WEBVTT - EBOS Group: Pills, pets, and pharmacies 0:00:00.819 --> 0:00:06.290 This episode was recorded on Wurundjeri, Woiwurrung land. We acknowledge 0:00:06.570 --> 0:00:10.110 and pay our respects to the traditional owners of this country, 0:00:10.369 --> 0:00:14.250 past and present. This episode is brought to you by 0:00:14.330 --> 0:00:22.520 Sharesies Australia Limited, AFSL 529893 in Australia and Sharesies Limited 0:00:22.739 --> 0:00:26.680 in New Zealand. This is general advice only. and doesn't 0:00:26.739 --> 0:00:31.640 take into account your personal objectives, financial situation or needs. 0:00:32.620 --> 0:00:35.890 Welcome to Shared Lunch. Today, we're at the eBoss Group 0:00:35.990 --> 0:00:40.550 offices in Melbourne with the CEO, Adam Hall. eBoss is 0:00:40.610 --> 0:00:46.210 the largest and most diversified healthcare, medical and pharmaceutical distributor 0:00:46.409 --> 0:00:50.050 in Australia and New Zealand, and a leading owner of 0:00:50.190 --> 0:00:56.000 animal care brands. eBoss's consumer reach is significant spanning the 0:00:56.060 --> 0:00:59.520 Terry White Chem Mart pharmacy network, as well as pet 0:00:59.560 --> 0:01:04.640 care staples like Blackhawk and Vitapet. The group generates around 0:01:04.640 --> 0:01:09.850 $ 13 billion in annual revenue and employs over 5,000 people 0:01:10.010 --> 0:01:15.770 across Australia, New Zealand and Southeast Asia. Adam Hall stepped 0:01:15.930 --> 0:01:18.610 into the CEO role a little over a year ago, 0:01:18.630 --> 0:01:21.570 and so it's a fitting time to sit down with him. 0:01:22.410 --> 0:01:25.429 Investing involves risk. You might lose the money you start with. 0:01:25.810 --> 0:01:29.530 We recommend talking to a licensed financial advisor. We also 0:01:29.590 --> 0:01:33.509 recommend reading product disclosure documents before deciding to invest. Everything 0:01:33.530 --> 0:01:35.580 you're about to see and hear is current at the 0:01:35.620 --> 0:01:36.280 time of recording. 0:01:36.400 --> 0:01:39.860 Adam, thank you for joining us and welcome to Shared Lunch. 0:01:40.160 --> 0:01:40.520 Thanks, Jackie. 0:01:40.740 --> 0:01:43.860 You stepped into the CEO role a little over a 0:01:43.940 --> 0:01:44.460 year ago. 0:01:44.480 --> 0:01:44.560 Yeah. 0:01:45.200 --> 0:01:48.480 You've had a career that's taken you through law, strategy 0:01:48.720 --> 0:01:49.550 and consulting. 0:01:49.560 --> 0:01:49.690 Yeah. 0:01:50.190 --> 0:01:54.930 You've previously held executive roles at a global agribusiness and 0:01:54.970 --> 0:01:59.130 also a chemical business. What shaped your decision to join 0:01:59.170 --> 0:02:00.450 as the CEO of eBoss? 0:02:00.810 --> 0:02:04.090 Yeah, and it's a little bit of a tangled path. 0:02:04.150 --> 0:02:05.710 So if I walk through it from the beginning, I 0:02:06.470 --> 0:02:11.540 grew up between Perth and Karratha in Australia. And then 0:02:11.600 --> 0:02:13.780 did law, as you said. And I realized I'd be 0:02:13.820 --> 0:02:16.910 a terrible lawyer. So I quit. I joined a consulting firm, 0:02:16.940 --> 0:02:20.710 as you say. Worked in Thailand, Indonesia, Mongolia, Los Angeles. 0:02:21.810 --> 0:02:24.310 And it was for a kid from Perth, that was 0:02:24.350 --> 0:02:29.510 a wonderful chance to see the world. I then did 0:02:29.530 --> 0:02:32.370 my MBA in the States. And coming out of business school, 0:02:32.810 --> 0:02:35.160 I was really close to one of my professors, an 0:02:35.200 --> 0:02:38.100 Australian professor. And he said, you need to work for Bungie, 0:02:38.160 --> 0:02:40.860 which was a global agribusiness company. I ended up doing 0:02:40.900 --> 0:02:44.160 a few other things and becoming the global head of 0:02:44.200 --> 0:02:47.590 strategy in M & A for that business, Bungie. In 0:02:47.600 --> 0:02:52.109 that role, I managed to sell their fertilizer business, which 0:02:52.130 --> 0:02:54.609 was in Brazil. We got just an unbelievable amount of 0:02:54.650 --> 0:02:56.929 money for it, like way more than anyone was expecting. 