Spectris plc

Good morning everyone. Welcome to Spectris' full year results for 2021. Thank you all for your continued interest in our business. I'm Andrew Heath, I'm the Chief Executive. I'd like to start this morning by saying thank you to all of my Spectris colleagues for their hard work and support again over the past year. Together, we've continued to face the challenges from COVID and the well-publicized global supply chain issues head on. Our teams have worked tirelessly, and I couldn't be more grateful for their commitment and support. Thank you. In many ways, 2021 was a challenging but also a very good year for Spectrus. Not only did our end markets recover strongly, on top of this, we saw equally strong demand for our products and services. there's been yet another year in which we have continued to execute our strategy for profitable growth. We set out this strategy in 2019 and through consistent focus and execution, the spectres we have today has been significantly strengthened as we will come to discuss. One of the reasons execution against the strategy has been so effective has been because my colleagues right across our businesses, they believe in it, they own it, and they aim high, consistent with our core values. And this underscores the importance of being purpose-led. Right across Spectrus, we're aligned behind our purpose to deliver value beyond measure. And this means harnessing the power of precision measurement to equip our customers to make the world cleaner, healthier, and more productive. This is echoed across the group. We know our purpose, why we're here, and where we want to get to. We also know and live our values, which speak to the culture of the business and how we conduct ourselves along the way. And we know our strategy, which is our guidebook and the roadmap to get us where we want to be, bringing our purpose to life. As I've said, last year we saw strong demand for our products and services. We entered 2022 with good momentum and a record order book right across the group. We are creating a Spectrus that is a more focused, higher quality, more profitable and a more resilient business, supported by a very strong balance sheet. We have demonstrated our ability to reduce costs responsibly, drive organic growth, expand margins, allocate capital with discipline for attractive returns, and we've made several synergistic acquisitions to enhance our customer offering. In 2021, on a like-for-like basis, orders were up 19% with sales up 10%. And this means we've outperformed buoyant end markets with market share gains supported by new product and service launches. we delivered good financial performance. Our adjusted operating profit improved 29% on a light for light basis to 209.4 million pounds with an operating margin of 16.2%, reflecting the growth in sales and the operational improvements we've made supported by the Spectrus business system. Having returned the business to an asset-like model, adjusted cash flow conversion was 96% and we further strengthened the balance sheet with net cash of £167.8 million at the year end. We want to retain this position given our pipeline of M&A opportunities, so we've elected not to do a special capital return this time. We've announced a final dividend of 71.8 pence per share, and that's a growth of 5% in line with our policy. In the fourth quarter, supply chain challenges and the onset of Omicron constrained our ability to convert our strong order book to revenue, resulting in some order fulfillment being pushed into 2022. Now, this was clearly frustrating, as we could have delivered an even better performance last year, but this revenue is not lost and will be realized in 2022. And as we look forward, I have many reasons to be optimistic. We are committed to being a leading, sustainable business. We have set ambitious net zero targets and have started to deliver our programmes to achieve them. We're also looking beyond our own operations to support the communities we operate in. The Spectrus Foundation has been established to promote STEM education. We've expanded our broader STEM outreach programme. And we're also aligning our strategy with key sustainability themes that will underpin future growth. Turning to our strategy scorecard, the message here is one of strong execution. I am very pleased with how we have continued to execute strategically. Our strategy is working. We have demonstrated our ability to reduce costs responsibly, drive organic growth, expand margins, allocate capital with discipline for attractive returns, and have made several synergistic acquisitions over the past year to enhance our customer offering. This gives us a much stronger business today than we started with in 2018. We maintained our investment in R&D and CapEx in 2021 and will be progressively increasing expenditure to fuel future growth and efficiency through this and following years. When compared to 2019, revenue has recovered within 2% of pre-pandemic levels with margins ahead and that reflects the enhanced quality of the group. We're making good progress in returning Spectrus back to its previous margin highs of over 18% and ultimately exceed them over the longer term. Also, during the course of 2022, we'll move into the next phase of our strategy for profitable growth, and we'll talk more about this as the year progresses. You should not expect the big themes of our scorecard to change and we will retain our discipline and focus when it comes to driving our organic growth initiatives, growing margins and balancing cost discipline with investment in growth. However, the work of the past two to three years means that we are now well positioned to go after numerous opportunities we see in front of us. We are aligned to win markets with attractive growth trajectories and