Volex plc

Good afternoon, ladies and gentlemen. Welcome to the Volex PLC four-year results investor presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged. They can be submitted at any time using the Q&A tab just situated on the right-hand corner of your screen. Simply type in your questions and press send. The company may not be able to answer every question it receives during the meeting itself. However, the company can review all questions submitted today, and we'll publish those responses where it's appropriate to do so. Before we begin, we'd like to submit the following poll, and I'm sure the company would be most grateful for your participation. I'd now like to hand over to the management team from Verlex PLC, Nat, John. Good afternoon.

Hello, ladies and gentlemen, and welcome to the FY25 event. full year results presentation for Volex PLC. As you know, I'm Nat Rothschild, Executive Chairman, and as always, joining me today is John Bowden, our Chief Financial Officer. So I'm going to begin by taking you through the highlights from the year before passing over to John to take you through the financial performance. I will then provide an update on our strategy, concluding the presentation with our outlook statement. There'll be plenty of time for questions at the end. FY25 was a year of significant progress as we successfully executed key elements of our strategy. This allowed us to deliver over 11% organic growth against a tough market backdrop. We invested in manufacturing centres of excellence, enhancing production efficiency and increasing our capacity in strategically important regions. Our position as an essential and trusted partner to global technology companies was strengthened through our consistent delivery of critical specialized manufacturing services. We continue to serve high value markets, including electric vehicles, data centers, and off highway. Each market has unique structural growth drivers, and our deep expertise allows us to capitalize effectively on emerging opportunities. The ongoing integration of Murat Tijaret was a significant highlight, focusing heavily on productivity enhancements and operational optimization. This integration provided substantial scale, strengthened customer relationships, and augmented our engineering capabilities, notably in the off-highway segment. These improvements are integral to our broader goal of capturing greater market share while maintaining profitability across our business segments. John will take us through the numbers in more detail later in the presentation, but I do want to highlight that this is the first time we've exceeded $1 billion of revenue and $100 million of underlying operating profit. This is a milestone on our way towards delivering our five-year plan targets, positioning us favorably for the future. Looking forward, we remain confident in our ability to navigate complex market conditions adapt to evolving customer needs and leverage our unique competitive advantages to sustain profitable growth so i'd like to provide an overview on what makes volex such a compelling investment proposition we've consistently delivered strong financial performance including five years in a row where our operating margins have been maintained within our target range of between nine and ten percent and this includes during challenging periods due to COVID, variable supply chains, destocking and inflation. Alongside this, we have delivered 11% average organic revenue growth over the same period. We are in the right markets with attractive characteristics and structural growth drivers. We focus on niche sectors where our capabilities align closely with customer needs. These are expanding markets with high barriers to entry, giving us natural diversification. Our global footprint and scale give us a real edge. We have well invested manufacturing and engineering presence across three continents that will be difficult for a new entrant to replicate. And this infrastructure gives us flexibility and resilience in our supply chain, while allowing us to be close to our customers, many of whom are global businesses themselves. Our engineering-led innovation allows us to add value far beyond simple assembly. We are not just a manufacturer. We design, engineer, and optimize solutions for manufacturability and performance. This includes developing a full suite of our own products for EV and data centers. Vertical integration allows us to control quality, manage costs, and ensure reliable delivery. We differentiate through our ability to be agile and responsive. Volex combines the rigor of a public company with the entrepreneurial mindset of a smaller organization. We make decisions quickly. We empower local teams while maintaining clear strategic and financial oversight. This allows us to respond rapidly to changes in customer demand, emerging opportunities or shifts in market dynamics. Finally, we've been highly disciplined in our approach to acquisitions. Over the past few years, we've made a series of carefully selected acquisitions that have expanded our capabilities, deepened our customer relationships and extended our geographic reach. We will cover our acquisition framework later in the presentation. So the scope and pace of recent changes in global trade policy presents opportunities and challenges. We have a resilient and diverse business well suited to navigating the current tariff landscape with our extensive global footprint. The evolving situation has created opportunities to deepen customer relationships. We actively support customers as they address all manner of supply chain challenges, taking a proactive approach to ensuring operational continuity. Our ability to relocate complex manufacturing operations seamlessly backed by a global interconnected approach and single points of contact underpins our value proposition. Given these dynamics, we see Taras as an opportunity, an opportunity to cement our position as the manufacturer of choice with our key customers to support new customers in their supply chain transformation activities and to demonstrate the value-add that we can provide. Based on the current tariff landscape, only around 12% of group revenue is potentially impacted by increased tariffs, which is very manageable volume given that we're frequently manufacturing mission-critical solutions for our customers. We're already engaged with key customers in transfer projects, reducing their exposure to specific markets and moving to our centre of excellence locations such as BATAM Indonesia. And throughout our discussions with customers, we've been clear that the incremental tariff costs will be passed through in their entirety. This has been accepted given our role as a manufacturing specialist. We're frequently the sole supplier of specialist solutions to our customers with limited alternative sources. Often this is reinforced by regulatory approval requirements or similar barriers. The fact that we have such a high degree of lock-in with our customers means that they are keen to work with us to mitigate tariff challenges rather than looking to transfer business elsewhere. So I'll now hand over to John to talk through our financial performance.

