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Well, good morning. I'm Lindsley Ruth, CEO of Electrocomponents plc, and welcome to our 2021/2022 interim results presentation. The front of this presentation and our annual report shows our people. And I will say that the health and well-being of our people remains the #1 priority for us on a worldwide basis. And before I get into the presentation this morning, I'd just like to address a few things. And first of all, let me start by saying there are 3 kind of major themes that have come out over the last month that we've heard from investors and from analysts, from brokers and from the market in general. One is, why have we outperformed? So as we go through the presentation today, we'll talk about that. But I think the question -- people beat around the bush a bit by saying, why have we outperformed, when the real question is, will we continue to outperform? And we do we think that's the case. So we'll get into that. The second question is, what's next? So we've been on a transformational journey. I will assure you we're not done. So we're not done yet. And I had the great opportunity a month ago to see a football game in the U.S., an American football game, college football. Alabama lost, the #1 team in the country lost to Texas A&M. It was the first time in 26 games that Nick Saban, who is probably the greatest football coach of all time, lost to a former assistant. That assistant's name is Jimbo Fisher. And when he started 4 years ago at Texas A&M, he came into the program with an attitude around transformation. He says it's not going to be like it used to be. We got to install toughness after disciplined grit and pride into the program. So it's all about attitude. But what he said after the Alabama game, which struck me as he said, we ain't done yet. So to translate that for you here. It's, we are not done yet. And I'll say the same thing, we ain't done yet. So for those people that think they've missed the boat, I can tell you, they haven't, and we're just getting going. So there's plenty of room on the boat, obviously. But we're not stopping yet, and I'll talk some about that today. So what's next? We've gone from being a very average company. So people often say to us, gosh, you guys have done great. It's fantastic. We have done well, so we'll agree with that. But we're not as great as some people think, right? Because it's not that we were coming from a good place. So are we that good? Maybe not. Were we that bad? Yes, we were. So we came from a really bad spot to a really good spot, to where we are today. And if you look at point A, where we were, to point B, where we are today, where -- many of you would think it's a good company. We ask the question, is good, good enough? And for many people, it is, but for us, it's not. And going from point A to point B, where we are today from where we were 6 years ago, hasn't been easy. It was hard. And a lot of people get caught up in strategy, right? So what is your strategy? The why, the what, the when, the who. And they forget the most important thing, which is the how. So the most difficult piece of the journey is the execution. And in distribution, it's 90% execution, 10% strategy. You can take a good strategy and have bad execution, you'll fail. You can take a bad strategy and have good execution, and you might have a chance of being successful. So it's all about execution, and we'll talk about that today.So why have we outperformed? Simply put, we execute, and I'll get into that. And what's next? We want to go from good to great. We'll talk a little bit about that and lay the foundation for the future. And then I know the third theme or topic that has come up recently is what's happening in the market? How do we see the market, the supply chain shortages? What are we doing? And I think just to level set, we're all in the same world together, right? And you can have 2 ways of looking at this. Some people walk down the hallway, they see a door that says crisis. They open it, they see opportunity. They immediately close the door because it's difficult, right? Others see opportunity. They open the door to opportunity, they see crisis, and they close the door. Well, we look at the crisis situation today. We see opportunity in crisis. So we're not sitting around waiting for the market to change. We didn't sit around waiting for the pandemic to change. We rose to the occasion, which was the point of our RISE program. And we're doing it again. And you can accept that this is what's happening in the market. And again, just react and wait for it to ease itself out. You can blame others. When there's nobody left to blame, who do you blame? The government. So a lot of people are blaming governments. It's not the governments' responsibility. They can raise interest rates. They can control demand, et cetera. But it's up to us in business, I think, to mitigate and to find solutions, to look at alternatives and do everything we can to develop a new plan and execute to that plan. So with that, let me get into the presentation itself today. Our people underpin our performance. And our people, I think, have gone from a position where I started 6.5 years ago. David started shortly, so I'll say I for a moment and I'll switch to we. So I remember meeting David about 5.5 years ago, the best day of his life, I think. Love at first sight from his side maybe. I like to get David smiling early in the morning. It's good to be back face-to-face with you. But it's -- when I first met David, we talked about the potential of the company. And you know what, we had -- what's the biggest difference between then and now? At that point, we had more talkers than doers. Today, we have more doers than talkers. So I'm a firm believer in that your actions have to speak so loud that you can't hear what you're saying. You have to do what you say you're going to do. And that's what's really important. So that's why, historically, we haven't given guidance. We haven't said a whole lot about what we're working on, what the future is. But I assure you, everything we've done up to this point, we thought we could do. And we've done what internally we said, we can do. And we often say that even if we would have said 4 years ago, 5 years ago, this is what we're planning to do, most people wouldn't have believed that anyway because we didn't have a track record of success. So we want to continue to build on that credibility. So the key reason for outperformance in the market gets down to our people, not accepting that there isn't opportunity in crisis. Because there is. And our people have driven the outperformance by doing, talking less and making things happen. And we've empowered our people and given our leaders greater operational ownership. And it's not that people felt like they were discouraged to take risk, but they didn't feel like they're encouraged to take risk.Now we're encouraging people to take risk, to speak up, to look at what the barriers are to success, the obstacles we need to overcome and to voice those. And he said, "Well, how do you do it?" Well, we got to prioritize, right? We've got to prioritize, and that's something we're getting better at and we'll talk about. So we have faced, without a doubt, significant external challenges, but we've reacted quickly. In many cases, we shifted from reacting to being proactive by anticipating what's next. We've been agile and we've had the foresight and experience to adapt. So people say, what's the greatest strength of your business today? I would say it's adapting to change, and we can't lose that. We can't become complacent because if we do, we'll become irrelevant. So that's underpinned our performance. And for those employees within our company that are here today, that are listening, I want to say a special thank you to everyone that's put in the effort to make a difference for us. Because you truly do make the difference for us. The next slide talks about the drivers of our market share growth. So we've talked about this before, but I want to reiterate. Our product breadth -- Lucy are you -- okay. Our product breadth, so if you look at this slide, you can see we've got 4 key areas, which we considered to be our needle movers. The product breadth and availability, really, really critical. So why have we been able to satisfy the demand of customers? We're able to get products that others can't. How do we do that? There's lots of different ways that gets into the how, the execution. We're able to keep availability at a reasonable level. Has availability dropped? Yes. Has it dropped significantly in comparison to our competition? No, because we hold inventory. And that is the basic fundamental strength of distribution, to hold inventory. Our specialist own brand, RS PRO. We continue to expand our range. When you look at supply chain challenges, we've got an option. If you can't find it, source it in your private label brand. So we're doing much more of that today across the business, including our OKdo business. And being omnichannel. So what does omnichannel mean? Omnichannel means we can do business any way a customer wants to do business. We have people that visit customers. We have people that can take phone calls from customers. And believe it or not, we still take faxes from customers, tens of thousands of faxes a year. It's not printed though, Andrea. They come in, in an automated fashion. And then we receive those and convert them to orders. But we get e-mail orders, and we get digital orders. Digital is underpinning our omnichannel strategy. And when we say digital, 2/3 of that is the Web. When some people say digital, 2/3 of that is EDI where it's what's existed for many, many years. For us, we invest significantly in the Web. We'll continue to invest significantly in the Web as we move forward around the world. So the digital side is really important to us. And then solutions. So whether it's product solutions by getting into adjacent product categories, such as PPE solutions and products that can help to offer existing customers more products. Or it's service solutions around integrated supply or eProcurement or in stock, [ com bon ] types of items, we're involved in all of those solutions. And the solutions side of the business, we'll continue to invest in over time. And we'll expand those solutions more and more to Asia Pacific, which we have, which underpins the success and the growth from a profit standpoint we've had within Asia Pacific. Now I'll pass you over to David Egan, our CFO, to talk a little bit about the financial performance.
