Good afternoon, everybody. My name is Miguel De Jesus. I'm a member of the U.S. Clean Technology Research Practice at Goldman Sachs. I'm very excited to introduce Eifion Jones, Chief Financial Officer of Hayward, and Stuart Baker, VP of Business Development of Hayward. Before we get started, I just want to reference the Goldman Sachs compliance disclosures that were highlighted in the earlier sessions today. Those are also posted on the website for your review if you haven't already. You know, with that, I'd like to go ahead and kick off today's discussion with Hayward. Hayward is a leading OEM in the residential and commercial pool industry. Very excited to have both Eifion and Stuart here with us today.
We've invited Hayward, just as a matter of explaining today's agenda, to give us a 10-15-minute presentation for those investors in attendance who may not be as familiar with the residential pool business or with the Hayward story. Following that presentation, I'm very excited to have a dialogue with Eifion and Stuart to dive into more specific questions and topics. Eifion and Stuart, I very much appreciate you guys being here and joining us at today's conference. If you're okay with it, I'll go ahead and get over to you and the floor is yours for your presentation if you are ready.
Sure. Thanks, Miguel.
All right. Well, thank you very much. I'm Stuart Baker. This is my colleague, Eifion Jones. Hayward, it may be a new company to you all. We've been around as a company for almost 100 years, but just come up to our first year of being a public company. We'll have a couple of slides just to get you level set on who Hayward is and then jump into some more of the details. Just teeing up who we are and what we do. You know, our main goal in life is to bring great experiences for the pool to the backyard to our consumers. There's really three themes on this slide we'd like to pick up on, and we'll dive into them in a little bit more detail as we go through.
First of all, we're a pure play, equipment, provider. We don't sell chemicals. We're purely in the equipment, everything that it takes to make the pool work. We think we have a very strong competitive moat. We're gonna talk a bit about the company, what makes us special and what makes us different from everybody else. Eifion will touch on some of our leading financial performance that we have as against our peers. In terms of some of the themes that you're gonna hear about our products, we are a product company. It's super important for everybody to understand that there's a bit of a revolution taking place in the pool space now. Gone are the days of just a pump filter and a white light.
Now, pools are much more complex in terms of technology, so you're gonna hear us talking about this theme of the SmartPad, where we've got IoT, connected controls, smart devices, smart pieces of equipment, so the pool can be close to auto-managing itself, self-regulating itself to make the actual pool ownership as easy as possible. Importantly, many of our products you're gonna see are very environmentally sustainable, energy efficient, replacing chemicals with natural sanitization. As we just take a look at Hayward, first of all, I'll just point to, we'll go left to right on the charts here. First of all, you can see we have two reportable segments. North America is a little over 80% of our business, with Europe and Rest of World is our second and smaller reportable segment.
The middle pie chart just shows here that we are a pure play. 95% of our revenue comes from the residential pool space, just 2% from commercial and 3% from our industrial flow control business. On the right-hand side, you can see that we're a full line player, and I'll talk a bit more about the products and the technology that we have, but we're present in all technology. You should think of Hayward as a full line supplier. There are no big gaps in our catalog. As a pool builder that represents Hayward, they can build the pool using everything they need from Hayward's equipment set.
Obviously the big categories you might expect to see are pumps, filters, heaters, but you may be surprised to see 13% of our revenue actually comes from IoT connected controllers and automatic sanitizers. Of course, we also have cleaners, lighting, white goods, and the other products we've mentioned from flow control and commercial. Let's just talk a bit about the SmartPad. The reason this is so important, our OmniLogic controls ecosystem is depicted here in the middle of the slide. There's an app, but this is really the key now to all of the pool equipment, because all pool equipment now has some sort of connected capability to make pool ownership super easy. Omni is the centerpiece of the SmartPad, and then you can see all of the other pieces of equipment connected to it.
SmartPad is super important because you can see here the growth, the products that have got the numbers against them, whether it's LED lighting, Omni is our control system, variable speed pumps, high efficiency gas heaters, and AquaRite salt chlorine generators. These are all connected products that add either energy efficiency or ambiance or comfort to the pool that really makes the pool ownership really nice to have an experience for your backyard, whether it's daytime or nighttime, great to have and easy to use. You're gonna hear us talking a lot more about Omni. I'll hand over to you, Eifion.
