Good morning, everyone. Thank you for attending today. You're joined today, obviously by myself, Daemmon Reeve and Ryan Govender. We've had a very strong first half to our year, for which I'd like to thank all of our colleagues across the Treatt group for what has been an exceptional amount of work that they've delivered fantastically on their efforts. We've seen record first half sales with growth of 14.6%. Profit is up 15% with very strong cash generation. Importantly, we are benefiting from a resilient beverage market where our strategic relevance continues to deliver, and we've seen some particularly strong performance in added value citrus, coffee, and China. Over to you, Ryan. Thank you, Daemmon, and good morning, everyone. I think we've learned a lot from the challenges over the last year. We've been able to identify process gaps quickly in the business and then work at pace to drive those improvements across the business, but increase our business discipline at the same time. We did a lot of that in the first half of the year. We've increased the rigor in our sales pricing processes. Our sales team has done a fantastic job implementing one of the largest price increases that we've done in the near history, and in January, passed on most of those price increases to recover raw material inflation. We executed a clear strategy on price increase by category without losing any contracts. To offset the macro inflation that we've seen in the UK and the US, to offset some of the UK depreciation, we've reduced our headcount in the business by 7%. We now have something like 395 people in the business when compared to 6 months ago, we had 425. Having implemented a revised hedging and currency management strategy early in the fiscal year, working with Alpha FX in the city to provide better visibility and control of our currency exposure, I can now say that foreign exchange impacts in H1 were successfully managed and were broadly immaterial in H1. Our supply chain team is focused with rigor on reducing inventory in H1, this is despite high orange oil prices and despite holding strategic volumes for our large beverage customers. I believe, therefore, that these improvements will help us mitigate risk over the medium and long term and strengthen our foundations. H1 financial review. This fiscal year for us, we are focused on returning to growth. For the half year ended 31 March 2023, revenue grew 14.6% to GBP 76 million, which is 8.5% ahead in constant currency, with strong sales performance in five of our seven categories. Gross margin improved 70 basis points to 28.2%. This reflects an execution of the price increases to recover raw material inflation and a positive mix effect in citrus. Admin expenses were just over 10% higher constant currency, reflecting the increased depreciation in the UK and general cost inflation. Adjusted PBT grew 15% in the period to GBP 7.3 million. An exceptional cost included the one-off cost for the relocation of the UK site and some restructuring. Positively, EBITDA has improved by almost 30% in the period compared to last year, as we expected. The board has declared an interim dividend of 2.55 pence per share, which is 2% higher than the same period last year. I think this reflects for us a balance of the importance of dividend payments to shareholders, but also reflects effective financial discipline and the benefit of transitioning to a longer-term dividend cover of three times. We have made a strong start to FY 2023 sales with record H1 sales of GBP 76 million, 15% ahead of the prior year. Despite the uncertain macro environment that we live in today, our beverage volumes have shown good resilience. Consumer appetite for natural, authentic and better for you products remain relevant. We continue to win business with both new and existing customers through direct sales to FMCG brands, also to flavor houses, which is a big strength of our diversified business model. In citrus, we have seen some encouraging progress, the category remains core for us today, as it will in the next five years. We provide more complex, higher value and bespoke citrus solutions. Citrus margins have improved across several key value-added products to the large beverage customers. We successfully executed our procurement and pricing strategies despite the record orange oil prices, we have looked to actively share volumes in our low-margin commoditized citrus categories. The growth in China, which Daemmon will talk about later, was following the country's reopening and is mainly reflected in the citrus category. I'd like to call out synthetic aroma, which relates primarily to food ingredients. This has declined in volume for us in the first half of the year, mainly due to customer destocking. These are used in products of alternative proteins. However, the volume decline for us in half one was largely offset by sales price increases. Positively, coffee sales grew to GBP 2 million in the period, focusing on the U.S. premium cold brew coffee and ready-to-drink markets. We continue to see material growth in this segment as per our expectations. The order book for us and the sales pipeline is healthy and we remain confident on the delivery of the full year sales target. Cash generation. I am mostly pleased with the improvement in net debt in half one. Net debt reduced to GBP 17.7 million, an improvement of GBP 4.7 million in the half. Our focus on cash remains undeterred, with our best performance in a decade despite the normal working capital build in half one. Operating