Thank you for standing by, and welcome to the Bega Group Half Year 2024 Results Conference. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. Barry Irvin, Executive Chairman. Please go ahead. Thank you, and welcome everybody to our FY 2024 half year results presentation. I'm delighted to be with you. I have CEO Pete Findlay with me and CFO Gunther Burghardt, who will share this presentation with me. Fair to say, we're pleased to be presenting the results we have today. It's important that we have always been an organization that has stuck firmly to strategy, been very clear in what we wanted to achieve, obviously refined and evolved that strategy as markets and circumstances changed around us, and I think this result is reflective of the very clear and focused strategy and indeed the information that we've been delivering to market over particularly the last couple of years. But look, fair to say that on the first slide, the welcome slide, there is always an acknowledgment. You look to our history, the company does turn 125 years old this year. It's one where we have always looked to build, we've looked to take opportunities to expand where that makes sense. We're very aware of the industries in which we operate and made sure we have balanced exposure to both opportunity and risk, and I think again, the results are beginning to show the value of that balance. Obviously, you know, there's great strength in the business, particularly when you look at the brand portfolio the company has today, and it's been extraordinarily important in this first half. Obviously, if we went back a year ago, we were dealing with significant cost increases and delays and being able to reflect those cost increases in the market. But clearly, this result shows how well those brands have stood up. But of course, we've had other challenges this year, which have been in the area of bulk, which I'll chat about a little later, and I'm sure Pete and Gunther will both expand on. If I move to the second slide, I think an organization that is 125 years old, always at its heart understands its purpose, but never forgets to emphasize it, and never forgets to make sure that we share that purpose and our values with all our stakeholders, whether they be shareholders, staff, our suppliers or customers. At the end of the day, you know, we wanna create great food for a better future, and we've always had the ambition to become a great Australian food company. I won't go through all the various values, but needless to say, they are unchanged, they are close to our heart. They are values that are created with our people, not enforced upon them. They are part of the ownership of the organization. So moving to the key messages, and I will be brief because these messages will be expanded on further in the presentation. As I mentioned, very pleased with the performance of our brand in the first half of the year. Obviously, a very inflationary environment and a higher cost environment, but we've been delighted with the loyalty that our customers have shown those wonderful iconic brands that are in our portfolio. As I mentioned, the bulk business has been significantly impacted by farmgate milk price disconnect to global commodity prices. We've spoken about this a number of times, both coming into the year and throughout the year. It is a significant disconnect. Those cost increases that we saw in the brands that had to be flowed through, that was driven by a number of inflationary factors, but a particular step change in farmgate milk pricing last year. That step change has remained with us, despite the fact that global commodity crop prices have significantly decreased. We are somewhat pleasingly seeing that gap narrow a little, but still, as reflected in the results, this half of the year has been significantly affected by that disconnect. It is pleasing to report that as an industry, we're seeing milk growth for the first time in a number of years, and indeed, that's leading to a more stable environment in terms of milk supply and indeed some more opportunities in that area. Obviously, we've chatted previously about the business and organizational restructure, always challenging and difficult to do as we've had to rightsize the business so that for the circumstances that we find ourselves in. I think that always when you announce a restructure, the great challenge is whether you can live up to the timelines and get the savings that are expected to be realized in that transaction. Pleasingly, that restructure has been executed very effectively, which Pete will talk about more, and indeed, the financial benefits of that restructure are being seen. We do continue to refine our brand, our branded assets and our footprint overall, and again, I won't dwell too much on that in this presentation, but Pete will talk about it more when he joins us to speak. In terms of the financial performance for the year, in overview, pleasing to see revenue growth to AUD 1.73 billion for the first half, up about 3.2%. Our normalized EBITDA improved slightly on last year at AUD 76.5 million. And indeed, our statutory net profit after tax was a significant upward movement. And Gunther will go into more depth on the financial outcomes for the first half. Very pleasingly, our leverage ratio and our management of inventory through that, through what is a traditional spring peak, where we see inventory grow very quickly, has been very well managed by the team, leading us with a very comfortable leverage ratio of 1.9 times. Moving to the next slide, which is really just a repeat of the first slide of the previous information I gave you, so I won't dwell too long, except to say that, we're pleased that we've announced our first half dividend per share of AUD 0.04, reflecting the momentum of the business, and I think the positive view the board has in terms of the direction that the business is heading. With that, with that, high-level overview, I'm actually really pleased to hand over to Pete, who's now been in the chair for, well, for through a number of periods actually, and has settled in very well, and as I've said, has led the restructure and resetting of the strategy for the business. And I think, again, the results we're presenting today reflect the fine work that Pete has done. So I'll hand over to Pete and come back to you at the end of the meeting to wrap up. So, Pete, over to you. Thanks, Barry, and Gunther and I are extremely pleased to be here today speaking to you, and just would like to thank you for the interest in our business and the actions that the team are looking to execute upon. So it's terrific to be here today. If we just swing over to the next page, which is our Bega Group strategy house. So look, our strategy's been sort of in its current state for nearly 12 months now. We sat and took the board through this 12 months ago and committed ourselves to our 6 core pillars. And look, we're still very comfortable with the direction that it's taking us in, and in fact, also pleased with the execution against our 5-year horizon. So we believe that we're achieving what we want to achieve and the run rate is looking good for the future. Just quickly, I'll just take you through the 6 key pillars. The first one is securing solids, and that's about growing and diversifying our access to solids, optimizing the returns on those solids, and also working on the connection between our bulk business and our branded business. We think that's incredibly important for the future. The next pillar is around protecting and growing our core. So we have a very strong core, domestic grocery business. We have 4 or 5 brands and categories that perform very well in that channel, and we wanna continue to optimize and grow that part of our business. It's an incredibly important part of our future. The third pillar is about winning on the street, and this is really more of an opportunity for accelerated growth for us. We really want to improve our competitiveness at regional, local, and national level outside of our core grocery channel. And we wanna leverage our incredibly strong distribution network, which we think is an advantage to us in this space in Australia, and also our product capability, which we think is probably unparalleled across the dairy cabinet. The fourth pillar is streamlining our sites, so optimizing our footprint and looking at how we can run our plants as effectively as possible. Sustainability, which is incredibly important, that's meeting the sustainability expectations of the communities and consumers with which we interact with. Of course, our international opportunity, particularly in the branded space, where we've seen some really good earnings growth of late, and we think that we can continue to really push that forward over the next five years, particularly in Southeast Asia. So we just move on to the next slide, which is delving into what happened in the result in a little bit more detail. As you know, last year, our branded business was hit quite badly in the first half by the extremely rapid rise of milk prices, which rose by about 30% and really happened on the doorstep of the financial year. The business had to work incredibly hard to cover for that significant cost shift, and we did that through a number of things, through price increases, but just as importantly, through value creation and product innovation. We're exceptionally pleased with the way we were able to hold our volume last year, in fact, grow our volume significantly, and start to increase value. What we should note that is in the first half of this year, we grew value as we said we would, to negate or mitigate those cost increases, and also had a little bit of volume growth as well, which we're incredibly pleased about. We did that through focus and innovation across our core growth categories. So we do have a focus on milk-based beverages, on yogurt, on spreads, and we accept that milk is also an important part. And we're able to grow all of those categories, which is terrific, both from a value and volume perspective. But some really good innovation in yogurt, milk-based beverages, and spreads, which I'll come back into a little bit further in the presentation. So our brand loyalty remained incredibly strong, despite that inflationary environment. We're really pleased with the way our brands have stood up. We