Thanks, Lindsley. Good morning, everyone. Thanks for joining us. I'm going to talk about our results for the 6 months ended 30th of September 2021. In summary, we delivered very strong like-for-like growth, and this is on both a 1- and also a 2-year basis. We've been -- we've seen profitability and margins in all regions increase. Asia Pacific, in particular, has delivered a significant turnaround in its profit and its marginal outperformance, and we've generated strong cash -- free cash flow, despite investing in additional inventory to protect our supply chain. And we're proposing our interim dividend of 6.4p per share, and this is as per our stated policy of equivalent to 40% of the prior year full year dividend. Our first half performance has been very strong on a 1-year basis as we've annualized against COVID-19 comparatives, but also on a 2-year basis. I'd like to focus my attention on our 2-year run rate. So on this basis, our revenue grew by 22%, with pure Web like-for-like revenue increasing 26% and our specialist own brand, RS PRO, growing 28%. Profitability-wise, our adjusted operating profit margin rose 1.2 percentage points on a 2-year basis to 12%. And our adjusted operating profit conversion margin was 27.4%. We had strong cash flow and return on capital -- a strong return on capital of nearly 25%, which again is a significant improvement from the prior years. Our net debt to adjusted EBITDA reflects our strong balance sheet. In the first half, we generated GBP 1.2 billion of revenue and an adjusted PBT of GBP 142 million. Our tax charge for the first half was 23.8%, broadly in line with the 24% we expect for the full year. The following slides detail the drivers of this performance. So let's take a look at revenue. In the first half, revenue grew by GBP 300 million. And this was due to increased volumes, as our customers benefited from our breadth of range, strong product availability and our service proposition. And this was driving market share growth. We also had a favorable market backdrop, especially in our electronics product range, which accounts for approximately 22% of group revenue. And we saw a 33% like-for-like growth over the 2 years in our electronic product range. Our average order value also grew, and we had a revenue contribution from our acquisitions of Synovos, Needlers and Liscombe during the period. Price increases were only low single digits during the period. There was a GBP 38 million headwind from foreign exchange during the period. Our customer base has grown, and total customers grew by 24%. B2B customers, which are over 95% of group revenue and are our most profitable, grew by 18%. The average order value increased 9% due to a larger number of products in customer baskets partly due to greater volumes of electronic products and a focus on higher-value transactions, plus some geographic mix benefits. Our Net Promoter Score, which is a 12-month rolling metric, was 52.2, There has been a number of external pressures, including supply issues and Brexit, plus the internally led decision to introduce a small handling delivery charge within our APAC region. But that was for the right reasons because it's focusing us more and more profitable customers. And that has contributed to our NPS score deteriorating during the period. NPS is a core component of everyone's incentive plans and, thus, is a key focus for us to address and to continue to delight our customers all the time and every time. We've put in place a work stream team to look at improving the NPS metrics across our organization. We are seeing some signs of improvement on a monthly basis, but it's still many variables that are impacting the customer experience. Our adjusted operating profit margin was 12% in the first half driven largely by our revenue growth, but also operational efficiencies. Our gross margin was 43.7%, up 0.5 percentage point. We saw gross margin benefits from less discounting, tighter pricing, our own brand products and better buying terms. Our RISE program, to simplify and streamline the group, is on track. And it delivered GBP 10 million of benefit during the first half. We did award a pay rise earlier in the year across all of our organization, and we had a higher incentive payment as a consequence of our stronger results. During the period, we incurred GBP 7 million of additional costs relating to COVID, including higher freight rates and delivery charges. And the 2-year increase for COVID-related costs has been GBP 15 million. For the vast majority of these, we see no signs of cost pressures unwinding. Additionally, we had GBP 2.5 million of costs relating to Brexit. We're also investing in our digital offer to ensure we remain industry-leading and have recruited additional expertise within this space and also across the board. Now on to the regions. My comments will focus on profit because we've provided you the revenue guidance as kind of our update in early October. So moving to EMEA. In EMEA, we increased our operating profit margin to 15.9%, largely a function of the strong revenue growth, increased margin focus, operational efficiencies and a more agile model. This was despite additional costs, such as freight and relating to COVID, but also some Brexit. EMEA has been the main beneficiary of our RISE program as we changed the leadership structure and flattened it. Our German distribution center extension is now in the early stages of commissioning, and the performance of our now German operations continues to improve. We will increase our European warehouse capacity. It's in the early stages of commissioning, and we are certainly delighted with the progress that's being made despite all of the challenges of commissioning a warehouse during the height of COVID.In the Americas, our operating profit margin was 12.8%, with our momentum continuing to build following our significant capital and operational investment within this region. And you will hear from Ken Bradley, our President, shortly in terms of the improvements that are being delivered over there. Our pure Web growth of 34% on a 2-year like-for-like basis is a good example of how the change in management and sales focus has become more proactive and certainly margin-driven. And that has been the foundation and the fundamentals of the improvements in our Americas business. Our operating profit margin has benefited from increased volumes, our product category work, our price optimization, less discounting, greater focus on value creation opportunities and operational efficiencies.And then finally, but not last or least, our Asia Pacific region. In Asia Pacific, we've delivered a 9.7% operating profit margin, a function of all the hard work of our President and the team in Asia Pacific have done during the last number of years. And this region has moved from a GBP 22 million annual loss that we inherited a number of years ago to a GBP 12 million profit in the first 6 months of this year. Again, a change in management culture has led to more focused and proactive and productive sales processes as we have concentrated on more profitable opportunities across the various countries within the Asia Pacific region. Thus, greater volume, the implementation of small handling charges to weed out the right customers for us has delivered the 9.7% operating profit margin, and that's a fantastic result from where we've come from. Now we move to cash. We remain a robust cash-generative business with an adjusted operating cash flow conversion of 76% at a time where we invested an additional GBP 46 million into our inventory. Our capital expenditure during the first half was lower than the last 2 years as our American distribution center was completed in the first half of last year. And we had some payments for the German distribution center that will push into the second half of this year. We invested in inventory to mitigate some of the industry supply constraints, support our growth and also to increase the product held initially within our American DC. And latterly, we will do the same with our German DC. Our inventory turn increased to 2.8x, reflecting the current demand driving faster throughput of our higher-volume products. We expect this to moderate somewhat as we invest further in our product breadth. Given our strong cash generation, and the fact that we didn't acquire any new businesses during the period, our net debt fell to GBP 84 million, giving us a 0.3x net debt to adjusted EBITDA ratio. We've restructured our existing GBP 300 million revolving credit facility to a sustainability-linked loan. And this will be measured against 3 specific annual ESG actions and will provide a scaled margin benefit. We're pleased that our key metric, return on capital employed, has recovered to 24.7% in the period, reflecting our strong financial discipline and performance. Moving on to inorganic growth opportunities. We're working hard on several deals. The market is very active, and we are receiving a lot of incoming interest. But we remain very disciplined, having walked from 5 transactions in the current period. We're looking at businesses that will accelerate our organic growth ambitions, which will work strategically and financially, but most importantly, fit culturally. We are totally focused. We're working hard, and we are confident there are deliverable opportunities which fit our criteria and will generate significant economic value for our group. But our discipline will remain.So turning to current trading. Over the first 5 weeks of the second half, we have continued to see good momentum across all regions, reflecting ongoing growth in market share and strength in our underlying markets. The external environment remains very challenging, especially with supply chain and resulting product shortages; freight inflation, which continued to rise; and labor inflation and some availability. We are mitigating these pressures as best we can with our sourcing expertise and early actions to ensure our availability rates remain as strong as possible. Thus, we remain confident of all that we can influence and plan for, but mindful of the external uncertainties being faced. And with that, I shall hand you back to Lindsley to cover the strategic elements of our story.
