Volution Group plc

Good morning and welcome to our analyst briefing. We're delighted and delighted so many of you have made an effort to come out and see us today. So what we'd like to do is together between us we'll cover off our half year results. I'll go through an overview which will be a little bit less financial. I'll hand over to Andy to talk about the financial review. Then we'll come back on the business review and talk about the three geographic areas and then at the end summary outlook and then I think very important around Q&A. But look, we've had a really strong first half performance. We're delighted about our performance in the first half of the year. Organic growth, 6.3% at constant currency. That's through volume and price. So both areas participated well. Our operating margin has been maintained at our sort of long term, above our long term target of being above 20%, so at 21.1%. What's really important here, Volution is a company that provides healthy air sustainably, and these metrics that we're talking about when we talk about sustainability are really important. So our recycled plastics use increased by 18% in the half. So we are now producing 76% of our internal plastic parts from a recycled content. We have a long-term target of 90%. And another statistic that we reported last year is around heat recovery ventilation. I know it's an interesting one. I know people are really keen to see what's happening there. But that increased again in the half to 32.2% of our group's revenue. So look, overall, strong cash generation, robust balance sheet. and significant headroom for acquisitions. It's important. We talked about a well-developed M&A pipeline, and that's essential. So look, strong performance underpinned by structural growth drivers, and we'll work a little bit more on what those structural growth drivers are as we go along. We feel that we're delivering on our strategy. Our strategy hasn't materially changed in the nine years that we've been listed coming up this year. I think what we've done is we've sort of coalesced and refined. But our strategy is hopefully relatively straightforward and easy to understand. But we want to grow organically. We've got a long-term target to grow organically between 3% and 5%. And we delivered 6.3% constant currency organic growth in the first half of the year. We are a company, we're an organisation that throws off cash really well, our operating cash conversion is strong and we have a clear expectation as to what to do with that cash and that's around acquisitions, no material acquisitions in the half but certainly we'd like to talk a little bit more about our well-developed pipeline as we go along and that for us is a really important ingredient in delivering our long-term EPS growth and I think since we've listed it's been around about 12 to 13 percent compounding so clearly this is an important component and then operational excellence and there's a nice slide that Andy's got later on in terms of the margins but what you can see is a consistent delivery now not just one half but consistently half on half maintaining our margins And that's made up of a whole raft of different elements, not least of which are issues such as utilising more recycled plastics. Utilising recycled plastics and having that circular economy type approach is really important to us, but we're also motivated by the fact that if we do it well, it actually gives us a cost advantage. And so from an ESG perspective, it's a great one to drive. Our customers are excited about the fact that we have such a large content of recycled plastics, but it also helps us with our costs. And revenue from low carbon if you like, energy saving products increased again, 69.4%, 65% in the first half of last year. And we'll go through, when we go through the individual areas, a little bit about what's driving that. But it shouldn't be a surprise. We're a company that helps our customers to decarbonize their buildings. And in decarbonizing buildings, you need more energy efficient products. And this is a really good metric. And in actual fact, our target was to reach 70% of our revenue by the end of 2025. So I think there's probably some rethinking to do around our target beyond this year and next. So as I said, we're an organization that helps with the transition to low carbon. If we think about net zero carbon 2050, seems a long way away. But if we think about in the different markets, whether it be the UK or the other markets that we participate, there's a significant stock that needs to be dealt with. And so what we see here is from a sort of decarbonisation perspective, 40% of the energy use or 36% of carbon emissions are from buildings such as the one that we're in today or the ones that we go home to at the end of the day. And we enable carbon avoidance. by providing great solutions to the marketplace. And there's a whole raft of updates. You've got the future home standard from 2025. That's due for consultation in this year. And in Europe, we've had new proposals around what we call EPBD. But these regulations are gently helping us every year. in any one year massively profound, but each year they just layer upon layer. And we can give you some further examples. But it's not just about decarbonising buildings. We provide solutions that ventilate in an energy efficient way, but it's about healthy air. And I think the healthy air dynamic is now much better understood post COVID than it was going in. And COVID hopefully I think is very much in the rear view mirror, but COVID was an airborne transmission risk. And you were more likely to catch COVID inside a building, particularly ones that were poorly ventilated than you were outside. And that's why all of the government guidance was about avoiding contact inside buildings and so forth. But there's also some other quite dreadful stories that have been in the press more recently, if you read our statement in more detail. but it was a very sad story in the UK around a social housing tenant, a little boy who passed away a couple of years ago. This is what will become our law. And what we saw as a result of the coroner's report is Secretary of State wrote to all the social housing providers in the UK on the 19th of November last year and specifically warned, said, you've been warned about the quality of the stock. And when we come on later on, you can see how that has quite a profound impact on the demand in some of our markets. But we all appreciate how important indoor air quality is. It's inextricably linked to health. I remember somebody saying to me, how long can you go without water? Well, go a few days, probably quite a few days. You can't go very long without air. And I think we're understanding the importance of air quality more and more. And the third element is that we provide comfort. There's an increasing risk, it's quite an amusing one, but actually in new low-carbon, properly specified new dwellings, there is a risk of overheating. If you've got a London apartment in the summer and you don't have air conditioning, you'll understand what I mean. And so the regulations now are thinking more sympathetically. Part O that came up more recently is thinking about overheating in a modern, airtight and well-insulated home. So these regulations are really helpful and we play to decarbonising healthy air and to comfort. Evolution has what we call our three P's, product, planet, and people. This is just a small snapshot of what's happening here. We've talked about these metrics already, but we had a target to reach 65% of our revenue in 2023 from low carbon solutions. And in the half year, we're already at 69.4%. And that's because the growth in our revenue is generally fastest around the low carbon solutions. We have quite a company called Energy Recovery Industries in September 2021. It provides heat recovery cells. It's a market leading proposition and that company is growing very well. Lots of examples. There's some products on this page. There's a KlimaRad decentralized radiator with heat recovery for the Netherlands for the refurbishment market. There's our positive input ventilation product in the UK. These are all low carbon solutions. And improving our environmental performance around recycled plastics. Again, and we talked about this, this wasn't a surprise, this number. If you look at the exit rate that we had in FY22, the work that we did in the first half of 22 that we knew would give us a platform, a springboard in the second half of the year, it's no surprise to us that we're making great headway with increasing our recycled content. And this is an essential ingredient when we talk to customers. What's happening now is our customers, specifiers, are asking us how much recycled content is in our products. And then finally, really delighted about this around people, we take health and safety as an organisation very seriously and we're delighted that our frequency incident report had come down in this year. Our ambition remains zero harm to have none of these incidents, but we made really good progress with health and safety in the first half of the year. So that was relatively high level. Andy's going to take you through the financial results and then I'd like to come back and talk about the three geographic areas in a bit more detail.