Thank you, Nat. And I'd just like to say it's great to be back on the InvestorMeet company platform. It's always one of the highlights for us of the the results process because we get such interesting questions. So please be thinking about your questions you'd like to ask at the end. So turning to Volex, these are an excellent set of results. In FY25, we delivered sustained, strong financial performance across key metrics. Our revenue grew by 19% year on year with organic growth of 11.1%. And that's a tremendous outcome reflecting a strong performance across the entire organization. I'll step through the performance by end market on the next few slides. Our strategy delivers strong growth with consistently healthy margin profile. And we've achieved this again, the fifth consecutive year within our nine to 10% margin corridor. This is a testament to our efficient manufacturing, strong customer relationships and disciplined financial management. Return on capital employed remains robust, demonstrating the effectiveness of our capital allocation strategy. Our net debt leverage ratio was maintained at one times, reflecting prudent financial management and ensuring substantial flexibility to support future growth initiatives. So if we turn to electric vehicles, we had an extremely strong year in electric vehicles with organic growth of approximately 40%. This marked a significant recovery from the prior year where we'd experienced destocking and we're firmly back on a growth trajectory. We're achieving this through a combination of expanding the products and services that we offer to existing customers, but also onboarding new OEMs who are keen to purchase our market-leading EV product sets. Adoption of electric vehicle technology continued to grow in key markets, notably in the European and Chinese markets, where EVs as a proportion of all cars sold are up to 26% and 53% respectively, demonstrating continued strong consumer adoption of this technology. We continue to roll out successful projects, including to one of our key customers, providing high voltage connectivity solutions that power all the electrical systems within one of their new vehicles. This demonstrates that our capability has broadened beyond external charging infrastructure to being able to support specialist applications on the vehicles themselves. In consumer electricals, we delivered significant growth of 9.6% organically. And again, this contrasts with the prior year where we were experiencing some customer destocking. This is an important market for us, given that it's highly cash generative. And we have, through vertical integration and automation, created an incredibly cost-competitive proposition for our global customer base. We've won additional projects in the year, with new and existing customers as they develop new technologies to improve the consumer experience. We're continuing to expand the breadth of our offering, particularly around our wire harnesses for domestic appliances, which is a further growth opportunity. Customer trends continue to be positive in the consumer electrical space underpinning our confidence in this end market for the future. As we anticipated at the beginning of the year, medical was slightly down year on year by approximately five percent this was really driven by the dynamics of the comparative period where we saw a one-off catch-up as our medical customers recovered from challenges around availability of key components over a five-year period we've delivered 10 compound annual growth in this market although we expect demand in fy26 to be fairly static In the longer term, there are strong structural growth drivers related to advances in medical technology and demographic considerations that will support the future growth outlook. We have an excellent customer base and we've onboarded new customers during the period, which will help support growth as we move forward in this market. In complex industrial technology, we had an excellent year delivering organic growth of 14.5%. We were particularly strong in the data center space, with high growth demonstrated in the second half of the year. Our data center customers are supporting significant increased demand in relation to artificial intelligence and cloud technology, and our high-speed cables are critical to their infrastructure rollouts. Approximately half the revenue in this end market now comes from data centres. Across the rest of complex industrial technology, we have a diverse book of business, including IT, telecoms, aerospace and defence, as well as a variety of other commercial and industrial applications, where we provide complex cable assemblies, printed circuit board assemblies and box build services to our customers. Demand across these customers was variable and organic growth on aggregate was 1.5%. This reflects similar dynamics to medical when the prior year benefited from a recovery in component availability. Growth was also lowered by certain customer projects rolling on and off, which reflects the specialised nature of the end-use applications that we support. We see wins in HVAC as a source of growth in FY26 as production ramps up. Moving on to off-highway. This is the first financial year where we've had a full year of contribution from the off-highway business we purchased in Turkey, Murat