Nomad Foods Ltd
NYSE:NOMD
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Nomad Foods Ltd
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Good day and welcome to the Nomad Foods Fourth Quarter 2018 Earnings Conference Call. Today's conference is being recorded.
At this time, I would like to turn the conference over to Mr. Taposh Bari, Head of Investor Relations. Please go ahead, sir.
Thank you, Carrie. Thank you for joining us to review our fourth quarter and full-year 2018 earnings results. With me on the call today are Chief Executive Officer, Stefan Descheemaeker; and Chief Financial Officer, Samy Zekhout.
Before we begin, I'd like to draw your attention to the disclaimer on slide two of our presentation. This conference call may make forward-looking statements that are based on our views of the company's prospects at this time. Actual results may differ due to risks and uncertainties, which are discussed in our press release, our filings with the SEC and this slide in our investor presentation, which includes cautionary language.
We will also discuss non-IFRS financial measures during the call today. These non-IFRS financial measures should not be considered a replacement for and should be read together with IFRS results. Users can find the IFRS to non-IFRS reconciliations within our earnings release and in the appendices at the end of the slide presentation that is available on our Web site.
Finally, please note that certain financial information within this presentation represents adjusted figures for 2017 and 2018. All adjusted figures have been adjusted for exceptional acquisition-related and share-based payment and related expenses in all comments from here on we'll refer to those adjusted numbers.
And with that, I will hand the call over to Stefan.
Thank you, Taposh, and thank you all for joining us on the call today. Earlier today, we reported fourth quarter and full-year 2018 earnings results. Highlights from the fourth quarter include organic revenue growth of 4.2%, representing our strongest quarter of the year, with solid contribution from both, volume and price. Adjusted gross margin of 29.9%, in line with our expectations as gross margin expansion in base business was offset by acquisition mix. Adjusted EBITDA of EUR101 million represented increase of 23% year-on-year, and adjusted EPS of EUR0.29 per share, representing growth of 7%.
Fourth quarter performance exceeded our guidance, capping a strong end to 2018, which marked a second consecutive year of low single-digit organic revenue growth, market share gains, and double-digit adjusted EPS growth. Importantly, fourth quarter performance reflected broad-based strength across the portfolio with 10 of our 13 countries in growth.
The innovations that we launched in the back-half of 2018, namely, Veggie Power, Pulses, and Plant Protein are being very well received by the trade and with strong early signs of consumer acceptance. We are also pleased with the progress that we are making on acquisitions as we continue to not only integrate Aunt Bessie's and Goodfella's, but also strengthen our capabilities to be a best-in-class acquirer and integrator in years to come. Both brands are posting strong year-on-year revenue growth with performance ahead of plan, paving the way for another good year in 2019.
And finally, our business results continued to drive strong cash generation, reducing our pro forma leverage to 3.8 times as of year-end, and providing us with a flexible balance sheet to accommodate accretive capital deployment. Overall, we are quite pleased with these results, which continued to reflect the [indiscernible] brands and the level of focus and determination throughout the entire organization.
Looking back at the performance of the company over the past two years, I can say with confidence and with pride that the investments that we've been making of people, of brands and of culture, are paying off. The strategic prioritization of [indiscernible] SKUs, strong execution of our commercial plans and a cost-conscious mindset, combines to drive margin accretive growth, while helping fuel our future.
We have achieved eight consecutive quarters of organic revenue growth since implementing the strategy, resulting in 3.9% organic revenue growth in 2017, and 2.6% growth in 2018. During each of these years, we gained market shares of the growing category, while achieving increases in both price and volume. These results demonstrate the strength of our brands and product offering, the sustainability of our growth model and the durability of our portfolio.
Looking out to 2019, I'd like to provide you with a few of our top priorities. First and foremost, we expect to deliver another year of top and bottom line growth in line with our long-term growth, which begins with low single-digit organic revenue growth. Consistent with the trends that you come to expect from us over the past two years, growth in 2019 is once again expected to be driven by our core portfolio, also known as Must Win Battles; these categories have gone for approximately 70% of our sales, carries our highest gross margin in market share within our portfolio, and have the greatest headroom for growth.
