XP Power Limited

Good morning, everyone. Thank you for joining us today, whether in person or online. As usual, we'll start with the presentation before moving to Q&A. If you're watching online, you can ask a written question by using the toolbar at the bottom of the webcast platform screen. Just select the question icon and you'll be able to type in the question. Thank you. All right, I just wanted to cover the highlights and then Matt will cover the financial details. I think the first point is we are seeing a strong recovery in each of our end markets. We believe our consistent strategy is showing clear benefits and the business is performing well. The market backdrop has improved significantly, but growth has been broad-based across all sectors and regions with overall orders up 55% year-on-year. Semi-fab is particularly strong, reflecting the early stages of a new investment cycle, but the but the recovery is also evident more widely across the portfolio. We're seeing the clear benefits of the strategy we've been implementing. The portfolio is now more focused and we are concentrating investment and commercial effort in areas where XP has strong market positions and the most attractive growth prospects. Operationally, we are scaling capacity to make sure we can meet demand while maintaining discipline on cost, quality and delivery. Our full year expectations remain unchanged and are well supported by the order book. The balance sheet remains robust, giving us the flexibility to support growth, continue investing behind the strategy and manage the business with confidence. On that, I'll hand over to Matt to cover our financial performance and I'll come and talk about operations.

Okay, thank you Gavin. Morning everyone. Let me take you through the numbers for the first half, starting with our key performance indicators. The standout feature of the first half was order intake, which reached £167.2 million, up almost 55% on the prior period in constant currency, with growth across all three sectors and all three regions. I'll come back to this shortly. Revenue of £109.1 million was 2% higher in constant currency, This includes a headwind from the expiry of some US-China export licenses as previously highlighted. The clearest evidence of the progress we've made on efficiency and operational improvement is in the margin. Adjusted gross margin increased by 450 basis points to 45.9%, taking us back to the mid-40s range we had initially been targeting. That margin improvement from a similar level of revenue drove adjusted operating profit up 23% in constant currency to £8.6 million with adjusted operating margin up 360 basis points to 7.9%. Adjusted diluted EPS rose to 14.2p. Net debt closed to half at £47.7 million with leverage of 1.3 times. As expected, we invested during the first half to support expected growth in the second half. You'll also see we've changed the definition of our cash conversion measure, which I'll explain later. Let's look at the income statement in more detail. Revenue reduced by 2% at actual exchange rates, but grew by 2% in constant currency, with the difference being a currency headwind from the weaker US dollar. Constant currency growth was slightly held back by the expiry at the end of last year of US export licenses governing our RF sales into China. Absent this headwind, that is of course beyond our control, revenue growth was in the mid single digits. Gross margin increased by 450 basis points to 45.9%. This improvement came from multiple sources. The closure of our China factory at the end of last year the full benefit of restructuring actions taken during the first half of 2025, product cost savings and improvements in price and sales mix, particularly in North America and Europe. There was also a modest currency benefit. Operating expenses of 41.5% were only 1% higher than the prior period at actual exchange rates. On a constant currency basis, it was a 10% increase, driven by the reset of variable pay as group performance improves, and by a change in the balance between capitalisation and amortisation of product development costs. Both were previously guided, and there is no increase in underlying overheads or indirect headcount. Collectively, this resulted in a £3.8 million increase in operating profit to £8.6 million, with the improvement in gross margin contributing significantly to this. Their financing expense reduced by 13% to £3.5 million, reflecting lower interest rates and lower average borrowings. Note that we swapped most of our borrowings to a fixed rate of interest in the period. The effective tax rate for the half was 20%, significantly better than in 2025 as guided. Together, this delivered adjusted diluted EPS of 14.2p up from 0.4p. On a statutory basis, profit for the period was 1.1 million pounds compared to a loss of 1.8 million pounds a year ago. The adjusting items this half relate principally to the closure of our China factory and our decision to exit the RF market together with the mark to market movement on our interest rate swaps and commissioning costs for our new Malaysia facility. Order intake was undoubtedly the highlight of the period. At £167.2 million, it was 55% higher than the comparative period and 48% higher sequentially in constant currency, with growth across every sector and every region. Encouragingly, momentum built as the half went on, with Q2 stronger than Q1. As the bridge shows, the strongest growth came from semiconductor manufacturing equipment, up 116%, as the industry enters a new wafer fabrication investment cycle, which is widely expected to be a multi-year expansion. Some customers placed orders earlier on longer lead times to secure supply in tightening