Good morning. I am Vikesh Ramsunder, the Chief Executive of Sigma Healthcare, and welcome to our full-year results presentation for the 12 months ending June 2026.

I am joined here today by Mark Conway, our Chief Strategy Officer, and Gary Woodford, our Head of Corporate Affairs and Investor Relations. Richard Murray, our CFO, is unable to join us today as he had a medical procedure on Tuesday and is recuperating at home.

We wish him a speedy recovery and expect him back at work next week. Mark Conway, who was Sigma's CFO pre-merger, will fill in for Richard today, and we are fortunate to have the management bench strength in the business.

In terms of today's agenda, I will provide an overview of the group's performance. Mark will then go into the financial performance in more detail, and I will then provide you with an overview of our operational highlights, strategic insights, and priorities for the year ahead.

Firstly, the strength and strategic execution of our business model is continuing to deliver strong results. We have a network approaching 1,000 pharmacies globally with a solid pipeline of growth in each market.

This brings significant scale that leverages our existing infrastructure, capabilities, and expertise, and is underpinned by defensive industry characteristics. With most of the infrastructure in Australia already in place and a clear runway for growth, we are confident the model will continue to compound value.

Let me start with the headline numbers for the year. Group revenue grew 15.5% to $10.8 billion.

That flowed through to stronger EBIT growth, which increased over 20% to almost $1.1 billion. To put that in context, in the prospectus ahead of the merger, pro forma EBIT for FY '24 was $605 million.

This demonstrates that the merger is working, and strong value is being created for our stakeholders. Net profit after tax increased 22% to $732 million.

Importantly, we delivered this while maintaining a conservative balance sheet with a net debt-to-normalized EBITDA ratio of just under 0.6 times. Our capital-light model in Australia continued to convert growth into strong return on invested capital, which is over 19% for the year.

For shareholders, that translates into normalized EPS of 6.4 cents per share, up 22%, and a final dividend of 2 cents per share, representing a payout ratio of approximately 63%. This brings total dividends for FY '26 to 4 cents per share.

The financial highlights I have just outlined are an outcome of the disciplined execution of our four strategic pillars. Domestically, the Chemist Warehouse-branded network sales reached $10.2 billion, up 16%.

This was driven by the addition of 24 new stores, combined with like-for-like growth of 13%. GLP-1s have provided a structural tailwind, which we expect to continue.

GLP-1 units sold were up over 75% for the year, contributing to sales and EBIT growth. This category is, however, dilutive to gross margin percentage.

Whilst not benefiting us in this year's results, we are also progressing with a clear program to reinvigorate the Amcal and DDS network. The international store network sales grew 23% to $1.6 billion, also driven by the addition of 20 new stores and like-for-like sales growth of 12%.

The distribution center in Ireland is now fully functional and supporting growth, and work is progressing to open a New Zealand DC by September to support growth in that market. The product differentiation strategy continues to build momentum.

With more than 470 owned and exclusive label products launched this year, sales are approaching $1 billion, which is around 10% of Chemist Warehouse-branded store sales, directly enhancing both customer value and margins. In our fourth pillar, volume was up 6.5% through the DCs with our cost per unit distributed down 2%, reflecting disciplined cost management.

We have combined our support centers in Preston and rationalized our DC network. The $100 million per annum synergy program remains on track with a $32 million contribution in this financial year.

Overall, in a short time as a merged group, there has been significant progress made in delivering on our strategy. I'll now hand over to Mark to discuss the financial performance in more detail.

Thanks, Vikesh. I will now take you through the financial results, the segment drivers, the balance sheet, and cash flow.

The central point is that broad-based revenue growth converted into faster EBIT and NPAT growth. Turning to group performance, as Vikesh outlined, revenue grew 15.5% to $10.8 billion, and importantly, revenue growth outpaced expense growth.

Gross profit rose 15.2% to $1.96 billion with gross margin holding at 18.1% for FY '26. In the context of strong growth in GLP-1 sales, which is dilutive to margin percentage, this is a strong outcome from our buying team.

Our share of profits from associates and joint ventures was up 25.7%, reflecting the continued strong growth and performance of our New Zealand stores. The result flowed through to the bottom line.

Normalized EBIT was up 20.6% with EBIT margin expanding 43 basis points as we capture scale benefits and efficiencies across the business. Statutory NPAT was $708.7 million, and on a normalized basis, NPAT grew 22.3% to $732.3 million.

In summary, we've grown the top line, protected margin, and delivered a strong result. This year, we are providing expanded segment disclosure for Australia and international.

Australia remains the earnings engine, while international is beginning to contribute at scale. Three points before we get into the detail.

First, our growth is broad-based. Revenue of $10.8 billion is up 15.5%, or nearly $1.5 billion.

Australia grew 14.9% for the year and 15.7% for the second half. Australia delivered almost 93% of the revenue growth for the group, showing continued strong performance in our core market.

Second, we held total margin while continuing to invest. Gross profit is up 15.2%, whereas cost of doing business grew 9.4%.

This highlights pleasing operating leverage with our cost of doing business improving 47 basis points to 8.6% of sales. Third, that leverage drops through to earnings with our normalized EBIT margin up 43 basis points to 10.1%, and both segments expanding margin.

