Avon Technologies Plc

Good morning, everybody. Thank you very much for coming and welcome to those on the phones. Thank you, especially to those that went to the Chelsea Flower Show last night, who are probably feeling a little bit worse for wear. We have had an excellent start to the year, a growing order book, significantly increased profits and much improved cash flow. Our strategy is working and we're seeing the benefit of our initiatives. there is meaningful improvement in our key operating metrics, such as productivity, scrap and inventory terms. These are leading indicators and demonstrate the improvements we're making. The order book and pipeline are both very strong. We closed the half with an order book of nearly $200 million, up more than $50 million on the prior year. This gives us confidence going into the second half. We are trading ahead of expectations for this year, And looking beyond that, we still have a lot to do. But the momentum that we have demonstrated so far gives us confidence that we can achieve our medium term goals. The group consists of two strategic business units, Avon Protection and Team Wendy. Both are the leaders in their fields and provide mission critical protection for those who protect us. We realise that the similarity between the name of the respiratory division and the group is a little confusing at the moment. We intend to change the name of the PULC holding company to avoid this. I'll now hand over to Rich to pick up the numbers.

Thank you, Jos. Good morning, everyone. So as Jos has already mentioned, we have had a good start to FY24. The headlines on this slide look pretty strong. with closing order book up 37%, giving confidence in continuing growth. Revenue up 24%, operating profit up 40%, and EPS up almost 60%, all compared to the same period last year on a constant currency basis. As expected at the time of the full year results, we've also seen very strong cash conversion as the high receivables balance at the end of September has unwound, coupled with a strengthening focus on inventory management. This has dropped through, to a further reduction in leverage down to 1.69 times net debt to EBITDA comfortably within our target range of one to two times. So a good start. There is, however, still a lot to do if we're going to hit our midterm targets that we set out in February. So starting with the P&L and as usual, comparators will be on a constant currency basis. Order intake of $190.3 million equates to a book to bill of 1.5 times. Highlights include strong growth in DoD mask demand and further NSPA demand from a number of countries including Belgium, Finland and Lithuania. A sizeable contract with the Swedish police and of course the German rebreather contract both represent good new European work and the $50 million of order intake across the two key DoD helmet programmes give more good order cover well into 2025. All of this has helped move the closing order book up to a record $199 million, which clearly gives confidence in the group's prospects for further growth. Revenue of $127.1 million is 24% up on last year, which is a creditable performance, although I will remind you that the first half growth rate benefited from the fact that we only started next-gen IHIP's deliveries at the very end of the first half of last year. As such, this growth rate is not representative of the full year. Growth in Team Wendy, therefore, has been very strong and offsets an expected decline in Avon protection, although this decline was a little smaller than we had thought. Adjusted operating profit margin across the business has been a little stronger than we expected, with operational gearing in Team Wendy, as the growth came through, boosted by some early benefits of our transformation activities, in addition to better than normal demand for high margin pads. good control on SG&A expenses dropped through to operating profit of $11.9 million, up 40% on last year. The effective tax rate went up a bit as guided, giving adjusted basic EPS of 22.3 cents per share, an increase of 59% on last year. In line with the dividend policy set out with the full year results in November, the distribution to shareholders has dropped to 7.2 cents per share, enabling a greater focus on organic growth and investment in our transformation programmes. As referenced on the previous slide, the Avon Protection Business Unit has benefited from healthy order intake in the recurring part of the business, in addition to the German rebreather order, resulting in a closing order book of $55.5 million, of which $37 million is for delivery in the second half. The decline in the order book year on year reflects a couple of significant orders that were sitting on the books this time last year for H2 delivery, including the Middle Eastern Respiratory Contract and, of course, US filters. As trailed, revenue saw a modest decline