Volution Group plc

Good morning. Fantastic to see so many people here in the room this morning. It's a real pleasure. I think through COVID it was quite difficult presenting our results remotely. So thanks for coming along. We're delighted to be here this morning and talk to you about our results for FY22 and indeed we'll give you a little bit of a hint of what we think comes next so we'll have to wait for that to the end of the presentation but we're here today to talk to you about healthy air sustainable that solution I'm Ronnie George I'm the Chief Executive I've actually been Chief Exec for over 10 years now a little bit scary when you say that eight years listed and over 10 years Andy O'Brien, Chief Financial Officer, three years with the group and really pleased to talk about our FY22. So a little bit about overview. Andy will take us through the financial review in a little bit more detail. Something about the business review, our three geographic areas. about summary, what happened in 22, and then we'll come on to outlook. And we'll try, I think what we'll try to do is allow a little bit more time for questions. I suspect there'll be quite a few questions around the inevitable what comes next and what are you seeing and so forth. So moving on from overview and a summary of what's just happened, I mean, it's been a year of strong progress, strong growth in revenue, operating profit, and in our earnings per share. Our operating margins have been maintained above the target despite the sort of well-publicised inflationary headwinds. Great progress with sustainability. Recycled plastics now at 67% of our manufacturing content. We're really delighted about that. And a statistic, I know a lot of people have asked us about this over time, our heat recovery ventilation proportion of total sales is now at 30% of the group's revenue. In the year, very important for us, strategic investment in two acquisitions. One very notable acquisition, Energy Recovery Industries, a company that we acquired in September last year. That's a provider of heat exchangers that go inside heat recovery devices, an excellent company and one that we've really enjoyed having as part of the group. And I mean, just a summary, really, we are very well positioned with the sort of regulatory underpinnings in our wider market. We have a flexible business model, and we'll talk a little bit about that as we go along. A strong balance sheet, really delighted with the position that we ended up at the end of the year with respect to the balance sheet. And this diversified end market exposure is crucial. It's really important. And I have to stress here that although Volution is a UK-listed, UK-headquartered company, we are very much international. And we'll talk a little bit more about that as we go along. So delivering on our strategy, three strategic pillars. Organic growth, we grew at 6.6% at a constant currency basis. That was supported by price. We have a sort of 3% to 5% organic growth range that we believe that we can deliver within. We were above that, and certainly we had a little bit more price delivery in the year necessary to deal with some of the inflationary headwinds that we're looking at. Value-adding acquisitions, and again, I think those that know us very well, we continue to acquire funded by our own cash generation and debt facilities. We haven't raised any equity in the eight years since we've been listed and delighted about energy recovery industries. And a small acquisition at the end of the year bearer in Germany, which is actually our inventor, our decentralised heat recovery proposition route to market in Germany. Small acquisition at the end of the year, actually quite nicely accretive in terms of the consideration. Basically, we just enjoy a little bit more of the margin that that distributor partner who was retiring had previously. And then on operational excellence, 21.1%. In actual fact, we improved our margins by 20 basis points in the year. So continuing to drive sustainability. Sustainability is essential for us. I genuinely believe it's authentic. I think it runs throughout the company. And I'd just like to talk to these slides here and just give a little bit of a flavor as to what's happened. So our low carbon content of sales You probably remember that we've got the green economy mark, one of very few listed companies, building products companies, that have the green economy mark. But this is to do with the proportion of our sales that are in what we call low-carbon product groups. And that increased in the year to 66.1% of our total revenue. We set, a few years back, we set long-term targets for... low carbon content of sales and also, I'll come on to it in a moment, our recycling content. And you can see there that in 2022 we actually exceeded the target that we'd set ourselves for the future years. Now we're looking to get to 70% of our revenue in low carbon content by 2025 and of course what we've demonstrated there is we're in good shape to deliver on that. The next one is about recycled content. For us, we make products that are primarily plastic. And I'm very mindful of the fact that plastic, I remember many years back or not so long back, we had the plastic bags fiasco with supermarkets and the plastic bag tax and so forth. So I'm mindful that we make products from plastic. And what we set out to do some years ago is to increase the recycled content. This is circular economy. We actually partnered with AO.com and we talk about fridges to fans. You're probably aware that the products come back, they're recycled, the plastic content is recycled and we are up to 67.2% of our plastic injection moulding and extrusion from recycled plastics. It's an incredible statistic. I absolutely believe it's market leading. I think our business development director told us recently that the average