Thank you for standing by. My name is Jay and I will be your conference operator today. At this time, I would like to welcome everyone to the Amcor Third Quarter 2024 Results Call. [Operator Instructions] I would now like to turn the conference over to Tracey Whitehead, Head of Investor Relations. You may begin.

Thank you, operator and thank you everyone for joining Amcor’s fiscal 2023 third quarter earnings call. Joining today is Peter Konieczny, Interim Chief Executive Officer; and Michael Casamento, Chief Financial Officer. Before I hand over, a few items to note. On our website, amcor.com, under the Investors section, you’ll find today’s press release and presentation, which we will discuss on this call. Please be aware that we’ll also discuss non-GAAP financial measures and related reconciliations can be found in that press release and the presentation. Remarks will also include forward-looking statements that are based on management’s current views and assumptions. The second slide in today’s presentation lists several factors that could cause future results to be different than current estimates. Reference can also be made Amcor’s SEC filings, including our statements on Form 10-K and 10-Q for further details. [Operator Instructions] With that, over to you, P.K.

Thank you, Tracey and thank you to all who have joined us for today’s call. Prior to discussing our third quarter performance, I want to spend a few moments recognizing my predecessor, Ron Delia, and his many accomplishments at Amcor. In the last few years alone, Ron led us through the transformational acquisition and integration of Bemis, the largest acquisition in the company’s history, successfully and safely guided the business through a pandemic and made the difficult and correct decision to divest our business in Russia. And most recently, Ron directed our teams in navigating that particularly challenging economic period. I now will speak for the Board, our global management team and our employees around the world and thanking Ron for his leadership, guidance and dedication during his 18 years with Amcor and 9 years as CEO. I’ve worked closely with Ron, our board and the other members of our executive team over many years to help shape and execute our strategy, and I am honored to take the leadership reigns in an interim capacity at this time. Today, Amcor is the established industry leader in our key markets and geographies, has world class talent and clearly differentiated commercial innovation capabilities, all providing us with multiple opportunities to capture high value growth. Importantly, the business is also well positioned to continue benefiting from the proactive steps taken by our leaders across the company to align the cost base with recent challenging market conditions. The results of those decisive actions were again evident in our third quarter financial performance as we showed strong earnings leverage across the business. Third quarter year-over-year volume performance also improved on a sequential basis, and we expect this trend to continue driving stronger earnings growth as we close fiscal year ‘24. My role right now is…

Thanks, PK, and hello, everyone. Beginning with the Flexibles segment on Slide 7 and focusing on our Q3 performance. Net sales for Q3 were down 6%, reflecting an unfavorable pricing impact of 4% and a 2% decline in overall volumes, which was a significant improvement of 8 percentage points compared with the December quarter. As we anticipated and called out last quarter, volumes for healthcare products remained weak and destocking continued, particularly in North America and Europe. In total, healthcare volumes were down double digits, and this had an unfavorable impact of approximately 3% on overall segment volumes and was the primary driver of the 4% unfavorable mix in the quarter. Across the balance of our flexibles portfolio, net volumes grew approximately 1% in the quarter, with growth in several end markets, including meat, pet food, cheese and unconverted film foil, and we also saw growth across a number of emerging markets. Across North America and Europe, third quarter net sales decline a high-single-digit rates and favorably impacted by a mid-single-digit lower volumes and unfavorable price/mix related decline in healthcare categories. Excluding healthcare across these two regions, we saw mid-single volume growth in cheese and a strong sequential improvement in meat and pet care volumes, which were flat and up low-single digits for the quarter, respectively. Across the Asian region, net sales were modestly higher than the prior year. China grew volumes for the third consecutive quarter. And volume growth in Thailand, India and the Philippines also helped offset lower volumes in South East Asian healthcare business. In Latin America, the business delivered good volume growth in Brazil, Mexico and Peru. Q3 adjusted EBIT of $358 million, was 5% higher than last year on a comparable constant currency basis. Strong cost performance through the quarter, including from restructuring initiatives, combined…