ESG, which is a term we use now more frequently than we have in the near past, but it's really been the heart of who Hayward has been for the last 100 years. At the end of the day, a pool pad, which is the equipment environment we create for the pool. That's basically a recycling plant. We're recirculating and recycling over 3 trillion gallons a year of pool water. If you accept the fact that people are gonna invest in swimming pools, Hayward is there recycling, heating, pumping, filtering, and adjusting the composition of that pool environment for the homeowner. We take it very seriously, the production of environmentally sustainable products. As Stuart mentioned in the beginning, we don't sell chemicals.
We sell natural sanitization systems into the pool environment. The planet is our environment at the end of the day, and we believe the pool, which is the center of the outdoor living experience, for many home consumers, we are there to have a positive impact upon the qualitative experience and the environment that homeowner is creating. We believe in a diverse workplace. We have made significant strides towards this. We believe in a healthy and safe working environment at the same time. In terms of governance structure inside the organization, we've made great strides over the last year, becoming a public entity, moving towards full SOX 404 compliance by the end of this year.
Most importantly, progressively, having an independent board and providing a strong governance structure across the organization. We've identified six key pillars of growth for our industry, and in particular for Hayward. Firstly, digital leadership. This is an area that's expanded over the course of the last five years, and Hayward has invested heavily in our capabilities to have a connected experience for the pool owner in their equipment running their pool. We do it through what we call our OmniLogic. That is connected now to every piece of equipment on the SmartPad, and it's controlled via an app, and we have a highly rated app out there in Google. So you, today, as a homeowner, don't have to fiddle behind the bush or behind the wood paneling.
You can control the entirety of your pool experience from a mobile app. Secondly, dealer conversions. You think about how we go to market. We go to market through distributors, and we go to market through builders and servicers. It's important to progressively convert those dealers and those servicers towards the Hayward brand. We do that through focused selling efforts, and we've converted our sales team towards more business development team over the last three years. We support this through our Hayward loyalty program, Totally Hayward partner loyalty programs. Think of a frequent flyer program. We've adopted the same principle within our industry, and you as a dealer or a servicer or a builder can earn points and rewards through your loyalty to the Hayward brand. New product technologies.
In order to be relevant in any industry, you've got to bring out new products, and our new product vitality index has been growing very strongly over the last couple of years. 30% growth in our vitality index year-over-year in Q1 this year. We're bringing new innovative products that improve the swimming experience, save you energy, and give you a digital connected experience at the same time. Operational excellence. This has been a significant driver of our growth. Really, the entirety of the history of Hayward, but really it's come to bear in the last two-three years as we've gone through the COVID experience. We're a vertically integrated manufacturer. We place our manufacturing footprint within our core markets. We have three manufacturing facilities in the U.S., two in Europe and one in Asia.
We've been able to get after it in terms of supply more so than any of our competitors, and it's enabled this organization to grow year in, year out now in terms of top line, two times the level of volume that we had three or four years ago. We've been able to do it through the existing footprint we have. Broad channel access is the fifth pillar. We're quite different here than some of our other competitors. We play across the entirety of the channel, distributors, builders, services, online, and retail. Environmental sustainability, as I just mentioned. We're in the business of circulating, cleaning, and filtering water. At the same time, we do it through innovative products that actually have a higher energy efficiency level than most in the industry today.
Okay, I'm gonna talk to you a bit about some of the technical or technology revolution that I mentioned earlier. I'm sure in the Q&A, we're gonna talk a bit about new construction, and we're gonna talk about the aftermarket. What you see here in the three rows of pie charts, on the left is penetration of technology in the aftermarket, on to the right of it, what the penetration rate is in new construction. If we just look at the new construction column right now, you can see the first row relates to automation, so our controls, automation platform, app controlled, IoT controlled, automation systems.
You can see if you, if any of you today were going out to build a pool, a new pool for the first time, the chances are 65% of the time they're putting on an IoT controller. In the aftermarket, controls are still under-penetrated. People are either using manual valves or at best have a time clock to switch the pump on and off. Why is that important? As we talk later, you're gonna see that 80% of our revenue comes from the aftermarket. Just 20%. Actually, slightly under 20% of our revenue comes from new construction. We think about sustainability of growth, the aftermarket is a very rich source of growth potential as these new technologies are available to us to deploy. Think about controls, that differential between 28% conversion in the aftermarket and 65% new construction.
