Latest / The Dutch Investors / #23 | A 170-year-old French compounder | w/ Heavy Moat Investments | Robertet Deep Dive

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#23 | A 170-year-old French compounder | w/ Heavy Moat Investments | Robertet Deep Dive · The Dutch Investors

0:00
SPEAKER_01: Welcome everybody to this special deep dive into Robert A, brought to you by Heavy Mode Investments and the Dutch Investors.
0:08
SPEAKER_01: Today we're exploring a business that you probably come across every single week, maybe even every day, without realizing it.
0:16
SPEAKER_01: Robert A operates in the flavors and fragrances industry, supplying some of the biggest names in the world.
0:23
SPEAKER_01: Think of Chanel, L'Oreal, Nestlé, or Danone.
0:28
SPEAKER_01: Think about the perfume you wear, the skincare products you use, and even the flavors in your favorite yogurt drink.
0:35
SPEAKER_01: There's a good chance that Robert A had a hand in making them what they are.
0:40
SPEAKER_01: To help us break it all down, I've got a special guest with me today, and he is the founder of Heavy Mode Investments on Substack.
0:48
SPEAKER_01: And today he is here to share his insights and help us analyze Robert A.
0:53
SPEAKER_01: Nicholas, are you ready?
0:55
SPEAKER_01: Yes, I'm ready.
0:56
SPEAKER_01: Let's get this show on the road.
1:07
SPEAKER_01: Alright, um, Nicholas, can you please introduce yourself?
1:12
SPEAKER_01: Uh, who are you, where are you from, and yeah, just what are your hobbies?
1:17
SPEAKER_01: Yeah, sure.
1:17
SPEAKER_00: I'm Niklas, I'm from southern Germany, and I have started um getting into the stock market at I think it was 20 years, uh 21 years of age in 2020.
1:29
SPEAKER_00: And since then I have been uh exploring um my own investment style and basically doing it publicly, first starting on Twitter, which I still do, then switching um also on the side to Seeking Alpha, writing there a bit.
1:44
SPEAKER_00: And since 2024, I've been writing almost exclusively on Substack with my own uh block heavy mode investments.
1:54
SPEAKER_00: And yeah, I try to focus on strong companies with a high competitive advantage in secular growth industries and led by good management, and yeah.
2:08
SPEAKER_01: Alright, perfect.
2:10
SPEAKER_01: I think uh we are pretty similar here, and that's that's one of the reasons we asked you to join on this uh this analysis.
2:18
SPEAKER_01: Um, can you tell us how did you come across Robert A?
2:21
SPEAKER_01: Because I had no idea of this company's uh of this company before uh last month.
2:27
SPEAKER_01: Um you put it on my radar and we decided to analyze it together.
2:32
SPEAKER_01: So, how did you come across this company?
2:34
SPEAKER_00: I came across Robert Tay, like I do with most of my companies.
2:38
SPEAKER_00: I like the cloner framework, as I think it was most made um popular by Monish Pabry.
2:46
SPEAKER_00: Basically looking at companies you see on podcasts, on social media, or on analyst um portfolios or something like that.
2:56
SPEAKER_00: So uh someday I came across it on Twitter and I I looked into it and I decided to like it.
3:03
SPEAKER_00: So, yeah, that's basically how I get most of my ideas.
3:06
SPEAKER_01: Yeah, that's that's a great strategy uh for any investor because there are so many companies and you can get lost in the in the in like the absurdness of how many there are.
3:17
SPEAKER_01: So, this is a great way of uh of finding new ones.
3:21
SPEAKER_01: Um let's get started with this French company.
3:24
SPEAKER_01: Let's introduce the company for a second.
3:26
SPEAKER_01: Can you give us a bit of background of how Robert A started uh and just explain very simply what they do?
3:36
SPEAKER_00: Yeah, sure.
3:37
SPEAKER_00: Uh Robert A is a very old company.
3:39
SPEAKER_00: It was founded in 1875.
3:42
SPEAKER_00: Back then it was a factory treating flowers and plants, and it wasn't founded by um um by somebody from the Maubert family, but um uh the founder had a nephew from the Maubert family, who he then um hired as a perfumer and distiller.
4:01
SPEAKER_00: And the Maubert family still runs the company and still owns, I think, around uh 60% of the voting rights and around 45% of shares.
4:11
SPEAKER_00: So the company still is based in in Grasse, the cradle of the French perfume perfumery industry since 1883.
4:20
SPEAKER_00: And yeah, so basically the company has been under the successful reign of the Maubert family for for a very long time.
4:28
SPEAKER_00: I think it is like 170 years.
4:31
SPEAKER_01: Yes, you're totally right.
4:33
SPEAKER_01: It's over 170 years old, which is very ridiculous to think about, right?
4:38
SPEAKER_01: So perhaps the Lindy effect comes into play as well, where um the longer a company is around, the more likely it is to stay uh around.
4:48
SPEAKER_01: Yeah, exactly.
4:49
SPEAKER_00: And yeah, about what they do, the company is supplying uh all all kinds of companies and uh basically everything that touches the skin, from perfumes, from food, it all has a taste or a smell, so a flavor or fragrance.
5:06
SPEAKER_00: And Robert is specialized on the natural part of the market.
5:11
SPEAKER_00: Um, they take, for example, a very famous example is the um Bulgarian roses.
5:17
SPEAKER_00: They take their oil, for example, it's a very high, high-value ingredient, and they do that with a lot of very exclusive ingredients, giving the products often a premium and a prestige.
5:31
SPEAKER_00: So, yes, they supply um all over the world customers with these ingredients.
5:37
SPEAKER_01: Yeah, it's it's it's pretty abstract the first time you look into their 10k.
5:42
SPEAKER_01: Um, but after doing some research, uh to give the listener either some more examples.
5:50
SPEAKER_01: If you're looking for a L'Oreal anti-aging cream, it has like a scent to it.
5:55
SPEAKER_01: Um, but also uh lavender in body lotion uh they supply uh or the vanilla extract from certain bakery products, or it's it's in so many different products, and uh you you can't even list them uh also many.
6:11
SPEAKER_01: Uh that's how I I asked Investor Relations about it, um, but I never got a response, unfortunately.
6:18
SPEAKER_01: But um I guess they're busy running the company.
6:20
SPEAKER_01: Okay, let's head on over to how this company makes its money, which is pretty important for a uh business.
6:27
SPEAKER_01: Um, can you explain how Robert A makes its money?
6:30
SPEAKER_00: Yes, sure.
6:31
SPEAKER_00: Um, as I said earlier, they focus on natural ingredients.
