British American Tobacco p.l.c. Q4 FY2020 Earnings Call

Hello, and welcome to the British American Tobacco 2020 Full Half Pre-Close Trading Update. My name is Molly and I will be your coordinator for today's events. Please note that this call is being recorded and your lines will be in listen-only mode for the duration of the call. I would now like to hand the call over to your host Mike Nightingale, Head of Investor Relations, to begin today's conference. Thank you.

Thank you, Molly. Good morning everyone. I’m Mike Nightingale, Head of Investor Relations. And with me this morning is Tadeu Marroco, our Finance Director. Welcome to our full-year 2020 pre-close conference call. Just before we begin, I need to draw your attention to the cautionary statements regarding forward-looking statements contained in the trading update. I will now hand over to Tadeu who has a few short words on current trading before we open up to questions. Unless otherwise stated, our comments will focus on constant currency adjusted measures. Over to you, Tadeu.

Thank you, Mike. Good morning everyone and welcome. Thank you for joining us this morning. In 2020, we are transforming BAT and continuing to grow the business against the challenging global backdrop caused by COVID. Throughout the year, our priority has been the health and well-being of our employees. We have made no redundancies or furloughs as a result of the crisis, and we have continued to pay all our employees in full. It is the commitment and dedication of our people around the world that has ensured that we are on track to deliver a strong set of results in 2020. We are committed to building a better tomorrow delivered by our continued focus on the three strategic priorities. Reducing the health impact of our business through providing a range of enjoyable and less risky products is the greatest contribution we can make to society. We continue to be clear that combustible cigarettes pose serious health risks. And the only way to avoid this is to not start or to quit. BAT encourages those who would otherwise continue to smoke to switch completely through scientifically substantiated reduced risk alternatives. We are continuing to increase investments and to drive a step change in new categories. We are very proud to now have around 30 million consumers in non-combustible products. We are growing value share in vapor, volume share in THP, and delivering strong revenue growth in Modern Oral. Our new category revenue performance is accelerating in the second half despite a strong prior period comparator. We are continuing to drive value in our combustible business and are on track to deliver savings of at least 300 million from Quantum. In addition, the radical transformation of the organization and increased agility brought about by new ways of working have enabled us to quickly and effectively adapt to navigate the challenges caused by COVID. The business is performing strongly against an environment which remains uncertain due to the global pandemic. We are on track to deliver on our 2020 guidance. Cigarette and THP volume has improved over the second half, driven by continued resilience in the developed markets and some improvements in emerging markets such as Brazil, Bangladesh, and Turkey. We expect to outperform industry volume, which we now expect to be down around 5%, with U.S. industry volume broadly flat. Given this continuous strong pricing and reduced fully revenue headwind for COVID of around minus 2.5%, we now expect to deliver revenue growth at the top end of the 1% to 3% guidance range. In this improving trading environment and thanks to our strong cash generation and tight cost management, we have taken the opportunity to further increase new category investments in the second half by close to £200 million. This represents a total additional new category investment of around £450 million in 2020. We continue to expect to deliver Mid-Single Figure constant currency adjusted diluted EPS growth. This is despite the further increase in new category investment, absorption of a one-off impact of new category revenue of 50 million, following our decision to withdraw glo Sens from the Japanese market. The effect of a strong prior period’s comparator, and associate income from ITC that is significantly negatively impacted by COVID. We expect the translation headwind of 3.3% on full-year 2020 adjusted diluted EPS with the impact expected to be between 2% to 3% for the full-year 2021 applying current foreign exchange spot rates. Turning now to trading in the new categories. In vapor, Vuse/Vype is the fastest growing international vapor brand, growing value share of its top five markets by over 7 percentage points to 26% year to date. The brand has now achieved value share leadership in closed systems in four of the five large vapor markets, exceeding 50% value share in two of them. Vuse/Vype is Number 1 in device sales in all top five markets with device volume share in excess of 50%. In the U.S., Vuse is the fastest growing brand with 24% value share of total vapor year-to-date driven by automatic at 90%. Vuse continues to close the gap on the market leader and has achieved value share leadership in seven states. Vuse also took market leadership in Canada in August, having commenced the brand migration from Vype in May. Canada is the first market within the top five to migrate to Vuse and achieved 100% migration rate. Market share for Vuse at the end of October reached 64% driven by the success of Epok. Migration to Vuse in the remaining top five markets will be completed during 2021. In THP, the continued success of Hyper was reflected in