Our thesis is that everybody in the aftermarket was as educated as somebody at the point of new construction. Why wouldn't they want the convenience of controls? You can monetize that quite simply. You know the differential of the 37%. There's 5.3 million in-ground pools in the United States alone, excluding Canada, Europe, and rest of world. That 37% penetration, if we could get them up to the same level as new construction, there's a $3 billion addressable market opportunity. The middle row relates to natural sanitization. There's a big move now to not use chemical chlorine, but to use salt chlorine generators, where you're putting salt into the pool, regular sodium chloride into the pool, and then using an electrolytic cell to dissociate the sodium chloride and form chlorine naturally from salt water.
It's a much nicer swimming experience, plus you don't have to store and handle chemical chlorine around the house. Also, other technologies, UV ozone, are coming into the forefront, where you can use even less chemicals. Again, most of you will be aware of UV being used for drinking water, so this is a very high efficacy form of sanitization, very strong against bacteria and viruses. So very common now for people to use salt chlorine generators and UV ozone systems. Lastly, one that you may, if you're a pool owner, be aware of is the big conversion from single-speed pumps to variable-speed pumps. You can see on new construction now, 75% of all pools have variable-speed pump technology. The aftermarket is still only about 35% penetrated. It's a great payback. A variable-speed pump uses way more energy.
The payback in certain regions is less than a year. It's certainly in the 2-2.5-year range for nearly everybody. It's a much better product, and it'll save you money, and it pays for itself very quickly. These are three examples of conversion upgrades. As we think about the aftermarket, really our salespeople, they're always focused on new construction, but the big opportunity is that 80% of our aftermarket revenue, and then evolving those existing pool pads into SmartPads.
I think one of the unique facets about Hayward and the pool industry at large is more than 83% of our sales volume is gleaned from the aftermarket. Often in conversations, we talk a lot about new construction of pools, but the reality is the pool industry is servicing 25 million pools globally, 10 of which are in North America. The engine of our business is the aftermarket.
It's been supported now progressively by some very strong secular trends. You think about the continued de-urbanization that has been taking place, I think, progressively over the last five years, certainly accelerated over the last several years. There's definitely a movement towards the Sun Belt states like Southern California. Well, Southern California, Arizona, Texas, Florida, these states are receiving a lot of influx from the cooler Northeast states.
We believe that is a permanent shift in the populace in the US, and we see it in other parts of the world as well. What does that mean for pool? It means most of those folks moving to the Sun Belt in order to have an enjoyable spring, summertime, they need a pool in their backyard. And that pool often is running 365 days a year, unlike a Northeast pool, which is running maybe four-five months a year. Just as we saw with the baby boomer cohort, we're now beginning to see the millennials move into their peak earning years. They bring with them a heavy attachment to the digital environment. They bring with them a heavy attachment to outdoor living and recreation, and that's driving pool demand.
Work from home. I would say this is a trend that's still developing, but I think we would all concur that there is going to be a hybrid work model for the foreseeable future, and that brings a bit more concentration in spending with inside the home and the backyard environment. Employment is strong. Residential investment remains strong. Home prices and equity levels inside homes are also very strong. Those are good support indicators for the pool industry. Additionally, remodeling activity, again, is also quite strong.
In terms of the average age of the pool inside the U.S. today, it's about 22-23 years old, so it continues to be remodeled and upgraded over the course of its life. Stuart's mentioned several times, looking at the bottom left-hand corner of this particular slide, we've seen a real attachment to what we call lifestyle products. These are products that we're selling that improve the qualitative experience of a homeowner's pool experience. That is lighting, sanitization, heating, et cetera. That is all driving towards greater sales through the upgrade and the remodel cycles we're seeing in this particular sector. Last year, this segment of our product line grew at 84%. That compares to the regular pool pad equipment, pumps, filters, et cetera, growing at a rate of 48%.
Last year, we grew in aggregate 60% as an organization. That follows 2020 to 2021 at 20%. This first quarter, we've grown at 23%. It's all been driven by the aftermarket, but in particular, homeowners' attachment to a higher qualitative experience. In terms of the bottom right-hand corner here of the graph, you see the rate of new construction inside the U.S. You can see this represents the number of pools built per year in thousands. In the far right, 117,000 in-ground pools were installed in the U.S. last year. That's beginning to get back to the historical mean of around 153,000 pools per year.
