Spirax Group Plc

and welcome to our 2022 results announcement call. I'm Nicholas Anderson, Group Chief Executive, and I'm joined here by our CFO, Nimesh Patel. Consistent with the format that we followed in the past years, I will start by sharing the 2022 highlights, and then Nimesh will take you through our financial performance. I will come back later to cover the operations in 2022 and our outlook for 2023. To finalize, we will be happy to take questions from the analysts joining us here today. So, a war in Europe, global supply chain disruptions, COVID-related economic slowdown in China, rising energy prices and heightened inflationary pressures turned 2022 into a very challenging year. Global industrial production growth, or IP, weakened significantly from a very strong 7.7% expansion in 2021 to 2.7% growth in 2022, which is much lower than forecasted one year ago. Against this very challenging backdrop, we achieved 14% organic sales growth, driven by volume growth well above IP and price increases that offset significantly higher cost inflation and protected the margins. All three businesses outperformed their markets and the group exited the year with record high order books, which demonstrates good business momentum as we enter 2023. Organic sales were up 12% in steam specialties and 14% in ETS. Both businesses also completed strategic acquisitions in 2022, that will enhance our long-term growth prospects, especially by Vulcanique and Eurex industries. I will expand on these acquisitions later in this presentation. Watson Marlowe organic sales grew 16%. Process industries grew a very strong 19%, driven by volume growth above IP, as well as price increases that offset inflation. Biofarm sales grew close to 15%. despite the extraordinary COVID vaccine-related demand for BioPharm customers beginning to normalize in the second quarter of 2022. Our adjusted operating profit margin of 23.6% in 2022 is comparable to the highest margins achieved in our history, excluding the exceptional 25.3% margin achieved in 2021. Consistent with our guidance last year, The margin difference between those two years is due to the full year impact of the 2021 revenue investments plus additional revenue investments in 2022 to support sustainable future growth. As anticipated, our cash flow conversion of 57% was lower than our historical levels of above 80%. This was driven by record capital expenditures to expand manufacturing capacity, as well as some inventory rebuilding in support of that strong sales growth. Now, on slide four, new business from the sale of self-generated solutions once again grew at higher rates than maintenance and repair sales, accounting for now close to 40% of sales in 2022, Self-generated solutions through our direct sales model remain attractive even during challenging economic times, as they are typically paid for by the customers' OPEX budgets with shorter payback periods. In 2022, we continued strengthening our direct sales business model by investing in the expansion and training of our direct sales teams, new product introductions, and digital technology solutions. We also stepped up investments in equipment modernization, process automation, and the expansion of our manufacturing capacity, which included the opening of a state-of-the-art sustainable multi-brand manufacturing facility for Watson Marl in the USA and a new facility for Watson Marl's BioPure brand in the UK. We continue investing significantly in the development and introduction of new products, especially sustainable products and solutions that help customers meet their own sustainability goals. In 2022, we launched the new two world target zero decarbonization solutions created through an internal collaboration between steam specialties and ETS, which will underpin incremental organic sales growth for at least the next 30 years. In addition, we invested close to 540 million pounds in three important acquisitions that expand and enhance our ETS business, as well as accelerate implementation of our digital strategy. The integration of Vulcanique and Xerox Industries mirrors the successful integration processes deployed on previous acquisitions and builds upon the lessons learned. These integrations kicked off immediately after completions And we are very encouraged by the positive engagement of the new colleagues, as well as the constructive collaborations already unfolding. These acquisitions will materially contribute to revenue growth in 2023. Lastly, we remain focused on the implementation of our strategic agenda across all three of our businesses, as well as implementing our One Planet Sustainability Strategy and Our inclusion plan, everyone is included, in order to create value for all of our stakeholders. On slide five, we set