Thank you, Michael. In closing, on Slide 11, our Q3 financial results guidance for the balance of the fiscal year and our expectation that we will continue to build earnings momentum in fiscal ‘25 will highlight that Amcor is a very well-positioned business. Amcor’s industry leadership across the globe is well established. Our differentiated innovation capabilities are assisting the world’s best known brands and smaller companies in achieving their objectives to protect, preserve and promote their products while enabling them to meet the sustainability commitments they have made to the stakeholders. And Amcor’s talented employees around the world are capitalizing on growth opportunities in priority categories, emerging markets and through sustainable offerings while also continuing to closely focus on cost controls. We’re confident we will continue to see positive momentum given the actions we have taken and continue to take across our operations to invest in growth, reduce cost and improve productivity. As I mentioned at the beginning of the call, my role right now is to ensure we stay focused and on track and that we capitalize on the strong position we are in to maintain momentum and further accelerate earnings growth. The continued safety of our goal will always be at the top of Amcor’s agenda. But a very close second for me right now is to keep our teams focused on delivering for all our stakeholders by reinforcing that our strategy, our agenda and our priorities have not changed. Our Q3 volume trajectory and financial performance underscores our confidence in stronger earnings growth momentum as the challenges we faced in calendar ‘23 are put further behind us. We have raised our full year EPS guidance, and we anticipate delivering mid-single-digit earnings growth in Q4. Our performance in the first few weeks of April supports this expectation. And our commitments to our longer-term growth and value creation strategy gives us line of sight to a return to growth in line with our shareholder value creation model. Operator, we’re now ready to turn the line over to questions.

Thank you. [Operator Instructions] Your first question comes from the line of Ghansham Panjabi of Baird. Your line is open.

Hi, guys. How are you? I guess first off, it just sounds like volume surprised you to the upside during your third quarter. Do you think that’s just a function of 2Q coming in lower than forecast just given aggressive year-end inventory destocking by your customers? What do you think this is more of a sustainable improvement that you’re going to build upon as you look out to your fiscal year ‘25? Thanks.

Yes, thanks. It’s a great question. I mean there is a couple of things to take away here from the discussion of the quarter. The first one really is that the volumes improved. The second one is that we had great cost performance. And the third one really is that we believe the momentum carries over into the Q4. But let me get back to the volume question. So significant improvement sequentially on volumes from the second to the third quarter, to remind ourselves, second quarter, we were down 10%. Third quarter, we were coming in 4% down versus prior year. And when you look at the 4% that we were down, it pretty much equally split between two drivers. That’s the market impacts. And by that, I mean consumer demand and our exposure to categories and customers. And then the second one is destocking. So that made up the 4% decline. And when you – and another way to look at that is the 4% decline was pretty much all driven by destocking in healthcare and North American beverage. That also means that the balance of the portfolio ended up being pretty flat. And we’re pretty much pleased with this outcome because when you think about it, healthcare and North American beverage is about 30% of our business, that means the balance of the portfolio, 70% came in flat. Now when I take a step back and we look at the third quarter volume performance, now there’s a few things that we take away. The first one is, we saw a bit of unwind of a very strong destocking in the December month. And when we discussed the second quarter, we talked about a pretty strong January. And there was a bit of a question mark around how much…

Your next question comes from the line of Daniel Kang of CLSA. Your line is open.

Good morning, Peter. Good morning, Michael. Just a question on healthcare. You mentioned healthcare continued to fall double digits in 3Q, which from memory sounds quite similar to the December quarter. Can you comment on whether there was any sequential improvement in 3Q? And just from the visibility of customer stock levels and given the low comps that you should be working with going forward, is it reasonable to expect that first half fiscal year ‘25 to show some improvement in healthcare bond?

Let me help you with healthcare a bit. So the main driver of the healthcare performance really has been the destocking and the destocking sort of abating from Q2 to Q3. I would say, overall, the demand situation has not really changed much in healthcare. So you would see overall healthcare is marginally better between the second and the third quarter. We do expect further improvement in healthcare though because the destocking will further sort of reduce in the fourth quarter. As a matter of fact, when we guide to low single-digit volume decline in the fourth quarter, we would believe that most of that is driven by healthcare – all of that is driven by healthcare. And we don’t really know exactly when the destocking will come to an end. It will certainly sort of stretch into the fourth quarter. Maybe we’ll see a bit of an – we see a bit of an impact also in the first quarter of fiscal ‘25. But that would be as far as I would go with everything that I know at this point in time. Maybe one more thing that I would want to add to is that, again, we’re talking about low single digits decline in volumes in the fourth quarter. But with a further improving trajectory, we’re expecting to exit the fourth quarter flat on volumes.