global reaching records total nicotine volume share in Japan of nearly 6% in October with Hyper reaching 2.3% nicotine share. Hyper has maintained a conversion rate in excess of 50%, two times higher than any previous glo product. Glo continues to grow volume share in inner with a THP category share of around 15% across the top eight markets. In Moscow, Hyper drove gross volume share of total nicotine show records 3.3% in October and was the top performing THP brand across all tracking social performance metrics. We expect growth of close to 20% in THP volume in 2020, reflective of the successful launch of Hyper in Japan in April and its subsequent rollouts into key cities in the region. THP revenue is expected to be down, mainly due to the year-on-year impact of the withdrawal of Sens and excise harmonization in Japan. In Modern Oral, we continue to grow strongly and to consolidate our leadership position outside the U.S. In the U.S., in November, we announced the acquisition of Dryft. The acquisition significantly strengthens our position, expanding our portfolio from vaporizers and flavors. It also enables us to participate in the segment above 6 milligram nicotine, which represents 6% of the category. The Modern Oral category in the U.S. has benefited mostly from geographic expansion by all the key market participants and currently represents around 1% of the U.S. nicotine market. Velo branded Dryft products have now been launched online and distributed in Circle K stores in the U.S. We expect to expand the distribution of Dryft products from 20,000 to around 100,000 outlets by the end of the first half of 2021. We are building capacity and expect to be unconstrained around mid-2021. In other regions, we are consolidating our clear leadership position with share growth in all key markets. We are achieving conversion rates from trial to regular use of over 50% and have higher average daily pouch consumption than the category average. In summary, we are entering 2021 with good momentum across all three new categories, with some exciting new launches planned. In vapor, we are launching a Bluetooth-enabled version of Vuse providing electronic age verification. The product will be launched in Canada as a pilot market in the first half of 2021. Our Vuse Alto PMTA submission in September also included age verification technology. Also in early 2021, in line with our ambition to explore and broaden our portfolio beyond nicotine, we are planning a city test of a CBD vaping product in the UK. In Modern Oral to better meet consumer needs, we are leading with the launch of the first mini pouches with a recyclable can in Sweden, Norway, Slovakia, and Switzerland. We plan to expand to at least 10 markets by Q1 2021. We also aim to make all our Modern Oral cans outside the U.S. recyclable in the first half of 2021. We will continue to lead in innovation in our multi-category approach. Moving to driving value from combustibles. Our excellent performance is underpinned by resilient industry volumes, particularly in developed markets with BAT outperforming the industry. Continued strong price mix drove global value share in sub 20 basis points and our strategic brands value share up 40 basis points. The U.S. business continues to perform strongly with an excellent performance from views and good pricing in combustibles. Corporate value share is up 40 basis points and premium share is up 50 basis points year-to-date. This is driven by Natural American Spirits and Newport. We are growing share in the branded value segments. And to date, we have seen no accelerated down trading. Moving to the balance sheet, we maintain our strong liquidity profile following recent successful debt issues. We remain committed to our targets to reduce adjusted net debt to adjusted EBITDA to around three times by the end of 2021, and maintain our 65% dividend payout ratio. This will be achieved through continued strong operational cash conversion in excess of 90% of adjusted profits from operations. Turning now to ESG, which is central to our strategy. I'm pleased to report that we have recently received further external recognition building on our BBB MSCI rating and the recent improvements on our Sustainalytics score from 28.2 to 27.8. BAT has again been named in the Dow Jones Sustainability Index for the 19th consecutive year and is the only tobacco company to be included in the DJSI World Index. BAT has been included in the Financial Times Diversity Leaders list for a second consecutive year with our score increasing from 7.08 to 7.23. We have also been included in the A List by the Carbon Disclosure Project for climate change action for the second year in a row. Finally, tomorrow, we are launching a sustainability focused report on human rights, the first by any company in the tobacco industry. In conclusion, the business is performing strongly during these challenging circumstances and we are on track to deliver on our guidance. We are investing, delivering, and transforming the business. Thanks to our continued focus on our three strategic priorities. We are growing share in new categories driven by innovation and an increase in investments supported by considered value growth in combustibles and the benefits of project quantum. These enable us to both deliver on our financial commitments and become a faster, simpler, more agile business. In summary, we are delivering on our three strategic priorities. We now have around 30 million consumers in non-combustible. We are investing an additional £450 million in new categories and continue to leverage the company. We are committed to our purpose of building a better tomorrow.

