which we've chosen not to do. I think we have bigger opportunities for us as a company.
But we'll see how this progresses over time. But The $50,000,000 we think there's a bigger opportunity for Imperial to compete in the much larger vaping sector.
Okay. And just one final question. I think you mentioned this on the slide deck, your Share in the top 5 markets was up 6 basis points, but actually your tobacco share overall was up 30 basis points. What markets are making that difference? And is it you driving that performance?
Or is it an issue of Tant. Portfolio just and which markets in particular are driving that would be helpful to understand.
Yes. Well, one of the The biggest drivers is that our top 5 markets exactly a year ago lost us 37 basis points. Yes. So actually, the biggest improvement here is actually our core markets. Now if you look at why are the wider markets still showing better share gains, there are a couple of markets, which are big volume markets because we're talking volume share.
You're talking markets like Saudi Arabia, yes? You're talking markets like Russia in our portfolio. So a couple of markets That actually where we have good market share performance, but if we go back to strategy, these are not markets where we, as Imperial, make good lots of money. Yes. So that is one of the things.
But I think what is reassuring, Pray, for you is about the focus on the top five markets Hasn't slowed down some of the other markets in our market share position. And the other one in this one, just to complete it, Our African markets, which we highlighted by this strategy, also had some very good share performance, which is probably of all of Tant. The most important one because they are strategically not within the top line, but not too far behind, which should also which gives us confidence about our strategy in the longer term. Many thanks. Yes.
Thank you. Your next question comes from the line of John Leinster from Societe Generale. Please go ahead. Your line is open.
Hi, guys. Back again. Sorry about that. I couldn't just A quick question. On the 1st 6 months, you mentioned that total market size was down 3.2% And that obviously with COVID sort of unwinding, so what would you expect the market size to be down for the full year, please?
Yes. It's a tricky one, yes. And just to share the dilemma with you. I think when you look at it, overall market size has been slightly helped by the COVID situation, yes? As COVID kind of Starts to unwind.
I think we'll see more of a return of volume market declines back to historical levels. But I think The challenge for all of us at this point in time when you look at our half to being April through September, it's quite tough At this point in time, to forecast how much it will start to unwind in these next couple of months, primarily, to be fair, based about Tant. Travel restrictions, yes, the ability of consumers to return back to their normal consumption patterns. So if you ask me today, I would say You will see a slow return back to normal consumption patterns and therefore normal market decline rates from a volume perspective, But I don't think you will see in half 2 a complete return to a normal pattern yet.
Tant. Your next question comes from the line of Jade Dingus from JPMorgan. Please go ahead. Your line is open.
Hi, guys. Actually, all my questions have been answered, but maybe just One quick one. So in the U. S, for a while now, we've been seeing some down trading from kind of the premium discount segment to the Deep Discount segment. Is this something that you guys would expect to continue?
And are you kind of adjusting for that and planning your strategy around that? So maybe if you can comment on that one.
Yes. I mean one thing is consumers I mean, with being more consumer centric as a company, I think it's important we follow and want to serve our consumers wherever they are. I think one of the things which is exciting for us is Imperial. While we're only the number 3 player in the U. S, We do have an attractive offer in the deep discount segment, yes.
So one thing I think that distinguishes us in the U. S. Is about of all the big players, We're the one with the most complete assortment of brands going from premium all the way down to deep discount. Yes, so the ability to serve our consumers, and you're right, If there is a segment that has grown in the last couple of years slightly ahead of the rest of the market, it's that deep discount segment, yes, which we do serve as well as a brand and has helped us on our share development, yes? So that is something I'm very happy with.
And when we look at now with Andy arriving as the new Chief Consumer Officer. We're looking about what offer, what brand offer do we have for what price point in the U. S. Market, yes? And You will be aware that the deep discount segment in the U.
S. Despite its name, is still a very attractive segment 4 industry players like ourselves from a cross margin perspective.
Thanks.
Tant. Thank you. I will now hand back the call for closing remarks.
Okay. Sure. I mean, first, thank you for Tant. So hopefully, you get a good sense about kind of a good start into the year, good top line performance, really happy, especially being able to stabilize our market share in our top 5 markets. Yes, and looking forward to a good year, but I think it's good to have the first half year under our belt, and I just want to reiterate the guidance that we gave for the full year, yes?
And hopefully looking forward to seeing you when we do the full year results face to face. None of us are giving up hope on that one. Yes?
All right. Take care.
Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.