CT Automotive Group plc ($CTA)

Good morning, and welcome to the CT Automotive Group plc Investor Presentation. [Operator Instructions] Before we begin, I'd like to submit the following poll. I'd like to hand you over to the management team.

Hello, and welcome. My name is Ray Bench. I'm Chair of CT Automotive Group. Thank you for taking the time to watch our full year results presentation for 2025. CT Automotive has been in business for 25 years, designing, manufacturing and distributing precision automotive interior components for some of the world's best known car brands. You'll hear shortly from our CEO, Simon Phillips, who will take you through the numbers in detail. But before he does, I will cover a few things that I, as Chair, think every investor will want to know.

Hello. I'm Simon Phillips, Chief Executive Officer. I co-founded CT Automotive back in 2000, and 25 years in, I'm more energized about this company's future than I've ever been. The foundations we've built, the talent we've assembled, the commercial momentum we've created, it all comes together in FY '25 in a really meaningful way.

Let me start with a brief picture of who CT Automotive is. We design, manufacture and distribute automotive interior components, air registers, light guides, wrapped assemblies, mechanical assemblies, HVAC systems and decorative finishes. We serve 64 vehicle models across 21 of the world's leading automotive brands spanning 3 clear categories: volume brands like Volkswagen, Ford and Stellantis, premium brands, including Bentley, Lamborghini, and Audi, and the next generation of electric vehicle pioneers with Rivian, Togg, and Lucid. We do this from facilities in China, Mexico, Turkey, the Czech Republic and India with a 25-year history of trusted supply. Before Simon takes you through the numbers, I want to address some key issues. I want to speak to the restatements now upfront because I think it's important you hear this from me as Chair on behalf of the full Board. During the preparation of our FY '25 accounts, our finance team and auditors identified 6 historical accounting errors spanning 2019 to 2024. These principally related to how certain lease accounting consolidation entries were treated when we converted to IFRS and to the misclassification of a customer prepayment in 2021. Importantly, none of these errors affected cash and none of them affected our FY '25 trading performance or our ability to generate profits going forward. The financial impact is a reduction of $800,000 in FY '24 adjusted profit before tax and a reduction of $5 million in net assets at the 31st of December 2024. All 6 errors have been corrected in full retrospectively under IAS 8. Full details are in Note 2 of the annual report. The Board and Audit Committee have completed a comprehensive review of the balance sheet. We are satisfied that no further adjustments are required. Enhanced financial controls are now in place to avoid any potential reoccurrence. And now I'll hand over to Simon, who has an excellent year to tell you about.