thought we would. We spoke about that, and in actual fact, that's played out. And we still we were able to execute on a number of efficiencies, but we still feel we have a strong pipeline of efficiencies to go. So this is not just about passing on price to the consumer, it's actually about driving efficiencies back into our own business and continuing to be competitive from a cost perspective, which we think is crucial to our growth in the future. The bulk business obviously has had significant significant headwinds, and we've talked about those. There was a large disconnect between farm milk price or commodity prices at the moment. We'll go into a little bit more detail on that later on in the presentation. We'll demonstrate that through some data. But our bulk business actually performed a little bit better than what we anticipated. And that's really down to some of the nuances that were playing out in the industry. So, we were able to achieve more opportunity milk than what we thought we were going to. And in fact, our farmers were able to produce more milk, and our tolling partners produced more milk, which all flowed through into our bulk business, which helped alleviate some of the pain that we thought. And we've had a really strong focus on setting that bulk business up for the future around looking at our cost agility and looking at our operations, and how they can tie better into opportunistic markets overseas, but also link into our branded business a little bit more strongly. And we've been pleased to note that after a real dive in commodity prices in Q1, we actually have seen a stabilization to slight improvement in the bulk commodity prices late in Q2, which gives us a little bit more confidence moving forward. We think that, you know, that can potentially continue, but still well below the farm gate price that we have in play at the moment. Our organizational restructure, which was a significant thing that we undertook between July and October in the last calendar year. So the early stages of this financial year has gone very well. We've taken out about 270 roles out of the business. We will deliver an annualized saving of more than AUD 20 million, which we're very pleased about. But I think most importantly, we've set the business up from an organizational piece in line with our strategy. And we now have an organization that's framed around those six pillars. It's very focused on delivering to those six pillars, and I think has clarified and simplified the business as we move forward, so particularly pleased with that. And obviously delivering to our bottom line. So that's another reason why we've seen improvement in the branded business profitability in the first half, and an improvement against expectation from our bulk business. And we continue to refine our branded asset footprint. So obviously, we completed the sale of the Canberra site. We've driven all of those products into manufacture out of Penrith, which has helped with efficiencies tremendously. And in actual fact, we've acquired the Betta brand, and despite it being a tough decision, we announced the closure of the Betta site in Launceston. So once again, a consolidation of our annual footprint, which has been really important to the ongoing future of our branded business and maintaining a strong outcome for our farmers and the communities in which we operate in. Also, we've been doing a lot of work on the optimization of our existing sites. As we've increased our capability around those sites, and we've looked to refine our operating effectiveness, the efficiencies of our lines, the run rates of our lines, we're actually starting to free up some optionality about how we might want to use our site footprint in the future. We're comfortable or confident that we'll actually continue to get some really good benefits out of that footprint. A lot's been happening across those four key areas. We just switch over to the next slide. We're just talking a little bit more detail around the execution of our strategy. Brand growth and innovation was key. I think it's really important to note that whilst we've had to put up prices, we do want to continue to drive volume into our facilities. We do want to continue to maintain our market share and our position in the market. So we've been very cognizant of executing on brand growth and innovation. You know, the first thing I'd mention during the half is kids snacking yogurt, which is the fastest growing segment in one of our key categories. We have doubled down on our innovation in this space. So that also coincides with the significant investment we've made around our pouch capability. So it's kids snacking yogurt, snacking being what we would call on-the-go snacking, which is very key to the pouch format. So we've relaunched our Yoplait Kids range under the brand of Yock. That's been really successful. We've brought out a no sugar product, and we've also brought out a high calcium product in that space, and that's for young children. Getting some really good signs out of that coming out of Woolworths at the moment, which has been terrific. And then we doubled down with launching a sort of an adolescent kids yogurt using our Farmers Union brand. Once again, a low sugar, high probiotic, high calcium product, and that's for kids as they come out of that Yock range into their teenage years, into the Farmers Union kids range in Coles, and that's also been incredibly successful, and we're really excited with the growth that it's bringing to yogurt. We've extended our milk-based beverage product range. So, we've launched lactose free in the Dare, in the Dare range and in Farmers Union. We've also launched low sugar and the Dare intense range for increased pick-me-up. So once again, you'll see they're really strong in yogurt and milk-based beverages. Playing around that core with small extensions that add value into our consumers has been our motto, and we're pleased with the way that's trending. We're building share on lactose-free white milk, so we launched in South Australia last year into New South Wales this year. We've just got sign off on our launch in Victoria, with ranging across key customers, and we've launched in Southeast Queensland. So we're really excited about where we're taking white milk.... the lactose-free range. That is the fastest-growing part of white milk. We weren't in that up until 12 months ago, and we're just really excited now that we've doubled down and pretty much have exposure to all of the lactose-free white milk markets around Australia now. And, of course, the Vegemite 100th birthday celebration. Really excited about the fact that Vegemite's grown. Once again, leveraging off immense brand equity, celebrating that iconic status and the 100th birthday celebrations. We continue to optimize our chilled distribution network, which is very important to win on the street. We're really pleased to say that we've completed our new digital sales platform, which will be going live out to our local trade and food service markets. It is a fully digital, mobile-enabled platform. We're moving off a green screen, 15-year-old portal into this. We think it's best of breed in this country. When we launched it, we looked to eradicate over 100 pain points for our customers, and we're just really pleased that we've built that in effectively 18 months, and migration's happening right now, so that we should have all of our 30,000 plus customers on that portal by year-end. So really pleased with what that brings to us. We've commenced an automation rollout across our distribution network. We're starting with our biggest DC in Laverton, which takes through most of our product range goes through that, particularly our yogurt range. That'll look to deliver about AUD 10 million in annualized benefits. Fortunately, it won't be completed until FY 2026, but we're really excited about what we're going to be able to do to that DC over the next 18 months, and sets us up really well for the future. We've commenced a substantial review of our customer service proposition and cost to serve in that local trade and food service network, and we think we can bring together some really good findings using our digital sales platform, using our technology and using our network to really enhance our customer proposition, but at the same time, deliver better economic outcomes for, in fact, our customers and ourselves. Our bulk segment, we've been working on the agility there. While we accept that we have this significant disparity between the farmgate milk price and what's happening in global commodity prices, we've certainly haven't stood still. We've undertaken a large review of that part of our business. We're working on our fixed costs. We've put in place a number of strategies to optimize value from the protein surplus generated by our branded business, and look to increase that above the standard skim milk powder returns. Done a huge amount of work around milk protein concentrate, which can have anything from AUD 0.04-AUD 0.18 a liter better return on skim milk powder. We've looked to open up new markets in North America and re-engage old markets in Europe. So a lot of work being done there. And of course, increased our lactoferrin capacity at Koroit, by bringing on new capital in capital projects at that site to increase that, and just look to optimize the returns on that with some changes we've made to the process. And, you know, we are seeing a slight return of commodity prices, and that's really based around... It's really been supply-led at this stage. So supply reduction of Europe, a supply reduction, or supply being turned off out of the U.S., which has brought back some strength into the commodity market. So it's not demand-led yet, however, we feel that as demand starts to pick up, that could actually accelerate commodity prices further. So we've been working there. We're actually quite pleased with our capability that we've got in our bulk business at the moment. It's only data points. I don't have any significant proof of this, but we were able to pick up a considerable amount of opportunity milk during spring, which would start to indicate to us that capacity within the processing capacity within Australia is probably right-sizing a bit more than what we thought. There's obviously been some public closures around facilities. We