Benchmark Holdings PLC
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Benchmark Holdings PLC
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Good morning to all of you, and welcome to this quarterly presentation for Benchmark where we are covering our second quarter and the first half of our financial year '23. My name is Trond Williksen, I'm The CEO of Benchmark, and I will do this presentation together with our CFO, Septima Maguire. And we will take you through a normal program for such a presentation starting with highlights going into the -- giving you an operational update on the three business areas before Septima is diving a little bit more into the financials, and I end up talking about outlook for the company, both in the short run but also in a little bit longer perspective. At the end, of course, there is an opportunity to come with questions to us. We are here to answer those.
So let me start with the highlights of the presentation and our second quarter in this year. Again, we have delivered a strong quarter in Benchmark with strong results that are driven by good operational performance and good contribution from all the three business areas within the organization. This is, again, a continuation of the journey that we've been on for the last 3 years.
Consistently, quarter-by-quarter, we have been improving our results through an improvement in our operations. As I said, this result that we are showing today is on the back of good contributions from all the three business areas. But before I go through those business areas and give you more granularity on what we have been doing within and achieving during the quarter, I will count you through some of the main figures for the quarter and the first half year.
Revenues are up 13%, and we have reached a top line of GBP 44.4 million in the quarter. This is translated down to an even bigger improvement in our adjusted EBITDA, that's up 32% due to increased efficiency and continuous cost discipline throughout the whole organization. Our EBITDA -- adjusted EBITDA for the quarter ended at GBP 9.7 million. It should also be mentioned that we have -- our adjusted EBITDA margin for the quarter is 25%, which is in line with the medium-term target that we set out. We came out with medium-term targets for the performance in Benchmark last year. And this is the target that we set out in those medium-term targets.
Also, if you're looking down in the P&L of the group, we see that it starts really to show -- the improvements really are starting to show. Our adjusted operating profit, excluding fair value movements are significantly up, and when I'm talking about significantly, 244% to GBP 4.5 million. This is a very relevant metric for us since it takes away the exceptional, it takes away fair value movement, but it also takes away the amortization of historically acquired assets. We have acquired assets historically that is showing very clearly in the technical P&L. So these metrics really shows the core of our performance.
Looking into the first 6 months of the performance, we see the same tendency, even stronger growth. If you look at the first half year in total, 25% up on top line. Again, we see the same translation down to an even clearer improvement in terms of our adjusted EBITDA, 47% up. And again, we see the same thing when it comes to our operating profit, which is up 193%. The performance operationally, the performance on P&L is also reflected in our balance sheet. And I would just point out the fact that our net debt, which has been a focus for us, is continuing to be built down throughout this year.
So all in all, good performance and good progress in Benchmark in the first half and in the second quarter of the year. One of the topics that we've had over the last year or more has been the listing at Oslo Børs. As you are well aware of, we successfully listed at Euronext Growth, 15th of December last year, and we are happy to reach that milestone. As we have also announced, we have been in consultations with our shareholders on a possible delisting from AIM. That consultation is now ended and the conclusion is that the Board plan to maintain a dual listing for the foreseeable future and an uplisting to Oslo Børs will be reviewed as part of the ongoing strategy that enhance the group's positioning and share performance.
Moving to more granularity and operational update on each of the three business areas. And let me start talking about Genetics, where we have had another good quarter with good progress, driven by good performance in our core salmon business out of Iceland and Norway. Our egg sales, and you can see that from the graph, has increased in the quarter from 58 million to 63 million eggs. Q2 is kind of in between quarter when it comes to seasonality for egg deliveries. And this is very much in line with the pattern that we see now throughout the year. So it's aligned with the expected seasonality that we see and the position that we have in the market.
The increase in egg sales are the driver behind the increase in top line. We have increased the top line for this business area with 14% in the quarter. In Q2, we also have completed what we call the configuration of the Salten facility, a very key facility for us in Norway to reach 150 million eggs that we set out as a target for this facility when it was established a few years back. This brings us up to the capacity we should have in Norway, short term. And this capacity will be effective from now on going forward and for financial year '24 and onwards.
The completion of the configuration happens ahead of our plan and the schedule we have to come to 150 million eggs. This also marks the end of our journey of investments that we have done in Benchmark to reach a total egg capacity of 400 million eggs on our own production; 150 million out of the Salten facility in Norway, 200 million in Iceland, 50 million in Chile.