FY '25 was a landmark year for CT Automotive. Let me show you exactly why. Let's go straight to the headline numbers, and they are genuinely excellent. Revenue came in at $114.8 million, broadly flat on FY '24 and the new wins we've secured support strong growth into FY '26 and FY '27. I'll explain why that's such a positive story in a moment. Adjusted EBITDA remained the same at $14.8 million. Adjusted profit before tax, our most important profitability measure, increased by 20% to $9.5 million. That is the strongest adjusted PBT in 4 years. And earnings per share grew by 25% from $0.091 in FY '24 to $0.114 in FY '25. The number I'm most proud of is our gross profit margin, 31% up 295 basis points on last year. And this is the third consecutive year of gross margin improvement from 22% in FY '23 to 28% in FY '24 to 31% in FY '25. That is not a one-year event. That is structural continuous improvement, driven by deliberate investment in AI, automation and operational discipline. On net debt, it increased to $7.7 million from $6.7 million. I want to be very clear about why we deployed $5.6 million of CapEx into expanding our Mexican production facility. It is to service the $47 million of new contracts now ramping up. That is deliberate strategic investment, not deterioration. Now let me explain the forward revenue picture because this is where the real story of FY '25 lives. Revenue was broadly flat because legacy programs reached the end of their natural life. This is planned and expected. But what was happening underneath that was extraordinary. We invested in building a proper commercial function, a dedicated structured sales team. And in FY '25, they delivered 15 new contract wins worth $47 million in annualized revenue when fully live, 15 wins, the highest in CT Automotive's 25-year history. The pipeline entering FY '26 is the deepest we have ever seen. Two brand-new OEM customers completed facility audits at our plants during FY '25, opening new revenue channels. The commercial engine is working. Current trading is in line with management expectations, and we have good visibility over FY '26 revenue with the $47 million ramping up materially through FY '27. FY '25 revenue was, if you like, the trough. We are targeting top line growth from here, and those $47 million of new wins are the engine that help delivers it. I want to take a moment to explain exactly why we believe FY '26 and FY '27 will be so transformational for CT Automotive because the investment logic here is compelling. The equation is simple. Revenue grows as $47 million of new contracts ramp up through FY '26 and FY '27 and our record sales pipeline potentially adds further wins on top. Mexico's nearshoring position brings new North American business. FY '25 was the trough and top line growth is now beginning. Fixed costs held relatively flat because AI and automation absorbed the incremental volume with little headcount inflation. Our agentic factory operating system launched in Q4 2026 drives further overhead efficiency and our rationalized China footprint gives us a lower base to grow from. Management is committed, fixed cost growth will stay below revenue growth. As a result, we are targeting profit expansion as operational gearing comes through. Every additional revenue dollar flows through gross margin with fixed costs held. Operating leverage amplifies profit as volumes ramp up. PBT has grown every year since FY '22, and the Board anticipates this trend to continue. This chart tells a story I'm very proud of. Look at where we were in 2021 and 2022, navigating the aftermath of COVID, supply chain disruption and the heavy cost of restructuring, loss-making years, genuinely difficult years and then look at the trajectory since strong PBT in 2023, growing again in 2024 and $9.5 million in FY '25, up another 20%. Profits have grown every year since FY '22. In FY '25, adjusted PBT jumped 20% and EPS grew 25%. With a record order book and expanding margins, the Board anticipate this trajectory to continue. And everything I'm about to show you on operations, technology and the order book is built to make sure it does. Operationally, FY '25 was exceptional across every dimension. The record contract wins, 15 programs, $47 million, historic for this company. Our Mexican production facility had a transformational year. We launched 6 new programs simultaneously. I want you to understand how operationally demanding that is, and we're now back at exactly the target efficiency levels we set. North American OEMs are coming to us because our Puebla location gives them the nearshoring they need as supply chains face tariff pressure. Mexico is now a genuine competitive advantage. On AI and automation, our in-house agentic factory operating system, or OS, is in active development and robotics deployment is accelerating across all our production facilities. Every robot we deploy reduces unit cost and improves quality and consistency. And on top of that, with 2 new OEM customers having completed audits, our strengthened RFQ and RFI pipeline gives us strong visibility well into FY '26 and beyond. I want to take a moment to spotlight something that I think genuinely changes how you should think about CT Automotive's future. We are making an integrated IP upper panel for the Rivian R2, a fully engineered structural wrapped panel assembly that incorporates electronic actuator air vents, a technology that CT has been developing in close partnership with Rivian through the entire design and development phase. This is not standard component supply. This is a true engineering design development program, CT's engineers working side-by-side with Rivian's team from the earliest design concept through to a production-ready solution. That is the highest level of customer integration in our industry. And I want to be clear about what this means for CT Automotive as a business. For 25 years, CT has built its reputation on precision manufacturing, but this program represents something more. Integrating the electronic actuator technology into a wrap structural panel assembly is a meaningful advance in our technical capability and product complexity. It is genuinely a step change in what we make, in how we work with customers and in the value we deliver per vehicle. An integrated IP panel carries significantly more content per vehicle than standard components, which is a compelling revenue opportunity as volume scale. This is exactly the direction we have been deliberately building towards. The Rivian R2 is Rivian's most important product ever, their first mass market EV priced from $45,000 in 2027, 330 miles of range, 0 to 60 in 3.6 seconds. Production has started in Normal, Illinois. Rivian expects to deliver 20,000 to 25,000 R2s in 2026 with the Georgia plant adding significant capacity in 2027 and full build from 2028 of up to 155,000 units per year. Reviewers comparing it directly to the Tesla Model Y. The market reception has been outstanding. Our business model is built on conservative volume assumptions. The quality of what Rivian has built, the scale of their ambition and the strength of market demand give us real confidence that this program could be highly successful. The integrated panel is at the heart of that opportunity. We believe this could be a great selling car.

I want to step back and talk about the world CT Automotive is operating in, because the external environment offers several potential benefits. First, the shift to electric vehicles. You might think this is a challenge for an automotive interior manufacturer. In fact, it's the opposite. CT is completely drivetrain agnostic. We supply both ICE and EV platforms and battery electric vehicle interiors typically carry higher product content per vehicle than traditional cars. Second, the rise of new Chinese automakers. These companies are disrupting global automotive markets at extraordinary speed on cost, on design, on time to market. Legacy OEMs face enormous pressure to improve profitability. With 25 years of engineering expertise, we are exactly the low-cost, high-quality supply they need. Third, trade and supply chain dynamics. As tariff pressure builds, North American OEMs are actively looking to bring production closer to home. Our Puebla, Mexico facility gives us the advantage we can capture market share from competitors who simply cannot serve that demand.