recycled content of a building products company in the UK at the moment is a maximum of about 16%. So we're at 67% there. But it's not just about circular economy. It's also the fact that if we use these recycled materials, they're more They're less volatile commercially price-wise. And we're keen to make further improvements there in the period ahead. And then ultimately, if we think about our three Ps, product, planet and people, it is absolutely about our people. And I have to say it's... It's a great sense of pride here today that I can talk about our people in the organisation. We are moving forward in a great fashion. We created a new role earlier on this year. Michelle Depman joined us as the head of group HR and I think our engagement with employees has moved to a new level more recently. Also worth noting that our sustainability committee that we kicked off in September last year has now had three meetings and is also attended by the senior NED, by Amanda Mellor. So look, on the three Ps, I think we made really good progress. This next slide I've got here for you It's quite complicated, and I thought, try not to lose the audience when I walk you through what this is trying to tell us. So lots of words on the page, but I'll try and be succinct here. We are a provider of ventilation products that reduce carbon emissions in buildings. What we've calculated through our scope one, two and three emissions is that effectively we have about 223,000 tonnes of carbon emissions across scope one, two and three. And sorry, that's nonsense. But what we have is 52,000 tonnes of scope one, two and three carbon emissions. What we did, and we wanted this to be credible, is we went to Arabs about six months ago and said, help us calculate the carbon emissions that our heat recovery products, one year's sales of heat recovery products installed for one year in a building would save as a carbon emission. And there's very well publicised energy performance if you like, energy performance for our products. And so therefore they've used this independent data to verify the amount of carbon that our products save. And in very, very simple terms, we are saving about four times our scope one, two and three emissions when our products are installed in a building for one year. But what does 223,000 tonnes of carbon emission means? It's about the equivalent of carbon emissions from 28,000 homes in one year. We're really pleased about this because our products are not just important in terms of indoor air quality and health, but they also save money and save carbon emissions. So it's basically four times saved than the carbon emissions from our group. However, the trick here going forward is to further reduce our carbon emissions. And what you'll see on the bottom right hand side of the slide is our carbon intensity. So this is our carbon intensity measured against effectively every million pounds worth of revenue that the group has. And we've delivered a 67% reduction in our carbon intensity in the last nine years. So really pleased about that. I hope the explanation makes sense. We spent a lot of time with Arabs and they independently, naturally they did the calculations and they were happy to put their name to it. There's a more detailed feature in our annual report. So look, what I'll do now, I'll hand over to Andy to talk about the financial results for last year and then I'll come back on the business review in a moment.

Thanks, Ronnie. Good morning, everybody. So, yes, just covering the numbers for last year. So, first of all, our sort of typical overview slide, just sort of charting the progress against our key indicators in the last five years. Revenue, Ronnie's already touched on, and we will provide a bit more colour later from a regional perspective, which I guess is going to be more enlightening, but look, a really strong... revenue performance in the year part through organic means part through inorganic means more importantly translating that through to profit and I guess you know if you look at the top right there the adjusted operating profit margin Ronnie again did mention this in the introductory slide but in in the context of a year where supply chains were enormously unstable where price pressure inward was was definitely more profound than we're ever used to seeing it. I think our ability to hold and actually ever so gently increase margins by 20 basis points really does stand out and I think look as testament to the agility of the team's decisive actions as regarding in particular price increases into the customer base but also doing what we can around things like you know recycled plastics content to take some of the cost out of there looking at other ways of driving efficiency across the operation and it's such an important measure for us and it's something that we sort of cherish and want to hang on to. Earnings per share 24 pence, I think you guys would all have read our pre-close in July where we talked about upper end of expectations and we were ever so slightly ahead of that at 24 pence for the year. Just a little bit on the bottom two, cash flow and leverage. I think, if you'll forgive me a bit of football parlance, I think our cash generation was definitely a game of two halves. So the first half of this year, as we talked about quite a bit back in March, we consciously and deliberately invested heavily in increasing our inventory levels. So we recognized the uncertainty, the challenge around the supply chain, the unreliability of supply deliveries for various reasons. And we felt that it was a sensible investment of our cash to increase our inventory levels for key, fast-moving components across most of our businesses. So that investment went in in the first half of the financial year. If you remember, we talk about cash generation being effectively how much of our adjusted earnings