6:35
SPEAKER_00: So the market is split into natural ingredients and into chemicals.
6:39
SPEAKER_00: Robert A exclusively is in natural ingredients, that means they have a lot of ingredients to take care of and also very critical components.
6:48
SPEAKER_00: For example, the uh Bulgarian roses.
6:51
SPEAKER_00: Uh, there are some uh products, like for example, champagne, who can only be um made in a certain region in France.
6:58
SPEAKER_00: So a lot of their products, the exclusive and premium products, are based in a certain region.
7:05
SPEAKER_00: So you basically have to get um your supply from there in order to call it um and sell it as that prestigious product.
7:14
SPEAKER_00: So the supply chain is um very tough and they have vertically integrated they own parts or in corporations uh with some suppliers for critical components.
7:27
SPEAKER_01: Um am I correct in saying they sell it B2B?
7:30
SPEAKER_01: So let's say you're a business and you want to sell certain scents or uh food and you need a flavor or fragrance or you need certain raw materials, you go to Robert Tay and uh uh they supply it or they sell it to you.
7:45
SPEAKER_00: Yes, and oftentimes um Robert Tay also collaborates with their customers.
7:52
SPEAKER_00: They have uh certain research research centers for that.
7:55
SPEAKER_00: Um they they ask the customer what kind of product you want to do, yeah, and then they try to find out what kind of flavor fragrance they need.
8:03
SPEAKER_00: So that's a good point.
8:05
SPEAKER_00: Harvesting the the product is also like formulating the specific um use in the product, and yeah.
8:13
SPEAKER_01: Yeah, they have over they have 31 natural raw materials uh sites which they uh show on the map on their investor relations, and there are this is basically like the location where they grow, harvest, and source the natural ingredients.
8:29
SPEAKER_01: Think of flowers, herbs, fruits, spices, and like you said, the research and developer uh centers are a lot more important than I initially thought because this is where you can collaborate with other um businesses to create the perfect scent or the perfect flavor.
8:48
SPEAKER_01: So they're very specialized in that way as well.
8:51
SPEAKER_01: It's a lot more difficult than one may think uh initially.
8:55
SPEAKER_00: And also, one very interesting um thing with the industry: once you have a um a product and the molecules and have it patented, you can also leverage that in your new research and development.
9:08
SPEAKER_00: So the the more research you do, the more products you get out there, the hard uh the larger your database gets, and the easier and the more unique you can do your next product.
9:17
SPEAKER_00: So also an interesting part of um of the industry.
9:22
SPEAKER_01: Yeah.
9:23
SPEAKER_01: Uh Robert A revenue is divided into four segments.
9:27
SPEAKER_01: Uh fragrances, so think of uh perfume, skincare, and home products.
9:33
SPEAKER_01: Uh flavors, uh, think of food, for example, uh soft drinks.
9:38
SPEAKER_01: They have natural raw materials, uh, where they sell the plants, flowers, and herbs into oils, for example.
9:45
SPEAKER_01: And they recently pretty new segment Health and Beauty.
9:49
SPEAKER_01: It's uh still not profitable, so that's good to know as well.
9:54
SPEAKER_01: And most of their revenue, over 80% of their revenue, close to 80% of their revenue, comes from Europe and North America, and the rest is divided across Asia, Africa, and Latin America.
10:07
SPEAKER_01: I think this would be a good time to head on over to the sector and industry because this was uh pretty difficult and interesting at the same time.
10:14
SPEAKER_01: What does the flavor and fragrance industry look like?
10:18
SPEAKER_01: Is it a large market?
10:20
SPEAKER_01: Is it fast growing?
10:21
SPEAKER_01: And perhaps you can share some useful insights on the industry itself?
10:27
SPEAKER_00: Yeah, it's a pretty large market, I would say, but not gigantic.
10:30
SPEAKER_00: It's around 30 billion, I think.
10:32
SPEAKER_00: I think it was uh 30 billion in 2023.
10:36
SPEAKER_00: It's not a very fast-growing market, it's uh growing at around inflation, maybe a bit more.
10:42
SPEAKER_00: So um the industry is um very fragmented.
10:46
SPEAKER_00: Robert A is only the seventh largest player, and um the first four, I think, are pretty pretty large and a lot larger than Robert A, around uh five to ten times the size.
11:00
SPEAKER_00: Um most players are in in the chemicals and or in the naturals, but Robert A is the largest pure play in naturals, so so that's one of the advantages.
11:13
SPEAKER_00: Um, there are a lot of small companies, and the large players are very active in consolidating industry.
11:20
SPEAKER_01: So I did some research on this as well.
11:22
SPEAKER_01: The largest um companies are publicly listed as well, so that's pretty useful to uh to know, so you can find a lot of numbers about the businesses.
11:31
SPEAKER_01: The largest uh revenue uh-wise is um and I I think you're Germany uh from Germany, so it's easier for you to pronounce perhaps Vermenich?
11:42
SPEAKER_01: Vermenich?
11:43
SPEAKER_00: Yeah, I think it's Fermenich.
11:45
SPEAKER_00: Yeah, uh but it it's it's it's from Switzerland, so they speak weird German.
11:49
SPEAKER_01: Okay, it's about the pronunciation.
11:52
SPEAKER_01: Um, but the other ones are uh IFF, International Flavors and Fragrances, uh around 11 billion in revenue as well.
12:00
SPEAKER_01: Uh Gifau Dunn, also from Switzerland, around 8 billion in revenue, and Simreis, uh, from your uh country, Germany, around 5 billion.
12:11
SPEAKER_01: So Robot A is very small compared to those.
12:15
SPEAKER_00: Yeah, exactly.
12:16
SPEAKER_00: Um with just the seventh largest player, there's also a lot of uh room to consolidate, and um they even were the target of an attempted consolidation.
12:25
SPEAKER_00: Um Givaudan and Feminich uh Fiemenich um used to own around 30% of shares outstanding, I think.
12:34
SPEAKER_00: And they just very recently and in recent months um sold their shares either to the to the family or to an investment um investment fund.
12:44
unknown: Yeah.
12:44
SPEAKER_00: That was a very interesting dynamic, and um the the Mober family obviously, with 170 years of uh ownership, did not want to sell, and they tried to do everything to basically stay independent.
13:01
SPEAKER_00: I think that's also what motivated them to get a CEO that's not from the um Mobile family, but an outsider to try to get uh more focus from the public markets and maybe also get a higher valuation because, in the end, getting a higher valuation is a good defense against an attempted takeover.
13:20
SPEAKER_01: Great points.
