CT Automotive Group plc (CTA) Earnings Call Transcript & Summary

Good morning, and welcome to the CT Automotive Group Plc Full Year Results Investor Presentation. [Operator Instructions] Before we begin, we'd like to submit the following poll. I would now like to hand over to the CT Automotive team.

Thanks for the introduction. Hi, I'm Simon Phillips, and I'm joined by Salman Mohammed and together, we'll be presenting the FY '24 earnings update for CT Automotive. Thank you for joining us. For those new to CT Automotive, we specialize in interior trim components for the global automotive industry. We focus on kinematic components, fascia finishes, general wrapped panels, in-car lighting and electronic actuation. By kinematic parts, we mean components that move within the car, such as air registers, armrests and deployable cup holders. This is a niche segment with high barriers to entry. Once our products are integrated into a vehicle, they generate stable long-term revenue, typically around 6 years of production. What differentiates CT Automotive is our deep vertical integration and technology-led cost structure. We manage everything in-house from design and tooling to injection molding, subassembly, wrapping, painting and final assembly. This vertical model drives down cost, increases speed and gives us full control over quality. We also operate in some of the lowest cost regions globally, including our administrative center in India. By combining vertical integration with digitization, automation and AI, we offer engineering and production at costs significantly below industry averages, enabling us to win business on both price and performance. Our customers include some of the most iconic automotive brands in the world. We supply to volume manufacturers such as Volkswagen, Renault Nissan, Škoda, GM, Ford and Fiat. We're also working with some of the most exciting new EV companies, including Rivian, Togg and VinFast. In the premium segment, our products are found in vehicles from Bentley, Lamborghini, Lotus and Audi. CT Automotive supports a broad spectrum of OEMs from high-volume platforms to luxury and next-generation EVs across every major global region. I'll now pass over to Sal to take you through the financial highlights.

Thanks, Simon. Let's begin with the financial highlights for FY '24. Revenue declined by 16% to $119.7 million, reflecting a broader industry adjustment as OEMs aligned production with softer consumer demand. But the real story is margin. Gross profit margin increased by 600 basis points to 28%, driven by cost efficiencies, automation and the integration of AI across our operations. Adjusted EBITDA remained resilient at $16.3 million, up $0.2 million year-on-year, while adjusted profit before tax rose 5% to $8.7 million. We also strengthened the balance sheet. Trade payables were reduced by $5 million, and borrowings came down by $3.3 million, delivering lower interest costs and improved flexibility. At the same time, we invested $3.2 million in CapEx focused on automation and core capacity enhancements. Net debt ended at $6.2 million, a level that reflects disciplined cash management alongside investment for future growth.

Operationally, FY '24 was a transformative year. We secured 8 new contracts with a combined annualized value of $38 million. Of that, $18 million came from replacement programs for existing models and $20 million from entirely new vehicle platforms we've never been on before. This represents not just retention but real platform expansion and market share gain. We also quadrupled the size of our global sales team. We now have targeted sales resources in place across Europe, Turkey, Japan, North America, South America and China, ensuring direct access to key OEM and Tier 1 decision makers across all major regions. At the same time, we leverage digitization, AI and automation to drive material efficiency gains, both in cost of sales and in fixed overheads. Being early adopters of these technologies allowed us to expand gross margin and sustain profitability even as volumes softened. These combined actions have strengthened our commercial platform and positioned us well for continued growth. While the market continues to evolve, these macro shifts are working in our favor. The shift to electric vehicles has no material impact on our strategy. We are drivetrain-agnostic with the same product relevance across ICE, hybrid and EV platforms. What does matter is the rise of new Chinese OEMs. They're putting real cost pressure on legacy automakers, and that plays directly to CT Automotive's strengths. Our technology-led low-cost production model is exactly what traditional OEMs are now seeking to stay competitive. Tariff uncertainty is another factor, and it favors companies with manufacturing flexibility with plants in China, Turkey and Mexico. We can shift production rapidly to manage risk, optimize landed cost and maintain customer continuity. Our positioning, our structure and our model are built for this environment, and we're leaning into it. Technology is central to how we operate. We are integrating AI across every aspect of our business from production planning to HR, delivering both cost savings and agility. Our commercial strategies are now supported by AI-driven processes, allowing faster responses to market and customer demands. We've embraced automation not just to reduce cost, but to elevate quality and improve speed. Innovations such as multilingual avatar videos, AI-based vision systems for quality control and AI-powered planning are already generating measurable ROI. Let's take a closer look at how AI is driving results. Previously, production planning required [ 6 ] staff across our factories. Today, it is fully automated. AI now optimizes materials, tools and machine allocations, improving consistency and significantly reducing changeover times. In China alone, this system has reduced direct labor by 35% and saved over $1 million in 2024. We are replicating this model. Feasibility studies are underway in Turkey and Mexico. These initiatives are laying the foundation for a new era of scalable, high-efficiency manufacturing at CT Automotive.

