Glanbia plc

Thank you. Good morning, and welcome to the Glanbia Third Quarter 2019 interim management statement call.

During today's call, the directors may make forward-looking statements. These statements have been made by the directors in good faith based upon the information available to them up to the time of their approval of the interim management statement.

Due to the inherent uncertainties, including both economic and business risk factors underlying such forward-looking information, actual results may differ materially from those expressed or implied by these forward-looking statements. The directors undertake no obligation to update any forward-looking statements made on today's call, whether as a result of new information, future events or otherwise.

I'm handing the call over to Siobhan Talbot, Group Managing Director, Glanbia plc.

Good morning. This morning, I'll take you through our Q3 IMS and provide an update and outlook for the remainder of the year.

I'm joined by our Finance Director, Mark Garvey, who will speak through the finances and join me for questions. Firstly, turning to the highlights.

Our revenues were up for the year-to-date for the nine months by 16.9% and volumes grew 2.4%, pricing up 3.2% and acquisitions adding 11.3%. Specifically, we had a strong performance from Nutritional Solutions, with overall revenue growing 25.4%.

The Watson acquisition, adding 12.2% volume, up 9.3%, pricing up 3.9%, and we had good growth across both our dairy and nondairy solutions globally. As a reference, the Watson acquisition is performing well and the integration within Nutritional Solutions very much on track.

Glanbia Performance Nutrition increased revenue by 16.5%, with the SlimFast acquisition adding 25.8%. This was offset by a price decline of 1.4% and volumes declining by 7.9%.

As we referenced previously, in Q3, we did successfully implemented a price increase in the U.S. and across some other international markets.

GPN like-for-like volumes were weaker than we expected in the third quarter, as our key non-U. S.

markets we referenced previously, such as Brazil, Middle East and India, undoubtedly remain challenging. We have a series of actions underway to address these issues, and those actions will continue into 2020.

The SlimFast growth accelerated in Q3 on a like-for-like basis pro forma, which was up 34.8%. Overall, when you take the strength of the overall portfolio of Glanbia, we are reiterating our guidance for the full year 2019 as adjusted earnings per share on a reported basis in the range of $0.88 to $0.92 In 2019, for the full year, Nutritional Solutions and U.S.

Cheese are expected to deliver good revenue growth, along with a positive contribution from the Watson acquisition. GPN is expected to deliver good overall revenue growth as like-for-like revenue declines of mid- to high single digits are countered by a strong performance from the SlimFast acquisitions.

The like-for-like revenue decline in GPN reflects, again, those ongoing challenges in the EU, Middle East, Brazil and India as well anticipated lower activity in the club channel for 2019 versus the prior year in the U.S. The SlimFast acquisition is expected to have a very strong year as a result of growth across multiple product formats and successful innovation.

Turning then specifically to the operations. GPN delivered revenue growth of 16.5%.

As I've referenced, SlimFast acquisition delivered 28.5%, which was offset by a volume decline of the 7.9% and pricing decline of 1.4%. While we're very pleased with the performance of SlimFast, the like-for-like volume performance in GPN has been disappointing this year.

The key issue being for us those ongoing challenges in the regions that I've mentioned. We remain strongly of the view that these regions represent very good medium and long-term opportunities for Glanbia, and we are very focused as a team on specific actions to address the challenges.

And these actions differ by region. In Europe, where the channel shift to online has accelerated, which has impacted the traditional distribution model, we have invested in our direct-to-consumer online platform.

And the Body & Fit brand has been rolled out across the region. That rollout is very much on track versus our plans when we acquired that business.

In Brazil, the Middle East and India, local market conditions for imported brands remain difficult as a result of currency and tariff headwinds. The actions required to address these challenges differ by markets and are essentially focused on moving further down the value chain to ensure that GPN brands are supported by the right infrastructure and resources to compete locally.

In the Middle East and Brazil, the route to market is currently being assessed to drive further optimization. While in India, GPN is very well advanced in developing alternative supply chain options.

These actions we are taking include a reassessment of the total chain, and we will continue doing this work into 2020, which we believe will position us strongly to recapture growth in these regions as we have grown very strongly historically. In North America, despite ongoing declines in the specialty channel, overall consumption has remained positive throughout the year, particularly in the online, mass and club channels.

