Thank you for standing by, and welcome to the Orora Limited FY 2023 full year results analyst call. All participants are in listen-only mode. If you wish to ask a question, you will need to press the star key followed by the number 1 on your telephone keypad. I would now like to hand the conference over to Mr. Brian Lowe, Managing Director and Chief Executive Officer. Please go ahead. Thank you, operator. Thank you All for joining. Hopefully, you all had the opportunity to participate this morning in our overview. So, today's session is really just to make sure that we can ask any or answer any specific questions you have, So, we don't intend to give another overview of what you heard this morning. I do acknowledge that there were a few people this morning who were left in the queue to ask So, me questions, but we did unfortunately have a hard stop. So, please, if that was you, you know, please, feel free to ask your questions as we go through today. So, operator, we'll now open the line up for questions. Thank you. Once again, if you wish to ask a question, please press star one. Your first question comes from Niraj Shah with Goldman Sachs. Please go ahead. Hey, good afternoon, guys. Just the first one for me, I mean, you talked about aligning production to match demand. I think others in the industry are doing the same. Can you give us an indication, I guess, on where utilization rates are versus So,rt of installed capacity across Saverglass network? Yeah, they've stayed pretty much at around 60% utilization, and which I believe is the last update we gave. And that's it is slightly under what demand is, and as you might have seen from what we had on, I think it was page 27 of our deck, with the inventory graphs. Yeah. The inventory we hold has been decreasing, So, you know, I guess the statement is more to ensure people that, you know, we're not building inventory and keep running- Yeah ... the plants unnecessarily. So, yeah, utilization is 60, maybe a touch below. But that's absorbing a bit of inventory in the process. Okay. No, I appreciate that. And then the second one for me: I think you mentioned on the call So, mething about a freight adjustment to Saverglass revenues, but I kind of missed it. So, mething you could elaborate on that? Yeah, it's just that, as we've Saverglass into IFRS accounting, the freight, the revenue is inclusive of freight. So, effectively, freight doesn't attribute the same margins. So, it's slightly dilutive in terms of the margins, but the revenue includes the, you know, the freight revenue, in the way in which we've reported it. Got it. Okay, perfect. Thank you. Thank you. Your next question comes from Keith Chau with MST Marquee. Please go ahead. Oh, hi, Brian. Hi, Sean. First question relates to just So, me of your guidance comments Saverglass. so, just want to confirm very quickly, the exit run rates out of FY 2024 into FY 2025, are you talking about it on an EBIT basis for Saverglass? We are, yes. Okay. Maybe while I'm talking about that, it might be good to say, when you look at the exit DNA, you'll see that the exit DNA is a little different to the guidance DNA. What's driving that is probably there's a little bit of conservatism in the DNA number that we've put into, trying to think what slide it is here. Chris will tell us what slide it is. But on Saverglass slide, in essence, what's driving that is an assumption around Glun, the Belgian furnace. So, we do need to rebuild that at So, me point. Our initial plan was that we would, we'd have that start now. We are pushing that build out just as part of the CapEx rephasing program that we've been working on and we've talked a little bit about. So it's probably a little bit of conservatism in the DNA number. Sean, when you back it up to the EBITDA line, even if you take out the conservatism for DNA, it means that EBITDA should be increasing on a run rate basis, given the EBIT is flat on 2H. Can you give us a sense of what's driving that increase in EBITDA? Yeah, there's a couple of things. So, when you look at it on a full year basis, there's really three things at play. So, firstly, there's a little bit of mix, a little bit of cost improvement year to year that we expect to get just with So, me of the costs coming down and holding on to price. And then the third piece is, you know, there's an expectation, I mean, we're not guiding, we're not guiding to this in terms of our blanket guidance on EBIT, but we would expect to see So, me improvement into the second half of the year with volumes, assuming, you know, as we talked about, those inventories continue to normalize and customer inventories start to normalize towards the back end of the year. Okay. So, I guess even without, you know, that step up in volumes going into the second half of the year, there should still be a bit of a step up in EBITDA in the first half. In EBITDA, yes. Yeah. Okay. A little, a little bit. We've certainly seen, you know, good mix in July and, and So, me good work on costs, cost recovery. We'd expect that to continue. Okay. And what are you hearing from your customers? I mean, Sean, I know you're based over there now, So, keen to understand, you know, whether you've had discussions with your customers and what's driving that mix benefit. I would have thought, you know, there might have been a chance mix was moving adversely rather than favorably. So, what's actually driving that mix through the business at the moment, the positive mix? Certainly a complicated equation in terms of customer, in terms of customer demand. I think, it's more about holding on to a little bit of price, a little bit of mix in a few areas. We are certainly chasing So, me volume in So, me of the, ... in So, me of the more commercial areas of the portfolio, but things are holding up reasonably well. Mm-hmm. Okay, thank you. I might just quickly ask one more. Just in terms of Aussie wine, you know, the early indications is that the exports back into China, as you pointed out on the call, are actually pretty good. So, the phasing of that AUD 10 million benefit, I think it was referred to briefly in the results pack. But can you give us a sense? I think last time the disclosure was AUD 10 million? Yeah. But the potential phasing of that AUD 10 million benefit, given what you've seen to date, if you can give us any clarity on that. Yeah, I mean, just a reminder for others on the call, the, you know, the impact, the negative impact from a pure margin standpoint when the Chinese tariffs came on a number of years ago, was about AUD 10 million to the glass business at Gawler. So, that's effectively the size of the prize if we get back to full volume at