Thank you for standing by, and welcome to the The a2 Milk Company Limited HY22 results release. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you'll need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. David Akers, Head of Investor Relations. Please go ahead. Hi, everyone. Thanks for joining the call today. We hope everyone's keeping well. COVID-19 restrictions mean that once again we are hosting our results and roadshow completely virtually. Although presenting virtually, many of the team are in Australia today, so I'd like to begin by acknowledging the traditional custodians of the land on which we meet, and pay my respects to their elders past, present, and emerging. I extend that respect to Aboriginal and Torres Strait Islander people with us on the call today. Turning to slide three, the agenda. On the call today, we have David Bortolussi, our Managing Director and Chief Executive Officer, Race Strauss, our Chief Financial Officer, Xiao Li, our Chief Executive Officer of Greater China, and Yohan Senaratne, Executive General Manager for International. David, Race, Xiao, and Yohan will present the half year result, additional updates, and our outlook, and there'll be time for questions at the end. With that, let me hand over to David Bortolussi, who will start the presentation on slide four. Thank you, David. Good morning, everyone, and thanks for joining us today. I'm pleased to announce that our first half result was in line with our expectations. Market conditions in China remain challenging, but we've made good progress stabilizing the business and executing against our growth strategy during the half. I'll start today's presentation by providing a high-level update on our results and strategy and will then hand over to Race to take you through the financials. Xiao Li and Yohan will then cover our China label and English label businesses in more detail. After which, I'll provide a brief update on our ANZ, U.S., and MVM businesses and outlook before Q&A. Starting with our results, today, we reported revenue for the first half of NZD 661 million, down 2.5% in line with guidance. EBITDA was NZD 97.6 million, representing a margin of 14.8% or 17.3% excluding MVM. Our net profit after tax, including the non-controlling interest relating to China Animal Husbandry Group's 25% interest in MVM was NZD 56 million or NZD 60 million if you exclude it. Our closing net cash position was NZD 667 million supported by high operational cash conversion during the half. Race will take you through the financials and drivers behind them in more detail shortly. From an operational point of view, there were several key highlights during the period that I wanted to draw your attention to. Firstly, although our reported China label sales were impacted by inventory rebalancing in the first quarter, consumer offtake was strong in store and online, taking our MBS and domestic online shares to record high. We made good progress stabilizing our English label sales with ANZ reseller channel trajectory improving during the period. In our ANZ liquid milk business, we grew sales and achieved record market share during the period. Our U.S. sales were, however, down due to the loss of distribution in our club customer. Finally, we completed our MVM acquisition in partnership with China Animal Husbandry Group and have started insourcing A2 product. A key focus for us in the first half was refreshing our growth strategy in response to rapidly changing China IMF market and the cross-border disruption we have experienced. The actions we have taken to address IMF channel inventory have had a significant positive impact. Most importantly, our brand health metrics have improved further, following a 37% increase in marketing investment. The combined impact of these actions and investment, together with early stage progress on implementing a range of initiatives associated with our growth strategy, have resulted in an improvement in the revenue outlook for FY 2022, and we move into the second half with good momentum in our China label and English label IMF businesses. However, at this stage, we do not expect this to translate into higher earnings as we plan to significantly increase our investment in brand and other initiatives consistent with our growth strategy in the interest of long-term value creation. Moving to page five. As we shared at our Investor Day in October last year, this slide outlines our refreshed growth strategy on a page for the a2 Group. We remain committed to and confident in our ambition to rebuild the a2 Milk Company into an exciting, innovative, and sustainable growth company. Our team is aligned with this ambition, and we are focusing on executing our strategic priorities to deliver on our people, sustainability, consumer, and financial goals. We've noted progress against these group priorities in our release today, and we'll share updates on early progress by business as we move through the presentation. In doing so, I hope that you get a better understanding of some of the important leading indicators of performance, which give us confidence in our ability to successfully execute our growth strategy. These include, firstly, our strong and improving brand health, share gains in our China label business that will be critical for the long term, improving channel economics and trajectory in our English label business, early progress on executing strategic initiatives, and finally, improved organizational capability. I'll now hand over to Race to take you through the financials. Thank you, David, and good morning, everybody. Moving to slide seven, which summarizes the key numbers behind our results. As David mentioned, group revenue came in at NZD 661 million, with an EBITDA of NZD 97.6 million, being a margin of 14.8%. Group revenue for the half was 2.5% lower than the prior corresponding period due to the significantly lower birth rate in China, as well as the actions the company took during the first half to rebalance channel inventory for China label IMFs. We completed the acquisition of Mataura Valley Milk during the half, all reported numbers include MVM. Excluding MVM, our revenue would be 8.2% behind prior year, and the EBITDA margin would be 17.3%. As expected, gross margin decreased for the half to 46.2%, with underlying gross margin of 50.7% when you exclude MVM. I'll touch on gross margin in a bit more detail on the next slide. The shape of the P&L was impacted by a number of costs below gross margin. Distribution costs were higher due to increased logistics costs, which have been impacted by various COVID-19 related restrictions and disruptions. Marketing investment increased by NZD 25 million compared to first half 2021 as we invested behind the brand, particularly in China. Our administration and other overhead costs also increased by NZD 24 million. I will provide more details on these in a few moments. As signaled in our outlook in August, our effective tax rate was higher than the historical average at 38%. This was higher than the prior year due to the proportional increase in the U.S. and now the MVM losses, which are not tax effective. Our NPAT was therefore NZD 56 million, which represents a 53% decline from the prior corresponding period. Note that the NPAT of NZD 56 million includes the minority interest share of losses in MVM. Turning to slide eight, this outlines our revenue across geographies and product segments. The major call-out is the decline in IMF of 10.5%. As David mentioned, we did intentionally hold back some sales of China label in order to rebalance distributor inventory levels. This equated to about NZD 35 million. Other nutritionals increased due to including MVM and a strong performance in China and other Asia, in particular in liquid milk in China. On the following page, gross margins decreased over the period to 46.2%, with underlying gross margin of 50.7% excluding MVM. A number of factors have contributed to the gross margin, namely the inclusion of MVM, an adverse product mix, and cost headwinds, particularly in raw milk and freight costs. These adverse movements have been partially offset by price increases across IMF and liquid milk. Compared to the prior year, which included stock write-downs, the underlying margin is lower by about 3%. We are expecting further cost headwinds in the second half, however, we anticipate recovering this with price movements, with second half gross margin expected to be in line with the first half. Moving to slide 10, our marketing and SG&A spend has increased over the period, which we foreshadowed in August last year. During the period, the SG&A cost increase was driven by the reinstatement of short-term and long-term incentives, as well as investment in our people capability, particularly in China. Professional service fees, legal fees, and insurance also increased. Marketing investment increased by 37.3% or NZD 25 million, reflecting