Melrose Industries PLC

Hello everyone and welcome to Melrose results for 2025. We appreciate you joining us to reflect on a transformational year and to talk through the exciting path we have for the future. We have lots of value to unlock, especially given strong demand and what we've done over the last few years to reposition our business. The key message today is that we're executing our plan. We've got a clear strategy to create shareholder value and we're getting on with it. We delivered a strong performance in 2025. There's no doubt that we're operating in a complex and dynamic global environment, and against this backdrop, our operating profit was up, driven particularly by engines and defence. We also delivered our cash target with positive free cash flow of £125 million, and this represents a really important inflection point in our journey. Good commercial and operational progress continued to be made, and we also completed our multi-year transformation programme. So this all gives us some very positive growth momentum, which is underpinned by the market, where there's strong demand across both civil and defence. Indeed, in all parts of our business, demand is very definitely on our side. We have established positions on all the world's leading aircraft and their engines, and this positions us squarely to benefit from strong future production ramp-up and the aftermarket, most notably in engines. Beyond this, the differentiated GTN technologies that we've prioritised are being actively sought out by leading OEMs. So we're nicely on track. We've got a clear path to delivering growth, margin expansion and increasing cash. This will deliver ongoing shareholder returns. And on that note, we're pleased to announce today a new share buyback programme reflecting our confidence in hitting the 2029 targets. So I'll just say a few words on these two themes covered here. starting with 2025 performance. In 2025, we delivered financially, commercially and operationally. Sales were up 8%, margins were up 240 basis points, and as I've said already, cash came through positively. On the commercial side, we continued to make good progress, particularly in our target areas, such as winning contracts in our aftermarket blade repair business and the rapidly emerging military uncrewed market. Now, from an operational perspective, we delivered further improvements in safety, quality and productivity. And I'm going to talk more about this in the second half of the presentation, because clearly operational execution is important here as we ramp up. Turning now to our positive growth momentum. At the highest level, there are two aspects to this, the strong market and the plan we're executing to unlock our potential. On the market side, our unique Tier 1 portfolio is embedded on all the world's leading aircraft. So the demand for our products and our technologies is at record levels. We have civil order backlogs going into the 2030s, structural aftermarket demand growth, and the turbulent world is driving an unprecedented increase in defence spending. And then there's the next generation of aircraft, where our technology is being actively sought out for future developments. Turning to the execution side, the last few years have been about transformation. We've focused GKN Aerospace on where we can win with design-led positions. We've exited non-core or cash negative businesses and we've repriced lots of work where we needed to get sustainable returns. In parallel, we've rationalised our footprint from 50 to around 30 sites. Back in 2023, we were operating at 12% margin and we were cash flow negative. We've just announced results today with a 600 basis points improvement in margin to 18%, and the cash is nicely positive. So quite some changes, and we now have a great foundation for further gains. Going forwards, it's a different type of growth because the restructuring is complete. Given the expected sales increase, we're going to see operating leverage from the ramp-ups increase. further productivity improvements from our improved cost base, as well as the gains coming through from our operational and commercial actions. So we are well positioned and we know the levers to pull. This gives us confidence in delivering 24% plus operating margin and £600 million of free cash flow by 2029. We'll return to this in the latter part of the presentation, but for now, let me hand over to Matthew to talk in more detail about 2025 performance.