Thank you, David. In the interest of time, I'm going to pick up the pace here, which is always difficult for me to do. So if we go to our opportunity, and I can assure you, I've never been more excited about the opportunity before us than I am today. I think it's quite exciting what we've got in front of us. And as a company, when I first started and people would say we think your business is a cyclic business, I wouldn't disagree with that. Now if you look at the next slide, where you look at our performance and the value we've created for our shareholders, our employees, our stakeholders overall, we've come a long way. But there's still so much more to come for us. And when I started, a lot of people said, you're a cyclic business. Reality was in certain parts of our business, we were, and we still are, but not as much as we once were. Because in a cyclic business, if you want to offset the down cycle, you got to focus more on indirect materials. We weren't doing enough on that side. We are now. And by indirect materials, just because the volume drops in half on the direct side, they still need manufacturing lines and processes to be able to make the product, ship the product, et cetera. Indirect materials support those types of solutions or products or challenges, opportunities within the customer's manufacturing plant. The more we do on that side, plus what we do on the direct side, gives us a great opportunity when the market is hot, but also offsets that when the market overall is down. So for us, I think there's still much more to come as we move forward. So from that perspective, yes, we've done well. But I still hold out -- hope that we can do much better. And I can tell you and assure you, we will do much better. It's not a can anymore because we know what to do. And it's just a matter of executing and staying focused on what we need to do as we move forward. So on the next slide. We operate in many markets with a much broader product offer than our peers. Our key customers that are the designers, builders and maintainers of industrial equipment and operations. The MRO market, maintenance, repair and operations, which we're focused on is highly fragmented, digitally immature with many small regional players. This is our greatest strength and our greatest opportunity. Meanwhile, the electronics market is much more concentrated and global. But our sales of electronic products are mainly to our industrial customers wanting high-service electronics and small volumes.So why can we get products others can't? It's much easier to get smaller volumes than it is large volumes today. So -- and typically, we pay slightly higher prices to the manufacturer because we're buying smaller quantities, so it's easier for them to ship those quantities to us. And these customers want specialist help. They want specialist help from a partner that understands their business, that can anticipate their needs. And as the model becomes more digitized and connected, we're there to take advantage of the market and to serve those needs. So we think our total addressable market is roughly around GBP 400 billion. We've said that for the last couple of years. We got that number at one point by looking at competitors' annual reports and talking to suppliers, and we built the number. And then we went out and commissioned a study of the Thomas Read Distribution Center Research (sic) [ Thomas and Joan Read Center for Distribution Research ] in the United States. And they came back and they came up with a number that was around GBP 400 billion pounds. And 173 pages later, they confirmed what we already knew. So that was good to have a third-party testimony on that. But that's roughly where the market is. Some people have the number higher. An Amazon business-to-business might have $7 trillion, something more significant like that. But we know it's a big market. At the end of the day, what matters is what percentage do we have of the market. It's small, less than 1%. So the opportunity for growth is absolutely phenomenal. On the next slide. It's really important to note, we're not a British company. We are not an American company. We are a global company. We're not a product company. We're not a service company. We're not a digital company, catalog, a store company. We are omnichannel. Omnichannel, underpinned certainly by digital without a doubt. We are not just a product supplier, but we're a product and service solutions provider. And you can look at this chart, you can say, well, you do business in aerospace, defense, manufacturing, all the industries I have up there. We focused in to say we're focused on industrial and processes. Now that's a large segment, but we're very focused on the industrial market. And specifically, the last point is B2B within the industrial market. David referenced a small order handling charge for Asia. Purpose of that was to try and reduce the number of B2C customers that we have. Now B2C customers are a good thing, because the same customers that buy from us in the B2B world might come online at night in the B2C world. But our average order value is GBP 37, and we pay freight in Europe and the Americas. So how do you make money on that? So it's all about, at the end of the day, how we make money, and it's about the triple bottom line, people, profit and planet, which we'll get to next. With that, I'll say on the next slide, we have a sustainability advantage. Now we're not talking about sustainability today because of COP26. We're not talking about sustainability today because it's the in thing. But we've been doing this for years. We've been focused on corporate responsibility for years. We've been focused on making a difference for years. So what we're doing is talking about what we have been doing and what we will be doing as we move forward. So given our product width, breadth and mix, we're well positioned to follow our customers' demands. And it's clear they want more sustainable solutions. And we already sell many products that can help our customers to be more sustainable, such as low-energy lighting, which we've offered for years, in terms of high-powered LED solutions that help customers save on their energy bills, variable speed drives and high-efficiency motors, and the list goes on and on. We're product agnostic, but we have specialist sales expertise to help our customers transition to the right type of product. When I say product-agnostic, it's really supplier-agnostic. We're already supplying energy and water saving solutions through our maintenance solutions division of RS. And we're working with our supplier base to reduce unnecessary transportation routes, buying and storing more locally around the world. And that's the advantage of having multiple distribution centers around the world. So when we talk about supply chain issues as a theme, we're able to mitigate many of these by sourcing locally in many markets. And we're being proactive in thinking of circular solutions, such as reusable packaging and product recycling. And a great example will be coming up around OKdo, where we're now recycling Raspberry Pi, which is saving on the environment. One of the worst polluters in the world is old motherboards of computers. You can see them piled up if you Google it online around the world. So they don't just evaporate into thin air. Our strong external ESG ratings mean we are a desirable partner for both customers and suppliers, and it's even helped recently win new customers. And I'll give you an example of one in particular as we move forward. So we talked earlier about going from point A to point B, and execution is important. But also what's really important is having a purpose and having a vision. When you're a kid and you're playing sports, you have a parent that pushes you forward, if all you're doing is being pushed, eventually, you're going to properly rebel and say I don't want to play this sport anymore. I don't want to do this activity. I'm tired of playing chess, whatever it might be. It helps if you love what you do. It helps if you're being pulled in that direction. That's our purpose. Our purpose has been to make amazing happen. We've reconfigured that to say we want to make amazing happen for a better world. Our vision is to become first choice, first choice of stakeholders, our suppliers, our customers, our employees, our investors and society. Most importantly in that, I would say, is our own employees. Because if you want to offer a world-class customer experience, it starts at home first. So our purpose is to make amazing happen for a better world. Our vision is to become first choice. That's what pulls us on this journey as we've gone from point A to point B, which has been hard. And I can assure you, point B to point C, going from good to great, will be even harder as we move forward. But if we keep that purpose at the heart of everything we do and we keep that focus on our vision, we will achieve great things. So today, we launched -- we put out a separate RNS this morning, the next stage of our ESG, environmental, social, governance, responsibility, which I will let our VP of Social Responsibility and Sustainability, Andrea Barrett, talk through. Before she does, I want to say, yes, that we and especially me, are completely committed to our ESG action plan. It is integral to our Destination 2025 growth strategy and beyond, and it supports our vision to be first choice for all our stakeholders and become a truly great company while focusing on the purpose: To make amazing happen for a better world. Andrea?