Tijeret. We've also delivered 3.6 organic growth, despite some softness in some of the end markets that we support, notably agricultural and construction. We've delivered this growth as a result of the diversification that we have in the off-highway space. combined with our relationships with customers and our strong commercial proposition. This has allowed us to offer cost competitive solutions into the marketplace. These are incredibly complex products and as a result the customer relationships are very sticky. We've also seen increased revenues coming out of North America particularly from our facility in Tijuana, where we're supporting a major North American manufacturer on a specialist vehicle program that will last for multiple years. We see North America as a huge opportunity building on our incredibly strong position in the European market and replicating this success in the region. As an organization, we put a huge amount of focus on cost control and continuous improvement. These activities had a beneficial impact on margin of 1.5% in the period, offsetting the impact of inflation, which was an adverse headwind of 1.6%. A significant element of the inflationary impact arose in Turkey, where inflation is beginning to trend down following changes in economic policy. Our cost optimization activities allow us to achieve stable operating margins while maintaining competitive pricing, which is a huge achievement in an inflationary environment. The margins were supported by product mix with a greater contribution from higher margin complex products, including those that we sell into the data center space. This has allowed us to deliver towards the top end of our guidance, even after incremental growth investments that support the continued development of our business. and the successful delivery of our five-year plan targets. Turning now to cash flow, this year we delivered almost $135 million of underlying EBITDA, which is an increase of 21% on the previous year. As we explained a year ago, FY25 was a year of investment in increased capacity and in total, we invested $45 million in capital expenditure. Much of that was supporting new customer projects and building up centers of excellence in key locations, particularly Mexico, India, Indonesia, and Turkey to support our ongoing growth plans. CapEx represented 4.2% of revenue slightly higher than normal levels of between 3 and 4% of revenue and in FY26 investments are expected to revert back to normal levels. Growth capex represents the majority of our spend for less than 1% of revenue required for maintenance. There was an adverse movement in working capital which included additional inventory to support various customer growth programs. As the business grows, we need to put in additional working capital to support those customer programmes. Interest and tax was broadly in line with the prior year, growing with the business. We delivered underlying free cash flow of $42 million for the year due to the excellent returns from our targeted CapEx investments. We ended the year with a covenant net debt ratio of one times, which is at the lower end of our one to two times guidance. This provides us with significant flexibility on the balance sheet to pursue further growth opportunities. We're incredibly proud of the industry leading return on capital that we generate of approximately 20%, which has been consistent over the last three years. This is despite a huge amount of investments in our business. We achieve this because of our strong focus on returns and organic investments. where we qualify projects comprehensively. We focus on investment that we know will generate a cash payback within a two-year period, whether that's through new customer programs or whether it's through cost outs, such as the automation and digital transformation projects that we've been deploying across the group. Our basic underlying earnings per share has increased 11% annualized since the launch of the five-year plan. and we're now at 36.3 cents per share, reflecting the additional value that we're delivering to shareholders through our strategy. Our capital allocation priorities remain consistent with previous years. Our primary focus is on organic growth, particularly given the strong return on capital that we deliver through organic investments, where we generally achieve a cash payback within a two-year period. We continue to originate acquisition opportunities that meet our strict criteria around valuation, bringing financial benefits and fitting our cultural environments. We've increased the dividend again this year with a proposed final dividend of three pence per share. We've consistently increased this every year since reinstatement in FY20. Finally, in terms of capital allocation, We would consider a share buyback if we're unable to deploy cash through organic investment or acquisition opportunities. We've consistently been buying shares in the market to settle our obligations under management share incentive schemes. And over the last three years, we spent a total of $28 million buying shares in the market, including $11 million this year. This is a decision that we've made to avoid issuing these shares and therefore limiting the dilution for existing shareholders. I'll now hand over to Nat to take you through an update on our strategy.