0:02:57.730 --> 0:03:02.989 A different fertilizer business was looking for a head of 0:03:03.010 --> 0:03:04.990 strategy in M & A, and they said he can't 0:03:05.010 --> 0:03:07.110 be that bad if he got that sort of deal done. 0:03:07.930 --> 0:03:10.990 I ended up going to Chicago and working with CF Industries, 0:03:11.010 --> 0:03:15.010 the world's largest nitrogen fertilizer company. And that's when, you 0:03:15.030 --> 0:03:19.770 may not realize this, but nitrogen fertilizer and explosives are 0:03:19.790 --> 0:03:24.200 chemically identical. So I came back to Australia to join Orica, 0:03:24.340 --> 0:03:28.760 which is the world's largest explosives company. And after some 0:03:28.800 --> 0:03:31.560 time heading up strategy in chemicals here in Melbourne, I 0:03:31.600 --> 0:03:36.840 then was tasked with leading Orica Asia. And again, very fortunate, 0:03:37.670 --> 0:03:41.830 to have a terrific run there. And that's probably where 0:03:42.570 --> 0:03:46.310 the eBoss connection starts to make a little bit more sense. 0:03:47.530 --> 0:03:52.780 Orica Asia was a business of about 3,500 people covering 0:03:52.780 --> 0:04:00.280 15 countries, about 20 small businesses contained in that. And 0:04:01.380 --> 0:04:04.400 the thing that binds all those tiles together was a 0:04:04.460 --> 0:04:08.550 regulated supply chain. You can... You can't store explosives for 0:04:08.570 --> 0:04:10.170 too long, and you can't have too much in the 0:04:10.210 --> 0:04:13.500 same place. So every day you need to be delivering 0:04:13.970 --> 0:04:17.560 those explosives to keep the mines running. And then you 0:04:17.580 --> 0:04:23.159 come to eBoss. So eBoss is 6,000 people across nine countries. 0:04:23.380 --> 0:04:27.520 It's about 40 small businesses, but all based on this 0:04:27.980 --> 0:04:30.500 highly regulated supply chain where you need to be delivering 0:04:31.170 --> 0:04:36.520 the medicines, the implants, the... pet nutrition every day in 0:04:36.560 --> 0:04:39.760 order to keep the surgeons, the hospitals, the very friends 0:04:40.180 --> 0:04:44.580 of Australia and New Zealand and Southeast Asia nurtured and 0:04:44.620 --> 0:04:46.760 cared for. And the more I talked about it with 0:04:46.779 --> 0:04:49.220 the board, the more we saw that commonality and we 0:04:49.240 --> 0:04:52.120 thought this could be pretty interesting. And it's turned out 0:04:52.140 --> 0:04:52.540 to be that way. 0:04:53.690 --> 0:04:57.630 So that background has really fed into the way that 0:04:57.670 --> 0:05:02.430 you've thought about the vision for eBoss. And you've articulated that, 0:05:02.550 --> 0:05:06.570 I guess, most clearly at the Investor Day back in April, 0:05:06.810 --> 0:05:10.010 where there you set out a model, which was based 0:05:10.110 --> 0:05:15.940 on three pillars. So care, partnerships, and productivity. Can you 0:05:15.960 --> 0:05:18.719 talk us through what that means? What is that vision? 0:05:19.000 --> 0:05:23.480 Oh, absolutely. And So when I arrived, the executive leadership 0:05:23.500 --> 0:05:25.320 team and I spent quite a bit of time, I 0:05:25.360 --> 0:05:30.219 would say, discovering or articulating what the purpose was. We 0:05:30.240 --> 0:05:34.590 didn't enforce it or draw up a new one. It 0:05:34.630 --> 0:05:37.529 was more, when you look at all these businesses, what 0:05:37.589 --> 0:05:43.270 is common is this devotion to care, whether that's a 0:05:43.310 --> 0:05:46.909 human or a pet. And so we've set our purposes... 0:05:48.540 --> 0:05:52.240 to connect people, pets and communities to outstanding care anywhere. 0:05:53.220 --> 0:05:55.480 And then the way we do that is through those 0:05:55.520 --> 0:05:59.060 three pillars that you mentioned. Care, because that's a growing market. 