The good news is pool construction, whether it ebbs and flows, always adds to the installed base of pools in the U.S. That's the engine, as I said, to our business, that aftermarket. We love new pool construction. It represents 17% of our overall sales per year. The reality is, 83% being aftermarket focused, new pool construction continues to add to that base of installed pools.
Okay.
Just a couple of comments here on the financial performance of Hayward. Since 2019, you can see on this graphic, sales as we exited 2019, $733 million. Now through the Q1 2022 LTM period, we're basically 2x that at just under $1.5 billion. It has been a really strong period for us over the course of the last three years. We've gained not only additional market share, we believe around 200 basis points in a global market of around about $6.5 billion, but our new product introduction has been well accepted and our operational excellence has overdriven the competition in terms of supply performance.
Our adjusted EBITDA profile in the business has grown from $172 million in 2019 to $441 million through the LTM period. The qualitative attribute of that EBITDA raising margins now at the EBITDA line over 30%. Our gross margin as an industry typically ranges between 46%-47% and growing. This is a high margin business, good discipline across the operational expenses, high EBITDA margin and great conversion to free cash flow. We are a light CapEx model, so we're typically converting over 100% of our net income to free cash flow per year and generating in terms of adjusted free cash flow, if we could talk about that metric, adjusted EBITDA minus CapEx.
About 95% of our EBITDA is converted to adjusted free cash flow. Really strong financial profile in the organization, which has done super well since we've become IPO and certainly in comparison to the 2019 period.
Okay, great. I really appreciate that. I think it's a good way to start off today's discussion. Maybe just diving into the market growth, you know, clearly, the pool industry has grown very rapidly in the recent few years. I appreciate the additional sort of color on the structural change that you were referring to on the migration and the millennials, and the increased spend on technology. How does that inform your view on sort of what is the long-term steady state growth of the industry? Have we seen an inflection? I think based on prior discussions we've had, it seemed like the annual growth was in that sort of mid-single to high single digit on an annual basis.
Where does that go from here with the structural changes in demand that you were alluding to?
Yeah. Historically this industry has grown at high single digits, typically 6%-8% a year, volumetrically 4%-5% with an institutional pricing mechanism of 2%-3%. What we have seen over the course of really the last 5% or 6% years before COVID is these strong secular trends start to kick in, coupled with a real expectation that technology will become an ever-present addition to both inside the home. You think about all of the technology that's been added to control your appliances and your security inside of the home, that's now migrating to outside of the home.
We believe that technology adoption, coupled with the comments that Stuart's made around moving away to natural sanitization systems, coupled with greater ambient features in the backyard, that will move the growth algorithm in the industry most likely up to high single digits, if not into the low teens, so somewhere between 8%-12% over the foreseeable future.
Great, that's very helpful. You know, when we speak to folks, you know, who are trying to learn about this space and who are newer to the Hayward story, I think there's this, you know, sort of persistent view that, you know, the business is more levered to sort of these more cyclical consumer demand trends. You know, you talk a lot about the aftermarket and the installed base of current pools, which is, you know, supportive of that sort of recurring revenue for Hayward.
Could you hopefully maybe you could elaborate on that a little bit more and then specifically what part of that aftermarket revenue could you say is more tied to you know things that these homeowners need to invest in because there is a repair that needs to happen or an upgrade that needs to happen or a variable speed pump that needs to be installed because of regulation versus more kind of wishlist type items that maybe are you know maybe can be pushed down the road a little bit if conditions maybe get tighter. I wonder if there's any way you can elaborate on that part of the aftermarket business a little bit more.
Yeah, sure. I'll lead off. The aftermarket, anybody that owns a pool knows that you have to maintain it. It's not optional. That decision to buy a pool, install a pool, or buy a home with a pool, you've started a relationship with your pool. If the pump breaks, if the filter goes down, you have to repair it, otherwise you lose the pool, and you end up with a green pond, which is very expensive to remediate. The biggest, as I showed you in some of the product categories, the biggest ones between pumps and filters, you know, there's no discretion there. You have to replace them. Some of the other products, there is some discretion. You know, if your heater breaks, maybe you decide that you will wait for a season.
That's usually a short-lived decision because nobody wants to swim in a pool if you had a heated pool to a non-heated pool. The way the math actually works out, it's about 50%, maybe a little over 50% of everything we sell in the aftermarket is nondiscretionary. About another 15% has some discretionary aspect to it, but chances are that you are gonna have to look for some sort of upgrade, and some of that now, as you correctly pointed out, has been driven by legislation. Right now, if your single-speed pump breaks, the chances are you're replacing it with a variable speed pump. About, ultimately, about 65% of the aftermarket revenue is non-discretionary.
