Good day, and welcome to the Dechra Pharmaceuticals half-yearly results webcast and conference call. I will now hand over to Ian Page, CEO. Please go ahead, sir. Yeah. Good morning, everybody. Thanks for joining the call today. Pleased to report another excellent set of results. Very strong revenue growth. We have continued to benefit from the strong market to people spending more money on pets, but I'll talk about that a little bit later in the presentation. I think probably the other operational highlight on slide three would be the acquisitions we've made, particularly post the year-end, Laverdia, which expands our portfolio into oncology. Again, I'll talk about that in a little bit more detail later on. Looking at the strategic enablers, the growth drivers behind the business, you know, our people, as always, and we have a number of them in the room with us today, have played a fantastic part in maintaining the business' success, throughout a very difficult couple of years that has been COVID that COVID affected. You know, we have kept all aspects of the business performing very well, particularly the frontline people within manufacturing, and the laboratories, that have done an excellent job. In technology terms, we're globalizing the business more and more every year, and we've got a couple of major programs underway to bring technology across the group, particularly within manufacturing and a new quality management system. Quick word on manufacturing. People will recall a couple of years ago we've got a number of supply issues. Delighted to say that most of those issues, bar a few minor projects that are still in remediation, the manufacturing has done an excellent job, particularly if you look at the high levels of growth, and being able to support that growth has been a big achievement. Just one other slide point on manufacturing. You'll have noticed in historic years that we've been exiting third party contract manufacturing. That is now all washed through the business, and we're no longer reporting on that basis. From an ESG perspective, we're still making excellent progress and with decarbonization being the main priority and setting measurable targets, that Paul and his team are working very hard on at the moment. I won't say much about the financial highlights other than, you know, the revenue growth is excellent and was mainly organic within the period. Underlying EBIT has slightly flattered by lower R&D spend, but, you know, it is nice to see that leverage coming through. On that note, I'll pass you on to Paul, who will cover the financial slides in detail, starting on page six of the presentation. Thank you, Ian. Good morning, everybody. As Ian said, we're really pleased to report excellent performance in the H1 of our financial year, with all major product categories posting double-digit growth. On a constant currency basis, revenue was up strongly by 15.9%, delivering a 15.9% increase in gross profit. Our operating profit of GBP 93.9 million represents a 22% increase on half one last year, with our revenue growth, as Ian said, aided by phasing of research and development costs being a little bit lower than we anticipated in the H1. This is leveraged strongly to increase underlying operating profit, or operating margin, sorry, by 140 basis points to 28.2%. Underlying EPS also increased strongly by 24% in line with trading. Move on to segmental performance. We delivered excellent organic growth in the period, supplemented by the product acquisitions we've made, that Ian will touch on a bit later in the presentation. Just to clarify what we're including where in our numbers, we have in our EU existing business includes DVP EU, DVP International, as well as our remaining third-party contract manufacturing. In EU acquisitions, we have one month of Osurnia relating to July sales for which there's no comparator, and five months of Tri-Solfen in Australia and New Zealand following its successful launch in August 2021. North America existing business includes a full like-for-like for Mirataz and a five month like-for-like for Osurnia. In acquisitions, we have the one month balance of Osurnia and a small contribution from the other U.S. product rights deals announced in our recent trading update. Moving on to EU pharmaceuticals. Slide eight. Slide eight. EU Pharma delivered substantial revenue growth, up by 10.5% on the prior year. Growth has slowed as expected as we start to see this market returning to more normalized levels of trading. The existing business increased by 8.3%. This still represents a very strong organic performance given the comparative period included a pre-Brexit load of EUR 7 million. Tri-Solfen in Australia and New Zealand, and July sales of Osurnia added GBP 4.2 million of revenues from acquisition. Operating profit from existing business increased by 8.2%, with operating margin maintained at 33.3%. Tri-Solfen and the one month of Osurnia sales contributed a healthy GBP 2.5 million of EBIT at a margin of 59.5%, reflecting the gross margin nature of product deals. Consolidated underlying EBIT margin increased by 50 basis points to 33.8%. Moving on to slide nine. In North America, we delivered exceptional revenue growth of 26.1%, with our existing business in particular performing ahead of management expectations, growing by 25%. This reflects a strong demand for our CAP products in that territory. Acquisition revenue consists of GBP 0.6 million from Osurnia and GBP 0.6 million from the product rights deals we completed in the period. Underlying operating profit increased strongly by 25.6% to GBP 43.6 million, with the majority of that increase coming from our existing business. Operating margin on our existing business reduced by 20 basis points to 34.5% as a result of SG&A normalization, which we previously flagged following COVID-19 restrictions being lifted. Acquisition margin had no impact on the consolidated underlying EBIT margin, which was also 34.5%. A small reduction of 10 basis points on the prior year. Moving on to pharmaceutical research and development on slide 10. We continue to make progress on the pipeline despite COVID-19. As Ian said, our R&D investment of GBP 13.5 million in the period was a reduction in spend compared to H1 in the prior year. The period-on-period decrease is the result of project cost phasing, which we expect to catch up in the H2. Of the total R&D spend, only GBP 0.5 million related to Akston, and we expect investment to increase