Our sell-in has lagged consumption for the first nine months, largely due to the seasonality of the business that, again, we've referenced previously. Our business has become quite seasonal to Q4 as retail partners prepare for New Year promotions and we had a particularly strong Q1 in 2018.

We're pleased that price increases were successfully implemented in the U.S. in the third quarter.

And that moderation is the overall price declines on the year-to-date basis. We've not seen significant elasticity in our core North America market in response to these price increases.

The lifestyle brands in North America delivered volume and price growth in Q3, driven mainly by the relaunch of the think! brands, which gained momentum despite a competitive market for bars in North America.

It is early days on the relaunch, but the early indications are good, as we have focused back on our core protein bar offerings. SlimFast, as I've referenced, continues to deliver a very strong performance with growth acceleration across multiple formats and recent innovation is proving very successful.

As I've mentioned on a pro forma like-for-like basis for the nine months, SlimFast brand was up 34.8%, with strong growth expected for the remainder of the year. For the full year 2019, GPN expects like-for-like branded revenue to decline by mid- to high single digits, predominantly as a result of continued challenges in those non-U.

S. markets and lower level of planned activity in the top channel in North America versus the prior year, while consumption in that channel will be very strong this year.

Revenue decline is expected to be all volume related, with pricing flat on a full year basis, as the price increases that were implemented in Q3 will drive further positive pricing momentum into Q4. For GPN margins, the margins are improving in H2 as expected.

However, with the recalibration of the volume expectation, we expect that negative operating leverage arising from that lower revenue and product and business mix will reduce full year margins by a further 50 basis points to the range we've previously noted, so a reduction of 300 to 350 basis points for the full year 2019. While we are navigating challenges in GPN this year, we are very focused as a team on returning GPN-branded revenue to top line growth.

We're very focused on our consumers across all our regions and are actually in clear plans to address the specific competitive challenges that have emerged in some of our key new – non-U. S.

markets. We are confident that investment in our flagship brands such as Optimum Nutrition and SlimFast will drive further and future growth momentum.

Turning then to Glanbia Nutritionals. We're very pleased with the continued evolution of GN as we have a very focused commercial approach, supported by centers of excellence and that continues to drive performance globally.

GN delivered revenue growth of 17.1% in the first nine months driven by volume increase of 7.9%, pricing of 5.7% and Watson delivering revenue growth also for the period. And as revenue increased by 25.4% in the first nine months, volumes in NS strong at 9.3%, with strong performance across both dairy and nondairy.

Pricing increased by 3.9%, primarily related to higher year-on-year dairy prices in North America and the Watson acquisition, delivering 12.2% revenue growth. Watson was closed in February 2019, is performing well with integration on track.

This acquisition has helped to expand the Nutritional Solutions, supply chain footprint and it will bring added technical capability into the business. We remain very ambitious for growth within Nutritional Solutions, and we continue to evaluate further M&A opportunities to facilitate that.

As you know, Nutritional Solutions is a key innovation partner with our customers in the area such as healthy snacking and that continues to drive growth for the business. And as further continued to expand its reach in non-U.

S. markets, where we partner with key brand owners, delivering a suite of products from straight ingredients to full consumer-ready solutions, as they extend their brand reach into new consumers and geographies.

For the full year 2019, Nutritional Solutions expects to deliver continued strong volume momentum across both the dairy and the nondairy platforms as well as contribution from the Watson acquisition. Full year pricing is expected to be positive, reflecting higher year-on-year dairy markets in North America.

As previously noted, full year margins will be reduced year-on-year, largely driven by product business mix, which will be close to the lower end of our targeted range of 13% to 15%. On the cheese side, U.S Cheese continues to be a leading producer and marketer of American-style cheddar cheese in the U.S., and we supply brand owners and private label organizations, who in turn supply major retailers and food service operators.

U.S. Cheese continues to operate all of the dairy processing plants within GN and the Southwest Cheese joint venture plants which produces cheese and whey ingredients.

U.S. Cheese revenue also increased in the period.