sustainability trends. providing the opportunity to accelerate our emissions. And I'll talk about this a little more later on. In 2021, we committed to being a leading sustainable business, both in the sustainability of our own operations and our wider contribution to addressing the global environmental challenge. I am very pleased by the progress we've made so far to embed our sustainability strategy. Across the group, there is renewed energy and innovation, all aimed at making the world cleaner, healthier, and more productive. At the time of our first half results, we published our net zero targets, which will see us work to minimize the emissions footprint of our own activity and also the activity across our value chain. These targets, though ambitious, have been subsequently validated by the Science Based Targets Initiative against a one and a half degree centigrade climate warming scenario. This year we also undertook a detailed climate scenario analysis in support of TCFD reporting to gain a clear understanding of the potential risks and opportunities from climate change. We have published a detailed report on this on our website. We recognise that the greatest difference Spectris can make to a net zero world is through our products and solutions. increasing our focus on product efficiency and circularity. We are already playing an important role in many sectors that are transforming rapidly, such as pharmaceuticals, energy, transportation, and where customers want to work with partners that have the capabilities and the capacity for innovation, helping them address these new challenges and accelerating their own journeys to net zero. As we refresh our strategy this year, sustainability will be central to how we will make a difference for our customers and the planet, very much aligned with our purpose. An important part of being a sustainable business is being able to look beyond the day-to-day operations of the group and consider the broader factors that contribute to our longer-term business success. And key to this is safeguarding the physical and mental wellbeing of our employees. And ensuring Spectrus is a great place to work, we remain fully committed to the continued support of our mental health, wellbeing and resilience activities. We also want to ensure that everyone feels they belong here. Our work on building a greater diversity and inclusion continues and we'll be strengthening our approach to this and to talent development through a number of initiatives in 2022. This year, we were proud to launch our global STEM strategy. It is focused on ensuring that the group is both an employer and partner of choice. For example, supporting young professionals, building partnerships with universities and enhancing our apprentice programme to attract young talent into Spectrus. This is consistent with the rationale for establishing the Spectrus Foundation, which we've set up to support education in STEM subjects. The Foundation recently made its first awards for a two-year STEM education project in UK schools in association with STEM Enthused Partnership and also an employee-nominated donation to the Sheffield UTC Academy to fund a project for pupils to design and build an environmentally friendly racing car. These will be the first of many more projects that the Foundation will help to fund in the months and years to come. I'd now like to hand over to Derek who will run through the financials in more detail before I come back to talk to you about the businesses and our future opportunities.

Good morning, everyone. For consistency, I am once again starting with our scorecard slide. As you would have been expected, we are showing a very positive performance compared to 2020 with ticks across the board. As we did at half year, given the nature of 2020, we have also included a comparison on this slide to 2019 to assess how we are performing compared to pre-COVID. I will cover the specific numbers during my presentation, but overall we have demonstrated a strong performance in 2021 and continue to make progress compared to the pre-COVID performance of 2019. Let me now take you through the specific details. Reported sales decreased 3% to 1292 million. Adjusting for the impact of disposals, net of acquisitions, which reduced sales by 107.5 million, or 8%, and foreign exchange movements, reducing sales by 54.6 million, or 5%, you see 10% growth on a like-for-like basis compared to 2020. Adjusted operating profit increased by 21% to 209.4 million on a reported basis and by 29% like for like. Adjusted operating margins increased by 320 basis points with like for like adjusted operating margins up 240 basis points compared to 2020. Adjusted profit before tax was 204.3 million up 23%. our tax rate came in at 22% in line with guidance. Adjusted earnings per share were 140.7 pence, a 26% increase over the prior year. And the final dividend per share of 71.8 pence represents a 5% increase over the prior year, consistent with the growth in dividend for 2020. We remain committed to paying a progressive dividend. While adjusted cash conversion was lower than the 141% achieved in 2020, which was unusually high, we were pleased to achieve 96% in 2021. Our net cash at the year end was 167.8 million. And finally on this slide, the trend of our return on gross capital employed has now switched and increased by 330 basis points from 9.9% to 13.2%. This slide provides a graphical view of the main P&L movements in the year. Sales are shown across the top with adjusted operating profit at the bottom. First of all, I have adjusted 2020 to remove the sales and operating profit relating to the disposals of Millbrook, B&K Vibro, ESG and NDC Technologies in order to provide an organic baseline. Foreign exchange translation movements reduced sales by 54.6 