For the year, international EBIT grew 91% to $56 million with particularly strong performance in the second half with Ireland contributing positive earnings for the first time. With that, let me take you through the detail.

Starting with Australia, which remains the core engine of this business, revenue of $10.4 billion is up 14.9%, and this has converted into EBIT of $1.03 billion, up 18.3%. Earnings is growing faster than revenue.

Total cost of doing business grew 7.7% against revenue growth of 14.9%. Cost of doing business improved 52 basis points to 7.8% of sales.

Despite a step-down in gross margin to 17.6%, EBIT margin lifted 28 basis points to 9.9%. Briefly on the cost lines, warehouse and distribution rose 7.7% on higher volumes, but unit economics continue to improve.

The network saw increased activity during the period driven by both integration activities and bringing a strategic supplier into our DC network from direct to store. Marketing and sales expenses were up 8.2%, and admin and general expenses were up 9.5%.

Employee expense growth was only 2.7%. The key drivers were investment in business and customer acquisitions, including Tillie's Soaps now being consolidated into the group results.

Other costs include IT and marketing subscriptions and license fees related to private label. There was also a one-off FX loss of $3.7 million incurred during the period.

As with the group numbers, these are normalized and exclude $33.8 million of integration and PPA costs. In short, we have a cash-generative core, still compounding, with productivity, brand mix, and synergies still ahead of us.

Now to international, which is moving from an investment phase towards meaningful earnings contribution. Revenue of $421.4 million is up 33%.

Gross profit was up 47.6%, and EBIT of $55.8 million has nearly doubled. EBIT margin expanded 400 basis points to 13.2%.

The Chemist Warehouse offer is resonating with more customers across more markets. We have contributions from new and recently opened stores.

Retail network sales across the international business was up 23.3%. Two things drove the margin.

Gross margin lifted 303 basis points to 30.6% on margin and supplier support, and revenue growth of 33% outpaced total expense growth of 23.7%. With increased scale, we now saw cost of doing business down 200 basis points to 26.5% of sales.

On the cost lines, warehouse and distribution fell 9.3%, which includes the closure of China. Marketing and sales were up 29%, and admin and general up 17.6%, reflecting employee growth in new international stores and the operating expenditure needed to support expansion.

This is the cost of building the network. International is now delivering genuine scale benefits and efficiencies in distribution and supplier arrangements, which we expect to continue as the network grows.

Turning to the balance sheet, our balance sheet provides flexibility while we continue to fund integration and growth. Net assets grew 7.1% to almost $5 billion.

We reduced debt facilities to $1.4 billion while keeping ample headroom and adding tenure to the book. Net debt fell to $663 million, down from $752 million a year ago.

Our disciplined approach to capital management is reflected in our leverage. Net debt-to-normalized EBITDA improved to a conservative 0.57 times, comfortably below prior year.

We had capital expenditure in the year of $56.7 million, investing in store rollout and distribution center infrastructure. Our model remains capital-light in Australia with spend aligned to our growth agenda.

We are also funding a final dividend of 2 cents per share for FY '26, payable on the 22nd of September, taking the full-year dividend to 4 cents per share. Overall, we have a resilient, well-capitalized balance sheet to support our strategic ambitions.

Now to cash flow. Firstly, I note that the prior period reflects just 4.5 months of Sigma cash flows, the statutory comparison isn't like-for-like.

Net cash flows from operations was $574 million. It was impacted by an investment in working capital, which I will talk through shortly.

Income tax paid of $114 million reflects timing differences that will normalize in the first half of the year. Free cash flow was $500.4 million, and net debt is down to $663 million.

In short, we have a strong operating cash generation, disciplined capital allocation, and a balance sheet that gives us flexibility to fund growth and returns. Finally, to working capital position, which is our clearest opportunity to further improve.

Net working capital increased to $1.6 billion, and the cash conversion cycle extended by 7.1 days to 54 days. Inventory levels increased 22% for three key reasons: firstly, growth in owned and exclusive label products, including Wagner; secondly, the transition of a significant supplier away from direct-to-pharmacy into our supply chain; and thirdly, overall growth in sales.

Days sales outstanding is up marginally, reflecting timing of store receipts that were settled in July. We see working capital management as an opportunity to further drive cash flow with a one-day improvement in CCC days equating to around $30 million, and we have plans in place to realize these benefits.

Overall, we have a balance sheet with low leverage, a refinanced facility with strong lender support, and further opportunities to increase cash flow. I will now hand back to Vikesh.

Thank you, Mark. I will start by again reminding you of the four pillars of our growth strategy.

Our business was built off the defensive nature of the healthcare industry where demand is less discretionary, and as a discounter, Chemist Warehouse is also best placed to traverse economic cycles. That resilience is reinforced by the following structural tailwinds: positive domestic demographics and an aging community that steadily lifts prescription volumes; a stable and supportive regulatory environment; deep and long-standing supplier partnerships; and the scale benefits that make us a critical link in the pharmacy supply chain.

On that stable base sits our four clear pillars of earnings growth. Firstly, in Australia, where we continue to build our market leadership, drive like-for-like sales growth, and expand our pharmacy franchise network.

Second is international, where we are focused on pursuing profitable growth in existing operations while we carefully assess and seed new markets. Third relates to product differentiation.

By expanding our own and exclusive label ranges, we enhance customer loyalty and margins. Fourth is operating leverage.

