Howden Joinery Grp Ord

Welcome to the Haydn's 2024 interim results presentation. I'll begin by introducing our performance for the first half. Paul Hayes will then review our financial results for the period and then share my perspectives on our 2024 performance to date and our plans for the remainder of the year. And then we'll take your questions. The group delivered an encouraging first half performance in, as we anticipated, a challenging marketplace. The results met our expectations for the period and we are on track for 2024. We continued with our investment program, which is focused on our key capabilities and which gives us end-to-end a stronger business. Group sales in the first half, which included an extra week's trading in January, were 4.3% ahead of those in 2023 and were 48% up on 2019, being the year prior to the onset of the pandemic. In the UK, we believe we gained kitchen market share, which helped us mitigate a decline in the overall size of the kitchen market. Entry-level kitchens represented a higher proportion of the kitchens we sold with sales of product in our kitchen categories increasing at a higher rate than in our joinery categories. We maintained an industry-leading gross margin with gross profit ahead of last year as we balanced recovery of cost rises with our commitment to providing competitive pricing across the board for our customers. Reported first half profit was in line with last year's and 44% up on 2019. Excluding net spend on strategic investments above last year's level, first half profit increased at a similar rate to sales. Our builders remained busy and we made good progress in our strategic initiatives for the UK and total sales of our international operations increased. The business delivered strong operating cash flow and we maintained a robust balance sheet. This gives us the flexibility to continue to invest in our growth plans for the business and to provide shareholders with an increased interim dividend for this year. The interim results demonstrate the strength of our local trade-only in-stock model. A strong product lineup, high stock availability, industry-leading service levels, and a very engaged team have all contributed to our performance, which benefits from the ongoing investment in our customer-focused strategic initiatives. We had a record number of customer accounts in the half year, with a similar proportion trading as last year. As well as maintaining an industry-leading gross margin, the business continued to deliver KPI volumes, which in aggregate were well ahead of pre-COVID times. So far in the second half, our performance has been in line with our expectations. And whilst we have peak trading ahead of us, we're encouraged by our sales performance in the year to date. In 2024, we expect market conditions and trends to be broadly unchanged from those seen in 2023. And this has proved to be the case so far this year. We are well prepared for this and our customers, mainly self-employed people, are adept at managing their businesses in such times. Delivered by our highly entrepreneurial and well-incentivized teams across the business, I believe that our service-orientated, trade-only, in-stock, local model is the right one to deliver sustainable market share gains. Our model is hard to replicate, difficult to compete with, and we have initiatives in place to make it more so. The addressable value of the UK markets in which we have an established presence is some £12 billion. and there are significant long-term growth opportunities for us. We continue to prioritise investment in the business on this basis. I will update you on our strategic initiatives, which are key to the long-term development of the business, after Paul Hayes has taken you through our financial results for the first half. Paul.

Thank you, Andrew, and good morning, everyone. I'm pleased to be presenting Howden's financial results for the period ending 15 June 2024. Howden's performed well in the first half in a challenging market. Group sales increased by 4.3%, £966 million, as we supported our trade customers with a strong product line-up, high stock availability and outstanding customer service. We also made further market share gains. Gross profit was ahead of last year at 587 million pounds. And we've continued to recover increases in commodity and energy costs through price increases and productivity improvements. The gross margin percentage is sector leading and included the dilutive impact of growing sales of our solid work surface category. Operating costs were £22 million higher at £470 million, predominantly due to £16 million of investments in our strategic initiatives. During the period, we took further productivity and efficiency actions to broadly offset around £12 million of higher inflationary costs. Now I'm going to cover that in more detail shortly. As a result, we generated an operating profit of £117 million, and after net interest charges, profit before tax was at £112 million. So let's look at revenue growth in a bit more detail. We continue to face challenging macroeconomic conditions in the first half, but we have maintained a disciplined approach to balancing price and volume to support our trade customers. As a result, UK revenue increased by 4.3%, £934 million, and was 2.8% ahead on the same depot basis. As I've mentioned, the major driver of our strong performance has been the ongoing investment in our strategic initiatives. We prioritised opening new depots, and we also revamped 26 older depots into the new format, which drives incremental revenue growth. At the half year, we had 850 depots in the UK, 480 of those are in the new format. In 2024, new products have been a key focus with infills to our existing kitchen ranges and new joinery categories. We've also refreshed our painter order covers and introduced new decors in our solid workset ranges at all price points. All these new products will be available ahead of our peak trading period. We're also continuing to prioritise digital investments to make it easier for our customers to trade with us. In the international depots, where we operate from 76 sites, we generated revenue of €38 million, which was 4.7% ahead of 2023. After a period of significant depot rollout in France, we are building out the existing depot team's capabilities. We're also expanding our joining ranges in France and Ireland to drive depot footfall, including higher quality doors, new skirting and architrave lines to supplement our kitchen ranges. Our Irish depots have continued to trade well since we set up there around two years ago, and we will continue to expand our depot footprint there this year. Now, Andrew is going to take you through these initiatives in more detail shortly. So now let me move to profit before tax. Written from 2023 PBT of £112 million on the left, Gross profit was £22 million higher versus last year. We were effective in implementing price increases early in 2024 that benefited the business by £10 million. The positive impact of volumes and mix was £14 million, which was encouraging as this was net of the dilutive effect from stronger sales of solid work surfaces. To remind you, these products have a lower gross margin percentage, but an attractive cash margin. Kitchen sales were encouraging in the first half. And while we remained remain focused on expanding our leadership positions in entry level and mid price kitchens, we continue to develop our offering in the higher price kitchen segment where we are underrepresented across these kitchen segments. margin percentage is broadly consistent and this remains an excellent opportunity for future green we've delivered further productivity improvements in our manufacturing operations which almost offset the increases in freight commodities wage inflation and energy costs these costs are still inflating although not at the levels of the past two years and there is a lag in the p l account as the impact is only realized as these items are sold We keep under review what we believe is best to make or buy, balancing cost and overall supply chain availability, resilience and flexibility. Recent investments have included new panel and lamination lines at our Howden factory. We've expanded capacity of our two solid work surface factories in the north of England and two new lines to facilitate our painter order initiative. All these investments are providing good returns. Operating costs increased by £22 million as a net result of managing our costs tightly while continuing to invest in our strategic initiatives. This discipline supported us in delivering PBT of £112 million in the period. Now, this slide here shows how we've managed our operating costs. Bridging from left to right, the incremental costs of the new UK depots totaled £7 million. We invested in our international businesses with a continued focus on the city-based strategy. The £2 million increase includes the incremental costs of the 10 depots that we opened in 2023. Other strategic initiatives included our investments in depot revamps, work surfaces, painter order and digital. The existing depot increases of £4 million related to higher inflationary costs, principally in property and labour. Other cost increases were tightly controlled, with the majority of inflationary cost increases being offset by productivity and efficiency actions taken in the first half. So now let's move on to the cash flow. From an opening cash position of 283 million, we ended the period with 166 million pounds of cash, a net outflow of 117 million pounds. Now, you can see from the slide that this was after paying dividends of 89 million. Overall, working capital increased by 107 million in line with our normal seasonal phasing. Stock increased by 27 million pounds due to the usual stock build ahead of our peak trading period and ongoing inflation. And we are carefully managing stock levels given the number of new product introductions and the continued geopolitical uncertainty. Debt has increased by £62 million since the year end, with ageing in good shape, and creditors were £17 million lower. Both these balances were impacted by the late finish to the prior year due to the 53rd week. Capital expenditure totaled £40 million as we continued to focus on the execution of our strategic initiatives. Just under half of the investment was in depot expansion and revamps. Other initiatives included investments in our supply chain and manufacturing sites, as well as expanding our digital capabilities. Now turning to earnings per share and dividends. EPS in the first half was 15.4 pence, which was level with the prior year. And our progressive dividend policy remains unchanged today. And I'm pleased to announce that the board has declared an interim dividend of 4.9 pence, an increase of 2.1%. So let's turn to technical guidance for the rest of 2024. Now, first looking at P&L guidance. As I've mentioned already, there is an earlier start to trading this year with our depots open in the first week. of our financial year when they were closed in 2023 and this reverses in the second half of the year there is also a benefit in the second half from the non-repeat of the additional 53rd week in 2023 which was worth around 17 million pounds we expect a continuation of higher container costs which have risen in the first half now at current pricing we expect around 5 million pounds of additional costs in the second half as inventory procured and shipped in the first half is sold. With respect to foreign exchange sensitivity within cost of goods sold, we've set out the impact on a full year of a one cent movement in both the Euro and US dollar shown on the slide. Now, in terms of cash flow items, we'd expect capital expenditure to be broadly in line with last year at 125 million pounds as we continue to invest the growth. Working capital is expected to increase this year, impacted by the higher debtors as a result of the timing of our peak trading period, period 21. This year, the last two days of period 21 fall into November, which means that a significant proportion of customer payments won't be due until after the year end. Now, we expect that overall impact of the year end date will be around £50 million. But I just want to be clear that that is simply a timing issue. The cash will come through early next year. And overall, our working capital remains in great shape. So in summary, we have performed well in the first half in a more challenging marketplace. We have been proactive in delivering productivity and efficiency savings to protect the P&L account. Our balance sheet and cash flow remain very strong and support our continued investment in the business. And we expect to maintain this at the current pace in the second half. Since the start of the second half, our performance has been in line with our expectations. And despite the ongoing macroeconomic hit wins, we are on track with our guidance for the full year. We remain confident of delivering growth ahead of our markets while generating strong cash flow and attractive returns for our shareholders. Thank you. And I'll now pass it back to Andrew.