in the half, reflecting the lack of US DOD filter sales following our shipment of two years' worth of orders in FY23, and a lower volume of US mask shipments, partially offset by NSPA mask deliveries and initial rebreather deliveries to Germany. Adjusted operating profit of $11.1 million for the half represents a solid 16.5% operating margin. While this is lower than last year, H123 margin was unusually high, reflecting high levels of overhead being absorbed into inventory as we built ahead of large H2 delivery schedules, and it is this sort of volatility that we're seeking to minimise through level loading the factories. Higher expensed R&D also contributed to the change. Looking forward for the remainder of the year, we expect second half Avon protection revenue to be a little below the H223 level, unchanged from the guidance given at the time of the full year 23 results. Team Wendy has seen significant progress in the last six months. Orders grew by 140%, with $50 million of orders under the contracted IHIPs and ACH programmes, further bolstering a decent performance across the balance of the business. The closing order book of $143.5 million gives excellent coverage for the remainder of this year and well into next. Revenue growth of 81% to $59.8 million reflects the half-on-half effect of IHIPs deliveries which commenced at the end of the first half last year. The business also shipped its first couple of lots of the new ACH helmet to the USDOD earlier than expected. Gross margins improved dramatically as the inefficiencies of low production rates started to fall away, and notwithstanding the increased SG&A costs to support the enlarged business, operating profit margin turned positive a little earlier than we might have expected. This improvement was further aided by higher pad volumes referred to earlier, and a reduction in scrap. As we detailed at the Capital Markets Day, however, the real opportunity for further margin expansion will come towards the end of FY25 and into FY26 as we execute the footprint optimisation plans and the benefits of continuous improvement really start to come through. For the second half, we continue to expect comfortably greater than 10% revenue growth compared to H2 last year, with ACH2 shipments ramping up and continuing IHIPs deliveries So as usual, this bridge sets out the key moving parts in the reported adjusted operating profit from last year to this year. As you can see, we have had a modest nudge down from translational FX in the period. The impact of lower revenue within the Avon protection business was, however, more than offset by the effect of volume growth in Team Wendy. And although it is still early days at this higher revenue level, we are already starting to see benefits in the key operating metrics that will drive stronger profitability levels into the future. We have also seen a meaningful level of scrap production in the period of a million dollars, and if things continue as they are, that variance will increase further at the end of the year. Going the other way, the non-recurrence of overhead absorbed onto the Avon protection balance sheet last year represented a year-on-year headwind. The R&D capitalisation bar refers to a small number but an important point. As we continue our focus on quality of earnings, we have applied rigid criteria to meet prior to capitalising R&D costs onto the balance sheet, and we capitalised just $0.3 million of R&D costs in the first six months compared to $2.2 million in the first half of last year, although the net year-on-year variance reduced to the $1 million shown on the chart through lower amortisation levels this year. And finally, as ever, the other bar represents a number of things including lower SG&A and freight costs in Avon Protection, more than offset by higher SG&A and Team Wendy to support the growth of the business. Moving on to cash flow, you can see that net debt was down by $14.5 million compared to the same period last year. A $1.8 million improvement in EBITDA was followed by an $8 million cash inflow from working capital, which compares to an outflow of $31.6 million last year. The headline drivers here are improving inventory turns and the achievement of a steady-state run rate on IHIPs. This gives very strong cash conversion of 155%, which represents a catch-up from some of last year's overhangs. We clearly do not expect it to remain at these levels going forward. Cash costs of the transformation activities in the first half were $4.1 million, and while these will accelerate in the coming months, we remain comfortable that this is an excellent investment with a very strong payback. Cash of $4.9 million was received in respect of Armour deliveries late in FY23. We expect this to be the last significant entry related to the now discontinued Armour business. And beyond cash flow from operations, we paid $6.3 million