Thanks for any morning, everybody. So yes, just a couple of slides just to highlight the financial performance for the half. So first of all, the slide that we always start with, which is looking back at our key metrics over the last five comparative periods. I must feel like saying it speaks for itself because I think largely speaking it does. Revenue, we'll come into a bit more colour on that shortly in terms of the regional mix, but just to break that down a little bit, so the 7.5% constant currency growth there, 6.3% of that was organic, 1.2% was inorganic from the drag through of a full year operation of our ERI business in North Macedonia. operating margins, you know, really, really pleased in what has been not just the last six months, but the last sort of 18 months, a really difficult environment in terms of supply chain, inflationary pressures, disturbances around, you know, input of materials and costs to maintain our margins above 21%. I think we're absolutely delighted with. I'll give you a bit more colour in a coming slide in terms of the regional shape of that um our earnings per share 12.4 pence for the half up six percent compared to the same half as last year slightly less than the 7.1 growth in operating profit and that's that's testament to two things that's obviously the interest cost burden not because we're carrying more debt but obviously because of the trajectory in bank base rates across all of our across all of our markets and secondly a slight increase in the effective tax rate which went from 22.6 to 23.2 percent in this period really good positive cash flow performance again I'll come on to that shortly you know we did say at the year-end results that you know we made a substantial and deliberate investment in working capital through the the late period of FY21 and the first period of FY22. And what we said at the year end was we were happy with the inventories we had. We were committed to normalising our working capital and maintaining it where it was. And indeed, our key metric there, we talk about a cash conversion target. and we have a target for the full year of 90% and in this period it was 88% and generally or in fact almost invariably half two is stronger than half one so that's a really good performance and the result of that is a leverage X leases at the end of the period of 0.8 times hence the references to headroom etc. revenue fairly easy slide here as well so you know again the regional piece Ronnie will come on to shortly but I guess just a couple of things to draw your attention to so the last time we updated you on numbers was at the AGM in December where we gave you position for the first four months of the year and at that point in time we said that constant currency organic growth for the group was 5.5% So the fact that we concluded the six months at 6.3%, I think shows really good continuing momentum through those last two months of the year. I'm sure the question will come, so let me preempt it in terms of the price volume constituent of our revenue growth. Look, it's not always easy because you've got to try to take out product mix, customer mix, et cetera, et cetera. But to the best that we can... analyse it, we would say about 35 to 40%, probably 40% of the revenue growth is coming through from volume and about 60% or so from price. But actually, if you then went down into some individual markets, so for example, you know, Ronnie will talk to you more about it shortly, but UK residential growth of 15.7%, that is probably 5, 6% price and 10% plus of volume. But then there are a couple of market areas, which again, we'll talk about shortly, where volumes were a little bit more challenged, hence the overall mix. But look, I think really encouraging to see both good delivery from price and from volume. In terms of operating profits and margins, so you're well aware now of our long-term target of 20% plus operating margin delivery and I think that bottom left chart there just shows the consistency over the recent periods in getting to that target and maintaining that target through, as I say, some quite turbulent and difficult supply chain and cost input environments. So really pleased with an outcome of 21.1%. And I think when you look at the regional piece over to the right, I think, again, the thing that we're probably most pleased with in the period is the uptick in the UK margins. So a year ago when we delivered our interim results, that was 19.9% in the UK. So we're now up to 21.2, so 130 basis points improvement. a little bit of softening in the European margin which again I think we sort of trailed at the year end and predominantly that's a mixed point because the highest growth area in the first half of the year has been our most recent acquisition in ERI in North Macedonia which has a nice margin but it's sort of 20-21% margin versus high 20s, 30s in some of our other territories. So the margin, the mix effect has brought that down slightly, but still look at 24% margin for that region is very, very strong and really good strong margins being sustained in Australasia as well. They're at 22.6%. Cash flow. So as I mentioned, one of the things that we had talked about when we spoke in October was our commitment and our imperative on holding working capital where it was and returning to really good, strong cash generation. And I think this slide demonstrates that. So 88% cash conversion, as I've already mentioned, a leverage of 0.8 times. So our net debt on the right there obviously includes the IFRS 16 finance leases. If you take that out, it was just under £56 million at the end of the period. And we typically generate more cash in the second half than the first half. Dividend is lower, etc. So I think there's one missing box there, which hopefully we'll fill in the second half of the acquisitions. There was no acquisition spend in the period. There was a little bit of spend on CapEx. So we spent just over £4 million. A fair amount of that was redirected at new product development. So I think one thing we've said, and again, I'm sure we'll talk about it some more, is is that new product introduction was something which we almost deliberately put on hold a little bit through the COVID, the early post COVID period. It was more important to focus on the business as usual delivery, but over the last sort of six, nine months with the operations being in a really good steady state, you know, we've absolutely put the foot down again on some of these really important new product introduction programmes. So that was a key piece of it. There was also some interesting investments that are ongoing in our facility in Macedonia, our facility in Bosnia with Klimorad. So, you know, all developing for the future opportunities for the business. So with that, I will pass back to Ronnie.