This was driven by volume growth of 7.4%, as a result strong operational performance and certain timing factors. Pricing also increased by 6.4% due to increased year-on-year cheese markets in North America.

U.S. Cheese expected to deliver low double digit revenue growth versus the prior year as a result of volume growth and stronger pricing.

U.S. Cheese margins for the full year will be broadly in line with the prior year.

Our share of revenue of the joint ventures increased by 7.5% in the first nine months of 2019. Again, we have volume growth in that sector of the business of 7.9% as a result of production growth.

This was offset by a modest pricing decline of 0.4%, driven by some comparatively lower dairy markets in Europe. As a result of the good volume growth, the share of PAC of joint ventures is expected to be higher in 2019 for the full year than in the prior year.

With that, I'd like to hand over to Mark.

Thanks, Siobhan, and good morning to everyone on the call. We continue to be focused on operating cash flow performance and expect to convert 80% of EBITDA into operating cash flow this year.

For the full year, we expect to incur our capital expenditure in the EUR 70 million to EUR 80 million range, of which approximately EUR 20 million will be on business sustaining expenditure. Strategic capital expenditure this year includes number of IT projects, including the installation of a new e-commerce platform for our Body & Fit direct-to-consumer business as well as additions and upgrades to our manufacturing footprint.

The group's net debt at the end of the third quarter amounted to EUR 816 million compared to EUR 398 million at the end of the third quarter of 2018. Primary reason for the increase was the acquisitions of SlimFast in November 2018 and Watson in February of this year as well as the timing of the interim dividend, which was paid after the end of the third quarter last year.

At year-end, we expect net debt-to-EBITDA to be below two times. The group currently has committed banking facilities of approximately EUR 1.1 billion, with an average maturity of three years.

At half year, we reported exceptional costs before tax of EUR 4.3 million related to organization restructuring, acquisition, integration and Brexit-related costs. For the full year, we estimate these costs in total to be approximately EUR 15 million pretax.

The organization restructuring costs related to a review of the operating models, primarily within Glanbia Performance Nutrition to ensure the structure is appropriate to support the current and future needs of the organization as well as the cost with respect to the integrations of SlimFast and Watson. Brexit costs related to costs incurred to mitigate the potential impacts on our businesses of the United Kingdom leaving the EU.

And with that, let me hand you back to Siobhan to conclude our outlook.

Thank you, Mark. Thank you, Mark.

I'd like to conclude by saying that the management team and I are very focused on addressing the issues in the GPN International business. There is a lot of work underway currently on this, and I'll update you on the outcomes of that work in the New Year.

We are very focused on regaining growth momentum in GPN, and we have a strong branded portfolio, which we will invest behind to achieve that growth. We believe that investment in key brands like Optimum Nutrition and SlimFast, in particular, will drive future growth momentum.

In addition, we have a strong broader portfolio in the group, including areas such as Nutritional Solutions, where we will continue to drive top line momentum through being that partner of choice for our global and regional customers. As a result of the strength of the overall Glanbia portfolio, I am reiterating guidance today that full year 2019 adjusted earnings per share will be in the range of $0.88 to $0.92 on a reported basis, assuming FX remaining at current levels.

With that, I'd like to hand over to questions.

Good morning, everyone. Thanks for taking my question.

My question is around margins and into 2020 and beyond. The fact that you're pulling your margins down in GPN for this current financial year financial year FY 2019, do you see any further read across?

Are there changes you're going to make in the non-U. S.

countries going to mean that margins in those countries decline over the years? That's my first question.

And my second question is, would you give us some commentary on input costs, please? And what's happening to your GPN input costs?

Thanks.

Good morning, Arthur, I wouldn't at this point conclude on any read across to the margin profile as we look forward. As a business in GPN, we have been very focused on margins.

We look at that through the lens, obviously, of our organic development, our innovations. We have had and believe that we will continue to have very profitable business outside North America, balancing, of course, a very profitable business within North America itself.

So I think it's too early to read across that at this point in time. I think in the very near term, as I said, Arthur, we will be very focused on regaining top line growth momentum within GPN across the total portfolio.