into the pension scheme in line with the guidance issued at the full year, which compares to zero in the first half of 23. As a reminder, we prepaid last year's contributions the year before in order to help the scheme de-risk its LDI position. As a reminder, contributions in 2024 are higher than future years, reflecting a top up as part agreed as part of the triennial valuation. And as usual, guidance is provided in the appendix. Capital expenditure increased modestly half on half as we invested in capacity for ACH and boots and gloves. And of course, dividend distributions fell following the rebasing of the dividend announced in November. So the first key item to pick out on the balance sheet is inventory reductions. The scale of reduction on the face of the balance sheet is flattered somewhat, as we still had some armour inventory on the books this time last year, but nevertheless it represents a very strong performance by the businesses. Moving down to the retirement benefit scheme, the accounting deficit increased to $50.7 million, an increase of $10.5 million since the end of last year. This results from the adoption of a lower discount rate assumption, reflecting reduced corporate bond yields. Half to half, the deficit movement also incorporates adverse actuarial experience adjustments incurred in H2-23 following the triennial valuation last year. As a reminder, the accounting deficit does not impact cash. This is driven by the repayment schedule determined as part of the triennial valuation. The net effect of all of this is that bank leverage has improved from 2.58 times at the end of the first half last year to 1.69 times at the end of March, comfortably within our one to two times range. Perhaps the most exciting news in relation to the balance sheet though is that we have successfully refinanced the revolving credit facility for a further three years plus two option years, comfortably ahead of the deadline of September this year. The new facility is $137 million and has been secured on terms that are more favourable than the existing facility. This is an update to the slide we first put up with the full year results last year. The left-hand column represents our view of OPEX investment at the full year results in November and the next column shows our updated view. As you can see our expected investment this year in footprint optimisation has increased from five to six million dollars to ten million dollars, partly offset by lower than expected investment in commercial optimisation activity where we feel we are already making good progress using internal resource. CAPEX expectations remain unchanged. Importantly Our view for the overall transformation investment for projects identified last year remains unchanged, but we have pulled forward investment in a number of work streams to de-risk the overall programme. As such, while we previously expected transformation costs to be evenly spread between 2024 and 2025, we now expect that investment will be biased towards 2024. As we have progressed our transformation activities, we have added a number of potential new projects to the funnel, These are currently in the planning and appraisal stages and initial indications suggest that they will have a very good payback. These projects would involve some additional cost but could potentially accelerate delivery of our medium term goals. So given the performance year to date and the clarity we have in the backlog which is of course subject to execution our outlook for the full year has improved. Revenue growth in Team Windy driven by strong execution on the key DoD programs, including earlier than expected deliveries of ACH and a more modest than expected decline in revenue in Avon protection means that our revenue guidance for the full year is now for 10% growth up from the high single digit growth expected previously. And the H1, H2 split will also be a little less marked because of the good first half performance. Given the success to date in improving our operational KPIs, and the improvements afforded by our operating leverage, we now expect operating profit margin to be marginally better at 10% or perhaps a little more. This compares to approaching 10% in the previous guidance. Our transformation programmes are progressing well, and as mentioned on the previous slide, we have pulled forward activity on a few work streams in order to further de-risk delivery. Total spend on existing programmes is expected to be unchanged versus prior guidance, although phasing is now biased more towards 2024. And finally, the passage of time has enabled us to be a little more specific on the expected net debt reduction, which should now come in at a little below 1.5 times net debt to EBITDA for the full year, with our expectation of greater than 100% cash conversion unchanged. And I'll now hand back to Joss to talk about strategic progress.