Thank you very much. So on to our operating segments. What's really important from our perspective is we think about Volution as being a ventilation group and being in this sort of EVAC industry. And so it's important here in terms of our sort of available market. We're focusing on the UK, on continental Europe, and Australasia. And what you've seen develop over the last eight and a half, nearly nine years, is a situation where Our UK is becoming a smaller proportion of the group's revenue. But of course, that's not because it's in itself becoming smaller. It's because we're growing faster, mainly by M&A, but also organically in the other two regions. So first off, revenue in the UK is 73.7 million, but that's revenue from the UK. It's actually not all in the UK market. A couple of things to bear in mind here is our UK export is obviously outside of the UK and our OEM is about half exported. So what you actually see is about 35% to 40% of the group's revenue is in the UK. And it's a really important point because I know what can happen frequently is that the evolution – can sometimes be compared only to UK companies. And we think of ourselves as a more international group in this HVAC sector. And I'll just leave you with that thought, because that's how we judge our performance against others. And we're not looking exclusively at the UK, let's call it building products market, for example. So I'll take you through a little bit more detail and just try and bring that to life. But in the UK, We're a residential leader and we have a plethora of brands. We've acquired probably as many as we are able to over recent years because we have a very significant market share. And so by definition, it's going to be much harder for us to grow inorganically in the UK for obvious reasons. But the particular highlight in the first half of the year was a 15.7% residential revenue growth, which I think is probably a little bit counterintuitive. I think the CPA are forecasting UK residential RMI at minus 9% for this year. We don't certainly think our markets are operating at minus nine, or certainly we don't believe our performance is expected to come out. But that's because the residential RMI bucket is quite a generic one. And one of the areas to think about is discretionary versus non-discretionary, if you like. And so what's happening in our residential ventilation is we have three component parts. We have the public RMI. the private RMI and the new build, and all three were growing organically. And there's quite a bit of detail in the individual statement that I would sort of refer you to later on. But if I just pick the major highlight was about public housing refurbishment. And this was particularly pleasing for me because I've been in this chair for long enough now to have to explain to you in previous occasions why it was underperforming. And we were underperforming and I know the question was, but is this really an underperformance or are you losing share? So I would say we weren't losing share. The sector was underperforming and this has been a built up problem in UK social housing that needs to be dealt with and it can't be dealt with in six months. And so the strength that we're seeing here is not necessarily just a six month hiatus. We've got five million properties in the UK, in UK social housing. What's particularly exciting, and I believe we're leading this from a ventilation perspective, is we're now starting to think about more deep refurbishment of these properties. And when you deep refurbish you move to insulating really well. And when you insulate really well, it becomes obvious that the impact of ventilation is much more profound in a well-insulated property than one that's leaky. And we've started to move some of these refurbishments towards the use of decentralised heat recovery. And I'm particularly proud of that. I sat here in this room in October last year telling you about taking 20 of our UK social housing specification and product management teams to Germany to work with our German colleagues on the proposition they had there, and we're getting traction. It's relatively small. It's hundreds of units, but there's 5 million properties to go out over time. This is what's happening in UK social housing. There's a tailwind in respect of awareness. There's a decarbonising issue, and I am confident that not only do we have a significant share, but we're also gaining share as we go. So that's the major highlight there in terms of public RMI, but our private RMI is also growing significantly. We look at search terms in Google, and we looked at some of the news that was happening in October, November last year on ventilation and problems and health risks and so forth. And you could see a correlation to searching for certain products, and we can correlate that to some increased demand for certain products. Do I believe that's only going to happen in this half and that it won't repeat next time round? I doubt it. And of course, the other interesting dilemma at the moment is everybody's being told to turn the heating down. The government's actually running a campaign on national TV telling you to do so. But those of you who know the physics here, if you like, air holds more water at colder temperatures than it does at hotter temperatures. You get more condensation in your house when you turn the heating down. So it shouldn't be a surprise to us that we're seeing more ventilation demand in RMI. Maybe what is a little bit counterintuitive, and I know we sat here in the room this time last year talking about residential new build being weaker, and we said that it would come back, and it came back very strong in the second half of our FY22, but it's also performing well at the moment. There's no doubt some storm clouds on the horizon, so we know that reservation rates are lower, but we also have a huge regulatory tailwind and part F and part L of the building regulations last year moved us away from exhaust ventilation into more system type ventilation for the future. That's happening without doubt with every house builder and that's a really important tailwind for us and we're extremely well placed with, in my opinion, the most comprehensive product portfolio in this market. So residential, great performance. Commercial is, for us, quite niche in the UK. We're not claiming to be the leader in the commercial space. We have a number of niches. I break them out into three component parts, if you like. Our RMI perform very weakly, and it's because in the first half of our last financial year, what we had is a situation where If you remember back, we were coming out of COVID, we were opening restaurants and small commercial properties and so forth, and there was a strong demand. It was a very strong period for us in terms of commercial RMI, and that hasn't repeated for obvious reasons. have some gaps in our portfolio when it comes to sort of commercial heat recovery and also in the education sector that we're working on. Andy's already talked to you about an increased focus on innovation and we have a whole raft of new products coming out into the marketplace in the second half of the year. We have actually performed very well in fan coils for commercial buildings. There's a number of commercial buildings that are going on at the moment that we've been involved in, and that continues to perform very well, and our outlook there continues to be confident. So I think the level of underperformance in our UK commercial in the first half of the year is potentially exceptional to that extent, and we have some innovation and some new opportunities to gain share in the second half of the year. Export. A lot of our exports go to Ireland. It is an export market. And we had one