Despite a challenging backdrop, our income statement reflects a business that continues to perform. Revenue declined to $119.7 million driven by lower production volumes as OEMs adjusted post COVID inventory levels. However, we maintained strict cost discipline and margin management was our top operational priority. Adjusted EBITDA came in at $16.3 million, up $0.2 million versus the prior year, demonstrating the resilience of our cost base. Adjusted profit before tax increased by 5% to $8.7 million. This was driven by strong margin improvement and lower interest costs as we reduced borrowings by $3.3 million. The result highlights the effectiveness of our operational strategy and financial discipline. We ended the year with a stronger balance sheet. Net asset value increased by $9.3 million, driven by prudent working capital management and a reduction in trade payables. Trade receivables were temporarily down in Q4 as the market softened but returned to expected levels in Q1 2025. Borrowings decreased by $3.3 million, which helped reduce our interest costs. We continue to manage our debt facilities conservatively, reinvesting where it matters most, automation, capacity and long-term growth. Tooling revenue grew from $10.9 million to $12 million, a 9% increase, demonstrating continued customer investment in future model development. The $24.4 million year-on-year production revenue decline primarily reflects a resetting of demand post COVID. In 2023, we benefited from elevated volumes as OEMs worked through production backlogs. In 2024, those volumes normalized across the industry. We had 41 recurring programs continue, 12 programs end and 10 new ones begin, a healthy transition that reflects program life cycle timing. Regionally, Turkey was up by $0.9 million, reflecting full capacity and consistent output. Mexico declined by $0.9 million due to overstocking in the U.S. and a softer macroeconomic environment. China volumes also came down in line with broader market adjustments. While we do not expect production volumes to return to FY '23 levels, we are forecasting mid-single-digit revenue growth from this recalibrated base, supported by new program launches and growing customer engagement. Gross margin improved significantly, up from 21.6% to 27.6%, a gain of 600 basis points. This was driven by a combination of strategic operational improvements and disciplined cost control. Key contributors included the ramp-up of robotics and automation in the second half of the year, quality enhancements across our sites and the relocation of key production programs to our lower-cost facility in Ganzhou, China. The fixed cost nature of semi-direct labor had a slight negative impact due to reduced volumes, but this was more than offset by structural efficiency gains. Tooling margins also returned to a more typical 30% following an unusually high margin project in the prior year. In addition, we made real progress on localizing supply chains and improving commercial terms, both of which contributed to this strong margin performance. Overall, the 600 basis point improvement reflects the success of our cost reduction strategy and the scalability of our operating model. Our adjusted EBITDA performance reflects strong cost management and a proactive approach to operational efficiency. We delivered $8.2 million in savings across materials, labor and quality, underpinned by automation, tighter process control and disciplined execution. These gains largely offset the $6.7 million margin impact from lower volumes. We also made structural reductions in headcount at both the group and plant levels to align with market conditions. Administrative costs were reduced by $1.2 million, driven by a more efficient group structure. We increased our use of the India admin office, internalized several previously outsourced consultancy functions and embedded more automation and AI across back office processes. These changes have structurally lowered our overheads while enhancing control, scalability and responsiveness. On the FX side, we experienced a $1.5 million swing year-on-year, moving from a $0.9 million gain in FY '23 to a $0.6 million cash loss in FY '24, primarily from operational trading and hedging activities. In addition, there was a $1.2 million noncash translation loss on intercompany balances, which is excluded from adjusted EBITDA. Tooling EBITDA was also down, not only due to the absence of a high-margin project in FY '23, but because we adopted a more aggressive pricing approach to secure long-term production revenues into 2025 and 2026. Despite revenue pressure and FX headwinds, we delivered $16.3 million in adjusted EBITDA, a strong result that reflects our operational discipline and strategic focus. We continue to manage our balance sheet prudently during the year. Net debt increased from $3.8 million to $6.2 million, reflecting a combination of strategic investment, working capital movements and one-off timing items. We generated $6.9 million in cash from operations, which was used to fund $3.2 million in CapEx focused on automation and capacity enhancement and $4.4 million in lease and interest payments. There was a $5 million reduction in accounts payable in China, reflecting disciplined supplier settlement and improved terms, but it also had a temporary cash impact. We also supported a $1.6 million increase in inventory to mitigate ongoing supply chain risk and ensure continuity for key programs. Additionally, we had a $1.7 million payroll liability in China accrued in December but paid in early January. Had that landed within the FY '23 reporting window, net debt would have remained broadly flat year-on-year. Overall, we remain in a strong liquidity position with leverage well within our comfort zone underpinned by operational discipline and stable cash generation.

We remain committed to delivering growth responsibly. Our ESG strategy is built on 3 pillars: reducing our environmental impact, supporting our people and communities and ensuring strong governance. In 2024, we received the EcoVadis Silver Award, placing us in the top 15% of companies assessed. We increased our investment in carbon offset by 20% through the Turkey hydroelectric project and launched our ESG Committee to drive internal accountability. Looking ahead, we will invest further in clean energy, maintain [ SEC ] compliance and continue embedding sustainability across operations. In China, we delivered a stable operational performance despite a softer demand environment. We've taken decisive steps to improve efficiency by consolidating production into our lower-cost site in Ganzhou, where automation levels are higher and labor costs are lower. This shift has significantly enhanced our competitiveness and overall margin contribution from the region. We also upgraded tooling capacity at our Shenzhen facility, reducing our reliance on third-party tooling suppliers and giving us greater control over quality, lead time and cost in response to trade and geopolitical risk. We are transferring the majority of Chinese manufactured product to our other facilities throughout the year to mitigate potential tariff exposure. This is a clear demonstration of our global agility and our ability to derisk customer supply chains. Strategically, China is more than just a manufacturing base. It is the platform we are evolving as a blueprint for the group. Our most advanced digitization, automation and AI implementations are happening here, and we are now using China as the reference model to replicate in Turkey and Mexico. This ensures we can scale best practices across our global footprint and consistently deliver low-cost, high-efficiency operations to our customers. Our Turkey site continues to perform well, operating at full capacity despite ongoing inflation and currency volatility. We are protected by a monthly cost escalation mechanism, and we're actively looking to expand capacity and long-term viability. In Mexico, we've secured contracts worth $20 million annually and expect volumes to ramp up further through 2025. OEMs have not changed their localization strategies despite recent political shifts in the U.S. and our footprint in Puebla puts us in a strong position to capture future growth. Looking ahead to FY '25, we remain cautiously optimistic despite continued macroeconomic uncertainty. We do not expect volumes to return to FY '23 levels. However, the business has now reset and is well positioned to grow from this new base. With several new programs launching, a significantly strengthened sales function and our continued push on margin-enhancing initiatives, we are targeting mid-single-digit revenue growth alongside further gross margin improvement. Our cost base is lean. Our global footprint is flexible, and our digital transformation is unlocking long-term structural advantages. We've shown that we can execute in difficult conditions, and we now have the platform, people and technology in place to scale profitably. CT Automotive is entering FY '25 with stronger foundations, a clear strategic direction and growing customer momentum. Thank you for watching this presentation today. Sal and I will now take any questions that you have.

[Operator Instructions] As you can see, we've had a number of questions, both pre-submitted and throughout today's presentation, and thank you to all the investors for submitting those. If I may, just ask you to click on that Q&A tab where appropriate to do so, just read out the question, give your response, and I'll pick up from you at the end.

Thank you, everyone. So I'll start the question from the top. Will you be considering buybacks given the current share price?

It's not really something that the company is considering at this point in time. I mean, if anything, we're looking to improve liquidity in the market rather than restrict liquidity. So I think that's definitely not what we're considering right now.

All right. What is management Board stock ownership like? Will you be buying more given the weak share price?

I'd say the Board collectively at the moment holds [ some 27% ] of shares and the majority of those are held by myself. Nick Timberlake, one of our NEDs has recently purchased more shares. I think there is a general view from the Board that given the share price, they want to buy more. Personally for me, for sure, I -- if I had the opportunity, I would be buying more. But due to the size of my shareholding at the moment, I'm kind of constrained by regulatory fee constraints.

Okay. Moving on to the next one. Could you talk about the barriers of entry into the industry?