As we integrate, expand, and execute our synergy program, we better leverage the combined scale of the business to convert revenue growth into stronger returns. This is a compelling investment case: a defensive, market-leading position that generates dependable cash flows, paired with multiple levers that compound earnings.

For investors, that means resilience when conditions are uncertain, and genuine upside as we execute our plans. Our first pillar is domestic growth, where the runway remains strong and is built through the execution of our three-brand strategy.

Our three brands, Chemist Warehouse, Amcal, and Discount Drug Stores, now let us enter underpenetrated locations that a single brand may not serve as effectively. Chemist Warehouse is the leading discount pharmacy operator in Australia, and I will talk to this brand on the next slide.

The Amcal and Discount Drug Stores brands have been through a natural transitionary phase with member numbers declining over the last two years as we progressed through the merger and integration program. With the brands now rebased, the focus is on executing our growth plans, supported by stronger retail execution, strategic investment, marketing, improved supply confidence, and a renewed customer proposition.

Encouragingly, we have 82 new Amcal and DDS members who have committed to be onboarded through FY '27. Continuing with the domestic network, where Chemist Warehouse has delivered more than 10 years of double-digit sales growth, the Chemist Warehouse-branded network grew to 561 stores and generated a milestone $10 billion in network sales at a 10-year CAGR of over 11%.

Beyond opening new stores, like-for-like growth provides a strong quality signal. The CW-branded network delivered like-for-like sales growth of 13.4%.

That came from three clear drivers: our unwavering commitment to great everyday prices; a focus on product newness; and strong demand in healthcare categories, including GLP-1 medicines. Pleasingly, Chemist Warehouse was once again recognized by our suppliers as the number one pharmacy retailer in Australia.

Looking ahead, the pipeline remains strong. In half 1 '27, we anticipate opening 13 Chemist Warehouse-branded stores and refurbishing a further 12.

The strategy for domestic growth is clear: more stores, more productive stores, and a multibrand runway. Turning to international, which is both an established and an emerging story, delivering real scale, real momentum, and a clear growth pathway.

New Zealand is a great example of our international expansion capabilities with the store network up to 75 stores and sales up 20%. In Ireland, sales grew 45% for the year with Ireland now a net contributor to profit for the first time.

In the UAE, where we are in an early stage, we have grown to three stores and are seeing positive trends. Across our core international markets, we opened 20 stores this year, taking our network to 98 stores, with total international store sales of around $1.6 billion, up 23%, and like-for-like sales growth of 12%.

As previously announced, the focus on profitable growth led our shift to an online-only strategy in China. We expect to complete our store closure program by FY '28.

This helps ensure that our capital and energy are directed to the markets with the strongest prospects and returns. As announced in May this year, we have entered an agreement with the Greenlife Pharmacy Group to enter the UK market.

We anticipate opening two stores prior to Christmas, with plans underway for a further three next year. This is a great opportunity to learn and adapt in an attractive market with a population of around 70 million people.

Looking at the first half of FY '27, we expect to open a further 19 stores in our international markets. Our third pillar is product.

This is where product differentiation provides a structural margin lever and the opportunity to drive customer brand loyalty. Firstly, I would like to reaffirm that Chemist Warehouse is and will remain a house of brands.

We are not displacing the brands customers love. We are building brands alongside them and expanding category growth.

This protects our supplier relationship, but still allows us to build differentiation versus our competitors. Owned and exclusive label sales grew 15% and is now approaching $1 billion, which is around 10% of the CW-branded store network sales.

We do not have a specific target for own label penetration, but our merchandise team tactically executes opportunities that benefit the business over the long term. Owned and exclusive label carries structurally higher margin, and newness is important for growth with over 470 new product lines added in FY '26.

One example is Wagner Generics, which achieved 88% customer adoption. That's customers using our brand at scale, and it points to a strong end-to-end execution capability across the franchise network.

Turning to pillar four, operating leverage. Our supply chain is world-class.

We executed over 600,000 deliveries and distributed 579 million units of pharmacies during the year with volume up 6.5% on last year. That's an additional 35 million units for the year.

This is where the benefits of scale, automation, and our fixed and variable cost structure make a difference to the bottom line. We are not standing still.

We are rationalizing our footprint to drive further optimization. The South Guildford DC in Western Australia closed in May, and our Port Adelaide DC will be consolidated into our Pooraka DC in the first quarter of FY '27.

We are also upgrading our Townsville and Hobart distribution centers to strengthen service in those markets. On logistics, we are optimizing routes, consolidating providers, and leveraging automation to take cost out of every unit we move.

Importantly, for our wholesale customers, we are maintaining our high service standards with delivery in full above 99% and on-time delivery above 97%. Our performance has been recognized by an independent supplier survey, which recently ranked Sigma the number one wholesaler in Australia.

A key part of pillar four of our strategy is our focus on synergies, where the $100 million annualized target is clear, achievable, and firmly on track. The $32 million of synergies that were achieved this year will also benefit FY '27.

The one-off costs of $26 million to achieve the synergies is in line with expectations. Importantly, this is not just about consolidation.

We have mapped the change management required to deliver our integrated technology solutions. It is important to note this is not an SAP implementation.

It is an SAP upgrade and integration of the Chemist Warehouse Group onto existing IT architecture. We are also introducing AI capability across the business to support decision-making and drive further efficiencies.

