Chill Brands Group (LSE:CHLL) — Investor presentation

0:01 Good afternoon, and welcome to the CHILL BRANDS GROUP PLC investor presentation. Throughout this recorded meeting, investors will be in listen only mode. Questions are encouraged, can be submitted at any time by the Q and A tab situated on the right hand corner of your screen. Just click Q and A, scroll to the bottom, type your question and press send. The company may not be in a position to answer every question received during the meeting itself, but the company can review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, we'd like to submit the following poll. I'd now like to hand you over to Callum Somersen, CEO. Good afternoon.

0:29 Thanks very much, Paul. Look. Thank you all for coming today. To start with, look, I'll give a brief intro to CHILL, then we'll drive dive straight into the regulatory changes that we've obviously come to learn about in the last few weeks and what we're gonna be doing about it. And finally, I will then touch on where the business stands. Hopefully, we'll leave plenty of time for any questions that may be submitted during the during the webinar. So without further ado, I'll give a quick intro to CHILL. You know, many of those here today will have followed CHILL on a very rocky journey. Make no bones about that. It started life as an oil and gas company, Highlands Natural Resources. It transitioned into, the CBD market, which was full of promise but didn't perform as anybody expected. The boom never came. And we've now found our form in the vaping world and also in developing a one of a kind marketplace on our website, chill.com.

1:20 Today, Chill is a diverse company with interests in The UK and The US. We've made some great strides in vapor since we launched our products with Chill Zero in August last year, and we're now being distributed into thousands of stores. Look. We've made progress on sales more so in the last few months than we ever expected. We've also got a growing marketplace on chill.com. It allows us to stay involved in the wellness space, including CBD where they're all this kicked off without taking such a downside risk on inventory, on product development. We're not the brands. We're the sales outlet, and we take a cut of each sale. So that in in sort of broad brush strokes is our business, and you'll see as we go through these slides. I'm not going to read them verbatim or sort of do them to death, but I'm gonna speak to them. So that gives an overview of CHILL.

2:09 I guess if you're to take anything from this brief intro, understand that CHILL has been able to pivot. The company's been able to withstand forces in the market, external events, product issues, and much more. It's still here today, and I would argue that in many ways, we're stronger than we've ever been. To survive in the consumer space, a company has to be agile. With that said, I'll just jump through some of our existing sort of initiatives and our our recent progress. As you can see here, we've launched those CHILL zero products in in the last two quarters, in the last half of twenty twenty three, and we have seen monumental growth, monumental uptake of those products from supermarkets, from retail chains, from consumers.

2:56 It's been much faster than myself and the team expected, but we continue to see real strong appetite for those products in market. We're now launching into smoker friendly stores this month, with pilot schemes there, and we continue to roll out to Morrison's, WH Smith, and other retailers. At the same time, we've continued to grow our chill.com wellness marketplace. The key for us there is to curate quality wellness products to make that wellness journey into functional ingredients simple for a consumer and, obviously, to to, you know, turn some turn some revenue and ultimately profit without taking that product risk. So, again, just more overview and background on the company for anybody who perhaps hasn't followed the story. What this has meant in the last couple of quarters is delivery of products into more than 2,400 stores, launches into major retailers, as I say, new launches into The US, and now online sales that are are quickly becoming, you know, very, very encouraging to us with Amazon. We're starting to reach new pools of consumers across The UK, across The United States, and soon to be beyond.

4:07 Again, you can see some of the brands we're distributed by, the companies we're distributed by there at the bottom. I guess getting into the major reason we're holding this presentation today is to discuss UK regulation. Everybody was shocked, and very disappointed, I think, certainly, was, by the stance of the UK government a couple of weeks ago now. The UK government has announced that it intends to prohibit the sale of disposable vapes, but they haven't decided what counts as disposable yet. They haven't affirmed that in any kind of legislation. Does that include nicotine free products? Does it include rechargeable products? At this stage, we just don't know precisely, but we are prepared for whatever flavor of regulation comes our way. The policy is not an immediate thing. From government ministers interviewing, we are expecting change to start at the beginning of twenty twenty five, and for retailers and brands to be given that six month switchover period we've seen slated by the media. This is the same as we saw when the UK government implemented a ban on menthol cigarettes during our days in the EU.