conditions. This drove a record sector book-to-bill of 1.81. Just as important, we saw the end of destocking in our other two sectors, with industrial technology orders up 22% and healthcare up 25%. This gives us a broad and resilient base of growth rather than reliance on any single market. For the group as a whole, book to bill was strong at 1.53. Now let's turn to revenue, which at 109.1 million pounds grew by 2% in constant currency year on year. This was in line with expectations and encouragingly grew sequentially from Q1 to Q2. We expect this trend to accelerate. Semi-fab and industrial technology both grew in constant currency with industrial technology up 9% and helped by strong demand from the distribution channel. Healthcare was 13% lower reflecting the timing of revenue for specific programs in what is our smallest sector but we expect growth to resume in the second half. By region both North America and Europe grew in constant currency up 3% and 6% respectively with progress most evident from distribution customers. Asia was 11% lower, primarily reflecting our exit from the China semi-market, but order intake was strong as we replaced those sales with new business elsewhere in the region. The strong order intake naturally expanded our order book, which grew by 58 million pounds in the period to 174 million pounds. This materially improves our visibility of four year revenue. The order book includes 135 million pounds of firm orders scheduled for delivery in the second half with further orders likely to come in. There is therefore sufficient demand to meet our four year expectations with the final outcome determined largely by the pace at which we can expand capacity to convert those orders and this is something that Gavin will pick up on later. Turning to free cash flow, adjusted EBITDA for the half was £16.3 million and we generated £8.4 million of operating cash. The key difference versus the prior period was working capital. A year ago, we were actively reducing inventory. In this half, we invested in it, increasing raw materials and semi-finished goods to support second half deliveries. This is a good news story, reinvesting improved profit to underpin growth. On our new definition, which I'll explain on the framework slide in a moment, operating cash conversion in the half was 52%, reflecting the work into capital investment I've just described. Net capital expenditure was £10.1 million and included the majority of the remaining payments for the construction of our Malaysia facility, plus some fit-out, together with capacity expansion in Vietnam. The Malaysia build, at a total cost of £20 million, was completed on budget. Net debt increased modestly by £6.2 million to £47.7 million and leverage rose slightly to 1.3 times. Both were in line with our expectations and we expect leverage to reduce by year-end. This slide brings together the investment we made in the first half to support growth. Our firm order book supports revenue growth of at least 24% from £109 million in the first half to 135 million in the second. To deliver that, we increased inventory by 29% to 73.8 million, focused on the critical high-use components needed to protect our production schedule. An increase, yes, but still well below previous levels, as you can see. We also invested 2.7 million in production capacity in the first half, 1.6 million pounds in Vietnam, and 1.1 million in Malaysia, with more to follow in the second half as we aim to increase our Asian manufacturing line capacity by around 75% versus the first half. Malaysia remains on track for the start of full production in Q4 and importantly has ample space for further expansion as we need it. This is disciplined investment against visible demand overall. This slide sets out our financial framework, the set of three cycle targets against which we manage the business. organic growth of around 10%, an adjusted operating margin of around 20%, operating cash conversion of 85%, return on capital of 20%, and leverage of zero to one times EBITDA. I want to highlight one change here. We have updated the way we measure operating cash conversion. Previously, we expressed it as operating cash flow as a percentage of operating profit with a target of 100%, We now measure it as a percentage of EBITDA, which brings us in line with our listed peers. And the equivalent through cycle target is around 85%. This is a change in definition only. There is no change in our underlying ambition on cash generation. More importantly, the first half gives us real confidence in this framework. The strength of our order intake underpins the organic growth target. Our materially improved gross margins with the benefit of operating leverage largely still to come, supports continued operating margin expansion, and we have a clear track record of converting profit into cash. We expect leverage to return to our target range in the near future, which in turn would allow us to reinstate a dividend. Finally, some modelling guidance for 2026, all set at current currency rates. On revenue, our order book supports second half revenue of at least £135 million and full year revenue, therefore, of at least £244 million, subject to the prevailing tariffs, which could have some influence on revenue but not profit. As such, our full year expectations are unchanged. We expect a full year effective tax rate of between 20% and 25%, depending on the precise mix of profits by jurisdiction. On cash and the balance sheet, we expect total capital spend, including capitalised product development costs, of between £25 and £30 million, and we expect leverage to be approaching one times by the year end. That's it from me. I'll hand you back to Gary.

