Welcome to the Slattery Asset Advisory
1st Quarter Report for 2017

The first quarter of 2017 kicked off with lots of activity giving us plenty of insights to share on current and predicted market trends.

It has been a strong start of the year for Slattery Asset Advisory and Slattery Auctions with a heap of activity across a broad range of sectors around the country. An interesting change has been that NSW and Victoria have been our two busiest states in contrast to the last 18 months where the bulk of activity was out of Qld and WA.

The importance of having operations around the country has been reinforced over the last quarter as buyers have shown more willingness than ever to buy assets interstate through Slattery’s simulcast platform and transport their assets back to their home state. This interstate competition has kept sales results high at all Slattery premises.

Road Transport in particular has been an area which has seen our NSW auctions achieving above retail value for many good quality trucks, and our Victorian office has had an increase in volume and results in the mid-size civil construction sector.

Of particular note in the last quarter was the release of the Caterpillar financial results at the end of April, which saw Caterpillar announce the first year on year increase in sales and revenues, the first time in ten quarters. Caterpillar has also raised its projected revenues and outlook for the remainder of the year.

This announcement may signal the end of the correction in new equipment sales, however uncertainty across the globe and volatile commodity prices may yet prove this to be a one-off increase in sales.

The Slattery Asset Advisory team has also welcomed a new addition to the team in Victoria with Mike Gill coming on board as a BDM in the corporate industrial market. As our team and company rapidly grows we are always interested in finding good people. So please feel free to pass on our details.

The quarter in short:

  • Caterpillar has recorded the first quarter of sales growth in ten quarters with positive signals for the industrial equipment sector;
  • Demand for plant and equipment used in civil construction has boomed in NSW and Victoria;
  • Trucks and tippers in the Road Transport sector have been selling for record prices due to the demand from operators servicing infrastructure projects in NSW;
  • The low supply of quality prime movers has kept prices strong in all state markets;
  • The mobile crane sector remains under pressure;
  • SUVs have relegated the Aussie family sedan to history and taken over the preferred vehicle type in Australia in the Automotive segment, now taking 40% of market share; and
  • Our special feature on the impact of the Qld floods explains how such events have caused a spike for quarrying and earthmoving equipment.

Slattery Asset Advisory

Key Point Summary
  • The mobile crane market has been one of the busiest sectors for the Slattery Asset Advisory team over the last quarter.
  • We have seen an increase in private sector work in the aviation sector with our aircraft specialists undertaking large fleet valuations, particularly in rotary aircraft as well as a number of recent insolvency appointments on small fixed wing operators.
  • There has been a small increase in pre-lend valuations and advisory work to drillers as a result in new exploratory work arising from increased commodity prices.

Operators in the mobile crane space have been struggling for a number of years since the end of the construction phase of many major mining projects around the country. This has seen a surplus in capacity for crane operators and downward pressure on pricing, which has caused a lot of stress for those operators. The Slattery Asset Advisory team has been quite busy over the first quarter offering advice to a range of different clients on not just asset values but remarketing and logistics strategies should these operators struggle to finalise a satisfactory restructure.

One of our Senior Asset Valuers, Tim Deeble, who specialises in aircraft has had a recent spike in advisory work for a number of private sector clients. The bulk of the advisory work has been with regards to rotary aircraft rather than fixed wing however we have also seen an increase from a number of recent insolvency appointments on small fixed wing operators.

The recent rise in commodity prices has seen an increase in valuations and advisory work for lenders to drilling companies who have re-commenced undertaking exploratory work. The bulk of these assets have been for hard rock drilling assets. This represents a distinct turnaround on a sector where as recently as 18 months ago was almost impossible to sell drilling assets at anything but a significant discount.

Slattery Onsite Auction
The recent rise in commodity prices has seen an increase in valuations and advisory work for lenders to drilling companies

Quarterly Sales Round Up

Road Transport

Key Point Summary
  • Heavy duty new truck sales hit their highest level in 2016, which has carried over into 2017. In good news for the sector, 2017 is on track to beat both years. Medium duty sales also increased over 2016 and the 1st quarter of 2017.
  • The Volvo brand continues to excel in both the new and used markets increasing its market share.
  • Strong buying activity out of NSW has underpinned used truck prices around the country as demand from operators servicing major infrastructure projects in NSW has seen higher prices across all Slattery premises.
  • Tipper trucks with quad dog combinations have been the stand out of the quarter.
  • Trailer prices appear to have rebounded from previous quarters with tippers, flat tops and refrigerated pantechs in the greatest demand.