5:07 Retailers continue to sell them right up to the last possible moment. They don't want to abandon that revenue, and certainly customer habits don't change that quickly. So this is not a cliff edge moment for us, and things will continue as is for the time being. So for now, we'll continue to work with our retailers, our distributors who, are still expressing great appetite for CHILL zero products, but we're also working to bring to market pod based, devices. And, I'll just give a a description here as well of exactly what we have in the mix. So anyone, again, who's familiar with the company will know that we have two core product ranges in vaping in The UK at least. We have a 1,500 puff device. We have a 3,000 puff device that is rechargeable, both of which contain no nicotine. It is simply vape carrier fluid and flavor, and they are the the staple of our range right now. In The US, we also have a 600 puff, which works as a great entry level device, and we will see that proliferated throughout the country with our Smoker Friendly launch this month.

6:08 We're working, as I say, to bring to market pod based devices. You can see on the right an example of this device. I've got the prototype here. As you can see, it it's done. This is rechargeable. It's reusable. It's refillable in terms of the pods that you put into it. That is not necessarily the final device that you will see landing on shelves or at least not the only one you'll see landing on shelves. I won't show more of exactly what we have cooking at the moment now, but what I would say is, look. It's reusable, both rechargeable and refillable. This is an avenue that we've been working on for some time. It's not a fresh idea to us, and it would have come to market regardless of the government's plans. It's now simply a case of expediting our launch of those products. Although, the negative media coverage is frustrating, it's provided us, I think, with several opportunities.

6:54 One, there's a good chance that it will thin the herd. Brands that are only here for a quick buck rather than to build lasting value may not take steps to stay on the market with pod devices. It's very simple for them to continue with their disposables, and I'm sure they will do so until the very last moment. However, I think there is a good chance they will not invest the time, effort, brand equity to bring to market slightly more complex devices even though the financial opportunity is just as great, if not even more so. It also moves the needle on consumer behavior towards pod devices. The reason that we launched a disposable or at least a high puff count rechargeable disposable device in the first place is that is common with consumer demand. That's what people want. It's the simplest way to pick up a vape and use it today.

7:40 People will now, as a result of, legislation over time, gravitate towards pod devices. Looking only at the commercials, let alone anything environmental or consumer behavior, the commercials are great because pods themselves are very high margin products. In vaping, the battery unit is the expensive part to produce, so they offer upside to us there. So, again, if we're looking at silver linings, I think moving in this direction, which we would have done anyway, ultimately leads to good things for CHILL. Just flicking ahead to sales here. Our new devices are being designed in collaboration with our retail and distribution partners. You can see on screen at the moment the sales growth we've seen since launching the product in August last year. Rapid uptake, very, very fast sort of agreements or routes to agreements with major retailers.

8:31 And the reason this has happened, the reason we enjoyed that rapid success is that we've tailored the products that we have on the market right now to meet the needs and wants of retailers who see where the demand sits in the market. Our new devices will be no different. We are working with our distributors, with our retail partners to make sure that we're delivering to the market a device that sits within what they are already seeing as a new body of consumer demand. That will allow us to continue with the retailers that we already have. We're working with them, of course, but also to open new doors as we, we tailor our device, to order. Beyond that, we also intend, as I've mentioned in RNSs, to introduce lower strength nicotine products. Everybody in the vaping space tends to gravitate towards high strength products. With an e f bar, with a crystal bar, you'll see twenty milligrams as the standard. We see this same trend in cannabis, in alcohol, in nicotine.

9:26 So many brands gravitate towards that top end. But the thing is many consumers want a more precisely dosed, lower strength alternative. It's why we've seen such an uptick in the low and no alcohol segment in The UK and beyond over the last few years, and we'll unveil more information about that, as our new device and plans, come to fruition. But we believe that our new device will enjoy equal, if not even greater, success than CHILL zero products today while we continue to sell them as well. A word on responsibility as well. There is change of foot in the vaping industry and not just in relation to disposables. There are two core problems, I think, for the industry. One is the environment and the impacts of vapes and lithium ion batteries on it and also sales to minors.