Thank you very much John. The strong results that John presented demonstrate our strategy is working. I'd like to talk now through the five strategic pillars that underpin our performance. This is how we coordinate activity throughout our organization across 25 countries with 13,000 people and with some of the world's most demanding customers. We operate at the heart of global mega trends, including electrification, data centers, and medical technology. We've built strong market positions in our five end markets by staying close to our customers delivering reliably and investing ahead of the curve. By concentrating in specialist areas, we develop deep technical knowledge in each vertical. We invest based on our understanding of customer requirements and our knowledge of our business. We develop our own range of products in the key growth markets of EV and data centers. Vertical integration allows us to control our own cable manufacturing, and automation initiatives support repeatability and speed at scale. We create deep, long-term relationships with customers. We work side by side with engineers to solve problems early, flexing manufacturing schedules to meet urgent needs, and driving continuous improvement at every level. This builds trust and deepens customer relationships. We acquire businesses we understand in sectors we know, where we see opportunities to create long-term value. Our most recent acquisition in FY24 took us into the attractive off-highway space at scale. I will cover our approach in more detail shortly. Our sites are empowered to make decisions, solve problems, and lead customer relationships locally. This is all supported by the standards, tools, and oversight of the group. This is what allows us to move quickly to meet customer demand and to respond resiliently to macro challenges. These five strategic pillars guide how we invest, how we lead and how we grow. They are why we have more than doubled the business in five years and we are confident in our future. Selecting the right markets is of course incredibly important for us. We've identified niche manufacturing areas where we can generate attractive returns and strong customer lock-in due to the complexity of the solutions required. In many cases, there are also stringent regulatory or similar barriers. More and more of our business is becoming highly complex, which supports our move into global and regional centres of excellence, where we can offer a range of solutions across multiple end markets. Our ability to share manufacturing skills such as vertical integration or automation techniques across multiple end markets creates efficiencies. For example, with the deep knowledge of power products gained within the consumer electrical space, we built a significant engineering advantage with electric vehicles. Our complete vertical integration in power core production enables us to be a low-cost producer and market leader in consumer electricals with low capital investment requirements. This sector is highly cash generative. Across medical, off-highway and complex industrial technology, we make extremely complicated harnesses for our customers. The knowledge that we have, both in terms of the sophisticated production and quality assurance processes for these products, is shared between our experts, allowing us to be regarded as leaders in our field. Our investment this year increased our production space by 21%, creating a platform for us to deliver our strategic goals. This positions us for the growth we expect to achieve as customers continue to optimize their supply chains. In the face of changes to global trade patterns, We also closed one of our factories, moving from three Chinese factories to two, reflecting our focus on China as a manufacturing centre for local sales opportunities. This all means that we now have 27 manufacturing sites. This includes regional centres of excellence, which are capable of delivering over $150 million of revenue at each. These sites deliver the broadest range of capabilities and achieve strong profitability by sharing overheads across a range of customer activity. These are the locations where we prioritise the rollout of automation and other technology investment. One of the projects I'm particularly proud of in the year is our support of Hypervolt. They are a market leading manufacturer of smart EV charging solutions. cleverly designed to work with dynamic EV tariffs. Hypervolt wanted a comprehensive manufacturing solution to support their ambitious global growth plans and allow them to focus on their core competencies around design and product development. We've harnessed expertise from across the Volex Group to bring together best-in-class manufacturing in a highly competitive package. Key components such as the printed circuit board assembly, specialist EV cables and complex wire harnesses are made at specialist Volex production sites prior to the final integration at one of our leading European facilities. It's the investments we have made in vertical integration and the integration of acquired businesses that enables this seamless delivery to our customer. And across our organization, we're able to support high growth, high technology customers with a range of solutions, delivering truly end-to-end value and becoming a trusted manufacturing partner. So acquisitions continue to be an important area for us. And although we didn't complete any acquisitions in FY25, as our focus was maintaining our a disciplined approach to acquisition opportunities and on successfully continuing the integration of Murat Tijeret. As that integration heads towards a conclusion, we continue to identify a pipeline of attractive acquisition opportunities that meet our requirements. We have a very strict criteria that we look for in a business to ensure that it aligns with our overall strategy to be manufacturing leaders in niche markets around the world. The financial parameters of any acquisition are incredibly important for us and we are highly disciplined and deeply focused on value. We buy businesses that we understand and tailor the integration activity for the individual businesses looking to augment the intrinsic qualities of the businesses that we acquire as well as benefit from the opportunities across our global organization. As we have touched upon earlier, we've continued our focus on the integration of Murat Tijeret this year. Particular prominence has been placed on productivity improvement through process re-engineering and embedding a continuous improvement mindset across the organization. This is critical due to the high labor inflation in Turkey. We've also started the program of site rationalization and optimization, which we've achieved through expanding two factories in more cost-competitive locations within Turkey and this allows us to close some of the sites that we inherited when we acquired the business and therefore to accelerate productivity enhancements. In North America, we now have a dedicated off-highway sales team. We have built out additional capacity which is online and available in Tijuana, Mexico and we have further capacity that will be coming on stream in FY26 supporting the significant opportunity that we believe there is in the North American off-highway market. So in combination, the investments we've made and the growth we've achieved firmly position us on track to reach our five-year goal of $1.2 billion in revenue by the end of FY27. Hitting our FY25 results represents a significant milestone on this journey. Since launching the five-year plan three years ago, we've delivered average organic growth of 10% per year. And looking ahead, only a further 5% annual organic growth over the next two years is required to meet our target. We've also consistently maintained our margin within the target range. Indeed, over the past two years, it's been at the upper end. With the momentum we've built, and the opportunities on the horizon, we are highly confident in our ability to achieve this goal. In summary, this is an excellent set of results across our diversified business in a challenging environment. With strong organic growth of over 11% and delivering at the top end of our margin range, our business goes from strength to strength. We have a truly leading position in many of our key markets where we are recognised both for our competitiveness, the quality that we deliver and for the customer service that we are able to provide. We've expanded our manufacturing footprint during the year, optimising our locations and taking opportunities to streamline our footprint. We're sensible to deliver continued improved efficiency across our manufacturing estate. Although tariffs may present some short-term challenges, we see a huge amount of opportunity through the changes that will happen in global supply chains as a result of changes in trade policy. Given our dynamic manufacturing capability and our global footprint, we are well positioned to benefit from those opportunities. We've made a terrific start to FY26. and with our revenue ahead of our budget in the first two months and a healthy pipeline of attractive growth opportunities. These are an excellent set of results, giving us continued strong confidence in our ability to achieve our five-year plan objectives. And we would now be extremely happy to receive your questions.