the margins, we're selling those products at the time. You know, we're anticipating this is maybe a 3- or 4-year journey to get back to fully loaded. So, you know, we're, we wouldn't be anticipating any more than, you know, a quarter to a third of the volume. Now, the mix will be dependent, or we're yet to see what that is. But in terms of volume, we think the volume ramp up to get back to where we were could be a 3- or 4-year journey. Early signs are good, but remember, this is about a 10% of our total production. For reference, you know, we were reasonably high single digit decline in wine volume in FY 2024 relative to FY 2023. So, we've seen. And this is on total wine volume. So, you know, the counter to the upside of China is we're still seeing, you know, So, me demand, decline in commercial wine. So, this is not a pure ad. It's certainly helpful, but at this point, it's yet to see where commercial wine is going to stabilize. Okay. Thanks a lot, Sean. I'll circle back on this one as we go. Thanks. Thank you. Thank you. Your next question comes from John Purtell with Macquarie. Please go ahead. Good day, Brian and Sean. Just had a couple of questions to start with Saverglass. just in terms of the synergies, how are they tracking? And obviously, you're targeting the AUD 15 million over time. What So,rt of realization should we expect this year? Yeah, you're right. The AUD 15 million, we're still confident in. You know, we said that would be over a few years. You know, there's probably So, me activity that we got in part of 2024, So, obviously that gets masked with volumes and other issues. And then the rest that we think to be fair, between FY 2025 and 2026 would be spread, So, a bit less than half of it. And So, me of that benefit, you know, will come into Gawler, where we're realigning So, me costs, that cost advantage Saverglass has in the Gawler, and So, me of it comes Saverglass, again, realigning So, me of that. Yeah, it's in our planning for this year, and it is real, and we're still highly confident of delivering, you know, that AUD 15 million through to the end of, you know, what we think will be 2026. No problems. The second one, just in relation to, as I was thinking about the other side of destocking, you know, the business historically, you know, you'd pointed to So,rt of that 6% CAGR volume growth at what it had grown at historically. Do you still see that as realistic on the other side? Obviously, there's a debate at the moment around premiumization and, obviously, you know, consumer trading down as well. Look, I think there's no reason for us to believe that that's not the case in the normalized world, and part of that CAGR was the premium segment growing faster than the segment as a whole. We've done So, me work, you know, trying to revalidate that with So, me external advisors, and that has all come through, suggesting that, you know, when the world normalizes again, that, you know, the premium segment still should grow above that. So, you know, we'd be thinking you're gonna get 3%-4% within that premium category, and Saverglass has consistently also done is gain market share. You know, whether it be what they've done in Mexico, the consistent gains they're getting in North America, you know, the opportunity we're now looking at, particularly in the broader Asia-Pacific region. So we're comfortable that that's a reasonable target for us to have once things settle back down. Thank you. Just 2 final ones, if I can. Just switching to North America, you talked about So, me green shoots there, et cetera. Just to clarify whether you're seeing that flow through to your order books for, you know, OPS, whether it's manufacturing and/or distribution, are you seeing improved order books as you look forward for the next 1-2 months? On the manufacturing side, So, corrugated, the answer is yes. You know, we've certainly seen, you know, positive sales and positive orders relative to comparative period last year, and that has been consistent the last few months. You know, we're talking single digit stuff. We're not talking, you know, there's a big resurgence, but we'd be comfortable to say that's clearly bottomed out, and we are seeing So, me growth come back in, and as that said, that is consistent with what we're hearing from So, me of the broader industry players in corrugated. We have not seen that yet on the distribution side. So, our daily sales numbers and volume numbers are still a little behind, you know, the same period last year. But it's getting, you know, that gap is narrowing, you know, to a point where we don't think we're too far away from that coming fairly squarely. Got it. Thank you. Just a final one, just a quick one on interest, for Sean. Look back in April, you provided an interest guide of AUD 132 million for 2025. Is that still the case? Yeah, we've actually got on slide 28, interest guidance at the bottom of that slide. It's AUD 130-AUD 135. So, obviously, that reflects the second half, you know, higher debt being held in the second half of last year. So, it's slightly less than twice, you know, FY 2024, for second half. Got it. Thank you. Thank you. Your next question comes from Richard Johnson with Jefferies. Please go ahead. Thanks. Thanks very much. Sean, can I just quickly go back to your very helpful answer on freight? I'm just trying to understand, well, if you could give us a sense of the order of magnitude, So, presumably the historic numbers we have Saverglass exclude freight? Yes, that's correct. So, if you go back to the margin slide, in Saverglass deck last year, that excludes freight. Yeah. So, what- Go- Can you help me understand how much it was included in revenue? Oh, I couldn't tell you. On an annualized basis, what So,rt of number should we assume? I'll have to come back to you on that. I couldn't tell you off the top of my head. Yeah. Okay. Then also, could you give a sense of what the, what the central costs were you put Saverglass, please? Relatively minor, So, low single-digit millions. Really, what that does is that reflects the incremental cost that we've incurred as a group. We've resourced up to manage Saverglass. Got it. That's helpful. Thanks. And then just on DNA in Australia, which didn't change very much, I was wondering if you could just step us through where it goes from here as you start to depreciate, obviously, the expansions that you've done here and obviously glass as it kicks through. Well, I mean, you know, we haven't given specific guidance on DNA for 25, but I mean, what we have given you is the specifics around the CapEx programs. In terms of the cans investments, we depreciate those cans investments over 30 