13:22
SPEAKER_01: Absolutely right.
13:23
SPEAKER_01: And you talked about the industry consolidating.
13:26
SPEAKER_01: Um, what I read from your analysis is that it's very likely that the largest players will keep acquiring smaller businesses so that the industry keeps consolidating into um into a few larger players.
13:42
SPEAKER_01: What are, according to you, the highest barriers to entry into this industry?
13:48
SPEAKER_01: Is it uh capital intensity?
13:51
SPEAKER_01: Is it uh regulatory requirements?
13:54
SPEAKER_01: Is it brand relationships, RD, anything else perhaps?
13:59
SPEAKER_00: Yeah, the the business is not that capital intensive, at least not on a uh cash flow um measure.
14:06
SPEAKER_00: On an income statement measure, it's it's pretty intensive.
14:09
SPEAKER_00: You have to invest a lot of money into RD.
14:12
SPEAKER_00: Robert A invests around 8% of sales into RD.
14:15
SPEAKER_00: You need to you need to develop new molecules and new ways to to get products to your customer to add value.
14:22
SPEAKER_00: And that's um that's a barrier to entry.
14:27
SPEAKER_00: And also, as I earlier said, if you um get bigger and have a larger database of reach research and development, it gets easier to get to new products.
14:37
SPEAKER_00: Then you also have the regulatory mode.
14:39
SPEAKER_00: Basically, all products get in contact with human skin or are consumed.
14:45
SPEAKER_00: So you have a lot of health regulations.
14:48
SPEAKER_00: Uh, oftentimes products are also spec'd in, you get um approval to produce um your product with with that supplier, and people will will um think think twice if they want to change the formula just to get a few percentages of margin.
15:06
SPEAKER_00: Also, a very interesting point is that flavors and fragrances are not a large part of cost of goods sold for customers.
15:13
SPEAKER_00: Usually they are from 0.5 to 5% of sales.
15:18
SPEAKER_00: So on a premium perfume, for example, you might have 5% of the of the price coming from a Robert ingredient, but on I don't know, a yogurt from Danone, you have probably 0.5%.
15:32
SPEAKER_00: So you don't really have a high incentive to switch to get a little bit of extra margin.
15:38
SPEAKER_00: And also you have the unique the uniqueness of the flavors and fragrances, especially in in high-value products like premium perfumes again.
15:47
SPEAKER_00: You don't want to try to get 0.5% better margins with completely um trying to re-engineer your your scent and having uh the risk of your product not being liked anymore.
16:02
SPEAKER_00: So so yeah, it it gets to very sticky customer relationships oftentimes with um with decades of uh of revenues for Robert A.
16:12
SPEAKER_00: And other players, of course.
16:13
SPEAKER_01: Yeah, I agree here.
16:14
SPEAKER_01: Uh great points, and I think you're already making a little bridge to the competitive advantage, which we'll talk about next.
16:21
SPEAKER_01: Um what do you think are the biggest modes for Robert A?
16:26
SPEAKER_00: For Robert A in particular, we of course have the the barriers of entry we have in the industry themselves.
16:33
SPEAKER_00: For Robert A, they have the focus on naturals.
16:38
SPEAKER_00: In our world, people are getting a lot more conscious about what they eat and what they wear.
16:44
SPEAKER_00: People don't want to have chemicals in their food and they try to reduce it.
16:49
SPEAKER_00: So having a, especially for premium products, having a um supplier that has um verified supply chains, and I think in the 2023 uh annual report, Robert Hayes said that 48% of their supply chain is um audited, and they will try to get that to um as close to 100% as possible.
17:11
SPEAKER_00: So you have basically the history of the supply chain, you can um avoid uh scandals as, for example, a luxury brand like MS, and that's something you want to pay a premium.
17:23
SPEAKER_00: And yeah, then you also have the vertical integration, which of course also plays into the um visibility in the supply chain, but it also helps them have a cost advantage, and especially with the premium ingredients um like Bulgarian roses, you have the exclusive access in some cases.
17:42
SPEAKER_00: So with uh on the one hand the integration, the vertical integration, the focus on naturals and benefiting from the sustainability tailwinds they have.
17:52
SPEAKER_00: Um then you also have the family ownership.
17:56
SPEAKER_00: I think um a lot of their competitors are run by public companies with shareholder interests and trying to appease the market, and Robert A is more long-term focused.
18:07
SPEAKER_00: They have a 170-year history and they won't uh won't try to uh cut corners to get you the next margin target for the next quarter.
18:17
SPEAKER_00: They they think in decades, and that gives them an edge as well.
18:21
SPEAKER_00: Absolutely.
18:22
SPEAKER_00: Yeah.
18:24
SPEAKER_01: In my analysis, it came down to three modes.
18:27
SPEAKER_01: Um, you're naming more specific modes here.
18:30
SPEAKER_01: Uh you're naming switching costs, which I totally agree.
18:33
SPEAKER_01: The incentive to switch is not is not high, and they do have um pretty significant switching costs.
18:40
SPEAKER_01: Um, the only question I have here, and perhaps you can help me out, um, I've talked to the other of my colleagues, and do you have any idea how difficult it would be for a um customer of Robot A to switch to a larger competitor, say Guvodon or um IFF.
19:01
SPEAKER_01: Do you have any idea here?
19:03
SPEAKER_00: I guess it depends on what kind of product they offer.
19:06
SPEAKER_00: If it's something like a high luxury product, then it's probably a lot harder.
19:11
SPEAKER_00: If it's just a yeah, let's again use the example of a yogurt.
19:16
SPEAKER_00: Um, if the the taste is a little different, customers probably won't care as much.
19:21
SPEAKER_00: If your$200 perfume smells differently, people will start buying it.
19:28
SPEAKER_00: So great point.
19:29
SPEAKER_00: So that's one of the points, then you also have to figure out what they did to get the scent.
19:35
SPEAKER_00: It's it's patented, you would have to re-engineer the process, you would have to find a substitute and a different way to get the same result.
19:43
SPEAKER_00: You would need a lot of RD and cooperation with the with the other supplier.
19:48
SPEAKER_00: So you have uh startup costs just to get the same product.
19:52
SPEAKER_00: Yeah.
19:52
SPEAKER_00: Then you have to get a better, cheaper deal with the other um company, and then you also have to go through regulatory hurdles in many cases to get a product launched and reformulated.
20:03
SPEAKER_00: So I think it's it's pretty difficult, and most of the time it probably won't make a make what wouldn't be a rational decision to change it.
20:12
SPEAKER_01: Yeah, I see.