Your next question comes from the line of Adam Samuelson of Goldman Sachs. Your line is open.

Yes. Thank you. Good afternoon, everyone. I was hoping to maybe talk a little bit about the operating leverage in the business or lack thereof on the deleverage side just given the profit performance, especially in Flexibles relative to the volume and mix declines you still saw in the period. And hoping to maybe just aggregate a little bit the amount of fixed cost reductions actually realized in the period versus the variable cost kind of efficiencies and productivity gains in the quarter and how kind of durable you think those variable costs and productivity improvements proved to be if volumes start to normalize or how much cost would have to leak into the system to serve incremental volumes from here?

Thanks for the question, Adam. I’ll take that. It’s Michael here. Yes, look, on the cost side, we’re really pleased with the cost performance of the business in Q3. We took another kind of $130 million out of cost, which included some benefit from the restructuring program that we’ve got in place. So we now are now starting to see that come through. So that was about $15 million, as expected. And if you just take a step back and think about the cost work we’ve been doing, what are we actually doing? There’s two things that we’re focused on. Firstly, the operational side of the business, the cost productivity and cost flexing in a lower volume environment. And then the second is that structural program that we’ve talked about in response to trying to offset some of the divested Russia earnings. So in the quarter, we saw benefits from both, and we saw that in both the Flexibles and Rigid segment as well. So that was pleasing. And look, on the operational side, what have we been doing, we’ve been really both proactive and aggressive in flexing the cost base. And that’s into account the lower demand environment. So we’ve been certainly eliminating shifts to take labor out where we can, reducing the overtime to take that labor cost out, taking extended shuts when we’re aligning with some of our customers, so we’re going to take extended shuts over long weekends and other things to get the plants fully closed and get the cost out that way. We’re driving procurement. Obviously, in a lower volume environment, that’s also an opportunity for us to drive procurement savings and we’ve been really focused on that, and the team has done really good work there. And we’ve been tightly controlling our discretionary…

And I would add that we’re particularly pleased with the work that’s been done in the Rigid segment here because we acknowledged that the business returned active profit growth in the third quarter on the back of a pretty soft environment still. So that speaks to a good leverage in that business.

Your next question comes from the line of John Purtell of Macquarie. Your line is open.

Good afternoon, Peter and Michael. I’ll just ask my one. The sequential volume pickup in Flexibles, just from the commentary and the release, so that appeared to mainly come from emerging markets rather than developed markets. So was there much sequential volume improvement in North America and Europe, for example?

Yes, that’s also a great question. So in terms of our country sort of performance or the different regions, you’re right, we saw low single-digit growth in emerging markets in the third quarter, which was obviously pleasing and positive. And on the developed markets, we saw a bigger sequential improvement while we’re still negative in terms of our volume performance versus prior year. Now you got to keep in mind that the bigger markets were the ones that were more heavily hit with inventory builds and now with a normalization, therefore, the destocking. And that would also make sense, particularly with our exposure to healthcare in those markets.

Your next question comes from the line of Richard Johnson of Jefferies. Your line is open.

Thanks, very much. PK, I think I’m right in saying you pretty much worked in every part of the business, except Rigid. I’d be really interested just to get a sense of how you feel about the strategic positioning of the group overall at the moment, but also particularly focusing on Rigid Plastics, which is perhaps in a slightly different position. And with the backdrop of in the beverage market anyway, other substrates appearing to be recovering a lot quicker than plastics.