out some examples of the significant progress achieved in 2022 through the implementation of our strategic agenda. By living our values every day, we are creating value for all our stakeholders in line with our purpose. With our colleagues' well-being in mind, we established 10 minimum inclusion commitments and refreshed our diversity goals to drive greater inclusivity, equity, and diversity, as well as continuing our drive for higher health and safety standards across our workplaces. A select range of product categories sold in 2022 saved our customers 17.7 million tons of CO2, 235 million gigajoules of energy, and over 88 million cubic meters of water. Big numbers, but to put these annual savings into some context, that is the equivalent of 804 million mature trees absorbing CO2, 3 million people's annual average energy consumption, and 35,000 Olympic-sized swimming pools of water. Our environment also benefited from a 30% reduction in our Scope 1 and 2's greenhouse gas emissions in 2022, taking us 41% below our 2019 baseline. We now contract 57% of our global electricity needs from green or renewable sources and invested in self-generation of renewable energy at four of our manufacturing plants with a combined capacity of 2.4 gigawatts, which is equivalent to about a quarter of the energy demands of those four facilities. Through our community engagement programs, our colleagues doubled to 22,000 the number of volunteering hours dedicated to making our difference in our local communities. Our group education fund supported 51 community projects in its maiden year with combined donations of over £1 million aimed at providing equitable access to education, helping women and girls achieve their potential, and encouraging pathways to careers in science and engineering through a variety of grassroots initiatives. I am delighted with the progress made on all fronts during 2022 as we worked hard and in challenging circumstances to engineer our difference for all our stakeholders. And with that, I'll now hand you over to Nimesh to take you through the financial performance.

Thanks, Nick, and good morning, everyone. So, as Nick has already highlighted, 2022 has been an eventful year for the group. as we delivered a strong financial performance against the backdrop of a weakening macroeconomic environment, while also investing in our future growth with record capital expenditure and through acquisitions. I'll now explain the main drivers of our financial performance. So as always, the numbers we will be discussing are the adjusted results. Adjusting items included £15.5 million of costs, relating to the restructuring of ETS in Europe, including the closure of Soissons, our Chromalox manufacturing facility in France, and £16.2 million of costs related to the acquisitions of Cotopaxi, Volcanique and Eurex Industries, in addition to the disposal of our Russian operations. Further details are in the appendix. Group sales were 20% higher at over £1.6 billion, reflecting an organic increase of 14%. And group operating profit was 12% higher or 7% on an organic basis at £380 million. The difference between our reported and organic growth rates reflects the effects of currency movements on sales and profit and the contributions of our acquisitions net of disposals. These impacts are reflected in our reported numbers and excluded from our organic growth rates. Our operating profit margin of 23.6% is in line with previous guidance, although below the exceptional level of 2021, driven by the full year impact of revenue investments made in 2021 and continued revenue investments in 2022, partially offset by the benefits of operational gearing. During the fourth quarter of 2022, the group raised £509 million of new euro and dollar denominated debt to fund the acquisitions of Volcanique and Durex Industries, resulting in an increase in net finance expense to £9.6 million. Our effective tax rate was broadly flat at 25%. In both 2021 and 22, we identified benefits such as innovation tax reliefs and consolidating filings, which delivered one-off reductions in respect of prior year claims and a lower ongoing underlying tax rate. We anticipate the tax rate in 2023 will be marginally higher than the 2022 rate. Adjusted EPS of 377.2 pence was 11% higher, slightly below the rate of growth in operating profit due to the higher finance expense, and return on capital employed was 55%, a decrease of 470 basis points, excluding the impact of acquisitions. This reduction was driven by our record capital investment and rebuilding of our inventory as global supply chain constraints eased. Moving to the sales bridge. Currency movements had a positive impact of £53 million on sales, or 4%, driven by a weakening of sterling, particularly against the US