Good morning, everyone, and thank you, Lindsley. So I'm delighted to be here today to introduce Electrocomponents' 2030 environmental, social and governance action plan, called For a better world. I'm going to give a high-level overview of our strong ESG progress to date as well as the key details of our new plan. So I'm aware that many of you would like more details and like to hear more. So Lindsley and I have recorded an ESG presentation that will be up on the website and available to you.So our ESG progress to date. I wanted to highlight some key successes from our ESG journey so far, structured around our 4 existing pillars shown here. So in support of the environment, we've cut our Scope 1 and 2 carbon emissions from our premises' energy use by 62% since 2014/'15. We're also refocusing our supply chain to source, store and deliver closer to our customers and our suppliers as well as using lower carbon forms of transport to reduce our emissions. For customers, we've expanded our sustainable product and service solution offering. And with suppliers, we are increasing our focus on responsible sourcing, introducing a new ethical trading declaration for our suppliers and conducting 89 ethical inspections with our RS PRO suppliers over the past 2 years. We've continued to create a safe, inclusive and dynamic culture for our people to thrive and this has been reflected in our employee engagement score, which has risen again to 74 last year.We've also supported communities by fostering education and innovation that improves lives. And this includes launching our new global partnership with the Washing Machine Project. So we've come a really long way, and we're really proud of the recognition that we've received with our upper-tier ESG ratings. But we know we can and need to do more. We're really ambitious, as Lindsley has said, and we want to lead as a truly responsible, sustainable and inclusive business. And we believe that this is a key part of our transformational journey from going from good to great. So we've got a fantastic opportunity to leverage our global scale and partnerships, expand our product and service solutions offering and deploy our differentiated offer to advance sustainability, improve lives and become a stronger business.So today, we're really proud to take the next steps in our ESG journey. For a better world is our 2030 action plan to support a more sustainable and inclusive future. We've set 4 ambitious global goals around the key ESG issues that matter most to our business, and this was informed by a robust materiality assessment. Our goals are: advancing sustainability, championing education and innovation, empowering our people and doing business responsibly. And each one of those goals is supported by a set of actions that will drive our progress. And I just wanted to highlight a few of those actions to you now. So for our advancing sustainability goal, our commitment is to develop sustainable operations, products and service solutions that will reduce environmental impact and help tackle climate change. And as part of that, we are making a commitment today to reach net zero emissions across our global operations by 2030 and across the wider value chain by 2050.And I know it won't have escaped your attention that yesterday, Rishi Sunak announced that, that will be a requirement for all listed businesses in the U.K., to set net -- publish their net zero plans by 2023. So we're really proud to be making that move 2 years ahead of time. So we've set science-based targets for all 3 scopes of emissions. And we've committed to the Science Based Target initiative as well as the business ambition for 1.5-degree future and the UN Race to Zero. We're also working closely with our suppliers to offer more customers an expanded range of sustainable product and service solutions. And we know this will help them to optimize their operations, reduce costs and save natural resources. On championing education and innovation, our key commitment here is to build the skills and foster solutions with 1.5 million engineers and innovators. So we will do this by providing educational technologies, learning content and skills development for the next generation of engineers and innovators. And we will engage our DesignSpark community of over 1 million members to support the development of sustainable and socially responsible solutions that we believe can become our customers' future solutions. On empowering our people, our third goal, we want our people to reach their full potential and thrive in a safe, inclusive and dynamic culture. As Lindsley said, they're the secret sauce to this excellent business. So to ensure we build a strong leadership team and truly reflect the customers, suppliers and communities we serve, we are going to be working towards 40% of our leaders being women and 25% being ethnically diverse by 2030. To achieve our final goal of doing business responsibly, we are taking action to ensure the highest ethical and environmental standards throughout our business and our global value chain. And we will encourage action towards this with both our people and our suppliers by embedding ESG objectives in our employee rewards and also in our supplier partnerships. And as David said, we've also amended our GBP 300 million revolving credit facility to link with 3 of our most material ESG actions as part of a sustainability-linked loan agreement.So those are the key highlights of our ESG action plan. But as you can imagine, there is a huge amount of supporting actions and details. So I do encourage you to view that presentation on the website. There's also some more information in the appendix to this presentation as well. And yes, thank you very much. Great to meet you all, and I'm handing back to Lindsley now. Thank you.
