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Edited Transcript of BWX.AX earnings conference call or presentation 25-Feb-21 10:30pm GMT

·51 min read

Half Year 2021 BWX Ltd Earnings Call Feb 26, 2021 (Thomson StreetEvents) -- Edited Transcript of BWX Ltd earnings conference call or presentation Thursday, February 25, 2021 at 10:30:00pm GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * David John Fenlon BWX Limited - Group CEO, MD & Director * Efee Peell BWX Limited - Group CFO * Rory G. P. Gration BWX Limited - Group COO & MD of Asia Pacific ================================================================================ Conference Call Participants ================================================================================ * Cameron Bell Canaccord Genuity Corp., Research Division - Senior Industrials Analyst * Elijah Mayr CLSA Limited, Research Division - Research Analyst * Marni Lysaght Macquarie Research - Analyst * Philip Pepe Blue Ocean Equities Pty Ltd, Research Division - Senior Industrials Analyst * Sam Teeger Citigroup Inc., Research Division - Head of the Australian Small Caps Team & Director * Sarah Mann Moelis Australia Securities Pty Ltd, Research Division - Analyst ================================================================================ Presentation -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Thank you for standing by, and welcome to the BWX Ltd H1 FY '21 Financial Results Conference Call. (Operator Instructions) I would now like to hand the conference over to Mr. Dave Fenlon, Group CEO and Managing Director. Please go ahead. -------------------------------------------------------------------------------- David John Fenlon, BWX Limited - Group CEO, MD & Director [2] -------------------------------------------------------------------------------- Thank you. Good morning, everybody, and thanks for joining us this morning for the BWX results for the half year ending the 31st of December 2020. I'm Dave Fenlon, group CEO and Managing Director, and I do hope everyone is safe and well today. Joining me today is Group Chief Financial Officer, Efee Peell; and our Group Chief Operating Officer, Rory Gration. I would like to just start off this morning by updating you that we are very pleased to advise that all of our teams are well, and we continue to maintain strong COVID safe work practices across all of our operations. But very importantly, I'd also like to acknowledge the great support that the total BWX team has given the management team and all of our customers to help us deliver the results and also the initiatives that we're announcing to you today. So I'm sure you've all read Slide 2 in detail. So we'll pass on and can start straight at Slide 3, the executive summary, if that's possible. And if you could just indulge us for a couple of moments before we get into the results in detail, what I wanted to do is give you a quick update of the high notes of the ASX release and also some of the exciting developments that we're announcing this morning alongside our half year numbers. So first and foremost, we are reaffirming our full year guidance today, of achieving at least 10% growth in both revenue and EBITDA. And in fact, the confidence in that second half outlook is underpinned by a number of the strategic initiatives that we are launching here today. So let me, first of all, walk you through a number of those. We've announced today the signing of an equity-linked strategic alliance with the Chemist Warehouse Group. This will see BWX becoming a platinum supplier to Australia's largest pharmacy retailer. The deal is over 5 years. It's a commercial partnership, but we'll see the entire range of the BWX brand. And let me remind you what they are. Sukin, Andalou and Mineral Fusion become available across MyChemist Chemist Warehouse online stores as well as their physical network, which now spreads across Australia, New Zealand and in Ireland. Now we will touch on the detail in a little bit more later on. And of course, we have launched a separate announcement around the alliance on the ASX today. And of course, we'll be delighted to take any questions you have on that. The second and very important part is we're also delighted to announce today a new retail partnership with Woolworths. This will see Australia as the largest retailer to range Sukin products nationwide. And this is indeed a very significant opportunity for us, and we're absolutely delighted that even more consumers will be able to experience the simplicity and efficacy of Sukin's natural products. You can also see that we've locked further distribution gains in across multiple other geographies with Walmart in Canada in a recent highlight, and we're on track to launch our initial 10 direct-to-consumer website in conjunction with our e-commerce partner, The Hut Group. And lastly, we're also announcing today the creation of an alliance with the original founders of the Yes To skincare brand, Ido Leffler and Lance Kalish. We're confident this alliance with 2 industry icons, who have got proven track record as brand builders, demonstrates our desire and our ability to bring innovative thinking and a really strong growth mindset to the natural sector. And we're going to be working together to bring together some strong innovative masstige skincare brands that we hope will be globally recognized. So as you can see, a lot of new news today, and we were very keen to share that upfront with you. So thank you for indulging us. In terms of the rest of today's agenda, we're going to take you through the half year performance results in detail, give you a bit of a brand update and some operational achievements. And Efee will also then take us through the financial summary and Rory will give you an update on the exciting growth agenda that we see ahead of us. We will then, no doubt, take some questions from you, and we look forward to that. So if I could ask you just to turn to Slide 6, which is entitled 1H21 Financial Highlights. So despite challenging external conditions, net sales for the group were $84.5 million, that is up 3.4% on a constant currency basis. And based on the current economic environment, I have to say we're pleased with our progress and very pleased with our sales growth of the Sukin brand. Our EBITDA increased 53.5% to $17.5 million, and it must be noted that this does include a one-off $5.8 million benefit that came from the agreement on the final compensation agreed under the Egide Compensation Plan. Noted that and advised you of that previously, and we're just now realizing that in our results. That one-off benefit is carried through to our statutory NPAT line, which increased more than 130% on the prior period to $9.9 million. Hope you agree, a very strong output. Our gross margin in the half was 55.1%, and it's important to note here that our core skincare margins did increase. The slight reduction on total gross margin is attributed to the mix as we open up more of the categories of hair and body, again, something we've advised you of previously, but, very importantly, gives us the opportunity to continue our sales growth in those very significant categories. We finished the half with a very healthy cash position of $77.7 million and a very strong cash conversion ratio of 84%. And that pleasingly allows us to announce a fully franked interim dividend of $0.01 per share. Now we will speak to the drivers of brand performance shortly. But overall, in context of the external conditions that we face, particularly in our overseas markets, we believe that this is a resilient half year performance from the group. The entire team has faced into the opportunities, but we've also continued to create products that are affordable, efficacious and on mission, making consumers feel good about their natural choices. And we believe that we have also added and preserved the long-term value for all shareholders. If I could just quickly ask you to turn to operational highlights on Slide 7. Despite what we know that is going on in the world around COVID, to the team's credit, we've been able to maintain our focus on executing our strategy. We've continued to deepen our connection with consumers, and that's demonstrated by not only market share gain, but also distribution gains in the first half. And as you can see, over 45,000 new points have been added in the grocery and mass channel. That takes our total distribution points of our core brands to just over 1.4 million globally. Our direct-to-consumer e-commerce business has also enjoyed strong growth and strong momentum. And across the group very