dollar. If February month end rates were maintained for the rest of 2023, we would expect to see a modest tailwind of between 1% and 2% for the full year. However, exchange rate movements are volatile and unpredictable, and the actual impact could be significantly different. Therefore, our guidance excludes any impact from currency movements. Acquisitions and disposals had a positive effect on sales of £22 million, or 2%. This includes the part-year contributions from Cotopaxi, Volcanic and Durex Industries, which were acquired at the end of January, September and November, respectively, net of the disposal of our Russian operations. Including the impact of acquisitions and disposals on a 12-month pro forma basis, group sales would have been almost 8% higher at over £1.7 billion. The group's organic growth of 14%, with double digit growth in all three of our businesses, was driven by higher volumes as we successfully navigated global supply chain disruptions and a weakening macro environment. Organic growth in steam specialty sales was 12%, with demand growth even higher, leading to an expansion in our order book. Growth was strong across all regions, supported by a higher proportion of larger orders compared to 2021, as customers' capital investments continued to recover from pandemic-driven reductions. ETS organic sales growth was 14%, led by increasing demand for decarbonization solutions in Chromalox and by the semiconductor and aerospace and defense sectors in Thermocoax. Organic sales growth in Volcanic and Durex industries was driven by the same trends. ETS's order book expanded, and we are continuing to work to increase capacity in our manufacturing plants to meet this strong customer demand. Organic growth in Watson Marlowe sales of 16% in 2022 followed the very strong performance of 32% in 2021 and 9% in 2020. Sales to the pharmaceutical and biotechnology customers grew close to 15% and sales to process industries customers grew at a higher rate of 19%. As expected, in the second half of the year, COVID-related demand began to normalize, leaving some customers with excess pump and consumables inventory, which they are working through, resulting in the rescheduling of deliveries into 2023. As a result, we saw a reduction in demand in 2022, although the order book remains above historical levels. The next bridge highlights the movements in adjusted operating profit for the full year. Currency movements had a positive impact of 13 million pounds or 4% as a result of both translational and transactional impacts. If February month end rates were maintained for the rest of 2023, we would expect to see a modest tailwind again of between 1% and 2% for the full year. Acquisitions and disposals had a positive effect on sales of 3 million pounds or 1% as the part year contributions from acquisitions were largely offset by the disposal of our high-margin Russian operations. The organic increase in group operating profit was 7%. Steam Specialties' profit grew 8% organically, below the growth in sales, reflecting our increased investments to support future growth, such as in sales-related headcount, new product development, and in our sustainability and digital initiatives. ETS profit increased 23% organically, driven by the strong performance of Chromalox with operational gearing benefits from the growth in volumes and improved pricing on new orders. During the year, the closure of Soissons also delivered a small benefit from overhead reductions in the fourth quarter. During 2022, both Chromalox and Thermocoax shipped a high proportion of orders, which were booked in 2021 or earlier, and therefore did not benefit from price increases to offset high inflation in material and freight costs. Thermocoax in particular was adversely impacted by its higher proportion of sales on medium term contracts and the costs associated with the ramp up of its manufacturing facility in France. Watson Marlowe's organic profit growth of 3% also reflects the full year impact of revenue investments made in 2021 as well as the costs of expanding manufacturing capacity during 2022 with our BioPure brand moving into a new facility in the UK and the ramp up of our new facility in the US. As Covid related demand slowed in the second half of the year lower volumes resulted in adverse operational gearing effects Steps were taken to appropriately right-size capacity and overhead support costs in the fourth quarter of 2022, with these actions continuing in early 2023, thereby protecting profitability. Nick will cover this further in his section. Central expenses, which remained at a broadly similar percentage of group sales, also reflected our increased revenue and sustainability investments. Moving to slide 10. As in previous years, we have set out