Tate & Lyle PLC
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Tate & Lyle PLC
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Good morning, everybody, and welcome to our Half Year Results Presentation. It's good of you all to be here this morning. And before I start, I'd like to welcome Imran, our new CFO, today. He's been with us for three months and he's already making a huge contribution to the business. I'm delighted to have him as part of my strengthened leadership team, which was finalized in September when Laura Hagan joined us as a Chief Personal Officer and Lindsay Beardsell joined us as General Counsel, and you will have a chance to meet them all after the presentation.
The agenda for today's presentation is on the screen. I will start with a brief update on the business, Imran will run through the financial results and the outlook and then I will come back with a summary before we take your questions.
Let me start by giving you a brief overview of the first half. Our three programs to accelerate business performance are making good early progress. As I said earlier, the strengthened leadership team is now complete and is driving a new sense of urgency across the business.
The business performed in line with our expectations in the first half. Food & Beverage solutions performed well with strong volume growth in North America, Asia Pacific and Latin America. In Primary Products, the sweeteners and starches business delivered solid underlying performance with overall profit in the division lower due to Commodities.
Despite seeing greater cost inflation in North America than we anticipated at the start of the year, we took the necessary actions to manage these headwinds in the first half. As a result, our guidance for the financial year remains unchanged, and the board has increased the interim dividend by 2.4%.
When I talked to you in May, I set out a clear focus and direction for the business. That was to execute our strategy through three key priorities and to build an organization with a strong sense of purpose and a dynamic culture based on partnership, agility and execution. The three priorities are, firstly, to sharpen the focus on our customers; secondly, to accelerate the development of our portfolio; and thirdly, to simplify the business and deliver $100 million of productivity benefits over a four year period.
I am pleased to say these three priorities are clear to our employees and good early progress is being made on each one. As I travel around the group, I'm beginning to see a real sense of belief in the future direction of the business. At our Capital Markets event in the U.S. in September, we explained how we are managing the business differently going forward and provided details of the three priorities and the actions we are taking to deliver them. As that was only eight weeks ago, I'm only going to touch briefly on progress against each priority.
Firstly, sharpen the focus on our customers. Our intention is to become a full-service growth partner for our key customers. To achieve this, we need strong relationships at all levels at our customers' organizations on both a global and a local basis. Since the start of the year, we have significantly increased the number of interactions we have with our customers, whether at the CEO level, in R&D or in sales and marketing. For example, the number of customer calls and meetings each month focused on growth have doubled since January.
In Food & Beverage Solutions, we are continuing to focus on sugar replacements and calorie reduction in our selected global categories. On the slide, there are some examples of customer wins in the beverages and the soups, sauces and dressings categories. Whether it is providing sugar reduction, fiber enrichment or a clean, sweet taste, the combination of our technical skills and local capabilities enabled us to provide the right solution for our customers in each case. In Primary Products, we manage our portfolio to maximize margins by optimizing products and customer mix.
We continue to diversify capacity towards new and growing markets where we can provide customers with high-quality products and differentiated service, whether that be supply chain flexibility or on-site technical expertise. Examples include sweeteners for growing craft beer and fermented alcohol markets and industrial starches for the cardboard and packaging market where growth is being driven by an increase in online shopping. In addition, through our joint venture with DuPont, we are providing customers with renewable-sourced ingredients used in a wide range of growing end markets, including clothing and cosmetics.
Moving to accelerating portfolio development. The priority is mainly focused on speeding up our innovation efforts by improving the quality of our pipeline, working more closely with customers earlier in the cycle and building external relationships to capitalize innovation. We are making progress in all these areas. Firstly, we are shifting the balance of our innovation portfolio towards projects with faster paybacks by increasing the number of line extensions and next-generation projects. A recent example of this is an extension of our fiber portfolio for customers in the nutrition bars category. The proportion of these projects in the portfolio has increased by 10% over the last 12 months and we expect this trend to continue.
Secondly, we are actively driving joint development with both our larger customers and faster-moving smaller customers. Collaborating with customers earlier in the innovation cycle increases success rates and drives faster adoption. Over the last year, more than 40% of projects in our innovation portfolio have been developed jointly with customers. Thirdly, we are pulling forward projects that best fit customer needs and represent attractive market opportunities. For example, consumer preference for natural sweeteners like stevia continues to grow.