Thank you, Paul. In reviewing our first half performance and plans for this year, I will use our strategic initiatives for the business as a framework. Fully aligned with our trade customer only focus and entrepreneurial culture and based around our core building blocks of service and convenience, trade value and product leadership. These are to evolve our depot network to improve our range and supply management, to develop our digital capabilities and services, and to expand our international operations. So first, depot evolution. High service levels, including local proximity and immediate availability, are very important to our customers, and we continue to see profitable opportunities to open depots. We are using our updated format for all depot openings, Deployed in several forms, the format enables us to provide the best depot environment in which to work and conduct business and to make space utilization and productivity gains in a cost-effective way. Overall, we can continue to believe there is scope for around 1,000 depots in the UK versus 840 trading at the end of 2023. We plan to open around a further 30 depots in 2024, of which 10 were opened in the first half. We have progressed our revamp program for existing depots. This continues to receive very positive feedback from depot staff and customers alike, and providing such a trading and working environment is important to our competitive position. By the end of 2023, including relocations, we had revamped 274 depots. In 2024, including relocations, we plan to revamp around a further 85 depots and completed 26 of these in the first half. And by the end of 2024, we expect to have revamped around 54% of the 670 depots, which were opened in the old format and have around 64% of all UK depots trading the updated one. Next, range and supply management. Sales of new products make a significant contribution to our performance. and we have upgraded our MPI programme in recent years. Total sales of new product introduced in the last 18 months or so represent around 17% of total UK product sales, with new product introduced so far in 2024 and the two prior years representing 28% of UK product sales. Sales of new product introduced in the first half of last year alone increased by some 52% this year. As in 2022 and 2023, our higher priced kitchens continue to contribute more to the kitchen mix by volume than previously, which is a positive impact on our average kitchen invoice value. Managing our portfolio of kitchen ranges efficiently is crucial for both best availability, which is highly valued by our customers, and for profitability. In recent years, we've reorganized our range architecture, removing duplications and improving the balance between new kitchen introductions and timely discontinuations. The more efficient ways of testing new kitchen colors and finishes is enabling us to bring more proven kitchen styles to market more quickly. And our new pay-to-order service is also informing our from-stock ranging decisions. At the end of 2023, around 60% of the kitchens available from stock comprise ranges brought to market between 2021 and 2023. And we have a further 11 new ranges confirmed for 2024. With our entire kitchen offering organized into 10 families, the same number as 2023. We are committed to providing market leading and competitively priced products for our customers to sell to theirs and value for money is a constant feature of purchasers buying decisions. Given pressures and household budgets, price featured predominantly in 2023 and as we expected is going to do so again this year. Our offering as enhanced by our 2024 MPI programme is well positioned to take advantage of this. With an emphasis on value for money and choice at all price points, our MPI for 2024 includes 10 new kitchen ranges aimed at the entry and mid price segments. We have also introduced clearer and more delineated pricing within ranges and across families. And we are innovating in other product categories and have added bedrooms to our overall depot offering. In 2023, we brought to market seven new kitchen entry kitchen ranges, adding new frontal options. And this year, we have added two more. Greenwich in Marine Blue and Whitney in Reed Green. Last year, we also refreshed the look of our best-selling Shaker family, and we renamed Halesworth and launched a new mid-priced Shaker family called Bridgemere. For these families, we have six new colours for 2024, including Halesworth in two of the best-selling paint-to-order colours, which are Antique Rose and Seafoam, and Bridgemere in Linen and also in Sage Green. Our best-selling mid-priced family, Clerkenwell, we're adding two new colors, super matte black and gloss reed green. We also continue to develop our high-priced kitchen portfolio, which is a large segment of the market in which we are underrepresented. The paint-to-order service for customers buying our top-end Chilcombe and Elmbridge ranges which we introduced in the second half of 2023, continues to be very favourably received by customers and depot teams alike. Priced at the premium to the nine range colours, which are available from stock for 2024, we are offering 15 paint-to-order colour choices from which customers can opt to have either or all or just part of their kitchen furniture. And we are about to refresh the paint-to-order palette with five new colours. For customers looking for a bespoke look, we believe the paint-to-order service is very competitively priced, with by market standards a short lead time between order being placed and the kitchen being ready for delivery. A strategic priority for us is the development of the market-leading supply and fit capability for premium work surfaces. Solid surface worktops are often but not exclusively associated with the sale of higher-priced kitchens. And this product category is one with significant opportunity for us. Following the acquisition of the Sheridan's worktop business and other investments in our in-house solid surface manufacturing capability, we're now amongst the largest in the UK. The number of solid surface worktop orders taken by depots increased significantly in 2023, and we continue to improve our offering and orders have increased again this year. In the second half of 2023, we reduced the time between template to fit at national scale, an industry leading five days. And this year, we've also reduced the time between order and template to fit five days. So far in 2024, we've added 14 more decors to our solid surface template and fit service, with eight more to come in the early part of the second half. In total, we have a comprehensive offering of 58 decors to suit all budgets in place well ahead of peak autumn trading during which kitchen sales represent an above average proportion of our sales megs. In 2023, we've also reinvigorated our offering in other categories and are innovating again in 2024. Indoors, we've added more color and bolder styles at all price points. Our new own label flooring brand, Oak and Gray, is performing very well. And new flooring product for 2024 includes a market-leading third-party premium price brand called Carndine. In appliances, we've added further additions to our Lamona brand, which is the leading integrated appliance brand in the UK, alongside extensions to our range of third-party branded product. And in sinks and taps, we've added more styles, colors, and finishes. In the latter part of 2023, we tested demand for new fitted bedroom ranges supplied by us. And by the end of the year, all depots were able to sell them. Installing fitted bedroom suites suits the skills of customers who fit kitchens. And they have a high cabinetry content, which matches our manufacturing capabilities. The ranges were developed in-house, utilising our existing manufacturing supply infrastructure. The first half are offering comprised of 16 new bedroom ranges in four leading family designs drawn from our kitchen range portfolio, matched with new internal accessories, including pull-down rails, mirrors and internal storage solutions. For the second half, we are adding three more comprising of our entry-level Greenwich range. in gloss white and in natural oak and in hockley and textured oak. We are committed to providing competitively priced product for our customers, and we have reinforced our focus on price and promotions, which demonstrate the value we offer to promote footfall across the year. Howdens is an in-stock business, and the trade tell us that the high level of stock availability is one of the key reasons that they buy from us. And the first half of 2024, our service level from primary to depots was 99.97%, a world-class performance by any standard. In 2023, facilitated by our new stock management system, which we call TED, we rolled out our daily traders initiative to all UK depots, which has benefited for us in a number of areas. Daily Traders is a means to improving customer service levels and promoting footfall and increasing sales by optimizing in-depot stock holding of best-selling SKUs and associated range completers. We are also using the insights from the Daily Traders to help optimize new depot opening stock and to provide stock guidance for depot revamps and relocations so that these are configured to hold the right stock in the right depth. This year, we have maintained improvements in key metrics, including at a higher proportion of stock being replenished by a depot's core weekly delivery order than previously. And this gives us efficiencies as it helps optimize the utilization of our XDC service, which I'm going to talk about next. In recent times, we've improved stock replenishment by supplementing a depot's core weekly delivery order with investments in next day service by a network of 12 regional cross-stocking centers or XDCs combined with a rebalancing of where we hold stock. XDCs are a key enabler to deliver the levels of high service and availability which differentiate our offer. And with mainland coverage in place, our focus is now on using these assets more efficiently. The improved depot stock mix following