before interest, tax and amortisation do we translate into operating cash. Normally we look to be 90% plus on that metric. The first half of the year we were 50%, so we were substantially different from what we'd normally be. But the full year measure was 76%, so you can do the maths, meaning the second half was effectively 100%. You know, that 50.4 million of operating cash flow that you see on the chart there, 34 of that was in the second half of the year. So we think that was a really, you know, we said that's what we do and we were really pleased that we did that. And I do like the shape of the bottom right chart there just showing how closing leverage has moved. over the years and look of course i mean our leverage essentially wax you know we are very cash generative our leverage waxes and wanes because of the timing of acquisitions um but to be in a position going into a new year with 0.9 times of leverage and continuing to generate good cash you know means that we are both very resilient to whatever comes but also hopefully in the right position to jump on acquisition opportunities as and when they present themselves Fairly simple slide here just in terms of the revenue breakdown between organic, inorganic and currency. You lost the obvious question how much of the organic is price and how much is volume. It does vary from business to business so I think in our UK brands and businesses it is definitely more price than volume but outside of the UK it's the opposite, it's more volume than price. Crudely, we would say that it's approximately half-half in terms of that 6.6% being delivered through those two means. Inorganic there, a big inorganic impact in the year. We were very acquisitive in the previous financial year, as you remember. So you've got two things here. You've got the sort of the drag through of the full year operation of klima rad and our two smaller acquisitions in the nordics which we made in fy21 and then you've got 11 months of eri which entered the group in september 2021. um currency was was a bit of a headwind last year predominantly in you know euro land and in the nordics um obviously currencies are moving slightly different direction at the moment This slide, just in terms of, if you like, putting a bit more colour around the operating margin, the 21.1%. And I guess if I look in particular at those four little mini charts at the bottom for the group and then the three regions, I'm going to start with the UK. So those of you who attended our half year presentation will remember that at the half year, actually our UK margins were trailing the prior year. So we were 19.9% in the first half of the year which was about 160 basis points down on where it had been in half one of 2021. And what we said there was, look, the full force of our price increases will now take effect in the second half of the year. There was a piece of it in the first half, but it will carry on taking effect. We knew we'd taken some actions which would move this in the right direction and looked really pleased to get that UK margin from a deficit of 160 basis points at the half year to being flat year on year in the full year. So that was a strong performance in the second half. Australasia, you know, really good that we've held on to the margins there. Our faster growth in the year was actually in the Australian business versus the New Zealand business. And generally speaking, we would have said that New Zealand is a higher margin profile business. But I think what we're enjoying in Australia is this really strong revenue growth, good management and maintenance of indirect costs, meaning that the leverage is coming through nicely in Australasia. And then continental Europe, yes, you see 160 basis points change in the total European picture year on year, but actually that is essentially an acquisition mix effect. And we're not ashamed of this, we talk about this in our acquisition strategy, that we would buy businesses which will almost invariably have a lower margin profile than the group, and that we believe that over time we can improve that and enhance that. The main contributor there being ERI. And just to give you very, very rough numbers. So ERI in 2022 represented about 13% of our continental European revenue stream. And the margins that we enjoy there are sort of close to 20%. So a nice margin, but below the sort of circa 27% that the rest of the European business was trading at. So effectively, that is the primary driver of that there. Net debt cash flow. So talked already about the half one, half two picture referenced earlier, the 76% cash conversion. And look, I'm going to say a closing leverage of 0.9 times excluding leases is a good, healthy position for the balance sheet going into the new year. Although the numbers are generally speaking, speaking for themselves, just in the acquisitions, as well as the purchase of ERI and Berra, probably worth mentioning that in that £24 million there, we had just about £4 million worth of contingent consideration payout For our business inventor in Australia and for the air connection business in in Denmark the larger one being Australia and both of those paid out at their maximum and You know, although it's cash out which normally isn't fun for a CFO actually the you know a hundred percent payout of an earn out is the best check that we can write because what that says is You know, we've set targets for those businesses we've delivered those targets and and we're delighted to then share in the success with with the sellers and A couple of slides just to put a little bit more around some of our capital allocation priorities and where our cash has gone in the year. CapEx, you know, we are a CapEx, relatively CapEx light business. So we've always talked about five, six million pounds being our sort of annual CapEx spend. It's been a little bit