Thanks, Peter, and good morning. It's a pleasure to talk about the business's strong performance in 2025, with profit and free cash flow in line with our expectations. Group revenue grew 8% on a like-for-like basis, led again by the engines division. Group operating profit took another significant stride forward, growing 23% to £647 million, due to the revenue growth and the further impact of our business improvement programmes. Margins also continue to grow, up 240 basis points to 18%, and EPS grew significantly, up 25% to 32.1 pence per share. These are a strong set of results with continued profit growth and a major milestone achieved, delivering positive free cash flow in line with our commitments. Turning to slide 7, breaking this down by division. Both divisions delivered revenue growth, and our performance continues to be driven by the ongoing strong performance of the engines business, up 15%. You'll notice that we've changed the name of our structures division to Airframes, and Peter is going to explain more about that later on. So, Airframes saw growth of 3%, with the strong performance of defence constrained as expected by the ongoing supply chain challenges being experienced in the sector, which is holding back civil OEM production rates. Margins continue to grow in each division due to the buoyant Engines aftermarket, as well as the benefit of our business improvement programmes. And both divisions are making progress towards our 2029 targets. So, digging deeper into each division, turning to Engines on slide 8. Revenue growth was robust at 15% up, with both OE and aftermarket contributing almost equally, OE grew 16%, and this was driven by higher GenX and GTF volumes and a higher spare engines ratio, as well as good growth in our non-RSP commercial contracts, including our military ducks business. It was good to see the strong growth for OE in H2. While some of this resulted from the unwind of H1's tariff impact, the underlying OE growth in the second half was still well into the teens. This reflects the volume ramp and bodes well for future OE growth. Turning to aftermarket, this revenue was up 14% in the year. RSP revenue performed well, with growth of 20%. And that revenue included £324 million of variable consideration, which grew by 22%, meaning the core RSP portfolio grew at 19%. As expected, due to a strong comparator, our Swedish military business declined 7%. But it was good to see, though, a return to growth in the second half, up 7%. We continue to deepen our relationship with the Swedish FMV, and have been awarded a contract to develop an uncrewed aerial vehicle demonstrator within 18 months. In addition, this business signed an agreement with the FMV to explore the propulsion requirements for future fighter systems, and we also signed an agreement to supply several mission-critical components for the Ariane 6 launch vehicle. After a challenging first half caused by tariff disruption, our aftermarket repair business returned to growth of 24% in the second half. Overall, the business grew 12% in the year. We continued to make good commercial progress in repair, winning a contract with Rolls-Royce to be the sole external supplier of fan blade repairs on three of their engines, and with Boeing for C-17 fan blades. We also entered into a five-year contract extension with Pratt & Whitney for critical fan blade repairs. Operating profit for the division grew by 27% to £520 million and margins at 31.9% continue to rise. The strong margin reflects the growth in the highly profitable aftermarket business as well as continuing improvements in productivity and quality in this division. So a very strong performance from the engines division, despite tariff and supply chain challenges, with further growth and improvement to come. Turning to airframes on slide 9, this division delivered 3% like-for-like revenue growth. This was driven by defence, which was up 15%, where increased build rates and improved commercial terms read through in the year. At the half year, we confirmed we had met our target of 85% of the portfolio being sustainably priced, and this rose to over 90% by the year end. Defence continues to develop commercial opportunities, signing an agreement with Andoril Industries to collaborate on next-generation uncrewed aerial vehicle solutions. The partnership with Andoril, which includes advanced composite aerostructures, wiring, a ground-based demonstrator and advanced flight testing, will initially target the UK government's upcoming land autonomous collaborative platform and the British Army's Project NICS. Elsewhere, the defence business has secured two follow-on contracts for C-130J and Typhoon Transparencies. On the civil side of the business, revenue was marginally lower, down 2%, as a result of modest growth in our key narrow-body and wide-body platforms, which is still impacted by continued supply chain issues affecting OEM production rates, offset by declines in business jets and other platforms. Commercially, we signed an agreement with Archer to expand engagement on the Midnight eVTOL platform, which is being selected as the official air taxi provider for the 2028 Los Angeles Olympic Games. Margins for airframes continue to improve despite the slower ramp-up with the impact of pricing, business improvement, restructuring