think that there's probably also been some downgrades of line capacity within facilities, probably shift structures and so forth. But we think that, you know, we were getting offered a lot of milk over spring that previously we probably hadn't been offered before. So that's also probably a good sign for that supply-demand picture within the Australian industry. We just turn onto the next page. We'll just come and also have a bit of a look at macro consumer trends. And these consumer trends really do continue to influence the way we think about our brand of business, what our customer and consumers are doing, and the product innovation we want to continually put in place to meet their needs. So in short, I would say that, you know, we continue to see changing demographics. We've got ongoing population growth in Australia. The makeup of the Australian shopper, though, and their profile is changing. We're seeing an increase in smaller households, probably leading to increased demand for smaller convenience packs that's driving a more frequent shop. That's formulating the way we think about things and obviously the way we're looking at our pouch yogurts and milk-based beverages and our spreads. You know, we're changing our pack sizes, and we're changing the way consumers really shop for us and where they might want to shop for us. You'll note that we've brought out smaller Vegemite sizes there. We've brought out 300 ml Dare portfolio and milk-flavored beverages portfolios is doing very well. And obviously, we continue to double down in pouch yogurt, which is fitting to those needs. And what's important, though, is that we understand the cost of living pressure that's happening at the moment, and we continue to offer really affordable products. And in particular, brands like Yoplait are doing exceptionally well in that format. Our White Milk brands are very much status quo, and we offer a really good family value pack there, both through independents and large retail. We feel like we're still appealing to customers and consumers as those cost of living pressures arise. That comes out in the fact that we've still been able to grow volume while increasing our value share. YoLocal continues to be important. That folds into our Betta Milk acquisition, which is a really strong local brand. We've continued to push provenance in places like Western Australia with the Masters brand, and we've got really good response from consumers there. We still continue to have a number of initiatives in place around sustainability. I'll talk to that a little bit later on, but we're communicating that with our customers. Also understanding the impact that alternative dairy plays, and not just around plant-based products, which we're obviously launching our Dare brand in April, which we're really excited about, an oat-based Dare product, and we're getting good ranging and good uptake and good reference from our customers about that. But also the strength of lactose-free, which is really starting to play out. We're getting significant growth in lactose-free. People still want the benefits of dairy, the high protein, high calcium, the high amino acid content, the high recovery benefits of dairy, but they just want it without that lactose piece. And so lactose-free is a really important part for us. And also, while people want health, they also want permissible indulgence, and dairy gives them that, and we've got some really good stuff coming out around permissible indulgence with dairy, particularly in yogurt, over the next six months that we're really excited about. So we'll just move on to the next slide, which talks about our growth categories. And really, what this slide highlights is, you know, I cover a lot of this on a pretty regular basis, but our categories are growing, and we're pleased about that. We're not in dead-ending categories. They're growing in value, they're growing in volume, and they have strong household penetration. And what that means is that they've been continuing incredibly resilient during this time, where consumers' discretionary spend is becoming limited and consumers are having to be careful about what they spend their money on. They continue to come back to our categories, and they continue to come back to our brands and products, and they are a key staple in the average Australian household. So we're really happy about that, and we continue to want to invest in our categories. We're not looking at these categories saying that, you know, this is a category that we see with a finite life and that it's losing relevance with consumers in Australia. So we take a lot of heart from that. I'll just move on to the next slide. This is really about our power brands. When I talk about, you know, simplifying, focusing, it's really simplifying and focusing around our power brands and the categories that they play in. You know, they do contribute more than 72% of our branded revenue. They're incredibly important. I'll just give you a little brief of what's been happening in them. So, you know, Dairy Farmers continues to grow in all segments in which it operates in, you know, white milk, flavored milk, cream, cheese, and yogurt. We will continue to invest heavily behind Dairy Farmers. We'll continue to invest and develop around those key categories, you know, with product innovation, and it's a really important brand to us. You know, Dare accelerated its market leadership in the first half through expansion of pack formats. We brought out the 300 ml pack format. We've started to range lactose-free and no added sugar. We brought on Intense, which was gangbusters. So, you know, that increased the category impact of Dare and sort of plays now, you know, plays Dare into an energy-based product that actually has sort of a relationship to Good For You with the milk component. And really is performing extremely well against brands like V and Red Bull. Farmers Union Iced Coffee continues to maintain its iconic status in South Australia, where it's experienced both value and volume group growth, and Farmers Union Greek Yoghurt continues to be the number 1 Greek yogurt in Australia. We're looking to leverage its versatility by expanding new formats and usage occasions. So obviously, pouches for kids was incredibly important there. We've brought in a honey inclusion, which we've just launched into market, and we continue to sort of push Greek yogurt into other cooking occasions, you know, particularly around dinner with curries and so forth, and Mexican food, and it's proving to be extremely popular there. So we're extremely happy with that Farmers Union brand. Yoplait is the number one brand in the yogurt category in volume, and one of the highest growing brands over the last 12 months in that space. It's played really well to the value piece for consumers and has helped protect us against that discretionary increase in discretionary spend for consumers. What I would say is that, you know, we have seen Dairy Farmers' single packs come under pressure as consumers have looked to discretionary spend, but we've been able to more than make that up with that Yoplait volume. Really pleased that yogurt actually grew 3% for the half year year-on-year in volume. It grew significantly more, double-digit growth in value, in GMAS, and gross margin, which we're really happy about, with that underpinning volume was driven by our ability to appeal to shoppers through that Yoplait offering. And Vegemite, you know, we celebrated the 100th birthday. That halo impact there with Vegemite, we've actually grown market share over the last 12 months, which for such a mature brand, is really exciting. And we'll continue to look at how we can leverage that Vegemite brand. We obviously launched Vegemite cream cheese into stores, which we've been happy with. Vegemite continues to be a really popular collaboration partner with other, other key brands and again, CPG companies within Australia. Just really excited by our power brands and how they've performed. If we go on to the next slide, slide, this is really just sort of building on that. Obviously, our market-leading brands here, really happy that during a time of significant upheaval within the, within the, the grocery shelf, that our brands continued to maintain their market position, very strong. But, but even saying that, within that, we still see a continuing opportunity to grow over the next couple of years, in these spaces, and, and I'm excited to have some of the innovation we'll, we'll continue to bring out. But we had a really good platform with which to move from, and having, you know, number 1, number 2 brands in the marketplace has enabled us to have great conversations with our retail customers and our consumers. And in times of a bit of stress out there, it's been, it's been really good for us to have that to fall back on. If we just move on to the next page, we talk about our multi-channel strategy. One of the things when we were really focusing on how we wanted to look at our business moving forward last year, and we took our strategy to the board and to investors at our strategy day in November was how we want to look at our business. And we really decided that our strategies were quite different. We wanted to maintain growth across key grocery partners where we were strong, where we knew we could bring innovation, where our brands are well-recognized, and, you know, and they were immensely important to us. But we realized the skills and focus to do that was different from the non-grocery channels. And so what we wanted to do was split our business up and actually align it across core grocery, but a real focus on convenience, and then food service and local trade. And particularly in food service and local trade, where we felt we had a real right to win on the street. And so what we've done is actually broken up our executive team to focus on that. We've brought in increased capability, and we want to you know, we really want to drive relevance around that food service and local trade. We wanna use our great portfolio of products and our distribution capabilities to, to actually win back on the street. And our market share in this area is significantly below our market share in grocery. We have all the capability and all the, all the requirements to win there. It's just a matter of that focus and leverage. So really