particular customer that was working on some destocking that happened on the 31st of December. We've seen our export trade more sensibly more recently. It is quite a small constituent part of the UK, but nevertheless, it declined. We're actually more optimistic about what's happening there. And that destocking, of course, generally only happens once. And our OEM, it's disappointing when you look at the 0.7% revenue decline, but in actual fact, inside, we're particularly pleased about the growth in our EC3 motorised impeller. We had very significant growth in that motorised impeller, and we've seen a further decline in what we would call old technology products. And of course, over time, those old technology products can only decline for so long. So overall, UK performance was a 5.3% constant currency organic growth. As Andy's already talked about, really good pricing discipline. We have market-leading brands, particularly in the residential space, and we improved our operating profit margin by 130 basis points in the half. Continental Europe. So interesting dynamic here, because in actual fact, in the Nordics, we had revenue of just 0.4% growth. So an important area for us, one of the first acquisitions, or was the first acquisition that I did in Volution back in October 2012. The Nordic situation is more challenging, has been around the new build space. Again, we quote in our half-year update that Volution's sort of complexion is around 70% RMI and about 30% new build. New build is definitely more challenging in some of the markets for obvious reasons relative to interest and mortgage rates. And we think we've had an element of RMI destocking with some of our distributors across the Nordic markets, well publicised. Some of these are listed groups and they talk about maybe a little bit of a consolidation or destocking that's been taking place. But nevertheless, the fundamentals with our Nordic business are very strong. We're very pleased about the proposition and we're also continuing to hold our operating profit margins as we go. What I'd like to do is talk about the only other area, if you like, of weakness in the first half of the year, and that was in Germany. We've sort of reminded ourselves that we've had three and a half years of exceptionally strong growth in Germany. I think last year organic growth in Germany was about 19% or something. So it's been very strong. It's not necessarily a surprise to us at the moment that we're coming up against strong comps and it's performed a little bit weaker. But decentralised heat recovery in refurbishment, particularly in refurbishment as we go forward, is a huge opportunity. And I've already given you some examples about how we're taking those products and getting traction in other markets. So let's focus on the highlights. What went well, KlimaRad in the Netherlands, a business we acquired in December 20 in decentralised heat recovery, strong product, sorry, strong project pipeline performed very well in the first half of the year. That project pipeline of orders that we have gives us a high degree of confidence going forwards. And the proposition there in terms of the payback with decentralised heat recovery with heating costs being significantly higher is really quite compelling. And again, in ERI, in energy recovery industries, in actual fact, we're capacity constrained. We've got to increase our capacity more quickly. And he's already alluded to the capex that we have and will continue to spend in that area to grow the output. And so the 24%, it's not a shabby margin, is it, to be at 24%, but nevertheless, the 180 basis points decline is predominantly around the mix there. with ERI not being at the higher end of the range, growing more quickly than some other areas that are weaker. And then finally, on Australasia, 15% of the group delighted to have these two positions in New Zealand and Australia. We've grown fantastically well in New Zealand and then latterly in Australia since we acquired these companies to grow at 4.5% versus some really strong comps. I mean, have a look at the growth that we delivered in half one 2022. We're excited about the market more locally. Again, there's a nervousness around the new build space in terms of housing starts and completions, but we are predominantly an RMI business. And what we're seeing in New Zealand, for example, is a greater awareness around regulations and how indoor air quality is linked to health. And so we see the long-term dynamics in Australasia are still very attractive. I've gone through these areas quite quickly, and I'd just like to summarise and then come back to Q&A. But we've grown at 6.3% organic growth in what is undoubtedly a challenging time. We read all the same statements that you do. So we're delighted about growing so well. We have maybe, rightly or wrongly, a conservative long-term 3% to 5% organic growth target. We're at 6.3%. Our margins have been maintained. This is really important to us. We work tirelessly throughout the company. Our leadership team are absolutely aligned and understand how important this is. And I've always played on the basis that it's not unreasonable to ask for price increases of our customers if we're providing them with market-leading solutions, good availability, great service. And I have absolutely no doubt that our service levels have been second to none in this marketplace. And that's helping us indeed gain share. Recycled plastics content is important. Particular accolades to our UK team where most or a lot of our plastic injection molding and extrusion takes place. Fantastic efforts and I can see how inspired these teams are to drive this number forward. And there's further work to do to get to 90%. 90% is a huge stretch for us. And right now, with two and a half years to go, I'm not sure how we get there. but I didn't know how we'd get to 76% two years ago, so I'm sure we'll work it out. Heat recovery ventilation at 32%, it's up from 30%. It's a really important part, but it's not the only solution that we have around low carbon. And as Andy's already said, just to reinforce that, strong cash generation, 88% operating cash conversion. It was lower last year, it was for a good reason. We're confident that we've got our working capital and our cash management under absolute explicit control. significant headroom for acquisitions i know people have been saying they haven't done anything for 18 months it doesn't matter it's absolutely the middle and center of our strategy and sometimes these things take a little bit longer to cultivate but who knows what comes next so strong performance underpinned by structural growth drivers in terms of outlook We are mindful of the cautious sentiment in some of our segments, but we do have a supportive residential RMI environment, particularly in the UK. We believe inflationary pressures are easy. Certainly from a material perspective, we think we've got that under really good control. There are still labour inflation challenges and a little bit around infrastructure, which is less significant for us. But if you talk about building rentals and so forth, I think that's an area of slightly higher inflation. But on the material side, We think we're in really good shape and we've got excellent levels of customer service. We are agile. I saw that in UK social housing and the strength of demand that we had in the last half and the way in which we were able to respond to it in a way that I believe some of our competitors weren't. Well-developed M&A pipeline, strong balance sheet. So we think we're well-placed to make further progress in the period ahead. That's the formal update. So we'd be delighted to hand over to the room for Q&A. And I'll try and go here with Charlie. Okay, thank you.