a significant step up in order to drive awareness and trial in China and to compensate for the continued subdued ANZ reseller activity, which previously was very effective for building our brand. The increase in brand and capability investment is in line with our refreshed growth strategy and is being stepped up again in the second half. On slide 11, the balance sheet remains strong, with an ending cash balance of NZD 747 million after purchasing MVM for NZD 268.5 million. With the consolidation of MVM, our balance sheet now includes NZD 80 million worth of debt, which incorporates a working capital facility of NZD 75 million, of which NZD 30 million is drawn down, and a loan to MVM from China Animal Husbandry Group of NZD 50 million. Accordingly, our net cash position at period end was NZD 667 million. Our inventory now includes MVM stock of NZD 31 million. Excluding this, our inventory was lower than the prior corresponding period. Pleasingly, all distributor stock is now in line with targeted levels. Moving to the next page, the business generated a very strong NZD 98 million in operating cash flow for the half. Excluding interest and tax, our EBITDA cash conversion was 130% for the period. This was driven by an overall improvement in working capital and includes the timing benefit of advanced payments from certain customers due to COVID-19. I'm now gonna hand the call over to Li Xiao to take you through the performance of our China label IMF business. Thanks, Race, and good morning, everyone. Before I go into the results of our China label IMF business, it's important to review the challenging market dynamics in China. That are impacting the MF category as well as us as a brand. Firstly, the number of births in China continues to decline. Recent data released by the National Bureau of Statistics suggests that the number of newborns in China declined by 11.5% in 2021, after a decrease of 18.1% in 2020. While increasing Stage 4 penetration is providing some offsets against this, overall, the China MF market contracted by 5% in volume terms and 3% in value terms during the first half. However, the ultra premium segment remain in growth, and the A2 protein segment performed significantly above the market. Secondly, and as highlighted during our investor day last year, there is a clear divergence in performance in TNA compared with BCD cities, with value sales in TNA cities down 6.6% during the half, while BCD cities were flat. We expect this divergence to continue, underscoring our strategic focus in developing our business in BCD cities, where we currently underindex. Finally, in this challenging market condition, we continue to observe that it is the brands that resonate with consumers that are gaining share. This includes domestic brands such as Feihe, Junlebao, and Aidi, but also a2, which is one of the few international brands growing share. The importance of brand makes our recent brand health tracking results particularly pleasing, and I will share these with you shortly. Despite the challenging China IMF market dynamics, our performance during the period in China label IMF was encouraging, underperforming in English label IMF was stabilizing. Turning to page 15, in terms of our sales for the half, while our China label IMF sales declined by 11%, this was driven by a deliberate decision to constrain sales to distributors to rebalance inventory levels. Target inventory levels were achieved by the end of the first quarter, and we saw that as efforts to constrain sales were unwound, our sales to distributor in the second quarter increased by 16% compared with last year and more closely matched distributor sell out. A clearer mirror of underlying consumer demand can be seen by looking at retail sales data. Nielsen MBS data indicates that our retail sales grew by 11% over the half, and the Smart Path data suggests our domestic online sales were up 17% in the half compared with the prior period. This growth in the declining market has resulted in share gains in both MBS and the domestic online. Our MBS share reached 2.6% on an MAT basis by the end of the half, and pleasingly, we closed the year in December with a record high MBS share of 3.2% for the month. We also grew our share in domestic online, reaching 2.9%. We anticipate further share gains as we continually optimize the impact of our above the line and below the line investments and the sales execution initiative linked to our growth strategy. Moving to page 16. In line with our strategy, we continue to expand our distribution footprint, ultimately targeting 30,000-35,000 stores. We added just under 2,000 stores during the first half and are also driving like-for-like growth in our more mature stores. On the next page, where we review our MBS performance within TNA and the BCD cities, we see that while we are achieving share gains in both, the underlying growth drivers are quite different. While we achieved very strong share growth in TNA city at 7.1% share for the half, this was largely a function of maintaining our sales in a sharply declining market. This is different to BCD cities, where the rate of growth of our share gain was less but was driven by a very strong sales growth of 18% in a low-growth market. We are particularly encouraged by our BCD performance and continue to be focused on capturing all opportunities in these lower-tier cities. Turning to page 18. We lifted our overall a2 share measured by Smart Path to a new high of 2.9% on an MAT basis. During the half, we focused our efforts on improving execution and growing share in our priority platforms, being JD and Tmall, which was successful. We underindex in the domestic online channel compared to our share in MBS, which is a key focus of our growth strategy. We continue to focus on accelerating growth in online channels, including through developing our team capability and refining our marketing mix. Moving to the next page. In addition to considering our performance across channel and city tiers, the other key lens to consider is our performance by stage, and we are very pleased to see that we are delivering growth across all stages in both MBS and the domestic online. Our early stage share goals in MBS is particularly encouraging, as our high loyalty rates means that, with these share goals, we are building a strong pipeline for the future. In addition, our big uplift in Stage 4 share demonstrates the impact of our increased focus in delivering on that opportunity. On slide 20, as Chris noted before, we have increased our marketing investment during the period. Our focus during the first half was continuing to step up our proven below the line playbook, as well as launching a more integrated consumer marketing campaign during the second quarter. Our most recent marketing campaign differed from past campaign in its heavier weighting towards digital, prominent use of a brand ambassador, and more functional messaging around the benefits of our A2 protein proposition. The campaign was fully integrated across consumer touch points at the sales channel, allowing us to maximize the impact of our investment through focusing not only on building awareness, but also driving further engagement in our brands, as well as activities to support trial. On the next page, the combined impact of our integrated marketing campaign and the step-up in below-the-line activities can be seen in the significant uplift in our brand health metrics. We achieved record high performance in all metrics, and the scale of the uplift was particularly pleasing given the amount of investment in our second quarter campaign relative to prior campaigns. Finally, on page 22, I'm very pleased with the progress we achieved in the first half against our strategic priorities. In addition to the success of our above the line and the below the line marketing activities in further developing our brand in China, we have really progressed in our key sales initiative. We have launched several new market pilots to help us refine our approach for growing in lower tier cities. We have extended our key account management team to deploy our proven playbook across more accounts and have driven solid growth from newer products such as Stage 4 and our broader dairy portfolio. I will now hand over to Yohan to take you through our English label IMF performance. Thank you. Thank you, Li Xiao, and good morning, everyone. With the challenging market environment, English label sales for first half 2022 were down versus first half 2021. I'm pleased with the improving channel dynamics we are observing in our English label IMF business in both our ANZ reseller and retail network, as well as our cross-border e-commerce channel. Over the past half, we have carefully allocated supply to manage inventory levels, reduced price-based promotional activity, and invested in brand activation. As a result of this, pick-and-pack pricing has increased, product