If that requires some investment in some of our key brands, we will do that. We have found even in the current year, that's where we activate investment, actually, we get a good return on that.

So I will update all of that in terms of margin piece early in the New Year. But at this point in time, I would say, it's too early to read across, and we remain very focused on that area.

Input costs, as we saw them increase and we have seen them level out in recent times, I think as we look into 2020, again, quite early to call, we don't see any major movement, plus or minus, I think, as we look into 2020 relative to the 19 year at this point. Again, we'll update that one with more visibility for the 2020 year, the early part of 2020.

Thank you.

Good morning, Siobhan and Mark. Just two questions for me, please.

Could you give some more color on the actions you've taken in Europe, specifically in your online channel? Perhaps you can give some guidance on how much you're expecting to invest there if it's incremental in terms of GPN margins?

And any actions, an example of what you've done to become more competitive in this region? And then the second question on SlimFast in North America.

So how are you thinking about the growth rates over the next 12 months as it starts to come into like-for-like? Perhaps you could give a sense on growth rates by channel?

And also, how much of your growth is coming from the Keto products versus the rest of the SlimFast portfolio? Are you expecting a step-up in competition as some additional capacity comes online from some of your competitors, particularly on the ready-to-drink side?

Thank you.

Good morning, Graham. And thank you for those.

I would say, in terms of the EU, the online, we're very much on track which where – with where we plan to be at this point. When we bought Body & Fit, we were very clear that this was a whole new capability for the GPN organization, and that we would invest behind that.

It is, therefore, as we would expect margin dilutive to GPN in total. And we see that probably sustaining into 2020 in terms of the investment profile.

But I have to say when I look at the evolution of the business, both in terms of driving top line growth, which is double-digit growth for the Body & Fit brand and I also see the capability that this can bring into the organization in terms of our engagement with the consumers, I think it would be really positive. It's also, I think, again, when you look to the evolution of the category across some regions that are less developed in North America, it's important to remember in the context of all of the challenges maybe we'll face this year and an important.

These are quite a mature market, quite fragmented. And having an e-commerce and B2C capability, I think, within the GPN organization, will position us very well in terms of capturing growth across a number of geographies as we look forward.

We're capturing a lot of that today in certain regions, such as Asia, where we're growing very well. But having that core capability build out from Europe, I think, will be very good.

So we have our platform across a number of geographies. Currently, we will be rolling out in other geographies in Europe as we look into 2020.

In terms of your question on SlimFast, we're clearly very pleased about that. The team has done a superb job with the innovation on Keto.

I think what's really interesting about the capability of the team in that context is that while the historical and very strong capability of SlimFast is in the ready-to-drink space. In fact, our innovations in Keto in the early part of that innovation launch was actually in the ready-to-eat space.

And the team have done really well with consumers in that space. In fact, as we went through the second half, we just brought on a very good ready-to-drink offering under the Keto range.

That's been a big focus for the year and has done very well. I think it is important to acknowledge, too, though, that the advanced and the energy lines for SlimFast have also been growing.

The original line, we will put more investment behind, as we look into 2020. So I think when you look to the totality of the SlimFast portfolio, we have evolved further the capability on the ready-to-drink space with the addition of the Keto range.

We have actually added to that across other formats for SlimFast. They didn't have a stronger presence historically, such as ready-to-eat and the fact that a lot of the consumers coming into the Keto products have been incremental to the category, I think, sets us up very well.

We are not naive in terms of future growth expectations. We're not committing to the rate of growth that we've seen in 2019, which clearly has been very strong.

But at this point in time, early though it is, we would be ambitious for double-digit top line growth in SlimFast next year.

Thanks, Siobhan. Thank you.

Good morning. Just in terms of Brazil, Middle East and India, which you've called out as being continuing to be challenging markets.

Can you remind us how big these markets are for you overall? And maybe can you give a bit of color on the performance of the underlying markets, notwithstanding the challenges that you faced?

And then in terms of North America, the club channel, in particular. I think you previously mentioned the food, drug, mass channel being about 35% of the overall business.

Can you give any granularity around the club channel space, given you're more cautious here? And maybe just to what extent is driving that level of cautiousness?