million and operating profit by 10.9 million. We saw a good like-for-like growth in revenue up 10%, as well as a 50 basis points increase in like-for-like gross margins to 57.1%, reflecting the incremental volume and favourable pricing offsetting inflationary cost pressures. There was an expected increase in like-for-like overheads, up 24.8 million, with the reversal of certain temporary savings, such as 9 million of prior year COVID-19 overseas government subsidies, investments of growth and salary inflation all impacting the cost base. Acquisitions, primarily concurrent real-time, added 18.8 million of revenue and 3.9 million of operating profit. resulting in the £209.4 million of adjusted operating profit, a margin of 16.2% compared to 13% in the prior year. This slide shows how we generated cash in the year and illustrates what we have then done with that cash. Adding back £37.3 million of depreciation and amortisation charged to the adjusted operating profit brings you to the £246.7 million of adjusted EBITDA generated in the year. As trading activities increased in the second half of the year and as we invested in more inventory considering continuing supply chain challenges, our working capital utilised £10.7 million of cash during the year. Despite this, our average working capital as a percentage of sales ended the year at a respectable 11%. Capital expenditure was £35.3 million. And this gives us our adjusted cash from operating activities of £200.7 million, which we divide into our adjusted operating profit to get our cash conversion metric of 96%. There was then a significant inflow of cash relating to disposals, offset by the acquisition of concurrent real-time. Within the £225 million of cash income is £333.7 million of net proceeds from disposals, plus £38.3 million in relation to the US listed company shares which we were holding at the year end. We received cash in the first half when the takeover of that company was completed. These inflows are offset by £135.5 million of acquisition payments and £11.5 million of other transaction costs. We then spent £201.3 million including costs on the share buyback announced last year. During 2021, we established the Spectris Foundation with a £15 million donation, which was made possible by the £23.2 million gain on equity investments recognised in 2020 and shown on my next slide. We paid £79 million in dividends and £11.9 million of cash has been spent in relation to restructuring. Interest and tax had a combined cash impact of £35.1 million, with other movements of £21.7 million, which included £14.8 million of lease payments and £5.9 million of software as a service payments, bringing us to the net increase in cash for the year of £61.7 million. The reconciliation between our adjusted operating profit measures and our statutory profit measure down to statutory profit before tax is set out on this slide. Restructuring costs were limited to £10.2 million as we completed the final aspects of activities started during 2020. The £19.5 million of transaction-related costs includes the £15 million donation noted on my previous slide, and the remaining £4.5 million relates to costs associated with acquisitions, including concurrent real-time and Crayoptics. In April 2021, a new IFRIC interpretation was issued relating to the capitalisation of costs of configuring or customising application software under Software as a Service arrangements. As a result, we have amended our accounting policy and identified SAS arrangements where we do not have control of the software. For these projects, we have de-recognized the intangible assets previously capitalized and recognized the expense within the consolidated income statement. Material SaaS projects which would have been previously capitalized will now be excluded from adjusted operating profit as a new alternative performance measure line called configuration and customization costs carried out by third parties on material SaaS projects. These projects incurred a net P&L charge of £5.2 million in the year. There were no goodwill impairments in 2021 and the amortisation of acquisition-related intangibles was at a more normal level of £19.4 million. And this reconciles to the £154.9 million of statutory operating profit. Profit on disposed businesses was £226.5 million. Financial income includes a 5.1 million interest credit following the positive settlement of an EU dividends tax claim and a 7.2 million FX gain on intercompany balances. After subtracting 5.6 million of finance costs, this brings you down to a statutory profit before tax of £388.6 million for the year. 2021 was a busy year in terms of completing disposals and we also acquired concurrent real time. I have therefore included a pro forma slide to help you with your models by illustrating how the group would have looked with all of the disposals removed and with a full year of concurrent real time. Starting on the left-hand side is our reported result for 2021. I have then removed the 2021 contribution for each of Millbrook, B&K Vibro, ESG and NDC technologies. Finally, I have annualised for the acquisition of concurrent real-time in order to provide you with a reasonable baseline upon which to build your expectations for 2022. Which brings me on to 2022. As we think about 2022, as always, we have several headwinds and tailwinds to consider, starting with the headwinds. We do not expect the same level of COVID challenges that we have seen over the past two years. However, we continue to experience localised COVID-related interruptions and anticipate that this will remain the case in 2022. We also expect supply chain issues to continue, but cannot predict exactly where or the absolute impact this could have. Nevertheless, we anticipate these issues will start to ease in the