years. And in terms of the Gawler investment, that investment is depreciated over a 15-year cycle. But we haven't given specific guidance on DNA. Okay, but in general, that'll step up progressively over the next couple of years, correct? Yeah, that's right. As will earnings in line with the cans growth. Yeah, no, got it. So, I mean, if you think about cans, you know, you form your view on what you think the cans' underlying growth rate is, the depreciation investments of the capital investments we've outlined reasonably clearly, I think. And as I said, they're depreciated over a 30-year life. Yeah. Okay, good. And then, Brian, just on cans demand, I mean, from the numbers you've previously given, it looks like volumes dropped 100 basis points in the second half. I mean, I know you did address this, but is there anything particular behind that or category concentration or kind of how should we think about that? Look, it's fairly consistent. I mean, one of the segments that has suffered a bit, which has been quite public, is craft beer. So, you know, that has been a growing segment for us, and that, you know, has certainly been in in you know So, mewhat of decline, and unfortunately, there's been a number of number go under. So, that has certainly tapered off a bit. But what we have seen is probably less you know less aggressive promotion from So, me of the you know whether the retailers or brand owners you know over that last period. So, you know, we're not at all concerned about you know the future prospects because we know we've got So, me step up in terms of you know share of wallet. In fact, as we go into calendar year 2025 with one of our agreements, and we know we've got further investments coming online, you know, from our major customer, So,ft drink manufacturer, in early 2025 relative to additional capacity for cans, and similar with our largest beer customer and others. So, these investments are not in place yet, and a lot of them are tapped out relative to can capacity. So, I think there's a little bit of demand, but there's also a little bit of available capacity for them and for us to fuel any growth. Got it. That's very helpful. Thanks. And then just two quick ones. I know you referred Saverglass volumes being down 11%. Can I just clarify whether that was production or sales? It's sales. Sales. Yeah, sales. Okay, perfect. Thanks. And then just finally, I mean, I know you couldn't answer this on the call earlier, but, you know, I can remember the days when Amcor used to say they could never sell Sunclips because the tax burden would be far too high. So, I know you don't have, obviously don't have a definitive answer, but, I mean, do you, I mean, presumably, the whole, the tax base was reset on spinout, or is that not correct? I'm not, I'm not gonna comment on tax at this stage, Richard. Okay, thank you. Thank you. Your next question comes from James Wilson with Jardene Australia. Please go ahead. Hi, guys. If I'm trying to understand the seasonality to Saverglass business, and also the OPS business going into 2025, are you able to just talk us through how we should think about So,rt of annualizing that second half run rate into next year? Is it just a factor of effectively timing by 2, or is there So, mething we should be accounting for, particularly for OPS, with the stronger fourth quarter that it normally reports? ... Well, I think if you think about seasonality right now, all of the rules are out of the window, in terms of, in terms Saverglass, because we've come off, you know, this, destocking cycle. You know, historically, you know, you kinda need to look at, you know, the spirits business is more evenly weighted, to the extent, you know, the champagne and wine season, more towards the back end of their summer. But, you know, in terms of 2025 guidance, you know, the way to think about that is first half consistent with the second half of 2024, and then, you know, once, you know, form a view on what you think will happen with destocking, when that will end, and that'll probably give a lift So, metime into the second half. So, you know, not a traditional seasonal pattern. On OPS, again, similar So,rt of pattern over the last three or So, years. The business used to be weighted towards the first half, but that hasn't really been normal at all, because with price inflation and then price deflation, that it's been, you know, less predictable than it had been in the five years, probably before COVID. Five, I know that you guys reported a lower rate for 2024 relative to your historical rate. How do we think about that? Is it So,rt of a reversion back to normal rates, or is there So, mething structurally changed, maybe jurisdictionally, that will lead to a lower rate going forward? Sorry, when you say rate, what are you referring to? Your effective tax rate. Oh, tax rate? Yep. Well, a couple of things. So, in terms of the statutory ETR, obviously the transaction costs Saverglass are not deductible, So, that impacts on the group's ETR. In this FY 2024 period. As we think about going forward, the ETR is probably closer to 26, 20... It'll come down a little bit. We've historically guided to So,rt of 27-ish%. It's probably slightly lower, depending on the mix of earnings. The French tax rate sits at just under 26%, 25-point-something%, there or thereabouts. So, you know, probably closer to 26 than 27 going forward. Great. Just one final one from me, guys, before I hand it over. On So,rt of the deferred CapEx from the second half of 2024 that was mentioned on the call, how much was that? And what So,rt of level of catch up is expected, perhaps if not in 2025, then in FY 2026, from CapEx deferrals? Well, firstly, we don't expect any catch-up. The essence of what we've tried to do is, you know, we always look at our CapEx spend relative to, you know, the affordability envelope in year, and then we try to manage that down. There's always an element of discretion, particularly around So, me of the base CapEx and phasing. If you think about the G3 furnace, that was originally slated to start at the backend of FY 2024, beginning of FY 2025. And, you know, because we're not drawing the same load, we're able to just hold that a little bit longer and, you know, we think that'll probably be So, me time towards the back end of the first half, maybe the beginning of the second half, depending on the wear in the furnace. So we don't really think that there's not a catch up in any way. It's more just, you know, a rolling slowdown across the portfolio. Okay, understood. Thanks for your help, guys. Thank you. Your next question comes from Nikolai Dale with Barrenjoey. Please go ahead. Pardon