To meet this demand, we found an innovative way to accelerate the Reb M stevia project in our innovation portfolio. This resulted in the launch of our new TASTEVA M stevia sweetener 12 months ahead of schedule. Produced through a proprietary route that enzymes for bio-conversion of the stevia leaf, TASTEVA M has a clean taste and attractive cost in use and we are seeing strong early customer interest.
Lastly, we are now partnering with four start-ups in the Terra incubator, working on early-stage development in areas such as sweetener testing and new sources of dietary fiber. Our third priority is to simplify the business. This program is focused on: firstly, simplifying the way we are organized and how we work to drive faster decision-making; secondly, delivering sustainable productivity to support $100 million of productivity benefits over a four-year period, including implementing zero-based budgeting across the entire organization.
A comprehensive program of simplification activities is underway, many of which were highlighted at the Capital Markets event in September. Here are four more examples. In North America, we have combined the logistics procurement and transportation teams to simplify the way we manage the transportation network, and therefore, speed up decision making and enhance customer service. We have also streamlined and focused our marketing capabilities by consolidating all group-wide marketing activities into 1 team within Food & Beverage Solutions.
Moving to two examples illustrating sustainable productivity. In the first half, we installed the new gas boiler at our plant in Decatur, Illinois. This new boiler will help improve plant reliability and will also produce steam to generate electricity. This project is expected to generate benefits of around $1.5 million annually. In our global supply chain, we are working to reduce storage and handling costs by increasing the amount of product we ship direct from our plants to customers instead of channeling them through our warehouse network. Overall, we had a growing pipeline of simplification projects, many of which are already underway.
So to summarize; the business performed in line with our expectations in the half despite cost headwinds more severe than anticipated; the three programs to realize the growth potential of our business have started well; and the strengthened leadership team is driving greater pace and the dynamic culture of partnership, agility and execution across the business. This is underpinned by a highly skilled workforce motivated by a strong sense of purpose. It is still early days, but six months in, we are broadly where I thought we would be at this stage. While there's more work to be done, the business has good momentum and that progress is encouraging.
With that, I will hand you over to Imran.
Thank you, Nick. Good morning, everyone. I'm delighted to be here, maybe before the numbers, just a few sentences. I've really enjoyed my time with the company in these first months. I've met talented and experienced individuals who have a strong passion for the business and who always put customers first. And having spent the last 20 years of my own career in the food and beverage industry, I know that this is what our customers need in their partners and what they look for in their partners. Equally important to me, the balance sheet and the financial position of this company is very strong and that gives me confidence coming in as a CFO.
So turning now to our financial performance. In line with the approach taken in previous presentations, I will focus on adjusted measures for continuing operations. Items with percentage growth are going to be in constant currency, unless I indicate otherwise.
So overall, we did what we said we would do at the start of the year. Food & Beverage Solutions saw strong volume growth with an acceleration in North America and double-digit growth in our emerging markets. Sucralose performed well and delivered solid results. And Primary Products saw steady demand in both its sweetener and starches businesses. We delivered good earnings per share growth, solid cash flows and our balance sheet is robust.
Turning to the financial results in a bit more detail now at a group level. What you can see here is that group sales were up by 2% and that reflects strong volume growth in Food & Beverage Solutions and an improved mix in our Primary Product business. Our profit before tax was also up 2% and that is the net result of number one, good cost discipline; two, solid volume and mix management; number three, a one-off insurance recovery; number four, lower finance costs; and lastly, very good performance at our joint ventures. Now these factors combined to help us offset the impacts of the lower Commodity profits that we had anticipated as well as the inflationary pressures we saw in transportation and energy costs in North America.
Now if you look at the bottom of the screen, the inflationary headwinds totaled to around £12 million in both the raw materials and the transportation costs. The adjusted diluted earnings per share on continuing operations came in at 27.9 pence. Now that is 5% higher than the comparative period and that was helped by a lower adjusted effective tax rate at 21.5%. Adjusted free cash flow continued to be strong as well and came in at 152 million. Net debt was £55 million lower than it was at March 31, 2018. And finally, as mentioned by Nick, the board has approved an increase in our interim dividend of 0.2 pence to get to 8.6 pence per share.