significantly in the H2. Moving on to slide 11. Our gross margin in the period was maintained at 56.9%, with CAP continuing to be the main driver of growth. On SG&A expenses, they increased to GBP 81.8 million in the period as our cost base started to normalize post-COVID-19. However, despite this increase, SG&A actually reduced as a percentage of revenue from 24.9% to 24.6%. Moving on to slide 12, in currency, we continue to see volatility with a significant weakening of both the euro and US dollar adversely impacting our reported results for the period. I've included the usual sensitivities that show the impact exchange rate variations have on our numbers, as well as the impacts the current exchange rates would have had these rates applied for the period. If current rates had applied for the whole period, the impact would only have been minimal, with underlying diluted EPS only being 0.3% lower. Moving on to cash flow on slide 13. The group continues to enjoy very strong cash generation on the back of the excellent trading performance in the period. Net cash generated from operations increased by 24.1% to GBP 103.3 million, resulting in cash conversion of 110%. Moving on to our net debt. We reduced net debt in the period by GBP 7.1 million to GBP 193.1 million at 31 December, with the strong cash generation of the business being utilized to fund the 6 product acquisitions we made in the period, which you can see in the bridge as part of our CapEx number. The only other significant movements in the period were payments of the dividend and interest and tax payments. The pro forma leverage quoted of 0.9x includes full year EBITDAR for acquisitions and is on a pre IFRS 16 basis. On tax, in slide 15, our underlying effective tax rates increased as signposted to 23%, reflecting the regional mix of operating profits and loss of patent box benefits. The reported ETR of 23.8% includes the tax effect of an exceptional deferred tax charge due to the Dutch corporate tax rates increasing to 25.8% on the first of January 2022. We continue to monitor relevant tax legislation internationally and the impact this could have on our ETR. Most of the territories in which we pay tax seem to be converging in the medium term to a rate of about 25%. Finally, just to finish off on the numbers, on other financial items, non-underlying items in the period were GBP 36.5 million, which almost entirely relates to the amortization of acquired intangibles. The balance of GBP 1.1 million related to an impairment on our non-core agrochemicals business, which was sold for GBP 3 million post-period end. The interim dividend of GBP 0.12 per share is an increase of 8% and reflects our confidence in the business and its future prospects. On banking, we have significant headroom on facilities and covenants, which will enable us to consider further relevant acquisition and investment opportunities as they arise. I hand back to Ian to provide some more detail on H1 highlights. Thanks, Paul. Just going back to the markets, many commentators have commented on the increased number of dogs and increased spending on pets, and there is no doubt about that over the last two years during COVID. We are now seeing normalized levels of growth returning. I would, however, remind you that normal growth in our industry is still pretty strong, and we'd expect mid-single digits as an underlying market growth. I'd also remind you that we have a long history of outperforming those markets. Looking at EU pharmaceuticals, you know it is our most mature part of our business, and mainly organic growth is an excellent performance with good growth in every country other than the U.K. The U.K. was against a tough comparator in the prior year, but we've now seen that Brexit load wash through, and as we start the H2 of our financial year, we're now seeing also the U.K. get back into growth. North American performance was quite exceptional, particularly if we bear in mind that there's new generic competition within the market within the U.S., and particularly an old subject that we've talked about is white label goods by wholesalers. We're still seeing a little bit of an increase in those products and one or two that have competed with Dechra. You know that performance is therefore very exceptional. Not just in the U.S., but across the whole of our operating businesses, it's great to see sales teams back in front of customers. Our relationship with vets is key, and one thing that we do extremely well is that technical sale with all the representatives having the capabilities to do lunch and learn lessons and also the educational programs that we've put into vets are very important to support our specialist therapeutic categories and the growth in those areas. You know, that's a real positive to be able to get back face to face. Also, you know, the North American pharmaceutical segment is driven mainly by the U.S.A., but it's pleasing to report that both Canada and Mexico have performed well. Just a quick note on our international business, which we report in the EU segment. That's also performed very strongly, particularly in Australia and Brazil, where we have our own subsidiaries. We're also getting growth out of a number of our distribution partners around the world. Looking at it by product category, Companion Animal Products at 74% revenue are the main driver of the business, and you can see it is the highest levels of growth, again, referring you back to what I've already said, on the strong market growth within companion animals and the increased spend on vets. We have exceptional growth in a number of our key therapeutic areas, particularly our major sector of endocrinology, but also topical dermatology and anti-infectives have done extremely well in the period. Equine continues to see growth, particularly benefiting from a couple of products that came out of the AST Le Vet Stable, an acquisition we made a few years ago. Those products were part of their pipeline that we launched in the prior year, but also through life cycle management from an old but still important and very large product, which is Equipalazone. Vet markets, so this is almost entirely rest of Europe. Vet markets have started to recover post-COVID. Nutrition, another successful period. These are our branded specific therapeutic pet diets. We've again seen excellent growth in a very competitive market. Our veterinary focus serves us well, and we're getting practice gains within Europe, but