freshness has improved, and inventory is within target ranges. We are also seeing positive momentum in our ANZ reseller and retailer network, with sales during the second quarter of 2022 significantly up on first quarter of 2022. Sales in the second quarter of 2022 in our CBEC business were marginally below first quarter 2022 due to the phasing impact of pre-stocking for 11.11. Slide 24 shows our market value share in CBEC and Daigou, as measured by Smart Path and Kantar. The challenges we have experienced in English label channels have clearly put pressure on our share. During the half, we pulled back on price-based promotional activity across all channels when compared to first half 2021 to support our overall English label ecosystem. For example, this year's lowest promotion pricing during 11.11 in CBEC was 30 RMB higher than in first half 2021. This, in conjunction with careful allocation of volumes, had an impact on share across both Daigou and CBEC channels. Moving to the next page, as I mentioned before, the level and age profile of distributor inventory holdings at the end of the period across CBEC and the reseller network has reached targeted levels. This, in tandem with an improvement in pricing, reflecting better balance in demand and supply, is encouraging and sets us up well for the remainder of the year. On slide 26, during the second quarter, we invested in a brand campaign across the China label and English label markets, which Li Xiao referred to. Our latest brand health survey shows English label awareness improved, but overall, you can see that awareness is relatively flat post the COVID-19 related disruption we have experienced. Improving English label brand health is a key priority which we are working on. In particular, we have focused on increasing our support of the reseller network through brand visibility and shareable content. On slide 27, you can see some of the activities we have undertaken, including content advertising in WeChat channels. Brand visibility in online and offline reseller networks, and shareable content for Daigou to use for WeChat communications with customers. Moving to slide 28. For this year's 11.11 campaign, our focus was on brand activation to drive new user recruitment with over 1,300 hours of live stream during the campaign period and interactive sessions with pediatricians. These activities proved successful with over 71,000 new users recruited during the event. To support the English Label channel recovery, we pulled back on price-based promotional activity with the lowest promotional pricing being around 30 RMB higher than during the 2020 11.11 event. Finally, on page 29, in summary, we have made progress on a number of our strategic priorities, including stabilizing English Label pricing, improving product freshness, increasing brand support to resellers, driving online new user recruitment in CBEC, and expanding in emerging markets. We've got a lot of work to do in regaining share and driving growth in our English Label business, but I'm pleased with our progress at this early stage. I will now hand over to David to take you through the remaining results. Thanks, Yohan. Moving to slide 30. Performance in our other nutritional products segment was mixed during the period. Sales in ANZ continued to be impacted by subdued ANZ reseller activity and clearance initiatives, with overall net sales declining 22% to NZD 16 million. Conversely, in China and other Asia, we saw strong growth in the other nutritionals category, with revenue up 69% to nearly NZD 10 million and liquid milk growth in China of 50%. Driving growth in milk powder and liquid milk in China is a significant opportunity for us and a key component of our growth strategy. Turning to our ANZ business on slide 31. Australian fresh milk grew during the period with sales up 2.5% on a constant currency basis. Volume was up 2.8% and was driven by ongoing COVID-19 lockdowns and increased levels of in-home consumption, which we expect to unwind in the second half as Australia hopefully continues to open up. We successfully expanded distribution in our 3 L product, and our new UHT product was launched last week and will be rolled out nationally. We're also pleased to have achieved a record high market share of 12.4%, and we continue to be the only fresh milk brand ranged in all major Australian grocery retailers and the largest brand advertiser in the fresh milk category. Moving to the next page. We made good progress in ANZ against our strategic priorities, including achieving top three branded SKU rankings in grocery, improving brand health metrics, expanding distribution into the convenience channel, launching UHT recently, and committing to introduce recycled content in our bottle manufacturing consistent with our sustainability goals. We also continue to invest in increasing capacity at our Smeaton Grange facility and are progressing the planning for an upgrade at Kyabram. Turning to slide 33 in our U.S. business. Revenue decreased by 5% to NZD 32.4 million, with an EBITDA loss of NZD 16.4 million, which was NZD 4.8 million higher than PCP. The decline in revenue was a lesser 2.6% on a constant currency basis. Total volumes were down 3% in the half due to the loss of certain regions of a major club customer, but up 13% in the rest of the business, supported by continuing growth in key grocery accounts. EBITDA losses were driven by lower volumes and significantly increased distribution costs. To improve margins, we will be rolling back trade investment during the second half as planned and have recently announced an 11% price increase, which will become effective in the fourth quarter. From a growth perspective, the highlight of the period was the successful rollout of our Half and Half product and the launch of our new Hershey's a2 Milk, which have exceeded initial expectations. The next page outlines progress made during the period against our strategic priorities in the U.S., including executing a new marketing campaign to drive increased awareness and new consumers to the brand, growing velocities in our core business in key accounts, and driving innovations for the two new products I just mentioned. We know we still have a long way to go to achieve profitability in the U.S. by FY 2025 or 2026, but we are focused on growing the top line in our core and through innovation, as well as improving gross margin to drive profitability. Slide 35 outlines the performance of MVM during the five months post-acquisition and the actions we are taking. Net sales revenue was NZD 38.6 million for the period, along with an EBITDA loss of NZD 10 million as expected. This result was impacted by China market dynamics, reducing the demand for nutritional products, with virtually all production being of commodity product during the period. Our goal is for MVM to become an internal integrated manufacturing facility for a2 branded product with market-leading quality, efficiency, innovation capability, and sustainability for ANZ and China label IMF and other nutritional products. In doing so, to achieve profitability by FY 2026 or earlier. To get there, we are taking the following key actions. Firstly, we have ramped up our recruiting of farmers to build our A1 protein-free milk pool in Southland, targeting 60% of total supply for the next season. During the second quarter of this year, we commenced production of our a2 Milk powder at MVM, with the intention of insourcing 100% of this from Synlait to MVM over the next 12 months. We have also taken steps during the half to insource some of our English label IMF products from Synlait, and we'll undertake trials shortly. We've commenced planning for a laboratory and blending and canning facilities at the site, which will allow us to finish English label product and open up the opportunity to potentially achieve SAMR registration for China label product in the future. In the meantime, we're actively procuring third-party blending and canning services from a production partner to act as a bridge before developing our own capability. Lastly, over this period, we will also be pursuing third-party nutritional product supply opportunities to improve capacity, utilization, and profitability. Now turning to slide 36, I'm really pleased to share with you the progress that we've made on sustainability in the first half, which is a passion for me personally and a key component of our overall strategy. In October, we announced that we are targeting to reduce our S cope 1 and 2 greenhouse gas emissions to net zero by 2030 and Scope 3 emissions to net zero by 2040. Progress on achieving these targets is already in motion, with us announcing the investment in a new high-pressure electrode boiler at MVM, powered by 100% renewable energy, as well as our contribution to convert Boiler 2 at Synlait's Dunsandel site from coal-fired to biomass. These initiatives will significantly reduce carbon