and the sale of lower margin businesses all dropping through. Margin progress, however, was constrained by lower civil volumes as well as lower productivity of one of our manufacturing sites in the Netherlands. Our plan to resolve this issue during 2026 is already well underway. Operating profit grew by 10% to £156 million, and margins grew from 7.2% to 8%. So despite the volume and supply chain challenges, the airframe division continued to deliver profit and margin growth, with more improvement to come when the ramp-up impacts our volumes. So let's now talk about the numbers below operating profit on slide 10. We've put the details of adjustments to operating profit in the appendix. From that, you will see that now we've finished our restructuring programmes, the size of that adjustment is much reduced. Net financing costs are £132 million, which largely reflects the interest on bank loans, with an average cost of 5.3%. The ETR for the year ended lower than expectations, at 20.4%, and this was due to the recognition of certain tax assets in Malaysia and Sweden. A combination of all of the above and a steadily reducing share count shows EPS at 32.1p, growth of 25%. And as a result of the strong performance in the year, a final dividend of 4.8 pence per share is proposed, increasing the full year dividend to a total of 7.2 pence per share, up 20% from last year. And this is in line with our capital allocation policy. So now let me turn to our cash performance for 2025 on slide 11. We were pleased that we hit our cash target, delivering positive free cash flow in excess of £100 million. Free cash flow post interest and tax was £125 million, with £200 million more than last year. Moving into a little more detail, we have split out the movement in variable consideration, continuing to give transparency as to how this affects our results, and at £324 million, this was very much in line with guidance. As expected, trade working capital performance in the second half of the year was strong, reflecting the seasonality of the business and the sector, augmented by certain customer settlements which we expect to continue. For those of you that want it, in the appendices you will be able to see our factoring position, which ended the year at £396 million. This reflects growth in the existing programmes and the ramp-up in the last quarter. Just to confirm, no new factoring programmes have been or will be entered into. With respect to the power and metal issue, we saw £68 million cash costs coming through in 2025, in line with our guidance. CAPEX was £94 million and represents 0.9 times owned asset depreciation and amortisation. This reflects continued investment in strategic growth initiatives, but also that capital expenditure on major restructuring projects was completed last year. And I'm pleased to confirm that our restructuring programmes have now concluded. From a cash perspective, the cost was £31 million, which is below our guide. And to confirm, there will be no significant cash cost in 2026. Moving on to the share buyback programme. During 2025, we returned £173 million to shareholders from the £250 million programme announced in 2024. In the first quarter of 2026, there is a further £60 million to be spent to complete this programme. Net debt ended the year at £1.4 billion and leverage at 1.8 times net debt to EBITDA. This was in line with our expectations and our capital allocation policies leverage target range of 1.5 to 2 times net debt to EBITDA. So having talked about 2025, let me now give you our guidance for 2026. All of this guidance is given at $1.37 to the pound. First, the P&L on slide 12. Given the expected OE volume ramp up and the strength of aftermarket in the sector, we expect to see continued robust revenue growth in 2026. This is despite the persistent supply chain challenges that are affecting the whole aerospace industry. We are guiding to revenue from £3,750,000,000 to £3,950,000,000, which at the midpoint represents like for like growth of around 10%. And this revenue growth continues to be weighted towards engines. Given the strength of our aftermarket business and our margin improvement plans, we're guiding to operating profit between £700 million and £750 million. At the midpoint, this represents profit growth of around 16%, and the midpoint margin is around 19%. At a divisional level, we expect engines to maintain strong growth rates in double-digit territory, with growth weighted to the aftermarket. Operating profit guidance is £565 million to £595 million, and this includes variable consideration of around £360 million at the midpoint, and we expect margins to be around 33%. The airframes division is expected to show high single-digit revenue growth on a like-for-like basis. This reflects an element of civil ramp-up alongside continued growth in defence. Operating profit is guided at £170 million to £190 million. We expect to hit 9% margins this year through growth and improving airframes operating performance. PLC costs are expected to be £35 million this year, including around £3 million of non-cash LTIP cost. Now, I had hoped not to mention tariffs today, but events in the last few days has the potential to cause further disruptions. We continue to caveat our guidance for any new tariffs and we wait to see