Volution Group plc

really pleased to have a good audience. We're delighted to tell you a little bit more about what happened in our financial year 2023. What we're also looking forward to doing today is introducing you to some new materials, which we hope will try and bring the story to life a little bit more and certainly should be helpful for context. But as you can see from the agenda here, I'll take you through the overview. I'll hand over to Andy's now four years with Volusion, so four financial years completed. Of course, a couple of those were really difficult through the COVID period, but I'm not sure if we should talk about this being the new normal, but nevertheless, it's a more sort of normal environment that maybe we're trading in. I'll go through the business review and we'll talk a little bit about summary and outlook. The headline there, leading player. So we think of ourselves as a leading player in the international HVAC market. And I think this is a really important headline for the slide because one of the things that we often talk about in Volution is sort of peer set, peer group and so forth. And of course, in our daily life, the companies that we think of ourselves competing with are not necessarily the same as we get peered with. And so for those, I think, probably already aware, HVAC is sort of heating, ventilation and air conditioning. And of course, Volusion today has less than or sort of circa 40% of its revenue ending up with the UK customers. I think this is a really important takeaway for today because many of the names that we compete with on a daily basis are one not necessarily UK listed and certainly not what you would call building products. This is an important aspect for us and maybe we'll come back to it a little bit later on. But look, in the year, We delivered what we think was good organic growth, not without its challenges. And we'll take you through some of the individual markets as we go along. But just under 5% constant currency organic revenue growth. An adjusted operating margin of 21.3%, actually up 20 basis points. It's essential for us, and we'll talk a little bit more about how we underpin and protect those market-leading margins as we go forward. And an excellent cash conversion, and cash conversion is absolutely everything for us. We know what we're going to do with our cash, and delighted that we had such a strong year, and does provide significant headroom for further acquisitions. And of course, on that note, we completed two acquisitions in the year, one in France and another one in Slovenia. And in actual fact, we've already completed our first acquisition of FY24. It completed on the 4th of August, and that was DVS proven systems in New Zealand. ESG is really important for us. And in respect of recycled plastics, I thought this was an outstanding achievement to go from 67% of the plastics that we consume in our facilities comes now from a recycled source, so up to 76%. So look, overall, we think it was a strong performance and it was absolutely in line with our strategy in delivering against our ESG targets. A little bit more about our strategy and delivering on our strategy, and what is our strategy? I mean, it's the same strategy, in fact, that we had nine years ago when we listed, although we've got a little bit more experience and maybe a little bit more of a track record that we can claim. But look, what we expect to do is to grow organically each year. And we think we've got a really good track record in doing that. In the year, just under 5%. There were some changes across the different geographic areas. The UK, in actual fact, was the outstanding performance in the year. And continental Europe was... certainly much more difficult. But still in Australasia, a 3.6% constant currency revenue growth. And that's off the back of very strong revenue growth, particularly in Australia, since we acquired the business back in 2019. Value adding acquisitions, I've talked about them. I think now we're averaging about two and a half acquisitions each year since we listed. And indeed, we made other acquisitions prior to our listing in 2014. And just to stress, the pipeline is healthy, and we expect further transactions in the future. For us, and when Andy and I talk to prospective opportunities, we think of ourselves as a serial acquirer. This is what we do, this is what we expect to do, and you shouldn't be surprised to see us do further transactions in the period ahead. And then last but not least, operational excellence. 21.3% operating profit margin. I think I've had the question every year since we listed How sustainable are your margins? And I guess the best way to prove sustainability is to just try and inch them up each year. No new targets today. Certainly our long-term target is to stay above 20%. And of course, there's always a risk of dilution, particularly if we do bigger transactions in future, because rarely do we bring new companies to the group that operate at the same margin that the group operates at. All opportunity, of course. So sustainability, I've talked about recycled plastics, but 70.1% of our revenue was from low carbon products. And in actual fact, we surpassed our expectations there. The target was 66.1. And in actual fact, a 2025 target is at 70%. So we are now creating a new ambition today to get to 75% of our revenue from low carbon product sets by 2026. And inside that 70%, so it's 33.8% of our total group revenue is from heat recovery. And heat recovery is a very, very important product set for us and one that we expect to grow materially over time and not to give you too much of a