I would now like to hand the conference over to Hannah Lynch. Please go ahead. Good morning, everyone, and welcome to Synlait's Guidance Update Conference Call. I'm Hannah, as the operator said. I would like to introduce you today to our new CEO and CFO, John Penno and Rob Stowell. I'd just ask that you keep your questions for two per person. John and Rob will provide a couple of opening remarks, and then we'll hand over to questions. John? All right. Look, good morning, everybody. Thanks for making the time available to come online and listen in. What I'd like to do is firstly just introduce myself, then Rob, and my role here, given this period of uncertainty we're in. I'd like to introduce Rob Stowell, who's here with me. We'll go to the business of the day, the substantive announcement, and then we'll make sure we've got plenty of time to answer your questions. For a start, hello to all the people who we've talked to and worked with in the past. As probably most of you know, I was here as the inaugural CEO of the company for the best 10 years of operations, and have come back. I've been on the board since I stepped down as CEO in 2018, and now working with the board in the role of Chief Executive Officer again. I do want to take a moment to clarify the way the board and I are seeing my appointment. Number one, while it's an interim role, we're not waiting for anything. This is not a holding pattern. There's a lot of work to do, and we're getting straight on with it. The first step is to fully understand our position, and today's announcement is really about that. Over the last three weeks, I've worked pretty hard with the finance team that's in place. As you know, in the last couple of months, made a change to the Chief Financial Officer, and that's all been about getting towards making sure that we can provide good clarity of where we see this year closing out, rather than providing a number and then pointing to a bunch of risks that might be going on. That's the first thing. Second is, we need to deeply understand what happened. Clearly, this is a very disappointing result after nine straight years of profitability. Some of it is about factors out of our control, but a bunch of it is about factors in our control as well, and that's really where we're putting our emphasis, making sure that we deeply understand the things that we as a company have done and the choices that we've made, so that we can build a robust plan going forward and get back to solid and sustainable profitability, and we'll talk to that later in the call. That leads to the third part. After understanding where we are, understanding the reasons we are where we are, that's the foundation for a good, solid plan that we intend to be able to talk to you when we come back in September, closing out the year and talking about the year heading forward. We'll be able to talk at a high level about FY 2022 and our expectations for that, because we can see already that as some of those moving parts sort of normalize at the end of this year, we remain confident of quick return to profitability, and we'll talk about the principles behind that. We'll talk about the detail when we see you in September. I know you'll have lots of questions. Don't be too surprised if we bat those away when we're talking detail on FY 2022. Let me introduce Rob. Rob will be here for another few minutes. I'll get Rob to give a quick outline of the changes that have led to us making a different forecast for year-end this year. Rob has been with this business for a very long time. I think he was about our third or fourth employee into Synlait Milk when we were first starting to plan the business many, many years ago. He's been with us for 14 years. He came to us after several senior accounting and finance roles offshore in various entrepreneurial companies. He worked with us as we grew up the finance team. He sat as 2IC under Nigel Greenwood for a number of years, until about 2014, I think it was. At that point, we basically faced losing Rob to a CFO role outside of the business, because Nigel was still firmly in the role. We took Rob and put him into various operational roles in the intervening years. He built our planning system, which is still at work today. We expanded his role probably four years ago into general manager of operations, where he, as well as continuing to oversee those planning functions, he looked after all the supply chain logistics, warehousing, which is a really important part of this business, and has done a great job of managing that for us. He's just come off leading the build of the rail siding and new warehousing, and that's a project which has gone really well. It's come in on time, on budget, and is set to deliver the expected business performance improvement from clarifying our logistics program and getting a whole lot of trucks off the road and using rail heading forward for our Dunsandel site. He's really well qualified. He understands the business very well from his background, from working at senior levels with his colleagues. He's always been an advisor around the finance function. He has been involved in an advisory context in the last three weeks as I've tried to work with the team to build a clear understanding of our current position. He's in a really good position to talk to the points today. I'm going to hand him the mic in a moment. Just before I do, though, the only one overview comment that I would make is that for those of you who are going to try and bridge back, use our comments and bridge back to the last forecast, it's just not quite as clean as that. This is a view that we're taking over the whole year, where we've gone back to looking at everything to make