Sure. So actually get into this industry sector, it's very difficult. I mean, normally, it starts with like 2 years for what I would say is pretty rigorous audit. So if something like Ford, for example, wanted to come to our company and we wanted to onboard them, it would normally start for at least 2 years of like heavy audit, cost analysis reviews, checking whether we're the right kind of supplier. And then eventually, really, when you get past those 2 years, which in itself is difficult enough to achieve. You then have to prove that you have the design capability to produce products. So we have multiple products in our range, as we discussed in our presentation. But if I gave you sort of one example of that, like air registers in the car, in order to design that, you need to do really heavy computer fluid dynamic modeling to ensure that the air hits strike points on people that the volumetric airflow that goes into the cabin can withstand temperatures from high temperatures to low temperatures. You then have to do stress analysis modeling for head-impact crash, et cetera. [indiscernible] for the field, just the actual harmony of the field of air registers in the car have to be in plus or minus 0.5 newtons, so that people can't notice the difference in the field across a range of air registers across the car. Then you have to go into a range of like testing, vibration testing, endurance testing, high temperature testing, low temperature testing, finally, going into like full head-impact tests on cars to ensure that the products don't disintegrate with high energy impacts. So this is really the reason why in the type of product ranges that we do, kinematic products that go inside cars, there really isn't many players because they're very design intensive. And then they even pass the design intensive side, then there's like -- Elon Musk says, I mean, you can make one part, but then you've got to put into mass production scale, build hundreds of thousands of them, they have to be consistent, high quality and not fail in the field. So for that reason there, automakers think the barriers to entry are extremely high, and there's not many companies like us that do the product range that we do.

How do you plan to grow market share from here? And what makes you different from our competitors?

So in terms of market share growth, I mean, I think what's really important for people to understand, particularly new investors coming on at the moment, is that we are a gross stock. That's exactly what we've always been. I mean, prior to COVID and IPO, we had sort of 20% CAGR growth rate. We've got 3% of the market share. That gives you an idea of the scale and the size of the auto industry. So the question for us now is how do we grow market share? Well, one thing that we do know is that because we're so technologically led in terms of automation, AI, the digitization which we've done. What that's allowed us to do, combined with our global sort of locations in the world is to be the most competitive supplier out there. So we've got really good prices. We've got great products, and our customers really like us. But what we now need to do is we need to leverage our product range because we do such a high content for interiors on cars, things like vents, armrest, deployable cup holders, wrapped panels, in-car lighting, electronic actuation. And although we're on quite a few platforms, on some of those platforms, we are not doing our full product portfolio content. So what our intention is with our new sales team that we've now ramped by another -- by 400% is to actually target the OEMs and the Tier 1s and to cross-sell our entire product range as well as starting to break into new markets with new OEMs. So when you look at the size of the market, the addressable market, the percentage that we've got -- the percentage that we currently have, and you also take into consideration what we've done now to be sort of -- in terms of automation and robotics to be a market leader. I think we are really well positioned to get back on to our normal [ growth trajectory ].

There's one question, I'll come back to that at the end. Is it possible for all goods which are ordered from the U.S. to be supplied by your non-Chinese factories so that any future Chinese tariffs can be sidestepped? And also, how reliant is the company on exports to the U.S. in financial terms?

So I mean, going backwards from your question there. First of all, like I think we're roughly about 22% exposed to the U.S. marketplace. Our facilities in Mexico has more than enough capacity and space to fulfill that requirement and actually grow substantially. So if you look at what we're doing in Mexico at the moment, that facility is running about $12 million. Our run rate come the end of '25 is going to be closer to about $35 million. And then as we launch more programs in '26, that will be up to sort of $45 million. So right now, no problem at all. The Mexico facility can completely negate the tariff issue in China, which it has done in main. We've got a few programs that we're still shifting over from China to Mexico, which will probably be concluded by the end of the year.

The largest OEMs have increasingly wanted to award whole interior system programs for high-volume models. Does that relegate CT to always being a Tier 2 supplier given the lack of scale?

That's an interesting question there from someone. And the way I would answer it is this, is that given the high technical products that we produce and the fact that there's not many companies that do it, what tends to happen with the OEMs is that they communicate directly with us throughout the whole of the development phase, and they go to the large Tier 1s, and they direct the large Tier 1s to us. We work with the Tier 1s and the OEMs throughout the whole of the development phase and the initial production start-up. And then afterwards, we [ come part ] of the supply chain to the Tier 1s. So the simple answer is that we -- yes, we will probably be Tier 2 in many cases, but we are directed by the OEMs to the Tier 1s.

I'll take the next one. I note that working capital was impacted by $13.2 million due to actions to address overdue vendor payments. Are there any similar legacy issues, which will still require action? And what is your DPO at the current time? So yes, during the year, in China, we paid back $5 million of overdue AP. The remainder of the movement was really in relation to deferred revenue on tooling and the timing of new invoices being raised. In terms of -- in 2025, we're looking to repay back further $3 million, and then that will sort of bring it all up to date. So we're on plan to do that. In relation to our DPO days, we're at an average of round about 50 days as we have 60-day terms with our key raw material suppliers, which we have been negotiating with them since last year, and we've got those in place as well. The next one -- question is, was the presentation, AI generated?

Yes, interesting. I mean I hope you guys -- so we're interested in it is, yes, AI generated to AI avatars. I think Sal and I are sitting here at the moment, hoping that we're living up to your expectation, having seen these AI avatars. But yes, it is -- I mean, what's clear, I think, throughout the company is that we're very technology-driven. We're very into AI, and we're using every opportunity we can, not only for our whole manufacturing base to apply AI, but also in ways to communicate with investors and to put our story over very clearly and well defined so that you have the maximum standing of what we're trying to achieve.

Did I hear correctly that you are moving all manufacturing out of China or just some?

No, that's not correct. We have got various manufacturing plants around the world. China continues to be an incredibly efficient place to be set up in low cost, high technology. I mean, in some ways, the thing that's driving the whole technology side of our business is China. I mean we're fortunate enough to have our technology center in Shenzhen, which is probably the most technologically advanced place in the world at the moment with regards, robotization and digitization and to be able to deliver that sort of level of technology with incredible ROI returns of anywhere between 6 months and 12 years. So we absolutely are not looking to move out of China. Manufacturing there still makes a lot of sense as long as you're not tariffed, but certainly from a design, development, engineering center, which is led out of Shenzhen for us, it's -- I can't think of a better part of the world to be in.

The U.K. automotive industry is focused in the Midlands. What challenges or benefits do you derive from being located in a region without any automotive history?

I'm not clear about that question, Sal. Without any automotive history?

Automotive history. So we're based -- we have a distribution center based out in Sunderland. And all the U.K. customers are serviced from there. So we sell intercompany from China across to the U.K. distribution centers. So I hope that answers the question, Mark. How much of your current turnover is supplied from China to the U.S. market, so impacted by higher tariffs? And how much will be moved in the next quarter or 2? I think we've already answered that, but we can probably summarize that, that it's a [indiscernible].

Something that's worth sort of saying [indiscernible] turnover left in China, I think we saw it to be about 8%. But it's definitely creating -- these tariffs for us are creating like incredible opportunities because what we're seeing in terms of sales growth is customers that still have work in China that want to move work out of China due to these high tariffs. We have our Mexico facility, which is a great answer for them. Other competitors of ours don't have this global footprint. And as a result of that, some of our most recent work we've won has been totally tariff related. And some of the work that we're working on right now is emergency transfer works for customers is future great business opportunities for us, and it's all driven by tariffs.