In Chile, which is one of our growth vectors, we have had progress in the quarter with new , customer wins. That brings us towards a milestone for us to -- which is first to get to breakeven and then fill the capacity of the facility. This is happening at the same time as we are now also getting results from complete cycles of our own Genetics in Chile of the [indiscernible] that we have established on there from egg to slaughtered fish, confirming that we have a very competitive genetics in that market, which is, of course, very important to have that documentation and you are penetrating the market in a responsible way as we are doing in this market.
This also happens at the same time as we have now obtained the disease-free compartment certificate from Senapesca, the Chilean regulators. That states that we have a disease-free compartment in our production. The biosecurity setup we have in Chile is unique, and it's part of the value proposition, unique value proposition we have in that market. The fact that we now also have this certificate gives us also a new vector, a new avenue to fill the capacity by having a potential for export out of Chile. This has been a target for us over the last years to get that certificate because that gives us in addition to fill the capacity with customers or sales to the Chilean market. We also have an opportunity to export to other markets.
Finally, on the highlights of the quarter. We have continued to strengthen over our scientific team and to progress our positioning in new technologies. We are firm believers that those who are going to be winners in this game in terms of Genetics needs to be in the very forefront of technologies and to bring forward traits that really solve some of the sustainability issues and are relevant to the aquaculture industry. So this is why we have had a program around this.
It is known that we are working on new technologies. We are working on sterility. We are working on positioning for gene editing going forward. And our target is, of course, to bring forward traits that is very relevant for the industry and that put us in the forefront of the technology development of genetics within aquaculture.
Part of what we are doing also within the technology field in Genetics is that we now have also enhanced our genotyping capability and capacity. This is actually having two effects. One of effect is that we could lower a little bit our cost in our own programs, internal programs, but we are also now able to offer genotyping as part of the genetic services that we are providing on other species around the world.
Giving you a little bit more detail around different parts of the Genetics Business era in Benchmark. And this slide has a lot of numbers. I'm not going to take you through all the numbers. I assume that's being read, but I'm going to point out some important elements on where we are and how we are aiming when it comes to the different parts of our Genetics business.
Core salmon, I have already touched on that. It's a driver behind the performance that we have been showing over for a long time in our Genetics business based out of Iceland, based out of Norway, and we have shown continuous growth in that part of our business, solid earnings, and we are aiming to continue that in the time to come, positioning technologically in the forefront, which is a key to do this, but it's also a key for us to be relevant not only for the customers and clients that we have in the core part of the salmon industry now, but also for the new paradigms, land-based and ocean-based farming, where we are very well-positioned, and to keep the standards that we have established, both in terms of customer service, technical quality, of course, genetic quality in the bottom.
Chile, also touched on in the highlights from this business area. The aim there now, we have done the groundwork, all the groundwork in Chile in a very, very good way. And the focus there now is to gain commercial traction in the market, and we see good signs of doing that and helped with knowing the capability also to export to other markets. We are advancing that part of the business. It's still a growth vector for us that we expect to get more effects of in the time to come.
Tilapia, where we have our own breed stock. If you look at the numbers over the last years and even this year, we are not satisfied with the performance, financial performance. It should be said that Tilapia is one of the areas where we have a top genetic nucleus, really high standard genetic nucleus, but it shows that it's difficult to make money with the business model that we have around Tilapia now. And that's why we announced last quarter that we are doing a strategic review of what we are doing within Tilapia. That review is still not concluded, the aim is at least to keep genetic services within the area. And we are expecting over the coming period to land this review and our way forward in terms of our engagement on Tilapia.
Shrimp is another growth vector for us within Genetics. We have used this year to reset and regroup a little bit on the basis of the experiences that we got from the first year of commercialization, which we had last year within our shrimp program. One of the conclusions we saw from the first year was that one size does not really fit all within shrimp genetics. It's very much unlike what you see in salmon. Huge variation, what is an optimal genetics from the different regions around the world and within regions in the world.
So what we are focusing on this year is to go through a program where we are tailing our genetics to fit more requirements in the different key markets. And we are expecting -- and we are doing testing now in the different markets to make sure that we get relevant results out of the amendments that we are doing. And we plan to accelerate our sales towards the end of the year.
If you look at the numbers, and this is the only number I'm going to comment in this. You see that we have a drastical development on the adjusted EBITDA for our shrimp activity. That's partly due to the fact that, for part of the year, last financial year, we brought some of the development costs to the balance sheet. So this is more reflecting of that we take all the costs into the P&L.