our adjusted operating profit margin, excluding the acquisitions of Gestra and Chromalogs made in 2017, both of which had mid-teen margins. The two things to note from the chart on this slide are one, our group margin, excluding these acquisitions, has remained consistently above 25% since 2018. And two, the gap between the acquisition margins and the group margin has narrowed in the last two years, consistent with our target to achieve greater than 20% margins in both acquisitions. In fact, in 2022, Gestra achieved the highest margin in its 120-year history, exceeding the 20% threshold achieved in 2021. Consistent with our guidance, Our overall group adjusted operating profit margin in 2022 was 23.6%, which is similar to the highest margins in our history, excluding exceptional level in 2021. Compared to 2021, the group margin contracted by 160 basis points organically, reflecting the full year impact of revenue investments made in 2021 and continued revenue investments in 2022, partially offset by the benefits of operational gearing from higher sales. When presenting our 2021 results, we estimated the full year impact of the investments made during that year would have reduced the Group's 2021 margin of 25.3% by approximately 200 basis points. During 2022, across all three businesses, we experienced high inflation in raw material, energy, and freight costs. We continued to mitigate these impacts on our margins through our well-established proactive approach to price management and have already implemented further price increases in 2023. And finally, our acquisitions during 2022 delivered a 12-month pro forma operating profit margin similar to that of the overall group. Nick will talk more about the margin performance in each of our three businesses shortly. Turning now to cash flow. As planned, our operating profit to cash from operations ratio was 57% below historical levels due to increased capital expenditure and investment in working capital. 2022 was a year of record capital investment relating to the expansion of Watson Marlowe's manufacturing capacity, particularly the construction of a new facility in the US the largest project in our group's history and the completion of the BioPure facility in the UK. We also invested to advance the delivery of our sustainability and digital ambitions. Capital expenditure equated to 7% of sales in 2022, above our typical range of between 4% and 6%. Excluding our new construction projects, capital expenditure as a percentage of sales would have been at the low end of our typical range. As we complete our large construction projects and in line with our plans for an extension to Chromalox's facility in Ogden, USA, we anticipate that CAPEX in 2023 will be similar as a percentage of sales to 2022. We also anticipate that CAPEX in 2024 will remain above our typical range as we complete these projects. Adjusting for the full year effect of acquisitions and disposals, our ratio of working capital to sales was 22.8% compared to 21.3% in 2021 at constant currency. The increase in working capital was driven by a planned rebuilding of stock as global supply chain constraints eased, as well as growth in the business. Going forward, we anticipate maintaining a similar ratio of working capital to sales. Excluding our investment in the new construction projects and the increase in our inventory, cash conversion in 2022 would have been above the prior year level of 82% and in line with historical levels. In 2023, we anticipate that cash conversion will improve to over 70% despite the ongoing high level of capital investment. We ended the year with net debt of 690 million pounds, up from 131 million pounds at the end of last year. As a result of our acquisitions, our net debt equated to 1.5 times EBITDA, including the contribution from acquisitions on a 12 month pro forma basis. Slide 12 detailed our history of resilient compounding growth in both our earnings and dividend. Over the past 10 years, we have delivered a compound annual growth rate of 12% in earnings and 11% in our ordinary dividend, excluding special returns, while maintaining prudent levels of dividend cover of between 2 times and 2.5 times. And in total, we have a record of 55 years of dividend growth, during which time the compound annual growth has also been 11%. and which is testament to the resilience of our business model through multiple economic cycles. In respect of 2022, we are proposing a final dividend of 109.5 pence, reflecting our strong growth in the year. This brings the total dividend for the year to 152 pence, an increase of 12% and equates to prudent dividend cover of 2.5 times. Thank you. I will now hand you back to Nick to run through our view of industrial production and our business performance.