Good question. Next one from Omkar. How about thinking to enter the Chinese OEM and what challenges do you see working with them?

Sure. So of course, the Chinese OEMs are aggressive. They're growing at an incredible market pace at the moment, particularly in China, and they're starting to get out into Southeast Asia, in particular, gaining a little bit of traction in Europe, not no traction for obvious reasons in the U.S. But we have a sales team that's focused in China at the moment, we're starting to do RFQs and design and -- early design and development work for a few different OEMs. We're just being a little bit cautious at the moment because of, let's say, many supply chains within China being quite stressed, mainly down to what I would call razor-thin margins, long payment terms. And we're just wanting to see how that settles out before we get in too deeply into it. Also, I think what's worth bearing in mind is its quite common knowledge sort of people are talking about that there's 420 EV companies in China at the moment. And there's an expectation that, that will be rationalized down to something like 6 to 7 EV companies in the next 3 years. So you have to be incredibly careful about which EV company you want to work with and that we're backing the right horse. So we're breaking into that marketplace, but we're being very careful about who we work with.

Next question from Julian. How do you see the outlook for operating cash flow, working capital and CapEx in 2025? I'll take this one, Simon. So in terms of -- we're expecting our working capital to worsen a little bit. So we're kind of looking at for it to go down by approximately between $4.5 million and $5 million, and the cash generated from operations will be in the region of $14.5 million to $15 million for 2025. Next question from Mark. CT would be a minor acquisition for a Tier 1. How could you defend against any opportunistic bids?

I think it comes down to -- first, you need more than 75% in order to -- Board approval and shareholder approval to try and do, let's say, an aggressive takeover of CT. And what I would say when you talk to our institutional investors at this point in time as well as the Board is we kind of recognize that CT is undervalued, I think that's fair to say. And it also has such good growth rate opportunity going forward. So I would say we've got a very supportive institutional shareholder group that sees the potential in CT and want CT to become what it's capable of being.

Question from Wayne. What level of production slowdown have you seen in customer production plans in the first half of 2025 and going forward?

At this point in time, we have not seen a slowdown. When we talk about sort of revenue drop between '24 and '23, the reason why revenue was up in '23 was like the post-COVID type situation, everybody was waiting on cars because supply chains have caused so many problems. And once they sold that post-COVID demand, I would say, automotive volumes have leveled back to normal. So at this point in time, we're tracking to sales as expected this year, and we're not really seeing reduced volumes. We have -- being completely straight, we have our concerns about tariffs in America and whether that might have an impact on demand on the U.S. side if the price goes up on consumer demand, but we're yet to see how that will work out.

A question from Luis again. Again, could you discuss your competitive landscape?

Sure. So most of our competitors are in sort of high-cost regions of the world, like we've got big competitors in Germany. We've got competitors in America. We've got competitors in Japan. I think what gives CT like a really great -- really what allows our growth and what's making us win so much new business is that we're obviously set up in low-cost regions of the world, but that is not the driver. We're not selling a company here that just works on low-cost labor rates, but why the business is so competitive is because of the levels of automation that we apply. I think that unlike most of our competitors, and we know our competitors really well. And as I was saying earlier, I mean, the fact that we're based out of Shenzhen, which is the technology center of the world, we're able to adopt and use this levels of automation faster and at lower cost than our competitors. So I would say we're in a very strong position, and I think our growth in sales shows that.

Next question from James. Would you plan to introduce a dividend in the near future, even if only symbolic in order to attract investors that require a distribution to be made in order to invest?

James, I really hope so as a significant shareholder in the business. At some point in time, when we're generating a lot more free cash, for sure, that's exactly what I would like us to do. I mean the difficulty we've got at the moment, James, is that there's so much opportunity for us right now. And so we're spending a lot of money in CapEx to plan for future growth, particularly into '26. And whilst there is so much opportunities being thrown at us, we will deploy the money in the best way for the shareholders. But I can tell you this that as a major shareholder, I would like a dividend and a dividend policy. But if we see a situation where we can significantly increase our growth and profitability, then it kind of -- we put that in front of dividends.

Yes. And just to add to that, it is a topic that is discussed in the Board meetings as well. I think the next question from Omkar that also covers one of the pre-submitted ones. How do you foster a culture of innovation within the company? And what strategy do you use to encourage employee creativity?

So I mean, just to give you a bit of an idea, firstly, the company is totally driven by constant improvement. And there's many companies that talk about that, but don't really do it. I would say that I'm on Teams meetings constantly and those Teams meetings broken down into production areas, automation areas, digitization areas across the team. And we look constantly to improve process, to come up with new innovations for our automation team within CT, which is -- that automation team is our own designs as well. This isn't external. We design and make this bespoke equipment ourselves. And we always talk in financial terms, how much are we reducing our cost by, what's our ROI on what we're doing. And it's embedded in the actual culture of the company. And that's really what's driven a lot of that improvement in gross profit margin that you're seeing.

The last question from Wayne. We've already answered the dividend one. But last not least. Tim, I think it's more of a comment, you are more handsome in person. Tim, I wish you've been a bit more specific who you're referring to, but we'll take it for both of us. Thank you very much.

On that note, guys, look, thank you very much indeed. You've covered off all the questions sent through from investors. Thank you to everyone for sending those through. Any further questions, of course, you'll be able to review those and publish responses where appropriate to do so on the Investor Meet Company platform. Just before redirecting investors to provide you with their feedback, particularly important to you and the team, Simon, if I could just ask you for a few closing comments, please.

Sure. So I mean, first of all, platforms like this, I think, is a great opportunity for us to get our story out because I think this is a great business. It's a great story. We've got good growth opportunity ahead of us. I think the main issue that we have is most people don't know who we are. And I think that's one of our core sort of drives this year with the introduction of our own IR department within the company to actually start making investors aware of the CT story, what we're about and getting our name out there. Other than that, really, I think, just to say thanks to everybody for taking the time to listening. I hope that you're pleased with our results because it's a lot of hard work by the team, and I think it was a tough year, but we proved that even in a tough environment, we can still turn out the profitability that the company needs to have. So thanks again for everybody for tuning into this. And I hope you got a [indiscernible] CT now.

Thank you very much, everyone. Appreciate it. Thank you.

Fantastic. Simon and Sal, thanks indeed for updating investors today. Could I please ask investors not to close the session, it will be automatically redirected to provide your feedback in order the team can better understand your views and expectations. It'll only take a few moments to complete and it's greatly valued by the company. On behalf of the management team of CT Automotive Group plc, we'd would like to thank you for attending today's presentation. That concludes today's session, and good morning to you all.