Yes, Richard, thanks for the question. I mean there is we’re in a particular situation right now with the business. We’ve had a couple of tough quarters behind us with volume weakness. And we’ve worked really hard to position the business as well as possible to take advantage of the volumes improving again. And we believe that’s exactly the situation we’re in right now. So we said in discussing – after discussing the second quarter, we said we feel like the second quarter for the business was below point. And particularly now as we’re having the third quarter an hour back, I think we can confirm that. That’s where we stand. And we believe that we will see a better volume performance in Q4. So that’s the starting point. In that environment, we felt we want to get, first of all, back to the earnings capacity of the businesses that we have without asking strategic questions about the businesses. And we believe, particularly to Rigid Plastics, you’re right. I’ve been around in Amcor a bit, Rigid Plastics, I’ve not managed myself. But when we look at Rigid Plastics, we think it’s a good business strategically. And I’ll give you a couple of views here from my side. First of all, it’s a scale business. It’s business for Amcor. There’s no question about it. And secondly, when you look at the portfolio of the business, it’s actually a number of different businesses under one roof. We – often, we focus very strong in discussing North American beverage, but it’s more than that. We have a specialty containers business. So where we started to diversify, we have a Latin American business and we have a closures business with our [indiscernible] business. So it’s a portfolio of businesses. We have really good industry positions. And across Rigids where we participate, we like the customer relationships that we have with good solid customer relationships. And on top of that, also in the overall context of plastic, we have a strong sustainability profile, particularly in that business, which is really important. And finally, I’ll come back to what I said at the beginning. We’ve done a lot of strengthening in the business and the restructuring, for example, with the footprint optimization that we’ve gone through when we’ve generated a leverage that has enabled us to return the business back to profit growth. So I think where we stand right now is we want to see the volumes come back and then we want to see what the business can deliver. There’s no question that we want the business to deliver more and that’s where I would leave it for now. By the way, I think – I don’t know if you said it’s the Rigid Plastics business or the Rigid Packaging business. Actually, we call the Rigid Packaging business, and it’s just a little clarification. Thank you.

Your next question comes from the line of James Wilson of Jarden Australia. Your line is open.

Hey, guys. Good morning. Would you be able to just talk us through the net interest guidance that you guys have put out, particularly what’s driving the lower net interest given that leverage looks unchanged in your guidance? I understand that you’ve had some working capital improvements, but are there anything else that’s driving that?

Yes. No, thanks for the question. You saw us we reduced slightly the guidance. Our guidance prior to this quarter was $315 million to $330 million, and we reduced that down to $310 million to $320 million. And look, that’s really just on the back of the timing of the cash flows and the working capital improvements. We saw a little better timing of cash coming into the business, which, as we look at the forecast for the fourth quarter, we can see that and see that there’s a little bit of upside there on the interest cost. So we adjusted the guidance range accordingly. But outside of that, there’s not a lot of to it. No real change in the rate profile or the mix of debt.

Your next question comes from the line of George Staphos of Bank of America. Your line is open.

Good afternoon. Thanks for taking my question. PK, could you give us a bit more color in terms of some of the trends you’re seeing in Flexibles, in cheese and protein and some of the other key markets. And relatedly, are you seeing your customers perhaps pushing back some of their sustainability targets one of the larger branded companies and what are the implications for you in terms of growth as well? Thank you.

Sure. So in Flexibles, again, a pretty significant improvement in volumes between Q2 and Q3. I did make a comment earlier in terms of the two main drivers here: market impact. We are pretty much – were flat in the third quarter and the destocking sort of went to low single digits, and it pretty much is the healthcare impact of destocking that drove the volume decline versus prior year and the balance of the portfolio is pretty much flat to slightly growing. Now in terms of the category performance against that, you would remember that we’re driving a couple of priority categories here in the business where we believe we have really differentiated products and a good position in the market and where we like the market dynamics. And those would be healthcare need. You have heard us talk to that protein, protein breaks out and cheese and meat. Hot-fill beverage, obviously, would be one pet food premium coffee. And those are really the five focused categories that we drive. And we have seen, particularly in pet care, meat and cheese, we’ve seen growth in the quarter, which we are pleased with. Now I will say these are green shoots and don’t walk away from the call believing that this is like significant growth numbers. These would be low single digits. So we got to stay bolted here. But we like what we see, and we’d love to see a little more. Maybe a little more color here on cheese, as you particularly asked North America and Europe, we would be up also on the basis of less destocking. Meat, also less destocking and some regional wins that we have seen. Sorry, I just want to take the other part of the question, which was just check my notes…

Your next question comes from the line of Brook Campbell of Barrenjoey. Your line is open.

Yes. Good evening. Thanks for taking my question. Just with respect to trajectory in the business, this financial year has been better than expected. In the third quarter, you saw some EPS good versus back in Feb, the expectation was for the third quarter to be down a bit at EPS. And despite this, you have kept your fourth quarter EPS growth at mid-single digits, which is unchanged. So, my question really is, why wouldn’t the better performance for the first three quarters continue into the fourth quarter? Any reasons what’s holding you back from upgrading that fourth quarter expectation would be great? Thanks.