sure we fully understand what's gone on and presenting, and we're presenting the most accurate picture we can. While the number is deteriorated, we don't see it as a recent deterioration in business performance. It's just a clearer view. If you compare the two guidance statements, I'd like you to think or I'd like you to note that we put a number out with a bunch of risks facing it. This one is we're really looking at those risks, taking what we believe to be a fair view of the risk of those things materializing and putting it into our expected financial results. You won't see that we're facing a bunch of risks there. We're saying this is where we think it's going to land, and we're going to manage it there. We're going to manage it as well as we can to be better than that, and then make sure we get focused on delivering an improved result next year. With that, I'll hand to Rob Stowell, and then I'll summarize again before we open up for questions. Thanks, John Penno. I just want to begin by saying how excited I am to be supporting John Penno in the CFO role, given the circumstances. Having worked with John Penno for 14 years with similar styles, and having a very much a strong passion for the business, I'm looking forward to stepping in. Look, to get into the detail of the release. The first thing we're going to point to is obviously the guidance is between NZD 20 million and NZD 30 million in loss for the group, and there's three key things that are driving that result. First one being shipping delays. The shipping delays have been there for some time, but as we move in towards July with a steer that they're actually going to get a little bit worse, and that's not helped by the fact that we had a little bit of a bulge of quality hold items towards in the last quarter as well. During at the end of July, really, we're going to probably have anywhere up to 10,000 tons of ingredient product, which is going to be sitting in inventory, and which we would normally have sold by our year-end. That's a drag on our P&L in FY 2021. The second aspect, and we noted this again in March release, is the ingredients business is not performing quite as well as we've seen it perform in the past. This is down to a few things. Obviously, we had a flip of milk from a2 product into the ingredients product. Through that, our sales phasing and the volume shift with the increase in volatility and commodity prices has, we think, eroded a little bit of value. The market, sorry, the butter/ AMF differential has absolutely been there and will continue to be there through to the year-end as well. That's another drag on our P&L. The third thing is, as we've moved towards our year-end, and we still have the uncertainty around the a2 demand, our base powder assumption, what we produce and what we hold in stock at the end of the year is a lot lower than what we've had in the past. That, coupled with strategic stock positioning, has meant another drag. They're the key aspects. You might ask me, what's the weighting of those three areas? To be honest, the reason being evenly spread across those three areas is probably the best way to explain that. All right. Just by closing out the year, we do make a statement in there that we've got good, strong supply. We've got waivers for this year, which we think is appropriate to have in place right at the moment, working with them constructively to get finance in place for next year. We've got some short-term debt rolling off September, October. That was always part of the plan. We feel confident that we'll get that in place. We'll be able to talk about that year-end. We are not planning on a capital raise. I know that that's been a question for a number of you. We see a number of the analysts writing to our [inaudible]. We would encourage you to look backwards through this history of the business. As a business when it's running well, has good operational cash flows, we expect that that'll return. Going into next year as we balance our base powder production with our sales of canned infant formula, even if we sell the same volumes that we've achieved in FY 2021, we can see a strong return to profit and a strong return to positive cash flows. Our CapEx program is running out. Our CapEx program will be much lower in the coming years. We have largely new plant and equipment that is fit for purpose. We're entering into a time where it's about fitting up plants to ensure that they are operating close to capacity, and a period where we really focus on walking back up that value path again. Project S coming on for Pōkeno. Good progress on selling high-value creams in China. Again, a project we would like to be able to talk to you about some more come September. A period when we will be balancing up again our CapEx spend. We feel reasonably confident that we are going to be able to work our way through this, with prudence and careful management. I'd like to leave it there, and turn the call over to any questions that you might have. Thank you. If you wish to ask a question please press star one on your telephone and wait for your turn. If you wish to cancel your request please press star two. If you are on speaker phone please lift your handset to ask a question. The first question comes from Adrian Allbon from Jarden. Please go ahead. Good morning, team. I've just got a couple of items. Maybe this is one for Rob. Just in terms of, I know you said, if I got the arithmetic correctly, those three factors that are driving the business into a loss, are you able to give us a sense of, just the inventory revalue stuff, is that a cash flow impact? Can you give us a sense of the cash implications of those three things and maybe where you expect the business