also we're now seeing decent penetration of these products into international markets, particularly into Japan and South Korea. Looking at the pipeline, as ever, you know, we're built on a lot of smaller products rather than major blockbuster products. In every single period we report, we've got numerous registrations in several territories. In this half year, that again has been the case. A couple of products that are worth mentioning, and they're all right, would be an equine strangles vaccine, which is a development opportunity we licensed in a few years ago, and we've now registered that and taken it to market. We've also bolstered our U.S. portfolio of generics with an amoxicillin suspension, which fits alongside nicely with the amoxicillin tablets that we have had a lot of success with within the U.S. market. Probably the one negative that might just need a little bit of explanation is Tri-Solfen, and pleasingly, we've had it registered in the U.K. In Europe, the partners, Medical Ethics, to remind you, we own 49.5% of that business, they're responsible for taking this to registration, not Dechra. We do have the global marketing rights for multiple species and multiple application, but the first target market was piglet castration. Medical Ethics took the decision to withdraw the application because, going through the procedure, a number of countries insisted that the product was sterile. This is quite surprising to us. The legislation in the European Pharmacopoeia, which is designed for human products and veterinary products, actually says that products that go into an open wound should be sterile. However, there is an exemption for veterinary products where justification is given. We gave an excellent justification. We can actually prove that we improve sterility of the wound. Bearing in mind that these piglet castrations are done in a dirty farm environment, it's quite remarkable that we believe that animal welfare has been compromised by them not giving us an approval route at this stage for a product which is safe, efficacious, and is economical for farmers to use that would have generated a huge amount of compliance. We have a number of options we're exploring at the moment as to how to get this product registered. What is interesting, we've managed to get a registration in Portugal, and there are regulations within Europe called the Cascade Regulations, which actually means that the big farm units where there's a clear demand for this product in numerous countries, particularly Spain and France, these farm units will actually be able to import from Portugal. You know, we will be putting a lot of pressure through lobbying and through information into the market to try and get this situation resolved. We also have, as I said earlier, a number of other opportunities as to how we can take this to market that we'll hopefully cover in September when we see you for the full year results. In terms of any more on the positive on the pipeline, we still recognize opportunities, and we're always finding new ideas to put into the pipeline. In this period, that has remained true. Delighted to have made some more bolt-on acquisitions. I think we've said in the past that sort of platform deals where we have to complete due diligence by buying companies has proved very difficult. To find these excellent smaller acquisitions that we completed in the half year to bolster our equine portfolio in the U.S. and also our companion animal portfolio in the U.S. is very pleasing. Rompun and Butorphanol are all the smaller products, but add something new for our equine team to say and add to our anesthetic and analgesic portfolio. Sucromate takes us into a slightly different specialist area within horses, into reproduction. It's used for synchronizing breeding. Provet is actually a device, where you extract the horse's whole blood, spin it down, and reinject it into the horse. It's a proven way to improve soft tissue injuries in horses and is a device that the vet can actually take with him into the stables. It's going to be increasingly widely used, we believe, over the next few years. The companion animal products, the anesthetic products are inhalation anesthetics that they use in the majority of operations. Isoflurane is the historic one, sevoflurane is a more modern one. These really complement our sort of critical care anesthesia, analgesia portfolio that we offer to vets. Pleasing to have launched the Atopivet range, which we've licensed in from a Spanish company. Excellent novel products that give us something new within our topical dermatology portfolio. Post the period end, we acquired Laverdia. Really excited about this project. It's a worldwide opportunity. This is a tablet that you can give to your dog on a daily basis. So it's owner applied and will extend the dog's life once it's got lymphoma, which is, you know, a bad type, a type of cancer and a very common cancer in dogs. Because of the clinical need, the FDA in the USA granted it a conditional marketing authorization. This is a. Not a common thing for the FDA to do. That means we can actually sell the product while we complete the development program. Not only will it be registered in the U.S., but we'll also be registering it in Europe and other key international markets. You know, the business is in good shape. Looking at the outlook, trading in the H2 has already started strongly. Those markets are returning to more normalized growth, and I think you'll see that, not just ourselves saying that, other commentators within the market are also reflecting that, as are a number of results from our competitors. Supply chain continues to be a big benefit to the business. You know, we continue to identify new growth opportunities and new acquisitions. You can see within the six-month period, we're also successfully executing strategic opportunities, which will continue to develop growth. You know, we remain very confident in the group's strength and future prospects. That finishes the presentation. We'd like now to open to questions, please. Thank you. If you wish to ask a question at this time, please press star one on your telephone keypad. Please ensure the mute function on your telephone is switched off to allow your signal to reach our equipment. Again, please press star one to ask a question. We will now take our first question from Max Herrmann from Stifel. Please go ahead. Great. Thanks very much for taking my questions, and congratulations