second half of the year. We expect to face labour cost, material cost and overhead inflation during 2022 and have seen a wide range of forecasts from many commentators. We will continue to control what we can and are confident of our ability to mitigate this headwind through our pricing strategies. Finally, we should recognise the potential risk associated with increased geopolitical disruption. Our assumed exchange rates for 2022 are a $1.38 and a 1.16 euro. If that proves to be incorrect, then for every cent change on the dollar, it has a 3.1 million impact on sales and a 0.8 million pound impact on profit. And for every euro cent change, it's 2.5 million pounds on sales and half a million pounds on profit. On the positive side, we have several tailwinds. Our order book remains strong and supports our continued organic growth confidence into 2022. Our organic growth will continue to benefit from new products and services. Every year, the Spectris business system becomes more established and we will continue to deploy it to reduce waste and inefficiency and remain confident of continued margin progression. As I mentioned on my previous slide, we will benefit from the full year contribution of concurrent real-time and we will continue to actively look at additional acquisition opportunities. In terms of other guidance, CapEx will be around £50 million. In combination with our CrayOptics acquisition and new projects, we expect to increase our R&D spend by an additional £10 million in 2022. We expect to spend around 20 million pounds of software as a service costs as we develop a new ERP system at Malvern Panalytical and from next year at HBK. In total, we anticipate an investment of around 45 million pounds over the next three years, which will be captured by our new SAS performance measure. We expect our tax rate to be 22% and working capital will stay within our previously guided range of 11 to 15%. And with that, I'll hand you back to Andrew.

Thank you, Derek. Now let's take a quick look at our end markets and then turn to our businesses. We have seen a good recovery in many of our end markets, and apart from energy and utilities, they have all returned to growth. Machine manufacturing, pharmaceutical and semiconductor stand out as the strongest performers. In machine manufacturing, positive outlook and the strong fit of our sensor applications for food production, medical equipment and semiconductor manufacturing continued the buoyant performance. In pharma, we're seeing a significant uplift in support of vaccine and viral vector development and also manufacturing, as well as an increase in the onshoring of production. And this has resulted in a record order intake. The on-shoring trend is also supporting growth in Semicon, as is the rising demand for chips, which is driving an increase in investment programmes from major semiconductor manufacturers. Automotive is now back into growth territory, recovering well in the second half of the year, and although energy and utilities remains weaker than last year, the second half saw growth and orders into this sector demonstrate the market is recovering. Turning now to our businesses, and starting with Melbourne Analytical. We had a strong year, achieving a record order intake following 25% growth in like-for-like orders. Asia was particularly strong, as was continuing demand in pharma and advanced materials. Sales increased 11% on a like-for-like basis, supported by both the strong market recovery and the impact of new products like the Zetasizer Advance and Omnitrust. which have both outperformed sales expectations. Revenue would have been stronger if it wasn't for the challenges experienced in Q4 and some sales being pushed out into 2022. However, this does position the business well for the first quarter and the year overall. The higher volume combined with greater efficiency and positive pricing helped drive a 36% like-for-like increase in adjusted operating profit and a 320 basis points rise in adjusted operating margin. Now this is despite investment being increased to both enhance the performance of existing products and develop new solutions with software, services and analytics being key areas of focus. The Smart Manager service was a key launch during the year, providing customers with insights into the real-time utilization and health of their instruments to help improve both utilization and process productivity. The key strategic focus has been on the pharmaceutical industry. It has been good to see organic sales increasing in this area by 34% over the past three years. To compound this growth, a small but important acquisition has recently been completed to tap into key growth trends in this market. Malvern Panalytical has a leading position in measuring the structure, stability and affinity for drug development. This enables customers to ensure the arrangement of the substances, the long-term quality and the drug binding come together in the product formulation. To further strengthen our position and expand our offering in the affinity area, we acquired Creoptics in January. They provide industry-leading instruments and software for measuring real-time biological and molecular interactions. While it is an early-stage business, the combination provides an exciting opportunity to quickly scale Creoptics' superior technology in terms of both speed and sensitivity by leveraging Malvern Panalytical's extensive customer base. HPK achieved 16% like-for-like order growth and again finished the year with a record order book. Like-for-like sales were 8% higher, reflecting the supply chain constraints and some longer dated orders from an increase in OEM business. But again, this positions us well for 2022. Robust demand continued in machine manufacturing, supported by strong