0:05:59.320 --> 0:06:03.750 That's a place where humans and pets are getting older 0:06:03.790 --> 0:06:06.070 each year. They need more support and we're delighted to 0:06:06.089 --> 0:06:09.290 be there for them. Productivity, because all the businesses that 0:06:09.330 --> 0:06:11.410 we're in are highly competitive. And so we have to 0:06:11.450 --> 0:06:15.190 focus on being efficient every day in what we do 0:06:15.370 --> 0:06:18.070 so that we can keep delivering at the lowest cost. 0:06:18.920 --> 0:06:22.120 And then through partnerships. And this one is probably a 0:06:22.160 --> 0:06:25.039 little bit of a distinguishing feature versus some of our competitors, 0:06:25.160 --> 0:06:29.719 because we love collaborating with other people in our value 0:06:29.740 --> 0:06:33.500 chains to find new opportunities. So whether that's with suppliers 0:06:33.540 --> 0:06:35.659 to bring the best technology to market or with puppy 0:06:35.700 --> 0:06:39.220 breeders to get the best nutrition in the hands of 0:06:39.440 --> 0:06:43.460 newborn puppies or with surgeons to make sure that we're 0:06:43.480 --> 0:06:47.859 bringing them the latest in medical technology. It's those partnerships 0:06:47.880 --> 0:06:50.040 that I think bring to life the business's success. 0:06:50.140 --> 0:06:51.820 I think for some of our viewers who might be 0:06:51.900 --> 0:06:55.100 less familiar with EBOS, are you able to take us 0:06:55.140 --> 0:06:58.640 through at a very high level what those business divisions 0:06:58.880 --> 0:07:00.130 are and what they do? 0:07:00.170 --> 0:07:05.550 We have two reporting segments and then within there, four divisions. 0:07:05.570 --> 0:07:07.830 The first one is Symbian and Healthcare Distribution. Think of 0:07:07.890 --> 0:07:12.290 that as Australia and New Zealand's probably equal largest medicine 0:07:12.330 --> 0:07:15.940 wholesaler and supplier. So Anytime that medicine flows to a 0:07:16.300 --> 0:07:18.560 patient or a hospital, we're in there and about a 0:07:18.620 --> 0:07:23.850 third of both markets. In retail pharmacy brands, we have 0:07:23.880 --> 0:07:29.750 about 780 different pharmacy franchisees. And under the Terry White 0:07:29.790 --> 0:07:34.790 label or Sink Cotter or MediAdvice, we're delighted that we're 0:07:34.810 --> 0:07:38.310 a significant part of the pharmacies in Australia. And then 0:07:38.870 --> 0:07:42.770 in medical technology in New Zealand and Australia and Southeast Asia, 0:07:44.100 --> 0:07:48.720 We're probably the leading independent supplier of medical technology. So 0:07:48.760 --> 0:07:54.020 think of that as being the link between those geniuses 0:07:54.060 --> 0:07:57.400 who are developing new medical technologies and the surgeons and 0:07:57.430 --> 0:08:00.310 hospitals and patients who need them across the region. We 0:08:00.330 --> 0:08:04.870 provide that link. And then finally, animal care. And there 0:08:04.910 --> 0:08:08.210 we are, Australia and New Zealand's largest vet wholesaler and 0:08:08.270 --> 0:08:11.530 Australia's best loved dog food, which is Blackhawk. which is 0:08:11.630 --> 0:08:16.570 Australia's actually largest dry dog food by volume. So it 0:08:16.630 --> 0:08:19.600 is a range of businesses, but all bound together by care. 0:08:19.840 --> 0:08:22.320 I want to dig into the distribution side a little 0:08:22.360 --> 0:08:27.320 bit more. It's high volume and lower margin by nature. 0:08:27.500 --> 0:08:31.640 And so operating at scale is really important there. If 0:08:31.680 --> 0:08:35.780 we trace the medicine from the manufacturer right through to 0:08:35.820 --> 0:08:39.350 the patient, Can you explain for us where does EBOS 0:08:39.710 --> 0:08:42.670 sit within that picture and what is the edge that 0:08:42.690 --> 0:08:43.130 it brings? 0:08:43.470 --> 0:08:47.910 Sure. Let's say a global manufacturer of statin for high cholesterol. 0:08:48.410 --> 0:08:54.810 They will have a contract with EBOS to manage that 0:08:54.870 --> 0:08:58.790 supply in Australia and New Zealand. And so we run 0:08:58.809 --> 0:09:02.290 a warehouse that effectively acts as an extension of their network. 0:09:02.809 --> 0:09:06.410 So we have to live up to their conditions. So 0:09:06.429 --> 0:09:08.589 they have very strict on how they want their warehouse run. 0:09:09.210 --> 0:09:11.250 But we'll have about 50 of those in the same warehouse. 0:09:11.350 --> 0:09:13.110 So we have to live up to 50 different standards. 