me, Nikolai, your line is now live. Please ask your question. Maybe if we can just jump to the next- Yeah, we'll go to the- question and come back to Nikolai. Thank you. Your next question comes from Cameron McDonald with E&P. Please go ahead. Afternoon, guys. Just I think, at the offsite in France, you mentioned that the OPS business, particularly around the distribution, was wearing about $5 million worth of additional recruitment costs for the sales force. Is that the right number that we should be thinking about, you So,rt of rolling and getting a benefit from in FY 2025? It was there or thereabouts, So, AUD 4 million or AUD 5 million. Yep. Yeah, that's, that's the right number, and I think we, as we talked there, Cameron and, and Kelly went through, you know, we, we have around about a So,rt of up to two-year cycle before they start to, let's say, fully cover their costs and then start to give us an incremental return. So, as we go through FY 25, we'll start to get So, me return from So, me of those. But, you know, we wouldn't be getting the full incremental return, you know, on a true, a true upside, probably until we, you know, start to get to FY 26. And, and one of the things that we have committed to do is to continue to add in 25. So even though So, me of them are generating return, you know, and, and we expect that, we are still continuing to add So, me cost in, not incremental cost to what we have been incurring, but to make sure that the long-term growth rate, you know, which is in our control, will be sustainable. Okay, thank you. And then just Saverglass, can you break down or give us So, me color around what you're seeing between Europe and then North America and So, me of the trends? Because, I mean, So, me of the big beverage companies obviously talking a weak US environment, but seeing So, me pockets of strength in Europe and other jurisdictions. Yeah. We're probably seeing a little bit different to that. We're probably seeing, in So, me ways, a little bit of the opposite of that. European demand has been subdued- Mm. to slightly down, and we have seen at least what's flowing through to us, you know, the forward order book, particularly for our Mexico facility and Mexican supply, is increasing. So, just for awareness, you know, we had curtail capacity in one of our furnaces in Mexico, and, you know, it's been very public about the decline in tequila and the reduction in tequila manufacturing capacity that most of the players had taken. Now, that directly impacted our facility there, but it's at the point now where we need to kick that, you know, additional capacity and second furnace back in gear as we get towards, you know, the latter months in this calendar year. So, our order book is increasing sufficiently that, you know, our production will lift. Certainly from what we're seeing in the U.S., we're seeing still So, me increased demand. Mind you, So, me of that is us winning additional business, which is- Mm. which is and has been our aim. Okay, So, the second line's coming back on in Mexico. Yeah. So that So,unds like that's a... Because I think, again, you So,rt of indicated that you had signed So, me take-or-pay protection around that facility with, with the tequila production. So, as we think about that capacity coming back on, you know, at what So,rt of capacity level does it have to hit before you get more than the take or pay? Well, effectively take or pay. So, we have a volume agreement, and that is with Diageo. So, there's no issues us talking, at least conceptually, around what that agreement looks like. And that was when we built the second furnace that, you know, they would provide a certain volume load, and they have underwritten that volume load. Now, what we saw in FY 2024 is that they weren't able to take all of that load because they were, you know, overstocked themselves and needing to run down- Yeah -their own inventories, which means they have a catch-up. So, what they've agreed is over the contract period, they will honor that. So, whether it all flows through and how quickly back into our Mexican production is TBD. You know, we have been given additional SKUs that they were So,urcing from others, now come to us to help beef that volume back up. And they're also looking at giving us So, me volume in Europe, where we don't supply Diageo, that as to true up the entire balance. So, it may not all come out of Mexico, but we're confident that agreement, you know, will be honored relative to total volume commitments they've made. But as I said, the good news is the underlying demand for certain products is starting to tick back up, particularly in Mexico. That means, you know, certainly from their own inventory depletion, that's a good sign that they're getting close to the bottom of that. Okay. So, where, where do you think you're currently? I think, again, at the offsite, you were saying that you're about 60% utilization. Where, where do you think you're at the moment, as you exit 2024? Similar to that, maybe a touch under. As you can see from the inventory graphs we gave you, we've been taking So, me inventory down of our own, you know, because, you know, we wanna make sure we're prudent and obviously managing cash and everything else effectively. So, you know, we'd be a little under the 60% utilization, and it's vastly different depending on the site, obviously. You know, we're not running every site at, you know, close to 60%. So, me are running at, you know, their 70%-80%, and others, like Mexico, where we had a furnace down, as you'd say, we're at 50%. Yeah. Okay, and So,rry, final question, just in terms of, you know, without you know, running the risk of wanting to get into specific customers. But, you know, our understanding is that, you know, or that you certainly curtailed production for Gray Goose, you know, as they came out of the COVID boom, and we saw that in France. Is, you know, where have you reached a point where you've depleted the inventory for them and you're putting capacity back into those bottles? Yeah, well, we won't get into the specific volume numbers because that's not ours to give. But, yes, their inventory levels have normalized. So, from a production perspective, we're producing, and we're producing to what their, you know, we would say, is equivalent to their ex ter nal demand. So, we're comfortable that that depletion has taken place and normalized. Great. Thank you. Thanks, Cameron. Thank you. Your next question comes from Nikolai Dale with Barrenjoey. Please go ahead. Yeah. Hi, there. Are you able to hear me? It is Brooke on, Nikolai's line. No problem. No worries. Yeah. Thanks for fitting me in. Just a few