cash flows were strong. These were partially offset by CapEx, dividend payments and tax. As mentioned before, we believe that we are at the end of our investment cycle. We expect capital to normalize over the next few years. To secure our medium-term funding needs, our treasury team, with the help of debt advisors, have refinanced our US dollar facilities with the Bank of America. That was for $25 million. We are in the process of completing the refinance of the U.K. borrowing facilities with HSBC. Having obtained credit approval, I expect that this will be completed in the spring. Both facilities have a minimum term of three years. Moving into FY 2023 guidance, I am pleased with the strong performance year to date, and I have good confidence in Treatt's proposition. We acknowledge that this is a transition year. I've said that six months ago. However, we are focused on returning to growth, supported by positive beverage market dynamics. There are four big factors for us: U.S. FMCG, value-added citrus, China and coffee are expected to perform well for the remainder of the year. Our momentum and performance in Q2 was particularly encouraging, and we enter the second half of the year with a healthy order book and sales pipeline, and I remain confident of the full year delivery. My expectation is that trading and profit before tax and exceptionals will be in line with market guidance for the full year. I also anticipate a further reduction in net debt to between GBP 12 million and GBP 14 million. Since joining Treatt a year ago, I'm able to reflect and admire the excellent quality and the industry knowledge of our people in Treatt, the outstanding Treatt culture which Daemmon has built and led over the last 10 years. Importantly, our strong relationships and long-serving relationships with our customers. As CFO of Treatt, I now feel I have a better understanding of the business and our markets. I remain confident in the short and medium-term growth plans and our strategic relevance to customers. We now have renewed focus. We've got renewed discipline on sales pricing, cost control and cash management, which is promising for us in the future. Back to you, Daemmon. Thank you very much, Ryan. The beverage industry is showing the resilience that we anticipated with strong loyalty to brands despite the wider consumer backdrop showing some challenges. If I compare beverage to, let's say, a typical household floor cleaner, you know, you can spend GBP 4 a bottle on a household floor cleaner at the super sort of premium level. You can spend GBP 2 on the branded product. You can spend GBP 1 on supermarket own brand, or you could buy bleach at GBP 0.50 or maybe clean your floor less often. All these choices are available to a consumer. Whereas beverage, the big contrast with beverage is loyalty to the brand. Loyalty to the big brands in beverage is certainly something that we anticipated, but something we're also seeing evidenced in our first half numbers, and we expect that to continue. Beverage typically shows strong resilience and great customer loyalty is usually evident in difficult economic times. Beverages are generally seen as affordable luxuries, and we expect that to continue. As Ryan mentioned, our strategic relevance is incredibly sharp in terms of the market we serve and becoming sharper all the time, and I think the outlook is very promising in that regard. If I turn to China now, we said at our full year results in November that an unlocked China would be positive for Treatt, and we have seen that assertion evidenced in the first half. Around 20% of all new non-alcoholic drinks are based on citrus flavors on a global scale. In China, that number is closer to 35%, and therefore our rich heritage in citrus and our strategic relevance to that market is delivering strongly. We have made significant advances with national beverage brands, which augurs well for the future. We have also invested in some key laboratory equipment in Shanghai, which will sharpen our offering into this exciting market even further. Turning to coffee, we said that this would be the year that we would grow our coffee platform and make a number of important operational refinements to the extraction process once we had consistent volumes running through this new platform for the business. This has proven to be the case. We are growing both with existing and onboarding new customers as we build our competence and efficiency in this important category. The market we serve is the ready-to-drink cold brew coffee market, which is expected to grow materially across the next five years. There's much to do, but the team are performing strongly, and we expect the growth to continue. Turning to the outlook for the year. We do expect beverage resilience to continue despite a challenging macroeconomic backdrop. Both China and coffee, we expect to continue to demonstrate the undoubted potential that they bring to our business. Our strategic relevance to the market we serve remains very strong. I believe it is clear that the financial discipline and commercial acumen that Ryan has brought to Treatt is going to provide a solid bedrock for the opportunities that lie ahead for us. Thank you. I think we're gonna take questions now. Charles Hall from Peel Hunt. Daemmon, can we talk about, a bit more about China? You talked about local partnerships, about, investment in labs. What does that bring you that, you haven't currently got? Can you chat a little bit about the relationships with the leading? Local