Thank you. The first question comes from Jon Leinster from Societe Generale. Please go ahead.

Good morning, gentlemen.

Hi, John.

Hi. A few questions, if I may. First question is on glo in Japan? I think at the interim results, you said your exit rate in June was sort of 5.9%. And then you say here, it's sort of high in October of 5.9%, with Hyper having risen from 1.3 to 2.3. I mean, does that imply that Hyper is just cannibalizing existing glo? And, you know, why is the market share – why is the total share of glo not really risen in a segment that has truly risen within the total market? That will be my first question.

Okay, John. Look, the reading in the middle of the year was a one ad hoc reading, weekly reading that we quoted at that time of 5.9. And in this one, now in October, is a more robust reading throughout the end of the month. We are clearly growing as a family. There is some cannibalization, but our total category, market share is growing as well in Japan, and now it’s slightly above the 20% mark. We were below that by the middle of the year. So there is a clearly a growth expansion on the whole glo family and the glo Hyper is outperforming within that.

Okay. And secondly, I think you mentioned that you don't expect to be capacity constrained in U.S. Modern Oral by the middle of 2021; can you give us some idea of what that capacity would be?

Well, we have a very well established capacity in our current SKUs. And as part of the Dryft acquisition, we are also inheriting third-party supply capacity for the current Dryft volumes and we are bringing a machine from an outside source also to reinforce our capacity in the U.S. So, when we mean to be unconstrained, it is basically a combination of all those three, and we expect to reach at least 60 million by mid of next year, which we believe would be a good capacity to fulfill our plans and go above that in the subsequent period.

Thanks. And lastly, if I may, obviously South Africa was, you know, rather bizarrely shut for a long time. Now it's reopened, has the market moved back to the legal market or is there still significant problems with illicit trade?

Well, the South Africa market we have to consider that before the crisis the government was making massive inroads into the illicit. In 2019, for the first time, in many years, we saw a reduction in the illicit trade, given the enforcement of the new government that assumed power at that time. And clearly, for the first time BAT in many years was growing; volume was growing, turnover was growing, share was growing, until this came to a halt in the end of Q1 this year. So, the illicit at that time had dropped back to the likes of 52%. Then you'll have this extended period of time without being able to sell any cigarettes. The illicit trade has dominated the markets, new networks were established as a consequence of that. And now the level of illicit is higher than was before, as you would expect, because it takes some time for these networks to be dismantled again, and the government to refocus on what they had been doing before. So, as we speak today, we have seen an increase in the illicit rate from the likes of 52% before to close to 60%. The government now needs to go back and do what they had done before the pandemic, which is a clear demonstration that when we have the willingness, there are ways to tackle that, and we will be supporting for sure.

Okay, well, thank you very much.

The next question comes from the line of Gaurav Jain calling from Barclays. Please go ahead.

Good morning, Tadeu. Thank you for taking my questions.

Good morning.

I have two questions. Number one is, would you be – can you share your initial thoughts on FY 2021 volume outlook, especially in the U.S.?

Well Gaurav, 2021, you'll note that today is still very volatile for us to make predictions now. We have a new government in the U.S. There are now discussions about fiscal stimulus, and the COVID crisis is nowhere near the end. We have a bright light at the end of the tunnel, but it's still a long months to go, in terms of the vaccine rollout, and it's very difficult to have a firm prediction about the volumes. The fact is that in 2020, we saw a very solid U.S. market. A number of factors are impacting it in a favorable way, but it's very early to make a call; we expect to have a more firm view on the U.S. market by our year-end results in February.

Thank you. My next question is, you know your two long-term objectives. One is high single-digit EPS growth, and the second is new category revenue of 5 billion by 2025, which would imply that new category revenue growth would be like £700 million per annum, versus the 200 million to 300 million growth that we have seen in the last two to three years. It doesn't require a significant step-up in funding growth rate and investment. And, again, the question I'd like to ask is: Are these two goals incompatible with each other?