Moving over to Advanced Nutrition, our biggest business area, where we have had very good performance in a challenging market situation. Very good performance in a challenging market situation. If you look at the numbers, they might not look too impressive, slightly down quarter-on-quarter compared to last year, slightly up, flat if you look at the first half year compared to the quarter, helped by favorable FX.
But despite these numbers, we are quite happy with the performance that we've seen within Advanced Nutrition in the last half year and in the last quarter on the back of very challenging market conditions for shrimp, which due to our range of factors have come into -- a range of factors have impacted the market, from less customer demand in key markets, increased cost, but even disease problems and even climatic problems in some of the regions has really created a difficult market, taking down the stocking levels of the hatcheries and the farmers, which again, of course, impact the demand that we are getting for our products in this industry.
So the performance that we are showing in Advanced Nutrition needs to be seen on the back of this challenging market situation. We expect that market situation to remain for a while. But we are very happy with the way that our Advanced Nutrition business or INVE has responded to the headwind that we have seen in the market. And we believe that we are very well-positioned to mitigate. We're a total different world now when it comes to mitigating the effect of a slowdown in the market and also being in a very good position to take advantage when the market eventually again, normalizes and picks up. I think we are very well positioned to utilize that situation when that occurs.
Also, we said that shrimp is more than 70% of what we do within Advanced Nutrition, the shrimp market. So that's the most important part of the market. 25% is marine fish. And in the period, that part of the activity has gone very well. So that's been part of the mitigation that we have seen within this business area. And of course, it's a strategy for us, and it's an opportunity for us to expand our activities within marine fish, which is a growing part of global agriculture where we have a relevant offering in our Advanced Nutrition business. And over time, that will even help us to mitigate even more fluctuations that we see from time to time within the shrimp market.
Finally, to help our last business area where we have delivered a strong quarter in a quarter that is not a main sea lice treatment season. It should be seen on the back of -- the performance you see in our Q2 is done in a quarter that is not a main sea lice treatment season. The performance that you see are with significant increase in top line but also on adjusted EBITDA is a result of a combined sea lice portfolio where we have Ectosan Vet and CleanTreat as one offering and Salmosan as a second offering.
If you go into what we are doing on Ectosan Vet and CleanTreat, revenues are up 32% quarter year-over-year, which is a strong growth. We see increased adoption of the solution. New players are coming into the play all the time. We get new clients that are asking for the solution, trying the solution. We see this as a good sign that the adoption is spreading into the industry. This is what we have been aiming for, so they can try it and get convinced of the efficiency of the solution.
Q2, as I said, is not a main sea lice treatment part of the year. Q3 is definitely not the same, also not a main season. But we expect to see a positive development when we are getting into Q4 and Q1 next time, which are the main seasons for sea lice treatment. We are continuing to work on the business model to make it more viable for us and for the customer, meaning that we make it less capital-intensive and less costly, both for us and for the customers. And we are working along different routes on that.
Our main route is that we need to integrate the CleanTreat system into the infrastructure of our clients. And a main route for that is to get the CleanTreat system installed in wellboats. And this is also why we announced this in Q1 that we've entered into a partnership with leading companies, MMC and Salt Ship Design, in order to develop and position the CleanTreat system to be installed in wellboat start coming to the market in the future.
I'm very happy with the progress that we've had in that partnership. It goes well. We are moving well when it comes to the technology side of it. And we're also taking initiatives towards first movers to install the system into wellboats that are coming. And our target now is to close the first contract having a CleanTreat system installed and integrated into a wellboat towards the end of this -- within the end of this calendar year.
As I started out saying that the results we are showing on Health is a result of our combined sea lice medicinal treatment portfolio. We used to have one medicine Salmosan, then we came out with Ectosan Vet created as the new transformational solution. The results we see in Q2 is partly due to very strong sales of Salmosan. This is again linked to the fact that we have a variation to the label that extends the holding period for that medicine increases the efficiency. But it's also due to the fact that the farmers now say that we are not coming only with one medicine, we are coming with two medicines that could be used in combination.
For years, I would say, since 2015, medicinal solutions for sea lice treatment has not been a very relevant option for the farmers. We are now coming with two medicines, and they see the possibility to use those medicines in combination. And that is, in my belief, driving sales, and we will see more of that in the time to come.
So with those words, taking you through the details of the different business areas, Septima, you can take on the development on financials.