Thanks, morning. It's Charlie Campbell from Liberum here. A couple of things just to help us understand some of the drivers, I suppose. Just thinking about UK new build, just wondering if you could help us sort of understand what the average spend on ventilation in a sort of two, three bed new house was maybe a couple of years ago and what it might be in a few years time when future homes comes through, just to understand the strength of that driver. Secondly, a similar question, I suppose. You very kindly told us that 32% of sales come from heat recovery products. Could you quantify the organic growth in that category versus the rest of the group, just so we can understand what that does for the group? And then the last question, I suppose, for me, has covered the company for a while. I guess we've always thought about kind of residential ventilation as a smaller part of the sort of overall HVAC sort of industry. But I guess with these big, powerful drivers coming in and decarbonization, does that make the industry sort of bigger and therefore maybe more appealing to some of the giant HVAC companies that are out there?

Okay great. So first of all UK residential new build. To simplify how this works, Think of ventilation in a new house being one of three solutions. The traditional solution that's been prescribed since the 80s. In actual fact, ventilation in new build was only in the building regs since the mid 80s. Before that, that's why you've got a lot of legacy properties with no ventilation. But it was exhaust fans, think of that as one. moving towards continuous ventilation. So a low carbon solution. There's a scientific argument as to why it's more energy efficient. I've been through it before. I won't do it again today. And then three, heat recovery. And where we are at the moment is that I joined this company 15 years ago. It was almost exclusively one. 95% of the revenue was in box one, 90% in box one, and then a bit in box two and three. Today, we've got about 30% in the third element, heat recovery, and maybe 15, 20, 25% in two, but still 40, 50% in one. Actually, it's probably 40, 30, 30. Think of it that way. The 40%, in my view, the exhaust fan solution, will disappear in the next 12 months. You will not be fitting exhaust fans in new construction. 12 months from now. Building regulations last year prohibited it last year. But developers are smart people. They plan out for long term. They break land. They build to old regulations. And so there's this gestation period. So when new building rigs come out, it doesn't flip the switch. But it sets the tone for what's going to happen over the next two or three years. Revenue in those boxes, exhaust fans, two to three bedroom. I always use the four bedroom. But if I do two to three bedroom, I would sort of think £100, £250, £300, £800 to £1,000. That's equipment only. There's quite a debate going on at the moment. There's so many different future homes quotes. There's future homes, STAD, and there's future... But one of the documents at the moment in consultation is talking about the install costs, and they've got the numbers too high. They've actually got the install costs as about two to three times the equipment, and it's not. So we're helping with that at the moment just to try and educate... the uninitiated but we talked about a big house builder wind this time last year and that's a that's an organization that in fairness to them is looking to decarbonize their dwellings and has already come to us and said by the summer of this year we don't want to be fitting exhaust fans we provide designs we do the design work we don't have design responsibility but we do the design work about how the ventilation goes into a building so we we know what's coming And we've had to take all of their house types, redesign the ventilation, the different type of ventilation in. And, of course, there's a lead time with us increasing our supply chain capability to cope with this. So we know it's coming. It's moving along. The issue for us now is how long we stay at two before we actually get to three. And the reason I say that is... This is quite anal, but I was looking at a development near me, very close to me, small private developer, and I looked at the proposals on the property. My wife had told me how much they were, and I sort of thought, that's interesting. But they specifically cite mechanical ventilation with heat recovery to improve. Wow. And we've always said that. Why, if you're providing a low-carbon, energy-efficient solution in a property, you wouldn't tell the potential buyer the benefits? And I think, Charlie, last year we talked about the energy costs saved on a new energy efficient house versus an older one. A couple of thousand pounds a year not to be sniffed at. Question two was the organic growth in heat recovery. I mean, look, we haven't given it explicitly, but what we can generally say is that the areas that we talked about that are growing strongly, Klima Rad in the Netherlands, energy recovery industries, UK residential new build, It's fair to say that they typically would grow above our average organic growth level. Now, I need to be very clear here. We've talked about the weakness in Germany. So in this period, Germany hasn't been additive to that. But nevertheless, across the medium to long term, we would expect our revenue growth in heat recovery generally to be quicker, faster than it would be across the average. So, of course, increasing the proportion of our revenue in heat recovery is helpful. Third element, HVAC. Yeah, it's an interesting one. In the residential ventilation market in Europe, it's really hard. And I know looking out of the room at the various analysts and the people that cover us, it's really hard for you guys to find a comp. And I sympathize with that because I can't find an obvious listed comp that I would put out there for you. We talk about maybe a Zender, but it's got a whole raft of radiators. and a lower margin. It's a great company, but is that a comp? And then we have companies like Systemair and Lindenab, again, great companies, but very commercial. So it's difficult. When you go up to the sort of wider HEVAC scale, I think the big debate at the moment is around heat pumps. And so you've got air conditioning companies that are very focused on heat pumps, and you understand all of that, and it's very well covered. But look, from our perspective, we just keep going and keep focusing on what we're good at. And we believe that over time, I mean, our ambition is quite simply to be one of the leading primarily residentially focused ventilation groups in Europe, you know, and including Australasia. That's our goal. We think we're on a good trajectory. And but it's lots of probably small to midsize M&A transactions rather than a couple of big hits. Rob, should we get you the mic?

Thank you. Hi. Morning. Thanks for the presentation. Just three questions from me. Firstly, on pricing, I guess we've all heard from a lot of the building products companies this week quite how strong pricing was in 2022, given the dynamics in their market. And you're saying you've kind of done 6% like-for-like growth, of which 60-40 was price volume. Can you just talk a bit more about the discussions you've had internally and with customers around pricing, and if there's that strong demand, has it been a requirement or kind of a discussion on whether to push it more? Secondly, kind of following up on Charlie's question, could you just talk a bit more about the economics, the larger heat recovery systems versus smaller systems internally, versus the kind of gross margins and the kind of drop through you might get on them? Is it better, superior, et cetera? And then thirdly, could you just kind of give us a bit more strategic medium-term view on where you see your business on a five, 10-year view in terms of residential versus commercial? Because we know the consolidation story in residential across Europe is quite fragmented and quite small bolt-on. Is there any appetite to become, you know, kind of go up the value chain or kind of look at more commercial, more kind of scalable type projects, et cetera, with bigger kind of unit size assets to buy? Just your thoughts around that would be great. Thank you.

Right, so I'll take the first one. So the first one, Rob, was pricing and where are we now? How are we looking at it going forward? What are the discussions? I think probably the easiest way to talk about it is to say that I think we started earlier and we were talking to our teams about it earlier and talking to our customers about it earlier. And I think by doing that, we sort of got ahead of where we needed to be. And I think what that sort of meant then is in terms of the frequency and the quantums that we've then had to be doing over the last sort of nine, 12 months, it's not had to be as severe. as perhaps some other people have had to do because we moved earlier and moved quicker 18 months or more ago. And I guess, as Ronnie mentioned earlier, if we look at our cost base now, well, two things actually. So I think in terms of conversations, our focus has been, look, actually, yes, you know, pricing is important, but clearly service, availability, product range, you know, that's what you're after. And initially we were together at the rugby in Cardiff a few weeks ago with some of our biggest customers. And, you know, I mean, they were, I mean, they were loving it, not just because we were taken to the rugby, but I think because, but, you know, they were actually, but they were hugely complimentary about, you know, the service quality, the performance of the business. And I think that they weren't just saying it because we were buying them drinks. They were saying it because, you know, that was before we were buying. That was how they felt about it. So I think, you know, we have done the right thing in terms of that. I think, you know. we we probably are conscious now that we we've sort of got to a level where actually we look forward and we think that you know the supply chain costs have been moderating for quite a while i think you know if there's one running mission one or two things that you know may come down the track at us i think probably the main one will be currency effects so we buy quite a bit of our materials denominated in us dollars and we try to hedge that forward by our dollars by about 12 months forward. So, of course, as the dollars that we bought 12 months ago roll off and are replaced by new rates, you know, we're going to be suffering a little bit on that. Energy, we were locked in on deals through to September 23 and September 24, respectively, for gas and electricity in the UK. They will roll off. Now, thankfully, at the moment, they don't look like they're going to go as fast drastically bad as they might have looked six months ago. And we're not a big consumer anyway. So, you know, we've got all these things in our mind. But what we're always trying to do is to look sort of six, nine, 12 months down the line, see what we think is coming. And then if we are going to have to do something on price, sort of do it, do it early. And look, if we have to, we will. But at the moment, you know, I think we've got it in the position we wanted it to be.