how the recent announcements are actually processed in the US customs system. I can confirm though, as a result of the swift and firm action on this subject during Q2, tariffs have not had a material impact on our results in 2025. Moving down the P&L for 2026, I expect absolute net interest costs to increase, reflecting the continuation of the share buyback and the fact that the cash generation will continue to be back-end loaded. For 2026, the interest rate for gross bank debt is expected to be around 5.3%. Guidance for ETR is 21% to 22%, and this is still very much weighted towards a Swedish tax rate, but will depend on the precise balance of profits during the year. So, from a P&L perspective, we're guiding to continued strong growth in the business with top line and operating profit moving forward significantly. Turning to our cash guidance for 2026. We introduced formal cash guidance in 2025 with our commitment to deliver £100 million plus a free cash flow. We now intend to guide a range for cash flow, like our sector peers do. The overall guidance for free cash flow, post-interest and tax, is £150 million to £200 million, which is £175 million at the midpoint, with the range reflecting the size of the group. Let me work through some specific guidance to help your modelling. I've just given P&L guidance as well as the guide for non-cash variable consideration. Whilst we are still experiencing supply chain disruption, we would hope that this starts to turn a corner by the end of the year. As such, we do not anticipate significant growth in trade working capital and we do expect further customer settlements in the year. Resolution of the powder metal issue is expected to have around a £50 million impact in 2026 and we remain confident that the total cost to Melrose of resolving this issue will be within the £200 million advised by Pratt & Whitney at the outset. We expect capex for 2026 to be around 1.2 times owned asset depreciation and amortisation. This is higher than prior years and reflects our commitment to strategic growth initiatives. I'm going to give you more colour on this on the next slide. Whilst historically we have left you to estimate cash interest, we are now guiding to the 2026 interest cash cost being around £130 million. Cash tax costs will increase in absolute terms for 2026, but will still be low compared to the P&L, around 4% of the adjusted profit for tax. When you combine all of this with the fact that there will be no material restructuring cash costs in 2026, we expect leverage to continue to be below two times EBITDA within our capital allocation policy. So to repeat, free cash flow after interest and tax is guided at £150 million to £200 million. And this cash flow will continue to be heavily weighted to the second half of the year, in line with historic Melrose and sector seasonality. My final slide, slide 14, reiterates our capital allocation policy. We are now a business that generates positive free cash flow, which will increase each year to our 2029 target of £600 million free cash flow. We will look to allocate that capital in a disciplined manner in three ways. Firstly, we continue to invest in the business, both for maintenance projects as well as investing in business expansion opportunities. In 2025, we invested in our additive fabrication expansion in Sweden and Norway. We also completed our new repair facility in California and set up a new wiring facility in Mexico. In 2026, investment will grow to 1.2 times owned asset depreciation and amortization and will include further investment in additive fabrication, an expanded building in one of our US facilities, as well as investment in capacity for the OE ramp-up in engines. From a balance sheet perspective, we intend to be efficient by maintaining leverage at between 1.5 times to 2 times net debt to EBITDA, with a view to attaining investment-grade metrics over time. Provided the first two pillars of our policy are satisfied, we will then look to return cash to shareholders. And we'll do this in two ways. Firstly, we will continue to grow our annual ordinary dividend, and you've seen that we've announced the final dividend that represents 20% annual growth. We will then make share buybacks, considering free cash flow delivery and leverage targets. It's worth noting that once the current £250 million programme is completed, Melrose will have returned more than £1 billion to shareholders in dividends and buybacks over the last three years. Taking all of this into account, today we announce a new £175 million 12-month share buyback programme, which will commence once the existing programme completes at the end of March. As previously announced, our share buybacks will be considered annually to tie into our year-end reporting process. We believe that our capital allocation policy reflects our intention to invest in the business, a disciplined approach to leverage, and make sensible returns to shareholders. So to conclude, the business has performed well in 2025 and, despite tariff disruption and supply chain challenges, we expect to deliver robust growth and margin improvement in 2026. We have passed the inflection point for free cash flow, and we will build on that good momentum as we progress towards our 2029 targets. And with that, I'll hand back to Peter.