pleasingly, 28% of our sales are now in the D2C channel. This channel, just over 12 months ago, was under 20%. Our BWX brand.com websites have been a key driver and have experienced in excess of 260% growth versus PCP. And as you know, the recently inked partnership with The Hut Group will unlock further markets for us, both in Europe and in Asia online. And we do look forward to updating you on the progress of those at the full year. But I do want to be clear. In the half, there was no revenue from that partnership just mentioned. We will continue to invest in ourselves. We do believe the ongoing improvements in capability and capacity will support our growth over the long term. And to that end, we have successfully completed, as you are aware, our $52 million capital raise at the beginning of the half, and we've wasted no time in progressing the development of our new operations facility, which pleasingly is on track to be completed and occupied by us by the year-end. Our operational improvement, our efficiency and sustainability target continue to be high priority of our getting clean and getting healthy strategic pillar. And our investment and continued investment in upgrading our ERP system is driving the improvements in both sourcing and procurement and will continue to give us better insight as we grow our overall gross margin. And very importantly, as the leader in the natural beauty category and as a company that is committed to sustainability, it is incumbent for us to walk the walk, and we continue to uphold the highest standards of ESG. We're making positive strides in recyclability, resource recovery and carbon neutrality, and we will collectively help us -- that will collectively help us become a clear leader in sustainability. Now turning to Slide 8, and we'll go into a little bit more detail by brand. Sukin has delivered an impressive performance in the half. Net sales were at $37.1 million, a 12% increase on the comparable period. We believe that Sukin continues to dominate the natural skincare market across grocery channels and in pharmacy, where it remains a very clear #1 in the natural skincare brand and now also haircare. Our gross margins of between 68% and 70% continue to be strong, despite the changing mix of categories as we expand into hair and body, thus support the distribution gains and new Sukin products on shelf, and it is continuing to make underlying market share increases. The brand continues to expand both locally and offshore, and we're very confident about our progress towards unlocking a $50 million supermarket skincare business. And we believe the announcement we've made today around the Woolworths Group will turbocharge that. We're very confident of outperforming that KPI by the end of '22, '23. In the Americas, Sukin has taken further market share gains despite the difficult market conditions. And in Europe, BWX's strategic partnership with The Hut Group does offer us a great vehicle to deliver holistic e-commerce offer and solution in that region, and that will start in the second half of this year. Now turning to Andalou on Slide 9. It is clear the first half performance has been impacted by both the worsening retail conditions in its home market, in the U.S., as well as some supply chain and stock shortages as retailers both navigated the changes to their operation, and we also faced into some longer lead times. There is also obviously a backdrop in the U.S. of some political instability. As a result, the first half net sales for Andalou Naturals were $21.8 million, a decline of 14% on the prior period on a constant currency basis. However, Andalou Naturals' Q2 performance is on an upward trend, which was up 14% on Q1, and that trend has continued in the first 7.5 weeks of Q3. And the Q3 brand performance is positive like-for-like. In Australia, Andalou has grown 20%, with the brand increasing popularity here, and that's evidenced by its rise to become the ninth ranked natural brand in Australian pharmacy, up from a position of 11 a year ago. And I think it's clear the partnership with Chemist Warehouse announced today will see it further rise up the ranks in the near future. So while sales growth will continue to be tempered by any COVID-related headwinds, we do believe the brand's deeper rollout across Australia, Southeast Asia and in addition the direct consumer channel position that we've created, the brand is well placed as the global economic recovery accelerates. Now moving to Mineral Fusion on Slide 10. Mineral Fusion recorded first half sales of $12 million. On a constant currency basis, that performance was flat. This is exceptional against industry benchmarks, which are somewhere between 25% and 35% down. Looking at the quarterly trends on a constant currency basis, Mineral Fusion's Q2 performance increased by 23% versus Q1. This reflects that consumers' demand is returning as well as our very clear focus on the D2C channel and the rollout of the new packaging is resonating with consumers. Pleasingly, margins were steady against the prior comparable period. And Australia -- and Mineral Fusion is now available in Australia via our Nourished Life platform, which will underpin its growth in this market. And again, the future rollout into the MyChemist stores, it shows that there is consumer demand for natural cosmetics, and we'll be accelerating that in the near term. Like Andalou Naturals, Mineral Fusion does maintain a strong market presence in the Americas with good penetration in the mass and grocery channels and in particular, the e-commerce channel, and we do expect sales to continue on the Q2 trajectory, in line with the recovery of the North American market and the broader cosmetics category during the second half. Now turning to Slide 11, Nourished Life, our clean living pure-play e-commerce business. Nourished Life has also had a very solid half, continuing its good momentum. Nourished Life half sales were $13.4 million, an increase of 18% on H1 '20. Now this result has been the output of all the hard work, some strong strategic marketing investment and also some deep understanding and insight from consumer research. We continue to personalize and improve our offer, and we continue to engage customers across their total life cycle, including ensuring that we follow and understand their repeat purchase and repetitive opportunities for subscription income. Website sessions and basket size grew in the first half. And while the group is focused on continuing to deepen the customer basket, we are also focusing on automating and improving our operations to further improve. Nourished Life's loyal base of customers continues to grow, and the number of contacts that we've had is also up 60% on the previous period. We launched 850 new products in the first half, and that will continue to accelerate in the second half. Overall, on Nourished Life, we're very encouraged by the new customer acquisition, customer retention and the growth in daily orders. And, most importantly, we've continued and will continue to improve the site's infrastructure, improving navigation, search and ease of use for consumers. We are very confident that we can continue to accelerate the growth, the improvements we've made in the platform, continue to leverage personalization to drive the customer experience. And obviously, with the economic tailwinds of online, we're also assessing strategic partnerships that may help us fuel further growth in Nourished Life. We know we want to continue to innovate and unlock the full potential of our Nourished Life business. Now before I pass over to Efee, let me just take a last look at the distribution gains on Slide 12. As I mentioned earlier, the first half has seen an improvement or an increase of 45,000 distribution points across pharmacy, grocery, mass and e-commerce. And with some exciting new retail partnerships and new direct-to-consumer website launches, all locked in for the second half, we expect to continue our strong growth in distribution points, which support our 3-year strategic plan. As you can see, conditions in North America and Europe as they recover, we're well positioned to benefit from that. And we do believe that we can target and deliver a 62% and 54% growth in distribution points, respectively, in FY '22. Globally, we expect to increase our distribution points by 42% off the existing base of 1.4 million. Supporting our strategic partnership with The Hut Group, the globally renowned end-to-end e-commerce platform, we are confident that we -- our rollout of our own.com sites for Sukin and Andalou Naturals across those 5 