While we've made good progress on the core, there is further opportunity to increase penetration through continued execution of our growth model. We'll look to build on innovation that we go-to-market in 2018 by further developing a pipeline in line with consumer trends, notably as and when [ph] this convenience and sustainability. The trade acceptance to our recent launches has been strong with equally encouraging early feedback from our consumers. We have exciting plans to further develop our pipeline in 2019, including the launch of plant protein product in U.K., a new line of our designed breadcrumbs codings in our fish portfolio and further modernization [ph] of our vegetable offerings.
We expect to deliver another strong year of cash flow in 2019 through a combination of EBITDA growth, working capital efficiency, and strong overall discipline around cash use. We are happy to see leverage below four times, which we expect to decline further throughout the year based on the free cash flow we expect to generate. This leaves us with plenty of flexibility to pursue our many ambitions as we see fit.
And finally, we will maintain our discipline and focus as we look to successfully navigate another year of raw material inflation as well as a potential Brexit. I'll first comment on inflation and then provide a few words on Brexit. As we indicated last quarter, the cost of fish is increasing due to a combination of supply and demand factors. This has led us and the rest of the industry to raise price. We continued to maintain a trustworthy dialogue with our trade partners, who are observing similar dynamics in their product label businesses.
At the same time, we continue to invest in our brands, allocate the frozen fruit category, and develop our networking management capabilities. While it's still early in the year, we expect our advancement in these areas to enable us to successfully navigate raw material inflation in 2019 just as we did in 2018.
Before I turn the call to Samy, I would like to provide some of data as we saw in Brexit. As a reminder, the U.K. represents 30% of our sales on the pro forma basis with more than half of their sales produced within the U.K. out of factory in lower stock.
Now while the final outcome of Brexit remains uncertain there are some elements that are fairly clear to us. First and foremost, our business model is compatible with the post-Brexit world. We have the scale, agility and levers to successfully adapt to Brexit and are prepared to take action as the situation gains clarity.
Second, we have the necessary contingency plan in place to manage the risk of needs some disruption in the event of a no deal Brexit. Specifically we have concrete action plans to ensure earning erupted service to our customers. This includes building additional safety stocks ahead of March 2019.
While a no deal Brexit scenario would like to be higher product cost during the short-term as a result of the WTO tariffs, it will also results in a higher prices. Our brands and good health and we believe we are well equipped to mitigate the scenario. In summary, we're very pleased with the result that we reported this morning, have strong momentum in our business and are excited to deliver another year of growth in 2019.
With that, I will hand the call over to Samy to discuss our results in more detail and provide initial thoughts on 2019 guidance. Samy?
Thank you, Stefan and thank you all for your participation on the call today. Turning to slide six, I will provide more detail on our key fourth quarter operating metrics beginning with revenues, which increased 21% to EUR650 million, driven by 4.2% organic revenue growth, and 17.1 percentage point from the acquisition of Aunt Bessie's and Goodfella's.
Foreign exchange translation offset revenue growth by 0.5 percentage points during the fourth quarter. Adjusted gross margin was 29.9%, declining 160 basis points year-on-year. Base business gross margin expanded 20 basis points, driven by volume/mix and price, which more than offset cost inflation and some residual effect from full harvest. The 20 basis points increase in the base business was offset by 180 basis points of acquisition mix, which we expect to moderate in 2019 as the acquisition enter the base and commercial initiative are realized.
Moving down to the rest of the P&L. Adjusted operating expense increased 8% year-over-year, primarily due to the inclusion of acquisitions. Within operating expense A&P increased 10% and indirect expense increased 7%. Adjusted EBITDA was EUR101 million, representing 23% growth versus the prior year. Adjusted EBITDA margin of 16.4% compared to 16% in the year-ago period due to the aforementioned factors. Adjusted EPS was EUR0.29 for the quarter, an increase of 7%, reflecting underlying EBITDA growth offset by higher finance costs in Q4 mainly due to phasing.
Turning to slide seven, I would like to review the P&L highlights for our full-year 2018 results. Revenue increased 11%, driven by 2.6% organic revenue growth and 9.4 percentage points from acquisitions. Foreign exchange translation offset revenue growth by one percentage point during the year. Adjusted gross margin was 30.3%, declining 30 basis points primarily due to the effects of acquisition mix of 110 basis points.
Adjusted operating expenses increased 5% as discipline expense management in our base business helped fund investments in A&P. Absolute growth in OpEx was largely driven by acquisition. Adjusted EBITDA increased 15%, we achieved 50 basis points of EBITDA margin expansion ending the year at the margin of 17.3%. And finally, we delivered adjusted EPS of EUR1.19, which grew 19% year-on-year. We are pleased to have reported full-year EBITDA and EPS ahead of our prior guidance.