Okay, that's very helpful, 65%. Speaking on the broader market, you know, there's a lot of concern. I think it's fair to say that these concerns are probably, you know, more than they have been since the pandemic started about, you know, everything happening in the macro on rising rates, on, you know, the threat of, you know, lower consumer demand, on general, you know, recessionary fears. How should investors be thinking about pool demand in this context?
That's a good question. I mean, we've studied the historical correlation between interest rates and new pool construction, and there is very little correlation. In fact, if you go back to 2000 to 2007 time period, when there was a tremendous amount of new pools put into the U.S. market, interest rates around there on the 30-year mortgage were in the mid-single- to high-single-digit range. Today, we're not near that point. Apart from that, again, I draw your attention back to the aftermarket. Most people are investing into their backyards, not on a leverage basis. They're not taking loans to upgrade their pool. In fact, 60% of the aftermarket is serviced from non-financing means.
Interest rates are less pertinent to the pool market than maybe some of the broader residential and new construction market. In terms of the nondiscretionary aspect, again, 50% of the pool equipment replacement activity that's taking place is nondiscretionary. If you've got a pool, you have to maintain it. If your pump breaks, you have to fix it or your pool will turn green within 48-72 hours, and then you've got a mess to clean up there afterwards. It's not like a bicycle or a canoe that was an impulse buy that you can park in the garage. A pool is a lifelong attachment that you have to continuously maintain and upkeep.
I'd say, in recessionary times, what we have seen, is folks tend to revert back to the staycation mentality, and back to their community pools or to their home environments. If they have a pool, it's much more of a qualitative summer than not. Pools often take a bit of a boost, in terms of remodel or upgrade activity during some broader recessionary periods.
I think that's helpful context. I wanted to switch gears. I don't think we can avoid in this environment a discussion on the supply chain. You know, I was hoping maybe you could level set us just in general for the pool industry, which raw commodities are kind of most relevant to the industry, and which of those raw commodities have seen, you know, the most meaningful challenges, either from a pricing or from a supply perspective?
Sure. So you saw on some of the graphics earlier the type of products we make, and you'll see metal, resins, electronic components, and packaging as well. Every piece of equipment we sell is packaged. Those four broad categories have been the tightest, most escalating categories. We've done very well through the pandemic period. Again, I come back to the manufacturing excellence platform that we have three large facilities in the U.S. and two in Europe being vertically integrated, so less reliant upon third parties, and we've got that buying power with those primary commodities that I just mentioned. We've actually performed very well. That's not to say it hasn't been painful at times. It has, and we've seen costs escalate.
One of the unique features about the pool industry, there's low sensitivity to price, and we've been able to pass pricing through, not quite real time, but close to it in terms of matching against our costs index, and we've been able to keep our margin, our structural margin, both at the gross margin line and EBITDA margin line, within our target range of 46%-47%. We've been very pleased with our ability in our manufacturing facilities to really repeat decades and decades of lean manufacturing experience throughout the last three years. We haven't been insulated from supply shortages or escalation in the cost of those supplies, but we have been able to pass price through, get a hold of those raw materials and manufacture product.
That leads me to the question I had on pricing in general.
Yeah.
You know, pricing seems like across the board for, you know, various inputs in the industry, you know, have clearly gone up. You mentioned the ability and the relative insensitivity of, you know, price increases on demand. You know, how do we think about it? Is there a limit on pricing? When does that start to potentially erode into customer demand? Is that the right way to think about it? You know, specific to Hayward strategy, what, you know, what is the, I guess the strategy weighing against the long-term margin targets that you laid out, but also keeping in consideration, you know, any potential demand erosion that may occur on the customer side?
Yeah. Again, coming back to my earlier comment, the growth algorithm for this industry includes an institutional pricing mechanism of 2%-3%, which basically equates to the historical inflation rate that's affected this industry. Over the course of the last two years, we've been able to pass more price through as inflation's accelerated. Particularly over the last year, we've put three pricing adjustments into the marketplace aggregating to 21%. That's offset the same amount of inflation, 20%-21%, that we've seen in our raw material index. It's a lot of price, I'll grant you that. When you think about new pool construction, only 10% of the overall installed cost of the pool is equipment.