emissions on-site. We have also extended our packaging targets to all our geographies which are aligned to the APCO targets, and we continue to support the communities in which we operate across China, ANZ, and the U.S. I'm pleased with the passion our team also has for these initiatives and the progress we are making, and I look forward to updating you more at the full-year results. Finally, on slide 38, in relation to our outlook, given the continuing uncertainty in our markets, we are not providing specific guidance but have updated our qualitative guidance. You will see in our announcement that our FY 2022 outlook for revenue has improved. Revenue in the second half is expected to be up significantly on PCP, with growth now expected on the first half and also for FY 2022 overall, which is ahead of initial expectations. This is due mainly to the growth in our China label and English label IMF businesses. However, this expected improvement in revenue is not expected to translate into higher earnings as we've decided to continue to increase our brand and other reinvestment to drive growth consistent with our strategy. There is still significant trading upside and downside risk in our earnings outlook, as well as increased COVID-19 related supply chain volatility. I won't read the comprehensive outlook on the call, but I encourage analysts and investors to review and consider the full statement that we have provided, which takes precedence over my comments today. That takes me to the end of the presentation, so I'll hand back to David Akers to move us on to Q&A. Thanks, David. I'll ask that when we take questions that they're limited to two questions and then please rejoin the queue. It looks like we have approximately 40 minutes remaining on the call, but we'll need to finish promptly at 12:15 P.M. New Zealand time. Matt, can you please open the line for the first question? Thank you, David. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on speakerphone, please pick up the handset to ask your question. Your first question comes from David Errington from Bank of America. Please go ahead. Morning, David. Team. David, you seem to have done a terrific job stabilizing the group in the last six months, so you must take a lot of pride in that, so well done. My first question is. I'm just trying to look at the slides that you're giving us and the message that I'm taking away. You look as though you've done some really good work in the China label, where you're gaining market share, although I wanna talk to you, the second part of my question is the cost of customer acquisition and how, you know, what the likely trends are. It looks as though you're sliding in traction in English label, CBEC, the CBEC market, if you look at slide 24. Can you say if that's the right way to look at that? Is it because it looks to me that you're gaining traction in English label. Sorry, you're gaining traction in China label, but you're losing a bit of traction in CBEC. Is that the right way to look at those slides? What's causing that? Thanks, David. Look, I think the China label picture is very clear. English label's, you know, the... It's a little bit hard to sort of gauge externally, but I'll just start with China label. You're absolutely right. Despite the challenging market and decline in the market overall, you know, we have performed well and gained share in, you know, in-store, in MBS and as well online. That's pretty clear what's happening there, hopefully. English label, you know, we're seeing the overall channel rate of decline improve. It wasn't long ago that we were seeing 30%, 40%, 50% decline in the channel overall, as well as our business. But in the most recent half, we've seen the channel decline stabilize as well as our business. That's still down, you know, low double digits. Within our business, we're seeing an improvement in trajectory over time. In relation to the CBEC business, the market share numbers, we've tried to highlight how well we've done in our priority platforms. We still think there's a bit of noise in the market share numbers due to the level of excess inventory that was in the channel in the past plus, you know, that sort of clearing through the system. Plus, we've been pretty measured in terms of our promotional activity in CBEC during the period, focusing on restoring market pricing and the balance between that and our Daigou channel over time, which we've also seen an improvement in market pricing as well. I hope. that slide on 24 is a reflection of the market clearing more. Is that right? Well, I think a bit in relation. Just mainly your industry. Yes, I think a bit in relation to the CBEC numbers, which we're seeing decline in share. Yeah, it's probably to an extent because we have pulled back on promotional activity. We probably have lost a little bit of share, but there's some platforms in there, you know, from a C2C point of view, that would have been clearing excess inventory that was in the channel over time. We're expecting that to sort of work its way through the system. Most of that's sort of gone now. Hopefully over time we will see a stabilization of our CBEC share and our Daigou share, and we're certainly focused on rebuilding that. I understand that the English label picture is a bit difficult to get a handle on externally. The data points on that are more challenging. I must say internally, we've got more confidence in our execution in both CBEC and Daigou, and we're seeing a degree of stabilization and positive trajectory on both of those businesses going into the second half. Which has led us to upgrade our outlook for English Label. You know, this is, I guess, news in our outlook statement that we're confirming that we expect the English Label to be up in the second half and up for the full year overall. That's indicative. Yeah Of our sort of confidence in it improving. Now, there's a long way to go on the English Label channel. It's nowhere near, anywhere near, obviously what it was in the past. It's pleasing to see, you know, tourist flights reopening in Australia today. That's helpful, but we're not factoring in that being a major recovery. I think we're certainly heading in the right direction. It's stabilizing, we're building capability, we're executing well, and hopefully we'll see a recovery in that. Okay. The second question is obviously the cost of acquisition of customers. I mean, slide 17 is a really interesting slide where in your key and A cities, your MBS value share, where you're up 22% in market share, but the market's declined by 18%. When you're up against, you know, players of the nature of Feihe, Junlebao and Yili, yeah, that's gonna be. You know, obviously, there's gonna be a fair increase in cost of acquisition of customer. What's the market look like in that? Is it these structural increases now so that the promotional spend that you're increasing is now more a cost as opposed to an investment? Or do you still see this step up as an investment to be able to gain share? I'm just really intrigued because you know where I'm going with this. Generally, when you're increasing share in a declining market, competing against some pretty big players, that generally means a fairly long duration erosion of margin. Can you give us a bit of an outlook of what you see in that particular area? I might hand over to Li Xiao to comment on in a moment. Yeah, we've definitely increased our investment and we're planning on investing sort of record high numbers at around NZD 220 million for the full year. Wow. With most of that in China, both on above the line and below the line. It's more challenging to get a handle on the above the line returns, but our below the line investment and the returns we're getting from that are really strong in helping us gain market share overall. I'll let Xiao Li comment a little bit further on that, David. Thanks, David. Yes. The market is becoming more challenging with more fierce competition. Yeah. Most of our investment is focused on building the brand because, you know, at the moment, I mean, those brand resonate consumer really, I mean, gaining the share. You can see, I mean, most of our investment below the line is like a mama class, roadshow, PG. I mean, it's mostly about, I mean, building the brand, induce the trial and also, I mean, recruit the new user. Also, if you look at above the line, I mean, that is all about, I mean, building the brand and the strength of our A2 protein, I mean, as a leader and a pioneer. These have, I mean, the business longer term fundamental rather than, I mean, going for the fierce price competition in the Stage 3. That's why in the slides you can see our early stage are growing faster than the overall, I mean, share. Which means that in the future we are going to sustain this growth. Also our growth in the Stage 4 under dairy category is also very strong. I mean, that's all the healthy shape we are