demand for our weighing technologies. It's also been pleasing to see a steadily improving automotive market come through last year. HPK continued to make solid progress on improving their financial performance. On a light flight basis, adjusted operating profit increased 32% and adjusted operating margin increased 280 basis points. This was mainly driven by the higher top line, drop through and ongoing efficiency improvements from the merger. But we're not stopping there. With further initiatives in train, In 2021, HBK moved to a new site near Copenhagen with updated manufacturing processes to better serve customer demands and a new go-to-market model. Also, a new CRM system is being rolled out during 2022 as we work to further simplify the operating model. And this will be complemented by the deployment of one common ERP platform across HBK over the next three years, following on from a similar implementation planned in Malvern Panalytical. Alongside these operational improvements, HPK has also been busy investing in organic growth projects aligned to the strongest market growth opportunities, such as electrification, smart sensing, virtual testing and simulation, and digitization. A number of new products and solutions have been launched this year, including our latest generation of NVH simulation software with significant new features and capabilities to give customers a highly accurate experience of sound and vibration through the product design and development cycle. And the QuantumX data acquisition system to simplify the complex measurement environment in battery electric drive trains, hydrogen fuel applications, and structural health monitoring. HVK also made two synergistic acquisitions during the year, Concurrent Real-Time and Vimana. Now, we've talked about Concurrent previously, so just to say that the integration into HVK's virtual test division is going well and to plan. In August, HPK also completed a license and asset purchase agreement with Vimana, a provider of software and services for smart manufacturing. The transaction brings data platform technology and software to HPK and will form the basis of a new engineering center of excellence focused on data management and connectivity. Its open architecture approach will allow customers to easily integrate test data into their networks. The first product will be launched alongside HPK's new data acquisition system during 2022. Turning now to Omega, I am pleased to say that we saw a much improved performance in the business last year. Omega posted above-market growth with strong demand from its strategic OEM and distributor accounts, new business wins and other share gains. Orders were up 23% and sales up 14% on a like-for-like basis. There was strong growth through our key channel partners in North America and also from semiconductor customers in Asia. Sales through the Newark partnership were up 50% year-on-year and the relationship is currently being extended to Europe and Asia. On a like-for-like basis, adjusted operating profit increased 82% with margins rising 430 basis points. This resulted from good operating leverage on the higher sales volume, price gains and also efficiency improvement. This performance reflects the impact of the revised strategic initiatives to drive above market growth and in turn improve margin. Optimising the customer experience has seen web orders and conversion rates back to 2018 levels, that's pre the new web offering, and record average order values. An investment in new products is better focused, targeting both customer needs as well as emerging technologies. And the HANI, which is the High Accuracy Non-Invasive Temperature Sensor, and the Layer N products for Industrial Internet of Things solutions were key product launches in the year. Alongside this, initiatives to simplify the business and improve operation performance continued. Now there is more to do, but it's good to see progress being made under the new management team. Turning now to industrial solutions, like-for-like sales here increased 8% with strong demand from semiconductor and pharmaceutical customers, reflecting a strong market recovery and the impact of recent product launches. Like-for-like adjusted operating profit increased 10% and margins increased 30 basis points. This primarily resulted from the sales increase and also reflected the impact of the disposals, which enhanced the division's margin. As we detailed in our presentation in December, ISD is now made up of three high quality specialist businesses. The strategic direction is centred around being a leading provider of high precision inline sensing and monitoring solutions based around PMS, Servimex and Red Lion. Each of the businesses will continue their customer oriented strategic initiatives and product development strategies to drive organic growth. Alongside this, ISD will be run as a more integrated division, retaining the business units and brands while looking for opportunities to leverage the existing infrastructure and drive efficiencies. Before concluding, I would like to share with you just a few examples of how we equip our customers to make the world cleaner, healthier and more productive. So starting with Cleaner, we are delighted to be supporting the exciting work at ITER to prove the feasibility of fusion as a large-scale, sustainable and carbon-free source of energy. This engineering challenge involves extreme environments, for example high temperatures and huge electromagnetic fields, with really large instrumentation requirements. Being experimental, everything is first of a kind and requires highly specialized materials and processes, as well as precise measurement instrumentation. HPK has a long collaboration history with ITER and recently won a new 1.4 million euro systems