0:09:14.050 --> 0:09:15.690 And we do a great job of that in our 0:09:15.890 --> 0:09:19.420 contract logistics business. On their behalf then, we will then 0:09:19.520 --> 0:09:23.240 ship to Symbian and Symbian will then purchase that statin 0:09:24.220 --> 0:09:27.839 and put it in one of our facilities, including Australia's 0:09:27.900 --> 0:09:31.440 most modern medicine facility, which is medicine distribution facility, which 0:09:31.500 --> 0:09:36.350 is Kemp's Creek outside of Sydney. And they're We try 0:09:36.390 --> 0:09:39.360 and drive productivity through the most automated approach that we 0:09:39.390 --> 0:09:44.580 can take. And every morning we will have received 10,000 0:09:44.580 --> 0:09:50.099 to 15,000 new orders that change every day. And by 0:09:50.100 --> 0:09:52.420 6 a.m., 7 a.m., those orders are on the road 0:09:52.850 --> 0:09:56.990 being shipped, including our statin that you've asked for. And 0:09:57.270 --> 0:09:59.650 that'll get delivered to the pharmacies and hospitals across Australia, 0:09:59.670 --> 0:10:04.160 including some Terry White pharmacies and that's where Terry White 0:10:04.540 --> 0:10:07.679 which is just beloved in the Australian community for care 0:10:08.260 --> 0:10:11.179 people often come in and talk to the pharmacist about 0:10:11.200 --> 0:10:15.120 the script that they've received and also how it interacts 0:10:15.140 --> 0:10:18.270 with their other medicines or with their lifestyle so for 0:10:18.290 --> 0:10:21.450 example the statin is dehydrating, then we would offer some 0:10:22.870 --> 0:10:30.240 hydration or nutrition opportunities as well. So it's one little pill, 0:10:30.860 --> 0:10:34.050 but we're delighted to be there every step of the way. Yes. 0:10:34.070 --> 0:10:36.839 I mean, so critical for the customers and the patients. 0:10:36.860 --> 0:10:40.130 That's right. We pride ourselves on, with this care, we 0:10:40.170 --> 0:10:42.520 don't want to be seen as someone that's remote from 0:10:42.540 --> 0:10:44.920 the customer. I don't know if you remember the bad 0:10:45.000 --> 0:10:49.120 old pharmacists of the 90s. You'd walk into the pharmacy 0:10:49.140 --> 0:10:51.160 and then at the back, there'd be like a raised 0:10:51.220 --> 0:10:53.679 podium and a screen, and then you'd sort of worship 0:10:53.720 --> 0:10:56.400 at the podium and be blessed with the medicine. We 0:10:56.420 --> 0:10:59.420 don't do that at Terry White. The pharmacist and the 0:10:59.440 --> 0:11:02.080 pharmacy assistants are constantly on the floor, trying to engage 0:11:02.140 --> 0:11:06.640 with our shoppers who love coming in and say, oh, Mrs. Smith, 0:11:06.660 --> 0:11:08.400 good to see you again. What's brought you in today? 0:11:08.480 --> 0:11:09.380 What can we help with? 0:11:09.420 --> 0:11:10.120 Yeah, that's right. 0:11:10.240 --> 0:11:12.939 And that is, I think, back to your point earlier, 0:11:13.000 --> 0:11:14.510 that's the point of differentiation for us. 0:11:14.580 --> 0:11:17.490 I just want to pause on animal care because it's 0:11:17.510 --> 0:11:22.090 an interesting segment and growing quite rapidly. So revenue in 0:11:22.570 --> 0:11:26.609 animal care grew over 30% last financial year. Can you 0:11:26.650 --> 0:11:28.970 talk us through what's driving that growth? 0:11:29.590 --> 0:11:35.110 So animal care began for EBOS as a wonderful extension 0:11:35.150 --> 0:11:37.310 of this commitment to medicines. And so we had gotten 0:11:37.330 --> 0:11:42.060 into the business of supplying animal medicines, which was analogous 0:11:42.100 --> 0:11:44.780 to our Symbian business. And then we noticed that more 0:11:44.820 --> 0:11:47.719 and more of our vets and patients needed quality nutrition. 0:11:48.160 --> 0:11:52.390 And then that led to our wonderful Blackhawk brand. So 0:11:52.429 --> 0:11:56.910 that's how we got into the business. And then what 0:11:56.950 --> 0:12:01.929 we see as the growth continues those two streams. In 0:12:01.980 --> 0:12:05.840 that vet wholesaling side, we were always Australia's largest vet wholesaler, 0:12:05.920 --> 0:12:09.440 but about 15 months ago, we bought New Zealand's largest 0:12:09.460 --> 0:12:12.480 wholesaler of vet medicines, SVS, which has just turned out 0:12:12.500 --> 0:12:15.360 to be a cracker. A wonderful business run by a 0:12:15.420 --> 0:12:19.520 great team, John and Emma, and they do a great job. 0:12:20.040 --> 0:12:23.410 And that's part of the reason the revenue grew 30%. 