excited about how we're starting to approach that, and, looking forward to really starting to drive growth in that area over the next 18 months as we, as we build up our capability. If you just move on to the next page, which sort of dials into that win on the street. It's worth noting, we do have a market-leading distribution network. We've got 3 national distribution centers, of which one of those we're fully automating over the next 18 months, which will drive significant benefits. We have 13 cool rooms and 81 depots around the country. I guess, in short, what this means is, we can pretty much get one of our SKUs to just about anywhere in Australia, and that is a huge advantage for us. When you couple that with the technology we're now wrapping around it with our new customer portal, the technology we put into that distribution network, around truck route optimization, customer optimization, we can now deliver to customers, we have full visibility of the chilled quality of that network as it's distributed around Australia, and we're able to actually tell our customers when their goods are arriving on our new portal. We believe we have every tool here, in fact, to win. And so that's what makes us really excited. And we're going to continue to leverage that network. We've just done some really exciting work with an external provider who's been working closely with our business. We'll look to segment our customers better. We'll look to increase our cost to serve, to benefit those customers, and to benefit, benefit the cost of our delivery as well. So we're very excited about that. We just move on to the next page. This is really win on the street. This is why we believe we've got significant opportunity here. There's currently 79,000 food service outlets in Australia, and we're not delivering to nearly enough of them. We deliver, you know, to about to about 20,000 food service and local trade customers at the moment. So there's a significant space for us to win in, and most of those deliveries focus around white milk. We're very much under strength, across cream, across cheese, across fruit juice, and so we think that... across butter. And so we have the repertoire of products there, we just need to leverage that. Australia has an incredibly high per capita eat out. It's one of the highest in the Western world, and it does focus on the breakfast day part, which plays to us hugely, so how we think about that. Food service is almost back to its 2019 pre-lockdown period, pre-lockdown volumes. And so we believe that with our capacity and our reach, we really should be able to play very hard in this space. We do have about 9,000 fridges out there that are waiting to take more of our product in local trade. We're really comfortable that we can deliver a great customer experience at a great price, with a great range, and that gives us a right to win in this space. I would say, though, that this space is probably feeling that discretionary spend and that consumer pain a little bit more than grocery at the moment. We just need to be careful around that as we work towards year-end. We're still extremely bullish about it over the journey, but there is some slowness that we're starting to see in that space, and we're just continuing to monitor. If I move on to the next page, this is just a really quick slide about our manufacturing network. Obviously, 19 sites, you're aware of that. We did have 20 sites for a very short period, but we will close the Lenah Valley site over the coming month. Sorry, the Burnie site. Sorry, apologies for that. The Lenah Valley site is an incredibly important site in our network. We'll close the Burnie site and put that volume back into our Lenah Valley site over the next month. So, we'll, we have popped up to 20 sites for a short period, but fell back down to 19, and that's continuing to drive benefits into our manufacturing network. Just onto the next slide, and this really explains where we're at around the disconnect between farmgate milk price and commodity returns at the graph on this slide. You'll see there, and we showed this in our investor day, that the orange line is the export trend index for Australian exports of dairy product. And the price, that's sourced from Fresh Agenda, and the blue line is the Bega Cheese farmgate milk price. And so, probably never before has that been disconnected at this level. We did see some disconnection back in 2014, 2015, 2016. It was driven by high farm milk output prices out of Murray Goulburn at the time. Then you'll see the farmgate price coming back from there, but you'll see a significant disconnect here, and that's what's providing a lot of stress on our bulk business at the moment. You'll see the orange line pleasingly has come back a little bit, over late in this last quarter, which we're quite pleased about, but still significantly below a return based off the export index, which is something that we need to keep our eye on. But still, Australian milk supply is stable. Our farmers have actually increased milk supply to us over the first half, which has been really pleasing, which we're very excited about. You know, it probably bodes well to their confidence in the current milk Farmgate milk price and where they see that going in the future. It's been really good seasonal conditions, which I think has helped me with that. We've obviously been looking to withdraw costs from our footprint, and we would be... Once again, I'll comment on the fact that we did see excess milk in the Spring peak this year, which would say that Australia's demand for milk and supply is starting to become a little bit more aligned, which we think is a good thing. Just onto the next slide, which is our sustainability piece. Obviously, we continue to be committed to our the Bega Group Greater Good strategy, which is aligned with the United Nations Sustainable Development Goals. We continue to do a lot of work around our packaging, and across a number of our sites and our co-commitments, which we're working very hard to meet by 2025, and we're in a pretty good position. We've got over 88% of our products meeting the co-requirements, which we're really pleased about. You know, the water sustainability and waste continues to be key parts of our agenda moving forward. We're working on that. Our diversity and inclusion, we now obviously have our 40/40/20 commitments for 2027, which we're happy that we're moving that close. So, we're taking sustainability very seriously. It's one of the six pillars in our strategy. As I said, very important that we continue to meet community and legislative expectations and our consumer and customer expectations. I'd be fair to say, we're having great discussions with our suppliers and our customers, and working together on that, which we're incredibly pleased with that. I'll now hand over to Gunther for our key financial messages. Fantastic. Thank you very much, Pete. And on the financial key messages page, it's interesting, both Barry and Pete reflected back to the previous year, F 2023, and called out the cost inflation that was close to AUD 300 million last year. You know, it was milk, as Barry said, 30%, but it's also things like transport and labor and packaging. As we forward, you know, fast-forward to the first half of this year, some people have asked us: "You know, is that inflation going negative? You know, are we in disinflation?" We're not at this point. We are seeing a decelerating inflation, so it's not growing as quickly as it was in the past or as it was in F 2023. But some areas, like energy and gas, for example, are going to be higher this year than they were last year, and labor is going to have inflation that continues for a number of years. So there's still some inflationary areas. Last year and in the first half, we put in place a number of growth strategies. In the next few slides, I'm gonna unpack some of those. As Pete mentioned, price was a really important part of that, but we don't want to simply use price with consumers as our only vehicle. So I wanna talk a little bit about product mix, and Pete touched on some of the innovation. Strategy is about choices, and so when we look at categories like yogurt or milk-based beverages, these are highly advantaged categories in that the margins are robust and the growth is strong. So what we've done in our growth strategies is to really over-index our focus and innovation on categories like that. Fresh white milk might be several times the size of yogurt and milk-based beverages, but the margins and the growth opportunity and the strength of our brands in those categories are streets ahead. So we invest several times as many resources, both people, resources, advertising and promotion resources, and really driving categories like that. So some of the 8% growth that we have in our branded revenue isn't just coming from price, it's also coming from that relentless focus on the mix of our categories and how we invest behind those categories. So that's very important... We also talked about the big disconnect in the bulk business, and we're down AUD 55 billion in EBITDA compared to the prior year. If we think back to that Investor Day, we did think that first half was going to be worse in terms of the bulk outcome, so it has been better than our expectations. Now, part of that has been the slight uptick in global commodity prices that we've seen in Q2, but actually, our internal resources have made a huge difference here. When you process a liter of milk, you get a fairly consistent ratio between protein, fat, and vitamins and things like that, but we have choices of what you do when you process that liter of milk. Do we use the fat for yogurt? Do we use it for creams? Do we use it for high fat? What sort of protein powders do we make out of that? What I'm pleased to say is that we have a lot of capability and strength internally to pivot in a very agile way and make those choices and update them as commodity markets move, and do that very quickly and almost on a live basis. So our teams have contributed just as much as the recovery in commodity prices in terms of making a difficult situation better for us, and that's why we've over-delivered against the expectations we set in November at our Investor Day. Barry and Pete also touched on the restructuring, and I think it's an interesting example here. The