20:13
SPEAKER_01: And do you have any idea if the other companies are trying to invest in the natural ingredient space more?
20:21
SPEAKER_01: Do you see any trends here or not particularly?
20:24
SPEAKER_00: Uh I'm I'm not sure if any um large one uh in particular trying to lay their focus on it.
20:30
SPEAKER_00: But of course, Robert A is uh while they are the leader, they are not um like a monopoly in the naturals ingredients market.
20:39
SPEAKER_00: So so the other customer, uh the other competitors are trying to come in.
20:43
SPEAKER_00: But I think especially with their reputation and their pure play focus, they definitely have an advantage.
20:50
SPEAKER_01: I see.
20:51
SPEAKER_01: Yeah, and the other two modes I came uh it came down to was intangibles, um, which you basically said as well.
20:57
SPEAKER_01: I mean, you could say a family and management team is an intangible as well, um, but also the patents and the um just to name a few.
21:06
SPEAKER_01: One thing I thought of, which you perhaps didn't mention here, but the cornered resources mode, I believe it's also uh here for Robert Tay, because they have access to these exclusive partnerships and and and uh sites that the others do not have access to.
21:24
SPEAKER_01: Do you agree or no?
21:25
SPEAKER_00: Yeah, definitely, yes.
21:27
SPEAKER_00: Especially with the vertical integration, a lot of the um most important resources they have integrated vertically, and uh they basically either own the farms or they have uh large partnerships.
21:39
SPEAKER_00: So even getting the um product, some customers uh buy it from Robeta.
21:45
SPEAKER_00: So even if the customer tries to compete with them, they still have to buy from them.
21:50
SPEAKER_01: Yeah, exactly.
21:51
SPEAKER_01: That's pretty strong mode.
21:53
SPEAKER_01: I think it would it's it's a good time to head on over to the financials because no business is is good without um making Money out of it.
22:01
SPEAKER_01: I always tell our listeners that the financials are pretty difficult to follow.
22:05
SPEAKER_01: So I do recommend checking out Nicholas' analysis on Substack or our written report so you can see the graphs and you can uh it's it's much easier to follow, but perhaps you can name some of the most important financial numbers.
22:21
SPEAKER_01: Uh, what do our listeners really have to know about Robert A's financials?
22:26
SPEAKER_00: I think for me, the most important um financial KPIs I want to keep track of is their growth.
22:32
SPEAKER_00: So, of course, you need revenue growth in the end over a very long time frame.
22:36
SPEAKER_00: Uh, revenue growth is the most important part of an investment.
22:39
SPEAKER_00: You also need to look at margins.
22:41
SPEAKER_00: Robert A has very good margins for the industry.
22:44
SPEAKER_00: And I also would look at reinvestment.
22:47
SPEAKER_00: They um they are investing in RD, CapEx, and um also are doing some MA.
22:53
SPEAKER_00: And you want to see them continue to make those investments, and you want to track if they can continue to achieve high returns on invested capital.
23:02
SPEAKER_00: So those I would say are the main focus areas I would pick.
23:06
SPEAKER_00: And also um keeping um keeping checks on the balance sheet.
23:11
SPEAKER_01: Yeah, it's uh it's funny you named the balance sheet.
23:14
SPEAKER_01: It's it's pretty it's pretty healthy.
23:16
SPEAKER_01: Yeah, there's uh not a lot of debt here compared to the uh competitors, and I agree on the KPIs mostly.
23:24
SPEAKER_01: What I would like to add is that revenue growth is important, but especially the like-for-like revenue growth, you want to see that growing besides the revenue growth, including acquisitions.
23:36
SPEAKER_01: I also included uh gross and uh uh gross and operating margins, uh especially looking at them compared to their uh peers.
23:44
SPEAKER_01: And like you said, RD spending as a percentage of revenue appears to be pretty important in this industry.
23:50
SPEAKER_01: So keeping track of that, I mean you don't want them dropping it to uh I don't know, one percent since it's so um it's a pretty innovative industry in a way.
24:00
SPEAKER_00: That would be a very red flag if their RD spend would drop to like uh one or two percent of revenue.
24:06
SPEAKER_00: Exactly.
24:07
SPEAKER_01: Yeah, yeah.
24:08
SPEAKER_01: Just to sum up the financials, um, in fiscal year 2024, they haven't released the uh um annual report just yet.
24:16
SPEAKER_01: It comes out in April, but they they did release some preliminary uh results.
24:21
SPEAKER_01: It appears they're going to uh earn around 807 million in revenue.
24:27
SPEAKER_01: Um, like for like revenue growth is up 9.6%, which is very good for this company.
24:35
SPEAKER_01: And like I said, the health and beauty, looking at the segments, the health and beauty segment is still unprofitable.
24:41
SPEAKER_01: And the fragrances and flavors are the most profitable segments uh for revenue, uh, which is the largest part of their revenue, so that's pretty um good to know as well.
24:55
SPEAKER_01: And I think you have the essentials for the financials uh this way.
25:01
SPEAKER_01: Um, but the financials are being run by a management team, so I think it's a good time to look at their management.
25:10
SPEAKER_01: What can you tell us about the the management team running Robert A?
25:15
SPEAKER_00: Yeah, so um the company used to be run by the Moberte family, and in 2022 they got a new CEO, Jerome Bruhat, I think it's pronounced, from L'Oreal.
25:28
SPEAKER_00: So you have an industry insider, especially in the um in the um fragrances um segment.
25:34
SPEAKER_00: And I think it was, as I said earlier, in in part of the way to try to appease um the markets and get a new perspective.
25:41
SPEAKER_00: Um, because there are some um prejudgments um towards family-run businesses, and people maybe would find it favorable to have an outside CEO, try to get some new wind in.
25:54
SPEAKER_00: The Mobile family is still uh running the company though, uh, from a um from their ownership, and they also have um several members on the board and other executive um roles.
26:06
SPEAKER_00: Um they definitely have enough skin in the game, and the new CEO also got a share package.
26:12
SPEAKER_00: And what I find very interesting is that he will get 1 million shares upon retirement if he is still with the company uh at that time.
26:20
SPEAKER_00: So that gives him definitely a long-term incentive.
26:24
SPEAKER_00: And I like that a lot more than, for example, um what we see in American companies where insiders just get a lot of um shares dumped uh once they get into the position, and then they can can just move on once they vest.
26:38
SPEAKER_00: Well, with this kind of schedule, there is a very big incentive to stay with the company.
26:44
SPEAKER_01: That's a great little detail.
26:46
SPEAKER_01: I think the management team is pretty conservative.
26:48
SPEAKER_01: It's uh it's I like the fact that they're family-led.