markets in the second half and a further 9 markets in F '22 will also continue to fuel our growth. Now I know there will be plenty more to say on that and no doubt some questions. And Rory in a moment, after Efee, will also give you a more detailed understanding of those distribution points and the targets we've set ourselves. So at this point, I'll hand over to Efee, who will take us through our financial performance in some detail. -------------------------------------------------------------------------------- Efee Peell, BWX Limited - Group CFO [3] -------------------------------------------------------------------------------- Thanks, Dave. Now turning to Page 14, where I will take you through a few of the key drivers of the group's financial performance for the first half. So as you will see, statutory NPAT increased by 133% in the period to $9.9 million, which includes the one-off benefit of $5.8 million flowing from the wash up for the final consideration payable to the sellers of the Andalou Naturals business. The group's NPAT was $84.5 million for the first half, an increase of 3.4% on a constant currency basis compared to PCP. A resilient performance given that this half cycled through COVID-19 related impacts. Gross profit was in line with the prior period at $46.5 million, with gross profit margin slightly lower due to the impact of a change in category mix as we unlock hair and body categories, particularly in the Australian markets. Reported EBITDA was $17.5 million, a 53.5% increase on PCP. It includes the $5.8 million one-off acquisition benefits already discussed. Underlying EBITDA increased 1.4% to finish $11.7 million, with underlying EBITDA margin continuing to expand, increasing 12 basis points to 13.9%. Operating expenses, you will see, remained flat and below sales growth, reflecting the group's focus on controlled and strategic investment in marketing and a continued focus on building capability across our teams to support growth. In terms of depreciation and amortization, it has increased by $0.7 million versus PCP, driven by increase from acquisitions of plant, property and equipment and intangible assets relating to things like websites, ERP and BI enhancements. Our effective tax rate, as you see, was 21.2%, in line with our expectations. There are some one-off impacts contributing to the reduction in the effective tax rates, including the $5.8 million one-off benefit relating to the Andalou Naturals release, offset by some nondeductible expense items. As Dave acknowledged earlier, fully franked interim dividend of $0.01 per share has been determined for the first half and is within the dividend payout guidance of 35% to 50% of the group's underlying income results. We've chosen to exclude the $5.8 million one-off acquisition benefit in the interim dividend payment calculation in order to facilitate the reinvestment of cash back into the business to fuel growth and in relation to our new operations facility that we are working on. Turning to Slide 15 now on the group's balance sheet position. As you can see, the group has maintained a strong balance sheet supported by a significantly improved cash position of $77.7 million. You'll see that the trade receivables decreased by 27.2% compared to June. This is a reflection of phasing out sales receipts of strong sales growth during the last quarter of FY '20 and a focus on management of customer payment terms across the group. To confirm again, we do not factor our receivables. Inventory increased by 5.8% compared to June. And this increase together with further anticipated build in the second half is supporting the group's growth agenda and increased distribution points through the U.S. and Europe along with a short-term shift in operating model as we move into the new operations facility in Melbourne. And Rory will talk to this in a bit more in detail shortly. We would like to see a continued improvement in stock turns, and this is a key focus area. However, as discussed, we are accepting a slightly higher inventory position in the short term. In relation to trade payables, excluding other payables, an increase compared to June 2020. This has been driven by management again of supplier term outcomes, particularly around raw materials and components. In accordance with AASB 16 leasing accounting, the group now recognize its leases as finance leases, which results in the recognition of a rise-of-use assets of $10.2 million and lease liability of $12.3 million. As at the 31st of December, the group has complied with its banking facility obligations and is currently operating comfortably within debt finance limits and associated banking covenants. The financial liabilities reported include bank debt at $56.1 million and the group's net debt position, excluding AASB 16, was negative net debt or positive net cash at $21.6 million at December 31. And we expect the group to remain compliant to its banking facility obligations in the foreseeable future. Moving now to Page 16 on working capital. You can see that working capital has been well maintained to support sales growth, along with new product development and global retailer launches into the second half. Again, disciplined and sustainable working capital initiatives were implemented across all trading components. So that's trade receivables, trade payables and inventory. And the business remains focused with its diligence embedded into governance structures as part of business as usual. The group increased its cash position to $77.7 million in the half, a significant improvement from $49.1 million, up $28.6 million reported at June 30. If we now move to Slide 17 on our cash flow reconciliation, you'll see the improvement in operating cash flow, again a reflection on our rigorous approach to cash preservation and liquidity management. The group reported an improved cash conversion ratio of 83.8%, highlighting again the healthy cash generation profile of the group and a strong balance sheet, which continues to support targeted investment and sales growth. In the second half of this financial year, with the exception of the investment relating to our new operations facility, we're not anticipating any significant capital expenditure outside of normal sustaining and sales growth activities. Thank you. I'll now hand back to Rory and Dave to talk through our strategy and outlook. -------------------------------------------------------------------------------- Rory G. P. Gration, BWX Limited - Group COO & MD of Asia Pacific [4] -------------------------------------------------------------------------------- Thanks, Efee. Turning now to Slide 19. With this slide, I really want to show just how massive the global opportunity is to unlock for our brands and why we're in these improving important categories skin, body and hair. The global categories of skin, hair and body that we operate in a bit -- they represent over USD 260 billion in revenue. The fastest-growing part of that, natural, represents over USD 33 billion. Our share of this market in Australia is strong at 26%, which currently draws the market share we've achieved in other markets like the U.S. and U.K., which should highlight a critical focus of our organization to unwind. Critical to that future success in these markets, strong retail partnerships in gaining distribution, and we have clear line of sight on what that growth or those future partnerships and what the organizational effort looks like to unlock natural. Turning now to Slide 20 on global retailer strategy. In line with our strategic pillar to go global and go mainstream, we are engaging key multinational global retailers within the health and beauty categories to deliver strong and targeted distribution growth and to democratize natural. What I mean by that is making beautiful products that are good for you, good for the environment and accessible to all. As announced already today, we have a clear executable plan for the coming years to maximize growth and meet consumer demand for innovative natural products. We will do this by both leveraging existing but also new retail partnerships across multiple markets together, driving a natural wellness revolution. Turning on now to Slide 21, global retailer strategy. As announced today, we're making incredible progress in the second half by unlocking a series of strategic partnerships with global retailers across North America, Asia and Europe, that will underpin distribution gain targets both now and in future years. Our most recent launch in February with Walmart Canada continues seeking successful rollout across Canada and