the introduction of a new reordering system and the daily traders initiative have enabled us to reduce annualized XDC capacity, leading to lower operating costs. We can also utilize XDC to bring new products such as bedroom to market quickly and more efficiently, and we can build stock as demand increases rather than being fully stocked for a full rollout at launch. We make all of our kitchen cabinets and some of our other product as well, which is a source of competitive advantage for us in several ways. We keep under review what we believe is best to make or buy, balancing cost and overall supply chain availability, resilience and flexibility. In 2023, several major investments came to fruition. Production of the new furniture lines at our Haydn site, which are amongst the most advanced of their type in Europe, totaled around 600,000 pieces in 2023, with a full year capacity of around 2 million pieces for 2024 and subsequent years. These give us the ability to make a variety of kitchen furniture, principally frontals and panels, and more of our ranges at the same time as we can source externally, at the same quality as we can source externally, but at a lower cost and at a reduced lead time to delivery. Our second architrave and skirting lines also commenced manufacturing in 2023, and the performance levels of the new line are now ahead of those of the original one. The line increases our full year capacity to some 10 million pieces. and also broadens the range of such product we can manufacture, enabling us to continue to service in-house substantially all of the growing demand we see for these products. Separately, we have also invested in two lines to facilitate our paint-to-order initiative. Located in a purpose-built facility near our Huyden site, these lines give us an industry-leading production capability in this area. We are achieving the order turnaround times that we set ourselves, and we have capacity to supply some 5,000 kitchens a year. So turning to our digital platform, we use digital to reinforce our model of strong local relationships between customers, depots, and their customers by raising brand awareness, to support the business model with new services and ways to trade with us and to deliver productivity benefits and more leads for our depot teams and for our customers. Usage of our online account facilities, which provide efficiencies and benefits to depots and customers alike, has continued to increase. New registrations totaling some 44,000 and around 50% of our customers had an online account by the half year. Total users viewing our trade platform increased by 17%, with around 80% of users regularly looking at their individual confidential pricing. Customers with an online account have on average continued to trade more with us more frequently and spent more significantly than non-users, and proportionally more of them bought across product categories. We saw high levels of engagement with our web platform and growth of our social media presence, which also stimulates interest in doing our products and services on howdens.com. Site visits totaled 11.6 million in the period, Amongst kitchen specialists, we continue to have the highest number of fitted kitchen site visits in the UK. And the time spent viewing pages and the number of pages viewed per visit were consistently at high levels. Across social media sites, our follower base is now 669,000. That's up some 21%, with around 5.5 million monthly engagements. In 2023, amongst other initiatives, we tested a digitized in-depot stock management system or live stock, as we call it, to record and pick deliveries, check allocations and determine depot stock levels. Amongst other benefits, the system frees up time for depots to use productively and the system now operates in all UK depots. It also enables us to have complete visibility of our locations of stock by SKU holding across our factories, primary warehouses and depots. The stock surety livestock and other initiatives such as Daily Traders provide have enabled us to offer an upgraded click and collect service to our trade customers. Rollout of the service was completed during the first half, which enables online account customers for all our UK depots. to check real-time availability of stock on a depot-by-depot basis, review their individual confidential prices at their selected depot, place orders for collection at a time of their choosing. Click & Collect is available for all of our products except those for which a survey or a CAD planning is generally required prior to placing an order, such as a kitchen range. Our initiatives are contributing to an increase in digitally sourced leads for depots. Digitally sourced depot lead contacts on the metrics that we use have more than doubled in the first half, albeit from a low base. These represent high quality leads for depots and customers, including for kitchens. A significant proportion converts to kitchen sales with above average order values, and we are looking to promote higher levels of lead generation online. And finally, international. Versus the first half of 2023, the first half performance of our operations based in France progressed significantly in a market at least as challenged as the one in the UK. The business is on track to deliver a material increase in sales in the year. The kitchen market in France is estimated to be worth around €4 billion, excluding appliances, with most kitchens purchased through kitchen specialists and DIY stores. As long-term followers of Howden's will know, we tested our ability to access this sizeable market in several ways before adopting a city-based approach, serving solely trade customers to be led and staffed by people who embrace the Howden's way of doing business. By the end of 22, we had doubled our depots in France and Belgium to 60 in a two-year period and opened a further five at the end of 2023. Consequently, when compared with their UK counterparts, many of our depot managers in France are less experienced in nurturing trusted trade relationships. For 2024, we're focusing on team development to foster these, and we may open a few more depots towards the end of the year. We are investing elsewhere in the business through enhanced offerings of footfall promoting products. We've introduced a regular schedule of trade days at all depots with aligned promotional activity and more supplier support. Sales in the Republic of Ireland continue to be encouraging and we are opening more depots there in 2024. We identified the Republic of Ireland as a market which suits our differentiated model and one which sets us apart from the incumbents. We commenced trading in the Republic in 2022 using a similar depot strategy to that in France, with the depot team supported by our UK infrastructure and our digital platform. During 2022, we opened five depot clusters around Dublin, and our arrival in the Irish market has attracted much attention. We opened five depots in 2023, three more around Dublin, two serving Cork, and we are taking the total traded to 10 year end. The first half of this year we added one more depot serving Waterford and the total we could open up to around five in 2024 and we'd increase the total trading to around about 15 by the year end. So for 2024 we are as well planned as we've ever been including on our strategic initiatives These are aimed at increasing our market share profitably as we deliver value to our customers across all price points. High stock availability is a major contributor to our performance. And in 2024, we are maintaining our safety stock policies for the most part at the levels by volume we deployed in 2023. We will have all of our new kitchen ranges for 2024 in stock well ahead of our peak autumn trading, with an emphasis on entry and mid-price ranges, together with our very competitively priced premium kitchen offering. We have a program of rooster promotions in place to keep Houdens at the front of the trades mind, together with other price initiatives. And we will continue to make improvements to service and availability, for example, by utilizing XDCs efficiently and through our daily traders, livestock, and click and collect initiatives. We are increasing the range of services and functionality we offer online to the benefit of our depot teams, customers, and end users alike. And we'll be making more in the UK as our new lines at Hidens move up towards full production capacity and solid surface business continues to grow and bedroom volumes increase. During 2024, we plan to open around 30 depots in the UK and refurbish around 85 existing depots to the updated format. By the end of 2024, we expect to have around 65 depots trading in France and Belgium and up to 15 trading in the Republic of Ireland. Lastly, Outlook. Whilst we have peak trading ahead of us, we have made an encouraging start to the year. Our plans for the business are on track and our expectations for the full year remain unchanged. We expect market conditions and trends to continue to be broadly unchanged from those in 2023, and we are well prepared for the challenges and opportunities that such market conditions may present. We aim to retain a profitable balance between margin and volume, as we continue to maintain competitive pricing whilst aligning operating costs and working with our suppliers to keep product and input costs controlled. We are that confident in our business model being the right one to address opportunities in our markets. And in summary, we are well-placed to outperform our competitors in 2024 as we continue to invest in our capabilities and grow opportunities which are pivotal to the long-term development of the business. And finally, I would like to take this opportunity to thank everyone who works for Howden's, many listening in now, whether in depots, our factories, our commercial operations, our support functions for their extraordinary commitment to providing exceptional service for our customers, which is a key component that sets us apart from so many others. So thank you for listening. and we'll now take your questions.