Thank you, Nimesh. So on slide 14, we once again share a graph of the annual growth rate by quarter of global industrial production, which we refer to as IP. The table in the graph shows the annual IP growth rates for the last three years. And as you all know, IP is the best predictor of our markets. The blue line on this graph represents Oxford economics forecast in July 2022, which we shared with you at the time of our interim results announcements last year. The red line represents their forecast in November of last year at the time of our trading update. while the green line is their latest forecast, published on the 23rd of February of this year. The three observations I wanted to highlight here for you today. First, expectations for global IP have weakened consistently over the past eight months, with the latest forecast now indicating 2.7% IP growth in 2022, falling to 0.7% growth in 2023. Second, global IP weakness accelerated in the fourth quarter of 2022 and is expected to continue softening in this first quarter of 2023. As global monetary policies aimed at containing strong inflationary pressures adversely impact demand of industrial goods and services. And third, the latest forecast indicates global IP recovery starting in the second quarter and accelerating as of the fourth quarter. of 2023, which suggests improved demand levels in 2024. Now, it's far too early to start making phone predictions about IP for 23 or for 24, as these forecasts could still change considerably. Nevertheless, our resilient business model, ability to self-generate sales, and significant proportion of demand from customers' OPEX budgets underpin our confidence in continued self-generated sales volume growth above global IP. On slide 15, we start the review of our operations with the steam specialties business. Organic sales increased 12% in 2022, driving 8% organic operating profit growth. This very strong performance combined strong volume growth ahead of IP, with proactive price management practices that offset significant cost inflation and protected margins. Demand growth exceeded sales growth across all divisions and expanded order books, with a higher proportion of larger CapEx-driven orders compared to 2021, as customer capital expenditure continued recovering from the pandemic-driven slowdowns. We achieved strong sales growth, across the key end-market sectors prioritized in our Customer First Squared strategy. Sales to the food and beverage and hospital sectors grew close to 11%, while sales to oil and gas and chemical sectors grew over 14%, and OEM sales grew 10%. In January 2022, STEAM Specialties completed acquisition of Cotopaxi. Cotopaxi's proprietary software platform, Strata, generates critical insights that are used to better understand industrial customers' management and use of water, air, gas, energy, and steam. Cotopaxi's experience with digital solutions for steam installations enhances our ability to connect to the customer's systems and analyze their data. generating further opportunities and solutions that support steam system uptime, reduce waste and increase efficiency for our customers. Steam specialties adjusted operating profit margin contracted by 90 basis points organically compared to the exceptionally high level of 2021, which reflects the full year impact of prior year revenue investments and further investments during 2022, partially offset by the benefits of operational gearing from higher sales. Excluding any impact from currency movements, we anticipate mid to high single-digit growth over 22 performer sales, driven by volume growth above IP and proactive price management practice that will continue to offset inflation and protect margins. We also anticipate a more typical drop-through from increased sales suggested operating profit of close to 35%, leading to further improvement in our adjusted operating profit margin for this business. Moving now to the electric thermal solutions business, or ETS as we call it for short. ETS has experienced strong growth in 2022 with sales up 14% on an organic basis and operating profit organic operating profit up 23%. Overall demand was even stronger, leading to a record order book for the second consecutive year. Thermocoax sales expanded 17%, driven by growth of the semiconductor and aerospace and defense sectors. Thermocoax's operating margin declined in 2022 due to its high proportion of sales with longer delivery times that faced higher material cost inflation than anticipated at the time that those orders were secured, as well as the impact of one-off costs associated with the ramp-up of our new manufacturing facility in Normandy, France. Chromalox revenues grew 13%, driven by volume growth well above IP and price increases that offset cost inflation and protected margins. Chromalox experienced increasing demand from decarbonization solutions which are mostly manufactured at our Ogden facility in Utah, USA, and are helping drive order book growth. Chromalock's operating profit margin increased strongly in 2022, driven by operational gearing from sales growth above IP, as well as underlying performance improvements. Now, significant