questions. You mentioned a couple of times, you know, that 6% type average utilization Saverglass. can you just talk about, you know, the level of margin opportunity if you get that utilization up to, you know, 70%-80%, presumably as you see volumes recover and normalize over the next couple of years? Should we see So, me nice margin expansion there, or is there So, me So,rt of offsetting to think about? Well, I think, firstly, what I'd say is, if we were to get the 11% volume lift, we would expect to be back where the pro forma numbers that we released in September were last year. And, and we haven't really given any guidance beyond that. But we would expect once we're through this destocking cycle... and look, there is a possibility that- ... you know, we might end up with an overcorrection briefly, just given what we are seeing with So, me of our customers running inventories down, probably a little bit below historical levels. Or at least they're So,rt of talking about that, and there was So, me commentary from Brown-Forman to that extent, you know, a few months ago as well. But we would expect the business to come back to, you know, the long run average CAGR of, you know, circa 6%. And So, you know, you get the 11% volume back, and you probably expect to see So, me growth from that point. Yeah, that's highly predicated, Brooke, on the mix- Mm-hmm. - between, you know, what we have in, you know, the premium or what that business called core business. So, the more premium specialized products versus, you know, the premium wine segment. So, depending on what the load is on those plants, you know, the margin is- Mm. You know, is So, mewhat different compared to that. So, we wouldn't want to tie it to specific utilization. It's more about, you know, the mix. And as Sean said, our first goal is, you know, get the business back to a volume level and profitability level, which is in line with what we paid for the business, you know, and then, you know, and then continue on the journey to get it back on the growth path. Thanks. And do you mind commenting on just the level of engagement you have with the private equity firm that So,rt of offered a bid for Orora, which was declined, which you know now makes sense given the numbers you've delivered and the plan you have. But just the level of engagement, is there still potential for them to come back with a more favorable offer? Well, what they may or may not do, we don't know. So, that's, that is for them. What I can say is that the offer is very recent, So, it's not like there's been a long period of engagement. A very recent, and an offer, not a whole lot of engagement, So, you know, which is why we were comfortable to reject it, you know, based on the price and very conditional nature of the offer. So, where to from here? Who knows? Bu`t, some we're not necessarily holding our breath waiting for another one. Yeah, understandable. And, just with respect to, net debt, I know you've provided So, me comments with, respect to leverage, getting down to a more comfortable level in FY 2026. But do you expect, or to what extent do you think net debt's goanna Sort of drop in, in FY 2025, relative to, to what you've just printed for, for June 2024? Yeah. Well, I think given my comments around leverage, I'd probably like to leave it at that, because then you'll infer So, mething from the calculation. I think we're, you know, pretty comfortable with the net debt level holding. So,rry, with the gearing level holding, net debt to EBITDA terms, with the first half, with the exit second half of 2024. And that really reflects the CapEx profile for the G3 rebuild and the earnings impacts of G3, when the furnace goes out, we lose a little bit of recoveries, as we've talked about, the circa AUD 16 million. And then from that point, we've really, you know, we've spent the G3 CapEx, and we would expect to start to see the group de-lever slightly, before we get into 2026, when we really see the, you know, the earnings start to recover. And then we get more of an earnings de-lever than a net debt de-lever. Yeah, that makes sense. Thanks for clarifying. No problem. Thank you. Your next question comes from Sam Seow with Citi. Please go ahead. Oh, hey, guys. Thanks for taking the question. Just quickly on the US there, I think, you know, previously you've quoted that kind of scanner data. And when you look at it, you know, most of the categories are currently declining. Just trying to reconcile that with kind of like your EBITDA increase commentary and maybe if we should just discount that scanner data altogether. Well, I think it's generally a guide, So,. And we certainly look at it over, let's say, the longer period, and I mean, So, me of the short-term data really just gives you an indication, is there, you know, is there So, mething driving at the moment? I would suggest, particularly with the U.S., there's a lot of uncertainty in the U.S. economy, obviously with an election coming up in November. And, you know, most people we talk to, you know, a lot of people are So,rt of sitting on the fence relative to what may happen. And So, I'm not sure we want to read too much into positive or negative trends of most of those things at the moment. But what we are comfortable with is, you know, depletion rates of inventories is definitely coming down. Mm. So, you know, even if consumer demand is pretty flat, you know, we should expect an uplift in orders because those orders have got to come from us instead of out of our customers' inventory. Mm. So that's the main thing we're So,rt of focused on at the moment. And then I think once we get past November, in the U.S. particularly, you know, we would expect things to settle down when people have So, me certainty on what's happening, at least on the political landscape. Mm. I think the other, the other add there, Brian, is when you look at that data, I think it's one of your analysts that does a really good job as well on that, I think Simon Hale. When you look at that data, you have to look beyond the headline volume to the individual products as well. And So, there's really quite a mixed bag in terms of the reporting on it. You know, certain products have, you know, in fact, one of the products that he regularly quotes, we actually supply, which is experiencing mid, you know, twenties growth year on year. And that's certainly not the, that's certainly not the whole portfolio, unfortunately. But there are certainly products that are doing well.... Well, what is clear is that the lower end volume spirits are obviously, you know, significantly affected, but that's not really where we play. We play in the premium end of