That's great, Nat, John, thank you very much indeed for updating investors. Ladies and gentlemen, please do continue to submit your questions just using the Q&A tab situated on the right-hand corner of your screen. Brian, Nat and John, take a couple of moments just to review your questions. I'd like to remind you that recording this presentation along with a copy of the slides and the published Q&A will be available via your investment company dashboard. Nat, John, you've received a number of questions from investors today. Thank you ever so much to everybody for your engagement as well as a number ahead of today's event. Due to the significant number of attendees on today's call, it probably won't be possible to go through them all, but perhaps if I may, John, hand back to you to take us through the Q&A and I'll pick up from you at the end.

Yeah, brilliant. Thanks, Mark. Look, we've had some great questions. We've had lots of questions. What I'll try and do is, Sometimes there's questions we can answer quite quickly, so we'll cover those off. Where there's questions where a few people have asked similar questions, we'll try and group that together into a single question so that we just have the opportunity to go through as much as possible. So the first question is around the US tariffs, and it's really as to whether we've seen any indications of customer order pull forward or customer stockpiling. So I'm happy to take that first one. Look, obviously we've been paying a lot of attention to our business, our customers, our orders with the tariffs that have come into play. And as we explained in the presentation, the impact of the tariffs is manageable. And in fact, we see tariffs as both a challenge and an opportunity, but we're very much focused on the opportunities from tariffs. In terms of the close of FY25 and the first two months of trading in FY26, we haven't seen any significant impact to either customers changing their behaviour, pulling things forward, moving things around, which I think is a great testament to the fact that we have this very deeply embedded position with our customers with high degree of and we're an important manufacturing partner for those customers. There's a question here for you, Nats, which is, let me find the right one. So there's a question here, Nats, that you have, numerous other business interests, how much time do you allocate to Volex and what areas of Volex are you particularly focused on?