Turning to cash flow on slide eight, we generated EUR291 million of adjusted free cash flow during the year, representing 99% adjusted operating cash flow conversion. Factors contributing to the free cash flow in 2018 included; adjusted EBITDA of EUR376 million, working capital inflow of EUR32 million, CapEx of EUR 36 million, cash taxes were EUR33 million, and finally cash interest and other were EUR48 million. We are pleased to be reporting another year of strong cash flow generation.
Before turning to guidance, I would like to spend a moment providing you with some background on IFRS 16. This is a new accounting standard on leases, which came into effect on January the 1st of this year and this impact will become apparent in our financial results beginning in the first quarter of 2019. For those of you familiar, this still is similar but not exactly the same as the lease accounting standard, which company's following U.S. GAAP are affected by.
We have summarized the impact of IFRS 16 on our financial in 2019 on slide nine. Beginning in 2019 and the first quarter to be specific, we will be required to capitalize operating leases onto our balance sheet. IFRS 16 will have a few affect on our P&L. First, it will increase EBITDA by approximately EUR15 million due to the effect of the lower lease expense, which will be offset by higher depreciation and interest expense charges. The impact on gross profit and SG&A will be relatively minor. This is effectively a reclassification out of lease expenses and into D&A and interest expense.
Please keep in mind that the actual impact of IFRS 16 will depend on leases that we enter and terminate in 2019, making these figure best estimates, which may be subject to change. Witnessing all of these factors, IFRS 16 is expected to be approximately EUR5 million dilutive to pre-tax profit and EUR0.02 dilutive to EPS.
With that let's now turn to slide 10 to review our initial 2019 guidance which includes the aforementioned impact of IFRS 16 and is based on foreign exchange rates as of February 26, 2019. For the full-year 2019, we expect the following: organic revenue growth at the low single-digit percentage rate which assumes moderate category growth and continued market share expansion.
Adjusted EBITDA of approximately EUR420 million to EUR430 million which includes the anticipated benefit of EUR15 million as a result of IFRS 16. When stripping out IFRS 16, adjusted EBITDA is expected to grow 8% to 10% reflecting growth in the base and contribution from acquisitions, adjusted EPS in the range of EUR1.28 to EUR1.32, which approximately includes EUR0.02 of dilution as a result of IFRS 16.
Implied in our 2018 full-year guidance are the following: base business gross margin are expected to increase for the year, offset by negative mixed from acquisition in Q1 and Q2 until we anniversary a full-year of ownership mid year. For the year, operating expense are expected to grow roughly in line with sales, finance costs are expected to be approximately EUR17 million, including approximately EUR5 million related to IFRS 16. We expect an effective tax rate of 21% and our modeling share count of EUR176 million.
Finally there are some quarterly variations that we anticipate in 2019 which I would like to bring to your attention for modeling purposes. As you may know Easter fall the three weeks later this year versus last, this will result in shipment space from Q1 to Q2 versus a year ago, shifting an estimated 2% of organic revenue growth from Q1 to Q2.
Second, on a consolidated basis, we expect year-on-year A&P growth to be greatest in the first quarter, with growth moderating throughout the year and declining in Q4. Taking all of these factors into consideration, we expect Q4 to represent the highest quarter in both absolute EBITDA and year-on-year growth.
That concludes our remarks. I will now turn the session over to Q&A. Thank you. Operator, back to you.
Thank you. [Operator Instructions] And we will take our first question from Andrew Lazar with Barclays.
Good morning everybody.
Good morning, Andrew. How are you doing?
Good. Thank you. So in speaking about organic growth in the fourth quarter, obviously quite a bit stronger than we and I think most had modeled. Volume was very solid, but the real sort of upside if you will to organic was the pricing piece, if that comes through, and it was good to see obviously volume remained positive in the face of that pricing. So, I guess, two questions on this; one is, what does that sort of suggest to you all about elasticity, is that running broadly inline with what your thoughts or expectations have been or perhaps is it a bit more positive? And then as additional pricing comes into play as you go through 2019 in light of some of the inflation you're facing, would you expect that sort of dynamic to continue or would we think the organic growth that you get in 2019 becomes increasingly sort of pricing - led versus volume? Thank you.