Thanks, Matt. Before I provide an update on each of the sector performance, I'd like to just take a moment to take a reminder of our strategy and our delivery against it. We've continued to deliver on all elements of our strategy and we're seeing the impacts as the market and XP returns to growth. Our focus remains on organic growth. We believe we have a market-leading product portfolio which we have further enhanced in 2026 through new launches and customer specific products. Customer engagement levels remain strong for our portfolio and we remain confident we can deliver double digit organic revenue growth across the cycle. Our technology solutions teams continue to work closely with our customers to meet their most complex challenges. Our investment in our Silicon Valley site is enabling even more collaboration with customers in the critical North American marketplace and supporting their growth. This remains a key enabler of growth for XP going forward. As Matt said, we continue to invest in our business and our supply chain to ensure we can meet our medium-term potential. The Malaysia facility is complete and we expect first customer shipments in Q4. And the sustainability agenda continues to be important to us. We are committed to making our operations as sustainable as possible. We're also working with our customers. We are leveraging the product efficiency as a clear value proposition to engage customers and support their sustainability goals. So we remain confident in XP's medium and long-term growth prospects beyond the current market recovery. Our focus is on markets with durable structural growth being the semiconductor manufacturing equipment, industrial technology, and healthcare. These sectors are all supported by long-term trends, including automation, digitalization, electrification, and they all need increasingly reliable high-performance systems. We're also seeing a broad recovery across our end markets. Semiconductor customers are preparing for what we expect to be a multi-year investment cycle, while healthcare and industrial tech customers are showing improving demand. XP has used its focus on these sectors to build strong customer relationships, deepen engineering engagement, and grow market share over time. We continue to win new designs and increase our content on customers' platform where technical performance and reliability matter most. The investments we have made in our manufacturing footprint, engineering resources and commercial organisation mean we are well positioned to support future growth and capture operational leverage as activity levels recover. Overall, this gives us confidence that XP can deliver sustainable organic growth and increase value over the long term. I just want to talk about the power market for a few moments. Power is becoming increasingly a more important factor of overall system performance. Across semiconductor manufacturing, medical technology, and analytical instrumentation, equipment is only becoming more complex, more automated, and more data-driven. As a result, the power architecture increasingly influences the accuracy, the stability, and the reliability of the overall systems. So many customers are therefore moving away from standard products towards application-specific solutions for new designs. They need tighter performance tolerances, greater customization, and closer integration into the equipment design. We're also seeing demand for higher-powered solutions, particularly in the semiconductor equipment space and advanced industrial applications, alongside growing requirements for precision and stability in healthcare and analytical systems. AI-related investment is reinforcing these trends by driving demand for more advanced semiconductor manufacturing capabilities and the supporting infrastructure around them. These trends raise the technical requirements placed on power supplies. That creates a more attractive environment for companies with deep engineering capability, application knowledge, and close customer relationships. As you can see, XP's strategy aligns with these market changes. And our objective is not simply to participate in attractive markets, but to establish and extend leadership positions in the product categories where we compete. The direction of the market favours XP because customers increasingly need application-specific solutions rather than standard products. Our product breadth, our technical expertise and application knowledge allows us to solve more complex customer problems and create differentiated value. A key strength of ours is our early engagement with customers in the design cycle. By working alongside their engineering teams, we can help shape the power architecture, reduce design complexity, and position XP products deeply with their next generation platforms. Our global operating model is also important. Many of our customers operate across multiple regions and value a partner that can provide consistent engineering support, reliable product availability and technical expertise wherever they are developing or manufacturing equipment. The Silicon Valley Innovation Center strengthens this position by bringing us closer to the North American leading edge customers and technology trends, particularly in the semiconductor healthcare and advanced industrial systems markets. It supports much earlier engagement, sharper market insights, and a stronger future product roadmap. Taken together, the strategy is clear. We're focusing XP on markets where power is becoming more critical and where our engineering capability, customer intimacy, and global support can translate into sustained growth and stronger competitive positions. Now let's focus on each of the target sectors in more detail. Let's start with CEMIS. As I've said many times, semiconductor manufacturing equipment is one of XP's most attractive and strategically important markets, and it remains a key driver of our long-time growth strategy. The semiconductor industry is underpinned by structural trends, including AI, high-performance computing, advanced packaging, and increasing digitalization across the global economy. All these trends required continued investment in semiconductor fabrication capacity, and increased sophistication in the equipment. We're seeing clear signs of a very strong recovery. Customer activity levels are increasing, investment plans are strengthening and extending, and order patterns are becoming more positive. We believe the sector has entered a multi-year investment cycle. For XP, this is particularly significant because our products are designed into many of the most demanding applications within the semiconductor manufacturing equipment space. XP is exposed across all steps in the manufacturing process, from lithography, deposition, etch, iron implant and inspection, and with all the key equipment manufacturers. So as semiconductor manufacturing processes become more advanced, power is playing an increasingly critical role in overall system performance. Higher process precision, tighter tolerances and a greater automation level create increasing demand for sophisticated power solutions. moving the market towards high-value, application-specific solutions. This trend is really positive for XP. We've established strong relationships with the leading manufacturers and have a proven track record of supporting complex applications where performance, reliability and technical expertise are essential. And this is what supported the 116% growth in orders. It's the market recovery supported by new business wins over the last few years. We see opportunities not only from overall market growth, but through continued market share gains. Our engineering engagement, product roadmap, and global customer support capabilities allow us to participate in new platforms and next generation equipment programs as customers invest in their future technologies. Industrial tech is another highly attractive market for XP Power. and is an area we see significant long-term growth opportunities. The market is being driven by several powerful structural trends. Customers across a wide range of industries are investing in automation, digitalization, industrial electrification to improve