on a great H1. Three, if I may. Firstly, I just wanted to understand a little bit more in terms of the phasing of the R&D spend. You commented that that's partly related to Akston spend. I wanted to get a bit better idea of where you are in the development and what key milestones we may expect in the H2 of the year. Secondly, I think in the release, there was some comment about the continuing expansion of the U.S. field force. Just wanted to get a bit more color on what you're doing there and geographically throughout the U.S. Is there any focus on that build-out? Finally, great to see that the nutrition business is growing really strongly. Just wondered whether there was a margin mix impact on that business relative to the pharma business. Is margins in line with the rest of the business, or are they lower or how do they vary? Thanks very much. Do you want to take Akston and nutrition, and I'll take. Yeah. Afterwards, I'll take the US field team. Yeah. Take nutrition first, Max. Margins on nutrition are a little bit lower than our average margin in the CAP business. Still above CAP, so around the 50% mark. It's still a small part of the business. It's great to see growth, but it's not really going to impact on the overall margin of the group, particularly with CAP growing as strongly as it is. On your first question about R&D spend, yeah, we have underspent at just over GBP 13 million in the H1. I'd guided to the full year figure being around GBP 40 million. We do expect a significant catch-up in the H2. We still think we'll be around a little bit below 40 million, but GBP 38 million-GBP 40 million range for the full year. Within that, Akston, because of the milestones, we expect spend in the full year to be around GBP 4 million-GBP 5 million on Akston come the end of the financial year. We will have a significant catch-up in half two. Yeah. Thanks. In terms of the. Go on, Max. I was just going to say on that, just following up on that, the Akston GBP 4 million-GBP 5 million spend, is there any particular milestone that you're referring to? Yeah. It's related to providing the API for the clinical trial. Great. Thank you. Just on the U.S. sales team, the Laverdia acquisition, the original had intended to try and sell it themselves. You know, we won this deal by persuading them we could actually get market penetration quicker than they could, but they had started to build a sales team. As part of the deal, we agreed to employ the majority of the people, which I think was about 11 or 12 people that they had employed to start the sales themselves. We're bringing those into our organization. Bearing in mind it is a new therapeutic sector to us, having a better coverage within the U.S. market is going to be important. I think if you look, compared to most of Big Pharma, we're still somewhat smaller in terms of the sales team that we have. Our representatives do still call on an awful lot of practices in the majority of territories. The other point was, where are we focusing that sales team? There is nowhere specific. It would be just spread across the whole of the U.S. Great. Appreciate that. Thanks very much. Our next question is from Anand Date from HSBC. Please go ahead. Morning, Anand. Hi, morning, everyone. Yeah, morning, guys. A couple for me as well. Just on Akston, could you talk about their progress on ramping up the manufacturing capability and the status of the larger dog trial, I think the 100-dog trial, please, when are results expected, you know, what's going on there? And over to you, Ian, there's a couple more. We need to be in conjunction with Akston. At this point, that will be a question for them. Our contract doesn't allow to speak on their behalf, so I'm sorry, I'm not trying to avoid your question, but I'm not allowed to answer that question without their permission. They're very restrictive because, you know, the principal is human company that are developing the product for humans, that they don't want any comment making without their prior permission. Okay. There is nothing. I would iterate that there is nothing untoward, however. Yeah. Okay. Just on Laverdia, just more generally, could you talk about the characteristics of oncology that make it quite attractive? Then the second bit is why now? Because, you know, obviously you've done lots of product deals in the H1 as well, but what reassurance that there's still plenty of white space to go for in your existing core therapeutic areas as well? I'm not entirely sure what you mean by that. There's a huge amount of scope to add new products to our existing. Well, no. That's what I'm saying. You've done loads of product deals in the H1, but you know, if one wanted to be bearish, one could argue, "Oh, it's a bit weird that they've gone to a new therapeutic area. Why have they chosen to do that? Why now?" Oh, okay. Okay. I mean, oncology is quite attractive. It's like, do you know what I mean? I don't agree with it, but. No, no. Okay. Anand, I understand your question. You've got to bear in mind that, you know, we've never been completely restrictive on the therapeutic sectors within which we operate. We've always said things that involve a specialist technical sell is what we're very, very good at. You know, the reason why we managed to win this deal was because the prior owners of the product saw that it was exactly our area of expertise. You know, we're constantly looking at new therapeutic sectors, but not things like flea, tick and worm. But anything that involves a specialist technical sell, we're good at. It isn't really moving into an area that we don't have competence in. You say that the cancer market is an attractive one. Well, probably not as much as you may think, because you know, the oncology products tend to historically cause a lot of sickness within the dogs and don't actually sustain life that much longer. The beauty of this product is that there are very few side effects, you know. As you'll be aware of that, most chemotherapy products have an awful lot of poor side effects. Mm-hmm. This product can be used alongside those chemotherapy products, but can be used individually as a product as well and will extend the dog's life for a good number of months. That's very important to people when their animals are diagnosed with cancer. You know, to that end, it was a category that we were delighted to move into. Yeah. Fair enough. Perfect. Thanks very much. We will now take our next question from Mike Mitchell from