brands, as to how significant those could be. Yeah, I think what we've done, primarily in China, Charles, in the last 12 months really, is to get behind the sort of the wall of the flavor houses and get to some of the national beverage brands directly. Some of those beverage brands have got the skills and competence to use some of our ingredients directly into a beverage, but others need some solubilization of some of the ingredients that we offer, and that's why we use a third-party manufacturer there, just to solubilize some of our added value ingredients before we then in turn sell them to the national beverage companies in China. It's very pleasing that we're now selling to three of the biggest four national beverage companies in China, and some of these companies are of a very significant scale. If I look at all the opportunities, for example, that we've got in our R&D pipeline, the projects that the teams are working on, China outperforms in terms of both number and value in that space, which is why I think we've seen the sort of very strong growth in the first half and what gives us confidence that that will continue. I mean, younger consuming middle classes in China are driving a lot of the beverage innovation, and I think with a citrus bias, this market is shaping very nicely in a direction that's gonna be very beneficial for the business. Do you expect the product range in China to be very citrus-biased, or can you sell other products in the range? We can, and indeed are selling other products in the range, but I think the citrus bias will continue. I think our rich heritage in citrus is really resonating with some of those national beverage companies, and I think we can continue to make some progress. We do anticipate some progress as well in things like lower sugar formulation beverage, where we've obviously got some important technology in that space. I think fruit and vegetable extracts as well will progressively play a bigger part in that role. It's definitely not gonna be a pure citrus play, but citrus has performed very well. Our intention is to use citrus almost like a Trojan horse, and then add in other opportunities as we develop the relationships with customers. On other areas, the two segments that were lower in the first half, it sounds as though they had specific reasons for them to be lower. Where are we now on things like customer destocking and product development and getting, you've had some problems with some products. Are you starting to see an improvement in H2 or is that still looking forward? I think that's still generally looking forward. We do anticipate demand coming back, particularly for some of the synthetic ingredients. I think there was one or two specific destocking events that happened or happened in the industry. We're hearing signs that they're beginning now to come to an end and that normal sort of demand will continue. You know, we don't think there's anything structurally wrong there. You know, it's a temporary timing thing. You know, we're quite confident that we'll be, you know, picking up the pace as the half moves on. I think, Charles, just on herbs, spices & florals in particular, we had some supply quality issues which have already been fixed in April. We can see the bounce back on that activity. Ryan, the net debt improvement was particularly marked in the first half, given the seasonality of the business. How are you thinking about the full year numbers? What should we be looking for? I think we should continue to look for a net debt improvement in the second half of the year. Traditionally, that's where we drive our sales book, and we have a good performance on net debt. Somewhere between GBP 12 million and GBP 14 million is our expectation. I'd like to be at the lower end of that, but, you know, I think it's important that we target cash management, we continue to do the good things that we're doing now, and then converting as much profit to cash as possible. The only callout I would say, Charles, is that it's important to partner with our large beverage, especially large branded beverage customers, and we'll continue to do that strategic stock holding for them, despite wanting to generate cash. That's great. Thanks. Marco Schwarzer from Davy, health and wellness sort of flat. you would've thought that would be something that would be important to consumers. Do you see that growing? I think it's got a very good track record of growth actually, Marco. I think it's just a timing effect in the first half. I mean, the first half of our year is not half of our year in terms of revenue. I don't anticipate anything there that's troubling us in terms of opportunity. I don't anticipate that will be ahead of the full year. Hi, Sara Welford at Edison. In terms of synthetic aroma, you've mentioned quite a lot the synthetic and the meat alternatives of late. Can you remind us how much roughly that accounts for synthetic aroma and how much the other stuff is? Secondly, back to inventory management and net debt. You've obviously talked about holding strategic inventory for your largest customers, but can you give us a sense of where you see the trajectory going there over the next few years? Is there scope for material reduction in inventory? If I take the first point there, Sara, on synthetic, it's very difficult for us to estimate with any great clarity the percentage of our ingredients that go into alternative proteins. If I would say the best stab at a number that we can have there is probably around 25%-35%. It's quite