No, I don't think that they are. We clearly have prepared the company to allow us to generate the savings that we need. That's why we launched project Quantum. We also have a very strong combustible business, as you know. These both factors will be generating the funds necessary to fulfill the growth of new categories. You have to take into consideration that 2020 is a very particular year. We had, for example, a number of headwinds in 2020 new categories that materialized the COVID impact on supply chains in the first quarter, as a consequence of the shutdown in China, like we spoke in the half-year results. The closure of shops in Japan, you know happened again in the second lockdown in Europe. In marketing activation disruption, we had more promotional bans in Russia at the end of 2019, beginning of this year that we had to manage. And we had also the impact of glo Sens that impacted our results. So, there were a number of factors: the vapor industry is still recovering from the vaping crisis in the U.S. and also the new legislation from the FDA at the beginning of the year. So, I think that we cannot read much through the numbers in absolute terms in 2020 in terms of projections, but the most important thing is just to recognize the momentum that we have in all those categories. As we quoted before, we are growing share in every single one of those categories. In vapor, we are really leading four of the five top markets and making significant inroads in the U.S. In Modern Oral, we are solidifying our leadership outside the U.S. In the U.S., now we have much more competitive offers for consumers. And in THP, we are seeing close to 20% of volume growth despite the headwind of glo Sens. This gives us the assurance that we'll be able to achieve our 5 billion target by 2025, while continuing to deliver our financial average, as soon as the first one the pandemic is over.

Sure. Thank you. And my last question is just on share repurchases. You have mentioned that maybe like 2%, 3% cost of debt and equity, free cash flow yield is north of 10% and leverage is much lower. So, why not start buying back the stock today?

Well, look, capital allocation is a subject we will be reviewing on a constant basis. We believe that the best thing we can do for the next year is to strengthen our balance sheet. We have done a very good exercise recently in terms of liability management that changed the shape of the profile of the debt moving forward quite nicely as we pointed out in the announcement. We believe that the best way to impart value to our shareholders at this point in time is to keep the dividends as they are, as it is part of the DNA of the company. We want to continue investing in our M&A business and new categories business, like we just did with Dryft in the U.S. By the time we get to the end of 2021, and we reach that three times leverage, we'll be reviewing the capital allocation again. And if the circumstances persist as they are today, because I agree with you about the undervaluation of the company, we’ll be reconsidering those points at that time.

The next question comes from the line of Alicia Forry calling from Investec. Please go ahead.

Hi, good morning Tadeu. My first question is about the guidance. The global volumes appear to be down about 2%, which is better than what you previously anticipated, and this is with a significant price mix in the developed market. I'm surprised that the top-line guidance was not increased by more than the approximately 1% you've mentioned. I understand you have briefly addressed some factors limiting revenue growth this year, but could you provide more specifics on the key factors that have primarily held back?

Yeah, sure Alicia. Look, like we articulated a bit in the half-year, there are three major drags for BAT this year. The first one is the global travel retailer. Although the volume is not that material, there is a massive intrinsic value to those volumes, and if anything was decimated. The second one is South Africa, which is a big market for us because we are leaders, and we couldn't sell one stick of cigarettes from the end of April until late August. This was a huge blow in terms of revenue, along with weakness that we saw in many emerging markets. There were a lot of disruptions occurring throughout the first half of the year, the likes of Mexico, Pakistan, and Sri Lanka, markets where stick sales are predominant. This was a big drag that was difficult to recover. We had some upsides, like you referred to, the developed markets clearly outperforming in this crisis, and our performance in the U.S. in particular was beneficial. But all of this nets to the 2.5% impact that we are quoting in terms of turnover. And so, that's what lies behind the numbers.

Okay. Thank you. My second question is on Modern Oral in the U.S., obviously a very exciting growth category. Many companies are involved in developing this space. Can you characterize the competitive landscape that you're seeing there? And has there been any change in competitive dynamics there in particular with regard to price mix?

Yeah. Look, there, you said this is a very fast-growing segment, although it's still 1% of the U.S. nicotine pool. And it's important to quote that because we have to put things into perspective. If you look at more developed oral markets, the likes of Norway for example, Modern Oral is now reaching over 20% of the market. And in Sweden, it is around 80%, while in the U.S. it is closer to 10%. It's a very competitive category, as you referred to. We have players investing in new products. In our case in particular, we were not able to compete freely across the whole scope of the category because we were limited with the offers that we had in place. The reason we are now in Circle K is actually to test our marketing mix to make it more competitive. I think that we'll see how this pans out. We are very optimistic about our possibility to extend our range of offers from 4 SKUs to 28 as you can imagine, and be able to compete in the segment above 6 milligrams that we were not able to before. So, we will need to see, but it’s a bit early to make a prediction in terms of price mix. At the moment, all players are trying to compete and increase distribution. The most important now is to have the right marketing mix in place.