Let me close on why I'm confident about the year ahead and the value we are building for our stakeholders. Sigma enters FY '27 structurally stronger than ever.

We have four proven growth pillars, a strong balance sheet, and the ability to continue driving operating leverage from integration. We expect our positive sales momentum to remain strong across every market in which we operate, and the start to FY '27 supports this.

Including the annualization of GLP-1s, like-for-like sales across the CW Australian store network is continuing in double-digit growth. Consistent with previous years, I will provide a trading update at our AGM in October.

Growth will come from four places. Domestically, we expect to onboard 13 Chemist Warehouse stores and 42 Amcal and DDS stores in the first half.

A further 19 stores will also be added internationally in half one, including our entry into the UK market. We are also focused on supporting margins with ongoing investment in our own and exclusive label products and maintaining our relentless pursuit of cost efficiencies.

GLP-1 demand and the pending introduction of the oral form in Australia also continues as a structural tailwind for the business. Importantly, our $100 million per annum synergy target is still largely to be captured by FY '29, and our conservatively geared balance sheet lets us fund both growth and dividends.

The investment case is clear. Sigma has a defensive and differentiated healthcare platform that is compounding double-digit earnings, with proven growth levers and margin opportunities still to be captured.

We have the scale, the balance sheet, and execution capability to continue delivering value for shareholders. Thank you for listening, and we will now take your questions.

Thanks. Good morning, Vikesh and Mark.

Got two questions, maybe first around administration costs. They were up some 17% in the first half and only up 10% in the full year.

Can you just talk a little bit about how you manage to slow the growth rate down in that administration cost line and how we should think about how that cost line grows over going forward, please?

Yeah. Hi, Shaun.

Look, in terms of that, there were no sort of standouts, big driver of that coming down. All I'll say is we're starting to see some of the benefits of removing the duplication, and some of the efficiency measures that we're putting in place.

Was that where a lot of the synergies were landed?

I wouldn't say a lot of it, but there was definitely some benefits of duplication being removed in that line, correct. Sean,

if I could even add to that, I would say to you it's just pure, quite timing. If you consider the merger last year, there were some costs that have slowed down, and that have lifted this year.

You're starting to get the normalization of cost spend come through. That's why you're seeing the trend go down with in terms of expenditure.

Yep. Okay.

Great. Maybe then secondly just around cash conversion and that the cash conversion cycle you call out sort of stepping up to 54 days.

I guess how much of that was the one-time just related to the bringing in, I think you mentioned Tillie's Soaps into the DC, and how much of it's broader growth? Because I'm just assuming that your working capital intensity will increase, one, because you're a growth business, but secondly it should also increase as the New Zealand DC is operating as well.

I just want to get an idea around how we should think about cash conversion cycles going forward. Is 54, that would appear the right number, but 46.9 might not be the right number either as you're a growth business and you're making some changes.

That's right. The increase in inventory was due to a strategic supplier.

Tillie's Soaps was more an acquisition we made during the period that we're now consolidating. That was more through the NPAT of the P&L rather than the balance sheet.

I think you're right. The answer is somewhere in between that number as we continue to grow.

Obviously, you've got higher costs like GLP-1s coming in, but a further benefit down the track of when we get to one system we'll be able to optimize the inventory a lot better.

I might just squeak through one quick one. In New Zealand, your CapEx, your guidance is flat.

You had $40 million of New Zealand DC CapEx. How much of that was in '26?

Then maybe does your guidance of flat CapEx, '27 or similar '27 on '26, does that also include most or all the residual $40 million coming in in '27, please?

It does. We had very negligible CapEx in FY '26.

A lot of the IT costs, SaaS costs are expensed. That's right, Shaun.

It will flow into FY '27. Broadly, we expect the CapEx number to be pretty consistent year-on-year.

As well at the same time, Shaun, the way the build will begin is the automation will probably only take about 18 months to kick in, you'll have the CapEx dripping in over probably two years for the New Zealand DC.

I see. Okay.

That would be, that's clear. Fantastic.

Thank you very much.

Good morning, Vikesh and Mark. My first question was relating to the federal budget.

We understand that the vitamin market actually fell materially post the budget in May, with majority of vitamins down double digits. Can you talk to how vitamins and other discretionary categories, like fragrances for example, performed in the fourth quarter and how they're tracking now, please?

I'm not sure I can directly link it to the budget, but there's no doubt if there's a category that's probably come under a little bit of pressure, I would say to you it's the vitamin market. At the same time, what we're seeing in, let's just say, ladies' fragrances is probably a bit of trade down because volume is still up, right?

Men's fragrances are doing exceptionally well. If I look at most of the categories, quite frankly, they're all performing really, really well.

I would say to you, I can't really say we're feeling the impact, right, of the consumer pressure at the moment. Certainly categories like vitamins or ladies' fragrances, which tend to be a little bit more discretionary, we can probably see a little bit of impact there.

Then we're picking it up in hair care, in healthcare, and a whole lot of other categories, it's balancing it out.

That's helpful. Thank you, Vikesh.

Could I just ask a second question? We talked in February about the opportunity to improve the processing and how you pharmacists co-recommend other products, like protein, fiber, et cetera, with GLP-1 scripts.