New Truck Sales

New truck sales in 2016 hit their highest level since 2008, before the Global Financial Crisis hit the sector hard, with 32,964 new trucks sold representing 3% growth on 2015 marking a very slow recovery for the sector.

Heavy duty sales saw market leader Kenworth retain their lead with 1980 units sold however this represented a 1.8% drop on their 2015 sales figures. Closely following Kenworth is Volvo, who we have regularly commented on their increasing popularity in Australia, which saw 1605 units sold representing a huge 8.7% increase on its 2015 figures.

The strong 2016 sales figures have carried over into 2017 with new heavy duty truck sales in January up 9.4% on 2016 and also a huge jump in in March with 979 units sold (almost 200 units more than last year). A big mover in March of this year was Scania who saw an increase of 158% on March last year.

The medium duty segment grew 4.5% in 2016 with Isuzu posting their 28th year in a row as market leader off the back of 8307 units sold, an 11% increase on 2016. Fellow Japanese rival, Hino again took a distance second place with 4407 units sold.

Light duty trucks also saw an increase of 8.1% in 2016. Isuzu led the market by a large margin on Fuso and Hino.

 

Used Truck Sales

The 1st Quarter of 2017 has been incredibly strong for trucks and trailers across all Slattery Auction premises with some results bringing well in excess of the retail value for the same assets. Feedback from the market suggests the demand is coming from end users who have a strong appetite for late model quality assets across a large cross section of trucks ranging from prime movers, tippers, flat tops, refrigerated pantechs and curtainsiders.

The consistently strong sales prices across the medium duty and lighter heavy duty assets has surprised many of our Slattery road transport experts who have noted that dealers have continually been pushed out of the bidding in favour of end users who are paying a premium at the auctions.

 

P1050803
the demand is coming from end users who have a strong appetite for late model quality assets

Used Truck Sales - Heavy Duty

Our NSW heavy duty truck and machinery auctions based in Newcastle offered 11 late model Mack Trident 6×4 Tipper Trucks with matching Hercules Quad Dog Trailers. These truck and dog combinations were sold as a set with all sets making in excess of 90% of their retail value and far exceeding expectations. The highlight of the sale was a 2012 combination that sold for $227,000. A result 110% of what you would expect to achieve retailing the same asset over an extended period of time. The exceptionally strong results for these particular asset types can be attributed to Slattery Auctions’ attracting a number of end users looking to service the large volume of infrastructure works currently being undertaken in Sydney.

The overall market for prime movers is very healthy in NSW for late model, high quality units. Slattery Auctions’ March truck and machinery auction saw a small fleet of Volvo prime movers all sold under the hammer with strong results. The highlight of the auction was an incredible result for a 2011 Volvo FH13 prime mover, which sold for $166,000 (approximately 111% of the retail value). The hard fought battle for the truck went to an end user who was able to immediately put the truck to work. Interestingly, an identical truck with only 90,000km more was offered as the next lot and sold for $115,000 to the under bidder of the first truck.  Our WA office offered some similar units in Perth attracting the same sales figures with both assets going to east coast buyers.

Many end users have been commenting in recent times of their growing preference for Volvo prime movers noting that they are more comfortable to drive, the automatic transmissions are easier on drivers and their fuel economy superior to their American counterparts.

Demand from NSW buyers is carrying through to all parts of the country with our Brisbane, Perth and Melbourne offices reporting strong buyer activity from NSW based buyers. Our Perth office has reported a lower number of prime movers being offered for sale across the board.

 

The transport sector in Queensland has seen a shift from large volumes of prime movers hitting the secondary market to the lower volumes now being offered. The reduction in supply with demand remaining strong has meant that strong results are being achieved in Qld across all asset classes. Road transport assets used in line haul operations (90 – 120 tonne GCM prime movers with sleepers, flat top trailers, curtain siders and tandem dolly’s) has seen the sharpest increase with fewer operators now bidding for the contracts into north and western Qld.  With reliability, a key factor in operator performance, we are seeing many of the both big and small linehaul companies look to upgrade their fleet.