Thank you, Trond. So Trond referenced earlier the fact that we use KPIs to establish medium-term targets for the group, and we brought these to the attention of the markets in the middle of last year. And these targets are to get our progress towards what we, as a group, feel is fundamentally important, profitability and cash. And as you can see, we are making good progress towards those medium-term targets.
As you can see, we're continuing to progress. Our revenue growth target of 15% to 18% has been exceeded within the half year with us delivering revenue growth of 25%, which is a good strong start to the year. This, in turn, with good gross margin and also good cost control, which is critical for the business, in good times and in bad, has allowed us to deliver adjusted EBITDA margin of 22%, which is progressing towards our target margin of 25% to 30% for the group as a whole. With this good adjusted EBITDA, this is helping us drive the cash generation, which we see as key for the group as we progress.
Our key focus is to be able to pay our own bills as an organization. And so this has allowed us to deliver the cash conversion of 43%. This cash conversion, along with very, very good working capital allocation management has allowed us then to progress towards our free cash flow target, which is 10% to 15%, which is allowing us to deliver positive free cash flow as a percentage of sales of 1% at progress for the business as a whole.
So moving on to the income statement. So Trond has brought you through quite a lot of how we've progressed within each of the individual business areas. So I'm going to focus on the group. And as we report quarterly, my main area of focus will be on the quarterly progression. At a revenue level, we've progressed well in the quarter, delivering growth of 13% at an actual exchange rate and growth at a constant exchange rate of 9%, bringing us to the GBP 44.4 million. This is due to the strong fundamentals that we have in our core business, which is the core business of Genetics, the core business of Nutrition and then also the increased adoption that we're seeing within our Health business in the quarter.
Gross margin progressed in the quarter by 24%, which was driven by, of course, the sales growth but also good product mix that we saw coming through from the business. And this has driven increased gross profit percentage from 51% to 56% in the quarter in question. In other operational expenses, we have seen an increase in the quarter, and this is driven mainly by an increase in cost of corporate and increased activities within the Nutrition business to drive commercial activity. And of course, as COVID is lifted, we have increased our travel, albeit not to pre-pandemic levels. These factors have driven an increase of adjusted EBITDA, both including and excluding fair value movement by 32%, which has resulted in a very pleasing result for the quarter.
When we look to our adjusted operating profit, that basically has increased to -- by a very strong level, 145%. Now this is becoming an increasingly important metric for us as a group because given the change of business model and the use of the PSVs within our Health business area, this metric includes the depreciation on those PSVs. So it represents a very good strong metric from a profitability point of view.
When we look at our exceptional costs, the exceptional costs in the quarter related to costs associated with the listing on Oslo in Quarter 1 and then also the work we've done around potentially uplifting into Oslo Børs within the second quarter. Ultimately, this has all driven our loss before tax to increase slightly to GBP 2 million from the GBP 1.5 million that we saw in the previous quarter.
So moving on to look at the cash flow. With cash generated from operations before tax of GBP 13.6 million, we've had a good start in the half year towards cash generation. This was then supported by very, very good capital allocation and very moderate CapEx of GBP 3.5 million, which then brings us in line with the capital allocation targets that we talked about for the full year of between GBP 6 million and GBP 8 million. And of course, the capital expenditure that you see here, the majority of this relates to the capital, which we've invested to expand the facility in Salten, ultimately to bring up production and sales capacity for the future.
One important investment we've made in this quarter was also the purchase of the minority interest that we have in our Icelandic operations, which is a very, very critical part of our genetics footprint. This allows us to fully control and develop our Icelandic operations, which is a very strategically important part of Genetics from a growth perspective.
The cash out of GBP 7.9 million for interest and tax reflects the net cash interest cost of GBP 3.8 million. Net of interest received GBP 0.3 million and the cash tax of GBP 4.1 million. It should be noted, we pay tax in our profit-making areas of Norway, Iceland and Belgium. And of course, the net proceeds for the equity raise within the first quarter of the financial year, all of this contributed towards us closing our net debt position of GBP 66.3 million. But as at the 22nd of May, with a cash of GBP 41.9 million, an increase on our position at the end of March from GBP 38.6 million and, of course, available liquidity of GBP 53.9 million, we continue to have a strong balance sheet and strong fundamentals to build the business as we move forward to the future.
Back to you, Trond.