I'd just be interested to see if much progress has been made with franchisees in recent months on that, and just how meaningfully you think the upside to the business is from this?

I think that's an ongoing process because we call them our SRS team, right, our store team that focuses on working with franchisees and execution in stores. If I just look at the impact on the cross-sell of, for example, protein in our stores, that is exceptionally high growth.

If I look at hair care and the complementary products that effectively a consumer would be looking for, right, digestion, etc., those categories are performing exceptionally well. I would say to you, I think that is an ongoing process in our stores.

A key metric that I provided in May, and that continues, the basket size of a GLP-1 customer is 40% larger than a non-GLP-1 customer. That trend has continued, which is obviously encouraging for the cross-sell.

The cross-sell opportunities will continue in stores.

Thank you very much.

morning, Vikesh and Mark. I just wanted to drill down into that Australia sales growth trends over the half, and then into the trading update.

Looks like May and June sort of slowed to 8%. Can you give us a bit more color on what you think's driven that?

Is there anything in there on the flu season, and then also the bounce back in FY '27?

Yes, it was slightly softer in May and June. There were two reasons for that.

Actually the comps were really big to last year, and that's obviously seasonality kicking in. The cold and flu season certainly started later this year.

As you can see, I've stated that we've got double-digit growth like-for-like in the new financial year. That trend has turned at the moment.

That's really it's probably two things, right: big comps in last year and a later start to the cold and flu season for this year.

That's great. Then, yeah, on the cost base in Australia, I think you've called out, are there any one-off costs that we should be thinking about?

Like is that $3.7 million FX, is that in those numbers? Then how big is that Tillie's Soaps acquisition?

Is that you taking on some of the losses there? Are there any one-offs that we might adjust for as we look into '27?

That's right. I think there are quite a few.

If I start with warehousing costs, we were transitioning our Tier 1 suppliers across from February, which meant we incurred some additional employee costs there in temporary labor. As you transition, you ramp up before you ramp down.

There's certainly, and that transition is now complete. We also obviously brought on a strategic supplier.

We did have EBA negotiations, we did carry some extra labor during some of those periods. Tillie's Soaps was consolidated in from about December.

I think that's around $6.5 million. Then yeah, the FX loss was certainly one-off.

There is, the business is going through a lot in terms of integration, there is kind of some costs. We normalized some of them, but obviously you can never normalize everything.

That's great. Just on that Tillie's Soap, how does that look into '27?

Would you be looking to improve that, or can you get it to zero? How should we think about that?

Yeah. It's flowing through each of the P&L lines, you'll sort of see it annualizing into that number through December.

It's not a meaningful EBIT contribution at this point. It's more just that the costs have started to flow through.

Thank you.

Oh, morning, guys. Just on Ireland and the UK, it's great to see Ireland profitable.

I think you're rolling out a bunch of stores over the next kind of 12 to 18 months. Should we expect the profits to potentially go to a loss as you do that, and you invest in those stores or can you just maybe help us understand what the trajectory looks like a bit in Ireland, please?

I think the good news is Ireland's made a profit, and it's been quite a good turnaround for the year. We expect that momentum to continue because you really needed the scale to absorb the fixed costs and the overheads of the office.

Once we have done that, right, and you can see Ireland's up 45%, you're getting really good growth momentum from the existing stores as well, which means we expect Ireland to continue being profitable and growing in profitability. The UK, of course, will be loss-making, right?

You're opening two new stores. We'll probably open another three in the FY second half of FY '27.

We expect that business to be loss-making for a period of time as we grow scale in that market.

Right. Just on GLP-1s, I know it throws around the sales a lot, can you maybe just talk through what trends you're seeing there in terms of volumes, and also the ASP?

I understand that people are kind of trading up going to heavier doses, as they're on their GLP-1 journey. Can you just talk through what you're seeing in GLP-1s, please?

To be fair, I think we always knew that GLP-1 trend would continue. What we find really encouraging is that it's kind of maintained a growth momentum.

You're comping really big numbers in last year, you can't expect that kind of level of growth to flow through, right? What I think is good is I'll give you the average price.

We're averaging around $300 of the mix of products, because as you can understand, some products are funded by the PBS, a very small portion, most of it is private. I actually find GLP-1s as a category will continue to grow.

What's interesting for me is when the oral dose will be registered in Australia. I truly believe that's a real tailwind for the business.

We don't know what the pricing could be or anything like that, but there's probably two big and important things in that medicine category. If the government puts it onto the PBS, which is obviously still being negotiated, and the oral dose comes into Australia, I think the market size starts to grow materially.

If you look then the cross-sell opportunities, that lifts our front shop. This category for me, I think, will continue to give us a tailwind into the future.

Great. Thanks, Vikesh.

Morning. Morning, team.

You've got Oh yeah, that's it, that's fine. All right, you've got Ben here, not Bryan.

Just following off from that GLP-1 question. Just if we did see the oral doses coming in and the cheaper pricing, do you expect that there's going to have to be a bit of a reset?

Say prices halve or more than halve, do you think there's going to be a bit of a reset period for 6 to 12 months where comps take a hit? I'm just trying to think about how we sort of ready for that if that does come in, his anticipation grows into '26.

Potentially, yes, because it's a really high value item, but I'm probably expecting a proportion of that to be offset by the increase in volume, right? With the market size increasing, the sales uplift in other products could probably offset that.