Turning now one level lower to our divisional results. And in Food & Beverage Solutions, what you see here is that the top line momentum really continued. What you see is that we had 4% volume growth and we had 5% revenue growth. Our operating profit grew 3% that is as we absorb growth investments we had made in the emerging markets in the back half of last year and we also had some of the cost inflation in North America that I've previously mentioned.
Our volume in North America itself was up a strong 3% and that is despite the fact that the food and beverage market in the U.S. as a category is largely flat. And it tells you that the strategy we've put in place is working. Shifting our mix towards higher-growth subcategories, shifting our mix to new channels and gaining share with our larger customers is delivering solid progress. And if you look at that progress from a categories perspective, what you see is that we are growing in a large range of our core categories beverages, dairy, baker, soups, sauces and dressings.
Turning to the emerging markets. If I look at Asia Pacific and Latin America combined, what you see is our volume grew 16% and that is double-digit growth in both regions. In Asia Pacific, we saw progress in all of our sub-regions and we had good growth in China dairy as a callout. In Latin America, we saw good growth in both our beverages and bakery businesses in Mexico, again, an important market to us.
And finally, in our Europe, Middle East and Africa region, what you see is that volume was in line with prior year. However, our sales were up by 3%. That is because we were successfully managing our mix. So we took out the lower-margin products and we substituted them with the higher margin, so what you get is actually a 3 percentage point benefit between volume and revenue.
New Products. Now for those who don't know our New Products, our definition are essentially ingredients, which were launched and are in the portfolio for 7 years. And we saw good performance in our new innovations. And what you see is that sales from our innovation portfolio increased by 6% and that was led by an increase in stevia, in our non-GMO texturants and our CLARIA clean label starches. Now free ingredients were removed under the seven year definition because they expired after the seven years. However, if you include them in the same definition, our growth in New Products would actually have achieved 47% and that gives you a sense of the strength of the portfolio in innovation.
Moving on to Sucralose. What you see is actually very strong volume growth, and that volume growth comes as a result of a successful debottlenecking project that we had in our facility in Alabama. Now sales were up 5% because they were impacted by the tighter pricing. Operating profit increased by 1% because profits, in turn, were impacted by the higher material costs that I referred to in North America, both transportation and raw materials. It's important to remember that while the overall market for sucralose continues to grow, market prices are continued to expected to moderate reflecting the increasing industry supply from Chinese manufacturers.
Primary Products. As Nick already referred before, industry fundamentals remained solid with the U.S. corn wet milling industry. It's well balanced and demand is firm. Our volumes were in line with the prior year and that reflects the firm industry demand, but also good operational performance and our good customer contract compliance. Our sweetener volume was in line with the prior period as we managed mix, balancing both customer products and also, in fact, category demand. North American industrial starch volume, you see here, was down 3%. However, that's the result of actively managing our corn wet milling assets and driving it to the higher-margin businesses.
Importantly, when you look, the profit in sweeteners and starches, in fact, came in line benefiting from the steady demand. Mix management and cost discipline helped to offset the high material and transport costs I mentioned before. It's also fair to say that profit also benefited from a onetime 4 million insurance recovery in Primary Products. Finally, looking at Commodities as standing alone, they were £5 million lower and that essentially reflects the fact that last year we had an exceptionally strong year and is in line with our expectations.
On this slide, just to give you the full picture, we thought it was helpful to show you the remaining components of adjusted before tax. What you see here is that central costs were down 4 million and that is essentially cost discipline, early fruits of our productivity program. The net finance expense was down £4 million following last year's decision to make a significant funding contribution into our U.S. pension scheme. What you also see is that our joint ventures have done a nice job growing 6% and that is both DuPont Tate & Lyle Bio Products and our joint venture in Almex in Mexico. As already stated, the overall profit before tax came in at £166 million and grew 2%.
Looking at cash, as you can see on the slide, we generated free cash flow of £152 million and that was an increase of 1 million. Capital expenditure, as noted on the bottom of the page, was £62 million and that's roughly in line with last year and it reflects the continued investments we are making in capacity, productivity and maintenance. We continue to expect capital expenditure for the year to be within the 130 million to 150 million. Net debt was reduced driven by the good cash flow that we generated by £55 million, and that is despite the fact that we had a net translation impact of £23 million due to our U.S. dollar borrowings. So overall, the message here is that cash flow continues to be strong and robust and helping us drive down our net debt.