productivity, efficiency and reliability. These trends continue to drive increasing demand for advanced electronic systems and importantly for XP, increasing the sophisticated power solutions. We're now seeing encouraging signs of recovery, customer activity is improving, project pipelines are strengthening, and demand levels are becoming more balanced across several end applications. So orders were up 21% in the first half, and we expect continued momentum going forward. And turning to healthcare. Healthcare is the final sector, but it still remains an attractive and strategically important market for XP. providing access to long product life cycles, high barriers to entry and resilient long-term growth drivers. The sector continues to benefit from structural trends, growing healthcare demand, aging populations, increased access to medical services and ongoing technology innovation are driving investment across a wide range of medical and life science applications. As healthcare providers seek better patient outcomes and greater efficiency, equipment manufacturers are developing increasingly sophisticated diagnostic, analytical and treatment systems. This aligns well with XP's strength. We support a broad range of application, including diagnostic imaging, robotic surgery, patient monitoring and advanced medical devices. Healthcare tech is also becoming increasingly sophisticated. The equipment is becoming more precise, more connected and more data intensive, placing greater demands on power systems. As these requirements increase, customers are increasingly seek partners who can provide application specific solutions and engineering supports through the product development lifecycle. This plays directly to XP's capabilities and engineering teams work closely with customers from the design stage onwards, helping develop power architectures that meet demanding technical, safety and regulatory requirements of supporting performance and reliability objectives. So for this area, orders were up 25% in the first half, reflecting the return to growth and the benefit of some recent customer wins. I now wanted to talk about how we're going to deliver to our customers in the second half and the 327 going forward. And I also wanted to highlight what we've built over recent years We've built a global manufacturing footprint that provides the scale, resilience and flexibility to support XP's long-term growth. Our operations are positioned for the opportunities we see emerging over the medium term. We've invested in strengthening our manufacturing network, improving efficiency, increasing resilience and creating the capacity required to support future growth. We've not simply added capacity, we've also optimised the manufacturing portfolio to improve operational performance through footprint rationalisation, process improvements and investment in modern manufacturing capabilities. We've created a stronger and more scalable platform. A key step has been the development of a laser facility. This represents a significant step change in manufacturing capability and provides substantial additional capacity to support what we believe will be a multi-year growth cycle across our core markets. The facility enhances our ability to scale efficiently while maintaining the quality and standards our customers expect. The investments made over recent years mean we are entering the next growth phase from a position of strength. with the capacity to grow, the flexibility to adapt, and the operational foundation needed to support customers as their own businesses expand. One of the key lessons from the post-COVID supply chain disruption that we all experienced across our industry was that customers are placing even greater value on reliability, resilience, and continuity of supply. So in response, we've invested throughout our operations to ensure XP is positioned as a long-term partner. These investments have included expanding and upgrading manufacturing capacity, strengthening our supply chain capabilities, increasing operational flexibility, and improving visibility for global operations. Together these initiatives have really enhanced both our resilience and our responsiveness. A particular focus has been investing in capacity to support customer growth. This is not only the facilities and equipment, but also people. Just to highlight this, during Q2, we've recruited and trained over 1,200 new staff in Vietnam. We've also invested in inventory, as Matt has outlined, to support the second half of 2026 and 2027. These actions help reduce risk and improve our ability to respond to increasing customer requirements. Key point, XP has invested proactively to assure delivery, strengthen resilience, and create the operational foundation required to support future growth. As demand continues to grow, we're well positioned to meet customer requirements while driving further improvements in our operational performance. So 2026 is a critical year for XP. The significant efforts and changes we've made to the business over recent years will result in improved performance as the markets recover and return to growth. So on this basis, I want to lay out our thinking for capital allocation as we look forward into the medium term. As I've said, we currently remain focused on organic growth and will continue to invest in capacity ahead of demand, driving productivity and automation in our operations and the new product agenda in high and low power products and in technology solutions where we believe XP Power has a clear competitive advantage. As revenue grows, our debt level will reduce rapidly. and we will further de-lever the balance sheet. As we have said previously, we're committing to bringing leverage down to below one times EBITDA and keeping it there across the cycle. When we are confident that leverage is structurally below one times, we will look to reinstate our dividend and also consider additional shareholder returns and potentially M&A. Finally, let me talk to the outlook. The market recovery is translating into stronger business momentum. Demand is improving across all our key sectors, order intake is strengthening, and we enter the second half with greater confidence in the trajectory of the business. As a result, we believe XP is well positioned to deliver strong growth through the second half of 2026 and beyond. We spent the last past several years preparing the business for this next phase of growth. We've expanded capacity across our existing manufacturing network, The new Malaysia facility provides a significant step up in capacity and capability, giving us the capacity, flexibility and resilience to support customers through what we expect to be a multi-year growth cycle. We have a robust balance sheet which provides financial resilience and the flexibility to continue investing in product development, capacity expansion and operational improvement while maintaining a disciplined approach to capital allocation. Looking further ahead, we remain confident in the long-term opportunity for the business. As we stand today, we're encouraged by the quality of our growth opportunities, the pipeline of new business wins remains strong, and customer engagement levels are only increasing. Alongside this, product development roadmap is delivering new solutions that align closely with customer requirements and future technology trends. This is all built on long-standing customer relationships, which continue to create meaningful growth opportunities. Many of our customers are global leaders in their respective markets and are deep engineering engagement positions as well to participate in future generations of their products and platforms. So as a result, we believe XP is well positioned to deliver sustainable long-term growth, improve profitability and create significant value in the years ahead. So on that, we'd like to open up for questions. We'll start with questions in the room before taking questions online. For those in the room, please could you use the microphone and state your name and company before your questions for the benefit of those joining via the webcast. As a reminder, if you're watching online, you can ask a written question by using the toolbar at the bottom of the webcast.