I'm thrilled to answer that question. I devote a considerable amount of my time and more and more it seems to the Volex business as it's grown. It's incredible to think when I got involved 2015 we were doing about $300 million a year and making no money and we now do well over a billion and making 100 million a year so the business has got a lot more complex and that's obviously meant that I'm more engaged than ever. I think that my role is, I have multiple roles within the business but I'm very involved in high level customer engagements, I'm very involved in acquisitions, I'm very involved in strategy and I tend to deviate to areas of the business that need the most work and so where I spend most of my time at the moment is in the off highway segment That's because I know most of the customers, so I'm very involved almost without exception with all of the major customers. I'm also something of a Turkey expert, so Turkey is a country that I know well. I obviously brought Sir Peter Westmacott onto the board to assist us a number of years ago when we bought Deka. those are the main points. I would add that what really makes this a terrific business is the quality of the team around John and I and I'm regularly pulled over in the street and congratulated for the success of Olex and I just think that my answer is always the same, it's just the quality of the people that we have brought into this business over the last 10 years and so I think the biggest role I have of all is leading the team and that's something I'm incredibly proud of, it's something I enjoy and something that I want to continue doing for as long as possible.

Good, thank you Nat. There's a few questions here I'll go through quite quickly. There's a question about our long-term financial targets and what metrics that we use to run the business. As we said in the presentation, our focus is very much on delivering the $1.2 billion of revenue at 9% to 10% operating margins by the end of FY27, so the delivery of our five-year plan. And we feel that these results are an important milestone as we're three-fifths of the way through that five-year plan. And in terms of the metrics that we use, we have a big focus on profitability, operating profitability, management of working capital. We have a whole suite of operational metrics that we use that covers everything around quality, on-time delivery, our customer service. Also, we look at things around staff engagement and turnover. So there's a whole suite of things that we're really using to manage the business. There's a question here. How would you define Volex's edge compared to its other competitors? I think very much as we try and say in the presentation, our focus is around being engaged with customers at an engineering level, being cost competitive, having extremely good quality and having excellent customer service. And when those things come together, that we end up with these deep customer relationships, which are obviously very, very important within our market. There's a question here for you, Nat, about what other larger companies do you admire and believe that Volex can follow a similar trajectory? And I'd sort of link that in with another question. There's a couple of questions about what do you think volets can achieve over the longer term? I know sometimes we talk about if you sort of wind back other companies 10, 20 years and look at where they were.

Yeah, well look I think I see ourselves as a compounder in our space and I would encourage people to look at companies like Jabil and Flextronics in the in the contract manufacturing space but I would also look at companies like Discovery or Discover IE, similar business that started out really as a cash shell 15 years ago and I think Nick Jefferies has done an absolutely extraordinary job building that business organically and inorganically and I think the greatest example of companies in our direct space is Amphenol where I think now Finola has a $75 billion market cap. It's run by a guy who is the same age as me, he was actually a lawyer at Gibson Dun & Crutcher in 1996 and has learnt the business and has taken it from a company roughly the same size as Volex and grown it over the last 25 years. I think that Volex is now an extremely, extremely, not only an extremely valuable business but a very, very good example of a company that has grown not just organically, it's grown inorganically as well, we've made 12 acquisitions and we're trying to be like those larger businesses and when I got involved certainly in early 2016 the market cap was $30 million and now at one point anyway on an intraday basis and today we're up at almost £700 million and we should be proud of that and we should be able to take our place next to some of the companies that I've mentioned.

Excellent, thank you Nat. There's a question here about cash conversion and why the cash conversion is lower than the previous year and really that's all to do with working capital So if you wind back to FY24, like many other companies faced with a supply chain crisis, we were building up buffer stock and we had additional stock on hand to cover some of the disruptions that we were facing in supply chain. And during FY24, as supply chains improved, we were able to reduce that buffer stock. So that gave us a favourable working capital market. a working capital inflow on the realization of that inventory. We went back to just a more normal year in FY25, where as the business grows, we need to put in additional working capital, particularly inventory, to support customer growth. So that explains the cash piece. So a question about EV growth, and did this include adding new customers during the year? Well, we're very pleased with the EV growth that we've delivered. It's around 40% organic growth. Now, of that, our largest customer represented 35% of that growth. The growth from other customers was around 70%. So you can see that we're growing very strongly with other customers as well. And then there's a question on how is Murat Tijeret affected by the economic turbulence in Turkey? We've certainly found that the measures that the governments are taking in Turkey to reduce inflation, having a short-term adverse effect on labour costs, and we're addressing that through delivering an efficiency programme that's seen us reduce headcounts in the Murat Tijeret organisation by 500 people already as part of our integration programme. And we're not stopped there. There's further activities that we're doing to look at how we can run that business in the most efficient way and that will help us manage the inflationary impact of higher labour costs in Turkey. There's a few questions on acquisitions, Nat, and particularly sort of our reflections on the acquisition approach that we made in relation to TT Electronics, but I think also just more broadly in how we're feeling in general about acquisitions.