savings have been important for us, and you're starting to see those come through our P&L in this first half, but the alignment to our strategy is the most important element of that restructuring. And a great example is marketing. If you go back a couple of years, we would have had a marketing team supporting our dairy and drinks business. We would have a marketing team supporting our foods business and some legacy marketeers supporting the old Bega Cheese business. By bringing them all together into one strong marketing team, it brings us focus and priority. We can focus on the innovations that matter and on the categories that matter. So it actually improves how we go to market, and that's even more important than the cost savings that came out of that. Finally, very pleased with the inventory optimization that we've had. Last year in the first half, our inventory rose by over AUD 100 million between the beginning of July and December during that peak season. Yes, that was driven partly by milk price increases, but also by many other factors. We've had a considerably lesser increase in inventory in our first half, and we're very focused on cash flow. I am very confident that we will get to the end of this year, and we will show a positive operating cash flow, both in the second half and for the full fiscal year, and we are laser-focused on that. On the next page, what I'm showing here is to try to unpack some of the financial levers that drive our profitability. So what you're looking at on this page, on the left side, it remembers what happened last fiscal year. So the left side shows the EBITDA progress from FY 2022 to FY 2023. So this is something we released, and this is at a more summary level. We released this in August of last year, when we talked last year's results. On the right side, what you're seeing is the first half of FY 2023 and what levers have now driven our profitability to this half, which is the first half of 2024. So if I start on the left side of that page, you see the branded business going down AUD 6 million. When we showed more detail last August, that it was actually comprised of AUD 290 million of cost inflation, partly offset by AUD 250 million of pricing, but also strong volume growth of nearly AUD 30 billion. So we don't do it justice showing a AUD 6 million decline, but behind that, there was some really hard pedaling to offset the significant cost inflation. The bulk EBITDA last year in FY 2023 dropped by AUD 18 million. It was really a tale of two halves. The first half, we have to remember, had very strong profitability in bulk last year, AUD 50 million of profit. And then there was a loss in the second half last year as the commodity decline began, right? So it's an AUD 18 million reduction year-over-year. We were already making progress on unallocated overheads last year and reducing those as a strategy. So when I talk about growth strategies, yes, volume, it's focused on key categories, it's innovation, but that value creation that Pete referred to, that was already a journey we began last year, and we've accelerated it. On the right side, you now see the first half of last year, at 2023, we had AUD 74.6 million of EBITDA, and there you see all that work in our branded business really coming through in the first half of this year. AUD 53 million improvement. It's fair to say that the branded business has delivered on the lofty expectations that we set ourselves at Investor Day. And again, not just volume and mix, also value creation, cost out, how do we run our factories leaner? How do we run them more efficiently? How do we take out some products so we have a more focused range, and we back the products that matter? Areas like procurement, logistics, and manufacturing have delivered against very important value creation opportunities, and you can see that shining through in the result. There you see the bulk EBITDA of -AUD 55 million, and a AUD 1 million improvement in unallocated overheads. Our restructuring, we announced in June, and we basically informed the employees that would move on from the organization in about October. So what's important to understand is that you really only have 4 weeks of that restructuring benefit in the first half. So you will sequentially, in the second half, see our unallocated overheads being lower than the first half as we get a full 6 months of that benefit, and that's very encouraging. Right, so a lot of pedaling again, but with all that, the branded business and tight cost controls and value creation have allowed us to increase by AUD 2 million to AUD 76.5 million.... On the next slide, you get a different view of those segments. So I won't repeat that stuff, but I do want you to cast your minds back to Investor Day that we hosted in November. Those of you who joined us or those of you who saw the materials that we posted on the ASX, we set some targets for the stock, you know, for the parts of our business in that Investor Day, we committed to them. One target we set was that for the full year, our branded business would earn around AUD 200 million-AUD 210 million. Now, in the first half, we've delivered just under half of that, AUD 97 million, and we do believe the second half will be slightly higher in the branded business. Pete's right to be a bit cautious on the local trade. As the mortgage cliff hits consumers, we're starting to see signs in January and February that they're going out to venues slightly less than perhaps they did over the last couple of years. So a few of you have sent notes this morning congratulating us on the first half, but asking whether our maintenance, our guidance for the full year is conservative. We do think it's worthy to look at that local trade and that food service, and to be a little bit cautious because that's how the consumer is feeling right now. We still believe that our branded business will earn AUD 200 million of EBITDA, ± AUD 5 million, and that will be a phenomenal growth, almost 40% year-over-year compared to last year. Now, our bulk business, when we got together at Investor Day, we said the full year will be a loss of AUD 20 million-AUD 25 million. And you can see in the first half, we've lost AUD 5 million, which was better than we thought would happen, right? We are seeing the bulk business moving ahead by a few million AUD with that uptick in commodities, with the focus of our teams and with a religious focus on costs. We do still expect the second half of the year to show a loss in our bulk business. We think it could be AUD 10 million-AUD 15 million, and I wanna just explain why that would happen. The commodity prices are improving. We do think they will continue to improve in the second half, but remember that in the first half of the year, we take in well over 60% of our full year milk. So the spring peak that we have, which is so important in the unit cost in these huge processing centers like Koroit and Tatura, when you take in more than 60% of your milk in the first half, you get a great unit cost of production. In the second half, you get less than 40% of your milk running through those facilities. So commodities will improve in that second half, but we will take in slightly less milk. So for the full year, we're expecting sort of AUD 15 million-AUD 20 million dollar loss in the bulk business, but getting increasing confidence in its trajectory for both the second half and for future years, which is really positive. On the next page, it's a reconciliation of our normalized results. So on the left side, we show our statutory results, and there you see an EBITDA of AUD 86 million in the middle of that table. And then it shows the changes that we make to arrive at our normalized outcome on the right side. So we have a situation here where our statutory profitability, EBITDA of AUD 86 million, is actually higher than our normalized EBITDA. So the first thing we're removing is the Canberra site. So the Canberra site had a profit of AUD 11 million, so very pleased, obviously, with that transaction, but that is not a trading result, so then we remove that from statutory. Pete talked about the Betta Milk acquisition, and the tough decision that we made, of course, to shut down the Burnie site. In the first half, we recognized AUD 1.6 million of costs related to that integration, but that was only for the four weeks of December. So the decision to sort of consolidate our capacity in Tasmania into our flagship Lenah Valley site, there'll be several million of cost for that in the second half of the year, which you're gonna see coming into the P&L. Finally, there are some tax adjustments which relate to our formation of a consolidated tax group. What I would model for you in future years, we will return to sort of 28%-32% effective tax rate in future years, but obviously, there's a few movements in deferred tax assets as we form that group. Our cash taxes are much higher than the effective tax rate that we show in our account, but there are some movements in DTA and DTL. So that's how we get to AUD 76.5 billion. Finishing off with balance sheet and cash flow. On the next slide, you see the balance sheet. Trade receivables are higher, and that just shows the strength of our sales in both the bulk business and the branded business in December. I think what was particularly pleasing is to see some of the bulk protein selling earlier than we thought. Honestly, what happens over the last 12 months when commodities are crashing is customers, the customers who buy those proteins keep their inventories lean as they wait for prices to fall and fall. Now that we think the bottoms in the market since September, October, are beginning to turn, we've seen some of that demand come from H2 into H1. So that's been fantastic for the bulk business, but it has increased our receivables. On the inventory line, you can see only AUD 6 million-AUD 7 million increase as we, you know, compared to last year as we go into spring peak, and that's a really strong result compared to H1 of the prior year. Intangibles has ticked up by about AUD 10 million, and that's about the Betta Milk acquisition. The final thing I'll point out here is trade payables is up AUD 16 million compared to the period that we're looking at last year. Now, we are very focused on trade payables, and I would say this, for small suppliers, whether they be farmers