0:12:23.410 --> 0:12:25.950 Like you said at the beginning, the wholesale business is 0:12:26.010 --> 0:12:28.480 high revenue low margins. So if you can imagine that 0:12:29.860 --> 0:12:31.719 high revenue business was not part of animal care and 0:12:31.740 --> 0:12:33.040 then all of a sudden is part of animal care, 0:12:33.460 --> 0:12:38.140 that's a big driver of that 30% increase. Now with 0:12:38.179 --> 0:12:40.569 that footprint, I think we feel comfortable that we've done 0:12:40.610 --> 0:12:44.870 the right acquisitions. But in branded animal care, I think 0:12:44.910 --> 0:12:48.090 we have a wonderful set of opportunities. One thing that 0:12:48.110 --> 0:12:52.050 we've been really good at is taking that existing Blackhawk brand, 0:12:52.290 --> 0:12:57.150 that really trusted, beloved premium brand, and then bringing it 0:12:57.190 --> 0:13:00.510 to new categories. So our market share is about a 0:13:02.110 --> 0:13:04.930 quarter in dry dog food. And then we've been able 0:13:04.970 --> 0:13:10.980 to extend into, for example, healthy benefits, which is where 0:13:11.020 --> 0:13:15.460 you have dog food that addresses itchy skin or an 0:13:15.520 --> 0:13:22.810 overweight pet. And we went from zero to closer to 20% 0:13:22.809 --> 0:13:26.030 of market within two years without much marketing support, just 0:13:26.090 --> 0:13:29.970 driven by that halo position from the Blackhawk brand. But wait, 0:13:29.990 --> 0:13:33.569 there's more, because what that team found was with that 0:13:33.630 --> 0:13:38.390 marketing expertise, they could plug in additional manufacturing. And that's 0:13:38.410 --> 0:13:40.530 what we did a year ago with an acquisition called 0:13:40.570 --> 0:13:45.390 NextGen Pet Food. Think of this as two crazy guys 0:13:45.429 --> 0:13:48.150 who are great at manufacturing pet food just outside Toowoomba 0:13:48.570 --> 0:13:52.610 in Queensland, but they didn't have a brand. They didn't 0:13:52.630 --> 0:13:54.770 have a way to bring it to market. And so 0:13:54.830 --> 0:13:57.520 we were able to buy NextGen And then hook that 0:13:57.580 --> 0:14:00.500 up to Blackhawk. In six months, we got 5% market 0:14:00.520 --> 0:14:04.750 share in air-dried, freeze-dried treats. We do manufacturing and marketing. 0:14:05.710 --> 0:14:08.950 If we can find bolt-on opportunities where one of those 0:14:09.030 --> 0:14:12.050 is not good enough, where there's a great manufacturer who's 0:14:12.070 --> 0:14:13.750 not good at marketing, a great marketer who's not good 0:14:13.770 --> 0:14:17.030 at manufacturing, that's a natural bolt-on opportunity in branded animal care. 0:14:17.080 --> 0:14:19.920 And I think pretty exciting for us to go forward. 0:14:20.270 --> 0:14:24.160 Healthcare is often described as defensive. And of course, in 0:14:24.220 --> 0:14:28.500 Australia and New Zealand, backed by really positive demographic tailwinds 0:14:29.140 --> 0:14:32.979 with an ageing population. Where do you see the opportunities 0:14:33.480 --> 0:14:37.570 for EBOS as it relates to this demographic shift that 0:14:37.610 --> 0:14:38.070 we're seeing? 0:14:38.090 --> 0:14:40.930 I think that's right. The two great macro drivers are one, 0:14:41.630 --> 0:14:46.110 ageing population. Just normally, as you get older, you need 0:14:46.130 --> 0:14:48.760 more care. And so more medicines, and we're happy to 0:14:48.780 --> 0:14:54.370 supply that. More implants, happy to supply that. More engagement 0:14:54.390 --> 0:14:58.510 with your pharmacist. But also, we're not the only people 0:14:58.530 --> 0:15:02.810 who've noticed that. And so the global medical technology, pharmaceutical 0:15:03.230 --> 0:15:08.110 companies have invested billions in new drugs, new implants to 0:15:08.130 --> 0:15:11.910 help serve that population. And we're positioned at the forefront 0:15:11.930 --> 0:15:14.090 of that. So we're able to bring those to