will help drive awareness and complement our targeted omnichannel approach to the North American market. Our announcement today entry into Woolworths Group alone will see 50,000-plus more distribution points for Sukin, while building on successful partnership we already have here in Australia with Big W and Countdown in New Zealand. The Chemist Warehouse Group announcement is both strategic and commercially sensible. As the #1 pharmacy retailer in Australia, Chemist Warehouse offers BWX' brands a massive footprint, both in-store and online, spanning Australia, New Zealand and Ireland. The range of products available to consumers via this channel will also be more prominent on shelf. After an already successful launch in Chemist Warehouse, our Andalou Naturals brand will continue to increase its shelf space and engage many more local consumers with the brand. Excitingly, Mineral Fusion will be launched by Chemist Warehouse across Australia in-store and online, which is the first move outside of North America. In building a partnership with one of Australia's most recognized retail brands, our house of natural brands will be catapulted to more consumers at a time when there is a renewed consciousness about health and lifestyle choices. And clearly, Chemist Warehouse is back in the natural category and its future growth potential through its investment as part of this agreement. We're really excited with this partnership and what it will mean for BWX, Chemist Warehouse and driving the natural category even further. Now tuning to look at e-commerce on more detail on Slide 22. This is a channel which has historically represented approximately 20% of sales. Today, it represents 28% of total sales. Our omnichannel distribution model has positioned us to capture this change in consumer demand and habit. And you can see 1 more investment in e-commerce and direct-to-consumer capability is front and center. Our existing brand.com sites have grown 260% during the first half. We continue to invest on all fronts, brand.com, retailer.com and online marketplaces, like Amazon, iHerb, Shopee and Lazada, to ensure our brands can be accessible to consumers, particularly at a time that has seen shopping habits disrupted and changed so quickly. Turning now to Slide 23 and our marketing strategy, which proved absolutely critical for enabling all bit of brands to remain relevant in all geographies when we operated at the time of brand disruption. I'll now hand you back to Dave. -------------------------------------------------------------------------------- David John Fenlon, BWX Limited - Group CEO, MD & Director [5] -------------------------------------------------------------------------------- Thanks, Rory. Thanks, Efee. So just touching on marketing. As you can see, we've increased our marketing investment during the half, and we now invest 14.2% of our net revenue. I think it's really important that that's within the target range that we've set ourselves, and it is an ongoing commitment that we have undertaken, because we continue and need to continue to educate both our consumers and also potential consumers on the benefits of natural. We do believe our brands are perfectly positioned to embrace the unique differences of multiple markets, regions and cultures, and we're committed to continuing to connect and understand our consumers deeply. It is something that we will do to make sure that we clearly continue to win. As you can see on the slide, there's a few images, and it shows the recent marketing investment we've made with a spotlight on A-Beauty, natural ingredient technology and efficacy, harmless beauty and sustainability. The right level of marketing investment is critically important. It attracts new consumers and convert existing shoppers who may not already be in natural. If I can now ask you to turn to Slide 24, a quick update on our new business ventures, BWX Tomorrow. So this part of our business, the group's dedicated investment arm was launched last year and is delivering what I believe to be really solid immediate traction. We have closed an additional further 2 investments during the half. The first 1 being GoodnessMe, which is a growing subscription service business that aligns with our good for you growth platform, and it draws on our experience within the Nourished Life ecosystem. The second is our alliance with the founders of Yes To, and this is to support and drive the launch of a number of natural masstige skincare brands. The co-founders, Lance Kalish and Ido Leffler, are experienced beauty entrepreneurs. As I said, they were the duo who founded the global skincare brand, Yes To, in 2006, and it went on to become the second largest natural beauty brand in the U.S. Basically, these guys know what they're doing, and we're absolutely thrilled to be partnering and sharing our expertise on launching together what we expect will be a number of significant brands that have potential both here in Australia and beyond. The time and investment and moderate levels of cash invested in BWX Tomorrow is paving the way and creating opportunities for stellar returns in the medium terms. We believe we're investing at the right time to maximize shareholder returns. As a business, we're always going to be focused on initiatives that support our growth, drive innovation and improve efficiencies, which brings me comfortably and happily onto our jewel in the crown, our operational facility on Slide 25. As we said in July last year, this represents a transformational growth opportunity for BWX. And pleasingly, I can confirm an update today that the facility has broken ground, and all key milestones are being met. It will transform our production capability from what is currently a semiautomatic facility to a cutting edge, highly automated manufacturing plant that really is a pillar to support our next phase of growth. It is expected this facility will step change our operational and financial outcomes, and it will allow us to outperform our existing 3-year strategic plan. We are looking at manufacturing efficiencies and the derisking of our supply chain and improvements in gross margin. The robust returns have been modeled, and we will deliver on the following. We will find labor productivity and efficiency improvements. We will reduce the cost per unit produced. And we will reduce our material wastage by over 50%. So since announcing this project last year, Rory and the team has been super busy. We've announced our developer, which is ESR. And as I said, under the current project time line, we expect to be in the facility from December this year. This initiative will drive the next step change to our improvement in gross margin. That will allow us and give us the authority to continue to grow our investment in marketing, which is a result will further fuel our sales growth. If I can ask you now to turn to the next slide on sustainability. As you know, consumers are very knowledgeable, and they continue to understand the impact of their choices on themselves and their environment. And our role is to ensure we develop highly innovative and efficacious natural alternatives to synthetic products at a good view and also the environment. We recognize that all of our products has strong eco values. They're quality free, toxin free and our ingredients are over 98% naturally derived. We've always been focused on ensuring what goes into our bottle is sustainable. So as we said at our AGM in November of last year, and we continue and recommit to the market today, we do expect to deliver at least 10% growth in revenue and EBITDA in F '21. This year has continued to require a very adaptive mindset, and the group continuously monitors the external conditions, especially in the Americas and Europe. But we continue unabated on executing against our growth plans, and we're very committed to our 3-year strategic plan. The outlook that we're reconfirming today is underpinned by strong brand health and the global distribution gains that we've achieved now and into the future. We will continue to make targeted marketing investment. We will continue to innovate with our product development. And as I said earlier unlock our operational and manufacturing efficiencies to allow us to continue to invest. In addition to our 3-year strategic plan, I do just want to remind everybody about the half 2 initiatives that are under execution as we speak, and we have talked about today. The Hut Group collaboration goes live in this half. We will roll out the first 10 direct-to-consumer website for Sukin and Andalou Naturals. The Chemist Warehouse equity