more this year, so just under seven million pounds, but some really important and interesting stuff here. So top bullet point. When we purchased ERI, part of the plan and part of the commitment was that they were approaching a capacity headroom ceiling, and so we announced a €2 million investment to acquire some adjacent land. build on that and increase the production capacity of the building. We've started that during 2022, we'll do more of that during 2023 and the programme should finish around December 2023. We've also spent some money, about half a million pounds, increasing our production capacity in Swindon for our OEM Torin motorized impeller business. And again, that's a function of it being at its output capacity and increasing production capability there. R&D is always important to us. So we spent just under £2 million on new product development programs and related tooling and equipment to operationalize it. R&D is an area which also new product introduction was an area which was definitely compromised and difficult during the pandemic and the immediate post-pandemic period for obvious reasons and indeed for most of the year just gone supply chain challenges and focusing on sort of operational engineering to be able to deliver to customers took a priority but what we are now able to do now that supply chains are working well and everything's in good shape is we are definitely doubling down and focusing again on that pipeline. And there's some really interesting new stuff coming through, we hope, this year. Bottom bullet point, you know, we've only talked earlier about our commitment to sustainability and how important that is to us. And we try to embed that in everything we do. So it's yes, it's in the operations, but actually even in, you know, I've referenced here the vehicle fleet. You know, we have we have a large sales force in the UK and elsewhere. They are spending a lot of time on the roads. And that's an area where, again, we can make more informed decisions. So we've moved our fleet in the UK to a fully hybrid fleet. We're not quite ready for electric yet, but we're definitely moving that in the right direction as part of our sustainability journey. Acquisitions, already covered most of that. So the two acquisitions in the year, ERI and Behrer, which was our distributor in Germany, as Ronnie described it. On the right hand side there, you know, the metric that we set to judge our acquisition performance is we say that once we've owned a business for three full financial years, we're targeting a return measured very simply as the operating profit of that business relative to the total acquisition spend, both the initial acquisition and the contingent consideration. of 18 percent and we say that we say we need three years because we need to work out how to support and work alongside that business and so the the only one that falls into newly into that category this year is is venter in australia and you know as i already mentioned we were really delighted to pay out the full contingent consideration there um a couple of stats revenues doubled or more than doubled since we acquired that in march 2019 and the return on that acquisition is now around 25%, so substantially ahead of our target. And we think there's plenty of further potential in the Australian business. Bottom right there is how that then accumulates over time. So of course, well, the bar is the aggregate spend to date, which is three years or above. So that just keeps growing over time. And then you've got the total return on that. So I think, look, it's an important metric for us and hopefully it's one that's important for investors as well. So with that, I'll pass back to Ronnie.

Just to add, we talked about the contingent consideration that we paid in Vente, but the owner's still with us and still part of a long-term succession handover plan. And I think that's key to our success, is that people stay with us even beyond the earn-out phase. We talked about in Denmark, and the chap who runs our business in Denmark is still with us. So that's a real pleasure for us. If we look now to the sort of business review, the operating segments here, this is UK, continental Europe and Australasia, but I particularly like the next slide. So what this is trying to show you is our growth history in 10 years. You've known us eight years since we've been listed, but in the 10 years, I became CEO at the beginning of 2012 and we materially changed the strategy which was to grow inorganically as well as organically. And what you can see there is that the green and light blue element of the graph has come in as we've acquired. And the only disappointment on that slide is, of course, FY20 when we had the COVID dip and things came off. But what you're looking at is a compounded revenue growth of 13.2% over that 10-year period, which is similarly followed in terms of earnings and completely funded from our own cash generation. And as Andy's already told you, balance sheet leveraged 0.9 times at the end of the last financial year. We're generating cash already in the new financial year. acquisitions are essential for us but it also shows the diversity of the group. We'll probably come on to it later but when I joined Volusion in 2008 it just had the dark blue element and this additional diversity and exposure is really exciting for us. You can see it again on the next slide. Now, I won't talk to this slide because I think it's just there. It's helpful for you to sort of relate to. But into the geographic areas. And so UK, there's Harple there in Reading. Harple's been with us for about 25 years, runs our mould and injection moulding and extrusion. And we've highlighted quite a few people in this presentation, and they are essential. They're absolutely what underpins our delivery here. But in the UK, we delivered 6.2% revenue growth