to land for this coming year end, based on your planning? Look, firstly, just to answer the cash piece. It's not so much cash, Adrian. It's more a position that we're taking. Obviously, the stock provisioning is non-cash. The infant base powder production piece is a bit of both. Obviously, if we are making less base powder, and we're making more ingredient products, then we should be able to cash those ingredient products up. It needs to be looked at with the shipping delays. If we still can't ship that product, then obviously that's sitting on our balance sheet as well, and we'll have to cash up those products in the first part of this financial year. If you'll let me jump in there, Adrian. If you look at our balance sheet over the last couple of years, we have been accumulating increasing amounts of inventory, and we'll be working hard to bring that back down. That's an area that we can release cash by making sure our planning systems are working really well. It'll happen naturally as we return to normality after forecasting considerably higher IFC volumes heading into this period, adding a lot of inventory, and then just having to work our way through that, taking a more conservative position about where those IFC volumes end up. We'll make cash from inventory. The shipping delay thing, it's a balance date issue. The cash will quickly move through those volumes early in the new financial year, but we're going to be pushing them over the balance date. That caused, obviously, that pull of earnings out last year's P&L. It also means that we won't have the cash on the balance sheet at the current time coming into the year end, but it'll rectify itself pretty quickly as the year closes out. They're quite big numbers at high commodity prices. They're higher numbers per ton than you would see perhaps a year ago when commodity prices were considerably lower. Just to follow up on that, I guess, after March, it would be around NZD 450. Should we think of the net debt being more like NZD 500, just to give us a sense of the debt here? Yeah, we should think of it definitely having a five in front of it, Adrian. Yep. Okay. I guess we'll manage the business from here forward with a pretty clear focus on balance sheet and releasing cash where we can. If this all pans out, Rob's right, that's about where it'll end. Okay. In reaching our numbers, I guess we're not fundamentally predicting, but for the current year end, we should have at least something more like NZD 500 on the balance sheet. There's opportunity for us to work our balance sheet a little bit harder going forward as well, Adrian. Okay. Just looking ahead, obviously you've been in review over the last couple of weeks. The profit, I'm trying to look backwards and then to look forward again. The profit's gone from plus NZD 25 million positive down to -NZD 20 million-NZD 30 million. I guess there's no imminent thing. Have you stopped the bleed at this point? Are we to assume that your view is also indicating, when you discuss with your lending providers, a pretty confident recovery of the long-run earnings power off the asset base? Look, we have bearing in mind whether there's anything that we should be impairing, the viewer is no. Of course. Again, we'll test that year-end. We have solid plans in place to return the existing plant to earnings and making the adjustments we need to get much better utilization out of the Pōkeno plant, which again, we'll see earnings come up on those. At initial view, we don't see any need to impair good quality assets with a plan to see them find their way in the near future. I would like to remind people to look backwards, and we've had a good solid track record of that in the past. I think it's just the fact that we haven't delivered well on that in the last year or two. The way we've traditionally approached these things, you've always seen us with good plant utilization, and we'll get it back to that. Thank you. The next question comes from Chelsea Leadbetter from Forsyth Barr. Please go ahead. Thanks. Morning, guys. I guess this question for me, in terms of, on your view here around some of the internal initiatives that have been talked about to help drive the business forward, I'm interested in what has changed after your review. Have you accelerated anything? Changed course in any way? I guess it still holds with the other guys being interested in what change of direction, if any, or acceleration of direction you've placed at this point? Yeah, that's a good question. I think the big change has been a much greater focus on the near term. We traditionally had been a business. I think the strategy of the company remains right. Yeah. I've been sitting around the board table. It's an evolution of the strategy that was in place when I was CEO. I don't think we've got things wrong strategically, but I think that our focus on short-term execution hasn't been strong enough. I'm moving management's attention perhaps away from some of the big long-term things that are not at the horizon, but two, three years away, and getting us really focused again on making sure we're executing in the short term so that we earn our right, so in our way to those other options that come. You will have heard about projects like Karinga, which is an execution strategy that Leon and the team put together. We're steering that right back into the short term. I guess the word there in some of that is more getting back to basics, keeping your operational things as strong as it can be before we start to think about anything on the horizon. Exactly right. Yeah. Number one, I do go back to that the site of the Pōkeno plant, which is what's the job at hand here. The first is clearly understand