broad brush. That category has been growing quite successfully for us for quite a sustained period of time now, and we expect growth to continue, you know, in that space. There's sort of copy-paste type ingredients that can be used in products such as snack foods, for example, the flavorings for potato chips and so on. I think food generally has been under a little bit more pressure, and there's been a bit more destocking specifically from one or two of our customers. The track record is set and we see nothing strategically concerning ourselves in that category. We expect that to come back. Yeah, then Sara on the inventory question, and net debt. I think our ambition on net debt, if I could talk about that first, is we are targeting, you know, moving into a net cash position over the medium term. Whether that happens in 2024 or 2025, we're not certain yet, but that's certainly our ambition is to get there. That will be down to cash generation and converting profits into cash, keeping a strong grip on our working capital management. To your question specifically on inventory management, inventory levels today are the same level as it was three years ago. The actual volume of inventory that we have in the business, we've reduced to those kind of levels. So pre-pandemic levels, if you want. The value of inventory going up over the last 3 years is really based on the commodity price. As commodities start to come off in the medium term, I'll suspect that inventory values will start to drop as well. Hi. Morning. Matthew Webb from Investec. Just a question on input costs and pricing. Obviously, you've had to put through some very significant price increases this year, to pass the input cost pressure on. Just wondered what the picture looked like for next year, you know, whether those price increases will be able to be much more moderate, and if so, whether you expect, you know, resumption of volume growth as a result of that. I think for us, this year is all about price. We had left some price on the table at the back end of last year, which we called out to the market. We went early on price this year, and we probably went more aggressively than we initially thought because we wanted to recover that. Most of the growth that you'll see in the current year is going to be price related. 2024 for us, it flips. 2024 becomes what we've done over the last 10 years, which is volume growth. I think volume for us is the number 1 internal KPI. By volume, I mean not just a generic measure of volume, but volume in particular categories. Next year will become a drive on sales volume and we'll do some price increase, but it won't be the biggest part of the growth. Morning. Michael Benedict from Berenberg. Just one from me, please. Appreciate the color you gave around gross margin for FY 23. I wondered if you could give a bit of color on the sort of exit rate you're expecting from this year, and then any numbers you're able to give around the step up we should expect next year. Yeah. I think we always viewed 2023 as a transition year. We had a big step up in our cost base through interest depreciation costs and general inflation. I suspect we'll get some inflation going into next year from an exit rate basis, but we should have rebased the other costs like depreciation and interest. Our ambition is to maintain a good grip on cost control and therefore allow more of the top line growth to hit the bottom line. Yeah. I think 2024 for us was always a year of acceleration. As we get towards the back end of this year and delivering this year, we'll have a clearer view on what 2024 could deliver on the upside. Obviously, new product launches are a really important part of your growth trajectory. Have you seen any change in velocity in NPD from the end market customers? Happily, it's picking back up. I mean, it definitely dipped away towards the end of the last calendar year. Things were quieter. There was a bit more turbulence there. We've seen an increase again and again, China weighs into that too. You know, unlocked China is very good for new product development, new products coming to market. It's not just China. We're starting to see quite strong evidence of a return to sort of more normalized levels of new product development and so on. Our teams are certainly quite busy within the business. I think it's not just about the way the beverage world is sort of feeling and behaving, but I think it's somewhat about our opportunity in the addressable market that we serve. I mean, if we think about what I know from the recent sort of weekend, coronation events, it was quite interesting to see our street party and what people were bringing to that street party. It tended not to be so much now bottles of wine or unflavored beer, but more sort of boxes of canned cocktails, which I was particularly interested in seeing, for obvious reasons. These are all good examples of how our addressable market's going and, God save the King. Good to see you're always at work then. Mm-hmm. Could you talk specifically about the cocktail market? Obviously, that's had its ups and downs over the last couple of years. It's maybe a more volatile market and maybe more exposed to tougher consumer environment. Your experience in that, and particularly referencing the new product elements. Yeah, I mean, our experience in the canned cocktail market is actually quite strong. Certainly, you know, we, you know, a couple of years ago, there was of course, a lot of noise in the industry about hard seltzers specifically, which were