Thanks, Matthew. As you say, let's now talk further about our growth outlook. To start with, I think it's worth just recapping what Melrose is today. We have a unique Tier 1 portfolio that we've repositioned to deliver value for the future. It starts with two end markets, civil and defence, and serving these markets, we have an airframes business and an engines business, both of which play in the OE side and the aftermarket. So there's a number of dimensions to our business. In civil engines, we have an RSP portfolio that gives us an entitlement on 70% of global flying hours, plus an increasing network of parts repairs facilities. In civil airframes, we have design positions on all the world's major aircraft. We serve Airbus, Boeing and increasingly Comac, and we have a good position on leading business jets. In defence engines, we partner with all engine OEMs as the leader in military ducks, as well as technology on the Pratt & Whitney F-135 engine and supporting the Gripen fleet. In defence airframes, we have embedded positions on all the major rotary and fixed-wing platforms, particularly the F-35, and we're also on key European platforms. So it's fair to say we have real breadth in aerospace and defence, and our positions are typically sole source. And against that backdrop, we all know there is strong demand growth, so I won't dwell on this slide. But I do want to reinforce, on the civil side, we've got record backlogs going out into the 2030s, and in the last year we've seen a big increase in wide-body orders, which is good news for us given our positions on the A350, the Boeing 787, Gen X and XWB. There's also increasing shop visits as flying hours go up. On the defence side, it's clear that there's a generational uplift in NATO spending going forwards, both in Europe and also likely in the US. And then there's this new opportunity with uncrewed aerial vehicles, and our development teams are hard at work here. So suffice to say, demand is strong, reassuring, and underpins our business. Now I'll turn to each of our businesses in turn, starting with our engines business, which is unusual because it serves all of the OEMs. At its heart is our RSP business, and here we provide load-bearing components on all the world's leading engines where such partnerships exist. What this means is every time one of those engines is shipped, then we have a lifetime entitlement to the aftermarket revenue and profit, and of course that generates significant cash for decades to come. Our government partnerships business is where, among other things, we support the Griffin fighter jet, We're the provider of aftermarket support globally, and of course, this is certainly a growing fleet, as in the last year, again, we've seen more nations buying more planes. Then we have our repair business, where we have invested and built new, highly automated sites to meet demand in growth areas such as blades, blisks and discs. It's a purely aftermarket business, serving growing global market needs. And then to round out the portfolio, the commercial contract side, where we have long-term agreements on all the engines that are out there, even when we don't have an RSP. And this effectively gives us some balance as it's an OE business giving us exposure to all production ramp-ups. Now the final thing I'd say on engines is we shouldn't lose sight of our breakthrough additive fabrication technology, which is in demand from all the OEMs now and for the future generation. And I'll talk more about that shortly. Engines is an exceptional business. So now on to our design-led airframes business. This is a business that has global reach and also local presence. As Matthew mentioned earlier, you'll notice that we've used the word airframes here. Historically, we've called this our structures business, but as this slide shows, our technologies and products span beyond structures, including our leading wiring business and also transparencies. On the composite side, we have leadership in terms of design and advanced manufacturing methods. We make major components for aircraft like the Boeing 787, the A350, F35 and Black Hawk, and we have deep capability through our global design technology centres. This is an OE business facing significant ramp up with existing and next generation aircraft. Turning to EWIS now, we're one of the top three global players in wiring. Here we supply defence aircraft such as the F-35 and a broad fleet of civil aircraft. We have proprietary design capability and a global footprint covering North America, Europe, India and China. And again, this is in demand with more electrification and higher voltage requirements going forwards. In transparencies, we're effectively the sole high volume provider of canopies for the F-35 fleet. We make Boeing's passenger cabin windows and have breakthrough technologies to bring forward for the next generation. And finally, metallics, which is a core and differentiated part of the business that's at the heart of the world's high-volume aircraft, such as the A320. This is a broad portfolio, and it's important to reiterate that what differentiates us is the combination of design and cutting-edge production capabilities. So across engines and airframes, we have established positions on all the world's leading civil and defence aircraft, and this really is the cornerstone of our