So I would think that way, Andrew. Elasticity, it's a bit too early in 2018. However, obviously we started to implement some price increases, so -- but definitely the bulk of the price increases on the share is 2019. So talking about 2019 what we've seen so far is early signals in terms of price elasticity is good, but I would put it that way, so this would mean this have matured in 2018, but the more important thing is obviously quarter-by-quarter you can have some spikes here and there. What really matters for us is obviously the low single-digit organic revenue growth that we have in mind. So yes, quarter four was very strong. This being said, we know what really matters for us is to go through all the quarters with that kind of algorithm [ph] in mind, but back to your price elasticity, so far so good, I would put it that way.
Okay, thanks for that. And then…
Does this answer your question?
I did, yes. That's helpful. Thank you. And then just from a full-year perspective, when we think about the type of flexibility that may be in the model, I'm trying to get a sense of how much of any incremental potential Brexit costs that you may have sort built into the model? Is it that you built in some of the contingencies that you've been or that you will take, but obviously if something goes to the worst-case scenario, I would think that's not built in fully of course to the type of guidance, so just a little more clarity?
You're right. The no deal what we call -- what everybody calls, the no deal is in our guidance because by definition nobody knows, starting with operation nobody knows exactly what that really implies. We obviously have some ideas that it's really premature. At the same time we are in any case in terms of Brexit, yes, we're preparing ourselves and in terms of inventory, in terms of the capabilities and all these things. And so we have incorporated a bit of cost no matter what because that's -- we have to be prepared so that -- with or without any deal.
The good news for us is, overall in the Brexit in the no deal Brexit scenario is all brands that are doing mix really well with all that's received there is a no deal that we will be covered and those with the strongest brands will obviously be the best equipped in terms of price increase.
Great. Thank you.
And we will take the next question from Steve Strycula with UBS.
Hi, good morning and congratulations a good quarter. Stefan, curious operationally, it sounds like both of the acquisitions that we recently acquired are tracking ahead of plan. Is that purely distribution growth or is it there something that you're tactilely doing in the marketplace that is leading to that revenue outperformance there? And what innovations do you have planned for this businesses for 2019? I'll stop there, but I have a follow-up afterwards.
Yes. I think to start with -- you're absolutely right and that's what I'll respond by the way of our plans. We knew that by incorporating these two brands together with the Birds Eye, it would lead to obviously to additional listings. And you have just to start with the initial reaction from the trade, straight fold fine. We like this idea of incorporating these brands because if you do what you have been doing with the Birds Eye, I think, it can only be a win-win. And on -- with the trade, on the -- in the pizza, we see the difference. So that's really the first piece.
In terms of improvements and all the rest of it, the first manifestation is with these two additional brands is obviously -- they're becoming part of them. They really have embraced the we Must Win Battles strategy which is about focus. So -- and this means also, by the way, that we are -- be focusing some pieces of the part of the portfolio and the understanding on what it means, so -- which is good news. They see that it's starting to pay off.
Then in terms of the rest of the flywheel, which is obviously improved packaging, improved quality, improved innovation and advertising. It's on its way, so more to come probably in Q2 and Q3.
Okay. And then a quick follow up on the EBITDA bridge that you guys outlined today, should we think about -- is there any synergy factored into that assumption net of the investment spend you would put behind those brands. So, again, maybe cost synergies net of the advertising spend you put back into the brands? Is that baked into guidance? And I'll pass it on.
Yes. I mean it clearly is baked into the guidance.
We'll take the next question, Carrie.
And we'll take our next question from John Baumgartner with Wells Fargo.
Good morning. Thanks for the question.
Hi, John.
Samy, I'd like to drill into the outlook for 2019 EBITDA a more broadly, because I think we've been expecting another step up in brand investment for the portfolio. And then obviously the Brexit contingencies are there as well. So could you maybe just outline where you see the margin support in terms of synergies versus lean manufacturing, versus shared services or anything else going on there, just kind of your progress, overall?
Yes. As I mentioned in the remarks, we're expecting effectively a margin growth, I mean, over the year. The one element about the investments that we are carrying now in the portfolio is, we are really building up on the synergies and the cost sharing program that we had put in place in order for us to extract the funding to self-fund our intervention. And the source of funding is around leveraging, if you want, our strategies as defined.