26:51
SPEAKER_01: Um I like the fact that they have a very experienced CEO.
26:57
SPEAKER_01: I mean, the incentives are aligned.
26:59
SPEAKER_01: Yeah, and after conducting some research myself, I found that management receives uh a pretty, I mean, it's not it's not a lot for a CEO, uh, compensation for 500,000 euros a year, which is, I mean, for such a business not not ridiculous.
27:17
SPEAKER_01: Um, they can get an annual bonus up to 70% of their salary, and their long-term compensation is tied to revenue growth, which we like, uh, abadar growth, which is uh also pretty good since it doesn't include the depreciation and uh amortization, so it doesn't fluctuate as much.
27:38
SPEAKER_01: And um the CSR criteria, which we did we haven't mentioned yet.
27:45
SPEAKER_01: Um for our avid listeners, I am not a big fan of ESG goals.
27:51
SPEAKER_01: Uh, we usually make jokes about them since they're there's often bonuses tied to a lot of ridiculousness around ESG goals.
28:00
SPEAKER_01: But this is the first time that it really makes sense for a company.
28:04
SPEAKER_01: Can you perhaps explain why ESG is so important for Robert Tay?
28:10
SPEAKER_00: Yes, I I generally agree that it's not something I take too much time um spend on.
28:17
SPEAKER_00: Uh I don't want to invest in immoral businesses, but I don't really care that much for most of the ESG incentives.
28:24
SPEAKER_00: In Robert Tay's case, though, um as I mentioned, um their um supply chain is a big part of the competitive advantage, in my opinion.
28:32
SPEAKER_00: And they have the goal to get um the supply chain audited.
28:37
SPEAKER_00: They currently have around 50%, and for example, auditing the supply chain is a good ESG goal.
28:44
SPEAKER_00: I would assume that's in there.
28:46
SPEAKER_00: Um and also just for a naturals business, um, trying to reduce emissions is probably also a good target.
28:55
SPEAKER_00: So it does make sense.
28:56
SPEAKER_00: Also, on uh general compensation.
28:59
SPEAKER_00: When I started to look more into European companies, I noticed that they generally have a lot lower compensation.
29:07
SPEAKER_00: Like uh it's it's not that unusual to have CEOs from large companies earning just in quotation marks just a million dollars a year, or euros in that case.
29:18
SPEAKER_00: And I honestly prefer it because looking at some American companies where insiders get like on a$5 billion valuation, get like a$50 million equity paycheck every year, and some tech companies it's I don't know, it's not really in alignment with shareholders in my opinion.
29:37
SPEAKER_00: And uh I like that about your European companies.
29:40
SPEAKER_00: Um the um the variable bonus payments also are lower than the normal salary, so that's also the case in uh in Robert A.
29:52
SPEAKER_00: And yeah, generally I like the compensation.
29:55
SPEAKER_00: What I would like to see is some more focus on, for example, return on invested capital or something similar, just something to also tie on the yeah, the capital efficiency and not just uh revenue and the beta growth to compensation.
30:13
SPEAKER_01: I I absolutely agree.
30:15
SPEAKER_01: And um when looking and calculating the return on invested capital uh myself, it has been dropping over the past three years.
30:23
SPEAKER_01: Um, and I believe it's mainly due to goodwill since that um um puts pressure on the ROIC uh of from the acquisitions, but it is still higher than all of its competitors.
30:36
SPEAKER_01: But it would be good to see the incentives tied to uh to it, but um it's not right now, but I don't think it's a red flag.
30:44
SPEAKER_00: No, they have been more active in R in MA.
30:48
SPEAKER_00: Yeah and obviously um it's it's an inter industry with relatively high valuations, it's um a very um durable industry.
30:58
SPEAKER_00: Yeah.
30:59
SPEAKER_00: You have very sticky customer relationships, so you you pay higher multiple, for example, compared to a food business.
31:07
SPEAKER_00: So it's it's only natural that you have um higher goodwill in acquisitions.
31:12
SPEAKER_00: The the big question is if they can um make good acquisitions, and I think they are disciplined.
31:20
SPEAKER_00: That could also be um, for example, an advantage that they don't have to um force growth.
31:27
SPEAKER_00: A lot of the public competitors who are run by um more um towards the the Wall Street expectations, maybe try to optimize for single quarters, and obviously, if you need revenue growth, you can just make an acquisition.
31:41
SPEAKER_00: I think um being disciplined in that way is an advantage um for a family business, but it also makes revenue growth more lumpy.
31:49
SPEAKER_00: So you probably shouldn't expect a smooth, let's say, 8% per year revenue growth.
31:54
SPEAKER_00: You will have higher growth years and lower growth years more so than a company that tries to focus on expectations more.
32:03
SPEAKER_01: Yeah, in uh in our analysis, we said that the cyclicality in this industry is pretty low since it's so such a small portion of customers' uh products.
32:14
SPEAKER_01: Um, but also the risk of disruption is not really there since they're it's pretty fragmented, but it is consolidating.
32:22
SPEAKER_01: So let's say a very small company has a new invention, it's pretty likely it's going to get bought by someone, and the barriers to entry are significant, in my opinion.
32:33
SPEAKER_01: It's very difficult to just come in and take over the larger players.
32:37
SPEAKER_01: Um so I agree here with you.
32:39
SPEAKER_01: Let's head on over to the risk and opportunities for Robert A.
32:43
SPEAKER_01: What do you believe to be the biggest risks for Robert A and why?
32:48
SPEAKER_00: Uh while I normally am not um that big of a fan of the whole AI hype, I think in in this industry it it could um be a double-edged sword.
32:58
SPEAKER_00: I think AI could make the research process easier and faster.
33:02
SPEAKER_00: And that could drop the barriers to entry in a sense.
33:07
SPEAKER_00: But it can also um help the company.
33:10
SPEAKER_00: So that's a double-edged sword.
33:12
SPEAKER_00: I think um we should look out for that.
33:15
SPEAKER_00: Uh luckily Robert Hay is already investing in the area.
33:19
SPEAKER_00: I think they also made um made an acquisition and they have um made partnerships, so they are experimenting with AI.
33:26
SPEAKER_00: And yeah.
33:27
SPEAKER_00: I mean the RD process relies on um yeah, finding new ways to use products, natural ingredients to make sense.
33:36
SPEAKER_00: So uh similar to the efforts in, for example, um new medicine, AI could um accelerate the process with with finding new combinations.
33:47
SPEAKER_00: So that's an interesting thing.