strategy. Many of you have seen this slide before, and no apologies for sharing it again, as it's central to the value Melrose will generate in the future. There are three waves to our strategy. First, 90% of the value that we will unlock is delivering growth in the existing platforms from production ramp-ups, RSPs, engine repairs, and of course, in everything we do, operational excellence. Second, beyond the existing platforms, we've identified target areas very selectively where our breakthrough proprietary technology is most in demand from our customers and our customers' customers. Most notably, this is in additive fabrication, military uncrewed aircraft and advanced air mobility. And thirdly, actively participating in the next generation of aircraft. This includes being the only engines player to have a position on both current next generation single-aisle engines programs, as well as working on the sixth generation fighters, such as GCAP. So I'll now talk about our progress in each of these three waves, starting with existing platforms. Aircraft production has clearly been constrained by the supply chain over the last few years. And in some areas, this is still the case. but the ramp is coming, given the demand backdrop. There's ongoing and live discussions about what rate will come through and when, but production is going to increase over time. On civil airframes, we have a weighting towards wide-body and airbus, and on the engine side, each new aircraft needs two engines, and we're involved in all of them. On the defence production ramp-up, this is driven by increased spending, and this is evident from material increases in recent orders that will need to be built with existing fleets, for example F-35s, Grippins and Typhoons. NATO's ambition is for these aircraft and new UAVs to be built swiftly given the threat environment. we of course need to make sure we can deliver the ramp. And to start with, our operations are now positioned around technology centres of excellence. We're investing in capacity, automation, robotics and AI. And we've also got an industrial plan which we're working on to scale up for defence over the longer term. So the supply chain is gradually easing, production is ramping up, and we're positioned ready to serve our customers. Our next area of growth from existing platforms is the engines aftermarket. Let's start with our RSP portfolio. Now, it's important to recognise that we do have legacy engine RSPs generating cash, particularly on programmes such as the CFM56 and the V2500. These engines are flying longer, and that benefits us in the short to medium term. But as those engines do retire, they're replaced by new engines, in particular the GTF, XWB and GenX, where we have an RSP program share which is much greater than the legacy engines. So, as those legacy engines get replaced by newer engines, we're set to benefit on two counts. Firstly, there are more engines flying, and secondly, our program share on those engines is greater. So we have a significant compounding impact with more returns from the engines aftermarket. I should also touch on the importance of the GTF here. Right now, the two GTF variants are the only engines out of our portfolio of 90 RSPs that are not cash generative. There are still net cash outflows associated with the GTF. These are the PMI inspection programme, which is set to complete in 2027, and further investments in the final stages of engine development. The promising GTF advantage is now starting to come into service, and we expect the overall programme to become cash positive for GKN in 2028. This will have a major impact for us, which further compounds the RSP growth story and its embedded value. Beyond RSPs, we have our engine repair capability, where we're building on our legacy position with two new state-of-the-art facilities in California and in Malaysia. Our repair service is very much in demand, as older engines are flying longer, and of course, more sophisticated repairs are needed as newer engines take to the skies, often in harsher environments. Now, all of this needs to be delivered in a way that serves our customers well and generates financial returns. And to do this, we're increasingly embedding an operational excellence approach, which we call the three brilliant basics. This is centered on lean principles and a continuous improvement model that involves three levers, daily management systems, problem solving and breakthroughs. But what does this really mean? If you cut it all the way through, we have key metrics for operational performance, which are cascaded from the shop floor, so literally from tier one team leaders level, up through every management layer to the boardroom. Each level has measures that it controls and we strive for improved performance every day. It all adds up. Now we've been at this for the last couple of years. It's delivered some benefits to date, but there is much more to come, especially now our restructuring is complete. The core measures are SQDIP, or safety, quality, delivery, inventory and productivity. In 2025, we saw further gains in safety, which was 32% better, and I'm proud to report this results in 80% less accidents over the last three years. Quality and productivity also both improved in 2025, as this chart shows. At the same time, we've had some challenges along the way. These