Panmure Gordon. Please go ahead. Thanks. Mm-hmm. Morning, all. Thanks for taking my question. I just wondered what your options are practically with regard to Tri-Solfen in Europe. I'm just thinking, is this an issue with a regulatory solution only, or are you going to be looking at manufacturing processes and what that means potentially in terms of additional costs or timing for Europe? Yeah. First thing I'd say is please bear in mind this is just one application, piglets castration. You know, it's got numerous other applications that we're working on as well. To answer your question more specifically, we're considering a number of things. We're considering reapplying with a slightly different indication, which would involve a little bit more clinical work. We're considering doing some national applications in one or two countries where there is a huge demand from farm units, where we think there may be a little bit of pressure that we can bring to bear from a little bit of lobbying, not directly from ourselves, but by the animal welfare groups and the farming groups. We're also looking at the suggestion that you made as a manufacturing change. Can we actually irradiate this product, or can we filter sterilize it? Both are options that we're looking at at the moment. The problem with that is one of the great things about Tri-Solfen is very economical to be used on farm. Bearing in mind that most of these procedures are actually done without pain relief at all, one of the ethical issues with this is to actually drive compliance and a low, easy to apply, low cost, easy to apply product will actually help that compliance. As soon as you start adding sterility into the package, you're adding to cost. That's not our preferred route, but is an option that we're considering. Understood. No, that's very helpful. Thanks. Just a follow-up on Laverdia. Just wondered if you could elaborate on the conditionality of the approval that's in place at the moment. Just wondering what terms there are and what the obligations are in terms of and timings in terms of full approval. The obligations are that you continue to provide clinical data, that you continue to work on the full approval. There is an annual review by the FDA to reinstate that approval. I think it runs for five years, by which time you've got to complete all the clinical data. We're well down the road with that, with those clinical studies. The safety and efficacy is obviously key. In terms of safety and CMC, we're pretty much far down the road already. That five years won't be a challenge to us. Great. Thanks, Ian. Thanks, Paul. Cheers. Our next question comes from James Gordon from JP Morgan. Please go ahead. Hello. James Gordon, JP Morgan. Thanks for taking the question. First question was about normalized historical growth towards the end of the period. There's been a lot of moving parts over the last few years, sort of just distorting growth to the positive and the negative. What do you think historical growth would be on, like, a clean basis now over the last three or four years? And do you think, assuming we do come out of COVID, that the growth trend does actually change, or do we just go back to what that was? That was the first question, please. Just one sec. Second one on M&A, you've done quite a few for you. Sorry, yeah? I'll just take that one first, then if we could, and then come on with your second question. Mm-hmm. The normal historic levels of growth before COVID were sort of low single digits within Europe and mid-single digits, sort of 6%-7% within the U.S. We're still probably slightly higher than that at the moment, but it is reverting more to those numbers. You've got to bear in mind that the markets are not measured brilliantly, probably with the exception of the U.S. Most of our data is coming out of the U.S. at the moment, and you may have seen one of the bigger competitors report their fourth quarter recently, which actually reflects exactly what I've just said. We also have some fairly hard evidence from another major veterinary company within the US that provides practice management systems that have also published information that show what practice turnover and footfall has been sort of over the last quarter, which supports the information that we've given you today. Sorry, what was your other part of your question? Well, actually, maybe just on that first question. The low single digit and the mid single digit, that was market. Yes. Yeah. In terms of what Dechra was doing. Yeah, Dechra's. You were a few percentage points above that, probably. Yeah. Outperforming the market. We've always said our objective is to outperform markets and, you know, we've done that for 20 years. Great. Thank you. The second question was M&A. I saw you've done quite a lot in licensing of individual products. I think I also heard about it was harder to do sort of big deals during COVID because of the challenges doing face-to-face diligence. Are you in discussion on any bigger company deals, taking on whole companies rather than just products? Is that something that could step up over the next 12 months? We're always talking to companies that we consider as potential acquisition opportunities. When you actually get them over the line or if they ever decide that they want to sell to you is a completely different subject. I mean, to give you some examples, AST Le Vet was a eight to nine year courtship, if not longer. You know, a lot more of the business we've bought we've courted, shall I say, for a good period of time before we actually get to buy them. There are always businesses that we're talking to. I think the key thing as well, James, has always been during COVID the ability to travel. We are now back out traveling and able to get out of the U.K. and going to have some conversations face-to-face. You've got to bear in mind, it's never a cherry-picking exercise. There are not many businesses within animal health, so hence a lot of the success that we've had is because of this relationship that we've developed with businesses. You know, I mean, if you look at the Laverdia-CA1 type product, I mean, that was about having a relationship with the business. Makes sense. Thank you. Third and final question. On Tri-Solfen, you mentioned one scenario for Europe would be that you might have to irradiate or filter the product in order to get EU approval, so you would actually be tweaking the product. If you did have to do that, how much of a delay