Thank you, Andrea. Thank you. Thank you. Andrea has been a great addition to the company. She does what she says and says what she does. And look forward to her long-term sustainable commitment to us for many years to come and for making a difference for us. I'm going to kind of just fly through the next couple of slides. We get to the video on the Americas. We put the slides in this deck so that you can ask questions and we can talk about them. If you do have questions on the next couple of slides, we're getting into a little bit of a Destination '25 strategy, which we haven't done because historically, we haven't done a Capital Markets Day. So on this slide, you can see details around our needle movers and what the key areas of focus are, and what we're doing to address the building blocks of our Destination 2025 plans overall. And ESG is an integral part of this.So we definitely -- if you click to the next slide here, please. Please go through all the building blocks in the next slide you have in your package, and you can see online. This is really about how we go from where we are, being good, to how we truly become exceptional or great, which is really kind of the evolution and the acceleration of our journey. And I look at it saying, our destination, which -- maybe Destination 2025 isn't the right word or choice of words for a program because it's not a destination. It's an ever-lasting journey. But that's because it was a 5-year plan, and we came up with something catchy, but it is going to be ongoing. So I look at it as it's just a snapshot of time, a milepost we want to hit. What we've got is a fork in the road today or a fork in the river, right? If we go to the right, right, we can throw away the oars and we can coast and our momentum will carry us down the river. But if we look to the left, we see rapids, and we see the ability to accelerate. So we're throwing away the oars, changing out paddles, get a new boat, which is our culture, right? We've got a purpose. We've got a vision, and we're ready to go. So we're launching in a sustainable way, blasting off in a sustainable way to make sure that we can hit that destination much faster than what we've done before. So you can see elements of what we're focused on today and we'll be focused on as we move forward into the future. The next slide. So I'd like to now go to a case study on the Americas with Ken Bradley, and this is all about changing our mindset for growth and how we drive profitable growth. I spent a lot of time in the Americas the last year, 1.5 years during the pandemic, working with our team in the Americas to make sure that our strategy is underpinning the investment. So what's the point in expanding our warehouse if there's not a strategy to go with it, and we're not going to accelerate our profitable growth. And we've got to make sure we're doing that in a profitable way. So Ken Bradley, our President of the Americas, is going to explain what he's been doing. And given it's just gone for A&M in Texas where I've been up until yesterday, so I'm just getting going now. We videoed his thoughts before the morning shift comes in.
Hello. I'm Ken Bradley. I'm President of Allied Electronics & Automation Electrocomponents business here in the Americas. I've been in this role for the past 2 years. And prior to that, I spent several years in the U.K., working within our EMEA business within Electrocomponents. Within the Americas, we've made significant changes within our business the last 2 years. But that change really has been centered around initially a culture change, a shift in mindset within our organization that moves us away from a place of thinking of things through the lens of we've always done it this way, to looking at the world and our business through the lens of why can't we? Why can't we transform our business? Why can't we accelerate our ambition and think bolder? We've delivered that culture change, but we've also delivered a transformation in terms of our commercial processes, our focus and our collective ambition, as I referenced earlier.A large part of this change has really been underpinned by not only the shift in mindset of our established teams, but also the incorporation of new talent within our teams, new talent within my team that I have as well as extended throughout our organization to bring in new ideas and to challenge the status quo of our thinking and to accelerate our ambition and our mindset for the future that we've now headed into. At the same time, this past year, we launched a distribution center expansion, which was very exciting. We launched in July of 2020, and that expansion has enabled us to have more than double the product capacity as well as double the throughput capacity through the launch of new automated capabilities and solutions that are at the cutting-edge end of supply chain capabilities in today's environments. Truly excited about what this actually allows us to do. And this sets us up for scale as we move forward, at the same time, reducing our environmental footprint through reducing our carbon emissions as well as our consumption of packaging materials and allowing us to contribute to the betterment of the world in other ways other than just our business.On the digital side of our business, we've also expanded our expertise and enhanced our digital platform to improve digital traffic, conversion rates and just the overall customer experience that we're providing. While we've also integrated AI tools to work smarter, not harder and ultimately to realize the full potential of our omnichannel capability within the business. Lastly, we've expanded and developed upon our solutions offering, both in terms of launching a new virtual technology lab that allows us to engage customers remotely on their application solve their problems virtually from a distance when they need it to be solved. But also expanding our eProcurement solutions and through the acquisition of Synovos, which we can collaborate with to go and expand customer opportunities together.I'm incredibly excited about the opportunity we have. We're working hard. Our DC expansion is working well, and we're delivering significant growth. That growth is in part due to strong market conditions. But also, it's down to the fact that we have a much stronger proposition. We have a highly motivated team. And yes, we have an expanded facility and capability that we can exploit, both now and into the future. And with that in mind, I'm going to cut to a short video that shows you our distribution center in Fort Worth and brings to life some of our new capability. Thank you very much.[Presentation]
Thank you, Ken. Hope you're sleeping well. When I first started, I've always been a firm believer if you always tell the truth, you don't have to remember what you say. When I first started, I used to manipulate -- manipulate is probably not the right word, but it probably is true. I used to change presentations quite a bit. I don't have to do that anymore because I trust in our people, and we have the right people. I will say rule of thumb in distributions is never do a video where you show empty shelves, especially today. But I will note that the shelves Ken was showing that were empty were just built. That's our new expansion in Allied. So we do have a lot of full shelves, and we welcome anybody that's listening in or that's here today to come visit us. We've got plenty of product. Just go online and buy if you want to know. So with that, let me shift to the next slide, which is case studies, number two, where sustainability is driving revenue. So sustainability is already driving our profitable revenue. Synovos, in the United States, has won a new contract with the largest U.S.-based semiconductor manufacturer due to our shared commitment to sustainability, diversity and inclusion. RS Maintenance Solutions has partnered with Amazon Web Services. Amazon is one of our fastest-growing customers in the world today. We actually provide them with solutions. We work closely with AWS. They've helped us with programming. They've helped us introduce some new software tools and products. So a great partner to us. And what we sell to Amazon is not for resale. It's actually to support their warehouses. So as they grow, we grow, very important to note. So they've developed with us a new monitoring system to enable predictive maintenance. We're working with a major European industrial manufacturer on their sustainable product development program. And OKdo, as I referenced earlier, has developed a recycling program for Raspberry Pi boards.Next slide. So just in summary. Let me begin by just saying that we are a good company, but our strengths can be deployed better for us to become truly great. RISE, as David referenced, has shown us the value of being more streamlined, agile and focused. We definitely have strong leaders, as evidenced by Ken and his performance in the Americas. But we've seen the benefit from giving our regional presidents greater ownership, greater accountability, P&L ownership. And we want to be doing that further down the organization and the management chain. We have a wide offer, which we are expanding, but we see the opportunity to broaden it even further. There's roughly 13 distribution segments from a product perspective, where we can play, and we can manage our margins even better.We're data rich. We get over 15 million website visits a month. We're highly digital, but we don't utilize that advantage fully, which is putting it quite nicely. We're now focusing more on customer lifetime value and working smarter, and we can see cross-group benefits as we think more cohesively. One significant advantage of the pandemic is, yes, we've had a lot more Teams calls and Zoom calls, but there's also been a huge advantage in terms of the cross-functional benefits and getting teams together in an informal way, which we have benefited from.And lastly, we have good cost control. But remember, distribution is all about execution. It's all about what you do today, not what you did last week or the month before. 1 month today in a digital world equals 1/4 of a year or 3 months in an analog world. 1/4 equals a year, a year equals 3 to 4 years, so you've got to move faster. You've got to constantly stay ahead and not look back and continue to challenge yourself on a daily basis. So we've got a program of activity underway to look at how we can drive stronger, profitable growth and build our group from its current state to a truly great one. And we'll return with our findings before the end of our year.So with that, let me just close by saying that we definitely have the right team in place to drive stronger growth and a differentiated offer. Integral to our strategy is our continued commitment to build a more sustainable and inclusive environment worldwide. And so today, we launched our 2030 ESG action plan, which we believe we're well positioned to benefit from and the world is as we contribute to a more sustainable future. Having repositioned the group, we're now moving to the next stage of our Destination 2025 strategy to unlock further potential. With increasing market share, but still less than 1% of our global market, we have never, never ever been more confident of the significant growth opportunities we see despite the external challenges being faced, as David and I discussed at The Pointer in Brill in March -- for dinner of 2016. And now I'd like to open it up to Q&As, firstly, from here in the auditorium and then to the phone.