the market. But it is hard to get a read through that scan data on the premium versus, you know, mass market portions. Got it. That's really helpful. And then maybe following on from that, I mean, inherent in kind of your guidance for the second half run rate, both, I guess, for OPS Saverglass, is there, I guess you touched on it earlier, but is there an inherent kind of macro forecast, you know, with... I mean, taking into consideration that most kind of consensus expect So, me kind of slowdown, you know, towards the end of the year? Well, I think we're- Yeah. Yeah. No, I think what we've really done is just looked at, you know, to be honest, both of those businesses, OPS Saverglass, have been relatively stable- Mm ... for the last number of months, and we're effectively extrapolating that out. We don't see any real drivers up or down- Mm that should radically affect that. Now, there's always So, me ups and downs in every business. Mm -when we look back on it, but, you know, normally So, me of the ups offset the downs and vice versa. So, we're comfortable at, you know, it's a steady state at the moment. You know, would we like- Mm ... more volume? Yes. But, you know, we feel that we're in a relatively steady state, So, extrapolating that out, we don't see any macro or major macro influences on that. Okay, cool. And then, the French government benefits you touched on, could you perhaps just give us a quick, you know, short 101 on how they work? You know, when you get the benefits and how they reverse, and- Yeah. Yeah. Like a lot of things in France, it's Sam, it's very complex. The way it So,rt of works is, we effectively get a benefit on the So,cial charges we need to pay on employee labor. It kind of broadly works for what they call part-time working or short hours working, we effectively get So, me benefit, and it's negotiated almost site by site with local government and federal government support. Belgium is different to the sites in France as well. But in essence, you know, what we do is approach the government, talk to them about the amount of people that are impacted, negotiate an outcome, and they take part of the cost by accepting a reduction in the So,cial charges that we might otherwise pay. The employee also ends up taking a bit of a haircut because they are not getting paid for those hours, but we get a bit of a benefit by keeping them on. We get a reduction in what we pay them, we get a reduction in the So,cial charges we pay on the rates that we actually do pay them for. But it's quite a complicated equation. It's, you know, low single-digit EUR millions. Is the benefit in FY 2024? Yes. Yes. Okay. And that should fully reverse in 2025? No, we expect it probably to continue. But once the utilization start to lift back again, we would, you know, if we, we would expect that we'd bring, you know, our staff back to full-time working. One of the things Jean-Marc's done a really good job at is where we have contractors or contract labor, certainly reducing that, certainly reducing the labor in areas or jurisdictions where there are less issues. So, you know, in Mexico, for example, or in Iraq, we're able to release our staff a little more easily than in Europe. And of course, we've then rebalanced. This is the benefit of having a global network. We've been able to rebalance the load across that network. Thanks. That's really helpful. And then just quickly, OPS, just the timing, you know, yes or no, you know, decision, is there a kind of timing you're working with to get to a final decision either way? Uh ... or is that just gonna drag and kind of be there in the background? No, we think we'll know in the next few months. This is, you know, this is. You know, we're progressing, you know. I think we're progressing comfortably at a reasonable pace to So,rt of work through it. But there, to use the phrase, there's still a bit of wood to chop- Mm before we get to a go, no-go. Yeah. But yeah, it's inside a few months. Mm, okay. And if it's a no, would you put it to a broader market or- Uh. Or is that just with the one guy and that's it? Look, I mean, it's, you know, I think, you know, over time, we've had quite a bit of inbound interest for that and other parts of our business. Mm ... which shouldn't surprise you. You know, and to be honest, now that it's in the public domain, I wouldn't be surprised if there are interested parties that we get it. Our intention is not to- Mm ... to run a very broad, you know, anyone can participate process. We're comfortable with the process we've currently got going. But, you know, would it surprise us if we get So, me additional interest that we could or should evaluate? No. But, you know, we'll make a determination as we get to the decision juncture in a few months' time as to, Yeah ... what we do from there. Thanks, guys. Very helpful. Thank you. Your next question comes from Neeraj Shah with Goldman Sachs. Please go ahead. Hi, guys. Thanks for the follow-up. Be a quick one. I'm just trying to reconcile your comments around So,rt of hunting for standard product versus, I think, the green shoots and mix you called out in June or July. Yeah. So, it's about price and mix. So, one of the things we have said previously, Neeraj, is we've been looking for additional volume in the more standard premium products as opposed to our premium products. What we've also been able to do is hold on to price with So, me of the price reductions. So, with So, me of the, you know, the things like energy, So, me of the raw materials, like Soda ash, et cetera, we've been able to hold on to that cost in terms of our average sell price, and that's what we've seen in July. Got it. Okay, thanks. Thank you. Your next question comes from Daniel Kang with CLSA. Please go ahead. Hi, guys. Just a couple of quick ones from me. Just with regards to the inventory charts on slide 27, I guess you commented on your production discipline to take down your own stockpiles. And I guess we're not really seeing that same rate of depletion or acceleration in your customer inventory levels. Just wondering if you can comment on your competitors, whether they're showing the same level of discipline as you are? Oh, I couldn't possibly comment on our competitors. But what I think you can see in that chart is really towards November 2023, you can see quite a peak in the customer-owned inventory. You know, it really accelerated at that point, whilst at the same time we were actually seeing, you Saverglass's own inventory levels start to fall, you know, post the So,rt of, you know, Well, really the beginning of our financial year. You know, we have seen that spike. We have seen it start to come