largely a sort of lockdown driven phenomena, that did spectacularly well, and we certainly did very well with that. Then the market, I think is, you know, moved to sort of more normalized levels, but there are still a number of brands of canned cocktails, even within the hard seltzer space that are doing particularly well. We're seeing some good growth with a number of those brands. You know, I think the general shift away from unflavored to flavored is a good thing for Treatt. I think the other part of this aspect is calorie control in alcohol. I mean, a lot of canned cocktails are marketed to have, you know, a certain alcohol content. You know, our products perform very well in that space 'cause our products are calorie free. Therefore, it's often difficult to get juice into the blend because juice contains sugar is calories. Whereas our calorie free natural and authentic extracts can often play quite a strong part in that space. Again, we're seeing a number of opportunities there across, you know, happily, a wide spectrum of geographies and customers. You know, it's, it's a, it's a rich place of opportunity for us. We've got four questions from Anand Date from HSBC. We'll take each individually. The first is, peers have talked about a soft U.S. on destocking and end consumer demand. You've clearly done much better than that. Is this something you recognize in the environment? Would your growth have been even stronger without this? Is it that you're smaller and/or in different categories? My answer to that question would be, it's highly likely to be our focus and our specificity around beverage that's driving a lot of the demand that we're seeing. You know, we're very beverage focused as a business. I think that the beverage is showing, I would say, of all the food categories, probably the most resilient that we're seeing. Again, back to the big brands being, you know, very strong in this space. I think that that's driving, you know, a lot of our success in that market, which has provided some, you know, some obviously some good resilience in our numbers in the first half. Ryan, could you go through working capital and headcount, please? Is there more you can do on inventory levels and receivables or payables? Is there a net working capital target as a% of sales? On headcount, would you say the reduction is now done, or is there further to go? Working capital for us is a key focus in cash management. We target debtor days, we target creditor days. We've got very strong teams in the business that focus on ensuring the efficiency in those areas. Our supply chain team focus heavily on inventory management. We will reduce inventory to the extent that we're not shorting customers and to the extent that we can still maintain strategic holding levels. There's always more that we can do. I think we're getting sharper with it. I think we're getting better with it internally in terms of KPI management. I suspect that we'll see improvements on this over the next 12 to 18 months. In terms of headcount is a really interesting piece. I think for us, we will, despite the savings that we had over the last six months, most of which have not come through in the P&L yet, I suspect we'll continue to invest in particular areas, and we're already doing that. We'll continue to invest in our front line sales teams, both in the U.S., China, and the U.K., and we'll continue to invest in R&D. What we'll do though is, be clever around it, and where there's opportunities to save heads, we will take that naturally, and we'll reinvest it in places that we want to. In citrus, could you talk about the mix of sales or products split by gross margin? How actively do you manage the transition to higher value add sales or products? Does it make sense to actually wind down cash generative low margin sales, say, to make capacity available for other sales? Do these just reduce as a mix of citrus? Certainly in half 1, we have actively managed down our lower margin commoditized citrus business. To give you a very broad indication, volumes in that particular category are down something like 30%-40% in the half. That's a strategic call that we made as a business to move up the value chain in citrus. Citrus is a big category, but it's got lots of, you know, lots of different products within that. Orange being the largest. Really when you look across citrus, each of those categories has got a very different story. We may want to push more volume in lemon or lime or grapefruit because that's where some of the canned cocktails may be doing well, and reduce some of the commoditized volumes in orange. It's not an easy answer, and there's lots of complexity around it, but the ambition will be to continue to shed some of that lower margin commoditized business. The final question from Anand. Arguably, we need to think about gross margin and EBIT margin quite separately. Gross margin driven by category mix, et cetera. On EBIT margin, can you talk about what you'd expect to see over the next few years, non-volume related gains? For example, headcount reduction, increased efficiency in new sites versus operational gearing as sales increase. For example, utilization at the new site, et cetera. Yeah. I think our medium-term target for EBIT margin is somewhere between 15% and 20%. We were there a few years ago, and we've got ambitions to be there in the medium term. I think 2023 will be a particularly interesting year in that we've got the raw material price increases diluting the effect of EBIT margins, but that should