Is it demand patterns you're seeing? Or is it promotional activity?

Are you losing shelf space, et cetera? And then just finally, getting back to the international business, when you talk about addressing your supply chain within India, is that looking at co-manufacturing on the ground?

Are you looking to put maybe some of your own manufacturing capabilities? Just some idea of what you're thinking about in those markets or particularly India would be helpful.

Okay, good morning. Thanks for that Jason.

Overall, Brazil, Middle East and India, we're about 10% of our overall portfolio. Clearly, as we referenced, I think when we were last speaking, those regions are very profitable for us because we are effectively leveraging the infrastructure that we have in North America.

We remain very positive about the medium's long-term opportunity, and that's where your question is very relevant because the underlying markets are in growth. And our job of work is to ensure that in a world where relative currencies have made our products more expensive and tariffs, of course, have made our projects more expensive, is to make sure that we have the right infrastructure right through the business in terms of our model and our business model that we can have our products as competitive as possible in that space.

We've spoken previously to investments to protect the consumer in terms of pricing for areas like tariffs. But now we're looking deeper at the total value chain.

And maybe to jump to your latter question, as I answer this, that may well include in-country manufacturer, it may well include just non-U.S. manufacturers that cut effectively for those regions.

We're currently running an export model out of the U.S. It will include further engagements with our partners in some of those regions to make sure that our brands are staying front and center of consumer minds.

Historically, we've also – when we're thinking of innovation, thought about the types of innovation that can be price-competitive in those regions. So across a lot of different areas.

Fundamentally, although the markets are immature, are more fragmented, there is growth in the market. And it's just broad now to recalibrate that operation and business model to position ourselves to go after that growth again, and we're very positive in that overall piece.

It's just a journey because a number of them have come against us at the same point in time. It's a journey of putting those actions in place, as I said, will continue into 2020.

And Siobhan – I'm sorry, I was just going to follow-up. In terms of making that decision to maybe invest locally, how long does it actually take typically if you decide and pull the trigger to go down that route on your own?

Yes, I would say, in certain regions, we've already made elements of the decision. In India, for example, we've referenced that we're well advanced on supply chain solutions, including becoming the importer of records, doing some in-country manufacture.

It takes a period of months, but not terribly long either. It's about clearing our minds in terms of the consumer proposition, which we've already been testing and then engaging on opportunities with co-manufacturers.

So I would say, in relation to the supply chain opportunities, we're probably more advanced in India than we are in some of the other regions, but we remain in the top process for the total piece.

Okay.

In terms of your question around club in North America, it's a really important factor to remember here, and I know it's an understandable point of frustration around the sell-in and the consumption lag that we've seen through 2019. We've had very strong consumption growth across the channels that you referenced online, mass and in the club.

Our consumption is very good. If you take some of our core SKUs in club like Gold Standard Whey, doing very well in that channel.

The way the club channel operates in North America is that you have a core offering, and then certain offerings can rotate around that. Our retail partner in the club channel last year had a lot of activity with us in the fourth quarter.

I think for the current year, some of that activity would slip into the first quarter just by their own order patterns. So it's really just a timing piece.

It's fair to say though that some of the innovations we put into that channel hasn't worked as well as we might have hoped, but our core offering is very strong. Our core consumption is very strong.

So that gives us overall positivity about the North American business. And as I referenced previously, the problem of some of the difficulty can be just calibrating timings quarter-on-quarter can be difficult because our retailers plan, as you know, a lot of activity for the early part of a New Year, sometimes.

Last year, they pull a lot of that in, in December, sometimes such as this year, they might take a little bit more of it into January, February.

Okay. Thank you very much.

Hi there, good morning. A question for me on – just coming back to international GPN.

Just as you look at the issues that you're facing in terms of the trajectory for improvement and returning to some form of, I guess, business as usual, what is the time frame for that now as you look at it today versus where you saw it in Q2 when you last spoke to us? And then if you factor that in as well as some of the club channel issues in the U.S.

plus even with the high pricing and double-digit growth in SlimFast, are you able to say that you think organic branded like-for-like growth in GPN in 2020 will be positive? Yes, I'll leave with that.