I mean, for instance, net revenue management is definitely providing an upside in many areas, whether it is going to be about pricing, whether it's going to be about mix, which we then can use to reinvest. Supply chain productivity is another one. And the other piece is, we continue the efforts in the area of being direct to where we are, now the ability to implement some important projects that are effective fueling again to the growth through efficiency that we are now generating.
Okay. And then, Stefan, just a follow-up, I also wanted to touch on the agreement with Ocean Beauty for the U.S. market. Can you go into the details around that a bit, just in terms of entering with Findus into food service and moving on from there? And then, I guess, in terms of the numbers, I mean, how do you think about profitability in the U.S. versus Europe. And, I guess, also to what extent is the distribution factored into your organic revenue for 2019.
Well, you know, let's face it. It's going to be a -- it's a starting point. Findus brand is a global brand, which is good news apparently and has a good recognition in the U.S. It's going to be obviously a price -- it's going to be well priced, more as a good -- high quality product. For the rest, quite frankly, it's too early to say. I would say it's early investment in the U.S., which is a huge market. And so, at this stage, I wouldn't take too much out of this. It's an encouraging start, but much more to be done, obviously.
And for us in terms of exports, U.S. is one piece. We also believe that we have a lot to do in some of our neighboring countries like Central and Eastern Europe where things like the Captain, for example, has a high recognition and potentially also Middle East. So, again, back to exports, we're also are trying very hard to focus. We had a limited number of countries, which was probably one that -- not what it was in the past.
Excellent. Thanks for your time.
You're welcome.
And we'll take our next question from Jon Tanwanteng with CJS Securities.
Good morning, gentlemen, and a very nice quarter.
Thanks.
Maybe get started once again that -- within your guidance, how much impact are you expecting from no-deal Brexit?
At this stage zero. So basically it's impossible to have a clear definition of what it is going to be. As I said, even as the politicians, they have no clue. So we are working very hard, obviously, in terms of what -- how we should engage in all these things. What we know, which is good news, is our model provides us with the right level of agility and flexibility to move within the next two years to fully adapting ourselves to whatever no-deal Brexit would be.
And in terms of price, in terms of footprints, in terms of dealing with copackers and all the rest of it. So level of preparedness for the near term is high. That's very clear. So we will -- the priority number one for us is to make sure that all customers are not going to be -- that we're going to be able to supply them. And so we've added a significant number of weeks ahead of what we already have, so additional inventory. So don't be disappointed by the end of the quarter if inventory is being increasing, so the working capital, obviously, will have to adapt itself. But we're doing that -- we're doing this for the right reasons.
Got it. That's helpful. And then any color on Q1 sales, just now that we're two months in, how are the markets doing, the new products being accepted in the market?
It's in line with our expectations at this stage and in line with our algorithm.
Okay. That's fair. And then finally, just a little more color on the pipeline and your capacity for acquisitions now? Maybe, you've been working your leverage down very nicely. How do the valuations and the number of opportunities look in the pipeline compared to say 90 or 180 days ago?
To your point, I think, we -- in terms of a ratio, we're moving in the right direction, 23.95. So we know that we'll be significantly lower by the end of the year, which is good, which is again recreation -- or the additional M&A opportunities for us. As being said, we keep our discipline. And so the first piece for us is organic growth. And the second is obviously a synergy -- let's say, acquisitions need to fully in line with our strategy. And the priority number one is to reinforce or position as the leader in the consolidated food industry in Europe.
Okay. Thanks, Stefan.
And we'll take our next question from Bill Chappelle with SunTrust.
Hi. This is actually Glenn [ph] ph) on for Bill. Thanks for taking the question. I was just wondering on the innovation in the consumer that's kind of been buying the innovation, especially the vegetable and plant-based protein. Are you finding that that's a consumer that's bought by your brands in the past? Is that someone that's new to the frozen category? I guess trying to get out -- are those incremental sales to your other branded sales or that somebody maybe switching to a different option?
I think the answer is that it's going to be both I would say. We definitely are innovating in to target new users, I mean attracting new users is going to be very important and particularly, millennials that are very interested by all of these new performance and that's going to be really one of the area of focus. The other element is I think for existing user base is providing with a broader range of the portfolio. They like our brands, they consume our brands and we a wider range, and I think it's good for them as the product is for broader range.
Got it. And then I guess just one other question on kind of the commodity outlook. Obviously, you've said fish is up this year, is that specific to certain species? Is that across the board, and any other outlook to maybe the crop so far this year? Thank you.