33:49
SPEAKER_00: Then also um Robert A, especially as a natural natural pure play, is um requiring um ingredients, often very localized.
34:00
SPEAKER_00: Um and as we can see, um if you focus, for example, uh companies like Hershey's or or Lint, uh cacao cacao prices are currently skyrocketing in the last year or so, they like I think tripled or maybe even more at this point.
34:17
SPEAKER_00: So um with climate change, we we could see parts of the portfolio threatened.
34:23
SPEAKER_00: And even if they have ownership um of the product, if the climate changes, we we could maybe see some ingredients um maybe even disappearing.
34:33
SPEAKER_00: So so that's a risk, but I think that's still um probably just a part of the portfolio if it materializes, but it's something uh we we should keep in mind.
34:42
SPEAKER_01: Yeah, I that that's my number one risk as well, the dependence on the natural raw materials.
34:47
SPEAKER_01: It's a huge advantage, but at the same time, it comes with uh quite a few risks, um, which makes sense.
34:53
SPEAKER_01: I'll I'll name the other two I have, and perhaps you can share your thoughts whether you agree or not.
34:58
SPEAKER_01: I think competition is pretty a pretty big risk for Robot A.
35:02
SPEAKER_01: Although they are pretty unique because they're so focused on natural.
35:06
SPEAKER_01: I mean, the the industry is dominated by three, four large companies, and they have a lot more financial resources to invest in RD for acquisitions, to grow volume, uh production efficiency.
35:21
SPEAKER_01: And I mean, if they see Robert A as successful, it is only natural for them to pursue Robert A's niche, which they are operating in.
35:32
SPEAKER_01: And if the larger larger players are successfully expanding into their natural um segment, I mean they could risk losing market share, or perhaps they're going to get acquired.
35:45
SPEAKER_01: Um, although they just got rid of the two larger competitors from their holdings.
35:50
SPEAKER_01: Um, I so it it it is a bit of a it's a lesser risk now, but um who knows, right?
35:56
SPEAKER_01: And my last point for the risk is macroeconomic.
36:00
SPEAKER_01: Although Robert A does not sell direct to consumer, their clients, luxury brands, food companies, beauty businesses do have direct customer exposure.
36:11
SPEAKER_01: So if the economy slows, these customers will experience that and it will hurt them.
36:18
SPEAKER_01: So perhaps, like a second-order effect, it will also hurt a Robert A.
36:23
SPEAKER_01: I mean, consumers tend to cut back on non-essential purchases during tougher economic times.
36:29
SPEAKER_01: Uh, those are my three uh risks.
36:32
SPEAKER_01: Would you agree?
36:33
SPEAKER_00: Yeah, um let's let's talk about the the second uh one first.
36:38
SPEAKER_00: Um they of course uh would be impacted if the macro gets gets worse in general, but I think they are pretty um resilient.
36:46
SPEAKER_00: Most of their revenue goes towards food products or um hygiene products, perfumes.
36:53
SPEAKER_00: So it's it's not the first thing people would cut.
36:56
SPEAKER_00: And especially with a higher focus than competition on premium products.
37:01
SPEAKER_00: Um I would, for example, uh assume that customers who buy MS are less affected than people going to cheap brands.
37:10
SPEAKER_00: Um then to to competition.
37:14
SPEAKER_00: Of course, if uh more money flows in, they they will get competition.
37:18
SPEAKER_00: But um uh the good thing is that MA is a part of the business, but most of the growth still is organic, and especially with the barriers to entry and also the localized ingredients, in man in many um cases they they are uh advantaged against the competition, but of course um they they can get more competition and will have a tougher time.
37:38
SPEAKER_00: But I also think um they have a different investment time horizon than some competitors, and maybe some uh for example, vertical integration uh investments wouldn't be worth it if you look at a uh quarterly or annual uh target you have.
37:53
SPEAKER_00: Um and then also regarding acquisition, like um them getting acquired potentially.
37:59
SPEAKER_00: I I don't think that will happen, especially after um the the two competitors are not owners anymore.
38:05
SPEAKER_00: And also some uh some interesting uh fact is um in I I don't remember if it was 22 or 21, they did a 10% buyback of of shares.
38:17
SPEAKER_00: This was mainly done um to to buy out members of the Maubert family who did not want to stay invested in the company because they they feared that they would run to competitors like um like Guy Vodan who who are building who were building a stake at that time.
38:35
SPEAKER_00: So they are trying actively to keep the the ownership within the company.
38:41
SPEAKER_00: Um as you can imagine, it's a 170-year uh legacy.
38:47
SPEAKER_00: It's not just one or two people who have this ownership.
38:51
SPEAKER_00: The Mubert family is is big and it's not in full unison, so I guess that would be a uh somewhat of a risk.
38:59
SPEAKER_00: Um, but but as of now, they have the majority of uh ownership, and I don't think that will will change.
39:05
SPEAKER_00: They would probably rather buy out family members than let them sell their voting rights.
39:11
SPEAKER_01: Yeah, yeah, perhaps, yeah.
39:14
SPEAKER_01: And then switching over to the opportunities, um, let me name the two I have, and uh you can either add to it or disagree, perhaps.
39:23
SPEAKER_01: Uh, the first one I have to say is the they have very strong ESG tailwinds.
39:29
SPEAKER_01: I mean, we have to go greener, we have to go healthier.
39:34
SPEAKER_01: There is a lot of nonsense in our food, in our health, in products.
39:39
SPEAKER_01: Um, I mean, you can't deny this.
39:42
SPEAKER_01: That the tailwinds to more natural clean label ingredients is is massive, and they are jumping in on this, they are all in on this.
39:51
SPEAKER_01: So I really like this tailwind, and uh, I think they have a very high chance of growing for a long time, very uh steadily, and the industry is consolidating, and besides getting acquired, I don't think this is likely at all, um, like you said.
40:08
SPEAKER_01: Uh, but the more the market is consolidating, the higher the margins should eventually go.
40:15
SPEAKER_01: Uh, if the market is going to get dominated by 10 players, for uh let's say.
40:19
SPEAKER_00: Yeah, Robert Hay definitely is benefiting from the secular shifts, and I I think we will also see some uh parts of the players and fragrance industry shifting from more chemical solutions to more natural solutions.
40:32
SPEAKER_00: And Robert Hay is well positioned to continue thriving because of that.
40:36
SPEAKER_00: I mean, they have been uh natural for all of their life, so it's not like they are shifting towards it and trying to um to look clean, they are clean.
40:46
SPEAKER_00: And then also what I would add is um AI, as I said, is a double-edged sword.
40:52
SPEAKER_00: It could make RD more effective and cheaper.