The page to help you walk through the exceptional items, and what you can see here is that, in the fast half, we recognized net exceptional costs of £47 million. Now working through the lines from top to bottom, we recognized a noncash £40 million impairment charge for our oat ingredient business and that was following a period of underperformance. We no longer believe that this business fits well with the mainstream food categories we now focus on, and we're conducting a full strategic review to determine the future of this business.
Secondly, we also recognized a £2 million restructuring charge that was relating to our target to drive £100 million productivity benefits over the next four years. The total cash cost to implement this restructuring program and hit the savings is estimated at around 40 million. If there are any noncash costs that are incurred, we will report to them to you, of course, as in due course. We recognized on the third line 11 million net gain from the sale and leaseback of our railcars. And finally, we recognized a 16 million provision for asset remediation measures following a group-wide safety review. All in all, there was a net £12 million cash inflow from exceptional items in the period. So look, in summary, we performed in line with our expectations and the sentence I like to use is doing what we said we would do.
The business did a good job at managing proactively the headwinds in the first half, and we will need to continue to remain focused in the second half. Diluted earnings per share came in at 5% growth and they benefited from a lower tax rate in the first half of this year versus the first half of last year. Cash flow continues to be strong. Net debt is lower and our balance sheet is robust, and that will continue to give us the flexibility to invest for the long term. Looking ahead, our outlook for the full year, as shown on the screen, remains unchanged.
And I'll now hand back to Nick for closing comments and questions. Thank you.
Thank you, Imran. So to conclude, our Sharpen, Accelerate and Simplify programs have started well. The leadership team is driving a dynamic culture across the business. And the group delivered solid performance in the half, in line with our expectations.
As I traveled around the group business over the last six months, I met with employees, customers and a range of other stakeholders. I have been struck by two things: firstly, the passion and pride of our employees in our purpose of improving lives for generations, to grow the business, and at the same time, make a positive difference to the world we live in; secondly, from my meeting with customers. It is clear to me that the solutions and expertise we have to make food healthier and taste great is needed more today than it has ever been. The combination of these two factors makes me more convinced than ever that despite the short-term headwinds we may face, this is a business with real growth potential and that we have the portfolio and the capabilities and the people to unlock that potential.
So I'd like to finish by thanking my team across the whole of the Tate & Lyle organization for their hard work, their skill and their commitment over the last six months, which has led to the solid results we are presenting today.
With that, Imran and I will be happy to take your questions.
And if I could just ask you to state your name and organization as you ask them, that would be very helpful. Thank you. Martin.
Martin Deboo, Jefferies. I've got three, but I think the middle one's quite brief. Primary, I mean, first of all, well done for being straight up on the insurance claim. The transparency is noted and appreciated. But if we strip that out, you're sort of down about 5% in the sweeteners business and you got a tough comp on the Commodities in H2. So the question is around just how do we think about Primary in H2, okay? Second one is very quick one. Sucralose volume of 5%, is that now indicative of the sort of sustainable volume momentum in Sucralose? I can't remember what happened with the prior year comp or anything like that. Just is that a sort of indication of that business' momentum. And just on the productivity, it sounds a bit too good to be true, if you don't mind me saying so, 40 million of cash cost to get 100 million of benefit. Just remind me again what are the nature of the productivity benefits and why is it coming through at such a low cash cost? Those are the three.
Okay, so let me take the first two and I'll ask Imran to cover the productivity one. Look, on Primary Products, I would say quite simply, on balance, we had a very solid half. Volumes were good, margins were stable. We saw some inflationary pressure that we've broadly covered in the first half and we expect to see that continue into the second half. There's always the question of the pricing round, as you know, and we're still in the pricing around, but we're not seeing anything yet to change our view on the second half of the year or our guidance and we'll give you an update on pricing as normal as we conclude through our quarter three until the first half -- first quarter of next year, rather, calendar year. So nothing unusual at this stage, I'd say.
On Sucralose, we saw the benefit of yet more great work in the plant to unlock a little bit more capacity so -- and that's the marginal gains thing rather than putting capital in. So we saw an increase in volume in the first half. There's nothing unusual in the comp, and we're on kind of run rate for volume that I think we should see sustained through the second half into next year. But we're not expecting to see volume growth going into next year because we're broadly at the maximum of our capacity unless the plant works more miracles again, which we'll obviously continue to work on. So those are the first two questions, Martin. And Imran, you want to cover the productivity one?