partnership will continue to fuel growth for Sukin, Andalou Naturals and Mineral Fusion in here in Australia, New Zealand and Ireland. And very pleasingly, the Woolworths Group partnership will see Sukin launched in 930 Woolworths stores, allowing us to connect with even more consumers and educate them on the benefits of natural. The distribution gains in North America, including Walmart Canada and Natural supermarkets as well as the relaunch of Mineral Fusion as the lead brand in Whole Foods Market are also good terms of growth in half 2. We'll continue to invest in our D2C channels, which in the first half were up 260%. And we're also pleased in the acceleration of the growth we're achieving with our other D2C partners such as Amazon. Our operations facility is on track. And as we've said, we expect that to pay back within 4 years. So in alignment with our 3-year strategic plan and our four strategic pillars, we believe we're well positioned to continue to unlock organic growth if the natural wellness revolution accelerates. And finally, with our strong balance sheet and the backing of our lenders, we believe that we've got plenty of flexibility and firepower, should acquisition opportunities arise that meet our very strict criteria. So I'm now happy to open up to questions. And once again, apologies for the small break. ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- (Operator Instructions) Your first question comes from Philip Pepe from Blue Ocean Equities. -------------------------------------------------------------------------------- Philip Pepe, Blue Ocean Equities Pty Ltd, Research Division - Senior Industrials Analyst [2] -------------------------------------------------------------------------------- Well done on the good result, particularly the new doors added. A couple of quick questions relating to those. From memory, when you first announced the $50 million of the supermarket target you were exclusive in Coles. So were you foreshadowing expansion into other chains? Or is this growing that potential target over time? -------------------------------------------------------------------------------- David John Fenlon, BWX Limited - Group CEO, MD & Director [3] -------------------------------------------------------------------------------- So I'll kick off and then I'll hand over to Rory. We were always confident of that sales target. Obviously, the relationship with Coles is strong and remains strong, and we have a very good sales trajectory growth with them and our other mass retailers, including other household names such as Target and Big W. Of course, the deal rewards we think accelerates that, and we're confident that we should be able to outperform that target. But we're very pleased with [following on our partnership with dominant] retail customers. Rory, anything to add? -------------------------------------------------------------------------------- Rory G. P. Gration, BWX Limited - Group COO & MD of Asia Pacific [4] -------------------------------------------------------------------------------- Yes, Philip, beyond a doubt, that was an FY '23 target. The announcements today will allow that to be achieved a little bit earlier. -------------------------------------------------------------------------------- Philip Pepe, Blue Ocean Equities Pty Ltd, Research Division - Senior Industrials Analyst [5] -------------------------------------------------------------------------------- Very good. And secondly, the agreement with Chemist Warehouse, what are the advantages of having an equity agreement structure in place versus just straight products on the shelves? -------------------------------------------------------------------------------- David John Fenlon, BWX Limited - Group CEO, MD & Director [6] -------------------------------------------------------------------------------- Look, I think it rubber stamps and reconfirms a strong collaboration that we've always had. But I think to Jack's quote, they have choices of brands that they come back. They have choices of people that they choose to be strategic partners. And I think we're very clear that this is going to allow us to grow revenue and be mutually successful. And we think it's the right thing to do. They are an amazing retail partner, and they really do have many consumers shopping in the natural category. And I think this accelerates our growth. So we're very pleased. As you can see from the announcement, we believe Jack and the team at Chemist Warehouse Group are also. -------------------------------------------------------------------------------- Operator [7] -------------------------------------------------------------------------------- Your next question comes from Elijah Mayr from CLSA. -------------------------------------------------------------------------------- Elijah Mayr, CLSA Limited, Research Division - Research Analyst [8] -------------------------------------------------------------------------------- Congrats on the results. Obviously, a lot of work being done behind the scenes and a lot of exciting things to come in the second half. Can I just touch on, I guess, the trading update to reaffirm that today, it looks like most of that growth is going to be coming through the partnership, obviously, with Australia, Europe and sort of Canada. But maybe could you give us a bit of color on how America factors into that guidance? I mean, if that business was sort of flat or down 10% for the year, would you still be sort of confident achieving that guidance? -------------------------------------------------------------------------------- David John Fenlon, BWX Limited - Group CEO, MD & Director [9] -------------------------------------------------------------------------------- Absolutely. We are certainly seeing a better Q2 than Q1, and we've certainly seen Q3 start stronger. So as you can see, Mineral Fusion was flat for the half and was up on Q2 on Q1. Andalou had a disappointing Q1. I think, historically, we've been too reliant on the, what you call, natural supermarket channels in the U.S. We spend a lot of time pivoting and appetizing direct-to-consumer in the U.S. Amazon is now a very, very strong customer of ours. But we are seeing recovery in Q2, Q3, and that gives us confidence to, again, confirm the guidance. -------------------------------------------------------------------------------- Elijah Mayr, CLSA Limited, Research Division - Research Analyst [10] -------------------------------------------------------------------------------- Yes. Understand. And just with that Woolworths partnership, does that have any impact on, I guess, further expansion in the Coles? Were they involved in the arrangement? Or did they have any input? -------------------------------------------------------------------------------- David John Fenlon, BWX Limited - Group CEO, MD & Director [11] -------------------------------------------------------------------------------- Rory, do you want to take that one? -------------------------------------------------------------------------------- Rory G. P. Gration, BWX Limited - Group COO & MD of Asia Pacific [12] -------------------------------------------------------------------------------- Yes, I will. So partnering with Woolworths doesn't diminish our growth partnership we have with Coles. In fact, we've already been working on a number of partnership arrangements with Coles as well. So as part of our channel strategy, we have a responsibility to get our brands into more places. At each of those places, retailers activate them differently. So whether it's Chemist Warehouse, Woolworths, Coles or others, we will activate and work on different joint business plans to unlock growth in those customers. -------------------------------------------------------------------------------- Elijah Mayr, CLSA Limited, Research Division - Research Analyst [13] -------------------------------------------------------------------------------- Excellent. And then maybe if I could just squeeze 1 more in. Just on the Chemist Warehouse partnership that have announced today. I mean in the BWX announcement, there wasn't really any reference to sort of access to China, but just Jack's commentary at the end of them in the announcement was sort of just highlighting the fact that of their strengths and using that as a growth driver in terms of getting into China through the Alibaba platform. How much did that factor into your decision as an access point into the China sales market? -------------------------------------------------------------------------------- David John Fenlon, BWX Limited - Group CEO, MD & Director [14] -------------------------------------------------------------------------------- Look, it's very clear that there's been disruption to the Daigou channel for many brands. We don't have a very significant China business. It's always been in the last recent 24 months or so under 2% to 3% of our revenue. We do have a very keen eye on it to look at some point to go into domestic. But as you know, to do that at this moment, you have to be able to test on animals, and we won't do that with our brands. So importantly, to work with MyChemist, we've got a very strong platform over there, does open the doors. And it allows us to go in, in a very controlled strategic partnership manner. What we don't want is to be incumbent to a volatile Daigou market. So we hope that we'll be able to unlock it with our partnership with MyChemist and do it in a sustainable way, waiting for some stage in the future for the market of domestic to open up to us because that's the real opportunity. -------------------------------------------------------------------------------- Elijah Mayr, CLSA Limited, Research Division - Research Analyst [15] -------------------------------------------------------------------------------- With that, we're seeing some progress, it seems, with the animal testing, I think, more so sort of internationally in Europe. I think France had an arrangement where they can sort of accelerate some of their brands going domestically into China that don't test on animals. Is that something that is open to, I guess, maybe Australia more broadly or something that you guys have looked into a bit more deeply? -------------------------------------------------------------------------------- David John Fenlon, BWX Limited - Group CEO, MD & Director [16] -------------------------------------------------------------------------------- It's been on our agenda for a good 12 to 18 months. We're comfortable at the moment, but it is something that we will unlock at the right time. There are obviously movements, as you mentioned, between the French and Chinese governments, will allow that to happen. There is a program called Project Leaping Bunny that allows you to bottle in China and sell domestically. And we are continuing to monitor that situation. So we'll keep you updated, but it is certainly opportunity that we can look at. But I will just remind everyone, at the moment, distribution gains that we are unlocking in Australia, distribution gains that we're unlocking today and announcing today as well as the U.S. remain our #1 priority. -------------------------------------------------------------------------------- Operator [17] -------------------------------------------------------------------------------- Your next question comes from Marni Lysaght from Macquarie Capital. -------------------------------------------------------------------------------- Marni Lysaght, Macquarie Research - Analyst [18] -------------------------------------------------------------------------------- Congratulations on a great result. I've got a few questions. Some of them have already been asked. But just wondering with the Woolworths launch. Can you give us any color around kind of what products you initially push into Woolworths? Will this be hair care or skincare? And also, what are your thoughts on other competitors that are on the shelves in Woolworths in the natural segment and how you think about competition? -------------------------------------------------------------------------------- Rory G. P. Gration, BWX Limited - Group COO & MD of Asia Pacific [19] -------------------------------------------------------------------------------- It's Rory here. I'll answer that, Marni. So our intent with Woolworths, obviously, we're in every other retailer in Australia in a number of different categories, whether that's in hand, body, hair, skin, men's deodorants, et cetera. So we'll be launching all of our categories with Woolworths as part of the partnership. When we think about competitors, those decisions are somewhat more in the retailer's hands. We are thinking about how do we help them unlock the natural shopper in their stores as we do with all retailers because the value of the natural shopper is significantly higher than the normal shopper. So we're focused on that element, but we're looking forward to launching with Woolworths in the future. -------------------------------------------------------------------------------- Marni Lysaght, Macquarie Research - Analyst [20] -------------------------------------------------------------------------------- That's all clear. And can you give us some color around, I guess, the new facility? And if there's any event -- there is quite a fair amount of capacity. Could you -- when you're speaking about BWX Tomorrow, all the early stage investments, is there a potential to use any of the capacity in the facility for that? -------------------------------------------------------------------------------- David John Fenlon, BWX Limited - Group CEO, MD & Director [21] -------------------------------------------------------------------------------- So the facility is built for our growth agenda over the next 10 years. Its capacity allows us to achieve that and improve margins. Of course, as we bring BWX Tomorrow skincare businesses into the family, we'll consider the opportunity to improve the relationship and the margin. But initially, some of these businesses need very bespoke, very tight MOQs. So we'll assess each on its merits. But the trajectory and the plan as those businesses grow is, of course, they'll become part of the family, and we'll get the benefits of them being in-house manufactured at the appropriate time. But the capacity of the new facility allows us to achieve our next 7 to 10 years growth trajectory -- growth options. -------------------------------------------------------------------------------- Operator [22] -------------------------------------------------------------------------------- Your next question comes from Sam Teeger from Citi. -------------------------------------------------------------------------------- Sam Teeger, Citigroup Inc., Research Division - Head of the Australian Small Caps Team & Director [23] -------------------------------------------------------------------------------- Is it fair to conclude that the stock shortages had a greater impact on Andalou relative to the other brands? -------------------------------------------------------------------------------- David John Fenlon, BWX Limited - Group CEO, MD & Director [24] -------------------------------------------------------------------------------- Yes. Look, I think what we saw, and it was probably Q1, we started to see some extension of lead times on components into the U.S. As you know, currently, we have contract manufacturers in the U.S. The whole idea of the new facility is to try and take control of that part of our supply chain. The lead time on some of the components extended. And if we're very honest with you, there were some internal errors on our forecasting. We've solved those now. And Q1 was a disappointing performance for both those reasons. We have to take responsibility that some of that was our own errors. -------------------------------------------------------------------------------- Sam Teeger, Citigroup Inc., Research Division - Head of the Australian Small Caps Team & Director [25] -------------------------------------------------------------------------------- All right. So it's just that 1 brand that had most of the stock shortages right? -------------------------------------------------------------------------------- David John Fenlon, BWX Limited - Group CEO, MD & Director [26] -------------------------------------------------------------------------------- Yes. Look, we -- on Mineral Fusion, we have a slightly longer lead time, and we carry a little bit more stock coverage. And obviously, there were some sales downturn in existing stores, but it was offset by growth in new doors. So it wasn't as volatile. So it was predominantly around Andalou in the U.S. We had no supply shortages or issues with Sukin. -------------------------------------------------------------------------------- Sam Teeger, Citigroup Inc., Research Division - Head of the Australian Small Caps Team & Director [27] -------------------------------------------------------------------------------- Great. And how do you expect the Chemist Warehouse deal to impact your ranging in other pharmacies and potentially Coles? -------------------------------------------------------------------------------- David