10:13 Taking the environment first, we have to be a responsible brand, but the truth is that a significant majority of vapes already widely available on the market today are very recyclable. They simply need to be treated in the right way. Consumer behavior is difficult to change, particularly when it comes to some sort of environmental responsibility. You can lead a horse to water. You can't make it drink. You can give someone a recycling bin, but you can't make them fill it up. That's frustrating, but it is just the nature of getting people to engage with recycling schemes. To combat that, we'll be working again with our distributors and retailers to make sure that it is readily available, that is recycling provision for customers in stores, and we'll obviously be making sure that our devices are as sustainable as they can possibly be. However, what I would say again is, just to reiterate, the product, when treated properly, is already widely recyclable, provided that it goes to the right treatment center and is managed in the right way.

11:08 On children and minors, the, area that the media has been so keen to beat the drum about, Well, it's about responsible retail. We support a retail register. This is the this is the recommendation of the World Vape Alliance, the UK Vape Industry Association, and that is an accreditation scheme that prevents vaping products and nicotine products from being sold by unscrupulous retailers or inappropriate venues like fast food takeaways or hairdressers. The key is to make sure that the existing legislative, schemes and provisions are enforced as best they can be. And so we're very, very keen to make sure that our brand is going into responsible hands. Beyond that, though, and what I would say about these, sort of regulatory moves is simply this. By banning potentially a disposable vape product, which again is still the simplest way for an adult to pick up a product of this kind to move from tobacco and combustible cigarettes into this category, governments in any country risk creating a movement of attrition back towards tobacco.

12:10 That is a dangerous public health change. We do not want to see that, and I think it is utterly mad to consider ultimately banning these sorts of products while also not taking sufficient measures to prevent people taking up smoking. That is clearly, you know, the most dangerous of of all nicotine consumption methods. So with all of that said, look. We have a pod device in the works. It is very, very well progressed. We continue to work with our retailers and distributors to move it down the track, and, we will obviously release more information in due course, but that is well in hand. Moving forward and looking at our our retail footprint, look. We're still continuing to expand. Despite any rumblings in the media in the last month, we've commenced our rollout into WH Smith stores, Morrisons, and Major Forecourts.

13:00 This will take time, but initial indications are good. Our independent store footprint continues to grow as well, and reorder rates so far have been in line with what we'd hope to see to secure that all important product market fit. Of course, at the same time, The UK is not our only market. While this legislation is clearly bound to The UK, we also have a very rapidly growing market in The US. It presents unique opportunities as well as a significant number of the nicotine vapes sold in The US are gray or black market. To date, enforcement by the FDA on that has been lax, but they're starting to impose fines on retailers for selling nicotine vapes that have not been authorized. With CHILL zero, retailers don't run that risk. So we have a very clear proposition in b to b sales, and our proposition in b to c sales continues to grow as we see additional appetite come online from consumers for zero nicotine products.

13:54 You'll see more and more content as time goes on of us starting to roll out into these smoker friendly stores, and there is so much more to come in The US and beyond because, again, The US isn't The UK, sorry, is not our only jurisdiction or regional focus. We also continue to see major category growth in vaping regardless of movements, regardless of the need for brands to be agile. Look. The big tobacco companies, as you can see on screen now, are continuing to make huge investments into vaping and reduced risk products. They know that this is the future. They know that cigarettes and combustibles, the days are numbered for those products. But many of the world's largest vaping companies are not affiliated or owned by big tobacco.

14:39 In fact, many of them are Chinese. Look at iMiracle, Pax Labs, GeekVape, Smock, all listed there. These are Chinese companies that have absolutely conquered the market due to availability. But there is a golden opportunity, we believe, for Western challenger brands like CHILL to develop and to gain market share. So that is obviously the space that we are targeting. Just to recap, and, you can see on screen now, you know, the the vapes that we already have in the market, I look forward to introducing, new ones, of course, to you. But we will continue to sell our CHILL zero products into contracted retailers and to build new deal flow both in The UK and The US, but also further afield. We'll also be developing our proposition with an expanded range of pod devices designed to specification, compliant by design, and guided by those who sell them, the retailers and the distributors. We want to be delivering a product to market that has a home from the moment it hits our soil.

15:35 And finally, we will be expanding our addressable market as we offer devices in the nicotine free and low strength market that provide people with a genuine route to quitting tobacco and nicotine, giving them the opportunity to slowly dose themselves down to wean themselves off of what is ultimately one of the world's most addictive substances. That overall gives, you know, where we're headed in vaping. But I want to also give a few sort of notes here on on chill.com. We are, after all, a diversified business. Above all, chill.com as a marketplace is our low cost route to deliver additional upside and value by creating a highly scalable online sales outlet. When CHILL, Zoetic even were launched as CBD brands, I think it would have been highly beneficial to them to have an online outlet that provides exposure to customers that are already engaged with functional alternatives.