Yes. Thanks. Brook, it’s Michael here. I can take that one for you. So yes, look, we finished Q3 with EPS growth, which was really pleasing. And that was on the back of a couple of things, slightly better volumes really coming out of that December period as P.K. touched on earlier. When we look our way through January, clearly, we saw an improved performance and some of that was relating to some of the unwind out in December. We weren’t 100% sure on how that might translate for the rest of the quarter. And what we saw in February was some more unwind clearly from December, which helped improve the performance in the March quarter and led to us being able to deliver EPS growth, which was really pleasing. So, you have seen us increase the full year guidance. We have taken the full year guidance to $0.685, $0.71, so an increase there. That’s really on the back of that improved performance in Q3. In Q4, we are still expecting sequential improvement, both in volumes and profit. And clearly, the driver of that, we are going to see that sequential improvement in the volume really held back by the continued destocking in healthcare. That’s really the key point that’s holding the volumes back in Q4 as P.K. touched on. That in itself has some unfavorable mix, which we have talked to in the past. So, that will continue into Q4, although start to abate and certainly down favorable mix from healthcare will unwind as volumes start to normalize into the future there. But Q4 is still expecting good cost out, good leverage through the P&L from that cost initiative as well as the structural piece, adding through there. And we are also expecting the earnings trajectory to improve to that mid-single digit. We get benefits from the Q4, the absorption in Q4, which is seasonally our biggest quarter as well. So, we feel pretty good about where the outlook is for Q4. We have confidence in delivering within that range. What we have seen in the early parts of April confirmed the volume outlook, so we feel confident there. And we just felt that we didn’t need to get ahead of ourselves at this point in time. Clearly, we have given you a range. We have given the marketing range. So, that’s a reasonable range in Q4. And if the volumes come in a little better than what we are expecting, then, clearly, that’s one way that the outcome for the full year could get towards the upper end of the range, along with cost and let’s see where raw materials impact as well. So, overall, I would say we feel pretty good about where we have landed in Q3 and what’s ahead of us in Q4 to deliver a good year.

Your next question comes from the line of Keith Chau of MST. Your line is open.

Good afternoon Peter and Michael. Peter, a question just around the PPWR that was voted into European Parliament earlier in this month, can you give us a sense of what Amcor is planning with respect to any changes to the regulation around plastics in the European Union? I know there is some impacts that are expected to the, I guess a headwind for the plastics industry in Europe by 2030. But just we came to hear your views on whether you think there is a headwind for the Amcor flexibles business? And if there are any mitigation strategies that are being put in place or whether Amcor is planning ahead to mitigate those headwinds? Thank you.

Yes. It’s also a great question and obviously falls into our sustainability strategy. Look, I will start out by saying that we are very supportive of regulatory and legislative developments that sort of drive the whole industry to this circular economy for plastic. And as such, the PPWR is actually welcomed from – by Amcor and from Amcor because I think we are making – we are creating an environment that allows us and the whole industry to make more progress into that direction. Again, everybody has a role to play. We are sitting in the value chain at pretty much the start. Our job is to come up with structures for plastic packaging that are recycle-ready that can be recycled. And I said a little earlier that we are making really good progress in hitting our targets by the end of 2025. So, when customers want to have these structures, we are ready to provide them to the extent we are not doing that already today, right. So, these – many of these cycle ready structures are commercial. And by creating a regulatory environment, everybody gets level set. And we can work with certainty in certain directions in order to support the business and help the very efficient and high-performance packaging substrate, find its place also in the context of sustainability. I mean there is a place for plastic here. And we got to remind ourselves why we have so much plastic packaging. It’s because it’s a very efficient and high-performing substrate. The challenge is end of life. The circular economy addresses that and regulation that gets us into that direction is welcomed.

Your next question comes from the line of Cameron McDonald of E&P. Your line is open.

Good morning. Question for Michael, if I can, just going back to the interest rate guidance. Can you remind us of what your hedging profile actually looks like? There was – obviously, last year, you had some significant interest rate exposure. And my understanding is that, that was mainly due to hedging and the exposure to floating rates. So, as interest rate expectations have been rather volatile in the last month or so, how do we think about your hedging profile in that and the exposure to that changing interest rate environment into FY ‘25, please?