where we are, that's what we're talking about today. Clearly understand why we are where we are, then build a plan off that to turn it around as quickly as we can. Three steps, the change in emphasis that's happening internally are aligned with those things. Had a very good look, not so much at the things that have happened to us, how we've responded to it, the things that we've been doing internally that haven't quite executed on our strategy as cleanly as we might have. Plants aren't built. The way to make these big plants work well is to make sure that they're operating at or near capacity and then working your way up the value chain over time. No, that's helpful. Just a second question now. Just a little bit about inventory levels and obviously trying to focus on cash. Is there a view internally yet on what the appropriate levels of inventory or debt level is for this business at this stage? Look, we'll give you a better view over our FY 2022 as we discuss that plan. Clearly, we're a long way from our earnings target in the last 12 months. That's mostly on the balance sheet. We can see things that we can do on the balance sheet to release cash, to help us through this odd period. You will see us managing inventory not just to maximize profitability in the next little while, but to manage the volume of ingredients we're buying in, the amount that we hold on hand at any given time. It does run back, as you suggested, to getting the basics right. If the manufacturing process is running really well and products are coming out and we don't have quality issues to sort our way through, it's much easier to keep stock turn going quickly, and do not need to accumulate the volumes of inventory that you have seen accumulating on our balance sheet over the last year or two. What should I perhaps see coming into fruition in FY 2022? Is that a right way to think of it? Yeah, look, it's Rob here. Absolutely. I'll give you an example. We obviously, at the start of the year, this financial year, we're running at much higher demand volumes for a2, and we had a raw material balance there which was servicing that production and that demand. The demand came reduced significantly at Christmas time. We were left with powdered whey protein powder, for example. That's not valuable. We need to work our way through those balances. We need to get down to a really efficient inventory level on that side. It's the same with base powder. We need to be careful that we don't make too much base powder because then we could run into expiry issues. All that sort of stuff can be run more efficiently through our FY 2022. It all comes under this category of getting the basics right. Get the basics, run the business really well, you'll see it coming through in Profit and Loss sheet from all the places you would expect it. Thanks so much. Thank you. The next question comes from Marcus Curley from UBS. Please go ahead. Good morning, guys. Just two if required. John, can you talk a little bit to whether you think any of these issues are sort of carrying from this year? I suppose, and potentially, you did mention a bit of pressure on ingredients margins, where these products are being sold into China and potentially where commodity prices are. Just keen on understanding, of these three, any significant flow over to next year. Nice to hear from you, Marcus. Look, most of these issues we see as contained in FY 2021. The big external factor in terms of the downswing in our volumes of IFC, which actually happened toward the end of the first half. They have had an ongoing effect, but we did just land them for this year. We had a lot of milk converted into whole milk powder, skim milk powder, and we were already looking at quite significant increases in that because of the extra milk that had come into the business for this year. Our ingredients business grew, and in a year, I'm not going to say volatile, it's just that prices came off a bit at the start and then they've gone up very strongly in the second half. If you don't get your phasing quite right, that's where you really fall out. It's not a question of us not achieving margins on a day-to-day basis. The teams do a reasonably good job of it. We've got a great group of customers. They're usually premium-end products, which can attract a margin on the day. It's just about getting your sales phasing right. As we look back, we haven't always done that. We haven't always sold to optimum product mix, and we haven't always got our phasing right. When you run at full tilt, you don't have to be very far out to make a big dent, and it is. The good news is that these are things that we can turn around really quickly. Just secondly, John, no mention of infant formula in the list of issues. Obviously, we've seen a2 announce a big stock buyback program and a desire to freshen the product being delivered to customers. Has that caused you any issues with your own whey or other ingredients in terms of carrying costs or your base powder in terms of carrying costs? No. Ultimately, it's determined by their ordering and off take of these IFC products. Actually, the estimate that was made right back in December about the year on year swing in volume was quite close. That's why we're not talking about it, Marcus, because this is not a further degradation of volume. Also, I think it's just a reality that when the tide goes out, the rocks start showing through, and we've got a clearer idea of some of the other things that have been happening in the business during this phase we're through very quickly, where we had very good earnings and very good free cash flow. Too much attention went on to one part of the business and not enough on other parts. What we're