That's my question.

Hi James, suffice to say that, yes, we are very focused on having a positive like-for-like branded revenue growth in GPN for 2020. Obviously, we're working through a number of variables to achieve that as we currently speak, but that is absolutely our ambition.

Your question about some of the fix of twos in an inelegant phrase in relation to the international business, I think it is fair to say, but as we sit today, we believe that some of those will take longer than we would have anticipated. We have done a lot of work really looking down into the detail of the business model across these geographies and thinking about how we best position ourselves for the next phase of growth.

We have great teams on the ground. We've grown very well historically.

Now we're ambitious to take that to a new level across a number of these geographies. And that really is giving us the opportunity to really stand back and consider, as I said, the totality of the chain in terms of the value chain for our brands in those regions.

And we're taking this opportunity to look at that right across the piece, everything from supply chain to the brand portfolio, to the route to market, and that will take into 2020. Excuse me.

It's difficult to calibrate the exact phasing in 2020 at this point in time, James, but I guess, to your core question, when I stand over it all with the different phasing of some of those items across different markets and momentum that we have across other parts of the portfolio, I restate that we are very ambitious for branded top line growth in GPN in 2020.

Okay, thank you.

The first one is, again, on the value chain in the international business and making adjustments here. The first question in relation to that is the price difference you currently see between your flagship, say whey Gold Standard brand and some of the local brands, how much of a price gap is that typically in this market as it appears that the locals have been more successful getting the growth of the market?

Second question in relation to that is the distributor model, which still accounts around 20% of your turnover. Is that also something you are closely looking at to potentially organize differently?

Those were the two questions.

Thank you, Karel. The price difference versus the local competition, that clearly varies.

It varies across markets. It varies across SKUs.

In some instances, as we have historically, we will actually absorb elements of the tariff. So that is a variable piece, but suffice to say that we're very focused on narrowing that gap.

And that can be across a number of different areas. We can narrow that gap through innovation, as we've done historically as well, where we introduced what you might call price fighter brands within our portfolio to help that, so we – and a key part of it is freeing up effectively value from other parts of the value chain that will enable us to meet closer to some of that local competition.

Again, I'd have to say, though, too, our brand equity is strong in these regions. We are probably the only North American brand in a number of these regions, Optimum Nutrition is a very strong brand.

Our powder offerings are very strong in this region. So that gives us confidence that if we can recalibrate elements of the value chain, invest, indeed, where it's appropriate in the brands, invest in appropriate innovation that we will get back to growth across these geographies.

You're absolutely to right – sorry apologies Karel.

No, sorry go ahead.

I'll go to your second point then on the distribution model, yes, absolutely. I mean, what I would say as an organization, we're quite fluid in how we think about approaching a number of these geographies.

That's again, I would reference the B2C e-commerce capabilities that I referenced earlier, building that in-house, I think, gives us more optionality around how we might go as a route to market in some of these geographies. We will absolutely be looking at the distribution model, again, because these are relatively immature fragmented markets.

We may well decide for certain categories of the market we go directly. I've often referenced the example in Australia, where we had a distribution model that turned us very well to achieve a certain level of growth.

When we had ambition to take that growth to another level, we actually bought out that distributor and went directly ourselves. So ultimately, I think, the way you will see us approach our international markets is on a tiered basis and I think we've referenced previously.

In, what we would call, Tier 1 markets, we will have a strong direct capability. We will have a very close relationship on the ground with our consumers and with our key retail partners.

We will have certain markets then that are just best accessed through distributors. And for us, in that relationship, it's about making sure we have a really good partner and the business model that operates between ourselves and our partners, very robust.

And then there'll be other markets that will be more opportunistic by virtue of their nature. That will ebb and flow depending on political conditions and economic conditions.

So that's the overarching lens, Karel, that we're thinking of the strategy of our international business. And then making sure as we go through these next number of months, that the operating and business models for each of those is absolutely as honed and as good as it can be to ultimately keep us close with those consumers that consume our brands.

Great, thank you.

Thank you.