looking forward rather than, I mean, price fighting under Stage 3. If that answer your question. Thank you. Absolutely, it did. Thank you so much. Sorry, Dave, just to round off on that before we hand over to the next question. So I would characterize it that the cost of acquisition has increased because if you look at our collective business, we have no doubt benefited quite significantly in the past by the level of daigou activity in the market, which has helped build our brand. The level of investment that we are currently undertaking and increasing in the future is net returning growth in the business, and we're getting a reasonable return on that. Yeah. Well done, David. Thank you very much. Thanks, Dave. Thank you. Your next question comes from Matt Montgomerie from Forsyth Barr. Please go ahead. Hi, David. Thanks for taking my questions. Just checking you can hear me okay? Yes, I can. Hi, Matt. Hi, David. Maybe if I sort of follow on from David's question around marketing. Clearly a big step up as previously signaled. Do you sort of view the NZD 220 million guidance as a new base with growth from there sort of somewhat aligned to revenue? Or do you consider the second half spend more of a catch-up from the last 12-18 months? That's a bit of both. Like in the second half, we're actually reviewing our brand positioning, and we're planning a big campaign in the fourth quarter, so there will be significant investment associated with that. I see us kind of increasing kind of this maintaining and/or increasing this level of investment over time. In terms of the reinvestment rate as a percentage of revenue, it's hard to be specific about that at the moment. I suspect it may still increase a bit more over time. Eventually, we get to the stage where hopefully we'll get a little bit of leverage out of that and the reinvestment rate may come off. I think in this medium term over our plan, I think we might see the reinvestment rate increase. Great. That's helpful. Then maybe secondly on China label. Looking at the release, you know, your stated second quarter sales increased on PCP by 16%, if I heard Li Xiao correctly. Just noting that second quarter last year was also well ahead of other quarters. Do you think there's anything worth calling out in that second quarter? Or would you expect to grow sort of sequentially from that second quarter number through the second half of the year and then thereafter? Sorry, Matt, could you go back to those numbers? I just wanna make sure that I'm referring to the same numbers that you were. Li said- Yeah. Just slide 15, just around second quarter sales for China label products increasing on PCP. I thought I heard on the call that, you know, 16% growth, but maybe I misheard. I'm just trying to get- What happened in China was, and I know this is getting to the heart of your question, but, the first quarter was down, our sales out ex-factory sales were down significantly in the first quarter because we constrained sales. Then the second quarter, they were up. We haven't quantified the exact kind of quarterly split on that. I think the 17% that you're referring to was the growth in online in China. In any event, our retailer sales in MBS and domestic online were very healthy sales out, in terms of retail sales ahead of market, and we gained share during the period. I don't know if that helps, but if it hasn't, please ask the question again. It's Yeah, I mean, just I guess at the heart of it, would you expect to grow sequentially on that second quarter number? You know, there's nothing in there to call out specifically. We're not giving... What we've said that we expect the second half in China label to be up significantly on the first half, is what was said in our outlook statement, and obviously significant on the PCP, and the China label overall will be up. You can probably interpret into that we're expecting, you know, fairly healthy growth rates in China label in the second half, if that helps you in terms of the trajectory of the business. Yeah. No, it's, that's good. Thanks, David. Thank you. Your next question comes from Anna Guan from Goldman Sachs. Please go ahead. Morning, guys. Thanks for taking my questions. Just the first one, apologies, but I'm just trying to ask another follow-up on the marketing angle. Can I just understand on the digital marketing front, in terms of the performance there, and obviously, you know, the social media and the digital marketing platforms are getting quite a bit of power. Are you guys seeing any increases in cost of acquisition there? And also what's specifically to digital marketing, what sort of returns are you getting from there versus other channels, please? I might let Li Xiao and Yohan, if you wanna chime in as well. Li Xiao, do you wanna comment on our mix in marketing by channel, which has been reorientated more towards digital, but the cost of that and the return that we're getting? Yeah. Digital, I mean, the marketing part, I mean, we have a dashboard, I mean, trying to understand the return on investment. You know, it's always, I mean, difficult on the marketing ROI analysis. From our understanding, I mean, most of our digital marketing actually goes to the, what we call the word-of-mouth consumer path generation on the social platform. Take for example, we invest on Red Book, Babytree, Watsons. That's where, I mean, the mom gets, I mean, a recommendation, consultation on their consumer journey. On that, we see that, a very significant uplift, I mean, after our always-on campaign efforts. You see that, I mean, our Red Book search, our consumer paths, not... I mean, there's a brand path. I mean, consumer path is path generated by consumer by their interaction. I mean, it's also have a very big uplift. You know, these are very powerful, I mean, to drive the consumer conviction of our A2 protein benefit. So, if that explain the answer your question or- I think from a cost point of view, there's no doubt digital marketing costs are increasing in China, but we're seeing an improvement in the overall mix and return because we're reorienting more in a more targeted way to digital and out-of-home and other mechanisms as well, away more from the broadcast mass media propositions we've had in the past. I hope that helps. It's hard to be very specific about that. Yeah. Unless you get right into the details. Yeah. Yeah. Yeah. No, of course. Thanks for the color. And then second question, just around MBS strategy and also, from a, I suppose from a pricing angle. Xiao Li, earlier you mentioned you saw some good like-for-like sales growth through some of the key MBS stores. And I think, you guys put through some price increases in the second quarter across, a number of channels. So can I just try to understand to what degree the like-for-like sales growth, was driven by, I suppose, I don't know, just trying to think, is there any promotional or heavier promotional activities in the quarter? How should we think about that going forward? Xiao Li, do you wanna comment on that? Yes. I mean, our double-digit growth is generated by a mid double-digit store expansion and high single digits of store annualization of the new stores we entered last year and also high single-digit like-for-like growth. But also we have an offset by store closures from MBS because of the challenging market environment. The store like-for-like growth is mainly driven by, rather than price promotion. I mean, it's more of our new user recruitment and activation generate a stronger demand, because I mean we feel that with more new user recruitment, it's going to build a pipeline for the future. Probably not instantly, but it's gonna help your future business. Also we drive the productivity uplift by Stage 4 because that's incremental opportunity when you are driving more penetration in this consumer base. Keep more of your consumers stay with your brand. Thank you. From a pricing and promotional activity generally with. In China, we've been very conscious about that, and that's part of the reason why we held back on sales in the first quarter in terms of inventory load right through the channel and distributors and retailers. If anything, we've seen a reduction in promotional activity leading to an average price increase in our retail customers in MBS. You shouldn't take away from this that we are increasing promotional activity to drive sales. It's completely the opposite. Same approach that's- Okay. Adopted on CBEC as well. Yeah. Understood. Thanks, guys. Thank you. Your next question comes from Thomas Kierath from Barrenjoey. Please go ahead. Good day, guys. Just another one on the marketing. I think you're flagging NZD 127 million spend in the second half. Is there some expensing of incentives in there? I'm just interested in how much that is and if that kind of NZD 127 million, we should kinda annualize that, you know, for the next little while or if there's some kinda one-off