order, reflecting its unique capability and expertise in delivering high performance measurement systems using both optical and electrical technologies. ITA's specific requirements often reach physical limits and with its expertise, its sensors and its software, HPK is able to build the customised solutions that the customer needs, cementing its position as a valued partner. Turning out a healthier, we continue to be actively involved in supporting the fight against COVID. Malvern Panalytical's differential scanning calorimetry technology is a gold standard technique for assessing thermal stability and facilitating the selection of stable vaccine formulations. Using this technology, Malvern Panalytical is collaborating with Leucocare, who specialise in biopharma formulation development, to understand how the stability and the subsequent supply and storage of the vaccine can be improved. bringing together Leucocare's pioneering expertise with Malvern Analytical's analytical know-how is helping to increase the production and simplify the distribution of COVID vaccines. And this technique can be further used to achieve stability improvements for a wide range of vaccines. Lastly, to more productive and Omega's new award-winning product, the HANI. In the food and beverage industry, temperature control is critical to ensure product integrity and quality, for example measuring the temperature of a fluid moving through a pipe during manufacturing. The HANI is easily installed by clamping it externally to the pipe, delivering immediate high-accuracy temperature readings without any costly installation and downtime. Also, by being non-invasive and non-contact, it avoids contamination risk, which can affect product integrity. So it allows for easy connectivity and data collection and the flexibility to easily change the temperature monitoring system around the facility. Using HANI, the Food Innovation Centre at Rutgers University achieved their required temperature of measurement outcome within seconds, rather than days it would have historically taken, all while ensuring product integrity. So I wanted to finish with a few insights into our thinking on the next phase for Spectris, as we look beyond the strategy for profitable growth. In 2019, we set out to simplify and bring more focus to Spectris. At that time, the group comprised 13 operating companies and lacked strategic clarity. By executing our strategy, we have delivered a Spectrus that today is more focused, more profitable and more resilient, with sustainability at the heart. This gives us a very strong platform to accelerate our ambitions. During 2021, we conducted an in-depth review of our operations and assessed our activities across a range of key sustainability trends that offer exposure to high growth, high margin in markets. we are already well positioned to take advantage of these trends, which will support the next phase of our development. To go into a little more detail, we have identified seven growth trends, which include advancements in health, the transformation of mobility, the energy transition, responsibility in sourcing and production, the transition to the circular economy, environmental protection, and the evolution of food production and advanced agriculture. Spectris has strong positions in many of these areas today, and we see exciting opportunities to accelerate our growth aligned to these trends over the coming years, both in our organic development and in targeted M&A. For example, we see opportunities across all these trends at Malvern Panalytical. Health is obviously a key area of exposure, and we see continued strong growth in pharma and life sciences, a key market for PMS2. Alongside this, the transformation of mobility and energy transition is driving significant investment in new battery materials and new greener technologies and fuels, as well as environmental protection. This will play not just to Malvern's strengths, but to HPK, Omega, PMS and Servamex as well. And with material use set to double by 2060, we see an opportunity to improve the circularity of our own products in addition to developing recycling solutions support of transforming waste materials to new product these themes are very much aligned with our purpose and this will feature heavily as we articulate the next chapter for the business a chapter that will take us beyond our existing strategy for profitable growth and i look forward to talking to you more about this later in the year so in summary we delivered a good financial performance in 2021 demand for our products and services has been and continues to be strong And although supply chain and COVID challenges somewhat constrained our ability to maximise sales in the fourth quarter, we enter 2022 with a record order book and have made a strong start to the year. This gives us confidence in our ability to deliver continued good growth and to maintain our progress in returning the Group to its previous margin highs and ultimately exceeding them over the longer term. We have made significant progress in executing our strategy. Spectrus is now a more focused, higher quality, more profitable and a more resilient business, supported by a very strong balance sheet. We have demonstrated our ability to reduce costs responsibly, drive organic growth, expand margins, allocate capital with discipline for attractive returns and have made several successful acquisitions to enhance our customer offering. Looking forward, we will build on this progress, investing in our businesses to take advantage of new growth opportunities strongly aligned to our purpose and to our focus on sustainability. We will continue to aim high and be bold in our pursuit of enhancing value for all our stakeholders. Thank you, and we'll now be happy to take your questions.