Thank you. And if I could just ask a final one, can you update on anything that you're seeing in the U.S. market with respect to various local menthol bans? What impact, if any, are you seeing on consumer behavior in those areas where there have been local menthol bans?

Well, where they have been implemented, we haven't seen much impact, because at the end of the day, consumers circumvent that by buying in other geographies close by or through e-commerce, if possible. So, there were really no implications in terms of sales. We still believe that the FDA is the body responsible for making these types of calls. Based on the latest youth research incidents in terms of menthol use in cigarettes and vaping, there was a remarkable reduction from the previous year, which just takes the pressure off. And as time passes, and you start having examples of menthol being banned outside the U.S., you can use this as a kind of reference for the future. For example, we saw this year the introduction of menthol bans in Turkey and also in Europe, and in both of these cases, the level of retention was even higher than 100%. In our case, we gained market share because we had a differentiated product. If you look at Newport, which is our largest menthol brand in the U.S., it has a unique franchise with 100-millimeter length that cannot be copied. As you know, the FDA has frozen old specifications of cigarettes since 2007, meaning you cannot launch new SKUs. We are also investing in new categories. We are well-prepared for potential menthol bans in the future.

Thank you.

Next question comes from the line of Sanath Sudarsan calling from Morgan Stanley. Please go ahead.

Hello, good morning everyone. Regarding the level of investment, you've done an excellent job attracting new consumers this year, and the numbers continue to rise. How should we approach what seems to be the appropriate level of overall investment in this category going forward? I'm particularly interested in whether you are still aiming for the $5 billion revenue target by 2025 and what this might mean for shareholder profits. Additionally, could you briefly discuss how your emerging markets are performing now that restrictions have eased? Are you observing down trading, brand migration, or a shift away from the illicit market? Please provide a general perspective on the emerging market consumer. Thank you.

Okay. There’s a lot of questions, let me try to address them. Look, we are very pleased with the performance on the non-combustible consumer base. We have 30 million, which is almost 30% more than a year ago. As you know, we have the ambition to reach 50 million by 2030, as set out in our revised strategy. It's important to recognize that today, there are already more than 80 million of those non-combustible consumers out there. We have 30 million of that. This indicates a massive contestable space for us, which gives us confidence that we will be able to achieve the 5 billion by 2025. Given the strength of our new category portfolio and the contestable space available to us today, we expect to start accelerating our growth from next year. In terms of profit for shareholders, I believe we have invested a lot in the new categories in the first three years in building the necessary capabilities to be successful. More recently, we have adapted our focus to more consumer-facing investments and we think that we have the right level, which is driven by revenue growth. We expect that we have reached the peak in terms of losses in our P&L for new categories in 2020, which will mean that for 2021 onwards, these new categories are expected to be more EPS accretive. This together with our cost agenda that we articulated at mid-year will allow us to continue delivering our financial algorithm while transforming the business. Now, in terms of your emerging markets, today is a mixed picture. Countries like Brazil, for example, are performing extremely well with double-digit volume growth, a consequence of interrupting illicit flows from Paraguay. Remember that many of these emerging markets have been impacted by illicit trade, but illicit trade is growing slightly lower this year than the previous year. We have markets where we can control illicit trade, like Brazil, performing extremely well, and those where we cannot, like South Africa, where we have still a lot of work to do in recovering that space. Overall, we are seeing some areas of good performance, particularly in countries like Turkey, Bangladesh, and Brazil, which are trying to offset some of the more negative views.

Okay. Thank you very much.

The next question comes from Rey Wium from SBG Securities. Please go ahead.

Hi, Tadeu. I'm just curious if you could elaborate a little more on South Africa. Since you have been allowed back in the market, what is your market share, relative to what it was in the same month in the prior year? Are you down? What I understood is that the illicit side is still gaining a foothold and it's struggling to dismantle that. Is this a correct assumption?