type factors in there. Tom, I didn't quite understand the question. You said, is there some expensing in the marketing in the second half? Yeah. Some of the SGIs and some of the, like, incentive payments. Oh. No. Just wondering if that's the reason. No, no. The marketing spend. The reinstatement of incentives, short and long term, is elsewhere, so in the P&L. The marketing investment of NZD 220 million is above the line, below the line investment, mainly in China. Yeah. Okay. You shouldn't think that there's yeah. Yeah. It's all oriented towards the consumers and the trades. Yeah. Secondly, on pricing, I think you're flagging some cost pressures coming through, which everyone's seeing. How are you kinda thinking about pricing for this year? I'll ask Race to just talk about cost pressures and pricing across the business. Yeah. Tom, good morning. Yes, we certainly are seeing some cost pressures, and we do expect them to continue in the second half. However, we are getting the benefit of the price increases we've already put through, particularly in, previously when we put through the English label back in May last year. We are also seeing, as Yohan mentioned, lower price discounting through 11.11. Going forward in the second half, we will be expecting further price increases, particularly in milk and some packing materials and likely in inbound freight. We expect to recover those costs by further price increases that are planned. Therefore, it's important to note that we expect that our second half margin will actually be about the same as our first half. Great. Cool. Thanks, guys. Thank you. Your next question comes from Larry Gandler from Credit Suisse. Please go ahead. Thanks, guys. I'll try and be succinct. You guys are indicating that your China label presence is sort of underrepresented in B, C, and D. I'm trying to explore the opportunity there. B, C and D is a greater proportion of your stores than K and A. I'm surprised 'cause China label's a luxury product or premium product. Maybe can you just confirm indeed that BCD is the greater proportion of your China label sales? What is the opportunity to tap into that BCD market in terms of stores or geographies? That's correct, Larry. I'll hand over to Xiao Li to comment on the opportunity that we have very low share in BCD compared to K&A. A 2% share in MBS in BCD versus 6.4% at December in K&A. I'll hand over to Xiao Li to talk about the BCD opportunity and how we're approaching that. Yeah. Actually, you can refer to our, I mean, October investor day presentation. I mean, we talk a lot about the BCD opportunity. In the BCD CT, we see that, I mean, for the MF category, roughly 16% is coming from K&A, and 84% is coming from BCD. There's A2. We are almost 31% is in the K&A, while 69% on the BCD. We are pretty underrepresented in the BCD cities. I mean, in terms of market share, our K&A market share is 7.9%, while the BCD is only 2.2%. The opportunity is, I mean, even if you look at our October investor day material. I mean, in the BCD city, you'll see a very clear, I mean, premium realization trade up from consumer. They're also looking for, I mean, a better product for their baby. The ultra premium segment almost contributes, I mean, 45%-46% of the BCD. That's our opportunity. We are going to expand it, our distribution in the BCD, plus, I mean, improve the, I mean, the RKA, regional key accounts, local key account management, so that we can improve our velocity. The fundamental is that we need to invest on the brand. I mean, building bigger penetration, I mean, of A2 protein, in the consumer, which, creates, I mean, a bigger consumer base, versus A1 product. Thank you. Do you have a target level of stores that you want to achieve in BCD? Is that something you've discussed? Probably, I cannot quantify that number, but in October Investor Day, you can see that our ambition for the next five years is expanding from existing, I mean, 26,000 stores to 30,000-35,000 stores. I assume most of the growth is coming from- Yeah. We haven't, Larry, broken it down by K&A and BCD, but 30,000-35,000 stores is our medium-term target with a weighted distribution of 50%. Our weighted distribution in BCD at the moment is 37%. Okay, great. Thanks for that. Just quickly, Race, can I ask you about the guidance for profit being, I think you're saying, there won't be a translation of the revenue outperformance into profitability, relative to what? I mean, are we comparing it last year in the second half; it was an EBITDA loss. Of course, profit's gonna be larger than that, I suspect. Yeah. What we're saying, of course, we're not giving quantified guidance. Mm-hmm. What we're saying is, compared to what we said previously in August. Ah. Our revenue will be a bit higher. Yep. However, that incremental revenue will not flow through to incremental profit in the second half. Whatever you've assumed for your second half profit, we're saying the incremental revenue which we will generate in the second half will not flow through. Relative to my own estimate. Correct. of your profitability. Yeah. Larry, we haven't provided quantitative guidance for the full year, but we have provided pretty extensive qualitative right through the P&L. Yep. I get it. I guess whatever you and the market have assumed, we're just saying, you know, be careful about factoring in significant profit increase associated with the revenue because we've proactively decided to reinvest that in brand and capability investment to drive future growth in the business. We've just been clear about that. Thank you very much, guys. Thanks, guys. Thank you. Thank you. Your next question comes from Sam Teeger from Citi. Please go ahead. Morning, David and team. Congratulations on the turnaround so far. Nice to see things heading in the right direction. Thanks, Sam. First question is on price rises. Just wanting to understand, I know you said this half, but when in this half, and what's the magnitude of price rises you're expecting? And will this price increase be applied equally across all your channels in percentage terms? Sam, it's very specific by product, by market. I mean, the only thing we've clarified in the announcement today is 11% price increase in the U.S., effective in the fourth quarter. We have taken price in Australian liquid milk in November last year. We may have to take price again, unfortunately, in Australia, just given the pressure on milk prices and input costs, etc. In IMF, Race mentioned just before that we have taken price during the year, last year on English label. In China label, we've priced up. I think we priced up the 400 g tin during the year as well, which will have an impact. We may need to take a little bit more price in different areas, but that's sort of what we've disclosed at this stage. As you'd expect, we'd have those conversations firstly with our customers. All right. Then, maybe one for you, David, and if Xiao Li can chime in. Just keen for your expectations around the birth rate in China later this year and next year. Just wondering, you know, in your view, based on what you're seeing and the people you speak to, what's the prospect for a rebound from current COVID-depressed levels? Sam, it's always I mean, Xiao Li, chime in, if you want to. It's obviously incredibly difficult to predict the future birth rate. Back in October, in our Investor Day materials, we gave a directional range on one of the pages, in that, in terms of our outlook. We probably still think that there's still more pressure to come on the absolute number of newborns in the market or ongoing trend associated with the socio-demographic drivers, plus the impact of the rolling impact of COVID as well as we cycle through the impact of vaccinations, et cetera. We still think there's more pressure to come. If you go back to our October strategy day, you'll see where we think that the range of outcomes that may impact the business going forward. Xiao Li, do you have anything else to add to that? No, I think you covered most of the points. Thank you. Thanks, Sam. I'm sorry I can't be more helpful on that. It's difficult to predict. All right. Thanks again. Thank you. Your next question comes from Marcus Curley from UBS. Please go ahead. Good morning, David. Could you just talk a little bit about, you know, English label in particular? You know, is it fair enough to assume, you know, with what you're saying for the second half, that it's principally matching, you know, demand where you did it in the first half? You know, are you expecting, in other words, any significant change in English label market share in the second half? Well, I mean, it's hard to predict exactly what the market's going to do. But from our point of view, we're expecting English label to be up in the second half and up for the full year. Obviously we're expecting reasonable growth. I don't know, Yohan, if you wanna add anything further to that. No, I