John Fenlon, BWX Limited - Group CEO, MD & Director [28] -------------------------------------------------------------------------------- Look, as Rory said, we're in all retailers. We've added Woolworths today. Each retailer dealt with us -- or deals with in a partnership model differently. We have a strategic plan with each of them. We believe it's the right thing for our business to put the Sukin brand available in more stores, so consumers can reach it and shop it. We're confident that we've got strong relationships with all of our retail partners. We'll continue to do that. But bottom line, the partnership with MyChemist is not just about Sukin. It allows us to expand our space on Andalou, which is a new brand in Australia, and it is going to bring Mineral Fusion to retail in Australia where it currently doesn't exist. So there are good distribution gains for our other brands that the MyChemist partnership allows us to unlock. -------------------------------------------------------------------------------- Sam Teeger, Citigroup Inc., Research Division - Head of the Australian Small Caps Team & Director [29] -------------------------------------------------------------------------------- Great. And then if you can just turn to Slide 12 of the presentation. What are you guys defining as a distribution point? -------------------------------------------------------------------------------- David John Fenlon, BWX Limited - Group CEO, MD & Director [30] -------------------------------------------------------------------------------- So the distribution point, Rory will take that. -------------------------------------------------------------------------------- Rory G. P. Gration, BWX Limited - Group COO & MD of Asia Pacific [31] -------------------------------------------------------------------------------- So it's quite simply number of doors on number of SKUs. So if there's a retail with 200 stores, then we range 10 SKUs, that's 2,000 distribution points. -------------------------------------------------------------------------------- David John Fenlon, BWX Limited - Group CEO, MD & Director [32] -------------------------------------------------------------------------------- Sam, the reason we calculate it that way is, you'll go into some reserves and you may have a range of 5 SKUs. You might go into a category with Woolworths, for example, in that five SKUs. But you may list that as a relationship. What we do is we say how many doors multiplied by how many SKUs is a distribution point. -------------------------------------------------------------------------------- Operator [33] -------------------------------------------------------------------------------- Your next question comes from Sarah Mann from Moelis Australia. -------------------------------------------------------------------------------- Sarah Mann, Moelis Australia Securities Pty Ltd, Research Division - Analyst [34] -------------------------------------------------------------------------------- So just another question on the Chemist Warehouse deal. Can you give us any color around some of the performance metrics they need to hit to get all their shares issued? -------------------------------------------------------------------------------- David John Fenlon, BWX Limited - Group CEO, MD & Director [35] -------------------------------------------------------------------------------- I can tell you that it's EPS accretive almost immediately. You can see that it is in tranches. And if it's EPS accretive and it's over 5 tranches, you can be rest assured there are sales targets that are set in that agreement. But I'm not going to get into the specifics on a tranche by tranche basis, but just to reconfirm it is EPS accretive. -------------------------------------------------------------------------------- Sarah Mann, Moelis Australia Securities Pty Ltd, Research Division - Analyst [36] -------------------------------------------------------------------------------- Okay. No worries. Then just more broadly, I guess, around the general market conditions. So you said, domestically, you're still #1 in the natural market. Can you talk a bit about I guess some of the category trends in the period and perhaps some of the shift between, say, grocery and pharmacy and also online? -------------------------------------------------------------------------------- David John Fenlon, BWX Limited - Group CEO, MD & Director [37] -------------------------------------------------------------------------------- Yes. Look, I'll start, and then I'll hand over to Rory. I think it's been very clear. It's driven across Australia. And I see you're talking about Australia. -------------------------------------------------------------------------------- Sarah Mann, Moelis Australia Securities Pty Ltd, Research Division - Analyst [38] -------------------------------------------------------------------------------- Yes, that's right. That's right. -------------------------------------------------------------------------------- David John Fenlon, BWX Limited - Group CEO, MD & Director [39] -------------------------------------------------------------------------------- So as we know, there were a number of retail closures for discretionary retail, particularly in Melbourne and Victoria. They were stronger. We've seen pharmacy have a very strong early COVID period and a disappointing COVID second period as consumers stayed at home. I think it's important to see now that we're a brand that's across all channels, not just Australian pharmacy. We were historically a skincare business in Australian pharmacy. We're now a skin and beauty business across all geographies. So I think when you look at it, you've got to look at the total share across Australia. And as we grow more distribution points away from the heritage of just pharmacy, you will see some plateauing of that performance in dollars, but continue to grow its share in pharmacy. So we're confident that the go global, go mainstream, that mass approach, is the right approach, and we're seeing gains in the total usage and the total category of natural. Rory, anything you want to add ? -------------------------------------------------------------------------------- Rory G. P. Gration, BWX Limited - Group COO & MD of Asia Pacific [40] -------------------------------------------------------------------------------- No. Sarah, all I'd say would be the team is staying incredibly close to the data and understanding the shifts because it is different by country, by category, by brand. So having that right level of closeness to be able to respond quickly and make changes from bricks-and-mortar to online subcategories within skincare, we're selling a lot more masks state and local. You can actually sell to home if they are going for treatments. Being close to that and pivoting quite quickly is what the team are focused on. -------------------------------------------------------------------------------- Sarah Mann, Moelis Australia Securities Pty Ltd, Research Division - Analyst [41] -------------------------------------------------------------------------------- Okay. Got it. Last one from me, just on the new facility. So the FX moves have kind of moved against you. Does that impact kind of your expected returns out of the facility at all? -------------------------------------------------------------------------------- David John Fenlon, BWX Limited - Group CEO, MD & Director [42] -------------------------------------------------------------------------------- In short, no. So the FX is -- the FX impact this half is only on sales. If you look at it from an EBIT perspective because we buy and trade in commodities in U.S. dollars, it pretty much balances out, is within $100,000 in the half. So we know it's immaterial. We don't see it as an impact at all for the new facility, and it's potential upside. -------------------------------------------------------------------------------- Operator [43] -------------------------------------------------------------------------------- Your last question comes from Cameron Bell from Canaccord Genuity. -------------------------------------------------------------------------------- Cameron Bell, Canaccord Genuity Corp., Research Division - Senior Industrials Analyst [44] -------------------------------------------------------------------------------- Just that's on the distribution gains you're flagging for FY '22. Can you give us an idea of what the percentage increase is going to be in FY '21? -------------------------------------------------------------------------------- David John