Thank you.

Thank you.

Good morning, and welcome to the CT Automotive Group Plc Full Year Results Investor Presentation. [Operator Instructions] Before we begin, we'd like to submit the following poll. I would now like to hand over to the CT Automotive team.

Thanks for the introduction. Hi, I'm Simon Phillips, and I'm joined by Salman Mohammed and together, we'll be presenting the FY '24 earnings update for CT Automotive. Thank you for joining us. For those new to CT Automotive, we specialize in interior trim components for the global automotive industry. We focus on kinematic components, fascia finishes, general wrapped panels, in-car lighting and electronic actuation. By kinematic parts, we mean components that move within the car, such as air registers, armrests and deployable cup holders. This is a niche segment with high barriers to entry. Once our products are integrated into a vehicle, they generate stable long-term revenue, typically around 6 years of production. What differentiates CT Automotive is our deep vertical integration and technology-led cost structure. We manage everything in-house from design and tooling to injection molding, subassembly, wrapping, painting and final assembly. This vertical model drives down cost, increases speed and gives us full control over quality. We also operate in some of the lowest cost regions globally, including our administrative center in India. By combining vertical integration with digitization, automation and AI, we offer engineering and production at costs significantly below industry averages, enabling us to win business on both price and performance. Our customers include some of the most iconic automotive brands in the world. We supply to volume manufacturers such as Volkswagen, Renault Nissan, Škoda, GM, Ford and Fiat. We're also working with some of the most exciting new EV companies, including Rivian, Togg and VinFast. In the premium segment, our products are found in vehicles from Bentley, Lamborghini, Lotus and Audi. CT Automotive supports a broad spectrum of OEMs from high-volume platforms to luxury and next-generation EVs across every major global region. I'll now pass over to Sal to take you through the financial highlights.

Thanks, Simon. Let's begin with the financial highlights for FY '24. Revenue declined by 16% to $119.7 million, reflecting a broader industry adjustment as OEMs aligned production with softer consumer demand. But the real story is margin. Gross profit margin increased by 600 basis points to 28%, driven by cost efficiencies, automation and the integration of AI across our operations. Adjusted EBITDA remained resilient at $16.3 million, up $0.2 million year-on-year, while adjusted profit before tax rose 5% to $8.7 million. We also strengthened the balance sheet. Trade payables were reduced by $5 million, and borrowings came down by $3.3 million, delivering lower interest costs and improved flexibility. At the same time, we invested $3.2 million in CapEx focused on automation and core capacity enhancements. Net debt ended at $6.2 million, a level that reflects disciplined cash management alongside investment for future growth.

Operationally, FY '24 was a transformative year. We secured 8 new contracts with a combined annualized value of $38 million. Of that, $18 million came from replacement programs for existing models and $20 million from entirely new vehicle platforms we've never been on before. This represents not just retention but real platform expansion and market share gain. We also quadrupled the size of our global sales team. We now have targeted sales resources in place across Europe, Turkey, Japan, North America, South America and China, ensuring direct access to key OEM and Tier 1 decision makers across all major regions. At the same time, we leverage digitization, AI and automation to drive material efficiency gains, both in cost of sales and in fixed overheads. Being early adopters of these technologies allowed us to expand gross margin and sustain profitability even as volumes softened. These combined actions have strengthened our commercial platform and positioned us well for continued growth. While the market continues to evolve, these macro shifts are working in our favor. The shift to electric vehicles has no material impact on our strategy. We are drivetrain-agnostic with the same product relevance across ICE, hybrid and EV platforms. What does matter is the rise of new Chinese OEMs. They're putting real cost pressure on legacy automakers, and that plays directly to CT Automotive's strengths. Our technology-led low-cost production model is exactly what traditional OEMs are now seeking to stay competitive. Tariff uncertainty is another factor, and it favors companies with manufacturing flexibility with plants in China, Turkey and Mexico. We can shift production rapidly to manage risk, optimize landed cost and maintain customer continuity. Our positioning, our structure and our model are built for this environment, and we're leaning into it. Technology is central to how we operate. We are integrating AI across every aspect of our business from production planning to HR, delivering both cost savings and agility. Our commercial strategies are now supported by AI-driven processes, allowing faster responses to market and customer demands. We've embraced automation not just to reduce cost, but to elevate quality and improve speed. Innovations such as multilingual avatar videos, AI-based vision systems for quality control and AI-powered planning are already generating measurable ROI. Let's take a closer look at how AI is driving results. Previously, production planning required [ 6 ] staff across our factories. Today, it is fully automated. AI now optimizes materials, tools and machine allocations, improving consistency and significantly reducing changeover times. In China alone, this system has reduced direct labor by 35% and saved over $1 million in 2024. We are replicating this model. Feasibility studies are underway in Turkey and Mexico. These initiatives are laying the foundation for a new era of scalable, high-efficiency manufacturing at CT Automotive.