think the indicators that we've had over the last half have been promising, but at the same time, we do also have challenges that we need to address, such as brand health, et cetera. Yeah, I think it's good to see those some of the indicators come up, but there's more work to be done. At this stage, the intention, you know, is you're done on your requirement to short the channel. You know, you're happy just matching, you know, sellout indicators and English label from here on in? Yeah, I would say the inventory levels are at targeted ranges, as you can see in the flag deck. I think, you know, it's hard to predict how our share will go in the next half, but it's something that we're working on. Yeah. We've gone to great lengths, Marcus, to rebalance our English label revenue in the second half of particularly the fourth quarter of last year, and China label as well during the first quarter. We feel really good about our inventory levels in the business and in the channel. In fact, probably we indicated in our materials today that probably just because of this ongoing Omicron disruption to logistics and that, we may even be a little bit light at the moment as well, just to make sure we got enough stock for volatility reasons as well. Generally our inventory is at the right level and the sell-out should match sell-in, sell-in should match the sell-out through the trade. Okay. Secondly, you know, when you look at your marketing spend, can you give us a little bit of color in terms of the incremental spend? You know, how much of that is above the line versus below the line? I suppose where I'm heading with this is, you know, how much of it do we think is gonna benefit English label as we head into 2023? Right. We haven't been specific about that. If you go back to our Investor Day, you'll see that our below-the-line spend in aggregate is greater than our above-the-line spend. In the second half, as I mentioned, we've got a significant campaign coming up in the fourth quarter. That'll be an integrated campaign through, you know, above-the-line consumer comms right through the trade, et cetera. We will leverage both China label and English label positioning in that. We're not just advertising our China labels, so it's designed to be of benefit to both. Relatively though, we're gonna be upweighting the consumer component in the fourth quarter. It's one of the reasons why we're increasing it, and we'll continue to kind of progressively roll out our below-the-line investment consistent with our strategy, improving our execution in the trade. We haven't been specific. I just hope that directionally gives you a little bit of color around that. When you say consumer component, is that the advertising component? Yeah, the advertising, brand marketing, consumer-oriented mainly through digital, out-of-home, other kinds of mechanisms. We might have a TVC component; we just haven't decided that yet. We're just going through the planning of the execution around our campaigns for the fourth quarter at the moment. Okay. Thank you. Thank you. Your next question comes from Adrian Allbon from Jarden. Please go ahead. Good morning, team. Maybe a question for you, David, to start with. Can I just clarify some comments you've made around the marketing expense as a, as an intensity of sales? I think it was in reference to Matt's question earlier. Was your answer along those lines, but did you pretty much say that the second half percentage was sort of a reasonable base, and over the next few years you'd expect it to incrementally increase? This is probably referring to the full year. The second half, it will step up as a reinvestment rate. It'll be sort of. I don't want to give specific guidance on this, but overall for the year, I suspect the average reinvestment rate for the year may need to be tweaked up even further a little bit in the future. But I think we're getting close to the right levels. I hope that we get the sales growth to support ongoing absolute increase in our marketing budget and spend that we don't have to continually increase the reinvestment rate. Okay. I might have to follow that up on a small group Yeah. I'm just cautious, Adrian, 'cause if I give you the reinvestment rate or comment on that specifically, now that we've given you an absolute number for marketing, we might as well give you specific revenue guidance, which is not the intention. That's why I'm being cautious. I'm not trying to be cute. No, that's okay. Okay. Can you just, given some of the macro backdrop being difficult around birth rates and the market sort of in decline and the a2 category being in growth, can you just comment, I guess, what you're seeing from the competition coming into the category? Like, I guess it's probably more of a feature for the English label. China label, actually probably even more so in terms of the competition coming in. Xiao Li, would you like to comment on the number of new entrants into the A2 protein category in IMF in China and how that's being positioned and our views on that? Yes. I mean, basically, if you look at all the international or local player, they all launch their A2 product. I mean, seeing this is the segment still growing fast and we are the dominant brand in this segment. So that. I mean, everybody has their A2 copycat. And also the trends we are seeing is these are competitor rather than building consumer education amplified A2 protein benefits. I mean, they don't do that much, but rather they are kind of benchmark their benefits versus A2 and they're trying to take a share from us. From the market share, I mean, tracking the Nielsen data, you see there are some, I mean, there's some progress, but we are still, I mean, a dominant brand in this segment as the pioneer and the leader of this segment. We believe, I mean, keep on educate consumer the A2 benefits and growing the pie is the key growth driver for the future rather than compete with our, I mean, smaller competitor. Thank you. Agree, Adrian. Our key objective is we wanna grow the category and we wanna lead the category, and we think there's a big opportunity for us in China and other markets to do so. Okay. Just, I mean, sorry, again, the line was a little bit difficult, but you're saying you are seeing more entrants, you are seeing increased competition, but at the moment that's growing the category and your whole part, obviously your share numbers and sales are saying that you're taking share overall. How do you feel? Like, presumably you're still taking. Are you not still losing some share of the category, presumably? Overall, we're gaining share in the market, gaining share in ultra premium. If you have that strict definition of the A2 protein category, that is growing rapidly. It's the fastest growing segment. Our share of the category has declined, but we've grown overall. Okay. There are many other new entrants to the category, but most of the A2 component of it is really being positioned as an add-on to the product, almost like an ingredient rather than our fundamental A2 proposition and positioning in the market as the pioneer and leader in this space. Okay. I think that's good on that question. Can I just a second question. Like, not referring to your presentation, but in the text that goes or that supports that, I noticed on the innovation side of things, this is for reference, I'm actually looking at page numbers up. It's in the bullet point under ramp-up product innovation. You're talking about advanced infant label IMF product refresh from mid-2022. How have you sort of factored that in? Like, presumably that's in terms of your second half outlook, like traditionally when you've had sort of label change and stuff, it's been quite difficult to execute. Yes. I'll let Yohan comment on our innovation plan for English label. We shared a bit of this back in the Investor Day, but Yohan, do you wanna give an update? Yeah. In the Investor Day, we did talk about the need for innovation in English label. It was the fifth pillar of our strategic plan. As per the note that you're referring to, yes, we are looking at a new product and an upgrade to our English label. Yes, you know, managing the phase out and phase in for a new product is always something that has to be done quite carefully. However, you know, that's our focus in terms of making sure that, you know, things like inventories are at target levels because that in particular can sometimes throw out the phasing of a new product. I think it's a promising development. It's only going to support our proposition further and, you know, we're pioneering in A2 protein, so it's only fitting that we continuously invest in improving our product. Adrian, just to recap then from an IMF innovation point of view, you should expect to see mid this year a refresh of the a2 Platinum products. We have made good progress with Synlait submitting the dossiers associated with our China label