Hi, Rob Chantry at Berenberg. Thanks for the presentation. Three questions all on market structure, I guess, and I'm aware you may not give precise numbers, so some colour would be useful. Firstly, could you just comment on where you see market share on a volume and value basis, given all the moving parts in your strategic focus at the moment? Secondly, some commentary on where you see kitchen market volumes versus 2019 in 2024. And then thirdly, early days of bedroom furniture. I know it's roughly 1.2 billion market and there's probably a third you're not interested in. But what do you see as a realistic market share target maybe three to five years out and who are you displacing in that mix? Thank you.

Yeah. So we started off the year by putting around about a 3% price increase across the piece looks like we've retained about one of that and we've maintained a healthy balance between volume and value i would say across the start of the year look i think it's not tremendously well tracked markets in terms of share but given what we've seen from competitors and some of our key competitors backing off either slowing down on on some of their freestanding units, we would see that we've taken a considerable amount of share at the start of this year. And we don't think the market's in particularly good shape this year. We think it could be down as much as 6% or 7% so far this year. So we're pleased with our positioning and our gains in that period. um we can see it in appliances where we've made you know good good share gains versus the market that's one that's reported pretty well but we also look into the supply base and see how they're getting on the uk we get anecdotal and you know feedback from some of the independents and it feels it feels like we are really making quite a significant dent in the independent market and we're also you know working very effectively at the opening and mid price particularly the opening price in the market where you know we've got a real strong hold um so yeah i think we made a we've made substantial progress this year bedroom furniture uh you're right and that's about the size that we see the market about 1.2 billion there's a freestanding element that we don't want to play and So we've got on with our program. We're pleased with what's happened so far because it has come in exactly where we thought it would be. And that's Prius taking our second move, which is opening up into opening price, which we are about to start in the next month. And we keep bedrooms rightly in its right place for us. We're a kitchen business primarily. That's our absolute focus. We don't want our teams getting distracted in the bedrooms, but we like it. It's the type of work our customers do. We had 200 depots selling bedrooms in our peak trading period last year, and everybody's got it now. There was some interesting anecdotal feedback around depots selling bedrooms with kitchens during peak trading last year. So we look with interest as we go through the second half this year, but we're pleased with the margins. We're pleased with what's happening so far. And it's been enabled by the initiatives like XDC that has enabled us not to distract our depots from holding stock in the right areas, which should really be peak traders and daily traders.