If it's slightly cheaper, the margin percentage kind of moves up. We're all hypothesizing here because we have no idea what price it's going to be registered at in the country.

It's probably the best negative comp I'm happy to take, right, because If you recognize what you're looking for is long-term volume consumption, and if the market size increases and customers are buying complementary products, then that's better for the business over the long term.

Because intuitively if you took a hit from, say, it's adding 3% or 4% to a comp at the moment, and say goes to zero for a period, but you get that 40% basket uplift and the penetration doubles, your net after 12 is materially higher, right?

Absolutely.

Yeah. Just as well, Vikesh, just thinking about the Australian composition of comps, and appreciate you don't want to break it down as explicitly for us, but if we look at the double-digit run rate you're at, I'm just trying to get a bit of a feel for how much of it is GLP-1 versus going to larger store sizes versus just core, more productivity out of your front of store?

Is it a relatively even mix that's flowing through in terms of that double-digit? As we look forward, I know you've been sort of talking to the GLP-1 impacts starting to wane, but it doesn't seem like it.

How are you thinking about the ability to maintain that double-digit comp right through fiscal '27?

Yeah. I would say to you there's no doubt, right, if you look at the long term, the 10-year run rate of growth at about 11% the CAGR, and the fact that we have been outstripping that over the past kind of, say, 18 to 24 months, it actually means that GLP-1s are helping drive that.

It's not normal to expect us to be growing at 16%, right, on an ongoing basis. What do we aim for on a consistent basis in the company is double-digit like-for-like sales growth.

Now that gets harder over time, right? The laws of gravity start to catch up with you as the base gets bigger, etc.

The ambition and the way we target growth in the organization is at least aiming for double digits like-for-like sales growth. You're seeing the 13% really, that's been driven by GLP-1s.

That's slightly above the norm, but we will be very happy with, let's just say, a high single digit, double-digit like-for-like sales growth.

Okay. Then, obviously, feeling comfortable around that for fiscal '27 given how you sort of talked to trading update in the outlook for the first half?

That's the thing. We're in the middle of seasonality at the moment, right?

We're slap-bang in the middle of cold and flu season, and it's very dependent on what happens with script demand over that period. It drives footfall and consumption of cold and flu medicine, so that's really why I'm feeling comfortable that we've probably had a later cold and flu season start, and we've gotten into double-digit growth now.

Double.

Thanks so much.

Morning, Vikesh and Mark. Just on back on GLP-1s again, just it's helpful to get that ASP on the I assume that's just on the GLP-1s themselves at $300.

Just wondering, you've talked to that 40%, sorry, 40% higher I think it's units per basket on for those on GLP-1s. I'd just be interested to get the sort of overall basket size, if it's possible to sort of dimension the degree to which you're getting those additional sort of add-on sales, those adjacent products in in terms of dollars.

Like how that might look relative to that $300 ASP?

Yeah. We don't give the basket size mix as you can understand.

That's information we'd love to keep away from our competitors, right? What I would say to you, what's interesting, if you think of the category mix in that additional 40%, I would break them down into actually more medicines, OTC products.

The consumer that's dispensing the script is also buying more analgesics. I cannot tell you why, but that you can see that in their basket, right?

They're buying more beauty products. They're certainly buying more protein.

You can actually see that these are complementary products to support their healthcare for taking the GLP-1 medicine. That trend, I think, just continues.

Internally, Mario's called it fit beauty. It's really about the fact that, we're selling products linked to individuals who are taking this medicine, that they probably feel better, they're buying more kind of beauty products and more healthcare-related vitamins and supplements.

That's interesting. Thank you.

Then just on back on the UK, I understand it's small and going to be loss-making for a little while, but can you just talk more broadly about the opportunity there? Obviously, you explored the Boots side of things, you're now going forward with the JV partner.

Is there potential for more JV partners outside of London? How do you think about sort of the long run in the UK beyond this year where I think you mentioned only a couple of stores is the plan?

Yeah. I actually think the model that we're entering the UK with is actually a very interesting model because one of the most challenging things when you enter a new market is how do you attract new scripts.

If you look at the density of footfall in pharmacy in the UK, it's actually double that of Australia. That means the density of people entering pharmacy is twice that of Australia.

If you have a JV partnership, and effectively you're opening a store and moving a license, you're opening day one essentially with a script volume, and the people are coming into your stores. In the UK, the front shops tend to be really small, right, in independent pharmacy compared to the prescription base.

What we will be opening up is immediately you have customers are coming and dispensing the scripts, and a much larger front shop offering. If this model works, we can certainly duplicate this with other partners in the UK and accelerate our growth there.

We've got to test and learn initially.

Just as a follow-up to that, would you prefer other JVs or maybe other acquisitions if that's the way to go if there's others on offer? They'll obviously be smaller than Boots, I'm sure.

Oh,

we'll certainly look at all opportunities that come our way, but the way we also look at that is how we allocate capital, right? That would be a key consideration in making any of these decisions.

Understood. Thank you.

We have a question from Dave Stanton. "Please explain the generic opportunity with Wagner's.

What can that get to and what does that mean in terms of percentage EBIT margin uplift? Is Wagner's for OTC and for prescription meds?"