Despite a challenging backdrop, our income statement reflects a business that continues to perform. Revenue declined to $119.7 million driven by lower production volumes as OEMs adjusted post COVID inventory levels. However, we maintained strict cost discipline and margin management was our top operational priority. Adjusted EBITDA came in at $16.3 million, up $0.2 million versus the prior year, demonstrating the resilience of our cost base. Adjusted profit before tax increased by 5% to $8.7 million. This was driven by strong margin improvement and lower interest costs as we reduced borrowings by $3.3 million. The result highlights the effectiveness of our operational strategy and financial discipline. We ended the year with a stronger balance sheet. Net asset value increased by $9.3 million, driven by prudent working capital management and a reduction in trade payables. Trade receivables were temporarily down in Q4 as the market softened but returned to expected levels in Q1 2025. Borrowings decreased by $3.3 million, which helped reduce our interest costs. We continue to manage our debt facilities conservatively, reinvesting where it matters most, automation, capacity and long-term growth. Tooling revenue grew from $10.9 million to $12 million, a 9% increase, demonstrating continued customer investment in future model development. The $24.4 million year-on-year production revenue decline primarily reflects a resetting of demand post COVID. In 2023, we benefited from elevated volumes as OEMs worked through production backlogs. In 2024, those volumes normalized across the industry. We had 41 recurring programs continue, 12 programs end and 10 new ones begin, a healthy transition that reflects program life cycle timing. Regionally, Turkey was up by $0.9 million, reflecting full capacity and consistent output. Mexico declined by $0.9 million due to overstocking in the U.S. and a softer macroeconomic environment. China volumes also came down in line with broader market adjustments. While we do not expect production volumes to return to FY '23 levels, we are forecasting mid-single-digit revenue growth from this recalibrated base, supported by new program launches and growing customer engagement. Gross margin improved significantly, up from 21.6% to 27.6%, a gain of 600 basis points. This was driven by a combination of strategic operational improvements and disciplined cost control. Key contributors included the ramp-up of robotics and automation in the second half of the year, quality enhancements across our sites and the relocation of key production programs to our lower-cost facility in Ganzhou, China. The fixed cost nature of semi-direct labor had a slight negative impact due to reduced volumes, but this was more than offset by structural efficiency gains. Tooling margins also returned to a more typical 30% following an unusually high margin project in the prior year. In addition, we made real progress on localizing supply chains and improving commercial terms, both of which contributed to this strong margin performance. Overall, the 600 basis point improvement reflects the success of our cost reduction strategy and the scalability of our operating model. Our adjusted EBITDA performance reflects strong cost management and a proactive approach to operational efficiency. We delivered $8.2 million in savings across materials, labor and quality, underpinned by automation, tighter process control and disciplined execution. These gains largely offset the $6.7 million margin impact from lower volumes. We also made structural reductions in headcount at both the group and plant levels to align with market conditions. Administrative costs were reduced by $1.2 million, driven by a more efficient group structure. We increased our use of the India admin office, internalized several previously outsourced consultancy functions and embedded more automation and AI across back office processes. These changes have structurally lowered our overheads while enhancing control, scalability and responsiveness. On the FX side, we experienced a $1.5 million swing year-on-year, moving from a $0.9 million gain in FY '23 to a $0.6 million cash loss in FY '24, primarily from operational trading and hedging activities. In addition, there was a $1.2 million noncash translation loss on intercompany balances, which is excluded from adjusted EBITDA. Tooling EBITDA was also down, not only due to the absence of a high-margin project in FY '23, but because we adopted a more aggressive pricing approach to secure long-term production revenues into 2025 and 2026. Despite revenue pressure and FX headwinds, we delivered $16.3 million in adjusted EBITDA, a strong result that reflects our operational discipline and strategic focus. We continue to manage our balance sheet prudently during the year. Net debt increased from $3.8 million to $6.2 million, reflecting a combination of strategic investment, working capital movements and one-off timing items. We generated $6.9 million in cash from operations, which was used to fund $3.2 million in CapEx focused on automation and capacity enhancement and $4.4 million in lease and interest payments. There was a $5 million reduction in accounts payable in China, reflecting disciplined supplier settlement and improved terms, but it also had a temporary cash impact. We also supported a $1.6 million increase in inventory to mitigate ongoing supply chain risk and ensure continuity for key programs. Additionally, we had a $1.7 million payroll liability in China accrued in December but paid in early January. Had that landed within the FY '23 reporting window, net debt would have remained broadly flat year-on-year. Overall, we remain in a strong liquidity position with leverage well within our comfort zone underpinned by operational discipline and stable cash generation.

We remain committed to delivering growth responsibly. Our ESG strategy is built on 3 pillars: reducing our environmental impact, supporting our people and communities and ensuring strong governance. In 2024, we received the EcoVadis Silver Award, placing us in the top 15% of companies assessed. We increased our investment in carbon offset by 20% through the Turkey hydroelectric project and launched our ESG Committee to drive internal accountability. Looking ahead, we will invest further in clean energy, maintain [ SEC ] compliance and continue embedding sustainability across operations. In China, we delivered a stable operational performance despite a softer demand environment. We've taken decisive steps to improve efficiency by consolidating production into our lower-cost site in Ganzhou, where automation levels are higher and labor costs are lower. This shift has significantly enhanced our competitiveness and overall margin contribution from the region. We also upgraded tooling capacity at our Shenzhen facility, reducing our reliance on third-party tooling suppliers and giving us greater control over quality, lead time and cost in response to trade and geopolitical risk. We are transferring the majority of Chinese manufactured product to our other facilities throughout the year to mitigate potential tariff exposure. This is a clear demonstration of our global agility and our ability to derisk customer supply chains. Strategically, China is more than just a manufacturing base. It is the platform we are evolving as a blueprint for the group. Our most advanced digitization, automation and AI implementations are happening here, and we are now using China as the reference model to replicate in Turkey and Mexico. This ensures we can scale best practices across our global footprint and consistently deliver low-cost, high-efficiency operations to our customers. Our Turkey site continues to perform well, operating at full capacity despite ongoing inflation and currency volatility. We are protected by a monthly cost escalation mechanism, and we're actively looking to expand capacity and long-term viability. In Mexico, we've secured contracts worth $20 million annually and expect volumes to ramp up further through 2025. OEMs have not changed their localization strategies despite recent political shifts in the U.S. and our footprint in Puebla puts us in a strong position to capture future growth. Looking ahead to FY '25, we remain cautiously optimistic despite continued macroeconomic uncertainty. We do not expect volumes to return to FY '23 levels. However, the business has now reset and is well positioned to grow from this new base. With several new programs launching, a significantly strengthened sales function and our continued push on margin-enhancing initiatives, we are targeting mid-single-digit revenue growth alongside further gross margin improvement. Our cost base is lean. Our global footprint is flexible, and our digital transformation is unlocking long-term structural advantages. We've shown that we can execute in difficult conditions, and we now have the platform, people and technology in place to scale profitably. CT Automotive is entering FY '25 with stronger foundations, a clear strategic direction and growing customer momentum. Thank you for watching this presentation today. Sal and I will now take any questions that you have.

[Operator Instructions] As you can see, we've had a number of questions, both pre-submitted and throughout today's presentation, and thank you to all the investors for submitting those. If I may, just ask you to click on that Q&A tab where appropriate to do so, just read out the question, give your response, and I'll pick up from you at the end.

Thank you, everyone. So I'll start the question from the top. Will you be considering buybacks given the current share price?

It's not really something that the company is considering at this point in time. I mean, if anything, we're looking to improve liquidity in the market rather than restrict liquidity. So I think that's definitely not what we're considering right now.

All right. What is management Board stock ownership like? Will you be buying more given the weak share price?

I'd say the Board collectively at the moment holds [ some 27% ] of shares and the majority of those are held by myself. Nick Timberlake, one of our NEDs has recently purchased more shares. I think there is a general view from the Board that given the share price, they want to buy more. Personally for me, for sure, I -- if I had the opportunity, I would be buying more. But due to the size of my shareholding at the moment, I'm kind of constrained by regulatory fee constraints.

Okay. Moving on to the next one. Could you talk about the barriers of entry into the industry?