Ainsley Laman from Investec. Just two from me, please. Just following on the kind of pricing, just wanted to give a bit more colour of the trends you've seen on the price. Have you lost a bit more price as the kind of half year progressed? Essentially just trying to gauge how much pressure there might be on gross margins in the second half, what your expectation is there. And then secondly, just obviously net cash was high. You ticked up the dividend a little bit. Just wondered what your thoughts are on share buybacks at this point. So, yeah.

Yeah. I think we're pretty happy with where we're at on price. And I think what we're seeing from the competitors is some pretty random stuff. And I think when people are under pressure, the teams will get presented with quotes from competitors. And our instruction to them is, you take that business. We're interested in profitable volume growth through the year. I don't know that I'd point to anything particularly on the gross margin. We shouldn't be particularly concerned about the second half. The teams are working very hard and driving customers into the business. So when we're very active on joinery, flooring, doors, that kind of business, we drive footfall in. That gives us the opportunity to build conversations with our builder customers around kitchens. You can see those two things work very well together. Good footfall drivers. That's why the teams get very behind in trade days. We do a national trade day this year. And we keep activity going in the business. Once we see the customers, we've got the opportunity to work very hard on kitchen. So we're very focused on keeping the kitchen margin in the right place, taking the bits of business that we need to take. And then we trade very hard in joinery. That's been a consistent strategy and one we've been focused on very clearly through this year. Yeah, so I wouldn't add an awful lot more colour on that.

If I take a question on share buybacks, our capital allocation policy, we've always been very clear on that. This year, the priority is really investing in the business and delivering growth. And I think you've seen that in sort of the level of capital investment of around 125 million or so, which helps us to that. We're excited about the business. And in the longer term, we will look and we're investing, increasing our capital allocation. capabilities and capacity. So as we look forward, there will be some other investments in terms of things like increasing our capacity in manufacturing cabinets and things like that, where there will be sort of larger investments in equipment, products, processes that we know and really understand. understand well and pay back. So we will see that, but we will advise as and when we get to those sorts of investments. So that's one thing we're aware of in terms of managing the cash appropriately. We've already picked up on the progressive dividend. And then we're very clear around the policy of cash in excess of £250 million. Then we look to make share buybacks. What we will be aware of is the timing issue around this. I talked about that 50 million of the timing due to the way the calendar falls. When we look at our capital allocation policy and where we stand at the year end, we'll take that into account. But we understand, you know, the share buybacks is an important part of our approach as a business. Just to remind you, we bought back 300 million over the last couple of years and we continue to remain committed in terms of sort of managing a strong balance sheet. The share value, that's where it makes sense.

Hi there, Ben Barrow from RBC. I'll take two, please. Just in terms of heading into P21, what are your thoughts there in terms of volume and price. I mean, do you change anything that you've seen so far in the first half with regard to price? And then the second on the international business, could you give a bit of an update there? And then is there any color on the path to break even? Yeah. Thanks for those two.

Look, there's always a, you know, we, we would, we have a pretty strong, steady rhythm about how we play H1 versus H2 in the business. We come out in January, we do a price increase. The past couple of years, we've had to do a bit more than that. But a good rhythm for us is to come in with a January price increase and get it settled in well and let the teams know exactly where we're at from landing the price increase. We get that settled in the first couple of months. I think we're in the right sort of place as we position ourselves forward for period 21. and are you know we're very ambitious about what we want to achieve in the second half as always um and we are in a place now where our depots will be building the lead banks looking forward into period 21 given where we're positioned uh on margin they'll be building their lead banks and we'll be very focused on where the lead banks are at where the target lead banks need to get to to glide us the right place for period 21 but also the conversion rate. We run a very high conversion rate with our builder customers. So I think it's really hard to call how H2 is going to happen. We think we will do very well. We think we're incredibly well set up. And when I mean set up, we've bought sensibly for volume growth. We've got the right incentives in place for the teams that are planned. They don't know exactly what they're getting yet, but it's all planned and set up. Our availability, as I mentioned in my speech, is perfect, almost perfect, 99.97. And we've sprinkled on some new product as we go in. So I would say morale in the business is good, which is a key feature of our performance in the second half. I think everybody's eyes are on the prize. And, you know, I've been going out and spending time with we do regional boards where we get 90 managers together, nine regions, seven meetings a year. And we spend a lot of our time out in front of the depot managers. And I've been overlaying this year with smaller meetings with, you know, 10 managers and really getting down into some deep issues with them. And I think we're in as good a place as we could be. you know we'd like a bit of help from the market we're expecting none you know this is this is about self-help in the second half and I think we'll make a good fist of it so I think so the price volume makes similar to the first half but you know in balance I would hope the international businesses has been interesting because we came out of COVID in France and I'll come back to Ireland a wee bit later but we came out of COVID in France very confident about our French business and We moved too fast, I would say. We put down 20-odd depots in one year on quite a small base, and we learnt from it. We absolutely tackled into fixing it. We appointed Andy Witt to oversee the operation. Andy's brought that steady chairmanship to... We put in Zoran Zalic, who was our operations director in London. Part of his development, he's gone out to be operations director in France, and I was doing an internal conference call with the teams and we were talking about, you know, post their peak trading last year, it was like sunflowers and their heads were down a wee bit. You go back into that business now, all the sunflowers are pointed in the right direction. It's actually quite encouraging and they've had a good first half. I expect them to have a good sales growth in the second half. um and it's encouraging to hear some of the stories about how the brand is getting out there and how how we're affecting like flight performance you know we've and it's encouraging not everything goes perfectly in a business we saw it we identified the issue we we sorted out on top of that we have um a chap called sebastian prycheck joining our international business sebastian was commercial director at kingfisher he joins in september it's a big appointment for us sebastian's chap who who loves people and he loves product. And he's Polish and he's French and he's very excited about joining the team to develop out that business. Ireland, I think the Huygens brand is falling on very fertile soil. The economy looks good. There's an awful lot of building going on out there. We're up to 11 depots. We'll do a few more this year. We keep them around cities. You know, there's it's it's an interesting market for us. And there is nobody doing what we do, you know, in Ireland or in France. When you go into the depot and you see, you know, teams customer facing fantastic product quality, amazing value and then stock in depth. There's just nobody doing that there in either of those two countries that we're operating in. So we're pretty excited about it.