lesson on the technology, but basically the most efficient way to ventilate a well insulated property is with heat recovery. You're not losing all that precious heat that you've paid increasingly more cost for heating in the first place. So just thinking about volution and what underpins our revenue growth, why do we believe that we can grow well organically and certainly above the sort of general market trends There's things that are going on in our space that are sort of obvious, but I thought we'd just try and summarise them for you here today. Decarbonisation. And I know there's been a lot of debate, for example, in the UK at the moment about whether or not we're stepping off in terms of decarbonisation. But for us, we see decarbonisation agenda every year become more helpful. It may not move as quickly as we would like, but it certainly every year improves. 40% of our energy use or 36% of emissions, carbon emissions are from buildings, buildings such as this one that we're in today. Healthy air, you know, healthy air is essential. You know, how long can you go without air? Don't try it, but it's not for very long. Healthy air is essential. And I think what we saw through COVID and certainly we've seen coming out the other side is a greater awareness and appreciation And so, for example, we see regulation increasingly focusing on indoor air quality or mould and condensation problems and so forth. And let's not forget comfort. The biggest objection to ventilation typically in a property, whether it be a refurbishment application or new build, is noise. Noisy ventilation gets switched off. Ventilation that gets switched off creates all sorts of degradation to the fabric of the building. So we work very hard on providing solutions that are quieter, that are less intrusive in the building but still provide good quality air. So I'm going to go over these slides quite quickly, but we talk about our three P's, product, planet and people. And under product here, we got to 70.1% of our revenue from low carbon sources. Now, there's no doubt that the acquisitions that we made more recently helped accelerate that trend, but they should do. If we're acquiring the right companies with the right technology, why wouldn't they help accelerate the trend? So some of the companies that we acquired more recently, for example, energy recovery industries in North Macedonia, is a producer of aluminium heat exchangers, the absolute integral part of any heat recovery system. And of course, the acquisitions that we made more recently haven't had a profound impact on that metric in the year. But nevertheless, VMI in France and iVent in Slovenia, iVent is a provider of of almost exclusively decentralised heat recovery retrofitted into Slovenian properties with a very significant market share. So as I say, new ambition for 2026 to get to 75% of our revenue from a low carbon source. Planet. We are absolutely serious about the impact or lessening the impact that we have on the planet. A lot of the products that we provide to our customers are made from plastic, and we decided some years ago that we could utilise more recycled material in our production. Some of the investments that we made last year helped accelerate that production, particularly in our Reading factory with respect to plastic ducting and so forth. But this is a fantastic performance. We still don't know how to get to 90% by 2025, but I think it's fair to say when we set the target back in 2020, we didn't know how to get to 76% for last year. This is an absolutely stretching target, but we're making really good progress. And when we stay with Planet, we have made a commitment to be net zero by 2040. And so reducing our carbon intensity by 9.8% in the year to 11.1 tonnes per million of revenue was a really compelling achievement there. So we're very pleased about the progress that we're making. But last but not least, around people, and I'm personally disappointed about our accident rate for last year. We had an increase and we're disappointed about that. However, I'm confident that the efforts that we're making to improve our health and safety, to keep our people safe at work, will take us in the right direction. And there were a couple of important new additions to the group last year. Andreas Berber joined us as the Operations Director in the UK in May. And we've also strengthened some of our health and safety representatives and management in the local areas. But staying with this people theme, management development programme four, what's management development programme four? Just before COVID, we were planning to have our fourth management development programme. But of course, no point having a management development programme if we're carrying that programme out virtually. The strength of our management development program is that we're bringing together an international management team that get to work together more closely. I'm particularly delighted about this. We'll kick it off in a couple of weeks' time. The chairman will join us at that launch. And it's one of the most exciting development programmes that we have across the group. And the reason I say that is that if I look back to the first three programmes, I could reel off to you today the people who are on programmes one, two and three and what they're doing in the group today. So this is really important for us and I'm very excited about what comes next. That was a very quick introduction to the year. I'm going to leave Andy with the exciting part to take you through the financials. But having said that, I think it is a very exciting update that Andy can provide.