looking at is a year where actually as well as that movement, we've left a lot on the table. That's why I return to this three-step plan here that's rather my assignment is, one, understand where we're at, two, understand why we're there, and three, the plan in place to pin it around. That plan is not waiting around until IFC volumes rebuild. It is executing really well on the new customer that we have coming in, Pōkeno, which we continue to believe is a really exciting opportunity. That opportunity was one that was built up over many, many years by slowly building the relationship. It's one where actually we are going to see genuine diversification in effectively our pediatric business. It's a business that is core to the way we've developed. It's a business that we're really good at, and so that'll bring balance and de-risk us there and brings a key customer for that Pōkeno adjustment. Making sure our ingredients business works really well. It's always been a really important part of the business. At times, we've lost sight of that. It's grown in volume. I'm not going to say it's grown in importance. It's been important, but perhaps we haven't focused on it as much as we should. It's core. The business makes money because it has a good, solid ingredient business where we buy farmers' milk. We make premium ingredient products, and we have a really good range of customers who we sell that to. Then we march upmarket with higher value products via the pediatric prep products, the formulated products that we manufacture, and these days take all the way through to finished consumer products for our customers. That remains core. When we do it well, that's a very good earner. Part of the reason it does well is because it's built on that solid ingredients business, and you'll see over the next few months that's working really well again. Thank you. Your next question comes from Nilesh Makwana from Goldman Sachs. Please go ahead. Good morning, John, Rob, and thanks very much for your comments today. Just a couple questions from me, and it certainly sounds like you're reasonably confident in this regard, but just thinking about covenant management fiscal 2022, how comfortable do you feel based on how the business is likely to be running during that period? Do you think that you'll need to continue to manage the banks during that period? Maybe if you could talk through how you expect that mix to change. John, you talked about marching up the value chain, but I'm just wondering how dramatic the mix might move in fiscal 2022. What you'll see us doing, when we start talking about planning 2022, you won't see us making heroic assumptions about big changes. What you'll see are the one-off effects that we see contained to FY 2021 coming out of the forward projections. Number one, there's been a lot of talk over the last three or four months about the impact that the unrecovered fixed costs in our formulated dairy business have had, the impact that's had. We carried a lot of base powder inventory in. We haven't needed to manufacture very much, and so we've got a lot of unrecovered fixed costs in the business this year. That will be gone, as we will have worked our way through that, and that's a big number. Even if we repeat our sales volumes of IFC for next year, you'll see that come right back into the business. Second piece is this ingredient piece that we've been talking about. We see no reason that we won't be able to return to managing that the way that we normally do in the earnings relative to prevailing market conditions returning to normal. If those two things happen, we're back robustly profitable. Beyond that into FY 2023, that's with this coming on and some other opportunities that we're working on, that's when you'll see perhaps us returning to the sort of mix between ingredient and value-add opportunities that we've been used to over recent years. Okay. Thank you very much for that. Just in terms of how you balance out your strategy versus the interest of your major shareholders, do you see any potential problems in that regard? No. Two major shareholders, firstly Bright in China. The amount of business that we do with Bright has always been reasonably small, so that's not a big issue. They're largely a financial investor, want to see us doing a good job around the business. That always comes first and foremost. We do a little bit of business with them. We're talking about a few opportunities at the moment that, if they come to fruition, there'll be a lot more business than we've done, but on commercial arm's length stuff. We have the same relationship with a2. a2 are almost 20%, but a really important customer because we manufacture such a high proportion of their IFC business, which is so important for their business. You'll see us continuing to work really closely with a2, given the landscape that we've got in front of us in terms of volumes, in terms of us strictly competitive in their business to ours. You see [inaudibl e], I think you'll see us working constructively with them. They've been quite public about their need to build a clearer view of their supply chain, and that'll be really important for us because it allows us to plan better, it lets us manage our inventory better. I think that we're 100% aligned on those. It actually also allows us to serve them better as they have changes in their requirements in terms of offtake volume. Look, I don't see any challenges in where we're heading. Any changes you'll see us make, I think it'll help overcome some of the things that we've learned in the last couple of years as we've just been growing and focusing on that growth for that customer. You'll see us taking a more balanced view across the