Thanks. Amigala from Citi. Just a few questions for me. First one was a follow-up in France. One, in terms of the sort of price points that you typically get more interest in France, can you give us some more color there? Do you think there's now a bigger appreciation for a fitted kitchens model, which is primarily a flat pack kitchen market? And in terms of break-even point in France, from a line of sight, do we have that more visible price milestone insight as to when do we get there? And the second one was really in terms of, um, do key and current trading post election. Have you seen any discernible sentiment boost of coming as a feedback coming from your depot managers? And the last one was on cost trends in the sort of input cost line. I mean, is there anything to call out on what you're seeing in your input cost side?

Yeah. OK. Look, people keep on asking me about France and what the differences are. So to spin it around, there's many more similarities between the France and the UK when we look at the markets. And the more we lean into what we do as a business, serving trade customers, doing the right thing for the trade customers, the better we seem to do. So whilst the market has got a predominantly flat pack feel to it, our rigid cabinets are a very important thing for us to be given the trade because it means the fit is so much faster. The cost that they can make on the project with the customer, they can make more money. I sort of had always felt that we were probably more contemporary in styling than traditional in France. And that may be because of our dominance around Paris, where we've got a big number of depots. But I think we're discovering that that's not quite the case. And the balance may not be the same as it is in the UK, which is sort of 50-50. It could be, you know, 70-30 in France. So that's an interesting opportunity for us. The point I made earlier about driving footfall into the depots in the UK and keeping our depots active and busy, whether it's trade days or selling joinery or flooring or skirting and architrave, these kind of things that in supermarket terms are milk and butter for us. Those types of products we are getting really good at selling in France and they're growing well. I think that feels good. Around break even, we reduced the losses significantly in France this year with all the good work that the team are doing. It's largely a sales job. It's about driving volume through the business. But as we've been adding on more depots through the year, it takes time for those depots to mature. I don't see us breaking even next year. The following year, depending on how it goes, I think we would have a chance. and certainly trading profitably in the year after that, you know, in 26. I would see that quite sensibly. But it's always that balance between rolling out depots and you're incurring losses in new depots and you're trying to mature the estate. But I think this is the right sort of proportion of investment a business of this size should be doing to try and make the brand work in a different country. And I think the team are doing a fantastic job on it. Regarding the input costs, there's not a lot to talk about. And Paul picked up the point about freight. There's two dynamics going on. There's less pressure on raw materials, I would say. There's probably still pressure from a labor point of view in our supply base, the sort of labor inflation. But then you've got a competitive dynamic going on where we are a big purchaser of kitchen product in Europe. That's everything that we don't make. So there are deals to be done and people want volume with us, particularly when we're sort of making more ourselves. There's always those tough conversations between we're going to make it or do you want to keep it? So we always keep that strong tension and we understand the cost profile incredibly well in our supply base because we're involved in many of those activities ourselves. So that's what I would sort of say on the input costs. Look, regarding the UK election, I would say... And what we have sort of said to the team, it's great that it's done and it's out of the way. I don't know that we would say we're seeing anything different than we've seen. I think it's probably far too early to tell. I would have thought an interest rate reduction would make us all feel good. But I think if we look at our half million customer base, it's, you know, the strong continue to be very strong and we continue to work very hard to support the tail of our customer base. But, you know, I'd say our customers are in reasonably good condition actually going into the second half.

Thank you.

Yeah.

Hello, Kristen, you're from B&B Numis. Two from me, please. So first of all, just on higher priced kitchens, just a bit more detail on how things are going there, what's gone right, what's maybe not gone quite so well. And then secondly, historically, a lot of Howden's market share gains has been through new depots. But if we look through maybe since 2019, where you've clearly taken a lot of share, how should we think about the mix between new depots gaining that share and actually mature depots driving market share gains? And I think, you know, as a sort of supplement to that, looking forward, should we think about mature depots continuing to outperform the market and being a bigger driver of that market up?