I absolutely agree. The heat recovery question. When we talk about heat recovery, there's sort of central heat recovery and decentral, and they are different. Where we're very strong is in residential heat recovery systems. A little bit technical here, but if you think about the duty required in a typical... four or five bedroom house, it's about 450, 500 metres cubed. And so we have units that are sort of 200 metres cubed up to about 1,000 metres cubed. Larger commercial units, you're into many thousands of metres cubed an hour. And we're not... But if you look at air handling units in buildings, it's quite a commoditized space. So we're quite particular. That's why I talk about commercial, niche commercial. I think companies like System Air and Lindelab do a great job, but their operating margins are significantly lower. And there is a structural reason for that. So it's a market that we don't see long term as one that we want to necessarily participate in. And that's why we talk about niche commercial. In residential, it's different. We have an ambition to have leading positions in all of our European markets over time, and that's not necessarily easy, and that will almost certainly, where we don't exist at the moment, happen through M&A, through acquisitions. But I am hugely excited about RMI, and this is an issue for you. I said I've been here for 15 years and who knows how long it goes on for. But whoever sits in this chair in the future will be telling you the same story about refurbishment. And that's the opportunity. And it's interesting in a way because people end up, you know, the sexy attractive part is the new build space, isn't it? Of course, less so now because of interest rates and mortgages. 70% of our business is RMI. And of course it would be, wouldn't it? Because the built established stock that we have It's going to be around, you know, I think the statistic is something like, you know, 30 years from now, 80 to 90% of the stock that we'll have 30 years from now is already here now. So we've got to deal with it. And that's where we position ourselves. And it's quite slow. Getting UK customers, UK social housing to move materially towards decentralized heat recovery is painfully slow. But it's typically the thin end of the wedge. Once you start to break through and you've got these case study examples, off we go. And in Germany we lead, in Netherlands we lead, in the UK we lead, but it's a very small market. But we lead it and we'll drag that along. So long answer to your question, continue to be a leader with central systems in residential. Drive the decentralised debate. And look, some of our peers, you know, I've mentioned one of them already, are quite... quite principled about central systems versus decentral, which is fine. We're agnostic. We believe that it's the most appropriate solution for the building. So we'll sell decentralised heat recovery and refurbishment and central systems in new build or decentralised in new build if that's what the customer wants. We're not pinning all of our hopes on one or other technology. I think the last question was about how do you think of the group over time? I put this slide up. We're eight and a half years listed. I think the eight years EPS growth is 12% to 13% compounding. all from our own cash generation. I don't believe we'll necessarily need to do the big equity finance transaction, but if it came up and it was compelling and it was sensible for us, then we wouldn't be embarrassed to come and speak to the market about that. But generally speaking, the strategies continue to deploy our operating cash really well, and I'd like to think that our long-term targets are pretty much the same as what we've delivered over our last eight years. The strategy, as I started with, hasn't materially changed. It's been refined. We've got two other colleagues from the board here today who are part of that process, and I think we've refined our focus and we're not trying to stick to your knitting, if you like, or my fairway analogy down the middle. We're not trying to veer off and do other things because, quite frankly, I don't think we'd be quite as good at it as we are in terms of sticking to what we know best. Okay.

Thank you, Christian. You're from Numis. Well done on a really good first half. Thank you. The numbers were very good. So the first one, maybe just sort of slightly similar to Charlie's question, but maybe going in a little bit more detail. I mean, obviously, margins, very attractive. Returns on capital, very attractive. Are you worried about new entrants? And I know brand is really important. So maybe that's sort of acquiring a smaller brand and building it out and also increased price competition, because, you know, perhaps there's the opportunity given where margins are and where returns are to still grow at a slightly lower price. So that's the first one. Second one in terms of M&A and you sort of point to that historic earnings growth. And M&A, as you say, has been quite an important part of that. But looking back, it's been characterized generally by more smaller deals, which I suppose make less of an impact when you grow. So when you look at the pipeline now, is the size of the deal generally growing or are you just going to have to sort of execute many more smaller deals to keep that growth rate up? And the third one, I was just wondering, you know, a lot of comments around the sort of colder weather and heating down. Is there increased seasonality in the business, do you think, as the weather is colder, particularly on the RMI side and the mould and the condensation, et cetera? Thank you very much.

Great. We were just working out who was going to answer. The new entrance, it's an obvious question to ask, isn't it? But I'd sort of reverse it and say the problem that we have where we want to be somewhere, and we think we're quite good at ventilation we've got a product portfolio we know what we're doing and we have a debate about white spaces on the european map you know germany here's a good example we're in germany we've got a product portfolio that is specified that we sell through agents we don't have a distribution model in germany we're not there i'd love to be there now why don't we do it organically we've got products we've got capital to deploy we know what to do don't bother waste of time so i think any other new entrant with potentially a lesser capability, doesn't have the products, doesn't have the experience. That's a brave call to make, isn't it? So I don't think it's organic. The competition that we will have in future years will be, generally speaking, the same sort of competition that we've got now that may perform better or worse in the local market. So it's our job locally to ensure that we're staying ahead. And that's not easy. And I'm not saying we do it everywhere all of the time, but that's obviously the sort of focus. And on the margin point, Our margin is held because we recovered pricing, but I think our margin is also the vertical integration. I was thinking about a product that performed very well in social housing. There was a picture of it earlier on called positive input ventilation. We make the plastics. Actually, that particular product is 100% recycled plastic. It goes in the loft. It's not seen. We can use recycled. The motor, we manufacture the motor. Our cost base... is unrivaled. I know who our competition are explicitly. I give you the three names in the UK. I know where they source their materials. I know how they do it. They don't have the cost leadership that we have. which means that actually when they look at their margins, they're not as attractive as ours. So there's not so much to play around with. I don't think the pricing discipline that we've implemented creates a new headroom. And actual fact, I'd argue there's one small listed peer, have a look at it. I mean, if you listen to their story, their margins are going down. So if they were using pricing as an opportunity or could use pricing as an opportunity to gain share, they're already struggling. So I think we've been appropriate. We're not embarrassed about it. I mean, Andy and I, we don't get to see customers as much as we would like, but the example that Andy gave was some very big UK customers a couple of weeks ago and asked them, how do you feel about this? You know, we're pretty down to earth in that conversation. If they felt that we were price gouging or unreasonable, I think they'd tell us we're not doing that. So I wouldn't overestimate just how much of our margin resilience has come from the pricing has been disciplined, but we've also been disciplined around costs and execution as well.