Rory.
First, great to see you all again. It's only a small change from video calls, but it already feels like a better world. So nice to see you all. Can you talk about, first, the B2B customers? You said, up 18% over the past 2 years. How has volume and average order value trended within that group over the 2 years? And could we even say or interpret that the small drop in NPS as a fact that they want you to do even more for them, especially in the current environment? So what are the most pressing things you can bring to market to help them in the short term? And then secondly, on margins, given that growth, I think you've seen a 39% incremental conversion margin over that 2-year period. That's both lower than the 50% plus you saw in the first 3, 4 years of your tenure. But equally, it's not been a normal 2 years. So the question is, do you count that incremental drop through as average, good or great at the moment?
That's great. Great set of questions, Rory. It's a pleasure to see you again as well. See you already work on your headline for your next report. So -- and thank you for acknowledging our focus on making amazing happen for a better world. I think as it regards to growth and our drop-through margin, David will get into that. I would say it's good. There's headwinds against us, and David can cover some of the Brexit and COVID headwinds that are somewhat one-off effects. But you have to realize that's offset by reduced travel as well. So travel costs have gone down by 80% roughly, and so David can get into that.The first 2 questions you had, if you look at David's charts on average order value -- and you can correct me if I'm wrong, but I think we show it going from GBP 184 (sic) [ GBP 186 ] to GBP 210 in terms of the average order increased GBP 26, right, year-over-year. So B2B customers have grown by 18%, overall customers by 24% over a 2-year period. What it doesn't show is the numbers from year to year. So B2C customers have dropped in terms of the total mix, which, as I referenced earlier, might have picked up. We were at average order value of GBP 37. So the mix change in terms of the customer average order value has changed. So it's weighted more to B2B, which was a higher customer average order value to begin with, so slightly less than the GBP 210. So there's an impact to the mix change on customers, and you can do the math, I'm sure, and look at the 24% versus 18% and kind of extrapolate what that would be, knowing it's GBP 37. So I think when it comes to the AOV overall, we want to continue to push that higher by having an increased number of lines per order, by getting customers online, by identifying their behaviors and getting customers online to buy more products from us, by boosting products. Those that have bought this have also bought these things, like pasta makers and 27 other items. But those are things that the Amazons do quite well. And we've got to do more of that to improve our conversion margin and ratio, to improve our overall average order value and to get more traffic to our site in general. So that's all part of our digital strategy. As it relates to NPS, Net Promoter Score, I'm surprised it didn't drop more. It's all relative. So yes, customers are unhappy they might have to wait a month to get product or 10 months to get Raspberry Pi. You say it's out of our control, but if you're their first call, right, you got to take ownership to that, and perception becomes reality. But as it relates to customers, if they get it from 1 month from us, they're unhappy, but it may be 4 months from somebody else, right? And we may have stock. It might be a slightly higher price, but what's the price of the stock you can't find? So the market sets the price. And what you got to be careful with in terms of pricing -- and if you talk about volume from pricing versus volume in terms of increased orders from direct, you got to be careful in terms of putting prices up. You don't ever want to get in a position where you look like you're taking advantage of the market or gauging customers. We don't want to do that. But at times, we have to pay more, and we want to make sure that we're passing those costs along and not just taking advantage of the market opportunity. Certainly, the market sets the price, and we want to be at a market price. But for us, pricing really is -- takes a back seat in terms of priorities for customers. It's availability that drives Net Promoter Score. So availability has dropped. Your Net Promoter Score is going to drop, and that's the same for Ferguson and most other distributors out there, right? So Ferguson probably would tell you, 2,500 parts at a branch drives their NPS, and lots of other companies are -- in distribution are in that same boat where you got to have the product available. As far as the conversion margin...
Yes, drop through, I'd characterize it as good, but we want to move it to great over time. And to do that, we want to get greater efficiency and operational leverage within our group. We've been on a journey. So if you just look at just global shared business services, as an example, we've got the foundation now in place. We need to improve the efficiency within our processes. We need to drive more through the digital channel, again, which comes more at a lower cost to serve. So there's a whole host of opportunities. It's not going to happen overnight, but we're certainly heading in the right direction.
Henry Carver from Peel Hunt. Good to see you all in person. Just a couple of questions for me. First of all, on Asia, obviously, you've seen the great step change there. A lot of hard work over the years clearly paid off. So where -- how should we look at that in the next 5 years, I guess? Is this you sort of crested the hill, and there's more to look at? Or are you going to be here or hereabouts for the foreseeable future? And then secondly, on the acquisitions, just interested in any more color on those 5 that you walked away from. Was it all basically on price expectations? Or were they varying degrees of quality when you lifted bonnets on them, et cetera. So just any color around that would be great.
Yes. Yes, we didn't lift anything. But just to be clear on both questions, if you go back 4, 5 years ago, I'll tell you the same thing we said then, Henry, we lost GBP 23 million in Asia when we came out 5 years ago and we said, well, we were losing GBP 23.7 million pounds to be precise. And I remember people saying, well, how long is it going to take for you to be profitable? And we said we're not going to give you a time frame, but we'll tell you we will be. And our goal is to get to double-digit pretax. So 9.7% is close. We definitely want to get in the double digits. So that started with a 1, obviously, 1-0. We're on that trajectory, and we've done it much faster than what probably most people expected, outside of us. So we're very driven.Why have we been able to do that? It's focus, right? It's making sure that we're driving the right level of gross margin. We're keeping our costs under control, that we're winning customers. We're providing more local inventory and stock and availability. We're doing all the basics well. So buy low, sell high; turn your inventory more often; collect soon or pay later; keep your customers and suppliers happy; keep your operating expenses down. Those are kind of the 7 key ways to make money in distribution. And those are all great. And that's where I say point A point B. That's -- everybody knows that recipe, maybe they don't. But the key secret ingredient is the execution of the people. So we've got great people in Asia now. We've got a leader who knows how to execute and knows how to make money, confirmed by his former company that I was with in Ohio last week in Cleveland, Ohio, with -- the Chair, Vice Chair, CEO of Parker Hannifin, where he used to work, and he's doing a fantastic job. And we're -- so what we expect in the next couple of years, is more solutions, which comes at a higher operating margin, higher gross margin. So more on the solutions side. Not to give you a number, but I would say, as I said earlier, we're not done yet or we ain't done yet. So we still -- and people always say, well, why do business in Asia? Because it's a massive market, and there's no reason not to do business in Asia. And it could potentially be our most profitable part of our business. And that's ultimately the goal for every -- we want a competition internally for every region to want to be the most profitable part of our business. That's a healthy competition, right? That's a healthy conflict, and they can all help one another to do that. As far as M&A, I'll just stay quite short in terms of color, they were bad. So not a great -- we can mince words and say, well, they weren't a great cultural fit, a great financial fit. But they were bad to us. And so we can't take -- we're not confident enough for -- I'd say, arrogant enough to think we can take a 2% to 3% operating margin company and turn it into 12%, right? So you could do it, but it might take you 7 or 8 or 9 years and by that time, maybe Dave and I will have our walkers at Brill at The Pointer, meeting up to talk about our journey. But it would take a long time. Hopefully, we have walkers then, but you never know. But for us, I think we -- David has said, there's a lot of incoming calls earlier. There is a lot of outgoing calls, too. So we are spending more time -- I'm spending a lot of time visiting companies on the M&A front that are highly attractive. And it's just trying to figure out, okay, how do we unlock them. Because many of these companies are privately held, and they've been owned by the same family for decades or century or so, in some cases. And so you got to make them feel comfortable this is a great cultural fit. It's even more important to them than the financial fit. So that we're a good home, that we're going to treat their employees with respect and be engaged with them overall.