Yeah, that's a good question, Christian. Thank you for that. Look, I think one of the things that we have done well is because a lot of businesses get excited about an increased higher value of kitchens and moving up market. And I think there's probably a history of businesses that have done that and got excited about the high value end of the market and ignored the opening of mid-price. We have absolutely not done that. Kitchen cabinet volume is critical for us. And our mantra in the business is about 0 to 2K kitchens, driving volume, you know, be that with councils, be that with buy-to-lets, wherever those kitchens go, that is vitally important for us. And that has been a very healthy part of our business, sort of our first segment, 0 to 4,000 pound kitchen, very healthy segment. The mid-price is well competed around, and you've seen some of the innovation that we're bringing in to make sure that we've got a strong second half in the mid-price kitchens, but that's where most people can't compete with us at opening. It's a fought over area in the mid space. The top end is very exciting because we bring our ability on our common carcass platform to bring a really high quality door with a solid surface worktop, light it well, and you really are challenging the independence, you know, at a price point that is really surprising, leaving money for the builder, great experience for the end customer. So, you know, we continue to do that. We are not stopping innovating there. So you'll see a brochure at the back of the room and a range called Hilt Recruiting that we're testing at the minute. It's a complete in-frame solution, makes it easier for the builder. And it will it will shock some of the independence when it hits the market in volume. And we think we've got a lot to do. You add that paint to order service at pace and our fitted solid surface offering at pace. And it's very, very hard to compete with. So it's just, it's going to be a slung low burn and we will continue to, to grow in that space very effectively, but we're making a massive difference. And of course it all ties into how we position the brand online. what the depots looked like and the reformatted offering, which is, it's just substantially different from how it was before. It still feels like a trade environment, but it's a, it's a brilliant place for our trade customers to do business with their customers. And, you know, we've got good at that. So we're encouraged by what's happening on the better end of kitchens, lots of room for growth. I mean, it's our smallest market share. We still think we're around single digits on that better end of the market with, with lots to go after, but not forgetting opening price and mid price. Um, Look, I think one of the things I identified when I joined the business with the mature depot estate is, you know, it is where the gold is in this business. We've got an opportunity to get up to a thousand depots. And we always talk about depots maturing at around seven or eight years. But I'd take you up to our Glasgow depot where our manager Davey runs it. And he has consistently grown that depot despite us opening, I think, four depots within his catchment. And he is going to hit significant numbers this year. He's going to hit a number that we've not seen yet, is what he tells me. We've not broken through that barrier. So the reason why the opportunity for us to go to mature debt is all the other activities that I've described. So it's the refit program. It's the rebranding. It's the innovation that we're bringing through in product. It's the click and collect service that just makes it so easy for our customers to interact with our depots. It's amazing stock availability. It's XTC supporting extra range as you go into the tail. So I would always take my read by some of our best mature depot managers. And they're pretty good places.

And just adding a bit more colour on that, if you bridge back to 2019, for instance, and you look at the sales since then about, and that's grown by 48%, it's very clearly half of that is price and then half of that is volume. Then when you dig into the volume, you see within that the benefit of some of the new UK depots, but you also see quite a starting to sort of contribute into the business. Things like HWS would be a part as well. So, you know, that shows that we are, that those initiatives are adding long-term value and supports our sort of continuation of the investment and therefore the opportunity as we continue to grow.

And this is happening in a market that's under pressure. So something changes, you know, it improves. We are incredibly well-placed.

Hi, it's Charlie Campbell with Stifel. Just a couple of questions, please. Can you just remind us where we are on percentage of product manufactured in-house? And also just remind me kind of what's euros and dollars within that? Apologies, I should know. And just your aspirations, whether that's changed just where that percentage might get to. And the second question was on XDCs. I think when you first talked about them, you said that these would reduce the amount of cross-depot shipments coming in. I'm just wondering if there's any KPIs you could share with us on that to show the progress you've made on that front.

Yeah, I'd start with the XDC one because it is very interesting. And when I was taking over the business from Matthew, One of my early observations was our split between A's, B's, C's and D's skews in the estate. You'd expect far more emphasis in A and B fast sellers. We were actually pretty even across the estate. We've completely reshaped that with most of our cash being in A's and B's and then the XDC's. But I was also observing the amount of inter-depot transfers that were going on. That was at least 10 million pieces being moved in between depots. and we're well below a million pieces now. And there's a lot of benefit from that in that you'd be in a depot with particular responsibility around arranging stock for a customer and you'd be spending a big portion of your time finding out stock, sending balance to go and pick it up. It's not factory fresh product when the customer gets it, but it's a distraction from what some of those teams in the depots should have been doing and gives them more time too. do all the things we want to do, which is effectively sell kitchens and join me and take care of our customers. So that has been a brilliant game changer for us in terms of availability and customer experience. But it also gives the opportunity to bring more product to market, given the box doesn't change any size, doesn't change its size. But it also means further on down the line, it's supportive to margin. The best way of not encouraging exit stock or red bucket, as we call it in our business, where the manager's got accountability, exit stock, has not put stock there in the first place. And if you're focusing on A's and B's skews, and we've not reduced stock levels in the depots at all, we've just invested heavier and faster sellers, you're not creating trapped stock, which can be a problem. And we can remove trapped stock and bring it back centrally, but use a lot of value in it. I think XTCI would hold with us and probably our depot managers, if they were all sat here, would say it's one of the biggest things that has been of huge use to them and has driven customer experience. On manufacturing, we manufacture around about a third of our volume and a bit more by values towards 40%. We would have an aspiration over the coming years to make that 30% more like 40%. I think that sort of feels about right. And then it might be half of the value somewhere around that to give you a guide. And the stuff that we are incredibly strong at is, you know, cabinets and end panels and some of the detail high margin, low change type product that you know, we can get ourselves very busy. But the fact you're also curious about what else they can work on, if there's any joinery products and so on, they might get involved with so We've been thinking through how we increase our cabinet volume capacity to hit our five-year plan, because we love growth in France, growth to 1,000 depots. We love investments to make over the coming years in those. But that's probably the best guide we would give you at the minute. Euros and dollars.

Yeah, if you look at this in terms of, as Andrew explained, you know, we, we manufacture a fair amount of our product in the UK, the products that we then tend to look and source out more sort of around, uh, Europe would be things like, uh, uh, kitchen frontals, uh, appliances, those sorts of items that are more defined in euros. And you, and you're looking at a spending euros of about 190 million, something like that in, in, in the mix of things, uh, from that. And then, uh, other currencies would, would pick up things like, um,

uh product that shape further i feel like it's solely for doors and things like that but uh they're the most of the dollar shane carberry from good buddy uh two from me just with regards to france first of all uh you gave good color around kind of rolling 2024 i'm just thinking beyond that in the medium term you mentioned that maybe 20 was too fast a couple of years ago, but do we get back to that sort of level on a two, three, four year sort of view? How should I think about kind of pace the roll out there? And then the second was just regards to Ireland. You mentioned how kind of, I suppose, differentiated your product is or the offering is in Ireland versus peers. How have competitors reacted? And, you know, two years in now, does it make you think any differently about just how big a portion of the pie Ireland could be for you? Yeah.