would that be from sort of now to when it could actually potentially be approved if that scenario played out? Is that a lot of work and then lots of trials have to be repeated? Yeah. Is that relatively trivial? No. I'd say it would be a major development, which is why I said it isn't our preferred route. You'd be talking, I would've thought, a minimum of two years. Again, just to repeat, this is one application, piglet castration. It has numerous applications in different markets. Thank you. We will now take our next question from Andrew Whitney from Investec. Please go ahead. Hi, Ian. Hi, Paul. Thanks a lot for taking the question. Mm-hmm. Just one left from me. Is there an optimum balance of the group at Dechra as a whole? If I think about CAP versus FAP versus equine, I saw you'd done some equine deals recently and some CAP deals. If Tri-Solfen, which can be a relatively big driver in FAP, you know, just nudges out a little bit, do you think about the group in terms of the balance across those three sort of divisions? Or is it, you know, you're just taking opportunities as they become available? Well, I think you know, Andrew, that we've always been opportunistic in you know, many of these opportunities. We don't allocate capital per se to specific parts of the business. We just try and take sensible opportunities when they arise. Is there anything more you want to say, Paul? No, I just think that particularly in the last sort of three or four years with CAP growing as strongly as it has, it doesn't seem to matter what we do with equine, nutrition or FAP. CAP continues to outstrip a ll of those other sectors. I think in the fullness of time, I don't think there'd be any material change to that, Andrew. If you have to look at us five years down the line, I think we'd still be a very, very heavily focused companion animal weighted company. That's helpful. It's reasonable to think there's still lots of opportunities in CAP. That's probably the area where there's most sort of coming through that you could have a look at. Yeah, always. I mean, people still continuing to spend more and more on their pets, particularly in the U.S. market, which is, you know, the biggest driver in the world of the companion animal market. You know, the dynamics of the business remain very, very strong. Thank you very much. Vets can treat more. We will now take. Sorry. Continue. Apologies. We will now take our next question from Zoe Karamanoli from RBC Capital Markets. Please go ahead. Hi. Thank you for taking my questions. Sorry if any of the questions were asked before. Just my line dropped. Three questions from me, please. The first one on cash conversion. Is there any normalization of cash conversion expected? Are there any working capital positions particularly unusual? I can follow up with two questions on white label products. Yeah. Thank you. Yeah. I think we are flattered a little bit at the end of half year, Zoe, to be honest. The last couple of years or last three years, I think at least with you know, full year, we've been around the 90% mark. It's getting tougher and tougher to get to our internal target of 100%. Having said that, you know, we've had you know, as Ian touched on in the presentation, really good solid supply chain. It's a lot more robust than it's been previously. If you're looking at our numbers, we've not had to invest significantly, particularly in inventories. It also, from a seasonality perspective, we tend to finish the year. June is a big sales month compared to December, which is, you know, relatively quiet sales month given that people close down for the holidays. I would expect to see an increase in receivables, but that would only be it. I still think we'd be close to 90%-100% from year end from a cash conversion perspective. Okay. Thank you. If I move on to the white label products, what proportion of your current portfolio is currently exposed to white label products? And how much do you expect this to increase by year on year? Well, Basis? Well, we don't know that. We can't predict what they're going to launch about us. At the moment, we're talking two major products and a couple of minor products where we have white label competition. There's a lot more to this. You know, you've got to think about these companies are wholesalers and they're not drug companies. There are various ways that we create loyalty through brand awareness, through cross-selling across our novel portfolio, which these distributors don't have. They're not structural competitors in the same way as we would class most of the other drug companies. I think there's a limit to how far they can push it, because if these wholesalers whose bread and butter is really supplying our products and all the other major pharmaceutical companies' products, if they start to become a structural competitor, then we have to reassess whether or not we should be supplying through this route. While Dechra perhaps doesn't carry too much weight in the U.S., you know, one or two of these Big Pharma companies carry a huge amount of weight with these distributors, with these wholesalers. You know, I think there's only a limited way that we can push it. I think just also if you bear in mind to justify what I'm saying about not being a structural competitor to us, you know, look at the high levels of growth that we've had in the U.S., and that is despite these two products that we're now having competition in. While it's more of an irritation than a real structural concern to us. Okay, great. If I may, can you share what is the typical margin or revenue pressure when these distributors launch white label products? Well, you bear in mind that the generics in the first place are slightly lower than the novel products. You'd have to answer that question on a product by product basis. Mm. The recent product that we've launched, something called deracoxib, where there are white label products that has taken margins down to about 35%-40%. On the other two products that we're referring to, the bigger products, we're still keeping margins sort of in the 60s, 60% mark, despite having had to lower our prices. Okay, understood. Thank you. We will now take our next question from Kane Slutzkin from Numis. Please go ahead. Thanks. Morning, guys. Just two from me. Morning. Morning. Could you perhaps talk to the dynamics in North America versus Europe? I mean, clearly North America seemingly taken longer to slow. I know it's all CAP and equine, and clearly