market 0:15:15.510 --> 0:15:20.880 for those people. including the GLP-1 craze, for example. And 0:15:21.400 --> 0:15:23.320 then if I turn to pets, the other thing that 0:15:23.380 --> 0:15:28.410 people sometimes miss, people get the COVID-era pet boom. Those 0:15:28.470 --> 0:15:31.690 pets are just starting middle age now. And so they're 0:15:31.710 --> 0:15:35.170 going to need more love, more medicines, and we're happy 0:15:35.190 --> 0:15:36.570 to help with at least the medicine side of that. 0:15:39.210 --> 0:15:41.670 But also that means that they then live longer. So 0:15:42.770 --> 0:15:46.410 quite interestingly, pet lives have extended by 10% to 15%. 0:15:46.410 --> 0:15:48.690 over the last five years. And so I think that's 0:15:48.730 --> 0:15:52.120 a really meaningful opportunity as well in terms of caring 0:15:52.130 --> 0:15:56.240 for them in that older age era. So I see 0:15:56.260 --> 0:15:59.520 the macro trend demographically actually pretty positive for us. Yeah. 0:16:00.200 --> 0:16:04.490 You mentioned a massive trend around GLP drugs. How has 0:16:04.590 --> 0:16:08.530 it sort of influenced your volumes, your margin, and even 0:16:08.570 --> 0:16:11.690 as you think about distribution and how those drugs are 0:16:11.730 --> 0:16:13.530 stored and delivered and things like that? 0:16:14.330 --> 0:16:17.600 The market that adopted the GLP-1's first was the United States. 0:16:18.250 --> 0:16:21.720 And my understanding is in the US, between 10% and 12% 0:16:21.720 --> 0:16:25.280 of the adult population is on GLP-1s right now. And 0:16:25.320 --> 0:16:33.160 that's predominantly, but not exclusively, the weekly cold chain injectable format. Now, 0:16:34.340 --> 0:16:38.160 in Australia, the comparable figure is between 3% and 4%. 0:16:38.160 --> 0:16:40.340 And in New Zealand, it's between 1% and 2% because 0:16:40.400 --> 0:16:44.830 New Zealand came to GLP-1s a little later. And so 0:16:45.190 --> 0:16:47.130 the opportunity in Australia and New Zealand is at least 0:16:47.170 --> 0:16:50.910 probably 3x, just to catch up to where the US is, 0:16:50.960 --> 0:16:53.400 and the US is still growing. So you're seeing these 0:16:53.520 --> 0:16:58.160 tremendous growth rates in usage on GLP-1s. We have the 0:16:58.200 --> 0:17:01.720 capacity to deliver those weekly cold-chain injectables today, and we 0:17:01.760 --> 0:17:08.160 also have a tremendously productive dispatch of pills. And so 0:17:08.460 --> 0:17:13.649 as either of those two formats grow, we're well-positioned. And 0:17:13.670 --> 0:17:14.990 I think it's still a little bit in the balance. 0:17:15.630 --> 0:17:18.460 Australia hasn't yet approved the pill form, but they have 0:17:18.480 --> 0:17:20.620 in the UK. And the UK growth of the pill 0:17:20.660 --> 0:17:25.900 form was actually faster than the weekly injectable. And so 0:17:25.940 --> 0:17:28.050 that'll be really interesting to see how that plays out 0:17:28.470 --> 0:17:31.350 in Australia and New Zealand. The one thing I would 0:17:31.450 --> 0:17:35.590 add is GLP-1 growth is good, but it sometimes camouflages 0:17:37.100 --> 0:17:40.330 high value medicine growth. So although a GLP-1 is like 0:17:40.330 --> 0:17:43.230 $ 500 to $ 700, that's actually not a high value medicine 0:17:43.250 --> 0:17:45.410 for us. We think of high value medicines as sort 0:17:45.430 --> 0:17:48.700 of $ 700 plus. And you can have a single dose 0:17:48.760 --> 0:17:53.520 worth up to $ 10, 000 of certain key oncology drugs. And 0:17:53.580 --> 0:17:56.700 if you remember, I talked about those global pharmaceutical companies. 0:17:57.280 --> 0:17:59.359 They're bringing more and more of these drugs to market. 0:17:59.420 --> 0:18:02.980 They're really making a difference to people's lives. And those 0:18:03.020 --> 0:18:06.320 have grown actually 11% over the last five years and 0:18:06.340 --> 0:18:11.649 are now 40% of Australia's PBS. So a lot of 0:18:11.690 --> 0:18:14.850 attention on GLP-1s, which is right and correct, but also 0:18:14.890 --> 0:18:19.550 the high value medicines. And between the two, the companies 0:18:19.570 --> 0:18:21.410 that are going to benefit are going to be the 0:18:21.810 --> 0:18:26.340 nationwide scale, highly productive operators. And we're at the forefront there. 