include the operational issues at one of our Dutch sites, which Matthew mentioned earlier, and here we're well underway with addressing the root causes, including with our supply chain partners. Our arrears are also not where we want them to be on all programmes. With inventory, we've increased our levels, and frankly, we've had to trap some cash in doing that to protect customer delivery. As for the future, our aspirational target is to have zero harm, no escapes, and no overdues. We'll also reduce our inventory carefully over time, and we will drive further productivity gains, including from operating leverage, as the ramp comes. We know how this needs to be done. It requires granular and focused work throughout our global enterprise. But we have the toolkit and the operational excellence approach to deliver our potential. Beyond delivering growth from existing platforms, we're expanding in targeted new opportunities where we're advantaged and we have a right to win. I'll highlight two such ongoing opportunities today. First, additive fabrication. This is a breakthrough technology which has the potential to replace structural forgings and castings, which continue to constrain engine production rates today. This technology is not a new idea. It's in full serial production on the fan case mount ring on the GTF. We're not just using established additive manufacturing methods, but instead using our proprietary software and robotics to guide lasers that deposit titanium and alloys into near final form structural components. We have an encouraging pipeline of parts from OEMs and are working to certify them to expand this technology's reach, impact and value. Beyond the certification, we're industrialising the production process so that we can manufacture at high volume and low cost. This technology is in demand, not just because it's a smart, efficient and sustainable way to make parts, but because it can support engine OEMs in a concentrated and challenging supply environment. The second opportunity here is military uncrewed vehicles. This is a new market and an evolving one due to the nature of conflict and ongoing global tensions. We're in demand here, particularly as NATO nations typically want to have their own sovereign capabilities. The development cycles are shorter here too, and we're working across a range of countries to build new platforms at pace. We've already mentioned a couple of projects in the public domain with the FMB in Sweden and our partnership with UNDREL in the UK. We plan to tell you more about these breakthrough opportunities through investor teach-ins later this year. Finally, I want to mention we think it's important to deliver our growth sustainably, and we're taking focused steps to ensure that this is the case. From an environmental perspective, we beat our 2025 targets comfortably and we're just issuing new ones for 2030. These are aligned with protecting the environment and doing our part in terms of how we're operating the business. From a social perspective, I've already touched on our ongoing safety improvements and we're also investing in terms of diversity and our people engagement. And in governance, we've transitioned our business and our board to reflect our aerospace and defence business model with a combination of new NEDs and a new chair with deep global A&D experience. So as we're growing the business, we're aiming to do so in the right way and with the right team. As I wrap up here, I want to reiterate our confidence in delivering the 2029 targets. Just to recap on these, top line growth to £5 billion of revenue, 600 basis points of margin expansion, £1.2 billion of operating profit, and £600 million of free cash flow. Just like other parts of our business, we have momentum on free cash. We've gone from the performance in 2024, which was negative, to a £200 million swing this year. We'll see incremental improvements in 2026 with the guide Matthew has already taken you through. And this will then step up further to £600 million in 2029. Now, let's be clear. We know what the levers are and we also know what the trajectory is here. Essentially, there are three core drivers for this step up. The first is the growth in EBITDA from the ramp-up that I have just described. The demand is there. We're well positioned to generate more profit, which converts efficiently to cash. The second is increasing cash returns from our extensive RSP portfolio. And again, we have a locked-in position here, and this is all about the engines going into their shop visits and us capturing our entitlement as they do so. And then finally, and importantly, the GTF, which is set to turn cash positive for us. This is a function of both the completion of the PMI inspection programme in 2027 and then the development costs reducing and being more than offset by cash generative shop visits from the flying GTF fleet in 2028. So simply put, our assumptions, our market-based forecast, combining together with our execution to deliver the 600 million of free cash flow. So with that, I'll close and return to the message I started with. We know what we need to do and we're executing our plan. We've delivered strongly in 2025 and we've got great momentum for the future. This gives us confidence about delivering our exciting potential in the years ahead. And with that, I'll open to questions.