business going forward. Thank you very much. Thank you. Your next question comes from Maya Sari from Radio NZ. Please go ahead. [inaudible], John and Rob. I just wonder if you can give the indication on how things are tracking for your commercial price, and also if you can give me a suggestion on you might want to give our farmer suppliers to potentially concern by our farmer performance at the moment. Yeah. Thanks, Maya. Ultimately, we're a dairy company, and we need strong support from our farmers. The farmers maybe want to see companies that are struggling, and we have this year. Again, I'd like to remind everybody that we've had nine straight years of profitability and some really strong profitability, hopefully through the last three or four years. This is a story where we see some short-term issues, and we see ourselves returning to that position pretty quickly. There's no great change in strategy, working with our farmers to make sure they're doing all they can to add as much value inside the farm gate, us rewarding them for that. We've always had a promise to our farmers that we will leave them better off in the long run than their alternatives. That remains absolutely true and dear to our hearts. We're not at all concerned that this will see us deviate from that. As they should, they'll wait and see what we do. Doesn't really matter at this point what companies say. It's what that number is at the end, and we understand that, and we don't believe they'll be disappointed. You can say with confidence you carry your competitors with price or what do you think? No, it's not about that. Some years we do a little better, and other years we don't do quite as well. We have some very good premiums that the vast majority of our farmers part of now. If you look back at the average milk price that Synlait's paid versus others in the market, by and large, our farmers are being well rewarded, and we don't see that changing. Thank you. Thank you. Your next question comes from David Jeffrey from ACC. Please go ahead. Morning, gentlemen. Could I just ask, just clarifying the scope for the profit rebound in FY 2022? You obviously talked to the fact there'll be a reversal of the fixed overhead under-recovery issue with regard to IFC, as you won't be entering the year with such a large position. I think your predecessor also talked to the fact that if you were able to have better visibility with regard to your ingredient production during the year, things would've been a lot easier. Given that you sort of suggested we assume IFC volumes are flat, you should have therefore better visibility as to how much ingredient you'll be able to produce during the year. Could you just give an indication as to whether that second part is likely to be an important driver of profit rebound, and how that compares to the initial piece that you mentioned in terms of the fixed overhead recovery issue with regard to the IFC? Thank you. Again, we'll give further detail when we come together and are able to have a complete view of FY 2021, and we talk to how we're thinking about FY 2022 in September. There's one of those ones that I'll push down the road a little bit. What we are saying here is that the recovery next year, there's two big parts to it. The first is, as you mentioned, the fixed cost recoveries that we'll get as our base powder manufacturing rebalances with our formerly contracted offtake. The second is we think we'll be able to manage our ingredient business much better. It's probably fair to say that the IFC is more important, but we're seeing some decent actual numbers in the ingredients performance this year and the magnitude of that rebuild next year. Some of that is things that we've done to ourselves. Some of it is just if you have a good volume that pushes over balance date because of shipping delays, the earnings from that and the cash from that don't come in until, it might be a matter of weeks after balance date, but that's not there in the year-end accounts. Okay. Thank you. Thank you. The next question comes from Jonathan Snape from Bell Potter. Please go ahead. Yeah. Can you hear me okay? Hello. It just really is like the last three years have somehow disappeared, but still the same people. It does feel a bit that way. Welcome back. Just a couple of questions. If we can do one on FY 2022. I know you're kind of kicking a lot of these down the road. I just want to make sure if I've got the main moving parts right in terms of the bounce back. It sounds like a lot of that NZD 20 million-NZD 30 million that you're calling out today is largely one-off or timing issues. It's feasible you should get that back, plus you should be getting a recognition of margin in addition into next year's number. I think before you've spoken about NZD 70 million in cost initiatives. I'm assuming you're still pretty comfortable with that number that's out there, and if not, love to hear why not. Then as well, on the ingredient side of the equation, I think AMF and butter have seemed to, in the last couple of media sessions anyway, gone back to kind of their historic averages. You would, I suspect, try and hope to get that back in there as well. If all those three things kind of align, you start to get those numbers that you're kind of talking about in terms of profitability on flat volumes for IFC. Would that be the, I guess, a ballpark way of thinking about moving parts without having to put too much into other bits? Yeah, I think that's a reasonable way of thinking about it, John. Okay. Following on from that, I know you mentioned covenant waivers for this year. Are you able to say how far they've given you waivers for? I think before you used to talk about it four times