Thank you very much, Rich. Turning now to the strategy. We have clear medium-term goals. The STAR strategy is designed to deliver those goals. The strengthen stage positions us for superb execution. Transform reduces costs and improves working capital terms, freeing up resources to invest into growth and to reduce debt. Advance is delivering innovative products. driving increased sales, orders, and pipeline. Revolutionize is driving long-term growth by using our powerful customer relationships to increase co-funding and develop innovative products for the future. The heavy lifting on the strengthen stage is now largely complete. We have the right organization and leadership team, and we have a strong, highly motivated team. We moved quickly to improve productivity in Avon Protection. This has resulted in a much stronger business, able to deliver excellent margins and cash flow. We've made real progress improving program management. This is fundamental to the delivery of our large transformation programs and the successful ramp-up of the DoD Helmets programs. Driving change in any company is not easy. I'm therefore delighted that we have a very strong board, which has recently been augmented by the appointment of Maggie Brereton. Maggie is an excellent fit for Avon's journey, bringing deep expertise in transformation and a depth of insight and challenge, which will help us as an executive team be the best that we can. We were recently assessed by the Department of Defence against their emerging and ever more stringent cyber security standards. These assessments are pretty rare and could be an illustration of how important Avon is for the DoD. The important thing is that we were found to be keeping up with the evolving standards and to be performing well compared to our peers. This matters because it positions us well to win future contracts with the Department of Defence. Overall, we have a fitter, stronger organisation. This slide is a high level representation of how our transformation programs are moving through the gates. The amount each star is colored shows roughly how much progress we've made. In reality, each program contains multiple projects. So this is a fairly subjective view, but it gives you a sense of progress. The main takeaway is that all programs are on track and are now firmly into the execution phase. Six months ago, most programs were still in the planning phase, so there is a lot more activity going on now. As we develop the transformation muscle, we are seeing some potential new opportunities, which are still early stage, but look very promising. This slide shows the milestones that we have achieved on the current programs, just to pick out a few highlights. Starting with footprint optimization, the Unity program to consolidate helmet manufacturing on the East Coast is progressing well and is on track for completion in the middle of 2025, perhaps a little earlier. We have achieved some critical milestones. The DoD has approved the first ACH Gen 2 lot finished in Cleveland for ballistic testing. This is important because it means that we've demonstrated to the DoD that Cleveland's processes are robust enough to meet their exacting standards. In operational excellence, we are changing the factory layouts and processes in all three of the Team Wendy sites. We expect the new processes to enable us to improve productivity, lead times and inventory times. We also see opportunities in our Malksham factory and have made some changes to operational leadership to drive improvements faster. In functional excellence, we've completed the restructuring of the finance function, saving a million dollars a year on a recurring basis. With a view to ensuring that the value we deliver is reflected in our pricing, we have made some significant changes to prices in some areas. particularly in product categories that have historically been under-managed. We expect to see some benefits of this in the second half. At the recent Capital Markets Day, we introduced some new operational metrics and targets. We said that we were aiming for a 25% improvement in productivity, a 60% reduction in scrap, and inventory turns of over five. all the while maintaining excellent on-time delivery to our customers. These three charts show the changes to our operational metrics half on half. Direct labour productivity has improved 23%, scrap has reduced 45%, and inventory turns have improved 37%. But this is only the start. There is more that we can do. The productivity improvement in the Avon protection business has been particularly impressive. Half on half, direct headcount reduced by over 150 people on flat revenue, improving productivity by 44%. And we've doubled inventory turns from two and a half to nearly five, converting $23 million of stock into cash. As inventory has reduced, $1.8 million of overhead unwound from the balance sheet, dragging margins as expected. This is one of the quirks of absorption accounting. As you improve a business, you actually hurt your margins in the short term. As you can see from the right-hand side of this chart, on-time delivery to the customer and quality have both increased at the same time that we've improved productivity and inventory terms. Avon Protection has improved its operational metrics faster than Team Wendy. In Team Wendy, the focus so far has been on successfully ramping up the DoD programs and moving production to Cleveland. As those programs mature, we are turning our attention to driving similar improvement on the factory floors in Team Wendy, and we have a plan to do just that. I wanted to give you an example of why I'm excited by the new opportunities we're finding. Last month, we completely relayed out the Exfil helmet line in Cleveland. Most senior leadership was involved on the factory floor, including our CFO. The picture on this slide probably doesn't do justice to the amount of change we made. We moved everything, including the laser cutting machine for the first time since it was installed five years ago. As you can see, the results of the Kaizen are startling. In the planned ideal state, we can reduce work in progress and lead times by 99% and reduce the number of operators by 83%, some of whom will retrain into other roles to support future growth and improvements. We're now working on improving all four lines in Cleveland and building the business case to transform the entire factory. We have a record order book. of some $200 million, we also have a large pipeline of opportunities which gives us confidence in the future. The geopolitical situation remains unstable, which is driving increased defence spending. The changing nature of warfare, now involving both inventory and the heavy use of