I think it's just a bad business once we got through the front door. So on the surface, it looked better. And we got in the front door, did some work and it wasn't right for us.
Politically correct.
It's Kean Marden from Jefferies. I've got 3. Thank you for the data on Slide 43. I guess most of those make sense. Germany, you've taken quite a bit of market share in the last 6 months, not entirely sure in my mind what that would be. Perhaps it's in the text. And in France, doesn't look like you are gaining very much market share. So that looks a bit of an outlier relative to your other charts there. And secondly, just can you provide us an update, please, on synergy delivery for recent M&A. So I'm thinking particularly here the Needlers synergies and also the revenue synergies from combining IESA and Synovos. And then thirdly, you've also given guidance for CapEx for the full year. How do we trend from here? So has your cash investment in the business peaked? Or as part of sort of Destination 2025 and beyond, do we need another wave to take into consideration?
Thank you. I'll take your first 2, and then David can comment on CapEx. I think, first of all, in regards to IESA and Synovos, we've been working behind the scenes on an overall integration plan for the 2 operations. And it's really important we get it right and take the right amount of time to make sure we get it right, make sure we have the right names in boxes, the right people leading the different functions, et cetera. We're already seeing incredible benefit from revenue synergies. As you're aware, it takes a while to implement programs with customers. So that we have had some significant wins that we haven't shared externally yet, either because the customer won't let us or they don't want us to talk about it, or we don't feel comfortable bringing it up until it's up and running, it's operational. Because we don't want to tell our competitors certainly what we've done. But there have been some nice wins where we've been able to leverage both to do more of a global win. And we're starting to benefit from the combined operation within Asia Pacific, where we're greenfielding today. And we're also looking at potential acquisitions of a smaller scale to help us get a framework for solutions as we move forward. So that's certainly in the funnel. But I think if you look at the synergies overall, we're going to see procurement synergies as we move forward, and we get them combined and looking -- and put them on, on the same platform. We're certainly seeing revenue synergies today. But I think the biggest upside -- if you were to talk to them, they'd talk about Europe and the Americas. To me, the biggest upside is combining them and then taking it to Asia. So Americas integrated supply is well established. There's lots of competitors, not so much in Europe. I think there's a great opportunity in Germany. But the biggest opportunity is going to be in Asia Pacific, in China, in Japan. But specifically, I'd say China, Southeast Asia and of course, Australia, New Zealand as we move forward. As it relates to market share, I think the -- we've been able to accelerate market share more as markets open. We've done well during the pandemic, but there's still a lot of places around the world where people aren't sitting together like this today. So that's a bit of a challenge in certain markets. In Germany, I think Germany and the market for us in France are both kind of in the same position in that we're doing the same things. But Germany, the market is -- 30% of their GDP is manufacturing. It's coming back much faster as manufacturing returns to more direct sales, more electronic sales in Germany. We do more indirect in the French market, so a bit slower. But there's not really -- yes, we've got a lot of momentum in Germany with the expansion of Bad Hersfeld, where we're doing a launch next week, and so excited about that. So there's a lot of positive momentum in Europe. We talked about the Americas and APAC. But let's not forget, Europe is still 15.9% operating profit, which if we are a stand-alone company, you take out all the overhead like us, what could it be? 18%, 19% for sure if you took out all the cost to be a global company. So I wouldn't downplay -- and we don't want to downplay Europe and the opportunities that Europe represents. And we're doing well in Europe. It's just we weren't doing as well in the other regions, and I think we're level setting. And with IESA and Synovos, Dave and I will be in New York meeting with the teams in 2 weeks. So we're going to spend time going through the strategy with them and little motivational session to get things going in the right direction, which we are, but we need to accelerate and move faster. On the CapEx.
On the cash front, on the CapEx, our emphasis recently has been on the 2 distribution centers. We haven't looked yet in terms of what we do in Asia. What we've got in Asia is we've got capacity. We just may not necessarily have it in the most efficient, effective location. So that's one that's on the watch list, but we haven't got a view or a guidance to provide at the moment. Beyond that, in terms of CapEx, it will be more technology-related, digital-related and in the ordinary course at this point in time. But as we go from the good to great, we may need to invest appropriately. But we're not looking at sort of massive sums of CapEx at this point in time. The other piece on the cash front is working capital, and that's really inventory. We would need to continue to invest in the business with inventory, with the new capacity that we've got. And we'll continue to put inventory into this business to drive the top line.
It's David Brockton from Numis. Can I ask 2 questions, please. The first one relates to Rory's question about the increase in customer numbers that the business seen over the past 2 years. I just wonder whether you have any early insights into the, I guess, stickiness of that customer base, either in terms of repeat orders or retention. That's the first question. And then the second question just relates to the point on cash flow there and the change in inventory turn that you've seen. It would appear that the business has been -- maybe been somewhat fortunate in that slower-moving items, which were heavily provisioned, have been used up through the first half. And I just wondered if you could just touch on your plans to continue to build the inventory. And what you're seeing in terms of lead times there, please?