The heavy haulage sector has changed little in the last quarter. We believe pricing for heavy haulage assets such as prime movers >120 tonne GCM and trailers has bottomed out and is only likely to go up in the future. It is likely that these assets will be in high demand and pricing will recover strongly in Qld if the Adani project moves into the construction phase.

 

Prime Movers
Demand from NSW buyers is carrying through to all parts of the country

Used Truck Sales - Medium & Lighter Duty

Medium and light duty truck assets continue to be very strong around the country with asset prices remaining stable and consistently strong demand in line with our previous reports. In particular medium duty tippers have been in high demand due from end users operating in the construction sector in NSW and Victoria due to the construction booms occurring in those states.

Our Qld office has reported a jump in results due to fewer assets being available for sale forcing strong competition in the secondary market in Qld.

Isuzu unsurprisingly continues to dominate the secondary market.

A similar battle in the same auction as the Volvo’s noted above saw a 2012 and a 2013 Mitsubishi Fuso Fighter FM600 Table Top truck sold for above retail value at $71,000 each. These strong results highlight the critical importance of attracting a national buyer base with end user participation to ensure there is sufficient competition in the sales process.

Medium Rigid Trucks
Isuzu unsurprisingly continues to dominate the secondary market

Trailers

Similar to tipper trucks, tipper trailers have been in particularly high demand over the year to date due to the infrastructure works out of NSW. This was evident in the sale of a 2010 Graham Lusty Dual Axle ‘A’ & ‘B’ Combination tipper trailer, which made 98% of the retail value of the trailers.

In addition to tipper trailers, NSW saw some exceptionally strong results for some very good quality step deck, flat top and refrigerated pantech trailers. Similarly, our Qld office has reported very strong conditions for trailers used in linehaul operations with curtainsiders and flat top trailers in highest demand.

We expect demand for trailers used in linehaul operations to continue well for the remainder of the year.

Howard Porter tipper
We expect demand for trailers used in linehaul operations to continue well for the remainder of the year
AssetsKms/HoursPrice
Achieved
% of
retail
State
Road Transport
2012 MACK TRIDENT 6X4 TIPPER & 2012 HERCULES QUAD DOG TIPPING TRAILER (sold as set)324,471 km$227,00095%NSW
2014 HINO 700 FS 2848 6x4 TIPPER260,925 km$158,000100%NSW
2011 VOLVO FH13 540 6X4 PRIME MOVER285,562 km$166,000110%NSW
2011 MITSUBISHI FUSO FIGHTER 1627 FM600 4X2 7.6M TABLETOP292,168 km$71,000110%NSW
2010 KENWORTH T6091,123,305 km$102,00095%VIC
2011 ISUZU FH FVD 1000 6X2 TILT SLIDE354,479 km$105,000100%VIC
2014 IVECO POWERSTAR 6400 6X4 TIPPER20,444 km$165,000100%VIC
2015 HOWARD PORTER HP-DT480 6 AXLE DOG TRAILER END TIPPER198,041 km$95,26090%WA
1999 WESTERN STAR 4800FX82,8045 km$31,00095%QLD
2016 WESTERN STAR 4700SB631 km$184,00090%QLD
2010 HP SIDE TIPPER TRAILER$40,32395%WA
2010 TUFF TRI AXLE SEMI TRI AXLE EXTENDABLE DROP DECK TRAILER$66,000110%NSW

Mining & Earthmoving

Key Point Summary
  • Caterpillar has announced its first year on year increase in sales and revenues for the first time in 10 consecutive quarters.
  • An increase in aftermarket parts in Australia was significant enough to receive special mention in the Caterpillar Inc. quarterly financials.
  • Sales of ultra-class assets has remained steady with Slattery Asset Advisory executing sales on a number of very large pieces of equipment.
  • There has been strong buying activity for mid-size civil equipment across the quarter.
  • Graders appear to be in short supply with all Graders offered in the previous quarter achieving well above reserve prices.

New Equipment Results

The Caterpillar financial results released at the end of April saw Caterpillar announce the first year on year increase in sales and revenues for the first time in ten quarters. Caterpillar has also raised its projected revenues and outlook for the remainder of the year. This announcement may signal the end of the correction in new equipment sales however, uncertainty across the globe and volatile commodity prices may yet prove this to be a one-off increase.