Thanks, Ronnie. And echoing Ronnie's earlier comment, great to see. Thank you for coming today, guys. Great to see so many people in the room. We're obviously going to need some more chairs next time. But good to see both familiar and new faces. I'm just going to briefly talk through some of the financial highlights of the year 2023. As this slide says here, a strong financial performance. I think it's not usual, and it certainly makes your life quite straightforward as a CFO to see plus percentages on all of the metrics on the right-hand side there. We'll unpick all of these in a bit more detail as we go through the materials, but you know, a good, strong revenue performance. Really, really delighted that, again, managed to gently uptick our margins, so the margin growth slightly above the revenue growth. Earnings per share, despite the challenges of interest rates and what that brought to our finance costs in the year, again, you know, managing to deliver a very similar rate of earnings growth as we had with operating profit growth. And then, you know, I guess perhaps the number that Again, for a CFO, probably the most pleasing one of the lot is the 50% improvement in operating cash flow. Last year, we made a very deliberate investment, which we talked about in inventory, which absolutely stood us in good stead for delivery last year, stood us in good stead for delivery this year. But what we did promise you a year ago was we would return back to our normal levels of cash conversion and cash generation in the year 2020. And indeed, that's what happened. And then a proposed dividend, which will result in a total dividend for the year of eight pence, which is just under 10% up on prior year. as the strapline says at the bottom there, strong growth in organic revenue margin and cash flow and earnings per share ahead of consensus. So normally I show you these charts on a five-year basis, but I think there's 10 data points here now, because as Ronnie said, it's just over nine years since the business listed. And we thought it was really, really important just to just to draw out and show the consistency of delivery of this business ever since it IPO'd in 2014. You know, invariably you've got the little blip in 2020 for COVID, but you draw a line straight through those graphs on all the measures. So revenue, operating profit, earnings, and cash flow, and 13%, 14% compounding through that 10-year period, notwithstanding the 2020 piece. I think it's the numbers themselves, but it's also the consistency of that performance. It's not spikes and troughs and spikes again. It's a really, really consistent compounding performance through the 10 years, which we think is a great achievement. Revenue, so when we move into the regional pieces, Ronnie will unpick this a little bit more, there were different dynamics, different moving parts within the group, some markets having tougher conditions than others. But overall, a result of 6.6% revenue growth, organic revenue up 4.6%. The price volume question is something that we'll always get asked here. And we, roughly speaking, analyse that 4.6% to be about 75%, 80% of it coming through price and about 20-25% of it through volume. But I guess the way you should think about that, and again, you know, more apparent as we get into the regional slides, if you take the bits of the business that really did perform very, very strongly, so whether that be UK residential, whether it be Climorad or ERI in continental Europe, the growth rates there were very, very much volume with a small price assist. But of course, we did have a couple of markets, particularly in continental Europe, which were a little bit tougher, where volumes definitely did contract. So Nordics and Germany in particular, but we'll talk more about those as we move into the regional slides. Relatively small contribution from inorganic growth this year, not because we weren't active on acquisitions, because as Ronnie's already mentioned, to really exciting additions to the portfolio and then a third post year end but simply the timing of those transactions so the two in the year were respectively April and June so very very minimal impact in 2023 but you know definitely something that we're really excited about in terms of what it brings for 2024 and beyond moving then on to margins so you know I guess if you look at the bottom left there three full financial years now of delivering post-COVID, of delivering margins at or fractionally above 21%. So our target, as Ronnie said, is and remains greater than or equal to 20%. We're not going to be moving that target. But I think, again, back to that consistency of delivery point, these last three years have been very unpredictable, very challenging, whether it be market conditions, whether it be supply chain disruptions, whether it be inflation, we've had to navigate that period and to come out with that consistency of delivery, again, is something that we're very, very, very proud of. If you look at the bottom right there, we just tried to unpick what that looks like on a on a three regional basis. So you'll see the bars for 2022 and 2023. And I guess the important takeaway for 2023 is that really strong performance in both the UK and Australasia. So over 2% of margin improvement in both of those territories. A little bit of softening in continental Europe, which is predominantly mixed. So as I've mentioned, you know, Germany, Nordics, more challenging areas, they are traditionally and still towards the upper end of our margin profile in the group. So that mix effect hasn't been helpful. But what you then end up with is, you know, three regions all delivering margins, you know, very, very similar to each other and all very strong margins. ahead of the group target. You know, inflation has still been with us this year. I think it was, you know, in terms of materials, components and things like freight, it's definitely, definitely got much, much easier in the second half of