EU more mature. Could you just give us a little more color on what you're seeing in those two markets and that sort of divergence in performance? And I just sort of noticed, just reading in the commentary, the margins were lower in North America and higher in EU. Could you maybe just sort of give me some color on that? And then just on costs and labor inflation, obviously. The key thing in the market, you know, everybody wants to know sort of what you're seeing there. You don't really seem to be talking about any impact there. I'm just wondering from a sort of ability to pass on any increased costs, what do you see there? I mean, vets obviously need to mark up too. Just interested in your thoughts on maybe price elasticity. Just maybe, Paul, one for you on just the tax rate. I think if I recall, the guidance is 22.5%-23% tax rate. I think I dropped off the call when you were mentioning something about a 25% tax rate. Sorry, you could just maybe fill me in on that, please. Yeah. Let's cover the sort of U.S. versus Europe first. The high levels of consolidation that we're seeing in Europe are actually driving down market growth because there is discounting. You know, if you look at markets like the U.K. that are now highly consolidated, that increases the level of discount, which reduces the growth relative to the U.S. Although we have seen consolidation in the U.S., it hasn't carried the pace that it has within some European countries. Also within the U.S., the number of dogs and cats is still increasing, multiple pet households, and the amount of money is increasing faster within the U.S. that's spent per pet within the U.S. Of course, the U.S. is about 2.5x the size of the European market. That, you know, there's a lot of things that favor that U.S. growth. I think just one other point I would raise on the U.S. as well is you've got a huge country that has one product label, one technical support team, one pharmacovigilance. We need that in a small country like Denmark. You know, the European profile is very different to the U.S. profile. In terms of pricing, you've got to bear in mind a lot of veterinary products, the cost is passed through to the pet owner. There's not many products that are actually restrictive on the pet owner actually making a decision not to treat the pet. That would be a very rare event. The market does allow inflation to be passed on. The vets, of course, make a markup on the product of the drugs. The cost price isn't always the key focus. Simple answer is, we are able to pass through, you know, inflationary price increases into the marketplace. Paul. Yes. On the tax rate, Kane, you're absolutely right. 23% for the full year is where we think we'll be. What I said during the presentation was a number of our countries where we pay most of our tax appear to be converging towards a 25% tax rate. I think in the medium term, that is where I'd expect our tax rates in Europe to move. Okay, great. All right. Sorry guys, while I've got you. I mean, just wondering, you're obviously doing sort of these sort of little bolt-ons and product acquisitions. Just sort of thinking a little bit further, sort of outside the box, are there any sort of areas you would be considering looking at, I don't know, now or in the long term? You know, things like diagnostics. There's other sort of areas where, you know, maybe there's some higher growth prospects, or anything you feel you could enter to sort of leverage your portfolio? In terms of our portfolio, no, we're not, you know, you've probably seen people like Zoetis try and move into diagnostics. It's not a key area. Yeah. Yeah. It's not an area that we have any interest in at all at the moment. We've enough opportunities within specialist prescription medicines for vets. We don't feel the need to diversify from what we're very good at. Okay. Got you. Thanks, guys. We will now take our next question, a follow-up from Anand Date from HSBC. Please go ahead. Yeah. Hi, guys. Sorry, it's me again. It's a slightly dull question. When you look at the balance sheet, you're doing all these deals, but net debt EBITDA is just falling. You've got that target of 2x max. You know, you'll go up to 2.5x for the right deal. You're out traveling, maybe a platform deal is more likely now, maybe not. Has there been a discussion at the sort of board level, what your preferences would be if you start to look a bit under-levered? Or do you just build up a cash sort of position for whenever that next big deal comes? I'll refer you to about a number of years ago when we sold NVS. We suddenly found that we were getting very close to having cash on the balance sheet, and we couldn't get any deal over the line, and five happened all at once. The reason I'm referring to that is that I think we have enough things in the pipeline. We can't ever guarantee as and when they're going to happen, but we have enough things in the pipeline that I'm sure some will happen at some point, that we won't get into the position of having cash that we have to consider what we're going to do with it. Okay. Yeah, that's clear. Thanks very much. We will now take our next question from James Vane-Tempest from Jefferies. Please go ahead. Morning. Good morning. Thanks for taking my questions. With a strong H1 at the top line, just wondering if you can comment on the expected phasing of revenues through this year. My next question is just on the U.S. It looks like you had a higher mix of generics. Just wondering if you can comment on the relative strengths of your U.S. portfolio composition. Finally, if we do get into a recession, do you anticipate people trading down products? Thank you. In terms of phasing, James, the portfolio isn't really seasonal. Historically, we've been a little bit weighted from a revenue perspective towards the H2. Those price rises kick in, but most of the treatments are every day or chronic disease or critical illness. There's not historically been a lot of seasonality in the business. In terms of the U.S., there's another thing to bear in mind apart from what Ian said earlier on the U.S. business is with the Putney acquisition, which was entirely generic. There was also a number of profit share agreements in there with manufacturers, so that we, you know, our long-term agreements, and because they're profit share, tend to be a little bit lower margin than the European business, which is another reason why the U.S. margins would be a little lower than they are in the