down, and the way we're thinking about it is, you know, if you draw that line between the peak and the current levels, even just in the period that we've owned the business from December through to July, that's really sales we haven't been able to bill the customers for or production we haven't been able to have. Yeah. Got it. Thanks, Sean. And just, while Saverglass, pricing strategy into FY 25, you So,rt of commented on the main call that, yeah, So, me of the pricing pressure was more to the standard products, but just, if you can just give So, me color on the premium products and how it's looking into, yeah, the next 12 months. Yeah, I mean, certainly, as you said, the, you know, if you've got large-scale customers, then, you know, they have, you know, always a view of making sure that, you know, the products we supply, and whether they're premium or not, are competitive. And, you know, we have the mechanisms we've talked about before in terms of, you know, resetting price based on input costs and things, So, that works quite well. So, we're comfortable, you know, that those pricing movements, whether they be up or down, you know, are reflective of where our cost base sits. You know, certainly as you get to the very, very long tail of small customers Saverglass has, you know, thousands of customers, you know, these are very small quantities of products, and a large part of the cost, particularly for proprietary products, is the initial setup, design, and tooling costs. So, you know, the cost in terms of the unit cost, there's not generally competitive pressure on those. So, once they're set, you know, those mechanisms continue to work. So, we're comfortable with, you know, that long tail, which is, you know, a big chunk of the business, is quite protected from competitive threat. The larger premium customers we have, you know, pretty clear contracts on how pricing movements are made within those. But where there is, as we said, let's say, getting into more the commercial, you know, premium, but, you know, in a lot of cases they may call standard products, then, yeah, there's a little bit more competition. And therefore, at the moment, given most people are lightly loaded for their capacity, certainly more, more price pressure. Great. Thanks, Brian. Thank you. Your next question comes from Keith Chau with MST Marquee. Please go ahead. Yeah, Brian and Sean, thanks for taking my follow-up questions. First one, the OPS sale, can I just confirm that that was an inbound rather than an outbound? Uh- -that resulted in the sale process? Yeah, we and I might have said this before, you know, over recent years we've had a lot of inbounds for that business and quite a few for other parts of the business, and So, we have consistently said, you know, "No." So, we have chosen to engage, you know, based on where we see ourselves heading for the future. And, you know, it's not to say we hadn't had inbounds, you know, prior to that, you know, may have made sense. We've had a lot of complexity, obviously, with Saverglass acquisition. You know, we, to be frank, we had discussions prior to Saverglass about, you know, the long-term strategy for the business and focus, and, you know, we were all aligned relative to, you know, beverage containers being, you know, the packaging segment we wanted to be in. So, you know, once the dust has settled Saverglass, the timing has, you know, I could argue the dust hasn't quite settled Saverglass, but from an integration standpoint, settling, you know, the timing is more appropriate. But, you know, this is So, mething we've been in discussions on for quite a number of months now. Mm-hmm. So this is not a recent thing or a reaction, you know, based on our trading update or our concern about balance sheet. And as we've said before, this is not a fire sale, So, if we don't believe it brings the appropriate value for shareholders, then we will not be selling the business. Mm-hmm. Okay. It's fair, it's fair to say, Keith, that, you know, it's been, as Brian said, it's been a really active conversation for a, for a long period of time. And, you know, we've had a, a firm view of what value looks like- Mm-hmm ... for you know, a long period of time. You know, as we So,rt of got to the earlier part of this year, we were settling down Saverglass acquisition and thought the timing was starting to look like it might be right. ... Okay, thank you. And then on the OPS business, I think you mentioned, 4Q earnings did a little bit better. What was the makeup of that? You know, with volumes, was it just simply the case that volumes were not quite as bad as previously expected? Or, did price pressure from customers ease off? 'Cause, you know, it seems like it was a pretty sudden change from, "Oh, shit, you know, customers are coming to us and asking for price concessions," to now, "Maybe it's not So, bad." So, just keen to understand, you know, the differences between what you saw in April to what actually eventuated in the half. Yeah. Well, when we made the call in April, you know, at that point, we should have seen, you know, the start of the seasonal upticks- Mm. -which is, I think, what we were talking about back then. And yes, there's, you know, because volumes are a bit So,fter, there's a fair bit of noise in the market about pricing, and, and as we hadn't seen the volume come up, you know, we rebaselined, and I think we were, we were quite open with that. We rebaselined from that run rate through to the end of June and said, "Look, if, if we don't see any uptick and this price pressure is greater, this is, this is the So,rt of range." And we wanted to be relatively conservative because we hadn't seen the improvement, and we were a bit concerned. Mm. Now, the team did a better job managing the price, right, and negotiating it through and as they do, going back to our supply base, given it's a distribution business and ensuring that, you know, where possible, we're not the meat in the sandwich, giving price and therefore margin away. And I think that's reflected in the 5.3% for the second half. And yeah, volume is a little better than what we predicted because we'd So,rt of, we picked the floor and extrapolated that straight through. Okay. Thank you. And then, final question on the fiberglass business. Sean, the margin range, I think you've given a couple of times in terms of normal margins is 22%-24%? That's correct. But that was prior to the freight adjustment. Of course. So now that the freight adjustment is in there, what's the order of magnitude change that we should adjust to that margin? Would it be, you know, 50-100 basis points? Can you give us a steer on that, please? Yeah. I'm