Yeah, actually, the issue with the South African market is not about market share. The problem is the entire market because of the illicit issue that I mentioned earlier. We had seen our share growing until Q1 2020, right before the crisis, and we entered in a very strong momentum. We have been able to maintain our share level throughout the period, but the issue is the size of the market, which has shrunk due to illicit now, which means that the government must demonstrate the willingness to tackle illicit as they have in the past. We are optimistic that they can reassess that and return to tackling these issues.

Good. Then, I just have a question regarding the new products category revenue. I know your longer-term or medium-term target, I think, is 30% to 50% a year. In the first half, I think it was around 15%. So, based on what you have mentioned about the £15 million hit in Japan and the tobacco heating products revenue down, are we going to get a bit of an acceleration in the second half revenue versus the first half? And probably falling short of that 30% target? I just want to get an idea of the ramp-up until we reach those growth rates.

Yeah. No, we didn't provide guidance for new categories into revenue growth for this year 2020. We had a 12% increase in the first half and we are expecting that we will accelerate in the second half. Despite the headwinds from glo Sens, we are expecting to perform better in the second half than we did in the first half. But, as I pointed out earlier, we need to be cautious, because this is a very particular year, given the difficult backdrop that I highlighted earlier. We have seen problems including closure of our vapor stores across Europe due to a second lockdown.

Okay. And then finally, I just want to emphasize the share buybacks. Did I understand it correctly that you said that, once you get to the net debt-to-EBITDA around 3x, you would probably then put it back on the table to consider? I want to get a broad idea of what share buybacks could feature again.

Well, I think that we’re getting ahead of the game here. As I said, capital allocation is constantly being reviewed. We are very clear for the upcoming year that we want to strengthen our balance sheet. Hence, the leverage target of around 3x. We want to continue investing in new categories while maintaining our dividend payout of around 65%. For sure, when we reach that leverage level, there will be more flexibility, and we can reassess capital allocation at that time, but this will depend on the valuation of the company at that time.

Yeah. Okay. Excellent. Thank you.

Thank you.

The next question comes from the line of Alan Erskine calling from Credit Suisse. Please go ahead.

Good morning, everyone. Just two questions for me. One, could you clarify the 2.5% impact of COVID-19? Obviously, some elements are easy to quantify, like travel retail, etc., and others are harder to quantify. I would imagine that some of the better performance in the U.S. is due to people having more discretionary income to spend and more time at home. I think, Tadeu, you indicated that the 2.5% was a net number and your best estimate of all these impacts. Could you clarify that?

Thank you, Alan. Look, you’re absolutely right. It's challenging to disentangle all those effects. For instance, you see the U.S. market that is performing well this year. One of the significant impacts is due to the vaping slowdown and stopping the outflow to cigarettes. There are also beneficial shipment days this year, the low oil price, and the correlation between our product pricing and cigarette sales. These several effects, alongside potential fiscal stimulus, have contributed to the situation. The fiscal stimulus withdrew in July, but volume remained stable throughout the second half. Similar trends occurred in many other markets. Our overall figure of 2.5% accounts for many of these consolidated influences.

Thanks, guys.

Thank you.

We have no further questions coming through on the phone lines. So, I'd like to hand the call back over to Tadeu Marroco to close the call. Thank you.

So, thank you everyone. In summary, just to leave the message with you all. The business is performing well in challenging circumstances. We are guiding to the top end of our 1% to 3% revenue range, and we are capitalizing on strong momentum in the business to invest a further £450 million in our new categories. As you saw, we have been making significant inroads in our non-combustible, combustible product consumers now growing almost 30% to 30 million. Vapor Vuse has increased substantially its value share across the top five markets in THP. We expect in the top eight markets now to be above 50% of the category. Our Modern Oral or Velo/Lyft has consolidated its leadership outside the U.S., and the Dryft acquisition significantly strengthens our position in the U.S. The business is performing well, and we are on track to deliver on our mid-single-digit constant currency growth guidance. Let me tell you, we could have delivered high single-digit EPS this year in 2020. However, we are clear that continuing to invest behind new categories is the right thing to do for the business. We want to leverage the momentum that we have. We are investing, we are delivering, we are transforming, and we are committed to our purpose to build a better tomorrow. Thank you. I look forward to speaking to you all in February at the prelims, and I wish you and your families a very Happy Christmas. Thank you everyone.

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