Thanks, guys. Tom over from Deutsche Neumis. Probably two areas just to touch on. So I think, unsurprisingly, obviously, Semi is very, very strong. So I think I just want to touch on that. I mean, clearly supportive of the market share gains that you guys have delivered. So I'm interested to hear where were the key wins in your mind. Is this wallet share gains? Is this greenfield opportunities that you've won? And I guess how much do you think that sustainability of that outperformance? That's the first question.

Yeah, so yeah, we're very pleased with our sandwich performance. We work closely with a number of the key players in that market, and we're confident it's both new business and market recovery. And that new business is right across all of the steps in the process. So, you know, we had wins in etch deposition, iron implant, recently in inspection. And remember, those customers, when they're talking about new products, they're thinking 2030 out. So we're working very closely with them on where, on what's coming. We've also, one of our competitors in the high voltage space had a business continuity issue earlier in Q1 and on the basis of that we've gained additional share with some of our key customers.

And then just sort of leading on from that in terms of the lead times that you are seeing in terms of that segment, and I guess, Matt, you alluded to price as part of that as well, and obviously the gross margin performance was very, very strong in the first half. So I guess it also knows where are lead times, and I guess how are you approaching price in the context of that, and I guess, incrementally stronger for 27, or have we already started to see that in H1?

Yeah, so lead times in the sort of five to six month kind of region, really. As I say, slightly extended during Q2. It's one of the reasons why the order intake was slightly stronger than we were expecting in Q2. Yeah, price increases are coming through. Obviously, there's a price pass-through element that comes from tariffs. But if I just sort of put that to one side, underlying price increases did contribute to first half revenue. and I expect, as we head into 2027, probably an increasing contribution as well.