Moving over to the outlook for the remaining part of this financial year. As you all can see, we've had a solid start of the year. And of course, we are targeting good growth for the remaining part of the year in line with the market expectations. We are driving this business forward, and we have a continued focus on achieving profitability and cash generation and to receive -- to reach those medium-term targets that we communicated clearly last year and that we are progressing to reach.
In Genetics, we have good visibility in this part of the business. Salmon egg sales from Norway and Iceland, we have good visibility on that, and that will deliver strong growth, solid growth for us in the year. Focus within our Genetics business will be the growth vectors around Chile and SPR shrimp. We're working hard on those in order to bring them forward. And that will be a key focus for us in the remaining part of the year within Genetics.
Advanced Nutrition, strong performance by a good organization and agile operations in difficult markets. We don't expect the market to change too much short term. But we believe that we are in a very good position, both to mitigate the effects of a softer market, but also to be in position when the market eventually is normalizing.
Health. What we are in now is in quarters Q2 and Q3 that are not the main season for sea lice treatment like Christmas tree sales in January, a little bit. But still, I will say, advancing in those quarters. We expect to see an even bigger uptake when we are coming into Q4 of this financial year and into Q1 into next year, which our main sea lice treatment part of the year.
A few words on the positioning and key strategies for benchmark that I think I will use the opportunity to repeat to all of you. We strongly believe that Benchmark represents a real unique bet on the aquaculture industry, an industry that has really strong fundamentals for growth going forward, being a market-leading aquaculture biotechnology company. We have three very well-positioned business areas that are interrelated; Genetics and Advanced Nutrition where we hold market-leading positions in what we do. And this is a key part of our strategy. We are present in areas where we are market leading or where we strongly believe that we can become market lead.
From these three areas, we are providing highly specialized solutions and products. And this is also a key part of the strategy of Benchmark. We are not in a commodity business. We are only providing highly specialized science-based solutions, which combines high margins. And all of our solutions that we provide to our farmers throughout the whole world are so-called mission critical.
That means that they need them regardless of how things are moving around them, less sensible to fluctuations because if you're going to farm salmon, you need to have genetics. If you're going to rear a shrimp, you need to have start feeding. So all of our solutions are mission-critical, less sensitive to fluctuations. And we provide them, and this is a fascinating part of Benchmark, through a very well-developed distribution network.
We are a company that reaches customers in more than 70 countries around the world, really a relevant footprint towards the whole global aquaculture industry. We are present where it's relevant to be present in the global aquaculture industry. On the back of this unique platform, we are firmly believing that we will continue the journey of consistent growth and development also in the time to come.
If you look at what has happened over the last 10 quarters, we have systematically quarter-by-quarter, increased our top line in total for the whole period 62%, but we are more than double the earnings from our operations adjusted EBITDA in the same period. We believe it's definitely possible to continue that journey going forward.
In our Genetics, we will continue to develop our core business, which has a very, very strong positioning, and we aim to grow ahead of the market. We are well-positioned in terms of innovation, and we are well-positioned towards new production paradigms that also will add growth. In Chile, we are very focused on driving that growth vectors forward, getting a relevant position in the Chilean market, now also supported by an opportunity to export out of our facility in that market. Shrimp, we are doing what is necessary in order to position ourselves and take part of a very big shrimp genetics market and be present in key markets there going forward.
Advanced Nutrition, we have a really unique position and a strong organization and agile operations that are very well-positioned to take part of and develop in the specialty products in the first part of the growth cycle of both shrimp and marine fish that are growing species globally. And we see opportunities of continued innovation on the back of the platform we have in Advanced Nutrition even now that will drive further growth.
In Health, we think that we are still in an early stage. I repeated this -- It repeated it times. I think we are still in the early stage. I think we have done the right things in the right order so far. We are seeing increased adoption. We are developing our business model to become more agile, less capital intensive, less costly for the farmers. And we see ample room to develop that part of our business in the years to come. And finally, if you have a platform like this, on the top of that, it gives opportunity over time to add on by acquisitions on the top of what we already have.
I have to admit that the first 3 years have been very much focused to get our arms around things. And I think that has been the right thing. But it comes a time where it's natural to expand the platform and build on the solid foundation that we have established. And with those words, I think we end the presentation, and open for questions.
We will start by addressing any questions in the room first. Are there any questions?
Sander from Pareto. You said you had quite good visibility on the genetics side and especially on the salmon eggs for the remainder of '23. Could you elaborate a bit more on what we expect in Q3 and Q4 versus the first half of the year?