If you raise the price point 20% on the equipment, you're only affecting the overall installed cost by 2%. It's not a major dynamic. I'd say secondarily, the consumer never sees a line item invoice for their pool, typically. They've got no real understanding of the cost of the equipment. Most folks, as I mentioned earlier, are installing pools in a certain demographic which have a low price sensitivity to begin with. In terms of the aftermarket, most people are looking for solutions from their equipment. They're looking for energy savings, as Stuart mentioned. A new pump today will give you typically a two-three year payback. New gas heaters will give you similar type of paybacks. Shifting towards natural sanitizers will save you on chlorine tablets.
There is a tremendous value offering that we're providing today to consumers that they're actually seeking out to save money. Again, that leads to rapid price adoption that we're pushing through.
Okay. I wanted to talk about labor as well. We know that labor's been a constraint. I'm thinking about the crews that go out to the home and install the new pools or that are responsible for the actual upgrade or repair of a pool. You know, can you talk about what you've seen in the past year on the pool labor market, and then also how that's been trending or what, how you see that trending this year?
Mm-hmm. Maybe I'll lead off. I mean, after the Great Financial Crisis, you saw quite a lot of tradespeople leave the space. We're seeing that coming back. You know what I mean? You saw our numbers. The industry is doing well, so there's money to be made, so there are tradespeople coming back into the pool space. I think there's some other dynamics at play. There's different ways of manufacturing a pool itself. You know, traditionally, if you put in a concrete pool, it's about a three and a half month project. There are still people that will do that because they like the free-form custom look of the pool.
Equally, you can now buy some very nice-looking fiberglass pools or prefabricated concrete pools, and they're adding another option to homeowners or builders where they can literally come in, dig a hole, drop the pool, and fill it with water within 24 hours. You still have to do your landscaping, but it's more like a two-week project, not a 3.5-month project. Less labor required. That's been a new dynamic which has been changing. I think fiberglass is about 15% of the pool construction technology now. Different ways of making the pool. There's been some consolidation of pool builders, which has made pool builders more professional, perhaps a bit more lean, using best practice for manufacturing methodologies.
I think speed to swim is something everybody's focused on, and that comes from better efficiency, different methods of constructing the pool.
Okay, that's helpful. With the few minutes we have, I did wanna touch on capital allocation briefly while we have a chance. You know, earlier this month, you announced a larger share repurchase than we've seen Hayward do before.
Mm-hmm.
Just wondering if you could speak a little bit to the timing of the repurchase, any context you can give on the timing there, you know, specifically as it relates to where the stock's been trading recently. Any color there would be great.
Sure.
Yeah.
You know, our capital allocation policy is threefold. It's fairly straightforward. You know, we're gonna continue to reinvest inside our business. Our CapEx investments, which are very typically light, will take first priority. Secondly, M&A is always gonna be a priority for our organization. We've got a long-standing history of being able to bolt on acquisitions for Hayward. We're a great platform company in that regard. As it comes to share repurchases, we did announce at the end of last year a $450 million share repurchase program. We executed on the first tranche of those repurchases in Q1. We purchased back around 4.1 million shares, and that was from the sponsors concurrent with our sell down.
We thought it was a highly constructive transaction to encourage liquidity into the marketplace, but at the same time, reduce the sponsor overhang. We did another tranche in early April. That was a $50 million repurchase, about three million shares from the public. We did that over the first couple of weeks of April. Then, as you mentioned, we did a larger transaction, eight million shares, again, concurrent with our sponsor sell down. They initiated the secondary offering. They sold 24 million shares. We repurchased eight million from the underwriting bank. Again, we thought it was a highly constructive transaction to encourage liquidity into the marketplace, and again, reduce the level of sponsor overhang on the organization.
Good prices in each of those transactions. You know, well below where we as a management team consider the intrinsic value of Hayward to be, and we will continue to look at opportunistic opportunities to make repurchases when we think there is similar type of construction around encouraging sponsor sell down and creating liquidity there for public ownership, but at the same time, when we feel that the stock is greatly undervalued.
Great. Thank you. I very much appreciate that context. We are over a little bit on time. I think it was a very productive conversation. Appreciate the opportunity to hear from you both on the background of the company and more details as well as this discussion. With that, I think we'll conclude the session. Again, I wanted to thank Eifion and Stuart for joining us today at the conference.
Well, thank you.
Great.
Yeah. Thanks, Gail.
Great. Thank you. Thanks.