16:29 These are brands that are looking for somewhere to sell their products, somewhere to reach consumers, but are often restricted by the major platforms like Amazon, eBay, Facebook, all of the other majors that make it quite difficult and often very, very sort of unprofitable, in fact, to get to a position where you're able to interface with customers and sell.

16:51 We believe that we have one of the best dev domains available online today, and we continue to develop our market and capitalize on trends not only of our own CHILL products, but also in the alcohol alternative space, in wellness, in supplements, and beyond. The intention of this marketplace, as you can see, is to focus on those core areas, work, play, and rest, to introduce as many brands and consumers into the mix as possible and to make sure they are able to find their roots home to each other. The key, I suppose, is, again, also making sure that we're delivering highly differentiated products into that marketplace. So if you look at trends now in the alcohol free category, the huge swing towards, hemp beverages in The United States, the massive swing towards alternative, supplements and health brands, we are really capturing the zeitgeist with this website right now. We have to do a very good job of delivering traffic to that.

17:47 You'll see that we'll be working on that over the coming months. But overall, we're in a very good place. And for the first time, chill.com feels like a marketplace that is reaching a degree of maturity. So that's where we intend to go with this. And, again, to get on to the questions and to to start sort of engaging with you all, just to to recap what's next for us. Well, look. We'll continue to execute on our chill zero retail launches in The US and The UK. We have additional deal flow to come as well. There is still appetite and demand for these products from further retailers, not only in those two countries, but beyond. We'll be expanding our product range, and you will start to see as the months go on what the new CHILL devices will look like and what we have to offer that we believe is so unique in this market.

18:33 We'll continue to deliver compliance schemes and to make sure we are among the most responsible brands available on the market. And beyond that, you'll see continued and sustained growth of the chill.com marketplace. All of this, I believe, and the team believes lead to value creation, and that's obviously at the heart of what we're doing here. But the key is in these areas, in consumer products, you must be agile. We are an agile company. We're ready for whatever challenges come our way, and we certainly hope you'll come along for the journey with us. With that, Paul, I'll pass back if there are any questions. Fantastic. Thanks indeed for the presentation. Ladies and gentlemen, do please continue to submit your questions just using that q and a tab situated on the right hand corner of your screen. Just know it kinda takes a few minutes to review those questions submitted today. I'd like to remind you the recording of the presentation along with a copy of the slides and the published q and a can be accessed via your investor dashboard.

19:24 Callers, you can see we've received several questions throughout today's presentation, and thank you to all the investors for submitting those. Could I please just ask you just to, click on that q and a tab and start at the top? Just read out the questions where appropriate to do so, give your responses, and I'll pick up from you at the end. Thank you. Absolutely. Yeah. So taking these in turn, do you foresee anywhere in Europe and other parts of the world where they will take a similar stance to The UK when it comes to disposable vapes? What countries do you feel comfortable in furthering the distribution of the disposables and pod devices? It's a great question. And as I've alluded to in this presentation, we are looking further afield than The UK. Obviously, we have, very significant interests and opportunity in The US, but further from there as well. There is certainly interest in our products in Europe. We look at the Spanish market.

20:10 We look at the Belgian market. We look at Greece. We look at Italy. There is opportunity not only in disposables, but also for the pod device. I can't say exactly what governments will do going forward. I obviously can't commit to you today that no other government will take a similar stance to the one in The UK, albeit that's still far from done and still not yet sort of sanctified into or or kind of written into real legislation. That being said, the these European markets are large. We see still enormous numbers of people smoking combustible cigarettes in that Spanish, French, German, Belgian, Italian market, and those are areas that we want to conquer, whether with a disposable or a pod. The key here is we don't have to be a one trick pony. We can deliver both sets of devices into the relevant countries for them. Beyond that, we've got The Middle East. There's obviously an enormous number of smokers in The UAE, in Egypt, in Oman, and we will continue to work with local partners when it's appropriate to, see if there are delivery channels and, and retail distribution channels there for the products.