Yes, of course. So the way to think about productivity is 100 million, think of it as 60 million or so will come from the supply chain side and 40 million from the overhead side. The funding on the supply chain side is going to be mostly within the capital spend area. The funding on the overhead side is going to be coming from the reserve spending in terms of severance, in terms of moving people from where they are currently located to shared services. And if you think about that, that's a 1x of savings and that's probably roughly in line with what you probably had in mind.
John Ennis from Goldman. I've got two, the first is on your EM performance. I wondered if you could give a bit more color on what was behind the strong growth there and whether we should be aware of any phasing that might impact the second half or any sort of sizable contract wins that we should be aware of? And then the second is on Sucralose pricing, which, I guess, you flagged for a while now the pricing pressure is about to come in from increased capacity. I guess, the question is when do you think this will happen? Do you have any kind of stare on when you think that will have a more material impact because currently the minus 2% pricing that you've seen hasn't been a big movement. And related to that, can you give us a bit of color on the contract terms there? In general, are they annual? In general, when do they get renewed?
Okay, the emerging markets to start with, let's get that one first. So look, great momentum in the first half. What does that reflect? The investments we've made in capability. So we said we were investing to grow our business in emerging markets and that's starting to play through. And the nice thing about it it's broad based, it's not one particular market. We're seeing it in Latin America and we're seeing it in China or in and Asia Pacific more broadly. And it's a series of wins rather than any individual one-off. I mean, as well as I do that growth in emerging markets is never linear either.
So are we going to see double-digit growth every quarter, every half in one of our emerging markets? No, we're not and that's not the nature of the game. But what we do seem to have is good momentum because we've invested in the capability that allows us to grow and we feel good about the pipeline we've got. Whether we see that level of growth in the second half or not, we'll see because obviously the business book is developing overtime, the momentum's good and that's a good place to be at this point in the year.
On Sucralose, there's no real difference in the market to the last time we talked. So we know there's excess capacity out there. We know we're working with customers who value what we do. And we've got contracts that vary from annual through longer-term contracts with customers who really want to do business with Tate & Lyle. I still think we're going to see downward pressure on pricing rather than improvements in pricing, but we're managing that responsibly by working with the customers who really value doing business with us and we don't see any change in that into the second half. We'll be clear on the next financial year when we've got through the next stage of customer discussions.
I guess, related to that, is it similar to a high-fructose corn syrup negotiations? Does it take place in general around the start of the year? Or are they a bit more ad hoc in nature?
No, there's a range of discussions going on throughout the year. It's more like a rolling book. So it's not likely there's an annual contract around that concludes in mid-December and we can then give you guidance. It's a continued long-going discussion and we'll keep you appraised of how that evolves over time. Robert?
Robert Waldschmidt from Liberum. Firstly, congratulations on accelerating the growth at North America in terms of volumes. I think we've been looking for that for some time now. Can we get some more color on that, though, in terms of the types of customers, food service I think has been good opportunity for yourselves, SMEs, faster-growing elements. So that will be point number one. And sort of how we can look towards that going forward? Are we now sort of hitting a pace, which we can extrapolate a bit more forward? And then also with respect to the oat business, can we speak a little bit more about why that doesn't fit now with the portfolio? And how that might impact future direction in terms of M&A or other things that we might be looking to plug in?
Sure, so let's talk about North America. We're delighted about the momentum in North America as well because we've been talking about it for a while and it reflects a lot of hard work that's been done by Joan and the North American team over the last couple of years. The nice thing about the first half was the growth was broad based. So we've talked about three things.
We've talked about growing with the bigger accounts, accelerating growth with some of the smaller, maybe faster-moving customers and moving into new channels. We saw growth across all three areas in the first half and I think that's probably the first time we can say that for two or three years. And you add that up and you get to 3%, which feels really good in the context of a market that's barely growing.
The challenge now is to sustain growth across all three of those areas. And can we project 3% in the future? I don't know yet, to be honest, because 3% versus a flattish market is a big outperformance. What we are clear is we've got a model that we're executing against with increasing discipline and we can see the pipeline and it looks good. What we'll see in the second half versus the first half will play out over the next few months, but the nice thing is its broad based rather than one single thing we can point at. And I've forgotten the second question now. I should have written it down.