start to normalize again in 2024. Per your point around operational efficiencies, headcount savings, all of that is needed, continuous improvement savings to offset inflation over the next few years, and all of that is needed to drive operational efficiencies. We still have something like 50% of capacity in the U.K. site available and somewhere between 30% and 40% in the U.S. As we grow over the medium term, utilizing that spare capacity for us will drive benefits both in the top line but also within, EBIT margins. We'll go to Damian McNeela from Numis. If we could just talk about China a little bit and whether you... I know you've sort of opened a second lab there now. Just wondering whether there was any further incremental costs you might need to support the growth within China over the next couple of years or whether you're set for now? Within coffee, are you able to sort of give us an indication of what the underlying category is growing at the minute, please? In terms of which countries in Europe where you sort of see the nearest term opportunities for your coffee products, please? I think China for us has got a very low cost base as it is at the moment. We've spent a few hundred thousand GBP, really self-funded by the Chinese business to open a new lab. It's a technical facility allowing us to test and sample products to accelerate sales. I think we'll continue to invest in China. We've only got eight people on the ground in China, and we'll continue to add heads in China, predominantly probably on the technical and the sales side. For us, it's our partnerships on the ground that's important. Those local partnerships that can process and give us more value-added citrus is the places that we'll go to next. Damian and I are traveling out to China in the summer to meet customers and some of those local partners. I think it'll be quite an exciting time for China over the next few years. Turning to coffee, the underlying market is growing at a solid double-digit% in terms of ready-to-drink cold brew coffee. I think there's a little more nuance to that, the answer in truth, because there's a lot of brands of cold brew coffee in the market that are highly likely to be based on instant coffee powder, which is not the ambition of our customers and the brand owners. Instant coffee powder has got one particular advantage, and that is very stable, and one particular disadvantage, that it doesn't taste good. Our product enables the brand owners to take their ready-to-drink cold brew coffee to a more premium level, and that's an important part to play. Coffee is a huge technical challenge. It's not an easy product, but we have a very good solution in that place, and therefore, you know, we do expect the growth to progress nicely in the next few years. In terms of other markets outside the US, we're actually seeing some very good growth and opportunity in the UK market in terms of it being the sort of dominant sort of European opportunity. We wanted to hold back a little bit in terms of our marketing of coffee until we've sort of worked through a lot of these optimization process that we're going through, Damian, in the US. We always said that this year would be the year that, you know, we really got sort of some experience and built some knowledge in terms of our operating platform. We're doing that. There's more to come. W e expect to grow this category incrementally over the next few years. Certainly we see a lot of opportunity there. We'll go to Cathal Kenny at Davy. Just on H2, Ryan, could you provide us some commentary on just the cadence of pricing as you see it? Secondly, just coming back to the volume question. Is it fair to say you're modeling flattish volumes now on a full year basis? My final question, going back to just general visibility around the opportunity set. Would you say that you've got to a point where visibility now is starting to improve as we get into the key summer season? If I look at cadence on price increases, we put through most of our price increases in January. Q2 saw the benefit of some of that. I think we'll continue to see that benefit in Q3 and Q4. I'm expecting that to come through. The majority of the increase in sales is gonna be price related, as I said earlier. To your question on volumes, I think, you know, volumes for us is a really hard measure. Generally, to answer your question, yes is the answer. We suspect volumes overall will be flat year-on-year. We look at value-added beverage as one of our key measures, and that's where it could be interesting year-on-year come the end of this fiscal year. To give you an example, you know, volumes in some categories could be very small, but the price per kg or the price per ton in that category could far outweigh some of the lower margin categories. It's really important that we look at the volumes that are giving us the best margin impact in the business. Overall margin for us is a key indicator, even within this value-added beverage. Your final question around visibility. I think we've got good visibility in Q3, which is gonna be an important quarter for us. I think it's, especially when I look at the U.S. business, which has got more short-term visibility rather than long-term, I think it's probably too soon to look at Q4 visibility. What I can say, though, is that our pipeline is very strong, our order book is very strong. You know, I'm cautiously optimistic for the rest of this year. Thanks very much for coming along, everybody. I appreciate your interest in Treatt. Thanks a lot.