21:20 But all in all, I I don't take the the recent news in The UK as a sort of knock to our confidence in terms of where we can grow this brand. It's just a case of what sorts of products we deliver in each market, and that is something we are very well equipped to do. Taking the next question, how have the supermarkets and our retail partners reacted to the disposable vape ban? Do you think they will continue to reorder a product that will likely be banned in a year's time? Well, the answer is they've reacted, you know, very well. Of course, everybody took last week to take stock of the situation to understand exactly what was going on, to try and pull together the very loose strings of what the government has suggested they may or may not do, and the supermarkets and our retail partners have been very buoyant. The reason for that is, and again, to use the example of menthol cigarettes that I mentioned earlier, there is no cliff edge here. They do not want to abandon what has been the fastest growing category in grocery for the past two years. They still want that revenue. They will continue to want to replace that revenue with pod devices in time to come. But on disposables, you know, they continue to sell. And ironically, when the news broke last Monday, that was when we were starting to roll out into Morrison stores.

22:31 That rollout has continued. The same is true for WH Smith Travel Stores. So, look, Our retail partners are not shaken by this. They're very, very used to these sorts of situations, and it it's not a problem. It's just a case of making sure that you react in time, and that is something that we're, again, very well equipped to do. What is the best way to measure success for CHILL? There looks to be a large amount of opportunity from a sales perspective. How do you plan to execute, and what's needed to be profitable? In consumer goods spaces, you end up with a very capital intense period at the start when you're spinning up, when you're getting retail deals, spending on slotting fees, spending on, you know, brand awareness, marketing, you know, inventory acquisition, let alone anything else. I think the way that we can measure success is ultimately in the long term by consumer uptake. We want to make sure that we are obviously gaining a percentage of the market and making sure that we stay on shelves, but stay at front of mind for consumers.

23:31 We do that, in my mind, in in the team's view by providing differentiated products. If you look at chill.com, when we're looking at alcohol alternatives, we're not just providing, you know, a low strength cider or beer. We're looking at hemp beverages. We're looking at Sensia. It's a nonalcoholic spirit that'll give you a buzz. Those are the sorts of things we also then look at when we are delivering success in vaping. So our USPs there are things like, again, that journey. It's providing people with a means to slowly wean themselves off the product when everybody else in the market is focusing on higher and higher strengths. At the same time, in the zero nicotine market, again, this is something that a lot of people have focused on in brand terms as a token area. If they spin out a zero nicotine product or brand, they tend to do so just using their existing devices, not recalibrating their flavors, not really making much of an effort to make their name something that can be really attached to quality in the nicotine free space. So I think our USPs will deliver us there. But that success that sort of measure of success is ultimately customer uptake, And, obviously, for any company, it's revenues and eventually profits. So I think that as time goes on, of course, we have to spend money, speculate to accumulate, but that speculation is is really paying off. It's why we have seen, in a very calculated way, retailers backing CHILL. We will continue to see that in my view. That's where we're trending.

24:58 What is the strategy on customer acquisition? It's a really good question. In vaping, it's slightly different from from other product areas, and that is because if you look at e l f bar, if you look at CHRISTOL, lots of other similar sort of what I would call Chinese brands that are on the market here in The UK, they have been successful somewhat in spite of themselves because their brands are not particularly inspiring. They are just available on mass. What we seek to do is to ultimately combine both that mass distribution by making sure that we have enough stores online, enough availability of the product in lots and lots of venues with a highly attractive brand, something that chimes with that Western consumer. We, again, have designed these products in collaboration with retail partners, in collaboration with distributors, and that means we are following the trends when we're making the product. Not just sticking it on the market and hoping that it sells. So that's our customer acquisition strategy. Of course, marketing in any sin category, alcohol, nicotine, vaping, whatever it happens to be, is somewhat more difficult than if you're selling something a bit more vanilla.

26:03 But at the same time, the key there for us is to make sure it's available and make sure we continue to drive home the message that CHILL is the brand for somebody who is looking to genuinely leave nicotine behind. How we'll present that? Well, that'll become apparent over the coming months. We now have distribution. There's no point driving traffic to those stores until our product is in there, but you will start to see both online and out of home marketing come to pass in the very near future. When do you anticipate an upturn in the share price? Well, I wish I could give you a direct answer to that. It's simply not our you know, that that isn't in our control, but what is in control is our output. As I say, we will continue to, you know, drive deal flow. We'll continue to expand in The US and The UK and further afield, and and we can only hope that the market takes note of that. So I think the key for us is, look, there has been a seismic shock to the market.