Sales increased in the Asia/Pacific region assisted by an increase in construction equipment in China as well as aftermarket parts used in Mining in Australia. Both the construction and mining equipment segments in the Asia/Pacific increased 23% each, year on year. Much of the increase in the construction sector was due to an increase in end user demand, primarily in China, driven by increased government support for infrastructure and strong residential investment. It could be expected that these stronger figures will flow through to related industries in Australia.

The increase in sales of aftermarket parts into Australia is consistent with the trend we have reported in our previous Quarterly Reports of fleet operators holding on to their equipment longer and running out their maintenance programs to reduce costs. These sales could suggest that many operators are now having to catch up on maintenance programs and are being forced to increase operational expenditure on asset fleets. We are yet to see whether there will be a significant impact on asset values when those assets reach the market in poorer than normal condition.

 

Secondary market for Mining and Earthmoving plant and equipment

The rise in prices for quality assets reported in our last Quarterly Report has continued over the last quarter with plenty of interest in the mid-size equipment used in civil and infrastructure projects. A highlight for the quarter was Slattery Auctions Victorian office running an exceptionally successful onsite sale in Mt Gambier, which saw a great deal of equipment sell for higher than retail value.

We have seen an increase in crushing and screening equipment offered for sale over the past 12 months and in particular in the past quarter. Our WA offices sold a large plant out of the Pilbara to buyers in Ireland last year and facilitated the shipping of the plant direct to Ireland. Slattery Auctions’ Qld and Victorian offices are each offering a number of crushing and screening assets in the next quarter and we look forward to reporting back on the outcome.

 

Onsite Sale in Mt Gambier
A highlight for the quarter was Slattery Auctions Victorian office running an exceptionally successful onsite sale in Mt Gambier

Ultra-class mining equipment

There has not been much movement in the ultra class mining sector in terms of volume or price fluctuations across the sector generally, however Slattery Asset Advisory has facilitated the sale of one of the largest packages of mining equipment to hit the market in some time.

Slattery’s has been undertaking a wide-reaching remarketing program for a syndicate of a large mining rental operator offering over 85 pieces of equipment for sale. This fleet has covered large mining shovels, rigid haul dump trucks, mining service trucks as well as some civil constructions assets. The largest asset was a Hitachi EX-8000 excavator and the single biggest sale in the package.

Slattery has achieved sales on over 80% of the fleet to date with there being a preference for better sales prices over timeline. Prices achieved have been well in excess of Slattery’s estimated realisable values evidencing that there continues to be a market for ultra-class assets and the importance of seeking out likely buyers to achieve the best possible sales prices.

The assets generally have required a very proactive sales campaign to be run with Slattery sales managers successfully executing on sales contracts for the larger more difficult assets at prices well above expectations.

Key to any sales program of ultra-class mining equipment is very proactive sales agents and sufficient time to run an extended sales program.

Mid-size plant and equipment
there continues to be a market for ultra-class assets

Mid-size plant and equipment

The market for mid-size plant and equipment used predominantly in civil and residential construction has been very strong over the past quarter with most demand coming from the south eastern states. It will be of interest to observe whether demand slows into the usually quieter winter months.

The Slattery Auctions’ Melbourne office ran an onsite auction in Mt Gambier with more than 450 people turning up in person or online to bid on over 240 pieces of equipment offered to the market in one auction. The highlights out of the auction included a 2011 Cat 140M grader for 100% of the retail value and a 2014 Volvo L70F Wheel Loader that also achieved 100% of the retail value at $170,000. Both assets attracted buyers from Victoria, NSW and Qld into very competitive bidding.

Other popular asset classes included 20t-30t excavators and skid steer loaders. The rollers offered for sale had reasonable prices but the sales results were subdued relative to the remaining assets offered on the day. The auction generated over $2.5million in sales on the day, which was well above anticipated total values.

Feedback from the dealers purchasing at the auction was that the prices were well above their limits despite many reporting less than normal inventory levels in their dealerships. One dealer noted his inventories were sitting at 30% of normal levels.

 

Our Perth office has reported insatiable demand for graders with some assets purchased on the morning of the auction arriving on work sites by the same afternoon. With the results noted above in Mt Gambier, this suggests Graders are in short supply nationally. The cancellation of the Roe 8 project by the new WA government and the postponement of the Northlink road project is likely to see a drop in demand for yellow goods as contractors look for new opportunities and possibly see surplus assets offered into the market.