drones, is relevant for Avon because infantry needs protection from chemical weapons and blasts and bullets. We can help provide that protection through our masks and helmets. The threat of chemical attack was recently highlighted by the US State Department, which formally accused Russia of using chemical weapons as a method of warfare against Ukrainian troops. We are also seeing good demand from helmets and masks from police forces in the US as we approach the US elections. That will also benefit us during the second half. In Avon Protection, the order pipeline is strengthening. DoD demand for masks has increased, with more than 25,000 M50s ordered so far this year. Furthermore, the DoD has exercised their option to extend the M53A1 contract until March 2025, and have indicated that they will extend for another year after that. We recently won the contract for the general service respirator for the UK MOD. This is a four year contract with five further option years. This win is important. It cements our position as the sovereign UK CBRN expert and avoids a competitor re-entering the market. It is also a cornerstone contract for our UK factory. As a reminder, This is one of our only build-to-print contracts, so we expect gross margins to start fairly low. We have a plan to increase them to our normal range during the first two years of the contract through our continuous improvement programme and some insourcing. In the commercial sector, demand in the US has been good, and we recently won a seven-year framework contract with the Swedish police, which we expect to be worth around $15 million, with roughly a third of that shipping this year. We've also seen very encouraging demand from militaries outside of the US, some of which is no doubt linked to the increase in chemical warfare. Our MCM rebreather continues to be the system of choice across NATO. With important wins in Germany and another NATO country, we expect to deliver around 230 rebreathers to these countries plus related spares, consumables and training. Looking forwards, we are excited to launch the Mitre mask and we're focused on ramping up production of both rebreathers and boots and gloves to meet the increased demand. In Team Wendy, the order book remains very strong. Our focus is on successfully delivering on the existing programs. We continue to deliver excellent quality helmets to the DoD. IHIPs deliveries are now on a steady cadence with no lot failures and the first two ACH lots were delivered ahead of schedule. This has no doubt contributed to further orders in the half of $36 million on next-gen IHIPs and $14 million for ACH Gen 2. We also saw strong ongoing demand for pads and bump helmets. We're working with the DoD to agree a new comfort pad systems for the IHIPs and are focused on ramping up ACH production to 50,000 helmets a year. We are also working on launching a brand new rifle rated helmet for customers beyond the DoD and expanding the pipeline more broadly internationally. As a reminder, Our portfolio of long-term sole and dual source contracts provides a stable foundation upon which we can build. We've highlighted in orange on this chart the four new wins from this half, which demonstrate that we continue to be well positioned with our customers. Turning to the long term. We are progressing well with our existing co-funded programs with the DoD, to deliver a next generation of filters which will provide enhanced protection. In addition, we're now working with the DoD towards three new programs which will increase the amount of R&D funding from the DoD and will hopefully lead to further programs of record. In Team Wendy, we have successfully demonstrated that we can use our new hybrid tooling for production of the next generation ACH2 and EPIC helmets. This will significantly increase capacity and enable us to expand into the international market without a lot of additional capex. Six months ago, I talked about the risks and opportunities for this year. I thought it'd be helpful to update you on where we are now. Our biggest risk was losing the MOD general service respirator. We've eliminated that risk by winning the contract. But we do have work to do through our continuous improvement programme to get the gross margins to our target range of well over 30%. We won the German rebreather contract and have already delivered the first 30 of 205 rebreathers. So we no longer see rebreather timing as a risk for this year. The German Navy was admirably fast. The rebreather pipeline remains very strong. but we still do not know whether we've won the US rebreather tender. The program office has kept its cards very close to its chest. Epic sold well in the first half, and we've now improved manufacturing and reduced lead times, setting us up well for the second half. Pad demand was excellent. We're now seeing more opportunity for process optimization than we thought six months ago. we've not yet fully estimated the costs and related benefits. We'll update you in due course. Scrap rates have improved, but there is still more to do and some of the remaining causes of scrap are technically challenging to resolve. Overall, the retiring of risks and crystallisation of opportunities means that we're optimistic for the full year and beyond. Perhaps our biggest risk now is being able to successfully meet the increasing demand for helmets while at the same time consolidating factories and transforming our Cleveland factory. Timing is also dependent on customer approvals and we know from experience that those can take longer than we expect. This slide shows our performance over the last 12 months versus our medium term financial goals. The main takeaway for me is that we are making progress across all of our key financial metrics. Revenue, cash conversion and leverage are all at or better than our goals. We still have more to do on margin and ROEC, but we have a very clear plan, which will move them both into our target range in the medium term. We are on the right track. So in conclusion, Avon is well positioned to deliver exceptional growth to shareholders. The changes made to the organisation, people and processes have enabled us to successfully ramp up iHIP's production and deliver the first ACH slots ahead of the competition. We have a record order book with a lot of strategic wins. The pace of change is accelerating and we're already seeing the benefit of our actions. We are the leading supplier of CBRM protection and helmets to the USDOD and continue our sole source positions on Mars and filters to the UK MOD. And the geopolitical backdrop provides a supportive market for our world-leading products. With that, I will hand over to questions. Straight in there, Andy.