40:55
SPEAKER_00: So maybe we will see some uh decline in RD spending as a percentage, but maybe it will get more more efficient.
41:02
SPEAKER_00: That could be a tail into margins, but that's just a more speculative um opportunity.
41:08
SPEAKER_00: And then also I would see international expansion as an advantage.
41:12
SPEAKER_00: They are still a small business, even though they are global, it's uh still a large opportunity to go to more um countries, and especially in the uh Asian region as the middle class grows there.
41:26
SPEAKER_00: There is an opportunity for um Robert here, especially with the uh more premium um focus to get a bigger business in in those parts of the world as well.
41:36
SPEAKER_01: Yeah, yeah, good a good add-on, I I believe.
41:39
SPEAKER_01: And I was just I just had a little uh inside joke, you know.
41:42
SPEAKER_01: I just tell the men I I can just see all these people from the RD opening Chat GPT and then playing around with all these flavors and I don't know.
41:51
SPEAKER_00: Yeah, probably some some more sophisticated uh way, but yeah.
41:56
SPEAKER_01: Just an inside joke.
41:57
SPEAKER_01: Um, I think this would be a good time to head on over to uh the valuation uh where it all comes together.
42:03
SPEAKER_01: After doing some research, I found out that um Robot A is cheaper than all of its competitors.
42:09
SPEAKER_01: So is the market missing something?
42:13
SPEAKER_01: Are we missing something, or is there something else going on?
42:17
SPEAKER_01: Um, what is your feeling about the evaluation?
42:20
SPEAKER_00: Yeah, it's something that uh that puzzled me as well.
42:24
SPEAKER_00: Um I mean it's still not a very cheap business, it's um it's a very resilient market and with good tailwind, so you have generally high um valuation multiples.
42:34
SPEAKER_00: Uh during COVID um prices ran sky high.
42:38
SPEAKER_00: I think Robert A traded at like 40 times earnings, which I think uh it's a ridiculous um price for them.
42:46
SPEAKER_00: Some reasons I could see is that they are a lot smaller, and for that reason, uh indexes are not buying them as much.
42:54
SPEAKER_00: I think that's a a big part, especially in recent years, uh, that large caps are getting bit higher while small caps are getting ignored.
43:02
SPEAKER_00: Um then we also have their reluctance to sell the business.
43:05
SPEAKER_00: I think some people would have liked them to sell it, especially with competitors owning 30% at some point.
43:12
SPEAKER_00: I think it was.
43:13
SPEAKER_00: Um they would probably have liked the additional upside for a buyout.
43:17
SPEAKER_00: I think those are some reasons.
43:19
SPEAKER_00: And also just in in recent uh the recent year, French equities in general have had a pretty, pretty tough time with the whole uncertainties about uh about the government, and I think that also plays a role.
43:32
SPEAKER_01: Yeah, I think it doesn't help um operating in Europe uh right now.
43:36
SPEAKER_01: You know, it's uh America first, like Trump always says.
43:40
SPEAKER_01: So uh I think that has is partly uh the reason for the lower valuation.
43:46
SPEAKER_01: We always use a scenario analysis.
43:47
SPEAKER_01: It I've I we feel it's uh just a good way to get a feel for uh for the valuation.
43:52
SPEAKER_01: And if we assume 8% growth and then dropping it down each year uh with a 12% profit margin and an Exit multiple 15, which I find pretty low.
44:03
SPEAKER_01: We arrive at around an 8% IRR, which excludes dividends, but it isn't market beating.
44:10
SPEAKER_01: But at the same time, I don't know.
44:13
SPEAKER_01: It's it's i I don't know how I feel about this valuation.
44:17
SPEAKER_01: What is your view on it?
44:19
SPEAKER_00: Yeah, I look at valuation most of the time in an IRR model, also with like a bear, a base, and a bull case.
44:26
SPEAKER_00: I think they they should be able to grow between 5 and 10%.
44:31
SPEAKER_00: Um I think the margin will either stay at the same level or increase.
44:36
SPEAKER_00: And I I include dividends because I think it's important to include them.
44:41
SPEAKER_00: Uh on the exit multiple, I agree that it's um currently cheap.
44:46
SPEAKER_00: Um it's 12 times 4 water beta.
44:49
SPEAKER_00: So I think that would be the base level.
44:51
SPEAKER_00: I don't I don't see it dropping really lower, but I could see it being materially higher.
44:56
SPEAKER_00: So I get an IRR range between uh uh 4 and 20%, depending on uh multiples expanding and so.
45:04
SPEAKER_00: On a fundamental basis, I I think they they should increase uh intrinsic value by between 5 and 11%.
45:12
SPEAKER_00: So on average, I would I would assume uh the IRR could be around uh 11%, if uh especially if the bull case materializes and um valuation re-rates in line with the industry.
45:26
SPEAKER_00: But of course, we could also see the negative case where the industry just rates down uh aligning with Robert A.
45:32
SPEAKER_00: But I feel um even though it's not one of the higher IRRs in my portfolio, I think it's a a good risk reward looking at the longevity of the business.
45:44
SPEAKER_00: It's one of those businesses where basically uh I I bought it thinking that I would probably be able to still own it in like 10 or 20 years without thinking about it too much.
45:55
SPEAKER_00: This is a business that will most likely outlive myself and and most basically all of the viewers here, I would guess.
46:03
SPEAKER_00: Uh it's I I see very little um little reasons for them to stop existing.
46:11
SPEAKER_01: Yeah.
46:11
SPEAKER_00: So the longevity and especially with the with the tailwinds um they have, they should be able to continue growing at a at a decent um pace above inflation for a long time.
46:23
SPEAKER_01: So yeah, I think you uh when we talked beforehand, uh you you said and it stuck with me.
46:30
SPEAKER_01: But it's a it's a company you buy and forget about.
46:33
SPEAKER_01: Yeah, it's I don't think this company is gone in 20 years.
46:36
SPEAKER_01: I think it will still be around.
46:38
SPEAKER_01: I think it will be larger than today.
46:41
SPEAKER_01: I think revenue will growth, I think their market share will increase.
46:45
SPEAKER_01: There is a lot to like, like you said, uh it's family-owned, uh, the Lindy effect comes into play.
46:52
SPEAKER_01: I mean, it's such a small percentage of the customers' products that it, I mean, there is not really an incentive to switch.
47:00
SPEAKER_01: They have a a Tailwind, an ESG tailwind.
47:04
SPEAKER_01: There is a lot to like, uh, and I I would love to own a company like this.