Yes. So let me -- I'll talk about both, and David can jump in on inventory. I think as far as the stickiness of customers, without sharing specific numbers, I'll say that a pretty large percentage of our customer base is sticky. We track average order frequency. We just stopped sharing it, but we do have all those numbers to go through average order frequency. We've had a major emphasis on what we call loyal customers that have lapsed, which sounds very technical, and it is. But it's customers that no longer do business with us that used to do a lot of business with us, and that was a loyal customer for a period of time and then they stopped. And so we retarget those with a campaign called lapsed loyal customers, reactivating lapsed loyal customers. It's a mouthful. But basically, we want to get customers that we lost back. Because the best customer and the lowest-cost customer is one you already have. right? So you don't have to acquire a customer you already have. So customer acquisition cost of new customers online and off-line are quite high. So we are getting new customers, and I still firmly believe we can double or triple the number of customers we have on a worldwide basis just by looking at customers, like MonotaRO. And Japan alone has 6.4 million customers, right?So there's a huge amount of customers around the world that includes B2C. But on the B2B front, we can certainly expand that in places like Germany. We know we're less than GBP 100,000. That could probably be GBP 0.5 million or something. So by market, we have different goals, we have different numbers that we'd like to achieve over time. But what we do know is that customers that buy 2 or more of our value-added programs tend to buy 50 more percent than the average and stay with us longer. So if you want to improve the stickiness, the biggest lever we have is value-added solutions, where the switching cost goes up. So if all things are equal, it comes down to price. What we have to do is prove that all things aren't equal, and that's our goal from a customer perspective.As far as inventory turns, 2.8. Should it be at 2.8? Of course, not. So the first question you asked is what's the delivery for on time -- what's your on-time delivery report from your suppliers on your backlog? And has that gone down? Well, yes. So our availability, obviously, say, if your availability drops, it's not you're not buying stuff. It's that your stuff is not coming in fast enough. So it's not so much the long tail of products that's moved. It's the higher-moving stuff that's moved faster. So we're able to get product. Lead times have gone out. We're not -- I was at a pump distributor a few weeks ago. They've got lead times of pumps more than 100 weeks. Why even buy it if it's 100 weeks. So basically saying we don't want to order. So I was with the largest commercial builder in the south on Monday of this week, and he said that they can't get steel. They can't get -- I don't even know what this means, but J -- joist steel versus W -- it's already prefabricated, but they can't get it. And so now they're looking at bidding. And con subs to them are bidding 15 days versus 30, so it makes it more difficult for them to bid to their customers. They're looking at building concrete buildings. So the whole world, again, as I said earlier, it's about how you adjust and how you adapt. And so what are your new plans to adapt to this market, as my cab driver was telling me this morning, explaining it all to me quite well. But I think the reality is we're able to get products and others can't. So we know we're getting products and we're mitigating lead times. We've got multiple sources for different products. And can we get better? Absolutely. Should our turns be at 2.8? No. Should our inventory investment be at GBP 46 million? No. That's where it is. It should be higher, especially as you're expanding resources, et cetera. So as we get product, we expect that to come down as we expand, but we need our availability to come up a little bit. And it hasn't dropped substantially. So it's gone from the low 90s to the 80s. And so -- which is where it was when I first started. So it's still above when I -- where I started, but not where we like to run it as a company. Anything else on turns, inventory?
Is there anything left?
Not really. There's a lot of stuff that we need to move. I don't like provisions. You bring in provisions. So you can't fall back on a provision. If you sell it at cost, it's better than taking a provision. So you bring up provisions, and I just kind of just -- I get on him all the time here. Just because we have a provision doesn't mean you need to write it off. Get rid of it or sell it, right?
I think that's been the key advantage of the pandemic. There's been demand. We've been able to ship some of our longer-tail product. The key now is not to bring that product back into our business. So we've been able to convert some of that into cash, which has been very helpful for us.
Sanjay Vidyarthi at Liberum. Interested in the cultural change in the business and the kind of encouragement of idea generation, challenging status quo, and with that, potentially taking more risk as well. So while I get fully that you want to be agile, I guess, there has be some processes in place to manage that risk as well. So wanted to understand, first of all, how you nurture those ideas. How you actually filter them through? And is there a process in place to make sure that the best ideas come through? And with that then, in terms of actually managing the risk when those ideas are implemented, is there a kind of fail-fast mentality? How do you decide what to do? And if the idea does work, how quickly -- what are the processes in place? How quickly can you share those? And have that cohesive vision that you were talking about in terms of making the whole business better?
Yes. And just to take an old quote -- there's a quote, there's nothing new in radio. And I'd say it's the same in distribution when it comes to ideas or any business when it comes to ideas. There's a lot of companies out there that have set processes for how they manage ideation and how they prioritize and they have stage gates. And so we're doing similar things to what other companies have done. I'd say it's great to have a process. But what's really important is how you manage the ideas and the incoming and the failure. And so it's more about the behaviors. How do you manage and coach the behaviors? Because you want to encourage ideas, which means that you're going to get more ideas, which means you're going to say no to more ideas. So when you say no, how do you say no without discouraging them forever to come out with an idea again? So I think for us, it's more on the human side of the ideas. And then from a process standpoint, we do have a Chief Transformation Officer we've added. So we've got a real focus from that standpoint. And I'll be the first to stand in front of any of our employees and defend them anywhere around the world. And I think 8,000 employees we have today are remarkable. We've got a fantastic team, great organization, a lot of doers, a lot less talkers. And so I'm really, really excited about the people we have. But I will tell you, behind the scenes, I'll be the first to challenge, and we've got to challenge our people. Some people don't want to be challenged. They get upset. They say, I want to be challenged. And you challenge them, they get upset or they break down. And so we're trying to help our people understand how to challenge and be challenged, which is important. How to come up with ideas, and there's a lot of obstacles still within our company that we have to remove and barriers we have to move. David and I, in the last 18 months, have done over 22, I think, coffee chats with employees without managers on the call. So we get 10 or 15 employees. We do a virtual Teams call and we say, what's holding you back? What's stopping you from doing what you need to do? And David always says, well, if you were Lindsley, you're the CEO of the company, what would you do? Thanks, David.So what would you do? And what would you do differently? And you know what, we've listed, we've made changes based on their input, their feedback. And we've got remarkable people. We've discovered a lot of talent on those calls, too, that we didn't know about. So I think we're seeing a lot more, right, [ Karen ], in terms of opportunities that are coming up and a lot of great communications internally. And that's where the pandemic really benefited us. So there is a process. We'll talk more about that on our good-to-great journey and what we're coming up with and how we're prioritizing. Because the process side, the prioritization, to your point, is critical. So what will drive the fastest, profitable growth solution for us? So there's always got to be a profit element that includes a benefit to the planet today so that it's sustainable, and our people -- so triple bottom line: people, planet, profit. That's our focus.Any other questions in here? Quick questions? Any questions online?
Not online. [indiscernible]
Any on the phone?
None.
No questions. Apologies for running over a bit. I know it's exciting to be face-to-face again. I'm flying out tomorrow. So I'll be around. I know I'm being waved in the back for an inking interview. So got to go. But thank you so much, and we appreciate, as always, your support. We're always available for any questions. If you're up late at night -- and I'm in the U.S. over the next couple of weeks, I'll be back in December. But if you're bored and you need to talk to someone, I'm there for you. So I really mean that. I would encourage you to -- don't let David be the only one to call me at midnight U.K. time. So as much as I do love him. But thank you so much for being here. We appreciate your support.
Thank you.