Hi, David Farrell from Jefferies. A few questions from me, please. Just when you look at the order book cover for the second half of 2026, how does that compare to maybe the second half of 2025 and 2024?

Probably slightly greater overall. That being said, I mean, as we said in the announcement, there is still additional orders that can come in that are both booked and shipped that can add to the number. So one of the reasons why we say at least 135 million in revenue for the second half. the only thing just to be mindful of is that the overall supply chain is probably or definitely is tighter than it was 12 months ago so we're just mindful that you know there could be delays in the delivery of componentry as certainly as we get into Q4 and that could push some deliveries the other side of that balance sheet date so hence why we just kept it 135 million for now.

Thank you for slide 22 which was basically the capacity I was surprised looking into 27 that most of the growth actually comes from Vietnam and not Malaysia ramping up. To what extent is that growth in Vietnam driven by the actions you're doing in the second half of 2026? So that growth is really just a kind of annualization of the factors in the second half of this year?

Yeah, I think that's quite a fair point. I think take it as indicative. We still need to do the overall optimization. remember we have to get our Malaysia facility qualified with some of our key customers and that pace of qualification will just impact the ramps. The intent is very much when we're ready to balance the two but that's going to take a couple of years.

Final question. Industrial technology, if the area you've got the lowest market share is the largest addressable market and therefore in dollar terms it's growing the fastest year on year. Can you just talk to a wider strategy there of how you can get your market share up in that market? Because it seems like that would be relatively easy pickings for you in terms of focus as you think about expanding going forward.

Yeah, it is an important sector for us, and generally it's the largest sector. It's built up with lots and lots of smaller projects. Once you get to a certain scale, often the customer will go to a a contract manufacturer and do it specifically. So we'll do a development, but it almost feels it caps out. So we have a lot of customers and projects at the half a million to a million dollars level. And we have, and it's a very, very widely spread. Also, we put our distribution accounts in here. They're growing very, very strongly. and that's predominantly in industrial tech. So the high service level, the Digikeys, the RS1s, are all growing strongly. We also, in Europe, about two, three years ago, we looked at a way of accessing the mid-tier, the smaller customers who we don't support, and we do that through a partner who does design and work, and that is proving to be a very, very successful way program that we're looking at expanding in the other geographies. So we're confident that we can maintain or grow that market share in industrial tech.

Lydia?

Sorry, Lydia, can you invest us? Firstly, there's been a lot of news about a Chinese semi-equipment manufacturer. Can you maybe give us some idea of how you overlap or if you don't at all?

We don't. We pulled out of supplying the Chinese semiconductor market. the licenses that we had on RF have expired also a number of the key customers we are working with were put onto the entity list by the US which require a license which was very unlikely to be granted so we've focused on other areas rather than the Chinese semiconductor customers we supply them indirectly through some of our key customers do supply them directly but we don't it seems like the appeals

the appeal of the appeal timeline has now passed.

We were very positive about the result of the appeal. There was then a two-week period where the other side could ask for the appeal to be reheard. That has now expired. And we expect the case to be mandated back down to the district court today. And then we'll see where it goes.

Great. Thank you.

A question from the online portal. It's from Tom Frane at Shore Capital. An excellent question related to Astrodyne. What are your thoughts on the acquisition of Astrodyne by TE Connectivity for five and a half times sales multiple? How would you compare Astrodyne to XG Power, which has a much lower EV sales than the current share price? Do you expect more acquisitions in your space in the short term, given the market backdrop?

Yeah.

We've known, and I know Astrodyne very well. They're a good business, predominantly US-based. I think TE said they expect about $250 million of revenue this year, of which it's 60% semi, and about 25% industrial and medical, and about 15% defense. they are slightly different to us because about a third of their business is filters, which a lot of power supplies in, but they're a good business and the multiple paid I think is clearly interesting when you compare it to our share price. They're coming in at 1.4 on what we believe is circa 20 times of it to our multiple. We know the owners, Tinicum, put it up through a process, so we know there were other parties involved, whether that leads to further consolidation? I can't comment.

Thanks.

That's the only question I'll ask.

Okay. Well, thanks everyone for joining. Just to reiterate, we believe XP is now and is well positioned to deliver sustainable long-term growth further improve our profitability and create value in the years ahead thank you