Great, look I'm not going to talk about TT, that's for another day, but I think generally what we're seeing is we're seeing very high valuations in businesses that are quite frankly inferior to ours. So we're very valuation conscious when we look at deals and also we like to try and buy businesses with high customer concentration because actually that tends to reduce the acquisition multiples and then when they're absorbed into our company on a look through basis the customer concentration goes away. I think that's an effective formula. Right now we have a couple of interesting deals at the very early stages in the pipeline. We've also been very unsuccessful because we're simply not prepared to pay the prices that people are demanding of their businesses.

Good, thank you. There's a question here, it says, historically customers like Apple bullied Volex over price. Are you now able to tell them the price?

I think the difference is that Volex was a business that was losing customers because it was not cost competitive, so it was a high cost producer and so it was incredibly exposed to Apple. When I got involved in the business very briefly Apple was $130 million out of $300 million of revenue and we made no money, we lost money with Apple. So that is why we were, it's not a question of being bullied, it was just a question that we were uncompetitive and now we are hyper-competitive and we get, to a far higher degree we are able to pick and choose our customers. There are lots of customers out there and we are able to try to sort of, be more selective with who we work with.

Good, thank you. There's some questions about our forecasts and I suppose partly numbers in the market themselves side and the deliverability of the five-year pattern and the tone of the questions is that it looks fairly straightforward for us to be able to deliver that five-year plan and I am I certainly feel that this is a great step on the road to that five-year plan and that we're being sensible and cautious as we go into the FY26 financial year. It's a difficult economic environment. Lots of things are changing or have changed and as a result of that we've positioned our external guidance in a sensible way so that we sort of balance things deliverability but ensure that we have stretching internal targets as well. There's a question, Nat, about, there's a recent announcement about our manufacturing partnership with AFC. Do you want to talk about how we can support that business?

Yeah, so look, one way to to win a big piece of business is to be supportive of customers that are small at the beginning and can grow into much, much bigger accounts later on and one example of that is Hypervolt where Hypervolt is a startup, it's an offshoot of Octopus Energy and the business has some quite extraordinary growth characteristics we're already doing over $10 million a year of business with them and I took the same view with AFC, AFC is a company with great potential and the ability to manufacture portable hydrogen generators is exactly the type of thing that we are able to do and that's why we've offered our support to AFC in the way that we have.

Excellent. We'll take one final question, which is a bit of a combination of things that few people have asked, but it's really around in terms of one of the questions, do you see other sectors for Volex to move into? There's a question about whether we see the defence market as attractive and the final piece on focus is around do we see the Indian market as a major growth driver for the future?

I think that defence is very interesting and we're already in the defence industry. We make complicated printed circuit board assemblies in Irvine, California for mission critical applications. We work with some of the most well-known defence companies and we also have a small now a joint venture in Canada making military wire harnesses that go into armoured vehicles, tanks etc, gun turrets and that business obviously has a high degree of applicability in Europe and there's a number of huge defence companies in Europe who we're starting to engage with and we also do the same thing actually in Turkey with the largest domestic manufacturer of military vehicles so already in the defence business and we see that as an opportunity and we're starting as I say to kind of engage very seriously with some of the massive European defence players. Funny enough defence in India is an equally big opportunity and it's another area where we're starting to look. The Indian market is, slightly lower margin than what we would like, but it is one of the fastest growing sectors with a good management team there and a very, very well managed and hyper competitive PCVM box build business in India that we acquired a couple of years ago at a very attractive valuation and we also with it acquired 13 acres of land that we're in the process of building out with factory space. So look I think that's a good time to stop, this is obviously a happy day for all of the people who have invested in Volex, we've seen a tremendous re-rating of the share price along with many other AIM companies and I'm pleased that we've made some of you some money and for those of you who haven't made any money we hope you'll invest with us and we're grateful for everyone's support this is a committed management team, we've got huge insider ownership in the business, not just me but everyone else and we want to continue to grow and we appreciate your support and just a quick shout out to the excellent

investor meet platform as well thank you that's great now john thank you very much indeed for updating investors if i please ask investors not to close this session as well now automatically redirect you the opportunity to provide your feedback thank you very much for your time today