Yeah, I mean, on the M&A question, you're quite right. Our deals have historically been, let's call them small to medium. So, you know, a few hundred thousand up to sort of 40, 50 million territory. And, you know, is that because of restricting to what we could do or is it because of the nature of the market? It's probably more the latter, actually, because if we when we do strategy work and talk to the board about it and we take a good look across Europe and say, who are all the targets? Who might we be interested in? Actually, the vast majority of businesses are small, focused, niche businesses in that sort of space. So you're quite right. We probably will have to do more of them or perhaps do more of them that are at the upper end of what we look at. There are one or two slightly bigger ones out there, but equally, when we look at them, oftentimes you find that it comes with, I don't know, a lot of heating stuff that perhaps we go, maybe that's not for us, or we'd like that bit of the business, but not that bit of the business. So I think we're not going to not look at them. We absolutely will. But I think we can still do really well by carrying on doing what we're doing. And I think also what happens is there's actually sort of an accumulation effect that the more pieces we bring in, the more sharing of products we can do, and actually then the more sort of cross-selling opportunities that brings. So perhaps... And if we buy a business, you would expect that for the first few years, the organic growth, Australia is a great example, the organic growth will be faster in those first few years than the years beyond it. And I think the more products we have to sort of play with and share around, the more that we can sort of get that strong early year organic growth as well.

I think I said it a few times. It is a well-developed pipeline. We're conscious of the fact that it's an important leg of the strategy. But it's really interesting. We've got a long list. And we were talking to somebody the other day about the phrase that we cultivated. And I know a lot of the things that we'll do in time others won't do just because they're not cultivating in the way that we are and you know as and when it happens we'll refer back to you know when did we start when did we finish and it's many many years and seasonality really really good point there in terms of there internally it's a big debate because we talk about condensation season typically ending March I mean we've got some particularly cold weather at the moment but it should be sort of more spring-like and I think what will happen is that some of these works could continue for longer because, again, anecdotes from contractors that we've been able to talk to intimately more recently, what some of them are saying, believe it or not, in our sector is that they're very busy, but actually they're full. So the work goes on for longer. And I suspect with social housing, for example, in the UK, they'll use the opportunity through the spring and the summer months to carry on, but it might be more planned refurbishment opportunities. Clearly, what you won't be having is the sort of, oh, no, we've noticed a whole raft of condensation problems in the last couple of weeks. Of course, the group now, with a little bit more southern hemisphere, has an opposite effect. In New Zealand, I was there a couple of months ago. No, I wasn't. I was there about four or five weeks ago. But it's supposed to be summer there, although New Zealand's had some pretty difficult times recently with flooding and cyclones and so forth. But, of course, the busy period for us in New Zealand and to a lesser extent Australia... is when our UK RMI might be much weaker. So, yeah, interesting. There is always some seasonality, new build not, in my view, but an RMI, yes. Any other? Clyde? Okay.

Thank you, Clive Lewis at Peel Hunt. I think I've got four, if I may, Ronnie. Four. Four, Fred. Just going back to heat recovery, that 32%, it'd be really useful to sort of understand, I suppose, across the three regions, the variation. I mean, I'm expecting Europe to be obviously quite a bit higher than the UK, but it'd be useful to get a gauge on how much that varies. Australasia. be useful to hear a little bit more about the differences between New Zealand and Australia. Obviously, New Zealand went through quite a bit of regulation change and you've also been growing your market share in odds. So I suspect I know what the differences are, but it'd be useful to hear a little bit about that. On OEM, I mean, Ronny, you just referred to sort of the vertical integration. I suppose it'd be useful to hear about what other opportunities I suppose you can see in the group to do more, particularly around maybe motors. I can't see you getting into making PCPs, but it'd be useful to hear a bit more about that. And then lastly, I mean, you referred to it about the public housing renovation. How are the housing associations changing their approach to, I suppose, the specification with the contractors? Are they working more with you? I mean, you referred to taking some of them out to Germany. I mean, is that just the start of a process where they will understand the issues more? I mean, it sounds like, but how can that play out and how can you, you know, I suppose, dominate that position to a greater extent? Okay.

So heat recovery. It's somewhat polarised. So if we go to Germany, everything we do in Germany is heat recovery. If we go to the Netherlands, we have two brands, but under the Klimerad brand, 100% heat recovery. ERI, 100% heat recovery. And then UK, our heat recovery is mainly in our new build, but not all of it. So if you think about our residential new build, it's probably, the way we classify it, we don't put fans that go into new build in new build because we can't discern where it goes. if that makes sense, but we've talked about this in the past. It's actually quite a small volume that go into new build versus RMI. When we sell a fan into distribution, we don't always know what location it ends up in, but when we sell a heat recovery device, certainly central system, it goes into new build. So of the sort of third of the group, if you like, which would be annually just over 100 million, you can sort of break down that we've got annualized sort of 20 million. And these are very, it's ballpark, it's not exact. Sort of 20 million in the Netherlands, 20 million in Germany, 20 million in the RI, more than that. And actually, they're all coming out reasonably equal. So the UK proportion of heat recovery is smaller than the total. But of course, the UK is significantly larger and actually much more diverse. So in Germany, we're exclusively, you know, we're the leader in decentralized heat recovery and we don't have much else. So does that answer, does that give you a flavour? Okay. Australia-New Zealand regulations. I thought we've grown phenomenally well in New Zealand with healthy homes. We've grown phenomenally well in Australia with a land grab. We still think we can grow well in Australia through the land grab and the regulations For us, I think there was a nervousness after Healthy Homes that it would go up and then come down. A little bit like some people saw in RMI with COVID. We had using the sort of 19 comps to show that We went up and came down, but we're still higher than where we were three or four years ago. We haven't had to do that. I think going forwards, do we expect to deliver the sort of double digit type revenue growth that we had in that region? No, unlikely, but their regulations are progressive. And in Australia, there's a slightly different issue there in terms of regulations. There's slower adoption, but it will come over time. The OEM point is really interesting. And of course, when we talk about OEM, and as you said it there, I thought you were going to ask a different question. We have actually increased the participation of our motor internally, but you don't see that. There is an opportunity to do much more of that over time. But in actual fact, in our EC3 area, we are actually capacity constrained. We had some new capacity go live at the beginning of March, and we're already talking about what we need to do next. In terms of more vertical integration, there are areas around plastics where we don't injection mould all of the plastics for all of our assembly in every location, and we're looking to increase that over time. That makes sense. PCBs, no, we're not looking to become a PCB populator. So there is a sort of a limit to how far we would go. And also... Yeah, and I think that's the main opportunity from further integration. Sometimes when we buy companies, we end up buying companies that have quite a large proportion of their products that are bought from other areas, and we internalize that, but we don't have so much of that to go after. But undoubtedly, with future M&A, that opportunity presents itself again. And then finally, the fourth question was... Ah, yes, yes. Public Housing RMI has always been a specification focus where we have a team of people that don't actually take the orders. All they do is go and see housing associations and talk to them about their needs. I got involved in this last year with things like Zero Carbon Hub and deep refurbishment and some of it's a little bit counterintuitive because the local authorities or the social housing landlords are going to government to get grants but it's inefficient because at the moment they think a deep refurbishment is about 30 to 35k for an average property this is you know really driving the insulation hard putting in more energy efficient heating and ventilation but then you've really future-proofed the property and now you're on the path to net zero. The way the grants work is typically they're about 10k a time, so they're telling us about this inefficient process where they can have three goes at the same property. That clearly doesn't work. We sell our heat recovery very responsibly. Do not put decentralised heat recovery into a leaky property. It's a waste of time. you recover the heat to leak everywhere else in the property. So it does have to follow the path of insulation. But look, Grant Shapps came out with five billion about three or four months ago, which was all around insulation. So there is an understanding at the government level that you have to go insulation airtightness first. And that helps us when it comes to selling these propositions. But it is quite intimate. It is fragmented. I think I had a question previously about are these sort of big projects where it's quite binary you have a big project and then it disappears it's not it's very fragmented there's lots of housing associations and actually even inside a housing association you'll have planned maintenance you'll have voids and what we do we've got a couple of brands here in the in the uk we haven't we we try to have our claws into every element of the mix so whatever's moving we've got a voice to try and help solve their problems David.