Hi, it's Andy from Jefferies. Three questions, please. You've made a huge amount of progress on Transform in the first half. Can you just give us a flavour for the important milestones you are looking at in the second half, just so we can kind of figure out where we're going and how confident we are on that 2025 completion of the Unity project, I guess, in particular?

Yeah, sure. Well, we've just moved the press from... from Irvine into Salem, so we need to commission that. It's in, the foundations are in, but we've got to get it working. That will help us make IHIP's helmets there, and we need to get the full ACH line approved by the DoD and get the first lot approved through ballistic testing, although that bit should be quite straightforward, but we do need to do it.

The moulding element to the ACH entry, that's in the second half, or is that next year?

That is in the second half.

Well, it's in the calendar second half, so it will fall just outside our financial second half.

Behind you, you've talked about a strong competitive moat. Can you just give us a flavour for how you feel about that now compared to when you first joined Avon? It feels like, if anything, it's strengthened and... The risk, I guess, was that some of your peers caught up on some helmet contracts. Just wondering kind of where they are there and how you feel about it.

Yeah, I don't know that we see a change on helmets, actually. Gentex have, we think they're getting close on IHIPs. They do seem to be still, they still haven't submitted, we understand, FAT approval on the ACH. So they're still quite a long way behind us. But they're still a competitor that we respect. And if anything, I think they're quite helpful because they sort of keep us pushing forward and making sure we're as productive as possible. Yeah. So still two players in that market. I think on respiratory. I think that market has changed a bit for us. We had a smallish competitor trying to get into the US civilian market, but then we launched our own line for the civilian market, which I think has probably taken some of the wind out of their sails. And I think most importantly, We did see 3M starting to try and push the general service respirator or a variant of it in the US commercial market. That would have been quite unhelpful for us. But I think now we've won the main GSR program for the MOD. If I was them, I'd probably give up on that now because I can't believe they've got a robust enough supply chain really to keep that going. So I feel, yeah, I feel good about that.

And then last, small suits on someone contract. Are you able to tell us who the customers are and the opportunity there?

Do we call them European? Are they in Europe? Not sure.

On the fringes.

Under the NATO contract. Yeah, that was interesting. Strategically interesting, but not yet financially interesting. particularly material. But what's interesting about it is it's the first time a customer has said, I want to buy masks, boots, gloves, and suits all in one package. We like that idea because we get a bigger share of their wallet effectively. They're currently buying it from all sorts of people. If we can offer a one-stop shop, we like that. So I think it's good a customer has demonstrated they want that offering. Now we need to find more customers that want the offering.

Morning, Robin Byde from Zeus Capital. Just on the issue of scrapping, can you talk a bit more about some of the measures you've taken to reduce scrapping? And are you confident that you've stabilised those processes at 1.5% of revenue? And you did mention towards the end some of the technical challenges going forward. So perhaps a bit more, a few more insights perhaps on that issue.

Well, there was a long list of root causes of scrap, probably more than 10. So the first thing we did was just prioritise it, operate on it. And then a lot of them are actually caused by quite simple process, things like operators dropping helmets. As soon as you drop a helmet, you have to scrap it. Very frustrating. were also having issues we have to trace every helmet for the DOD through the production all the way from raw material through every single manufacturing process and if you lose traceability at any point you have to scrap the helmet and our traceability system was having glitches and that was leading to quite a lot of scrap also very frustrating and then some of the presses unfortunately the rotary presses are not the most reliable thing, which is why we want to move to vertical pressing. Um, they also going in and out of the temperatures were changing and that was also causing scraps. So there's a lot, there's a lot of things that we have fixed and the process definitely now is much more stable. And we were very pleased. We went to California recently. They've done a great job on, on improving the lines there. We do still have an issue with layers delaminating, particularly in one of the sizes of helmets. Fortunately, it's actually the size that the DOD orders the least of. That we've got a root cause analysis, what we call an 8D analysis. We're still working on that, but that's going to be, I think, probably we can fix it through a combination of different heats and pressures, but that one is going to take a bit more time, I think.

Thank you.

Hi, Richard Page from Deutsche Neumis. Three... Well done, Richard. I remembered it. So, you seem to be in slight contrast, maybe some of your peers on the US contracting, no real issues in terms of contracting, maybe the US rebreathers, an example where it is. But how is the US contracting environment at the moment, particularly given election year and so forth?

We haven't seen any impact from the election years. I mean, yeah, so far the contracts have been flowing through absolutely fine to us.

And one of those... No other than we have seen at the margins an uptick in demand, possibly linked to the election year and some of the protective stuff. Yeah, that is that. Yeah.

And then on that, on the respirator side, the filters order, when should we expect that two-year order to come in?

The back end of this financial year, the beginning of next financial year, I think.

And of a similar quantity as usual levels?

It's competitive, as a reminder. So generally speaking, we'll put in a bid, our competitor will put in a bid, and if they follow the same course as history, no reason to assume they won't, they'll give 60% to the lowest bidder and 40% to the higher bidder. But we'll see.

And just remind us, on the ACH Gen 2 ramp, how quickly do you think you'll get to that full-year run rate?

I would think next year we should get there.

Yeah, yeah, middle of.

Brilliant, thank you.

Any more in the room? Anything on the phones?

Any on the phones? You're obviously admirably clear on your financial presentation. Excellent. Good.

Thanks very much.

Thank you, guys.