27:00 I personally think, without providing financial advice here, that it has been overdone in relation to selling of CHILL. But as time goes on, of course, I think that people will see that, look, we're not a one trick pony. This isn't a cliff edge, and they can take confidence again that this is a company that has the ability and can generate continued success, growth, and, of course, revenues. When will you get into Europe? Again, I I can't give an exact answer to that, But as I've alluded to, there is interest for our products. There's demand for our products in various European territories. We are working with our retail partners now to work out what is appropriate. We don't wanna spread ourselves too thinly. I want to make sure that we have the right local market support, but I do believe, as I've stated previously, that 2024 is the year that we will get into Europe. Unfortunately, I won't be more prescriptive than that at this stage.

27:54 A question here. Apologies. Where are we at? Are the distribution agreements your predecessors announced in Eastern Europe still in place and valid? Well, look. I I think to be totally candid, as I said at the start of this presentation, CBD is not a space that went the way anybody expected. Our distribution agreements with CBD products are are not a focus for us right now because they simply don't drive the needle. Even if you're distributing CBD products, you know, off more often than not, they get onto the shelves, but they don't transact. That is not a chill thing. That is

28:29 common across so, so many brands and companies. And, frankly, a lot of them have have, you know, gone the way of some of our other listed CBD former competitors who perhaps are no longer listed anymore because sales didn't work out to, you know, what they were expected to. So looking at those sort of older distribution agreements, I wouldn't really assign too much focus to them. We have to be in the here and now. We have to be agile, and we have to roll with the punches. That's why we're in the vaping space. That's why we're building a marketplace because those are the areas that will deliver value long term. Do you have a rough idea of when you hope to bring the pod product to market? Well, look. As I say, I've got one here right now. We could bring this product to market very, very quickly indeed. I don't know if this is exactly where we're going to land. I do know that we have other irons in the fire that we're working very, very hard on, And the key is to ultimately make sure we're delivering a product in a way that is timely for consumers to sort of pick it up.

29:25 For now, people will continue to buy disposable products because that is simply what consumers prefer. However, as time goes on, they will drive towards pod devices. I think you can expect certainly in the sort of summertime of this year to see our pod product reaching the market, and we will continue to taper that upwards from that point of launch. But, yeah, it'll be a a sort of gradual start, and we, of course, want to find our feet in the right way rather than, as some competitors do, dumping the product in the market without much strategy behind it. When specifically will the next next financials be released, and is CHILL currently profitable? A good question. Again, our audited financials will be released at the end of effectively that spring period in June, July. Of course, we have to go through our audit process, and that's when you'll get those those official figures.

30:20 In terms of sort of more sales figures and information, we'll look we've only just launched into those major supermarkets. We have provided sales figures on those pipe fill orders, and we will continue to give more financial information when it's appropriate. I guess the guiding light for us right now is also reorders, and what I can say on that is, again, what I mentioned earlier, and that is that initial figures are very, very encouraging. Independent stores are not always the best source of data. But from what we have seen so far, there is a sufficient argument. There is very strong demand to show that actually we do have a product market fit, and we'll continue to expand from there. Can you expand on possible future out of home marketing? I can. What we will see over time is continued activations in relation to events, in relation to in store activations.

31:10 You'll start to see, one of our cofounders, Antonio, in stores in Smoker Friendly. If you happen to be in any of those nine states, pop along, you might see him. What I would say is that, look. Our out of home advertising is gonna be fairly all encompassing. You'll see lots of different areas in lots of different geographic regions driven by what we're being asked to do by retailers. Some of that will be, you know, the likes of billboards. Some of it will, like, you know, be, for example, those sort of vans and vehicles. You will see events. You will see coupons, sampling programs. All of that is on the table for us. You have to take an omnichannel approach to marketing, and we will certainly do that. So, again, sorry to not be more prescriptive, but the the reason for that is simply that we're looking at all avenues.

31:59 Just to get to another one here. Sorry. Working in retail myself, I attend many British retail consortium updates. With regards to the disposable vapes ban, there will be a lot of kickback by retailers to increase the six month transitional period. Here's hoping it'll be extended. I absolutely agree. Of course, I I I do believe that we have sufficient time to not only bring our new products to market, but to continue selling onwards, with the existing products, until we can't do that anymore in The UK, and then we will continue to sell them elsewhere. But that being said, look. CHILL wasn't a vaping company with this revenue stream eighteen months ago, hell, even twelve months ago. So, you know, twelve, eighteen months until a change is a very, very long time in the retail industry, so plenty of time for us.