Fenlon, BWX Limited - Group CEO, MD & Director [45] -------------------------------------------------------------------------------- So if you look at it, we've given you the target of F '22. You'll know that we would have hoped in a non-COVID world some of these would have been earlier. We flagged that there would have been some that have been delayed. We're clear and we've announced the Woolworths distribution gain, the Kmart -- sorry, the Walmart Canada gains. I wouldn't want to split them down F '21 to F '22. Be confident that we're clearly focusing on the U.S. Rory is taking you through the global retailer approach that we're taking. And we wouldn't be reaffirming that guidance if we weren't confident about what we looked in for the second half. -------------------------------------------------------------------------------- Cameron Bell, Canaccord Genuity Corp., Research Division - Senior Industrials Analyst [46] -------------------------------------------------------------------------------- Yes. Okay. And just on the corporate and admin line in the P&L. Can you just maybe explain why that dropped away so much? And does that bounce back in the second half? -------------------------------------------------------------------------------- David John Fenlon, BWX Limited - Group CEO, MD & Director [47] -------------------------------------------------------------------------------- We were very conscious about our cost base in the first half. It was a little volatile. As you know, trading conditions were something we needed to watch. We didn't pare back on any of our investment around sales and marketing people. But just as an example, we saved $1 million on travel and trade shows. So as the world goes back to normal and we get back to some of those events, we'll see some of that increase. We continue to invest in people and principal. We'll continue to do that. But we did pull our belt in just to be prudent on some of the investments we would want to have made. Now as the market recovers, we'll reconsider those. And if we're in a position to do so, we'll make those investments. -------------------------------------------------------------------------------- Cameron Bell, Canaccord Genuity Corp., Research Division - Senior Industrials Analyst [48] -------------------------------------------------------------------------------- Okay. And then the CapEx profile on the new facility. Is it roughly 50% first half, 50% second half? -------------------------------------------------------------------------------- Efee Peell, BWX Limited - Group CFO [49] -------------------------------------------------------------------------------- Thanks, Cameron. Yes. It's roughly maybe anywhere between 40% and 50% in the first half. -------------------------------------------------------------------------------- Cameron Bell, Canaccord Genuity Corp., Research Division - Senior Industrials Analyst [50] -------------------------------------------------------------------------------- Got it. And then the gross margin that you guys can generate on hair and body products, where does that land? -------------------------------------------------------------------------------- David John Fenlon, BWX Limited - Group CEO, MD & Director [51] -------------------------------------------------------------------------------- So if you look again, we were 55.1% for the half. Like I said, the underlying skincare margin was up. We've always said that there will be a slight material -- a slight change in mix, and that will slightly deteriorate our margin. When we get to the new facility, obviously, we're beginning to take the benefits of that, and that will more than offset it. But as we grow into those categories, we get more volume. As we get more volume, we get more efficiencies. So it is a short-term issue, but I would also be very clear. They are good volume categories and they're good margin categories. They're just not as high as skincare, but they're still very strong in margin. As you can see, the overall Sukin margin is still in the realms of 68% to 70% with that margin mix impact. -------------------------------------------------------------------------------- Cameron Bell, Canaccord Genuity Corp., Research Division - Senior Industrials Analyst [52] -------------------------------------------------------------------------------- Sure. And just on the Woolworths deal. So is there much of an overlap in the SKUs that you're going to have on the shelf there with the Coles SKUs? And do you have a method to prevent a sort of a promotional firepower? -------------------------------------------------------------------------------- Rory G. P. Gration, BWX Limited - Group COO & MD of Asia Pacific [53] -------------------------------------------------------------------------------- Yes, Cameron. So in terms of the SKU profile, they will be relatively similar. The way we differentiate is through our partnership agreements, whether that's Coles, Chemist Warehouse or Woolworths or other retailers. So we do have a customized offering. It could be in pack size. It could be in variance. It could be in a number of different ways or categories. So there will be differentiation. In terms of the question about firepower with promotions, it is interesting. We do know that shoppers are pretty promiscuous across all shopping channels. So promotions are relatively more to the total market. So we aim to closely monetize the amount total everywhere and not having the baseline sales everywhere. We don't expect it to see something deteriorate just because we're running some promotions in Woolworths. Yes. I guess you have to appreciate that pretty much all brands or mass brands are available in all retailers, and they all have promotions that run across all. We just got to make sure we don't crush them. -------------------------------------------------------------------------------- David John Fenlon, BWX Limited - Group CEO, MD & Director [54] -------------------------------------------------------------------------------- We certainly are going to see that with the margin dilution, if that's your concern. -------------------------------------------------------------------------------- Cameron Bell, Canaccord Genuity Corp., Research Division - Senior Industrials Analyst [55] -------------------------------------------------------------------------------- Okay. And just last 2 really short ones. The Chemist Warehouse deal, is there any notion of future BWX Tomorrow brands to be included in that? -------------------------------------------------------------------------------- David John Fenlon, BWX Limited - Group CEO, MD & Director [56] -------------------------------------------------------------------------------- It is absolutely key to a guess. -------------------------------------------------------------------------------- Cameron Bell, Canaccord Genuity Corp., Research Division - Senior Industrials Analyst [57] -------------------------------------------------------------------------------- Okay. Great. And then finally, I know you guys don't disclose this anymore. The Sukin revenue domestic versus international. Can you give us an idea? -------------------------------------------------------------------------------- David John Fenlon, BWX Limited - Group CEO, MD & Director [58] -------------------------------------------------------------------------------- As you said, we don't disclose it. -------------------------------------------------------------------------------- Operator [59] -------------------------------------------------------------------------------- There are no further questions at this time. I'll now hand back to Mr. Fenlon for closing remarks. -------------------------------------------------------------------------------- David John Fenlon, BWX Limited - Group CEO, MD & Director [60] -------------------------------------------------------------------------------- Thank you very much, everybody, for your time. Apologies we've run ever so slightly over and a small technical issue. But as I said, we're recommitting our guidance. I think you can see we've been busy with a number of strategic activities. We feel that they are putting this in growth there for future growth. We will continue to monitor the market conditions. And we'll continue to make sure that we are COVID safe. We look after our people and continue to put great efficacious natural products in the hands of consumers. If there are any follow-ups, and we've got many of you in the next few days, please look forward to that. We certainly are. And thank you once again for your time.