total that the waivers are. To a 3x EBITDA bond. Is that kind of your thinking on where the business has to get back to, say, 12 months' time, 18 months' time? Look, John, it's Rob here. Look, yeah, we've gained waivers, and at the moment, we're in a process to really risk test our P&L, our full P&L and balance sheet, and discuss it internally and with the bank. We're working through that. There's a lot of moving parts, as you know, but we'll be wanting to make sure that those forecasts are conservative enough, and we've got enough headroom within both our facilities and banking covenants to make through FY 2022 comfortably and into the beyond. All right. Great. Thanks a lot. Thank you. One second. If you wish to ask a question please press star one on your telephone [inaudible]. You now have a follow-up question from Adrian Allbon from Jarden. Please go ahead. Good morning again. John and Rob, I just want to know if you can give a comment on, obviously this is a sort of look forward from here over the next perhaps the 12 months. Can you just give us an update on what's going on the [inaudible], like what sort of renewals you have to get, [inaudible], what are the sort of outstanding data on that part of the business? Yeah, look, nothing's changed there, Adrian. We are continuing to work towards the same dates that we've been talking to. It's a really important project for us, obviously, in terms of making sure that we get those renewals done. We have to be mindful that we're in a COVID environment where travel isn't going on. There's been good progress in terms of between the New Zealand Government and China just to make sure that that is going to be achievable through the regulatory groups working together. I don't think there's any change in the way that we're looking at those risks or the way we're managing them. What is new is that we still have other processes in place, which may open up other areas of business beyond the work that we're doing at the moment. Again, going back in history to those for more products, more brand slots, that's actually still in play. I'm starting to turn my mind back with our team to how we position category properly with those things underneath the all-important objective of making sure that we maintain our regulatory approval for the [inaudible]. We don't have anything particularly to point to in terms of additional concern there. Just for a reminder, what is that sort of milestone date for the SAMR for the China label? It's about 18 months away. Again, just look back to what we said last time, because I'm not going to put everything out there three weeks from the point. That date is not one of the things I am. Adrian, we've loosely got between two and three. Yeah. He knows a lot of work going on, and they're not too worried about [inaudible]. Thank you. Your next question comes from Nick Mar from Macquarie. Please go ahead. Hi, guys. Just on the update today, any of the stuff that you've done around having a more conservative approach to things like inventory, is that all to, I guess, effectively push earnings in FY 2022 to obviously help make those covenants a little bit easier when you remove the waiver for the FY 2021 covenants? That's a really good question, Nick. No, that's not putting any attention on that. It's really just about making sure that we're being realistic about the volume and value of that inventory. It's actually about looking back and thinking about our balance sheet, thinking about where we can release cash from, making sure that we're sort of managing through this period carefully and conservatively. I guess the overall theme of this call, I hope, is we're looking at ways to get our sales up, get our cost structure down, and make sure that we're not committing more capital than we need to. Some of those basic things that businesses need to do to run well, that we've taken our eye off the ball through the years when we were growing fast and earning plenty of money and committing capital. Cool. Obviously, you're back in the old role and focusing on the borders. Is there anything, from what you've seen, any assets you would consider selling over the coming 12 months? Look, at these moments, of course, you've got to look across the portfolio of assets that we have. You won't see us selling any strategic assets, whether if we're holding assets that we don't need to. Of course, we have to consider that as a way of making sure that we make that balance sheet work a bit harder, and that's 100% in line with what you said, how do we get our sales going well, how do we manage our costs, and how do we make sure that we're not committing capital that we don't need to. Which assets are not strategic? Gosh. Well, I'm not going to be drawn on that, Nick. Good question, though. They won't be big, material assets. We're not going to be selling off parts of the business or anything like that. Pieces of property or things like that, you'll see us making it. All right. Thank you. There are no further questions at this time. We will now hand back to John for closing remarks. All right. Thanks, everybody. Thanks for your thought and comments. One thing that we will be doing is looking to catch up with a number of you in a couple of weeks' time. Rob's been in the role for a week now, and I've been in here for a couple of weeks. Given the number of changes that have gone on, we said we do want to give people the chance to sit down and talk to us further about FY 2021 and as far as we can, FY 2022, then leading into a normal roadshow after we close out the year in September. I do look forward to catching up with you and getting your ongoing observations of the business. Thank you very much for your time today.