milestones of 2022 include the acquisition of Vulcanique and Durex industries that significantly expand and enhance the ETS business, as well as the managed closure of the Chromalox loss-making manufacturing facility in Soissons-France that will improve operating margins from 2023 onwards. I'll return to the strategic benefits of the ETS acquisitions on my next slide. During 2022, we stepped up our investments to improve our sustainability performance and the development and launch of innovative new products, including the Target Zero solutions that help customers decarbonize their industrial processes and was co-developed with team specialties. We also invested in further operational improvements to improve manufacturing capacity in Ogden, where we're planning a major facility expansion to support long-term growth of Chromalox's patented medium voltage technologies that enable many of these decarbonization solutions. ETS's adjusted operating profit margin was up 240 basis points to 13.6%. And on an organic basis, the operating margin improved 100 basis points driven by operational gearing from sales volume above IP, the price management practices that offset inflation on the new orders that were shipped last year, and the small benefit from the overhead reduction in the fourth quarter resulting from the closure of Sasson facility. The balance of the operating margin growth came from the fourth quarter contribution of the Vulcanique and Duix Industries acquisitions that combined have a margin similar to the overall group margin. So actually, excluding any impacts from currency movements for 2023, we anticipate mid to high single digit growth over ETS22 pro forma sales, with an adjusted operating profit margin slightly below 18%. Now on slide 17, we highlight the important strategic fit that VOOC and EconDurex industries bring to the ETS business and to our group. These two strategic acquisitions expand ETS' 2022 pro forma sales by over 70%, growing group revenues by 10%, and adding 11 manufacturing facilities and over 1,100 new colleagues. including any direct sales and design engineering resources. The ETS business now accounts for 22% of group revenues on a performer basis. Who can you can do industries also increase the 2022 ETS addressable margin market by over 5% to 3.9 billion pounds through the new products, technologies and capabilities that these companies bring to our group. More importantly, ETS' 2022 pro forma market share expands from 6% to 10% and enhances the opportunities for new revenue synergies by leveraging products and customer contacts across complementary brands and geographies. Another strategic benefit is the improved geographic balance. with the regional split of 56% Americas, 32% EMEA, 12% Asia-Pacific, better aligned with esteemed specialties Watson-Marlow and Group Geographic Balance. This improved platform for continued growth also strengthens ETF's presence in faster-growing end markets, such as food and beverage, equipment manufacturers, and semiconductor wafer fabrication centers. while broadening support for the strong drive towards decarbonization of industrial processes. ETS is implementing a dual brand strategy modeled on the highly successful approach of steam specialties that aligns the Sparex Sacro and the Gesra brands with specific growth sectors. And I'll expand further on the ETS strategic approach to the markets on the next slide. So here on slide 18, we share today some key tenets of the ETS strategy, which internally is branded Engineering Premium Solutions or EPS for short. As you already know, all three group businesses operate a common strategic framework based on direct sales of engineered solutions for mission critical applications with priority focus on faster growing end market sectors that we refer to as sectorization. Now, other than the traditional geographic segmentation, we view ETS's 3.9 billion addressable market along three key dimensions. End markets, product categories, customer applications. This slide focuses on the intersection between end market sectors and the customer application views. The EPS strategy prioritizes focus on four fast-growing end-market sectors, energy transition, materials, advanced technologies, and health and nutrition, as well as the 10 subsectors within them. Now, against that backdrop, Cromlox and Vulcanique operate in the same market space of electric heating solutions for critical applications of industrial processes, including the decarbonization of those processes, with Chromalox being the lead brand for those markets in the Americas and Vulcanique the lead brand in EMEA. The Chromalox and Vulcanique priority subsectors include renewable power generation sectors such as solar, food and beverage, and engineered chemicals. Now, you'll note that inside of that addressable market, there's also some, what we call the other non-priority market sectors, right? Which actually today account for close to 30% of ETS's pro forma sales. And will continue to be serviced by Chromalox and Vulcanique, although with a slightly lower priority, level of priority than the faster growing priority sectors. Georex indices and