Just let's answer the last part of that first. At the moment it is, but I would say on OTC, we're moving more to creating standalone brands, and you've seen some of that come through recently.

On the generic side, we've got about 278 Wagner generic medicines. It makes up roughly a third of our preferred range of generic medicines in the network.

The margin profile of that is obviously stronger. What I expect to continue is probably another 40 new products, because we're getting to the tail of new products in Wagner.

As we grow new stores, on average 20 stores a year, and this continues to be rolled out in Australia, we expect Wagner growth to continue.

Another question from Dave Stanton: "Can you give us more color on synergies? Can you break out the specifics of what you are doing in terms of hitting the $100 million synergy target in terms of buckets of business?"

Sure. I'll start off by saying we're really pleased with the progress of integration, reporting the $32 million of synergies today.

Obviously roughly half the synergies will come through the efficiencies in our supply chain. The next phase, which Vikesh talked to in his presentation, was bringing the back office together.

It is a SAP upgrade, not a transformation project, it's about bolting the legacy Chemist Warehouse systems onto the existing Sigma network. Then, there will be layers of duplication there across ERP and various applications that we'll be able to take out.

Then obviously lastly, it will be both sort of buying terms with our suppliers and indirect procurement.

There's another question from Dave Stanton. I think you've already answered this, Vikesh, but in case there's anything you want to add: "Using the April update from Sigma, Australian CW like-for-like sales were growing at 14.4% year-to-date.

Today, we report 13.4%, which implies like-for-like slowed down in Q4 to 8% to 9%. Is this correct, and if so, like to understand the change?"

It's really the comps from last year and a later start of the cold and flu season. That's really it.

One more question from Steve Golaphy: "Welcome. The best country to practice or build a pharmacy career overseas is Canada.

Will you target Canada?"

It's not in our framework at the moment, but never say never. [laughter]

That's all from online.

Good morning, Vikesh and Mark. Can I just ask a question, I'm looking at slide eight on the Australian segment, the gross margin performance of that.

You've called out this significant supplier that has been moved into the DC. Did that have an impact on gross margins?

Can you sort of give us a sense of the impact that GLP-1 had on gross margins as well, just trying to get a feel for the trajectory going forward there on the gross margin line for Australia?

You're right. The gross margin did decline slightly.

I wouldn't say it was related to that supplier coming on. It was really consistent with what Vikesh was talking about before.

Obviously, the GLP-1s are dilutive to margin percentage, and then obviously there was that seasonality impact that flowed through that as well.

Right. The other question that I had was the strong growth that you'll have in Australia in FY '27 with the Amcal openings as well as obviously Chemist Warehouse.

How does the Amcal side impact, say the margin structure that we look at given it's more of a wholesaling arrangement? Is there any difference in how that may flow through to contribution across the gross margin and operating profit side for the Australian business?

I'd say it's very small at the moment. Obviously as we open these stores, it'll take time to build up in volume scale, and really that flows through our warehousing and distribution.

It really is a very small mix. That's why we spend a lot of our energy calling out the Chemist Warehouse network, which is the biggest driver of earnings.

Okay. Thank you.

Hi, Vikesh and Mark. Just had a question on sort of the broader competitive environment.

We've obviously got sort of a couple of relatively large competitors now looking at growth in the sector. Just keen to get your thoughts on sort of where you're seeing competitive intensity kind of across your major categories and then how you're sort of thinking about maintaining and or continuing to grow market share both from a dispensary and front of store point of view, please.

Caleb, I would say the competitive tension has probably remained the same. I can't say to you that the market's probably become any more, any less competitive.

What we always keep an eye on our competitors. We never become complacent, and we respond accordingly.

A rising tide lifts all ships, right? There's no doubt that the GLP-1 category has lifted all the groups.

When I look at our market shares, we continue to gain market share, which means we're performing really well, particularly in the chemist, for the healthcare categories and beauty categories. I feel confident that our strategy is working and will allow us to continue taking share into the future.

I dare say particularly where there's cost of living pressures, without a doubt we are a very value-centric, consumer-faced organization, and we will remain the customer's friend. We will be very competitive and will continue to be very competitive moving forward.

Sort of the strategic levers around that, Vikesh, clearly value sort of been a big focus, kind of ranging from a front of store point of view, but just where you're seeing that sort of ongoing competitive advantage from a strategic point of view?

If you think about it, right, it's back to the four levers once again. Value will continue to be driving value, and as we get the efficiencies on the fourth pillar, if we need to continue reinvesting that to take share, we will do that.

That's the levers we have at the moment, as an example. We certainly have differentiation as we build more private label products.

We also have penetration. If you consider we're opening an average 20 Chemist Warehouse stores a year and the base of pharmacies in community pharmacy tends to be pretty static, roughly 6,000 pharmacies, you're getting more penetration.

Now with say 82 Amcals and DDSs opening, you're getting further penetration. If you think of the Australian market, right, that continues driving penetration and scale for us.

All of that goes back into our wholesale business, quite frankly, which adds further operating leverage on the back end. You can see this picture, right?

It's scale, scale, scale, penetration, market share gain, and then obviously ultimately balancing what falls to the bottom line.

Great. That makes sense.

Thank you. Then just a final one if I could.