or small businesses, we will pay them on time, less than 21 days. That's the regulation. We stick to that, and we will support that. But for large suppliers, we wanna make sure they participate fairly in the working capital chain in this industry. So for us, that's making sure that payment terms are up around that 60-90 days. And we're making progress on that initiative, and we believe that's fair and balanced, and we're doing a lot of work in that space. Final sheet that I'll share is cash flow on the following page. You see this year, receipts from customers being higher than payments to suppliers, which is good, and that's contrary to what we saw in the first half of last year on that right column. You'll also see that we disclosed our use of trade receivables facilities, so we wanna be always transparent about those. Last year, with the challenges and rising cost inflation, we relied on AUD 43 million increase in our trade receivables facilities. And as you can see, this year, we haven't needed to rely on much of that at all. So we have only a AUD 6 million increase in those facilities in the current year. However, interest has been higher. And you see us going from AUD 10 million in the first half last year to AUD 16.5. So the interest rates are up close to around 6%, but that's a transitory thing, and in a couple of years, as we start to project interest rates coming off in 2-3 years, we do expect over time, we'll see that normalize. Final thing or two I'd say is we do expect further inventory reductions. Remember, when we go into that second half of the year, we now begin to sell down a lot of the protein powders and the milk that we took in during spring peak, and that's what gives us confidence that we're gonna see a full year positive operating cash flow and the second half positive operating cash flow. Strong investment in capital expenditure, Pete called out the warehouse project, so we're thinking well ahead, even a couple of years. How do we create value? How do we create savings? Of course, investing in capacity. We finished our yogurt pouch capacity and went live in July, August. So there are examples of how we're supporting growth and efficiency with our CapEx programs. So that's a summary of H1, and I'll hand back to Pete for our outlook. Terrific, Gunther. Thank you. I'm just on the outlook page now, the next page. Look, we're pleased that we've been able to deliver what we talked about over the last 6-12 months. We obviously wanted to rebuild the brand of business after a significant cost rise or cost rises that impacted our P&L, and we think we've done that to a series of good pricing decisions through our strong brand of portfolio, costs out across our facilities and in our logistics network, and also the restructuring of our head office team. We still think that there's a huge amount of momentum left in that brand of business to push forward with, and we'll continue to do that now through further opportunities in innovation and growing our market share around those core areas where we think we have advantages around production and distribution, and also into those channels that I've talked about before, particularly in areas where we play at an understated level, such as food service and local trade. Lots of cost efficiency programs still to get to. We've talked about the warehousing in place, but we continue to optimize our factories at a granular level. Our SKU count's down 6% at the moment from prior year. We'll continue to trim unprofitable SKUs and look to replace all our portfolio with, with, with innovation that supports a, a more profitable mix. And, you know, we are seeing an improvement in the bulk industry that the outlook for the bulk part of our business. You know, commodity prices have solidified, milk production has stabilized. We think that capacity is now better aligned within Australia, but we haven't just stood still. We've done a fair bit of work around our overhead structure in that space. We think we have a more agile cost footprint in our bulk network. We've also looked at innovation around our protein valorization, increasing our lactoferrin capability, which we think we can, we can lean into over the next 12 months, and of course, opening up more profitable milk protein concentrate markets. So that we think that as that gap closes between farmgate milk price and commodity prices, we'll have an even stronger bulk business to move forward with. We did have a benefit with strong Christmas sales in the branded segment and some third-party milk purchases in the bulk segment, which helped give us that lift in December. And as Gunther alluded to, we're staying with our guidance because we think that there might just be a little bit of softness around local trade, in particular, what's happening with the economy. We don't believe that is a long-term outlook, and we actually feel very comfortable around that sector in the medium to long term, so we'll continue to focus on growing that area. So we will maintain our guidance. I'd just really like to thank the Bega team. People have worked incredibly hard. We've had some significant shifts in our business. The people have done an amazing job of adapting to that. I think we're lined up for some terrific growth in the future. I think our strategic plan is still very relevant. So, thank you for listening, and I'll throw to Barry for a final roundup. Thanks, Pete and Gunther. I think everybody would agree that's a comprehensive update of the position of the company. It's great to be reporting some momentum and great to also be reporting that while there are challenges, they are well understood challenges and we've got good strategies and indeed the factors external to us that can influence things like our commodity business are beginning to normalize and fall more in the longer-term position that they normally hold. I don't have too much to add to the presentation, but I think I'm obviously very delighted to receive any questions. I think we might throw to questions. ... Thank you. If you do wish to ask a question, please press star then one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star then two, and if you are on a speakerphone, please pick up your handset before asking your question. First question today comes from Phil Kimber at E&P Capital. Please go ahead. Hi, guys. Trying to just take off speaker. I just had a question regarding the bulk business and sort of trying to look out to FY 25. I mean, at what point would you expect, you know, potentially that business can stop losing money? You know, I know that's been your target, but is, you know, should we assume that's gonna take, you know, multi years to get that business back into small profits? I think you've said in the past, I don't know, AUD 20 million or something like that. I guess, is that still your thinking? And just trying to understand the trajectory a bit more there, if you can. Thanks. Sure. Thanks, Phil. Well, I think as we've sort of outlined, that significant disconnect around farmgate milk prices is a historic one. So even when the disconnects have occurred in the past, they have not been at the quantum level of the one that we've been dealing with this year. I think on the positive front, we're seeing and generally, without being too general, when we look at a calendar year, we normally see dairy global commodity prices either be on the improve in a particular year or on the decline in a particular year. And in fact, that's what's played out last year. If you have a look, it really started to decline in January last year and went right the way through, which is what contributed to that second half loss, and then the big disconnect as farmgate prices didn't adjust to what was a declining market. We're now seeing a rising market for commodities, which we think there's good evidence that that should continue to the calendar year. And we're seeing milk volumes for the first time grow. And as Pete alluded to, anecdotally, we would say that capacity is probably more aligned than what our initial view was. So as we come into opening milk price season for FY 24, and it is too early to call, but the scenario that I think everybody would say is probably a fair outcome is that it would be ideal if commodity prices continued to improve, which would justify the you know a healthy farmgate milk price. But the probably the balanced outcome for the business would be that, or for the industry, would be that we see commodity prices improving, farmgate milk prices softening a little to narrow that gap. And indeed, you know, our objective would be that we would start to see an improvement in profitability in FY 25 for the bulk business. The switching point, if you like, is obviously the farmgate milk price environment, but it is worth remembering that over the past 3 years, as we've gone into mature procurement season, we've been going in with a dropping farmgate milk volume. So even to stay the same within your business, you have to procure new milk off someone, which meant that everybody in the industry was the same, so everybody was trying to procure new milk, and indeed, there was still capacity rationalization occurring. As we look forward, we see milk volumes growing, people having aligned their capacity to the volumes that they currently have, and we expect a more stable procurement environment. I'll be careful not to make any predictions on that, Phil, because I have, we have dealt with some of the most significant volatility. I've been doing this for a very long time, and the most significant volatility I've dealt with has been the last 2-3 years. But you'd certainly say there's a more stable environment for procurement than we've seen for a number of years, which should help that commodity business. Yeah, sorry, Phil, Pete, just to add one piece to Barry's answer, which is obviously very thorough, but we picked up 30 million liters of opportunity milk in the spring flush. That's milk that no one else wanted, that we were actually able to buy at a significant discount. That sort of says to me that capacity probably wasn't where it's been in the past. It's anecdotal, but that was a lot more than what we expected, which, you know, which I think is an interesting point. Well, and look, only time will tell how that plays out, but that might give you a little bit of an insight into