Thermocoax, operate in the same space of electric heating solutions for ultra-critical applications of industrial equipment, with Eurex Industries, the lead brand for those markets in the Americas, and Thermocoax, the lead brand in EMEA. So, Eurex Industries and Thermocoax's priority subsectors include nuclear power generation, semiconductor wafer fabrication, and the pharmaceutical and biotechnology sectors. Okay, so now moving to Watson Marlowe. Watson Marlowe achieved a strong 16% organic sales growth in 2022, an excellent performance, given its exceptionally strong 32% organic sales growth in 2021. Operating profit grew 7% in 2022. Pharmaceutical and biotechnology sector sales grew close to 15% in 2022. Untypically, over 50% of sales occurred in the first half, as COVID vaccine-related extraordinary demand began normalizing during the second half, with customers postponing new orders and rescheduling delivery dates of orders already placed. Now, the process and industry sector grew 19%, reflecting strong volume growth above IP plus price increases that offset inflation and protect the markets. This volume growth was supported by programs to accelerate demand in those specific market sectors, such as food and beverage and water waste water, and was also supported by new product introductions. In order to support strong sales growth, we deployed record capital investments to significantly expand our global manufacturing capacity. We opened new state-of-the-art facilities for BioPure in Portsmouth and for What's the Mile of Pumps and Tubing in Devons, USA. The adjusted operating profit margin declined 390 basis points to 32.8% as a result of the full-year impact of the 2021 revenue investments, costs associated with the transition to BioPure's new facility, and the ramp-up of costs at our new facility in Devons. Massachusetts, and all of these had a combined adverse impact of over 350 base response. So we anticipate biopharm demand normalization to continue in the first half of this year as customers reduce their existing stocks of some of our products. However, continued strong underlying demand for cell and gene therapy applications combined with our customers' ability to repurpose our products to the production of other drugs, underpin our confidence that biopharm demand will return to growth in the second half of this year. Although, of course, the precise timing and scale of the recovery remains difficult to call. But definitely in the second half we should see that recovery. During the fourth quarter of 2022 and the first months of this year, Watson Marlowe took some steps to appropriately right-size manufacturing capacity and reduce overhead support costs in order to offset the adverse impact of those lower sales volumes on the adjusted operating profit margins. Therefore, excluding any impact from currency movements, we anticipate overall Watson Marlowe sales in 2023 to be slightly below 2022, with over 55% of the four-year sales occurring in the latter half of the year. We also anticipate the full year adjusted operating profit margin in 2023 to remain at a similar level to 2022, with close to 65% of full year operating profit occurring in the latter half of the year. Moving now to slide 20, we have again added three customer case studies that help illustrate how our three businesses support our customers to improve their performance, help them achieve their sustainability targets by reducing energy expenditure and waste, as well as contributing to a more efficient, safer and sustainable world. We're also adding, for the first time, two wider stakeholder slides to share greater insights of our engagement with colleagues, communities and the environment. These stakeholder case studies are in Appendix 1 of this presentation, and I would strongly encourage you to read more about them at a later moment. So with that, we now move to the summary and outlook on slide 21. We have delivered a strong performance across the group, despite the weakening geopolitical and macroeconomic backdrop, with 14% organic sales growth and 7% adjusted operating profit growth. on an organic basis. Continued volume growth ahead of IP plus price increases that offset inflationary impacts on our costs and protected our margins are a testament to the strength of our business model and of our strategic execution. We remain committed to maintain strong capital and revenue investments in order to continue strengthening our group, improve our sustainability performance, increase inclusivity and underpin long-term sustainable growth. So in 2022, we also completed three strategic acquisitions that strengthen and enhance our ETS business as well as a digital agenda. So assuming no material deterioration in global IP forecasts and excluding any impact from currency movements, For 2023, we currently anticipate mid-single-digit sales growth over our 22-group performer sales. We therefore look forward to another year of overall double-digit sales growth, with a small progression of the adjusted operating profit margin and cash conversion above 70%, as we maintain higher capital investment levels to continue supporting long-term