and we held our margins in the year but in actual fact we had a lower margin in the first half of the year to the second half our residential category grew well but inside that residential category there were some interesting trends one of them i remember being in this room in march of this year and we talked about private residential refurbishment that had been challenging certainly there was a covid boost and we enjoyed some of that and we're seeing the other side of it now But the issue for Volution in terms of providing fans and ventilation products in private refurbishment is it's not a completely discretionary spend. If you've got ventilation at home and it breaks, you're likely to change it. You're likely to replace it. And although we make fantastic, great quality products, they don't last forever. And so there is a replacement cycle. There's 20 million private homes in the UK. And it's quite interesting because our estimates are that there's probably a third of UK homes that still don't have any ventilation. In actual fact, ventilation was only regulated in new build from about the mid 80s. So if you think about the UK profile, the stock profile, a lot of houses were built before the mid 80s and therefore not necessarily ventilated. But on the other side, public housing RMI has been very strong. We called that out in March this year. It's not a surprise. Going into COVID, it was reasonably strong and then through COVID it stopped. It ground to a halt because of access to properties. tenants clearly were nervous through COVID and landlords were sort of restricting access. So we've seen strong performance in public housing RMI. We think that will continue. And we're also seeing a really interesting trend when local authorities and housing associations talk about net zero carbon targets 2030. It's music to our ears. And about 10% of our public housing refurbishment now is heat recovery. and that's growing very nicely and in actual fact Volution in the UK is probably the only provider of decentralised heat recovery that goes into social housing. We have a pretty unique product range and we're about to launch the products from Germany into the UK market later on in October. Residential new build, I was here in March and we'd had a week first half of the year on residential new build, which was a lot about the hiatus and the supply chain and so forth. Not so much us, but there were difficulties. But we had a strong second half of the year and we've also had the change in part F and part L of the building regulations, which will act as an additional tailwind in terms of heat recovery and system ventilation going into new houses over time. And the other thing to bear in mind is I'm starting to see... commentary now around how much cheaper it is to run a new house an energy perspective than it is to run an older one and of course that's all about insulating well and using energy efficient ventilation and not emitting all of your nice warm air to atmosphere in commercial our revenue is broadly flat a little bit more challenging but we've had some particular highlights we announced one of them in july we've won a particularly large prestigious new uh bank headquarters in london it's a it's about just under two million of revenue for us That's a project that we're now supplying right now. It's kicked off already and that will support us in the coming months. And again, we've got similar drivers in commercial ventilation as we have in residential. And the interesting one through COVID was that the solution to COVID in schools was to ask our children to wear their coats and open the windows. which isn't really satisfactory. And we see that there'll be a greater push towards improving ventilation standards in commercial buildings, more medium to long range. But the issue in buildings is about carbon emission or CO2 levels. And we don't measure it. And if we were measuring it in this room now, although the ventilation is actually pretty good, you get to quite scary levels of CO2. And that's the issue in future is when you measure the level of CO2 in a building, you're then compelled to do something about it. And that's what we call demand control ventilation and that's a trend that's coming. Export performed well. We're the market leader in Ireland. The house building situation in Ireland is somewhat different to the one I remember back in 2008-9, where effectively we built too many houses in the wrong places. It actually feels like a more sort of underpinned sector, but heat recovery ventilation penetration in Ireland is far greater than it is in the UK. We estimate that it's about 30% to 35% penetration in the UK. In Ireland, I would say it's It's actually so well regulated that it is impossible to build a new house or apartment in Ireland without some form of energy efficient ventilation. The UK is moving in the same direction and will get there in the coming years. And you already mentioned OEM. We manufacture motorised impellers. These are low carbon impellers. motorized impellers that are effectively integral to driving the air movement part of a ventilation device and we are currently capacity constrained and have been investing in additional capability. We did something earlier in the last financial year and we've got another investment that goes in over the next three or four months to further uplift our capacity in our OEM area. Continental Europe Interesting statistic here. Our operating profit in continental Europe is now actually greater than in the UK. It's an interesting statistic for you. For those that can sometimes think of us as a sort of very pure play UK centric situation, it's not. I won't talk too much about the margins other than 25% operating margin is a strong margin. Inevitably, as we acquire in continental Europe over time, we're going to get some inevitable dilution. It's