Yes, sure. I think – look, the first point we could start, the debt profile today is about 70% fixed, 30% floating. With that, we have no maturities coming off now until the middle of 2025. So, from that respect, we have got a bit of flexibility in how we can manage the debt book and the interest exposure. As you look forward, we haven’t provided any guidance for FY ‘25. But clearly, we have given you some guidance for ‘24. If you look at our debt profile and then you look at some of the forward curves over the next 12 months or so, we are not expecting a material movement in our interest expense just based on the debt profile we have and the maturities that we have got coming. So, we have got some flexibility to work through how we manage that debt book and that currency exposure as well. So, when you put all that together, we don’t see any material change or impact on the interest expense as we look forward into ‘25. But we will provide you further guidance on that in August when we provide the full year guidance for FY ‘25 at that time.

Your next question comes from the line of Anthony Longo of JPMorgan. Your line is open.

Hey. Good afternoon Peter and Michael. Just a quick one on destocking you spoken about that a fair bit already. But how are you ultimately thinking about the restocking cycle in light of as some of the early positive customer discussions that you have had to-date? And ultimately, what does that inform the top line growth expectations from here? I appreciate there is no guidance, but just how you are thinking about that and philosophies around your customers’ inventory management from here as well?

Look, I will start and then maybe Michael wants to build on it. The way that we look at this is the destocking that we are seeing currently is really a correction of the industry of holding too much inventory after a pretty volatile environment, which was driven by partly supply chain shocks that we have seen in the industry sort of de-risking and protecting their top line by building inventory and then there are other reasons. But anyway, what we are seeing right now is that the industry is normalizing across the categories. We see healthcare a little bit delayed because that’s a very conservative industry, and they probably built more because of the dynamics over the last couple of years. And now they have – they are starting to be confident, again, in the environment so that they can also reduce their inventory levels again to a normal level. Now, the new normal is probably different from what it was before holding cost of inventories because of interest rates drive that down further. The industry is looking at new efficiency levels in terms of running inventories, and that’s what we are going through right now. Going forward, we will see changes in inventory, but those will be tactical or they will go along with the seasonality of the business. So, I would not think about it as there was a trend to restocking. The industry is coming down to a new normal and everything that we see from there is going to be tactical or following the seasonality of the different businesses. So, that’s how I think about it. And therefore, once we have this extraordinary impact behind us, and we will see with our category and customer exposure and then also – hopefully going forward, also a renewed and stronger consumer interest and demand, we will see top line growth.

Operator, we have time for one more question, please.

Thank you. Your last question comes from the line of Andrew Scott of Morgan Stanley. Your line is open.

Thank you. Michael, just a question for you, $40-odd million of below the line items there, I see the restructuring charges up relative to last quarter. Can you talk to us just two things, cash versus non-cash there? And when do we get line of sight to maybe seeing an end of these below the line items?

Look, Andrew, the main items in the quarter are really around the restructuring program, which we have had in there for the last 12 months or so. That program is pretty much two-thirds of the way through. We have now started to see the benefits come through from that program. You might remember, we committed to invest around $170 million in cash. We have spent on that program to-date about $110 million. So, we have still got $50 million to $60 million to go. But we are starting to see the benefits come through from that, so we are pretty pleased about the progress. And really by the end of the calendar year, we would expect to be most of the way through that program. So, that’s the way we see it from there. And as I said, we are pleased that we are now getting the benefits of $15 million in the quarter came through and we will expect to build on that in quarter four and then into ‘25. So, pretty pleased with where the program is at and it’s on track.

Ladies and gentlemen, this concludes our question-and-answer session. I will now turn the call back to management for closing remarks.

Yes. Thank you, operator. Look, thank you everybody for the interest in the company. The only thing that I want to say here before we close the call is we are pretty pleased with the way how the Q3 turned out for us. I hope we were able to demonstrate that we – this was based on a broad-based volume improvement that we have seen in the business, combined with really some good cost performance in the third quarter. That also has impacted our margin performance. And more importantly, we believe that we have some underlying momentum here in order to – that will carry into Q4. So, we are very pleased with the situation we are in. We are going to take advantage of the momentum. And with that, we are going to close the call, and we are going to talk to each other again at the end of the fiscal year. Thank you very much.

This concludes today’s conference call. You may now disconnect.