Excavators up to 30tonne have generally been selling very well however demand drops off rapidly above this size. Our Perth office has found the sale of a 70tonne excavator very challenging with very little interest in this size.

Overall we expect values for civil equipment to continue to remain high around the country over the coming quarter with a possible slight dip in Victoria due to the winter months.

Graders are in short supply nationally
Graders are in short supply nationally

Impact of the Queensland Floods

There was plenty of media coverage outlining the economic impact of Cyclone Debbie with estimates putting the damage and cost in lost revenue to the mining, agricultural and tourism sectors in the billions.

Once the damage is done the clean-up efforts commence, which has the biggest influence on the values of plant and equipment and a range of other asset types. The most obvious impact on values is the increase in demand for this equipment. These include wheel loaders and backhoes in particular to clear debris as well as bulldozers, graders, rollers, pavers, asphalt machines etc. to rebuild damaged roads and infrastructure. There will also be a notably increased usage on council equipment such as sweepers, tippers and water trucks.

In the mining sector plant and equipment lost to flooding on site requires replacement, as does equipment used in the agricultural sector.

In addition to the above, we have seen an increase in enquiries for assets used in those industries that will indirectly see a spike in demand such as the quarrying sector. In order to repair roads and town infrastructure, there is a spike in demand for crushed rock, gravel and soil, which is supplied by the quarrying sector. Large excavators and shovels, wheel loaders and dump trucks, as well as crushers and screeners, are all critical pieces of equipment needed in quarrying operations.

As a result of the cyclone, we have seen an increase in demand and sales for earth moving, digging, lifting, transport equipment and small plant. The extent of the demand and duration will be impacted by the actions of the insurers and the diligence in making claim payments. We will continue to observe and report on the impacts of the cyclone in the next quarterly report.

Impact of the Queensland Floods
The most obvious impact on values is the increase in demand for ... wheel loaders and backhoes in particular to clear debris
AssetsKms/HoursPrice
Achieved
% of
retail
State
Mining & Earthmoving
2010 CAT 963D TRACKED LOADER7,644 hrs$85,00085%QLD
2008 TEREX SC207 JAQUES TORRENT TWIN DECK TRACK MOUNTED MOBILE SCREEN1,200 hrs$80,00085%QLD
BOMAG BW24R ROAD ROLLER4,302 hrs$46,45895%WA
2014 ARJES VZ 950 DK SHREDDER599 hrs$378,87585%WA
2013 CAT 259 B3 TRACKED SKID STEER LOADER1,324 hrs$46,00090%VIC
2011 CAT 140M MOTOR GRADER5,575 hrs$235,000100%VIC
2015 VOLVO EC300DL TRACKED EXCAVATOR1,335 hrs$182,50095%VIC

Motor Vehicles

Key Point Summary
  • Late model and low km cars are moving well in all markets and priced near retail value.
  • Great Wall and Cherry are struggling notably.
  • Stock is limited in NSW but abundant in QLD and WA.

New Motor Vehicles sales

There has been a distinct shift in buying trends among the Australian population that we have been reporting on over many past quarterly reports with the “Aussie family sedan” slowly disappearing from garages in favour of SUV’s, lifestyle vehicles or downsizes preferring smaller sedans. This trend has continued again into this quarter with SUVs sales volumes overtaking passenger cars for the first time on a monthly basis. Over the first quarter of the year the SUV has taken the place as the most dominant vehicle segment in the country with just short of 40% market share according to the Federal Chamber of Automotive Industries.

An interesting note in buyer tastes in March saw 3 utilities occupy places in the top 5 highest selling vehicles for the month with the Toyota Hilux (1st), the Ford Ranger (2nd) and the Mitsubishi Trion (5th).

 

Secondary Motor Vehicle market

The secondary market tends to emulate the current buyer tastes in the new vehicle market. As such, the strongest performing vehicles in the secondary market are the SUVs and light commercial vehicles. As to be expected, late model vehicles with low kilometres, good condition and service books have been selling easily and for higher prices. Many dealers have commented on the challenges they face in sourcing quality stock.

All Slattery offices around the country have seen continued high participation from interstate buyers at their auctions further evidencing the preparedness of buyers to purchase from around the country to find quality stock. Our Sydney office highlighted the increased competition at their auctions with a number of operators from Western Australia starting up new operations in Sydney.