What I said say is that our core genetics, salmon genetics part of the business is giving good visibility because it's -- we are not ordering eggs today and get it tomorrow. We have elements of that, but it's basically you're building a book and you're building on contracts. What we see in the totality for the year is that we're going to have significant growth compared to what we delivered last year. And that's how precise will be. But we see a decent Q3 and a good Q4 also on the back of what I've just said.
So just remind everyone who is on the webcast that you can submit a question via the platform, if you have any. Are there any other questions from the room?
Just on the Health side. Could you talk about the ramp-up plan you have for more units for Ectosan and CleanTreat? And also, are you still expecting to be EBITDA loss making in the low season as you've been in the past?
The ramp-up plan, we started out with two systems in Norway, and they have been on contract and on spot. And the way that system is brought into the market is that we own and sit with the exposure to the infrastructure costs. So to move forward, adding new systems, we have a system ready basically in parts on the current configuration without having certainty on having the coverage of the infrastructure cost we are careful with. It goes without saying, this is a way for us to mitigate and to avoid a loss in the low season.
We are working actively with several partners -- several customers in order to take that system either as an integrated solution into a wellboat or as a separate system on the current platform that we have. That will give us an opportunity to expand the number of systems. We, of course, have clear plans and clear ambitions to increase the systems over time, but it will be balanced against the exposure we get as a company. We will try to now mitigate the business model towards a much less capital-intensive model for us and a cheaper model, both for us and the customers.
Eventually, we will come into a situation where we are getting more and more becoming a medicinal provider, not being an infrastructure company. And this is the aim we are having. And medium term, we think it's possible to get there. And that will create a different picture when it comes to the profitability also in what is the low season of the year.
A quick question on nutrition. You said that in shrimp, but it's a little bit challenging, but that marine species are doing very well. Can you say something more about kind of the split for you in these two segments?
70-plus percent in Shrimp, 25-plus in marine species, around 25 is sea bass and sea bream. We've been doing well there, and we are doing well in part of the shrimp market. What I'm trying to make a big point out, why I'm really proud of the performance that we have been doing in Nutrition and the progress we have had in that business area over the 3 years I've been here, it was down in a dump in the previous low, so we have a totally different organization in place now.
Really strong commercially, really agile in terms of operation. And what you see, despite -- and you can really about the downturn that you see in the shrimp market now and look at our numbers. I think the performance that we have been able to deliver over the first half year has been extremely strong. And that gives me good belief that we will continue to mitigate a soft market, and we are extremely well-positioned when the market is normalizing and picking up again.
Just if I may add. One of the things that Trond touched on is the fact that the strength of a really good commercial organization and a really good team is how well they perform in the bad times. When the market turns down, how well our commercial team can go out, keep the customers that they have, gain market share and compete in the right way with the competitors. So we've really seen that gain traction. So it's not just the commercial progress we made in previous quarters where things were within a strong market. It now is a real test of that organization, and we're very pleased with how they're performing.
Any more questions?
There are a couple of questions online. So the first one is, in terms of cash performance, is there anything in 2H that we should be aware of that may impact on achieving positive cash contribution for the full year '23?
Septima, that's a typical question for CFO.
That's an excellent question. From a cash point of view, the one thing that I like about this part of the year is that it's a game of 2 halves. We've already had the first half contribution and it's been very positive. The business is extremely focused on cash. We don't have any anomalies. We have the normal working capital cycle. We'll have our co-op payments in quarter 3, where we have one payment for under our TMA contract, but there is nothing unusual coming through.
And as I alluded to, we're well within our controlled CapEx target of between GBP 6 million to GBP 8 million in the coming half year. So the business is extremely focused on working capital management and maintaining good cash control so that we can continue to deliver towards our cash conversion target of 80%.
All right. Second question is with regards to potential acquisitions, are there any areas of particular interest? And what are the broad criteria for any acquisitions?
I'm not going to comment on too specific on that, to be honest. I'll just point out the fact that we have a very solid platform, a unique platform, well-positioned, and it gives an opportunity to add on acquisitions in all the three business areas. It needs to be within the core, it needs to be earnings accretive and it needs to be complementary to the business that we have now. We are not starting a new venture on the side of what we are doing in Benchmark. We have three very well defined business areas, very well-defined core businesses, and there is ample room to grow out of those.
And it needs to be cash generative.
I said that.
Are there any other questions in the room? That concludes the Q&A session.
Thank you for attending here in person, and thank you to all those on the line for attending the presentation, and see you next time.