0:18:27.180 --> 0:18:31.090 You mentioned the role of pharmacies and how they're evolving 0:18:31.130 --> 0:18:36.429 and shifting to providing more care, more clinical services. So vaccinations, 0:18:36.690 --> 0:18:41.460 health checks, and even prescribing for common conditions. How does 0:18:41.640 --> 0:18:45.419 eBoss support the likes of the Terry White Chem Mart 0:18:46.020 --> 0:18:48.659 as they make that shift and they provide more of 0:18:48.700 --> 0:18:50.600 those services to customers? 0:18:50.800 --> 0:18:54.200 Yeah, it's really interesting because we've made a strategic choice 0:18:54.850 --> 0:18:57.619 that costs us money. Yep. but it gives us a 0:18:57.660 --> 0:19:00.240 big benefit. And that choice is that in almost every 0:19:00.280 --> 0:19:02.600 Terry White, there is what we call a care clinic. 0:19:03.359 --> 0:19:07.850 We've reserved part of the store footprint, precious real estate space, 0:19:08.770 --> 0:19:11.570 and we put it aside as a private area behind 0:19:11.609 --> 0:19:14.230 a door where someone can go to get a vaccination 0:19:14.290 --> 0:19:20.490 or to get that prescription. And that commitment to pharmacists 0:19:20.670 --> 0:19:23.410 who care and a space for them to deliver care 0:19:24.160 --> 0:19:27.300 You can see that in the vaccination numbers. We're about 12% 0:19:27.300 --> 0:19:32.080 of Australia's pharmacies, but we're 25% of Australia's pharmacist vaccinations. 0:19:32.340 --> 0:19:35.179 So you can see we're wildly overrepresented in terms of 0:19:36.060 --> 0:19:37.480 what we can achieve in care. 0:19:38.030 --> 0:19:39.290 So I just want to take a step back now 0:19:39.330 --> 0:19:43.010 and just talk about the financials. You recently provided your 0:19:43.030 --> 0:19:47.169 first full year financial results as a CEO. Could you 0:19:47.190 --> 0:19:49.550 step us through what were some of the highlights from 0:19:49.590 --> 0:19:51.040 your perspective? from that result? 0:19:51.320 --> 0:19:54.220 Yeah, I'd say three key messages from the full year. 0:19:54.400 --> 0:19:57.720 First was we delivered on guidance, both financially and operationally. 0:19:58.380 --> 0:20:00.980 The second was we had great options in each of 0:20:01.020 --> 0:20:05.650 our four divisions. Pardon me. And the third was we 0:20:05.690 --> 0:20:09.910 have continued spare capacity for bolt-on M & A, with 0:20:09.950 --> 0:20:12.560 more to come. Just going back to that first one 0:20:12.580 --> 0:20:15.619 of delivering on guidance, we set a target range of 0:20:15.660 --> 0:20:17.820 EBITDA for the year and we hit that. But we 0:20:17.880 --> 0:20:22.490 also had said that during FY25, we would complete a 0:20:22.690 --> 0:20:26.110 major capital program, a DC renewal program worth $ 360 million. 0:20:26.290 --> 0:20:30.109 And we committed to that being completed by the 30th 0:20:30.130 --> 0:20:32.780 of June, and it was. So all facilities, all eight 0:20:32.820 --> 0:20:37.379 facilities were operational on that day. So as a result... 0:20:37.460 --> 0:20:41.690 That then means in 2027, our CapEx bill steps down dramatically. 0:20:42.050 --> 0:20:45.350 So it goes down from circa 150 million to circa 0:20:45.350 --> 0:20:48.470 100 million. So it drops by a third. And the 0:20:48.530 --> 0:20:50.510 investors know that and they're excited by it to see 0:20:50.590 --> 0:20:54.640 us using less cash to generate the same returns. Then 0:20:54.680 --> 0:20:59.060 in terms of the four divisions, I mentioned each of 0:20:59.080 --> 0:21:00.560 them just a moment ago, but they've all got great 0:21:00.660 --> 0:21:04.460 options for growth. Symbian is putting those new assets to work. 0:21:05.200 --> 0:21:07.359 Those new facilities were all in the Symbian business, and 0:21:07.420 --> 0:21:10.399 now they can continue to drive productivity or drive utilization. 