Sure. So actually get into this industry sector, it's very difficult. I mean, normally, it starts with like 2 years for what I would say is pretty rigorous audit. So if something like Ford, for example, wanted to come to our company and we wanted to onboard them, it would normally start for at least 2 years of like heavy audit, cost analysis reviews, checking whether we're the right kind of supplier. And then eventually, really, when you get past those 2 years, which in itself is difficult enough to achieve. You then have to prove that you have the design capability to produce products. So we have multiple products in our range, as we discussed in our presentation. But if I gave you sort of one example of that, like air registers in the car, in order to design that, you need to do really heavy computer fluid dynamic modeling to ensure that the air hits strike points on people that the volumetric airflow that goes into the cabin can withstand temperatures from high temperatures to low temperatures. You then have to do stress analysis modeling for head-impact crash, et cetera. [indiscernible] for the field, just the actual harmony of the field of air registers in the car have to be in plus or minus 0.5 newtons, so that people can't notice the difference in the field across a range of air registers across the car. Then you have to go into a range of like testing, vibration testing, endurance testing, high temperature testing, low temperature testing, finally, going into like full head-impact tests on cars to ensure that the products don't disintegrate with high energy impacts. So this is really the reason why in the type of product ranges that we do, kinematic products that go inside cars, there really isn't many players because they're very design intensive. And then they even pass the design intensive side, then there's like -- Elon Musk says, I mean, you can make one part, but then you've got to put into mass production scale, build hundreds of thousands of them, they have to be consistent, high quality and not fail in the field. So for that reason there, automakers think the barriers to entry are extremely high, and there's not many companies like us that do the product range that we do.

How do you plan to grow market share from here? And what makes you different from our competitors?

So in terms of market share growth, I mean, I think what's really important for people to understand, particularly new investors coming on at the moment, is that we are a gross stock. That's exactly what we've always been. I mean, prior to COVID and IPO, we had sort of 20% CAGR growth rate. We've got 3% of the market share. That gives you an idea of the scale and the size of the auto industry. So the question for us now is how do we grow market share? Well, one thing that we do know is that because we're so technologically led in terms of automation, AI, the digitization which we've done. What that's allowed us to do, combined with our global sort of locations in the world is to be the most competitive supplier out there. So we've got really good prices. We've got great products, and our customers really like us. But what we now need to do is we need to leverage our product range because we do such a high content for interiors on cars, things like vents, armrest, deployable cup holders, wrapped panels, in-car lighting, electronic actuation. And although we're on quite a few platforms, on some of those platforms, we are not doing our full product portfolio content. So what our intention is with our new sales team that we've now ramped by another -- by 400% is to actually target the OEMs and the Tier 1s and to cross-sell our entire product range as well as starting to break into new markets with new OEMs. So when you look at the size of the market, the addressable market, the percentage that we've got -- the percentage that we currently have, and you also take into consideration what we've done now to be sort of -- in terms of automation and robotics to be a market leader. I think we are really well positioned to get back on to our normal [ growth trajectory ].

There's one question, I'll come back to that at the end. Is it possible for all goods which are ordered from the U.S. to be supplied by your non-Chinese factories so that any future Chinese tariffs can be sidestepped? And also, how reliant is the company on exports to the U.S. in financial terms?

So I mean, going backwards from your question there. First of all, like I think we're roughly about 22% exposed to the U.S. marketplace. Our facilities in Mexico has more than enough capacity and space to fulfill that requirement and actually grow substantially. So if you look at what we're doing in Mexico at the moment, that facility is running about $12 million. Our run rate come the end of '25 is going to be closer to about $35 million. And then as we launch more programs in '26, that will be up to sort of $45 million. So right now, no problem at all. The Mexico facility can completely negate the tariff issue in China, which it has done in main. We've got a few programs that we're still shifting over from China to Mexico, which will probably be concluded by the end of the year.

The largest OEMs have increasingly wanted to award whole interior system programs for high-volume models. Does that relegate CT to always being a Tier 2 supplier given the lack of scale?

That's an interesting question there from someone. And the way I would answer it is this, is that given the high technical products that we produce and the fact that there's not many companies that do it, what tends to happen with the OEMs is that they communicate directly with us throughout the whole of the development phase, and they go to the large Tier 1s, and they direct the large Tier 1s to us. We work with the Tier 1s and the OEMs throughout the whole of the development phase and the initial production start-up. And then afterwards, we [ come part ] of the supply chain to the Tier 1s. So the simple answer is that we -- yes, we will probably be Tier 2 in many cases, but we are directed by the OEMs to the Tier 1s.

I'll take the next one. I note that working capital was impacted by $13.2 million due to actions to address overdue vendor payments. Are there any similar legacy issues, which will still require action? And what is your DPO at the current time? So yes, during the year, in China, we paid back $5 million of overdue AP. The remainder of the movement was really in relation to deferred revenue on tooling and the timing of new invoices being raised. In terms of -- in 2025, we're looking to repay back further $3 million, and then that will sort of bring it all up to date. So we're on plan to do that. In relation to our DPO days, we're at an average of round about 50 days as we have 60-day terms with our key raw material suppliers, which we have been negotiating with them since last year, and we've got those in place as well. The next one -- question is, was the presentation, AI generated?

Yes, interesting. I mean I hope you guys -- so we're interested in it is, yes, AI generated to AI avatars. I think Sal and I are sitting here at the moment, hoping that we're living up to your expectation, having seen these AI avatars. But yes, it is -- I mean, what's clear, I think, throughout the company is that we're very technology-driven. We're very into AI, and we're using every opportunity we can, not only for our whole manufacturing base to apply AI, but also in ways to communicate with investors and to put our story over very clearly and well defined so that you have the maximum standing of what we're trying to achieve.

Did I hear correctly that you are moving all manufacturing out of China or just some?

No, that's not correct. We have got various manufacturing plants around the world. China continues to be an incredibly efficient place to be set up in low cost, high technology. I mean, in some ways, the thing that's driving the whole technology side of our business is China. I mean we're fortunate enough to have our technology center in Shenzhen, which is probably the most technologically advanced place in the world at the moment with regards, robotization and digitization and to be able to deliver that sort of level of technology with incredible ROI returns of anywhere between 6 months and 12 years. So we absolutely are not looking to move out of China. Manufacturing there still makes a lot of sense as long as you're not tariffed, but certainly from a design, development, engineering center, which is led out of Shenzhen for us, it's -- I can't think of a better part of the world to be in.

The U.K. automotive industry is focused in the Midlands. What challenges or benefits do you derive from being located in a region without any automotive history?

I'm not clear about that question, Sal. Without any automotive history?

Automotive history. So we're based -- we have a distribution center based out in Sunderland. And all the U.K. customers are serviced from there. So we sell intercompany from China across to the U.K. distribution centers. So I hope that answers the question, Mark. How much of your current turnover is supplied from China to the U.S. market, so impacted by higher tariffs? And how much will be moved in the next quarter or 2? I think we've already answered that, but we can probably summarize that, that it's a [indiscernible].

Something that's worth sort of saying [indiscernible] turnover left in China, I think we saw it to be about 8%. But it's definitely creating -- these tariffs for us are creating like incredible opportunities because what we're seeing in terms of sales growth is customers that still have work in China that want to move work out of China due to these high tariffs. We have our Mexico facility, which is a great answer for them. Other competitors of ours don't have this global footprint. And as a result of that, some of our most recent work we've won has been totally tariff related. And some of the work that we're working on right now is emergency transfer works for customers is future great business opportunities for us, and it's all driven by tariffs.