the year. But that's now moved into whether it's labour, staff costs, property costs, some of the other overhead areas. So it's not to say inflation is gone, but I think it definitely is definitely moved in where it's gone. Then moving, probably the highlight for me was the cash generation performance in the year. So cash conversion, we set a target of greater than or equal to 90%. As I mentioned earlier, last year we were, by our standards, relatively lower than that at 76%, but that was a very targeted and specific investment that we made, which definitely did contribute to our service performance and therefore our revenue performance over the last two years. And to get back to now comfortably above 100% is really, really pleasing. A small inflow of working capital this year. That wasn't from inventory. Inventory basically flat. If you exclude the new acquisitions, inventory basically flat year on year. And that's what we said. We said, having done the build, we don't intend to unwind it. We still think supply chains have the potential to be disruptive and the relatively small cost that has versus the ability to keep on servicing the market really excellently is, we think, worth a lot more than a million or two of inventory. But what has contributed to that inflow has mainly been receivables, so a really good performance on receivables. And those of you who look at the notes, when you look at the ageing profile of the business, you'll see that actually the ageing profile of the receivables, it's always been good, but this year it was particularly good. particularly strong. If you were to draw a box around everything here, apart from the right hand one being the acquisition spend, what you'll see is an overall cash inflow of about £30 million. So what we would say is we de-lever, and we've always said this, in a year where we didn't do acquisitions, we would de-lever approximately half a turn per year. So it's a really, really strong cash generating business. But what we want to do with that cash generation is to invest it in really exciting acquisitions that add to the portfolio. So the right-hand bar there, 30.7 million, that includes a little bit of fees, but £30 million basically spent on the two acquisitions in the year. But still with that, we end the year with net debt fractionally lower than we went into it and leverage at 0.8 times on an ex-leases basis, again, means that we not only are in a good position at the end of the year, but we're definitely in a place where we can carry on pursuing these attractive acquisition targets. Ronnie mentioned earlier that we've tried to introduce some sort of new materials this year. And one of the things that we've been doing a lot of work on and consulted with a number of the analysts in the room as part of developing that, and thank you all for your help and insight, return on capital, ROCI or ROIC or whatever you want to call it. There are obviously multiple ways of looking at this. So we've always had a metric where we look at specifically the performance of our acquisitions. So we've had a target that we've had there for the last few years, where we say for each individual acquisition, we target it to deliver a return of 18% or more once it's been in the group for over three years. And that's still a really helpful measure. And it's the measure by which we test out how well we've delivered on both buying assets well, but then improving those assets well. But we felt it was really important to also move into developing an overall return on investor capital. It's all encompassing for the business, not just the acquisitions, but the whole business. On that old measure, you may recall that we would have said over the last couple of years, and the number is still the same this year, that the acquisition return is about 24% cumulatively. But what we've got here is a full return on invested capital for the group, and that's coming out at 27%. So we've taken a three-point average for the balance sheet. We've added back acquisition-related liabilities, net debt, and we've added back any historic amortization charges. So it is a true sort of grossed up invested capital. We have made an adjustment and we think this is the right thing to do for the original transaction that created the group back in 2012. So that's what you'll see there, the goodwill intangibles of the 2012 leveraged buyout. And all together, that comes out then with a return of just over 27% for the business. Now, That is a very, very strong return, as it says on the right there. Clearly, it's significantly ahead of whatever people would estimate your weighted average cost of capital to be. It's clearly far, far in excess of that. I guess going forward, and this is going to be interesting from a target and measurement perspective, if we carry on executing on the acquisition strategy, which absolutely is at the heart of what we do, acquisitions will be dilutive at the point of entry to the group. No question about that. And so actually, if we can carry on maintaining this sort of return in the mid-20s with the execution of a good, strong acquisition strategy, we think that's going to be a recipe for really good growth and good returns for the business. And so the final slide from me, and I think there's nothing new here, but just really summarising it back again in terms of how this year has looked relative to the targets, the core target that we have in our financial model. We've added, I say, that new return on invested capital target at the bottom there as well. But, you know, really, really good, strong performance, delivery against all of the targets. I mean, the only one that, if you like, is slightly below our model, for want of a better word, is the total revenue growth. But that is purely the function of the timing of the inorganic activity and when that starts to play through as revenue. But look, overall, I'd say a really, really pleasing set of numbers. And with that, Pass back to Ronnie.