unlikely that we can buy significant organisations in Europe that are already generating our group margins. But the proposition in Europe is very exciting. In the Nordics, we've been well established for some time. It was a difficult year. But in actual fact, we didn't have sort of soft comps in the Nordics. We had some strong performance. And we were pleased about how things held up. And if you consider in the Nordics, our exposure to RMI is probably greater than it is in some other areas. That was actually a really commendable performance. And we're pleased about the direction of travel in the Nordics at the moment. We're not seeing a sort of boom bust RMI play. in heat recovery, decentralized heat recovery, both in the Netherlands and Germany. Particularly pleased about KlimaRad. It had a stronger second half of the year, but most notably, the order intake was very strong. Andy and I have been with the team on several occasions over the last few months, and they talk about the payback on the investment for housing associations having halved in the last 12 months. And it's very obvious, isn't it? Energy costs have doubled. Our products have gone up a little bit to protect our margins, but the payback is really compelling. Very excited about KlimaRad. We still own 75%. We have a commitment to buy the other 25% at the end of 2024. And also in Germany, we've seen our inventor proposition where we're the market leader for decentralized heat recovery perform really well in the year and then energy recovery industries another heat recovery play Andy and I had the pleasure to be in Bitter last week and a really nice photo with about 200 of our colleagues but we are investing in ERI we are capacity constrained and we are investing to increase the size of the facility by about another 60-70% again. We're quite well underway with that investment plan and we want to reduce our lead times and increase our capacity for this strong proposition of heat recovery cells. When we print our annual report in a few weeks' time, you'll see a really nice case study, and we've opened up a little bit about the due diligence that we've done on ERI when we acquired the business and shared some of the commercial DD in terms of how that company ranked versus its peers. But we knew the company really well anyway. We've been a customer of ERI for many years. We had first-hand experience, so we knew what we were acquiring. and as Andy said earlier we've actually extended the earn out window to the end of 2024 with the senior team with the previous owners and I absolutely would be delighted if we wrote that cheque. It's quite a big one but there's quite a big hurdle for them to get over but they're confident about the direction of travel and really committed to helping us get there. And then Australasia, we're going in three weeks, three or four weeks. Can't wait to be there. It'll be a little bit warmer than it is here in Europe at the moment. But look, we've got a fantastic proposition in Australasia. In Symex, I thought about this this morning. In Symex, we've owned the company for four years and I've known the general manager for 10 years. It was a customer of ours. Ian Borley does a fantastic job in New Zealand. And in Australia, where we own Ventaire, it's been growing faster than in New Zealand. But look at that, 11.4% organic growth in the year, operating margin to 21.8%. And actually quite a lot of our inventory investment that went in in the last year was to provide the stock availability to our customers, most notably in Australia. We're not shy about putting inventory close to customers to support fantastic levels of good customer service. There we are. So that's a summary. I mean, this is very much backward looking, so we'll get on to the outlook in a moment. But it was, I'm repeating myself here. The only additional point that wasn't at the beginning of the slide there is our geographic diversity. So 62% of our revenue wasn't in the UK. And of course, that will grow again this year. We've got a full year of ERI. We had one month had one month last year sorry where we didn't own the company so we have an extra participation this year and we're pleased about this geographic diversity it's not that we don't like the UK market I particularly do we've got a market leading position in residential but by definition in order for volution to grow materially over time we have to be in more than just the UK market and onto outlook The new year has started well. We've delivered a revenue and profit that is ahead of the prior year. we're delivering great levels of customer service, best levels of customer service at any time since pre-pandemic. The pandemic was tough. A lot of people struggled with supply chains and so forth, but we're in really good shape, really good shape. And I stress that because it's enabled us to win share over some of the competition. There's been some, you know, well-publicized issues and events around the UK market in particular, and we've benefited from it. And possession is, you know, it's the old adage about nine tenths of the law. When you win an account, from somebody because of a poor service, it's generally yours to give up. It doesn't automatically go back to those that lost it if they get back to where they were. So we're well placed and pleased about where we are, but of course there is that wider geopolitical uncertainty, macroeconomic uncertainty that our view is only as good as anyone else's. But the agility of the group and the positioning of the group and the strength of the balance sheet, I think, puts us in a good place. So that's the sort of formal part of our presentation. I hope that update was helpful. We have tried to allow the sort of remaining 25 minutes, if necessary, for Q&A. So I think what we'll do is start in the room. So I'm happy to do that. So please, Clyde.