0:21:11.280 --> 0:21:14.909 In retail pharmacy brands, now we've got this network. It's 0:21:14.950 --> 0:21:20.510 actually Australia's largest network of franchisees. We found there's more 0:21:20.609 --> 0:21:24.370 ways to put that network to practice and to earn 0:21:24.390 --> 0:21:29.720 more money through retail media, through private label, through online sales. 0:21:29.960 --> 0:21:32.500 And we really haven't reached the limit of each of those. 0:21:33.170 --> 0:21:37.129 So that's a wonderful opportunity for our pharmacists. And then 0:21:37.670 --> 0:21:41.030 in medical technology, we've got new Allagraph products coming through 0:21:41.210 --> 0:21:43.750 as well as new acquisitions. And then in animal care, 0:21:44.390 --> 0:21:47.290 we've got some new products that are coming to market 0:21:47.850 --> 0:21:49.830 off the back of an acquisition that we did at 0:21:49.850 --> 0:21:50.770 the very end of 2026. 0:21:50.770 --> 0:21:56.960 You've just wrapped up this $ 360 million CapEx program over 0:21:57.020 --> 0:22:01.690 four years to modernize the distribution network. And Kemp's Creek 0:22:01.770 --> 0:22:03.610 is now the flagship site. 0:22:03.670 --> 0:22:04.209 That's right. 0:22:04.350 --> 0:22:08.070 Practically speaking, can you tell us what can eBoss do 0:22:08.130 --> 0:22:11.830 now or do better that it couldn't do, say, four 0:22:11.850 --> 0:22:12.290 years ago? 0:22:12.630 --> 0:22:16.869 And one of the ways that you look at productivity 0:22:17.470 --> 0:22:20.300 for a medicine warehouse is you think about it in 0:22:20.359 --> 0:22:24.040 terms of how many doses, and we call them lines, 0:22:24.440 --> 0:22:28.340 how many doses can you get out for every person, 0:22:28.840 --> 0:22:31.159 every hour of a person employed? And so the way 0:22:31.200 --> 0:22:33.760 we think about that is what we call lines per 0:22:33.820 --> 0:22:36.980 attended hour. So for every person that's there, how many 0:22:37.740 --> 0:22:41.790 doses can you get out the door? And we measure 0:22:41.830 --> 0:22:44.870 that very carefully at each of our facilities, not just 0:22:45.070 --> 0:22:48.190 between facilities, but also sort of week to week or 0:22:48.230 --> 0:22:50.409 day to day to make sure that each facility is 0:22:50.450 --> 0:22:54.510 on track. And so I'm very confident in saying driving 0:22:54.550 --> 0:22:57.649 that KPI is really what this investment was about at 0:22:57.690 --> 0:23:02.419 Kim's Creek. And we've already achieved 20% more lines per 0:23:02.440 --> 0:23:06.900 attended hour at Kimp's Creek in Sydney versus its predecessor site. 0:23:07.830 --> 0:23:10.850 And so that's a great achievement. And we've publicly said 0:23:10.869 --> 0:23:13.899 to the market, we'll hit 30% by the end of FY27. 0:23:13.910 --> 0:23:14.270 So far on track. 0:23:16.140 --> 0:23:22.129 You've earmarked around $ 150 million for Bolton acquisitions this coming 0:23:22.210 --> 0:23:23.169 financial year. 0:23:24.030 --> 0:23:26.649 I'd say up to. We're not committing to spend it, 0:23:26.690 --> 0:23:27.590 but it's there. 0:23:27.630 --> 0:23:30.690 Depends on what the opportunities are that arise, I guess. 0:23:30.710 --> 0:23:33.580 Can we talk about what are you looking for and 0:23:33.660 --> 0:23:36.460 what are the factors that you consider in terms of 0:23:36.760 --> 0:23:37.840 what is a good opportunity? 0:23:37.859 --> 0:23:41.660 Yes. And I think when you think about M & A, 0:23:41.680 --> 0:23:44.440 you've got to come back to Why is this a 0:23:44.440 --> 0:23:47.170 good deal for shareholders? And eBoss is very fortunate that 0:23:47.190 --> 0:23:50.130 there's a few different areas of synergy. One that you've 0:23:50.150 --> 0:23:53.170 just mentioned, which is in animal care, it's about bringing 0:23:53.210 --> 0:23:56.250 those two halves of marketing and manufacturing together. So anytime 0:23:56.270 --> 0:23:59.750 that there's a bolt-on like Paringa, for example, that we 0:23:59.790 --> 0:24:06.090 just bought, wonderful manufacturing site in Sydney, but no access 0:24:06.109 --> 0:24:09.900 to the brands. Second synergy would be around bringing sort 0:24:09.920 --> 0:24:15.290 of critical mass to individual players. And so in Retail Pharmacy, 0:24:15.330 --> 0:24:17.850