Good morning. So in your guidance, you said that pricing would be flat in GPN for the full year, that implies quite a big step-up in Q4.

Is that all agree? Is there any risk to that given that you might need to promote as demand seems to be weaker than expected?

And then the second question, you talked about the relaunch of thinkThin, it's now called think!. Can you tell us how the brand differs from the earlier brandings?

And how it also differs from the competition in the market? Thank you.

Good morning Heidi. Thanks for that.

Yes, you're absolutely right, we anticipate a step-up in Q4. So a cleaner, for the want of a better phrase, representation of the pricing coming through in Q4.

That is agreed. We've taken into account in that perspective any activity that we would expect to do through Q4.

And so all of that is taken into account in our overall perspective. The relaunch of think!

really comes from a number of different premises. The think!

brand is essentially a high-protein, good tasting, high-quality, clean offering in this – in the ready-to-eat space. When we acquired the thinkThin brand, we were always very excited and truth about the potential to extend the reach of the brand by using think!, and – so we've now launched it actually very specifically with that in mind.

Our ambition is to broaden the reach. Consumer research would tell us that under the name of thinkThin, female – it very much resonates with females.

But actually, when it came into the household, males were significant consumers of the brand. So relaunching it now as think!

will broaden the consumer set, will broaden the usage occasions, brings us back really to the strength of what has been really the historical strength of this brand, which is in protein bars – high-protein bars. So going back to our core, if you want to, again, use that phraseology, early days, as I've mentioned, but it is a really nice brand proposition.

The other thing I would say to you that using the brand name of think! allows us extend into areas where, again, we're seeing early but nice traction in that thinkKIDS products, in that thinkPLANT product.

So as we go upon think! forward, it actually, I think, will give us opportunity to extend in that core, high-quality, good tasting, clean ingredient space.

It is undoubtedly a competitive space, as we referenced previously, but the brand has a really strong heritage with consumers. We will extend that heritage now to bring more males into our brand as well.

And we would be quite excited, albeit at its early days.

Thank you.

Thank you.

Good morning Siobhan, Mark and Liam. Three questions from my side.

Firstly, just going back to North America, will it be possible to get a comment on growth by formats to the first nine months? Second question relates to SlimFast.

Just wondering, could you disaggregate the like-for-like number on a pro forma basis between velocity and points of distribution? And then finally, a question for Mark, just your outlook for working capital for the full year.

Thank you.

Hi, Cathal, in terms of North America in both by form clearly, powders is a core format for GPN. Obviously, we've grown in the ready-to-eat format as well as we've relaunched think!, as we've referenced.

And ready-to-drink, the Optimal Nutrition brand, we're not playing specifically into that as yet, but it remains a very interesting format for us for the future. I think when you take the core powder format, what's interesting for us and I referenced earlier, actually, is how our consumers respond to investment.

I don't know if you had an opportunity to look at, but we did a campaign called proven last year across many geographies, actually, including some of our Tier 1s and North America. And our consumers responded very well to that.

So we fundamentally believe that we have opportunity in the core powder space, which we will then augment with developments, as we've spoken previously in ready-to-eat. And indeed, as we look further down the line with the acquisition of SlimFast bringing further capability in the ready-to-drink space into the portfolio.

And SlimFast, in terms of the velocity versus points of distribution, I'm afraid not to calibrate that, Cathal, at this point in time, but suffice it to say that we are getting very good velocity across some of our key retail partners. I think the big addition for us this year for SlimFast has been that the bedrock of advanced and energy products growing, both the team have done a superb job in a very on-trend Keto category in this space in North America.

They have been very progressive in format development, as I've referenced, going first with the ready-to-eat format and really owning that space in Keto and owning that overall category that we believe growth will sustain within Keto for a period of time. So I would say, overall, I'm very pleased about the evolution of the portfolio, both from a distribution and velocity point of view across our key channels in North America.

Thank you.

No. Again, just want to thank everybody for your time on the call.

We're clearly very focused now, as I said earlier, on delivering 2019 and regaining the momentum as I've referenced in the international markets and GPN as we look into 2020. We have a very strong portfolio right across the organization and very focused on getting back to growth.

Thank you very much for your time.