Yes, it's across the board. Most of the fishes are happening on [indiscernible].
Got it. Thank you.
We'll take the next question from Robert Moskow with Credit Suisse.
Hi, thank you and congrats on a great year. I wanted to know -- I think in your opening remarks you said that that list prices are in place now -- list price increases are in place, starting in first quarter, but then I think you also said that discussions are ongoing with retailers regarding price. Does that mean that you are looking at taking more pricing during the course of the year? And I don't know maybe you touched on this already, but is there a lag in first quarter between price and inflation? And when do you think that lag would be caught up in thank you.
Thank you, Robert. Maybe I wasn't clear enough actually, sorry for this. So, overall, we are in line with our expectations and expectations in some countries we will have all our price ready by the end of the year even before. And in some other countries, it would take more time.
Structurally, that's always the same in Europe. So, you have countries like the U.K., which from a -- we can put in place as I said in Q4 and in countries like France, for example, structurally, you have to wait until the very end of Q1 which is what we have. But overall, we're very much in line with our expectations. We're getting there overall. Some countries, obviously, went faster than expected; some others went a bit -- more slower -- slowly than expected. But yes, think it's in line with expectations and what's important to say is also in the countries where we already put some prices, let's say again early signals and that you can imagine it's something that we are monitoring very closely. We're checking the price elasticity, it seems to be move in the right direction, but, again, too early to say and absolutely crucial for us.
Okay. So as we try to model your gross margin and I know there's some noise with the acquisition which is dilutive, should we assume that, I don't know, that your gross margin eventually catches up and levels out because you do have some -- it looks like you have a couple of factors in the first couple of quarters that are deluding it. And then does it a catch up eventually. And then should we then be modeling most of the leverage from the SGI and a line to get to your 8% to 10% EBITDA growth.
Yes, I think fact is that particular the gross margin in overall admission for the year would be up and in total, it will be up for the base actually just to be very clear.
In total our gross margin in half one will be down in total and it will be up in half two, OK. And you're going to the see the effect of the acquisition playing up from the perspective is driven by the acquisitions.
Okay. I understood. Thanks very much.
You're welcome.
[Operator Instructions] We'll take our next question from Brian Holland with Consumer Edge Research.
Thank you. Good morning -- good afternoon, where you are. Quick housekeeping question on the uptick. Forgive me if you touched on this earlier in finance costs in Q4, what was that tied to?
It's probably due to phasing of accounting and that's prominent overall, so there's nothing to be concerned for the year ahead.
Okay, perfect. Thank you. And then -- most of my questions have been answered, but could one ask a follow-up around the pricing component on the fish side. Is it too early or do you have a sense -- are the competitive landscape fairly in lockstep with you with respect to what they're pushing through such that you're pretty comfortable with where you're positioned on the other side of that? Is it fair to assume everyone's moving with you guys directionally?
The answer is yes and because everybody is confronted the same issue which is obviously price -- I mean costs are increased.
Okay. Last one for me. On the plant base side which seems to be a very successful launch for you, I'm just curious what's the competitive landscape there like? Are you a first mover kind of in the sub-segment that you're playing in there? How crowded is that and how much room do you feel like you have to expand over time sort of that niche state if you will?
Actually we just need to believe it's a category that has a great future, that's one thing. Definitely, our brand will play well with this category and -- together with our distribution, obviously. And when you think about it, plant protein which is even better, it's a P protein for us which I would argue to with even better than some other vegetables. We're definitely very confident that even to your point a lot of people are -- starting to get in, we have what it takes to be the number one in the category. And it plays all the right trends in terms of hesitant when sustainability and all the things together with frozen food by the way.
Understood. Thank you.
That concludes today's question-and-answer session. At this time, I would like to turn the call over to Mr. Stefan Descheemaeker.
So, thank you for joining us on the call today to review our fourth quarter and full-year results. We're pleased to report a second consecutive year of growth and I have an ambitious agenda ahead of first in the 2019 to continue our journey. Thanks for the investment that we've been making in our brands and the collective effort for nearly 5,000 employees. I'm proud to say that we're well-positioned to deliver another year of performance in line with the long-term growth algorithm. Thank you and I look forward to updating you on our first quarter results in May.
This concludes today's call. Thank you for your participation. You may now disconnect.