Thank you. Thank you, Andy. So just a reminder here. So I mentioned earlier on, Volution is a much more international business today. And so about 40% of our revenue comes from UK customers. And the balance, as you can see, comes internationally. comes elsewhere. And of course, if you think about the acquisition pipeline and where we're likely to cement future transactions, that sort of reducing UK proportion will continue, although the UK market is very important to us. But that will continue to change over time. And look, we think that sort of geographic and end market diversification or diversity is really helpful. And it does create quite a bit of resilience. And I think that comes out really well in a moment when I take you through some of the individual markets and how they performed. Although we delivered just under 5% organic growth, constant currency organic growth, not all of our markets were performing strongly. And I always say this to the teams, as CEO, it's very rare that every market points up strongly every year, no matter how hard we try. This is just showing how things have moved. So 10 years ago, two countries, in actual fact, when I became CEO, we had one country, and we were based in the UK. So 17 countries, that will change over time. Lots of white spaces on the map still, other geographies that we'd like to enter, and indeed existing geographies that we'd also like to add to. There's a lot of detail coming up on the next few slides, and I'm not going to go through every individual bullet, but they're There's sort of some core sort of highlights and maybe some lowlights that we should just discuss while we're here. So in the UK, I mean, look, it was an outstanding performance. I don't remember us growing 19.5% in the residential market before, notwithstanding the COVID recovery year was obviously a very strong performance, but it wasn't against a sensible comp. But we grew 19% in residential. In actual fact, we grew in all three elements of our residential business, public RMI, private RMI, and indeed in residential new build, which I know does feel counterintuitive when we understand what's happening in the house building market at the moment. Look, I'm convinced that in the UK we have a number of brands, leading brands. We have a strong, if not the strongest, product portfolio. We have the largest ventilation sales force. We have excellent customer service and excellent relationships. And I don't think the market grew 19% last year, so clearly we've been gaining share. That was a particularly strong performance. If we look at residential new build, even in residential new build, we talked about some account wins that we made early in the financial year and also this move towards lower carbon continuous system or heat recovery ventilation, which has a very profound impact on the unit revenue that we see per dwelling. And so that is the highlight for us. In commercial... We're underweight. We're not the leader in UK commercial ventilation, but we have some strong niches. For example, we're the leading provider of what we call fan coil ventilation in the London market. And in actual fact, our commercial revenue performed better in the second half of the year. If you look back in the first half, actually our decline was greater than that. So actually half two was stronger. In export, we grew 1.7%. That's mainly in Ireland. Most of our growth is in Ireland. We're the leader for heat recovery ventilation in the Irish market. under our Ventaxia brand with heat recovery systems. And in actual fact, that's a market that continues to sort of struggle with how they build more houses. I mean, it's completely different to, I remember, in 2008 when we were building the houses in the wrong place. But there is good sort of structural underpinning and faster regulatory underpinning in Ireland. It's a good example of where maybe the UK market could go more quickly because most properties in Ireland are built with some form of system or heat recovery ventilation. OEM was a disappointment. OEM is our motorised impeller business. And what we saw there, particularly in the second half of the year, was a situation where I think supply chains generally had normalised. One particular competitor that had struggled, had sort of caught up, a German competitor. And we also saw a lot of the business from our OEM, about 50% of the business is in export. And what we saw is quite a bit of weakness around Europe because these motorized impellers predominantly go into products that are new build focused. And in actual fact, we expect to see continued weakness in our OEM area, partly as customers are potentially overstocked and we see some destocking and also fundamentally we're seeing obviously a greater weakness in new build construction than we are maybe in terms of RMI. Sorry, how could I miss that? Margin. Yes, I mean, Andy, operating profit margin improvement in the UK from 20.4, 22.6%. And that's a function of a whole raft of things. Obviously the volume helps. I would say the pricing discipline, and our sort of relentless focus on operational excellence, factory efficiency and value engineering and so forth. So in actual fact, we exit the UK, if you like, in FY23 with, if you like, an improving margin trend throughout the year. So if you think about what the operating profit margin was in half one and then look at where we ended up for the year, that we believe is a good trajectory to exit the year on. Continental Europe, really quite a mixed bag. I think the two low lights were in the Nordics and in Germany, and particularly low in the second half