not sure we're ready to give that guidance just at the moment. I think we, you know, we need to see where the business settles, and then we'll give you a little bit more of an update. We're still seeing quite a bit of volatility in freight prices- We are. freight costs, and that'll materially distort that number. Mm. Yeah, we're trying to figure out how do we, how do we do this in a way that, you know, becomes clear for everybody, you know, and is So, mewhat predictable? Because, you know, freight costs went astronomically high a couple of years ago. Mm. Then they came right back down for a period. Mm. Now, a lot of this is contracted and passed through to the customers, So, it doesn't have an impact. Mm -on our true margin dollars, but obviously the margin percentage will fluctuate. The higher the freight cost, the more it has an impact. So, yeah, we're just trying to figure out how to make sure we can articulate that without people reading into it a margin improvement or decline. Yeah, I think the other way is, you know, the way we're thinking about it is excluding those freight costs, the margin range of 22%-24% is the right way to think about the business. It's a little bit like the aluminum impacts in Cairns. You know, we don't really talk to margin in Cairns because, you know, a wild swing in aluminum, which is, you know, a very substantial portion of the recharge through to our customers, really, looking at margin is the wrong way to look at that business. So, we guide to, you know, growth in terms of EBIT. We talk about underlying volume growth in that business, and we talk about returns, you know, holistically across the legacy Australasian business, but we don't talk to, you know, Cairns margin per se. I suspect, you know, we're probably, given the global nature of Saverglass, you know, production relative to its customer set, we're probably gonna land on that being the right measure. So, you know, consistent with history, 22%-24%, and, you know, provide a bit more color around freight over time. Yeah, okay. Fair enough. Actually, I may as well ask it. I don't know what kind of response I'll get with this, but, you know, you mentioned So, me comps that are available for OPS. I don't know if you want to be forthcoming that just to steer us in the right direction, just in case we've slapped So, mething in there that's not appropriate. Any guidance you can give us on that one, Brian or Sean? No. Yeah. Well, you can, you can understand why. I mean, we, we haven't finalized terms on this, So, you know, if we give a range, then, you know, we're effectively giving So, me guidance to a prospective buyer as well, which, we're not sure is, is particularly helpful. Yeah. I mean, if we sit there and give you a conservative number and you print it, then it makes it more difficult for us to negotiate with the buyer, because we No, yeah, I'm thinking more about the transactions in themselves rather than the multiples. Yeah. Mm-hmm. Yeah, I think just based on how we've agreed to proceed on this at the moment, we'd prefer to steer away from giving any commentary on value other than, you know, should we get the deal done, that you know, people would look back on it retrospectively and say that we've done an appropriate deal. Yeah. Good. Understood. Thank you. Appreciate it. Thank you. The next question comes from James Wilson with Jarden Australia. Please go ahead. Hi, guys. Just, one more from me, just around So,rt of the changes to the PPA that you've put through. Obviously, a large reassignment of value away from goodwill. Be able to So,rt of speak to what drove that over the period, that significant change in your thinking or how you valued the assets there? ... No, it's a good question. So, well, firstly, no change in our thinking at all. The international accounting standards require us to go through a valuation exercise to value the assets that we've acquired in the business. You know, to be blunt, if I could have, I would not have put, you know, value against a finite life intangible in customer relationships, but the standards require us to do that. And So, what we did is we engaged an independent valuer. Now we weren't able to do that in December, obviously, because we'd only owned the business for a month, So, we had preliminary valuations and, you know, our accounts reflected that. Over this half, what we've done is engaged an independent valuer who has visited the sites, looked at the assets, and then really ascribed value to, you know, a PP&E, to customer relationships, to brand names, et cetera. And then assessed, you know, the various valuations for provisions, et cetera, across the balance sheet. And So, that really reflects this change in goodwill and the increase in assets, really reflects those valuations. And then, of course, that's been independently verified through KPMG, our auditors. Okay, great. And just So,rt of two follow-ups on that. Firstly, in terms of the PPA changes, you guys put them through on a very helpful slide for Sapphire Glass. Am I right in thinking that those, their impacts to earnings were only felt over the second half of the year? Or was there also a December impact that was retrospectively put through in that slide as well included there? There was a December impact. Okay. If you look at our December results, it was a relatively minor impact 'cause it was based on not having completed the PPA work. So, what we did at that point was we had a view of an IFRS compliant set of financial statements, So, that meant we put leases into the accounts. We had So, me hedge accounting changes that we needed to make, but then when we've done this analysis, it also includes the full period benefit to the seventh. Okay, great. And then- Because effectively, we've had to do is bridge to the opening balance sheet. Okay, that makes sense. And then just So,rt of moving forward when it comes to guidance and, and talking to, to numbers. Are we right to assume that given the intangibles that you guys have reassigned to EPSA and, and Part L and Part A, will become So,rt of normal for how you guide going forward? We intend to guide to an amortization and depreciation inclusive number. These numbers, the guidance statements that we've given, include the PPA numbers in them. Now, I will say we might have to take any other questions offline. We have got another call we need to run to. Thank you, everybody, for your participation and please circle back with Chris if you've got any other direct questions. Great. All right. Appreciate your time today. Thank you all. That does conclude our conference for today. Thank you for participating. You may now disconnect.