Yeah. No, thanks for that. Yeah. The French question around how many we roll out, we will build back up to that sort of figure again, but we'll do it more steadily. So we will open depots next year and we'll grow our confidence again in doing that. We will not jump back to 20 in one go, even though we know there are opportunities and markets and so on, because it's about building the capability and building managers who've got the capability to run an entrepreneurial depot in their way. And the work that Zorin has been doing on acquiring managers to our standard and area managers to, you know, the standard to operate a Huygens depot is working very well. So we will continue to build capability within depots, grow the skill, and then those people will go off and run depots. So we're making good progress in that. Then, of course, having a French national running it who, you know, will know people in the market also helps a lot as well. And I think the systems work that we've been doing, like the system TED that we talked about, that supports managers, doesn't take control away from them, but supports managers in knowing what reorder points they should have. We've put it into the business. It systemizes a bit more. It doesn't take power away, but just empowers them a bit more and gives them more opportunities to serve customers and sell. But what Zorin is doing so brilliantly in France is bringing that drive, that real strong selling culture that we have, as well as operational excellence. So two things brought together and heightened. You have to go out and work to sell kitchens. People just don't walk in like they do for a pint of milk. You have to go out, hunt it down, build account bases and work it out. And they're effectively doing that. Ireland, I mentioned earlier, is great. There's 5.1 million people or so in Ireland. We compared it to Scotland before where there are about 5.4 million. In Scotland, we've got 86 depots. We would look at some of the population densities and it's quite dramatically different between Ireland and France. We would keep our eye on what Screwfix are doing in Ireland. They've got approaching 40 depots, and we like being next to them. And I think they like being next to us. So I think we'd have our eyes on something like 40 depots serving that population would be, I guess, 40, maybe 45, something like that. How have the competitors reacted? It's very fragmented. I think the market is very fragmented. I mean, we've probably become the number three player overnight since being there and only operating for a couple of years, as the team keep on reminding me. We're only just trading here for two years. The business is running twice the size it was last year. But, yeah, all to plan. I think we're a tough competitor to... compete with i think because you know we're it's rigid cabinets where our design service is incredible the product offering is right we're in stock and uh we'll do what it takes to take the market thanks uh sam cullen from peel and i've got three if possible i think we're all sort of follow-ups uh first is going back to bedrooms and probably bathrooms as well is there any investment you need to make in the factories to

expand the range of product there and photos were all pretty rectangular in terms of the product on offer at the moment is that just repurposed kitchen designs or is there more stuff you need to invest in as you grow that uh the second one is more sort of conceptual one around the take up of what you might call a higher price i guess uh ancillaries whether it's kind of cooker taps candy and flooring um paint order are you selling a great deal of those products or do you view them more as a a ticket into the customer to push more cabinets through the factories. And then the third one is, I guess, back to France and Ireland and the relative kind of different levels of success over the last 12 months. And do you view the French market as sufficiently sort of service-based in terms of, you kind of alluded to the fact that they need to improve the management skills a little bit. Is that... in some sense, the reciprocal of the market's desire for that level of service?

Yeah. The bedrooms one, we're not doing much bathrooms at all. Some kitchens are repurposed and used in bathrooms, and there's a small business there that we're very happy to take. But we've tried bathrooms. I think you need to do the pottery if you want to get really involved in that category. So the focus would be on bedrooms. And from a manufacturing point of view, it couldn't suit us any better. Actually, it's similar stuff. We back the range into what we sell in kitchens. We smartly thought about cabinet sizes. So our builders are used to the cabinet shapes and sizes that they're using in the bedrooms. There's really very little to do on bedrooms. Some items that we're buying in, like the drawer box is slightly different from a kitchen drawer box, tends to be wood rather than a metal one. We're buying those in at the minute. the factory may decide to do something different on that later on. But from a manufacturing point of view, all good. We are highly commercial on what we take in from a product point of view. We build a relationship with KUKA Taps. We're doing it for all the right reasons. And we're also keeping KUKA on their toes by having an opening price and a mid price underneath it to ensure that we've got a fair offering. But these are I have a very strong view that people want better things over time. One of the reasons why we're doing so well on solid work surface is people understand performance and longevity of it. And many of our customers will be prepared to trade off a top-end door, go to the mid-end of the range and use the two or three thousand pounds that's available there to invest in the solid surface rather than doing chipboard-based, lamina-based work surface. and there are conveniences like a hot water boiling tap. If you don't own one, you need to get down to your local hiding store and buy one because they are unbelievably convenient. You throw your kettle away. So our fitters like to fit high-quality trade product. You know, our cabinet is one of the best cabinets in the industry. It happens to be the most sold cabinet in the UK, but we are obsessive about the quality on it. And when our fitters are fitting carndine flooring, they love it. And many of our fitters are saying they've tried it. They don't want to try anything else because they find it so easy to fit. But our trades always want no callback quality. But you've got an end consumer also who's becoming more demanding. Well-informed, well-informed on colors, well-informed on styles. Spend half an hour on Pinterest and Your possibilities become amazing. We've got some amazing technology that David Sturdy is going to bring into the business later on to help customers and customers visualize what the kitchens might look like. And state-of-the-art stuff where you can pick a range and a style and then drop different colors on it. We'll have that to market quite soon. And we think that will help with lead bank generation, help with lead bank conversion, because we understand what customers want more. I'm very comfortable where we're taking the product because I made the point earlier about we are not losing the opening price. We're also not denying ourselves the opportunity of selling better product as long as it's done at the right price and the builders can make some money out of it. Selling Kruger Taps is a good example. It's a big business for us now with Kruger. And we don't deploy the stock into the depots. In the old model pre-Huygens, the quicker tap range is actually quite big. It's quite wide. And if you add on sparkling water functions with hot water boiling functions and different tap options, you'd find yourself in such a mess from a stock point of view. So we hold one stock holding location in our Rons facility, and we next day it to the depots. Works brilliantly. No discontinued stock, any issues. The stock is not tied into the depots. think that was the questions france and ireland um i i i could probably go back to the same point i made earlier that these the way we do business and what we sell french customers no different from other from uk customers and builders appreciating and appreciating the quality of product that we sell we've just um done a kitchen in a french property that my wife's um mother owns. And the only piece we sort of couldn't help was taking this wall down between the kitchen and the living space. And as my wife is phoning up different builders, the first builder came on the phone and said, Come on Tuesday, and we'll give you a quote. and said, and this is in Turin, the Loire Valley, about an hour and a half from our nearest depot, and said, you're obviously doing a kitchen. Where are you getting a kitchen from? My wife smartly said, we haven't decided yet. And he said, I'm working with this fantastic British business called Haydn Joinery. And kind of encouraging when you know word of mouth is spreading like that.

We've probably got started bringing to a close, I think, unless there's any final questions. Great. Thank you, everyone. Thanks, Arash. You're brilliant. Thank you very much, Aditya.