further insight into what we've seen happen this spring. Phil, and we keep adding to the answer, but- Yeah ... but and that is more reflective of what, I guess, the traditional players with the larger infrastructure's role that they would have within the business that we hadn't seen in recent times, that we are seeing a return. So it wasn't necessarily unusual that you would pick up volumes of milk at the appropriate price to market, for lack of a better way of putting it. But the fact is, we hadn't seen that for a while, which is, it's anecdotal, but it says that there were surpluses of milk around. It reflected a good solid spring. It does reflect that milk growth. So, you know, I think it's probably fair to say those procuring milk were procuring for a purpose, and then when they got milk growth, they needed to find the home for that, and we were the logical home, as we always have been. But it was interesting that there wasn't necessarily other homes or anecdotally- Mm ... other homes, which said capacity is more aligned. So, quietly optimistic on the speed of return to profitability on the bulk business, but, not making predictions, until we get through that milk procurement duty, so. Yep, and can I ask one more, just on overhead, Gunther was flagging that, you know, you'll start to see the full run rate of those cost savings in the second half. So I'm not, you know, I think you did AUD 16 million in the first half, so something below that. But if we think about it longer term, I think you'd previously talked around that AUD 20 million sort of level as an sort of overhead. Is that still sort of broadly what we should be thinking going forward? I just wanted to get a sense whether there, maybe there's been some reallocation from divisions or anything, just to try and understand longer term, what we should think about for unallocated overhead. Yeah, and on an ongoing basis, I think that's, I would say, the base load would be somewhere around AUD 25 million-AUD 30 million for a whole year. There'll be some years, Phil, where we invest a few million AUD in IT, and of course, with the new IT accounting standards, some of that shows up in overheads. So most years, 25-30. Occasionally, you might see 35 or something like that in a year where we're putting a few million AUD into IT systems, that if they can't be capitalized. So that's, that's the range. Perfect. Thank you, guys. Thanks, Phil. Thanks, Phil. Thank you. Your next question comes from Evan Karatzas at UBS. Please go ahead. Hi, thanks. I just wanna confirm some of those 24 numbers you've talked to Gunther before. So branded AUD 200 million, and a ±5 million? That's right. Is that- Yeah. Bulk, -10 to -15 in the 2H? Yeah. So, full year still in that -15 to -20 range? Yeah, that's right. Okay, and then corporate, no change to that. Is that right? So there's still this -15 to -20, sorry, the unallocated. Yeah, and I'd say sort of -20, -25, and so you, you sort of take these probability-adjusted weightings, and you see how we get back to that 160-170 with sort of probability weight. Okay, all right. That's really helpful. Thanks for that. Maybe just a quick follow-up. So when on bulk with the losses, I mean, are you getting any benefit from mothballing any of these dryers or plants? I mean, is that still going ahead? I just thought the plan was that it would be profitable, bulk would be profitable in the 2H because it's just primarily the nutritional business. I mean, has something changed? And just trying to get some more info there. Yeah, Evan, so bulk in the second half tends to struggle because you're not putting the volume to it. But what I can sort of chat about that, but so we are absolutely looking at our cost to produce bulk. So we're taking out overhead structure within our sites, and the team have just done a review of that, and they've been working on that. With the site managers, they're also looking at how we can optimize our supply structures around that. So that's absolutely what we're doing. Further work that's being done is, as I said, around finding a better home for that protein as it comes through. And so that'll build out over the next sort of 6 to 18 months. We're looking at increasing, you know, tolling arrangements for dairy and non-dairy, and we've had some promising sort of signs there. I think as capacities come out of the industry, there's a few more people that are potentially wanting us to toll for them, which is good. And then also non-dairy product through those sites as well. So, we're also seeing a little bit of growth in formula. So all of those things coming together, creating a more flexible and stronger bulk business. But what we'll, you know, really recognize the profitability of that is that close of the farmgate, farmgate disconnect that we obviously see at the moment. Evan, it's probably fair... Barry, sorry. It's probably fair to say that as we've looked at capacity alignment within our own business and where our brand and business relies on that ability for the, for our bulk infrastructure to balance, if you like, and then, as we've sort of mentioned, we've seen that level of inquiry around the capacity that we actually have available. We've probably concluded quite comfortably that we're not going to shift a big rock, if you like, and probably pull additional capacity out that we actually think has a role to play and will service out both internally and externally our business as well. And we're actually, that stability that we're seeing is actually... We've seen where there are opportunities, and we're taking those costs out where appropriate. But we probably are feeling more confident about our bulk footprint and what we didn't dwell on. As we look into the next milk procurement year, we'll be looking at milk procurement in strategic regions, which is a little different to, say, where we were in the past, where we were looking for milk wherever we could find it. And it is fair to say that even when we talk about milk price, when we're talking about the changes, we're actually seeing that in a number of our regions, milk price will probably be largely stable because of service in domestic markets and domestic product, but in... Or Australian, but in those areas where milk is destined for commodity, we're probably expecting a greater alignment because the capacity and needs some milk across the industry are feeling more aligned than they have for a little while. Okay. Yeah, so it's not so much turning off dryers, it's changing shift structures- Yeah. It's changing product mix, and sort of, you know, optimizing those facilities. We, you know, we think there's more benefit in optimizing than closing. Okay. So you're keeping capacity because you think, sounds like you're gaining some additional milk volumes or you- Yeah, yeah. And other opportunities. Other opportunities, actually. Yeah. So, but- Like holding. Okay. Yeah. Yeah. Yeah. We also have a bit more flexibility around that capacity with how we run our ships and so forth. Yeah. Okay. All right, perfect. That's. I really appreciate that, Kyle. Thanks, I'll pass it on. Thank you. Thank you. Your next question comes from Jonathan Snape at Bell Potter. Please go ahead. Hey, guys, can you hear me okay? We can, Jonathan. Yep. All right. Look, look, I hate to harp on about this, this guidance statement, 'cause there's been quite a few questions already, but can you help me with some of the math in my head? Because if I remember right back at the investor day, I think there was a footnote on the slide on the first half that kind of intimated that the SKU would be 35%-40% in EBITDA, which, you know, would've been a, I call it a AUD 60-70 million type number, and you've come in ahead of that in this result, and it looks like it's all been driven by the bulk side of the equation, where the commodity prices have been stronger, and as you said, you've got more milk. So it looks to me like you're probably doing about AUD 10 million better in the first half in the ingredients business. Now, if I, if I roll forward since then, like, ingredient prices today relative to November, you know, if I'm gonna skim milk, you're up AUD 200-AUD 300 bucks since then, and if you're holding the stuff further, you're up even more. So I'm trying to figure out, you know, how, how we're bridging to those same numbers, given we're 10 higher. Like at corporate, looks like it's maybe about AUD 5 million higher on the cost front. Bulk, you know, it looks like it should be- Yeah. I doubt it would've changed for the second half relative to where we were then. So it feels like you're adding in a fairly big contingency here on, you know, this food service shift, that maybe some of your competitors have been flagging. Am I doing it completely wrong, or is- No … is that kind of- Let me- Thinking about it. Yeah, it's a great question, Jonathan. It's a great question, and as you said, we did say that we get about 40% of our EBITDA in that first half, and that would've been sort of mid-60 millions kind of range. So we're about AUD 10 million higher. Now, I'm gonna say a couple of things to give you a bit more color of how some of that's phasing. In a couple of our branded categories, we saw customers that might have normally bought in January, taking product early in December. So an example of that is, you know, the spreads business, both Vegemite and peanut butter. Often you see retailers who will buy some in January to get ready for back to school promotions at the end of the month, but they took it early in December. We hadn't expected that. It's not an incremental amount, but a few million AUD of sales in that spreads business, materialized in December, that we expected in January, February to support those back to school promotions. So that's simply a phasing movement. The other thing that happens is, in the bulk business, you're right, we also saw some phasing movements forward into December. As I mentioned during my you know, comments, you know, we have customers who probably kept really lean on inventory of protein powders, for example, or bio nutritionals, as they saw prices falling. And then as prices began to turn the corner in October, November, December, you're starting to see some of them trying to restore more normal inventory levels. It doesn't mean that we have a materially different amount of milk for the entire year, but