Hi, thanks. A few questions for me. Firstly, around Australasia, if we look at January, December, that was actually down year on year. I think there was some tough comps, but can you give some kind of view of how that's recovered in the first couple of months of the second half of the year? My second question was around installation availability of your customers and whether as you get more complex products, there is a shortage of labor to actually install that. And then I guess if we were sat here maybe 12 months forward and not worried about recessions, is 3 to 5% the right organic growth rate for you to be targeting on the basis that your product mix is improving? the regulation and the subsidies look as if they're going to improve as well. Thanks.

Yes, you're quite right. Australasia, so what you've done is you've looked at what we said in December, which was a four-month comparator through to November and where we are now, and indeed in the last two months of the half, so in December and January, our revenue in Australasia was lower than it was in the period before. But I think we're not worried about that because actually the second half has started very well. So actually February is back at or perhaps fraction even above some of the rates we'd seen before. But what we saw in Australia and even more so in New Zealand in late December but early January, that is obviously their peak holiday season. And I can testify that whenever I tried phoning somebody up in the first two weeks of January or sending an email, it was an out of office and of course the year before um it's not that it wasn't their holiday but there was covered restrictions lockdowns etc people weren't traveling um so definitely definitely there was more of a pause and a break in activity over that over that period um and and i think what we've seen the the recent weeks since then so the back into january and and february has been has been good. It's going to be very difficult to sustain, almost impossible actually, the percentage growth rates that we were seeing in the last few years, particularly in Australia. I think it would be unreasonable to expect 15-20% growth year on year on year, but we are still very pleased with activity levels there.

Installer. Capability. It's a really good question and it's one that the industry wrestles with in each of the different jurisdictions. But I would look at maybe something like heat pumps where there's very clearly an installer capacity issue because of the rate of growth moving from a a sort of carbonized gas solution to renewables. And I don't think we're in the same bracket. If we were experiencing the sort of growth rates in heat recovery that you were having in heat pumps, then yes, it's a problem that we wrestle with. But we take the problem locally very responsibly. So, for example, in the UK, we do training courses for installers. And, of course, why wouldn't you? We bring them along. In actual fact... That's our training room at Crawley where we bring installers and there's an approved course they have to go through over two days. And we effectively do the course at cost. And what you generally find is if people have been learning on our products, they have a closer affinity. So it's a sort of Gebre type model, isn't it, in terms of you train your installers across your products. And we do that in Germany with our biggest agent in Germany, in the south of Germany, Ryder in Munich. is building a new training facility to bring customers generally contractors to train and learn and that's really important so this is not a new issue for our industry but we work very very hard locally with that training competence so I don't see it as a constraint other than the example I gave in social housing where there's just the volume of work and of course you know it's pleasing for us because we are hearing you know anecdotally that there's more training electricians and so forth and i think understanding that takes time to come through but it won't be a constraint three to five percent organic growth look if we continue to grow beyond that target over time then i'm sure we can come back to it but i think in the short term particularly in this environment we'll we'll just stick to i mean three to five percent organic growth target with m a has given us over 12 percent compounding EPS growth. So maybe some risk on the upside, but we'll just be conservative for now and see where we get to over time.

Any questions outside of the room? We have several questions from Chris Wright at Coli Global. When does your energy hedge roll off and how much of a headwind will this be on an annualised basis?

Andy talked about it in two bites. So we've got one contract September this year and next. It's not hugely material. It's unhelpful, but we're not a hugely energy intensive company. You can see that from our carbon emissions report in our FY22 annual report, just the sort of carbon emissions, scope one and two from our facilities as it were. So it's on our radar. We're pleased with the fact that we hedged it. I thought it was a particularly smart move that we took. We tried to hedge our costs and have some certainty for a reasonable period of time, but it's not overly material. September this year and October next year.

A follow-up question from Chris. You had a beneficial currency hedge. Presumably this has rolled off, and how much of an impact will this have on the business?

I think the impact I mentioned earlier in terms of the supply chain input cost piece. So we try to buy... We have a relatively predictable amount of US dollar spend, and what we try to do is to have roughly 12 months of it forwarded. And so if you think about it, you know, rates 12 months ago were maybe sort of nudging 130 when we were booking stuff. And now they're more like 120. So that's that's the difference. We spend about sort of 20, 25 million dollars that we're hedging in that in that in that process. So, you know, you can do the math there. So, again, it's a bit like energy. It's not helpful. It's certainly not as. not as gruesome as it looked in September, October, when we were down at dollar parity. So I think, you know, are we worried about it or do we have to do something about it? Yes, but it's not the catastrophe that it looked like being.

As there are no more questions from the online audience, let's hand back the closing remarks.

OK, well, we went a little bit over time, but we really wanted to ensure that we answered all your questions. Thanks very much for your attendance. That's it from us. Thank you. Thanks very much.