32:52 Can you comment on the competition? How do you see the dominant players in the market? Yeah. Of course. Well, you'll you'll have seen well, some of you may have seen British American tobacco publishing results today. They're very, very buoyant on the vaping category. They know that it is the future. Of course, their brands, Vuz, brands provided by Altria, Philip Morris International, Japan Tobacco, they are all, again, fairly dominant in terms of their market reach. But, actually, a lot of people in the vaping space are quite reluctant to stock them or support those brands because they feel that a reduced risk product portfolio is quite hollow when it's provided by big tobacco. They created the problem in the first place, so why should they be the only answer, when you look to solve it? I think that, look, we'll see continued, movements from the likes of Elf Bar, from Crystal, from Gold Bar, from skill, ski, from Hayate, all of these brands that are on the market today and that have dominated from the Chinese sort of, area.

33:50 They will stay on the market, but the question is now whether they take the time and they'd sort of assign the resources to staying on in a more complex pod based environment. They are looking for a quick buck. They, again, are not necessarily tailoring their products for the retailer. And so, look, I think there will be a thinning of the herd. But, again, CHILL intends to differentiate itself. We already have done that through our focus on zero nicotine. We'll continue to do that through a focus on the journey. And beyond that, look, I think that we are tailoring this brand for so much more than just providing, you know, a quick hit on a disposable vape. So that's my sort of view of the competition. I think we're already differentiated, and that sort of delta will will grow over time. Beyond that, do you think CHILL BRANDS will be cash flow positive by 2025, 2026 financial year? Well, look, it's another of those questions that I can't commit to. I don't wanna lead anybody down the sort of garden path on this.

34:47 We are ultimately a start up, but we're a start up that has seen really very rapid traction with our product offering over a number of months. So look. Of course, that's what we're targeting. We intend to keep our cost base as lean as we possibly can. Of course, this is a pay to play space. Retail always is. You can't bootstrap it. But at the same time, we have a higher margin product than most people in the vape space. So, certainly, that's what we're targeting. I hope it comes to pass. It's what we, of course, are modeling towards. Whether we get there. I can't commit to it, but, again, it's where we're aiming for. And, yeah, beyond that, I think that's that's all we've got. Fantastic, Cam. Thanks indeed for for taking those questions and, answering those questions for investors. Of course, the company can review any further questions received, and we'll probably respond to this on the investor meet company platform.

35:40 Before redirecting investors to provide you with their feedback, know it's particularly important. Can I perhaps just ask you just for a few closing comments? Yeah. Look. I really appreciate everybody's time today on this call. Thank you for attending. I know that, again, CHILL has been a rocky ride. But, look, there are lots and lots of things that are that are happening in this company and around this company that are very good, that present huge opportunities for us. And I do believe that over time, I think that we will continue to demonstrate that we're not only able to pivot, we're not only very agile, but that we are able to execute on a very clear path a plan. That clear plan for us right now is to simply grow our marketplace, drive more consumers and more brands to that site, and obviously take a cut of their their sales. But at the same time and most presently, to deliver a vaping brand that becomes not only very well known in the space, but also prolific in The US, in The UK, and further afield. These these are all things that we're focusing very, very hard on.

36:43 We want to make sure that we're able to deliver value and make sure that we have solid fundamentals underneath, obviously, the all of the the gloss and the marketing. And that's something that in the last few months, we've shown we are able to do. So I hope you can all take a degree of confidence in that. We're not unequipped to deal with regulatory change. It's the nature of the beast in this space, unfortunately. But CHILL is in a very strong position. I'd argue stronger than it's ever been, and we'll continue to build this company for every every stakeholder. So thank you for your thank you for your interest. And, of course, I'm happy to take any other questions over the course of well, however long it takes. Please email me. You can see my email there at the bottom of our presentation, and thank you for your time. Caleb, thank you. Thank you indeed for your time for updating investors today. Please ask investors not to close the session as you're now automatically redirected to provide your feedback in order the management team can better understand your views and expectations.

37:37 This will only take a few moments to complete, and that's greatly valued by the company. On behalf of management team at CHILL BRANDS GROUP PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.