Just on the openings, appreciate you've called out sort of expectations going into the first half, but I guess just wanted to get a sense on the velocity of those stores. When I say velocity, I think historically kind of Amcal has, not always, but sometimes, acted as sort of a pipeline into Chemist Warehouse.

Just how we should sort of think about, the relatively higher amount of Amcal, at least in the near term, and then how that sort of flows into a sort of Chemist Warehouse banner, perhaps, at some points in time in the future?

I think these are franchisees who are choosing, right, to come across to us as owners of those pharmacies. Effectively they will be an Amcal or DDS because they make sense.

Where a Chemist Warehouse has to open, I think we'll make a decision related to the location and the size of shop, and that would be for that owner to pick up. We don't see massive conversions from an Amcal or a DDS to a Chemist Warehouse, by the way.

We see them actually as a multibrand strategy fitting a particular segment or location, which is actually the power of having three brands over the long term.

That's helpful.

Thank you.

Hi, guys. Just a question is on the breakdown of the revenue line.

If I go into the accounts, there's a line called Services Revenue, and it's gone from $687 million to $570 million, even though you've got the additional whatever it was, 1.5 months for the old Sigma business. Within that, franchise fees has gone up significantly, and it's actually, I think it's gone up 30 basis points as a percent of network sales, but your marketing and advertising's come right down.

What's driving those lines, cuz I assume they drop pretty well straight to the bottom line, I just wanted to understand that a bit better. Thanks.

Without sort of going into too much detail, I think that's more around the accounting policy alignment with the merger, I wouldn't probably read too much into that, Phil.

Can you say, though, the franchise and related fees, are they pretty well all in relation to the Chemist Warehouse business or do they also encapsulate the other old Sigma business as well?

Predominantly, and New Zealand growth.

Right. That would be in there, I would've thought the New Zealand business would sit in the equity-accounted line rather than in the revenue line.

Oh, it's our fees to them, you're right, the stores do sit in the equity line, but our fees to them sit in that line as in group fees to the New Zealand stores.

Okay. Then my second question was just you mentioned that supplier basically has moved from direct store delivery into the store delivery into the store.

Can you give us a rough sense and maybe of the Chemist Warehouse network given it's the main driver, how much direct store delivery is there and how big is that opportunity, to be able to take a lot less direct stores and actually put it through your distribution center? It's obviously good for your DC economics, but I assume it also improves, efficiencies at the store level.

Thanks.

There's probably about 20%. If you really look at the mix of products that the stores buy from our distribution centers, it's roughly between 70% to 80%, right?

Not all those suppliers would ever come into our network. There's suppliers that have their own infrastructure that's very hard to move, etc.

This supplier we've had a list of top 10 suppliers that we think we'd like in our network, and to be fair, where we've seen the benefit of the supplier coming into our network has been the availability of stock. The turnover, quite frankly, in our stores have grown significantly by bringing the supplier in because we were able to supply our network of stores through wholesale far more effectively than they could themselves.

It's more strategic and tactical, rather than just try to bring all the suppliers in to manage ourselves.

Sure. Are there a number of others, who should we expect?

There's probably a few others that we are certainly looking at. Where we have done it, we can immediately see the difference, right, in the turnover, because the service levels out of our network is just far superior.

Perfect. Thank you.

Hi, Vikesh. A sensitive topic, but I want to cover it nevertheless.

Can you comment on the end of the escrow that happens today, and what, if anything, we should expect about ownership transition?

I think it's very difficult for me to comment. We put out an ASX announcement probably a couple of months ago describing the intentions of the founders.

Mario's made it very clear that he's holding on to his stock, and Jack and Sam have said they would potentially sell up to 20 20%, and that's really dependent on those individuals. The company really doesn't get involved in that.

I just want to clarify, though, is although the escrow arrangements end today, our trading policy only allows for that to end tomorrow evening. If there's anything that's probably going to happen, it's probably going to happen next week that the market would see.

Fair enough. Couple of follow-ons.

The changes to the wholesale margin arrangements, from about 7.5% down to about 4.5%, what impact do you expect that to have on your margin going forward?

Overall, it just moves it from a markup, and then it comes back into the pool, and then it's obviously picked up in what happens to the overall funding envelope, it shouldn't impact overall margin.

Do you feel, though, is it an advantage for you in terms of volume, or is it a disadvantage? Therefore, could you give us some sort of direction of where you think the margin's going to go based on those changes?

I think it's, yeah, it's pretty neutral. It's really how we view it is just what happens to the overall funding envelope, which I think was positive.

Fair enough. Finally, Vikesh, the Grattan Institute report, which came out several months ago, talked a lot about potential deregulation in the industry.

Is this something you'd support, and do you think it's likely?

Firstly, it's very hard for me to hypothesize, right? That's dependent on the industry and government engagement and that.

What I would say to you is that we trade in an industry where, like Australia, where we can't own the network, and we work with our franchisees. Then we also own stores in other markets, we literally work in those type of legislative environments.

Ultimately in the end, we prefer the one that drives the lowest cost to consumers and the best patient care. Quite frankly, that's a much larger decision.

If it does come up to a debate, we'll then provide our views on that. Today our view is just focus and trade within the regulations that exist.

Fair enough. Thank you.

Thank you, everyone, for listening and thank you for your questions. We'll meet some of you on our roadshows over the next couple of weeks.

Thank you, and goodbye from Gary, Mark, and myself.