of the year. In the Nordics, I'm convinced, because I can see what's happening more recently, is that we had a period of destocking. We had strong demand in a prior period. We had distributor and wholesaler customers with high levels of stock. We had weaker demand and then we had the inevitable destocking. And I think a lot of that destocking is largely complete. So we had quite a bit of weakness there. And in Germany, our exposure is greater to new build than it is across the wider group. We typically talk about the group being 65, 70 percent RMI to new build. But in Germany, actually, you could probably reverse that. And we have a greater predominance of new build there. And there was some subsidy changes and so forth. So the German market, which had performed really well for us for three or four years, in actual fact, if you remember back to COVID, we actually grew our revenue in Germany in the COVID year. And we continue to have a strong performance in 21 and 22, but it's come off. And what we had, as Andy's already talked about, is we had strong performance in other areas, in Klima Rad, in the Netherlands, where we have decentralised heat recovery, in energy recovery industries with our heat exchangers. and in one or two other areas we had a strong performance. So the operating profit margin decline of 2.2% isn't because we necessarily had a lesser quality delivery in the local areas. It's the participation or the lower participation of the Nordics and Germany bringing down the average and the greater growth in areas that are at a lower operating profit margin. So I guess what I'm saying there is that if and when we see a recovery in the Nordics and German areas. we would naturally expect to reflect that in an improving margin mix. And the inorganic additions, really very small. Ventel Air Sec or VMI in France. Look, we've acquired Ventel Air Sec in France as a small proposition that deals through electrical wholesale trades, has access to distribution, but it's a relatively small player in the French market. And we believe that has a huge runway of opportunity in the coming years. The issue for us is to introduce new products and open up new customer relationships. Some of those customers are international groups that we have strong relationships with elsewhere. And we believe will see us as the horse to back, if you like, in the local market because they know what we're able to deliver for them in other markets where we partner. So look, the opportunity in France is a long-run way of opportunity. We're working very hard with that right now. Whereas iVent in Slovenia is slightly different. It's got a market-leading position. It's a country of just 2 million people, although we are now opening up in Croatia. And we have a slightly different model in iVent. But it's very profitable, very exciting, and we're delighted to bring it on board. But those companies only participated for a couple of months in the year. Moving on to Australasia. Again, it was a really good year in Australasia. Slightly mixed, I would say, I think, in New Zealand. In New Zealand, the market has been tougher. In Australia, we still continue to grow very well, operating profit margin of 23.9%. So that's a great performance. If you look back at the sort of Vente margin when we acquired the business back in 2019, it was sort of circa 10%, 11%, 12%. So we've been able to steadily... improve the margin. And then, of course, more recently, it was a post-balance sheet event. It was the 4th of August. We did have to go through competition clearance. We had to work with New Zealand competition clearance authorities to get the approval, but delighted that we have. And what's important about DBS is that we have two routes to market in New Zealand. It's generally a smaller country, probably about 5 million people but we have a distribution market leading position in Symex. And we've also acquired DVS, which is an installer of ventilation and has a different proposition. And we believe the attraction of having the installation element in New Zealand is that we can upsell and upscale products more quickly. We're having a direct-to-consumer conversation about what's the right solution and so forth. And the attraction there is that we've got a very wide scope of products across the group, and we know that we can deploy those products into New Zealand through DVS. Which of course is exciting for Cymix over time as well, because Cymix is providing the products that are replaced over time, and so we're able to sort of double dip in the market. So really excited about that. Excited about the profit improvement in the year. You know, 22% growth in the profit in the year, partly because of the organic growth, but of course hugely assisted by the margin expansion. What I'd like to talk you through now is how our markets benefit from long-term structural growth drivers. And I think it's particularly relevant at the moment because, of course, we're all nervous about outlook and quite what's going to happen next. I'd remind you, of course, that in that context, we have just delivered a circa 5% organic growth. But there's no doubt that with inflation, higher interest rates and mortgage rates that new build construction globally is under some pressure in the UK, in continental Europe and indeed in Australasia. And we're just trying to show on this slide how this impacts us. So for example, if we look at new build residential, clearly our revenue in new build applications is hugely linked to the construction volume. Are we building more homes, less homes, or the same? However, there are also, as