The least preferred vehicles in the 1st quarter of this year have been Holden Cruze’s, which have been shunned by both our dealers and end users. Many dealers have commented that they see the Cruze as being a cheap Korean built car with a Holden badge. This has made these vehicles quite hard to sell even with significant discounting. A similarly challenging vehicle to sell of late has been the automatic Ford Focus. The feedback we have been given suggests demand is lower due to a defective transmission that Ford has not yet issued a recall for requiring a $2,000 – $3,000 discount on the wholesale price before we receive any interest.

 

All of our offices have reported on the challenges in finding buyers for vehicles manufactured prior to 2010. A 2008 Ford Territory with 250,000kms in our Newcastle premises has not found a home even failing to attract a bid at the $1,000 mark. Such cars are only attractive to an end user or someone looking for parts.

Any high performance vehicles, including HSV, AMG Mercedes and the RS Audi range, attract a large audience at our Sydney auctions with a noticeable increase in participation by end users.

In the light commercial vehicles segment, there is no surprise that Toyota Hiluxes continue to be the strongest performers alongside the Ford Ranger. The Mazda BT-50 is also a solid performer in the 2 door and 4 door models, both in 2WD and 4WD drivetrains, particularly with a tray back configuration. The strength of the Hilux and Ranger was witnessed in our Victorian auction when a 2012 Toyota Hilux SR with 62,426kms on the clock sold for $30,500 which represented 100% of the Glasses Retail amount. Similar a 2015 Ford Ranger XLT in the same auction with 31,659kms sold for $44,500, which was 105% of the Glasses Retail figure.

Secondary Motor Vehicle market
The least preferred vehicles in the 1st quarter of this year have been Holden Cruze’s, which have been shunned by both our dealers and end users
AssetsKms/HoursPrice
Achieved
% of
retail
State
2012 TOYOTA HILUX SR 62,426 km$30,500100%VIC
2015 FORD RANGER XLT31,659 km$44,500105%VIC
2006 LANDROVER DEFENDER 110178,761 km$22,250100%NSW
2012 MAZDA CX-5 MAXX SPORT17,289 km$29,25095%NSW
2013 MERCEDES-BENZ CLA 20062,197 km$35,25090%NSW
2008 SUBARU IMPREZA WRX STi111,925 km$24,898120%WA
2014 HOLDEN CAPTIVA 7 LS (FWD)10,759 km$21,379110%WA
2011 TOYOTA LANDCRUISER GXL (4x4)109,672 km$62,623105%WA
2014 FORD RANGER XLS 4X4 DUAL CAB UTE63,240 km$35,00195%QLD
2011 TOYOTA LANDCRUISER GX UTILITY140,528 km$44,759115%QLD
Steve Waterman

Staff Profile

Steve Waterman

Asset Manager & Capital Restructuring, Western Australia

Steve brings a wealth of banking and finance expertise to the Slattery team after a total of 21 years with Westpac as well as stints through his career in senior roles with AWB and Capricorn Society Ltd. Steve’s experience in managing files with large plant and equipment exposure is a natural fit with Slattery’s expertise as a leading national asset advisory practice.

Steve’s expertise further strengthens Slattery’s capability with our international partners to provide capital solutions in the industrial space through our offering of guaranteed asset values, short term bridging finance and guaranteed recovery positions among other innovative solutions.

His qualifications include:

  • Bachelor of Economics (UWA) – Majoring in economics and business management.
  • Many years in Banking & Finance completing many accounting and banking training courses in Cashflow and Balance Sheet Analysis, together with Distressed Asset and Insolvency Management.

 

What sets Slattery’s apart?

“Confidence that all assets will be professionally managed and received the best exposure from the well-established client base with truly national presence.”

What makes great client service?

“Ability to support all transactions with Slattery Asset Advisory’s team of extremely capable and very experienced industry specialists, and to be able to offer a range of realisation options.”

What are you hoping to achieve in the next year?

“To contribute to the development of new business opportunities and the continued growth of the Western

Australian branch, together with involvement in business operational enhancements. Particularly exciting is the opportunity to offer innovative asset restructuring and capital funding solutions together with guaranteed asset value and recovery positions through our international partners.”