47:09
SPEAKER_01: Um, I told you my conclusion is uh I like the business, but I need to do some more research on the industry.
47:16
SPEAKER_01: So perhaps I'm going to analyze a few other businesses within this industry.
47:20
SPEAKER_01: Who knows?
47:21
SPEAKER_01: I just need to understand the dynamics and which what what makes each company unique.
47:26
SPEAKER_01: What are you going to do with Robot A?
47:28
SPEAKER_01: I I think you you own it.
47:30
SPEAKER_01: Uh are you going to hold it?
47:31
SPEAKER_01: Are you going to increase it?
47:33
SPEAKER_01: Uh when are when would you sell this company?
47:36
SPEAKER_00: Yeah, so I own the company.
47:37
SPEAKER_00: It's not a very large um percentage of my portfolio.
47:41
SPEAKER_00: I think it's around uh 3%.
47:43
SPEAKER_00: I I recently bought some more as the company um traded down a bit to the lower 800 euro rate region.
47:50
SPEAKER_00: I think I bought it like 830 euros.
47:53
SPEAKER_00: Um it was mainly because I got some inflows from a large position I sold.
47:58
SPEAKER_00: Yeah, I will definitely continue to hold a company.
48:01
SPEAKER_00: I won't um make the percentage uh in my portfolio a lot higher.
48:06
SPEAKER_00: I think while it's a great business, it's one of those businesses where I am very evaluation sensitive.
48:13
SPEAKER_00: It's not that I expect a very high outperformance on the revenue growth.
48:17
SPEAKER_00: I don't think they will suddenly um be able to grow 15% a year.
48:22
SPEAKER_00: I think they will be within the 5-7-10% range.
48:27
SPEAKER_00: And with those kind of businesses, I want to buy them cheap.
48:30
SPEAKER_00: And while they aren't super cheap, I think they are at a pretty fair multiple.
48:37
SPEAKER_00: So I have been happy to increase my stake a bit and I will continue to own it.
48:43
SPEAKER_00: Um regarding reasons why I would sell them.
48:47
SPEAKER_00: Uh one thing that would definitely be a big red flag is if there were large scandals, um, especially with their focus on sustainability and the naturals, they, for example, um shouldn't have suddenly a child labor scandal or something.
49:05
SPEAKER_00: That would be basically a thesis-breaking uh thing.
49:10
SPEAKER_00: Then also if it would be starting to get clear that people stop caring for sustainability and those tailwinds would go away, that would make it a lot tougher to underwrite higher or like the 5 to 10% revenue growth.
49:26
SPEAKER_00: I don't see that happening though.
49:27
SPEAKER_00: Yeah, me neither, but it's it's a a thing that correct the thesis, yeah.
49:32
SPEAKER_00: And then also if you would start seeing value-destructing MA, them trying to build an empire, doing large MA that's um highly levered, for example, and all the kind of empire building um managers um tend to do.
49:48
SPEAKER_00: Doesn't look like it, but maybe they change the CEO in a couple of years and it gets worse.
49:54
SPEAKER_00: I don't know.
49:55
SPEAKER_00: It's it's something to keep in mind, not something I find likely, but um uh yeah.
50:01
SPEAKER_00: And then obviously, if there is, for example, um a very high re-rating and the company trades at 40 times again.
50:09
SPEAKER_00: Um, I would probably also sell, but I I try to not not sell winners too much, but especially with lower revenue growth businesses, if they get too expensive, it's it's it's hard for me to hold on.
50:23
SPEAKER_01: Great conclusion.
50:24
SPEAKER_01: Uh, I mean it's it's uh it's pretty similar to mine, um, but you own it.
50:29
SPEAKER_01: Uh you've been investing in this company for uh a lot longer than I have.
50:34
SPEAKER_01: I would I would love to just visit one of these research and development centers, like one of these factories.
50:40
SPEAKER_01: I would be so interested to see what is going on there, just to get a feel of you know, uh interesting.
50:48
SPEAKER_01: Yeah, I asked investor relations if uh I believe there's one in um in Belgium or like top of France.
50:55
SPEAKER_01: So I asked if I could yeah, if I could come over and just uh look around, but I never got a response.
51:01
SPEAKER_01: But who knows if they listen to this uh audio analysis that they will uh let me.
51:06
SPEAKER_00: Yeah, it would it would be definitely interesting to to see a factory because most of the different ingredients have different procedures to to get the product, the final product.
51:15
SPEAKER_00: So it wouldn't be a factory with like the same machine uh placed there 50 times in a row.
51:22
SPEAKER_00: So I I would imagine it to look very interesting.
51:26
SPEAKER_01: Hey Nicholas, we uh we said let's try to keep it under an hour, and I think we did it.
51:31
SPEAKER_01: Uh which is pretty impressive.
51:33
SPEAKER_01: I am usually pretty long on uh on uh on the information side.
51:36
SPEAKER_01: Thank you for keeping me restrained here.
51:38
SPEAKER_01: I think um the listeners will have a very good understanding of this business.
51:43
SPEAKER_01: Where can people find you?
51:45
SPEAKER_00: Yeah, people can find me on on Substack at heavy mode investments and also on on Twitter um with the same name.
51:54
SPEAKER_01: If if you'd like uh another analysis done by Nicholas and I, uh just let us know through email or just letting a uh comment below.
52:01
SPEAKER_01: That would be uh lovely to know.
52:03
SPEAKER_01: I would like to thank you for having you on and sharing your insights and thoughts on this company.
52:10
SPEAKER_01: Uh I absolutely loved analyzing this company, it was a lot of fun.
52:13
SPEAKER_01: I learned I learned a lot of new insights uh on this industry and this company.
52:17
SPEAKER_01: So thank you for that.
52:19
SPEAKER_01: Would you like to uh to say uh the final closing thoughts on this analysis?
52:24
SPEAKER_00: Yeah, putting so much pressure on me.
52:26
SPEAKER_00: Uh yeah.
52:26
SPEAKER_00: Thank you for having me.
52:27
SPEAKER_00: It was a lot of fun, and uh, of course, I would be delighted to do one more.
52:32
SPEAKER_00: If you check out my sub stack, my portfolio is public, so um you can check out my companies, and maybe there is an interesting one we we could talk about, which maybe you guys haven't analyzed yet.
52:45
SPEAKER_00: So, I mean, we'll see what the future brings.
52:48
SPEAKER_00: I would be happy to be back again.
52:50
SPEAKER_01: Awesome, awesome.
52:51
SPEAKER_01: Well, thank you for listening, and hopefully, we'll see you in the next one.
52:55
SPEAKER_01: Bye everybody.