Yes, the second is on the oat business where you've taken the impairment. One, sort of why the change in view in terms of why that may not fit? And then, secondly, what does that potentially mean for further M&A bolt-on, tuck-ins?
So as we've learnt more about the oats business since we bought it back in 2012, I guess, what's increasingly clear is the value proposition for our core customer base doesn't quite work as well as we thought it would be. It doesn't play into the category focus that we're focusing on. And therefore, we'll be reappraising it and we'll come back with a clear point of view and that means when we finish the work. What does it mean for M&A going forward? Look, with M&A, you always have to take some educated bets. The educated bets for us are going to be increasingly about strengthening our core product portfolio in the service of the categories we're chasing. We're much clearer on that now. So that's one thing.
And secondly, clearly, we want to be growing in faster-growing markets. That immediately points you to these. It's kind of obvious when you think about population statistics. So the kind of think we did with SGF and stevia earlier in the year is right in the sweet spot of the kind of M&A that we're looking at and we're continuing to think that through as we examine further opportunities. So there's not really different to the conversation we had in Capital Markets Day a few weeks ago. Eddy?
Eddy Hargreaves from Investec. Just on the central cost line that saw a nice dip. I understand just from broad cost discipline, given the cost savings program, would it be reasonable to expect that to continue to keep trending down at a reasonable lick?
Imran?
Yes, look, when you look at it from a run rate point of view, I would expect roughly, plus or minus, for the second half to mirror the first half.
And next year?
We will continue to drive productivity savings, absolutely.
Faham Baig, Crédit Suisse. Can I come back to raw material and transport cost inflation. I think you mentioned they were a bit higher than you had thought at the start of the year. Do you have a clearer picture for the second half? And as it's more of a headwind going into negotiation rounds in the Primary Products business with an increased cost base, should this allow you to get a higher-than-expected pricing in the second half, and hence, you've been able to maintain your guidance?
So as you rightly say, we saw greater headwind in the first half than we thought. Then we reacted to that proactively in the right way. We didn't expect those headwinds to soften into the second half at all. So what do you do about that? Well, it's a combination of things: you're very focused on cost and productivity and you're focused through the pricing round and recovering the cost increases that you're seeing in the right way, but in what's a competitive market. It's a combination of those things really and we'll see how that plays out through the next few months. We're really focused on both sides of that ledger, so making sure you price appropriately and you take the right approach internally to be disciplined on cost and productivity because in an inflationary environment that's what you have to do. Do you want to add anything?
No, I think that's right. I mean, I think the run rate on cost increases this quarter you want to be similar first half, second half.
John?
Can I just squeeze in another one on the Commodities business? It's always quite difficult to predict that particular line, but I guess, you mentioned that ethanol was a challenging market and you mentioned coproduct prices and I guess both of those things haven't really changed going into the second half. So should we expect a similar performance in 2H to what you've just done in the first half?
I don't think we see anything in Commodities markets to suggest things are going to change much in the short term, which would suggest a similar kind of outlook for the second half. There is always a little bit of phasing half on half, so we'll see how it evolves. But structurally, nothing has changed in the market that would suggest things will go significantly up or down and I think that's probably where we are at this point in the cycle.
Yes, if you look at soy and the dynamics, nothing has effectively changed so...
Martin?
Martin Deboo, I've got a follow-up to John's earlier question on Sucralose. Just trying to understand how much of a threat Chinese generics are and what the sort of price elasticity of sucralose is? Would you say, Nick, to general level, is sucralose trending towards a perfect commodity now? Would you say that in terms of the customers you've targeted, that there's an element of differentiation there either because you give them a better service level. Obviously, they want to do business with Chinese suppliers. I'm just trying to get a qualitative feel for whether there's any sort of protection.
Qualitatively, based upon what we observed with the customers who've chosen to do business is it's more the latter than the former. But it's within certain guardrails. And therefore, predicting the future precisely is an art rather than a science. But it's definitely the latter rather than the former.
There is a degree of loyalty and a sort of degree of inhibitions to...
If we continue to do what we do well, so we have to earn that right with our customers and that's a daily focus for the team.
Okay. Well, if there are no more questions, we'll conclude at that point. I'd just say, to finish, I thought Imran put it very well when he concluded his presentation. We feel we've done what we said we would in the first half. I'm encouraged by the first six months of the year, and we'll continue to look to do the same thing in the second half. With that, thank you for joining us, and enjoy the rest of your day.