re-registration. Hopefully, that will go through the approval processes, and we hope that that'll be approved at the end of this calendar year, with new product coming to market early next year. Then we hope after that to have an upgraded English label product into the market later during that year. That's sort of the roadmap that we're working towards at the moment. Adrian, just to refine your question about the impact on the P&L. There's not any material costs in terms of, you know, write-offs or anything like that. Where we do see an impact in the P&L is in the second half in SG&A, because that's where a lot of the innovation and R&D costs do step up. That's one of the reasons we have indicated in our release that the SG&A cost will step up in the second half. I think I understand. Certainly I'll ask, but the introduction of this, I guess, might be a risky upgrade to the English label that would sort of occur in FY 2023. Uh- Into the market better. As it fully diffuses into the market, yes, during the start of FY 2023. Yeah, yeah. The fourth quarter. Okay. Fourth quarter of this year and first quarter of next year, it'll be, you know, selling out from us into the trade and through to consumers over that, broadly over those two quarters. At the moment that's planned as a phase in, phase out, a sort of soft-ish change over. We need to work through the details on that at the moment, but not like a really hard change over where you would expect us to be removing product from the channel and et cetera. That's not currently the plan. Okay. Thank you. Thank you. Your next question comes from Stephen Ridgewell from Craigs Investment Partners. Please go ahead. Yeah, thanks. Just to follow up on the EBITDA outlook for the second half, so I think there's just a little bit of confusion. To be clear, should we be interpreting the guidance for EBITDA to be, you know, higher in second half 2022 than the first half 2022's NZD 97 million? I think it's just the confusion's more around the base reference. We're not specifically referencing it to a particular half. We gave, just to recap on what Race said before. At the end of the full year, in relation to the full year of 2022, we gave qualitative guidance through all aspects of the P&L, and we did not give specific guidance on EBITDA or NPAT at the time. Now we've updated our qualitative guidance, and we've said that we expect higher revenue in the second half, so we've upgraded that and we've given some color by aspect of the business where we expect to see that. We've said that relative to our previous guidance, FY 2022, not to expect that to result in an increase in earnings because we've decided to reinvest that in brand investment and other capability building across the business consistent with our strategy. It's not, Stephen, it's not in reference to a particular half or a full year. It's more a qualitative directional statement against what we previously provided for the full year. We're not saying that the second half is up, down or sideways versus the first half. We have not provided that specific guidance. Although you have obviously indicated sales will be up, and I think a comment earlier in the Q&A from yourselves was that EBITDA margin would be sort of steady in the second half and the first half. That would imply an improvement unless I've misheard that. No, we didn't say EBITDA margin. It's not that we're not saying that. We said gross margin in the second half would be similar to the first half. Okay. Look, I'll maybe take that as my. We expect the market, the analysts and investors make their own assumptions around sales. We're giving guidance on growth margin percent in effect. We've given you specific number for our marketing investment, which is the biggest component of our costs below margin. We've given directional comment on our SG&A, tax rates, et cetera. We've tried to provide the building blocks for the market to understand our outlook for the full year. We're obviously mindful of our continuous disclosure obligations. We'll monitor where the market ends up. Great. Okay, thanks. Just second question from me, just on gross margins and the comment you're expecting them to be stable. Are you able to comment perhaps in terms of the gross margin in English label versus China label? You know, it's been commented previously that, you know, there was some price pressure coming in on China label and that you're expecting margins to be a bit lower in that channel than English label going forward. Is that still the right way to think about it? Just to address that. We mentioned previously about the relativities between our China label product and our English label product. What we are seeing is cost pressures across all of the product, but China label we are seeing one of our materials actually coming down in price. So therefore, the margins will stay for China label actually about the same level. That addresses your question? Is it lactoferrin that's come off a bit? That is correct. Is it lactoferrin that's come off a bit? Yeah. Yeah. Thanks. That's all from me. Thank you. Yeah, it's quite material. One more question, I think, or? Yep. Thank you. Your last question comes from Jonathan Snape from Bell Potter Securities. Please go ahead. Yeah, thanks. Can you hear me okay, guys? Yes, we can, Jonathan. Great. Thanks. Look, can I just clarify the guidance statement here? I know you had a couple of questions on it. There are a lot of words in it. Simplistically thinking, say your sales you expected to... I'm just gonna throw a number out there. You don't have to agree with the number. Say you think they're gonna be NZD 100 million better than where you did back in August. What you're saying is that NZD 100 million delta isn't gonna change the profit because of the additional costs in terms of marketing, SG&A. Is that the simplest way to think about it? That everything else is kind of unchanged, just the revenue outperformance that you now think you're gonna have relative to back in August delivers no profit delta because of the additional costs. That's correct, Jonathan. Well put. Okay. All right. Thank you. Great. Good to clarify that. The second thing I just wanted to ask about, the comments around MVM and the internalization of the supply chain. Now, no doubt you've obviously had conversations with Synlait about this, but there's a large, I guess, available quantum of earnings that you can bring in by bringing the English label in-house. How does that affect the pricing of your China label contract with them, given that they own your license and your brand, for want of a better way of putting it? Because I would imagine that if you're gonna bring down the volumes that you're pushing through that business, then they're gonna wanna reset the pricing on that contract much in the same way that you got a benefit when the volumes jumped up. When you're looking at the business case for MVM as a standalone entity, are you also considering some of the diseconomies that might come on the other side of that contract? Yes, we are, Jonathan. I won't comment on the specifics of our commercial arrangements with Synlait. Only insofar as they remain in place, as you would expect, they have, there are volume aspects to that, and that we have taken, that into consideration. You know, we'll continue to partner with Synlait, as our core partner on IMF in particular. You know, we have acquired our own facility, which is underutilized. It's a very capable drying facility. We need to invest in that to turn it into an integrated facility. Clearly where our volumes are at the moment, we have excess capacity between Synlait and MVM, and we'll be seeking to transfer volume over time. Our hope is that we, the a2 brand continues to grow, and that we can share that volume between Synlait and MVM. At current volumes at the moment, you know, we need to prioritize our own asset going forward, and we will. All right. Great. Thanks, guys. That's gonna take time, right? It's a multi-year journey. Yeah. I get it. I guess I'm just trying to figure out, you know, how you're viewing it holistically. You got one plant you own 75% of, and- Yeah. You know, there's obviously a loss of economies through the other facility that then would change the pricing, I would imagine, on how that would work. Yeah. Yep. There's some dyssynergy associated with that, but there's synergy on the insourcing and the vertical margin capture. Yep. Great. Thank you. Thanks, Jonathan. Thank you. There are no further questions at this time. I'd now like to hand back to Mr. Bortolussi for closing remarks. Look, I've got nothing much more to say, but thank you, everybody, for joining the call today. You know, we look forward to catching up with most of our investors and the analyst community during the course of the rest of the week. We'll see you then. Thank you. Thanks for joining us. Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.