EU. Yeah. I mean, the Putney acquisition was key, Paul. That, it is slightly more biased to generics there. In terms of our pipeline, most of the money's going into novelty, and that novelty is hugely in product to keep that balance right. I'd like to remind you. Hello? Please go ahead. Thank you. Yeah, sorry. My third question is just on recession. Do you anticipate people trading down products? If I can just ask a follow-up to your answers on the prior one. Is there a proportion of products which are currently being outsourced, which you could bring in-house, and how material would that be? Thank you. Yeah. I think it's our well-known ambition of ours to actually increase the amount of products that we manufacture ourselves. What tends to go against that is we've been fairly acquisitive, and everything that we've bought has been manufactured by a third party. It's a constant fight to actually do that. But we do have a program of tech transfers bringing products in-house, but it depends on the rate of acquisition as to what percentage that gets to. I think it's about 40% at the moment in-house. We're trying to get it back to 50% where it was a couple of years ago. I don't understand what you mean by trading down of products with regards to a recession. I'm just wondering if consumers feel the pinch. You know, if there's a cheaper alternative product, would people take a generic product than a brand or white label product if it was available? Yeah. I don't think that that's particularly a facet of our industry. You know, it's not really a generic market in the same way as a human market is that you know, you've also got to think of the dynamics of the vet making a profit on the sale of his products, rightly or wrongly. You know, a big percentage of the profitability of the veterinary practice comes from the sale of products. They don't actually particularly want to race to the bottom of the lowest price. The answer I gave to a question earlier was that there are really not a lot of products that are restrictive in terms of that animal welfare. I could refer you back to 2007. You know, if you look at the veterinary market, it was one of the few markets that wasn't affected at all by the last recession. You know, the last part of household income ever to be sacrificed from a pet owner is the money that's spent on their pets. You know, I wouldn't say that we're recession-proof, but I think we're probably more recession-proof than most companies. We've just seen exactly the same during COVID, haven't we? Yeah. Yeah. Exactly. Thank you. We will now take our next question from Edward Thomason from Liberum. Please go ahead. Good morning, guys. Thank you for taking my question. Majority of my questions actually have been answered, but I do have one, specifically. We obviously saw the news flow from CVS yesterday, on Friday, related to market consolidation. Specifically, I know this is obviously market specific to the U.K., but are you seeing that trend in Europe as well as in the U.S., and what would be the impact on a slowdown in consolidation to your outlook? Would that impact potentially your ability to achieve sales growth or maybe achieve margins? Yeah. Obviously it's an interesting one in the U.K. For those that are not aware, CVS tried to buy a large practice group and the competition authorities said that that would create a monopoly concern in a number of U.K. cities. The U.K. is the most consolidated market. It's probably about half the U.K. market. So it's no surprise that we're perhaps seeing some restriction on that now. Most of the European markets are nothing like as consolidated, nor is the U.S. Does a slowdown in consolidation benefit Dechra? I guess you could argue that it reduces the pressure on practice groups getting bigger and bigger and bigger and demanding more and more discount. You have to bear in mind that a lot of these practice groups are excellent partners for us. In some countries, they help us deliver growth very quickly by, you know, being able to sell a new product to one outlet that then has a few hundred practices that will start to use it overnight. There's sort of swings and roundabouts, pros and cons to whether or not that slowdown in consolidation is a benefit or not. Okay. Very, very clear. Just one other question, just talking about Tri-Solfen, and just where you see the market opportunity for that product, and whether you can break that down by regions as well as in Europe and Australia and New Zealand region. What, in terms of sales or where we're trying to develop? sales. Well, you know, we don't break out sales by territory. I think we've disclosed what sales in New Zealand and Australia were. Yeah. which is the only place where it's currently approved. Paul brought that up, Paul brought that out earlier in the presentation. In terms of what the opportunities for Tri-Solfen are, we've got it, or Medical Ethics, the parent company have got it in development for horses, for wounds in horses, for foot conditions in cattle, for cattle disbudding, for piglet castration. Obviously, we've talked about tail docking in lambs, but also there are many human applications, and they've just got a number of patents granted for human applications of Tri-Solfen, debriding of venous ulcers. I think there's one or two other patents I can't remember on the human side. There are numerous opportunities for this product. The piglet castration one. You won't guide to a specific market opportunity for Tri-Solfen in Europe and. Well, I think we'd said in Europe that the piglet castration was relatively small, GBP 3 million, GBP 4 million, GBP 5 million. Yeah. Potentially, it was, you know, it's more of a disappointment from an animal welfare perspective than from a financial perspective for Dechra at this point. I think we've guided sort of globally this could be a $20 million-$30 million product. Yeah. In the fullness of time. Yeah. Very clear. Thank you. As there are no further questions at this time, I'd like to turn the call back to your speakers for any additional or closing remarks. No, other than just to say thank you, and we sincerely hope that it will be face-to-face meetings in September when we do intend to revert to a face-to-face roadshow. Thank you very much, everybody, for your time this morning and we'll catch up with you soon. Thank you. Thank you. That will conclude today's conference call. Thank you for your participation. Ladies and gentlemen, you may now disconnect.