you can see on the second line there, huge regulatory drivers that can assist us. And I would argue in FY23, our residential new build strength was clearly not as a result of building more homes, but was as a result of regulations having a greater impact. And just to understand the runway of opportunity here, we estimate pretty accurately that less than 40% of all UK house building consists of heat recovery. The future home standard, which is the standard that's basically setting the outline for how we build homes that are net zero carbon ready, would argue that heat recovery is probably the only sensible way to go. Now, I'm not arguing that by 2025 We'll see that 40% penetration go to 100%, but it is moving every year. And we have daily engagements with house builders and with projects around utilising more heat recovery and system ventilation. It's moving. It will continue to move. And of course, the last change in part F and L of the building race was really supportive. But this is a trend that's happening all over Europe, but not just in new build and What we're showing here is that in RMI the impact is less, but there are other impacts in RMI that are of greater importance. Energy efficiency, indoor air quality. We've only got to look at what's happening in the public housing market in the UK at the moment. Indoor air quality awareness is paramount. Mould and condensation is something, if you Google mould and condensation in UK social housing, It's every day. This is underpinning substantial increase in demand for proper refurbishment of social housing properties. So we're not arguing we're acyclical, if only that were true. What we are arguing is that there are other drivers that can assist us in a market when maybe overall volumes are a little bit weaker. And, of course, all of this is complemented by a broad geographic and end market exposure. So that's us really, that's what we wanted to talk to you about today. I'll come on to summary and outlook and what we think of as our clear compounding growth model. There's a debate for Andy and I which one of us would use the slide showing the nine, 10 year track record. Andy won that one, but look, I get the opportunity to summarise what should come next. We have structural growth drivers underpinning our long-term growth. We could not have delivered what we have to date and have the confidence in our future expectation without the structural undersupply of homes in the UK, or for that matter, pretty much all over Europe, and indeed in New Zealand, where if you've ever tried to rent a property in New Zealand, it's nigh on impossible, as one of our colleagues found a couple of years ago. We've got increased regulation. There's no debate about that. I know there's a lot of debate about the recent Conservative government announcements, but fundamentally I don't think they'll make a huge change to the progress that we see in the coming years in this space. A drive for energy efficiency. It's key. It's not just about carbon emissions. It's also about cost. Indoor air quality and health awareness and upselling. Upselling is something that we're very good at, particularly in areas such as private refurbishment. We have a differentiated business model aligned to our chosen markets. I won't take you through each of the individual bullets there, but our strong brands, you know, we have leading brands. And sometimes it might sound counterintuitive, but those brands might not lead an entire market, but they'll lead their niche. In the Netherlands, we have Klimarat. It leads the niche in decentralised heat recovery. We have Inventor in Germany. It does exactly the same. And just to remind you, you know, delivering... an attractive through-cycle financial framework, organic growth between 3% and 5%, we've actually been closer to 5%, overall revenue including the acquisitions at 10%, the margin consistently over 20%, an EPS growth that should be over 10%, a cash conversion over 90%, and a group return on invested capital of mid-20s. All of this augmented with an attractive bolt-on M&A strategy, and in that particular aspect our pipeline is It's full, it's busy, and we're excited about what we can do next. So it just gives me the opportunity now to summarise, it was a good year, you can see on the slide there, and maybe just come on to outlook, and I know it sounds like the long disclaimer here, but look, I think the important issue is that we don't know for certain what's going to happen next, but we do know where our business is at and the levers that we have to pull. We have the M&A that we've recently consummated that we're excited about improving in the year. We have certain elements of our markets that are running quite hot at the moment, for example, in terms of UK social housing that I believe is a multi-year trend. The amount of work that needs to be completed cannot be completed in one or two years. This is going to run for some considerable time. Also, I think from Andy and I perspective, credit to the wider management team. We are able to comfortably be here today on the roadshow for the next week in the comfort that we have a very, very strong management team, not just functionally in terms of leading innovation and procurement and product management, but also the local managing directors. And because of that, and of course our wider geographic and market diversity, it gives us really good confidence of making further progress in the year ahead. OK, well, that's the sort of formal part of proceedings. We've got a little bit of time now to open up to questions. OK. Right, quick. Rob, we'll go. Sorry.