Good question. Next one from Omkar. How about thinking to enter the Chinese OEM and what challenges do you see working with them?

Sure. So of course, the Chinese OEMs are aggressive. They're growing at an incredible market pace at the moment, particularly in China, and they're starting to get out into Southeast Asia, in particular, gaining a little bit of traction in Europe, not no traction for obvious reasons in the U.S. But we have a sales team that's focused in China at the moment, we're starting to do RFQs and design and -- early design and development work for a few different OEMs. We're just being a little bit cautious at the moment because of, let's say, many supply chains within China being quite stressed, mainly down to what I would call razor-thin margins, long payment terms. And we're just wanting to see how that settles out before we get in too deeply into it. Also, I think what's worth bearing in mind is its quite common knowledge sort of people are talking about that there's 420 EV companies in China at the moment. And there's an expectation that, that will be rationalized down to something like 6 to 7 EV companies in the next 3 years. So you have to be incredibly careful about which EV company you want to work with and that we're backing the right horse. So we're breaking into that marketplace, but we're being very careful about who we work with.

Next question from Julian. How do you see the outlook for operating cash flow, working capital and CapEx in 2025? I'll take this one, Simon. So in terms of -- we're expecting our working capital to worsen a little bit. So we're kind of looking at for it to go down by approximately between $4.5 million and $5 million, and the cash generated from operations will be in the region of $14.5 million to $15 million for 2025. Next question from Mark. CT would be a minor acquisition for a Tier 1. How could you defend against any opportunistic bids?

I think it comes down to -- first, you need more than 75% in order to -- Board approval and shareholder approval to try and do, let's say, an aggressive takeover of CT. And what I would say when you talk to our institutional investors at this point in time as well as the Board is we kind of recognize that CT is undervalued, I think that's fair to say. And it also has such good growth rate opportunity going forward. So I would say we've got a very supportive institutional shareholder group that sees the potential in CT and want CT to become what it's capable of being.

Question from Wayne. What level of production slowdown have you seen in customer production plans in the first half of 2025 and going forward?

At this point in time, we have not seen a slowdown. When we talk about sort of revenue drop between '24 and '23, the reason why revenue was up in '23 was like the post-COVID type situation, everybody was waiting on cars because supply chains have caused so many problems. And once they sold that post-COVID demand, I would say, automotive volumes have leveled back to normal. So at this point in time, we're tracking to sales as expected this year, and we're not really seeing reduced volumes. We have -- being completely straight, we have our concerns about tariffs in America and whether that might have an impact on demand on the U.S. side if the price goes up on consumer demand, but we're yet to see how that will work out.

A question from Luis again. Again, could you discuss your competitive landscape?

Sure. So most of our competitors are in sort of high-cost regions of the world, like we've got big competitors in Germany. We've got competitors in America. We've got competitors in Japan. I think what gives CT like a really great -- really what allows our growth and what's making us win so much new business is that we're obviously set up in low-cost regions of the world, but that is not the driver. We're not selling a company here that just works on low-cost labor rates, but why the business is so competitive is because of the levels of automation that we apply. I think that unlike most of our competitors, and we know our competitors really well. And as I was saying earlier, I mean, the fact that we're based out of Shenzhen, which is the technology center of the world, we're able to adopt and use this levels of automation faster and at lower cost than our competitors. So I would say we're in a very strong position, and I think our growth in sales shows that.

Next question from James. Would you plan to introduce a dividend in the near future, even if only symbolic in order to attract investors that require a distribution to be made in order to invest?

James, I really hope so as a significant shareholder in the business. At some point in time, when we're generating a lot more free cash, for sure, that's exactly what I would like us to do. I mean the difficulty we've got at the moment, James, is that there's so much opportunity for us right now. And so we're spending a lot of money in CapEx to plan for future growth, particularly into '26. And whilst there is so much opportunities being thrown at us, we will deploy the money in the best way for the shareholders. But I can tell you this that as a major shareholder, I would like a dividend and a dividend policy. But if we see a situation where we can significantly increase our growth and profitability, then it kind of -- we put that in front of dividends.

Yes. And just to add to that, it is a topic that is discussed in the Board meetings as well. I think the next question from Omkar that also covers one of the pre-submitted ones. How do you foster a culture of innovation within the company? And what strategy do you use to encourage employee creativity?

So I mean, just to give you a bit of an idea, firstly, the company is totally driven by constant improvement. And there's many companies that talk about that, but don't really do it. I would say that I'm on Teams meetings constantly and those Teams meetings broken down into production areas, automation areas, digitization areas across the team. And we look constantly to improve process, to come up with new innovations for our automation team within CT, which is -- that automation team is our own designs as well. This isn't external. We design and make this bespoke equipment ourselves. And we always talk in financial terms, how much are we reducing our cost by, what's our ROI on what we're doing. And it's embedded in the actual culture of the company. And that's really what's driven a lot of that improvement in gross profit margin that you're seeing.

The last question from Wayne. We've already answered the dividend one. But last not least. Tim, I think it's more of a comment, you are more handsome in person. Tim, I wish you've been a bit more specific who you're referring to, but we'll take it for both of us. Thank you very much.

On that note, guys, look, thank you very much indeed. You've covered off all the questions sent through from investors. Thank you to everyone for sending those through. Any further questions, of course, you'll be able to review those and publish responses where appropriate to do so on the Investor Meet Company platform. Just before redirecting investors to provide you with their feedback, particularly important to you and the team, Simon, if I could just ask you for a few closing comments, please.

Sure. So I mean, first of all, platforms like this, I think, is a great opportunity for us to get our story out because I think this is a great business. It's a great story. We've got good growth opportunity ahead of us. I think the main issue that we have is most people don't know who we are. And I think that's one of our core sort of drives this year with the introduction of our own IR department within the company to actually start making investors aware of the CT story, what we're about and getting our name out there. Other than that, really, I think, just to say thanks to everybody for taking the time to listening. I hope that you're pleased with our results because it's a lot of hard work by the team, and I think it was a tough year, but we proved that even in a tough environment, we can still turn out the profitability that the company needs to have. So thanks again for everybody for tuning into this. And I hope you got a [indiscernible] CT now.

Thank you very much, everyone. Appreciate it. Thank you.

Fantastic. Simon and Sal, thanks indeed for updating investors today. Could I please ask investors not to close the session, it will be automatically redirected to provide your feedback in order the team can better understand your views and expectations. It'll only take a few moments to complete and it's greatly valued by the company. On behalf of the management team of CT Automotive Group plc, we'd would like to thank you for attending today's presentation. That concludes today's session, and good morning to you all.

Thank you.

Thank you.