we did see sales of bio nutrients and some protein powders come earlier than we expected to, even when we were there in November. So phasing is probably AUD 6 million or AUD 7 million of that. I think the other thing that you'll see, as you begin to go through in our financial statements, we decided to put a bit of marketing in the second half to support some new innovation that's coming out in April, May. I'm not gonna tell you what it is. It's very exciting, you know, watch this space. But what you'll see in our comprehensive income statement is that half over half compared to last year, we have a couple of AUD million of savings from our overhead restructuring that are already evident, but we've weighted some of our A&C the second half to even more support a couple of the big innovations coming out. So phasing is a big piece of that, and I think it makes up, you know, two-thirds to three-quarters of that shift forward into H1, with phasing in branded ambient products and in bulk protein powders. And then, as Pete said, we are cautious on the last few AUD million in that local trade category, and in food service. Until we sort of see how consumers respond over the next while, we've been seeing information that sort of says consumers are feeling a bit tapped out, so we're looking for value in our portfolio. We're highlighting brands where we can provide value, but we wanna see a few more months of how that food service and local trade business perform, and we think it's right to strike a slightly cautious tone on that. That's how we end up at the 160-170, Jonathan. Yeah, okay. So there's, you've taken some of the beat from the first half, putting it back into marketing, and you're building in some risk around food service- Yeah By the sounds of it. Is that an easy way to explain it? That, that's a pretty good way of explaining it, Jonathan. We think that it's really important, we wanna maintain momentum in that brand of business, and that's around having some successful innovation and launches. You know, when the consumer is a bit tired, it's important you don't sort of retreat in that space. So we will continue to push for market share and volume growth. All right. And look, can I just ask you around, around food service? 'Cause if I look at your brand of business, I think your top line growth is 8%. If I took all those, you know, charts you put in there on market share and rolling MATs and supermarket, it looks like you probably grew revenue in supermarkets in your, in your big brands by somewhere around about 6%, which probably says you're picking up a little bit better in food service than you are or than you were in supermarkets through the first half. Look, is that, is that an accurate reflection? Because if I remember right, Lion Dairy, I think you're saying, probably didn't do the best job in that channel. And it looks like it must be doing high single, low double-digit type growth at the moment. So, you know, without sort of wanting to go back through history at all, it, it's part of our strategy to focus on this area. We probably didn't have the right product. So, yeah, you know, you do need to take a different sort of products into that food service space, so we've been spending a bit of time expanding that product range and getting it right for that consumer, to the back-of-house consumer. It's a different type of sell. We've been—we've just hired a new general manager for that area, who's been with us for 2 or 3 months now. We're ramping up our training. We're bringing in, chef-led, promotions and product, you know, innovation. We're doing a whole lot of work around that space, Jonathan. So we have been reasonably pleased by the initial uptake in that area. But we think we can go a lot harder and a lot stronger over the next sort of 18 months to two years. We feel like we've really only just got started. You would think that growth in a very, very mature Australian grocery channel will be far less than that food service space in the future. So, you know, we've been really pleased, probably around that high single digits number, but, you know, we think it needs to remain at that, at least at that growth level for the next, you know, two or three years. Okay. Look, just one last one on just some nuances on the numbers. The depreciation expense came down quite a lot in the first half. And, you know, I think this year was one of those weird years where you had some leases coming on, and a few other things going down in terms of the write-downs. Is this AUD 43 million type number, is this where it should be sitting in the second half, or does it pick up a little bit with some of the capital spend programs? Probably ticks up a tiny little bit, Jonathan. So I'm sort of guiding just kind of 45-47 kind of range in that second half of the year. When we look at the phasing of our capital investment, Pete talked about the warehouse automation, so we kick that off, but most of that spend, it really ramps up in the second half of the year, not the first. So I would guide that it'd be between AUD 2 million and AUD 4 million higher in the second half of the year, depreciation. Yep. And, you know, you mentioned CapEx. How are you thinking about that looking in the second half? Yeah, and I think, you know, we showed a cash CapEx number, you know, sort of all in, in that kind of AUD 35-40 kind of neighborhood. So the CapEx itself, we had a bit more spending in Q2, and it's that stuff that's going to depreciate into the second half of the year. I'm expecting a full year CapEx at sort of in the AUD 60-70 million neighborhood. Okay. It's about where it was - where we were thinking before. All right, great. Thanks, guys. Thanks, Jonathan. Thanks, Jonathan. Thank you. Your next question comes from Mitchell Hawker at Bank of America. Please go ahead. Hi, guys. Thanks for the question. My question is just in terms of the grocery channel. So I think it's fair to say that suppliers have experienced a pretty favorable environment over the last two years or so. Being able to pass on costs, I guess, much easier than what it has been like historically. With the intense focus at the moment on supermarket pricing, with the inquiry into supermarkets and that kind of stuff, I mean, I guess the situation may change for the worse. Can you please just touch on how you plan to continue to achieve price rises in that grocery channel, considering the changing dynamic in the market? Thank you. Yeah, thanks for the question, Mitchell. I would say it's never easy to pass on prices. I don't think it's. But it's certainly been, we've just gone through the similar process that we've always gone through. But you're right, there's been an accepted thought amongst customers and consumers that prices were rising because costs were rising. So, but it's probably worth noting, we've also done a huge amount of value creation during that period. We've done a huge amount of restructuring in our business, both at an organizational level, a physical level, by taking out factories. And, you know, we're continuing to invest in cost out initiatives, like the automation of our DC, like the new digital customer sales platform, which will enable us to reduce costs again. So we're very conscious of being able to reduce costs in our business, and it needs to be a two-way street. So, you know, I would certainly anticipate that we won't be putting through the price rises over the next couple of years that we have over the last 18 months, because I think cost inflation is slowing, but also we will continue to drive cost efficiencies into our business. I think we've got an appreciation of where we can drive volume in our business, and therefore drive efficiencies back into our plants and our factories and our supply chains. And so we'll be using that as well to get our cost per unit down, and ensure that we continue to stay competitive. And, you know, Mitchell, we sort of, we look at ourselves compared to our competitors in Australia, but it's very much about whether you're globally competitive or not as well. You know, we sell a lot of branded product overseas. We're continually just striving to be competitive on a global basis. And as you know, a lot of products coming in now globally, from overseas into Australia as people search for lower costs. So, we're continually focusing on our cost per unit and offering our consumer a great proposition. ... not only from a new product innovation perspective, but also from a value perspective. So we'll definitely look to balance those requirements out over the next couple of years. Understood. Thanks very much for your response. Thank you. Thank you. That concludes our question and answer session for today. I'd like to hand back now for some closing remarks. Thank you very much, and thank you, everyone, both for the questions and taking the time to listen to our results call. I think it is fair to say that the last 2-3 years or a little longer have been extraordinarily volatile from many perspectives. Navigating through that volatility has always been our role and what we wanted to try and achieve. You never achieve those things alone. As Pete mentioned earlier, you know, it's really important that we acknowledge our staff and all the good work that they do. It's important for us to acknowledge our shareholders and thank them for their support during times that have been less than predictable, and that have indeed created challenges. But the support is very well, very much appreciated by us. And the same applies to our farmers and our suppliers, and of course, our customers. So it has been. I think, in terms of what we're reporting this year, it does actually show the capacity and capability of our team. The fact that our brands are much loved, and that the business is capable of being agile enough to adjust to changing circumstances and design a path that will see this current five-year strategic plan yield well for all stakeholders. So, thank you. Thank you very much, and I look forward to speaking to some of you individually in the coming days, and obviously catching up with a number of shareholders over the coming months. So, thank you very much for taking the time to listen to the call, and we'll look forward to seeing you soon. Thank you. Thank you. That concludes our conference for today. Thank you for participating. You may now disconnect.