Technology is not a bolt-on for CT Automotive. It is the engine of our performance, and it's what makes this business genuinely different. Our in-house agentic factory operating system is being built on 25 years of manufacturing domain knowledge. This isn't a vendor product. It's ours developed by our own team, encoding the way our factories think at the deepest level of process and quality understanding. AI-driven production monitoring is already live and delivering efficiency gains today. Robotics and automation continue to roll out across China and Mexico. Our dedicated AI development team in India is working on the intelligence layer first, embedding domain knowledge before deploying it into production systems. You build the brain before you put it in the machine. The result: gross margin from 22% in FY '23 to 31% in FY '25. Technology did that, and management expect the factory OS to offer future pricing opportunities. I want to spend a little more time on the AI factory operating system because I think investors may not fully appreciate what we're building and what it could mean. We have 25 years of data, process knowledge, quality understanding and operational insight embedded in this business. That is the foundation of our AI. No third-party tool can replicate it. You cannot buy it. You can only build it. Our in-house AI team is approaching this in the right sequence. Intelligence first, encoding how a factory thinks, how quality is controlled, how yield is optimized. That intelligence layer is being built right now. Next, in 2025 and 2026, production monitoring, deploying that intelligence into live environments for real-time process control, quality detection and predictive maintenance. Then in Q4 2026, the full factory OS release, every CT facility running on AI-driven operations, internal deployment first. After full deployment in CT, this is where it gets genuinely interesting for investors. From 2027 onwards, what we built for CT could serve other manufacturers, a 25-year automotive manufacturing knowledge base embedded in a deployable system is a genuinely differentiated commercial asset. We are building what the auto industry desperately needs. We're not making announcements today, but the Board is watching the opportunity closely. The optionality is real.

On the environmental side, we hold ISO 14001 certification across our operations. We've invested in carbon offsets and energy attribute certificates to reduce our Scope 2 emissions. The rationalization of our Shenzhen footprint has meaningfully reduced our energy use and greenhouse gas output. So operational efficiency and sustainability reinforce each other. Socially, ISO 45001 certification means rigorous health and safety standards across every facility. We participate in the UN Global Compact and take fair employment practices seriously across all the jurisdictions we work in. On governance, the restatements I described earlier demonstrate our governance culture. We found issues. We disclosed them fully. We fixed them and we strengthened our controls. In 2025, we were awarded the EcoVadis Bronze Medal ranking in the top 35% of all companies assessed globally. In FY '26, we're advancing digitization of our ESG management systems and strengthening supply chain sustainability through enhanced supplier audits.

So let's look at the future trading. Current trading is in line with management expectations. The momentum from FY '25 is continuing into FY '26, and we feel confident about our forecast, the $47 million of new contracts won in FY '25 are now ramping up, generating strong visible revenue growth that the Board expects to translate into improved profitability. This is contracted business increasing on a schedule and margins keep moving up. AI, robotics and our automation program mean we expect gross profit improvement to continue alongside revenue growth. The agentic factory operating system launched in Q4 2026 will be a further step change in operational efficiency and our order book and active RFQ/RFI pipeline give the Board confidence in new business well beyond the current ramp-up. The combination of growing revenues, expanding margins and disciplined fixed cost control positions CT Automotive for sustained cash generation.

Thank you, Simon. In summary, the Board believes CT Automotive is entering a new phase, moving from investment and growth into sustained cash generation. First, what we have done. We expanded the Mexico facility, deploying $5.6 million of CapEx to build the capacity to deliver the contracts we've won. We built the commercial team that won 15 programs. We developed our AI capability and technology infrastructure, and we strengthened the balance sheet and improved our financial controls. The investment phase is complete. Second, what we are now entering, $47 million of new contracts ramping up in future years, growing revenue flowing through a healthy 31% gross margin with AI holding fixed costs flat. Third, the Board recognizes the loyalty of our long-term shareholders. Capital allocation policy is under active consideration and the anticipated cash build provides optionality on how to deploy this to best serve shareholder interests. The Board will develop these plans and update the market in due course. On behalf of the Board and on behalf of Simon and the entire CT Automotive team, thank you. Thank you for your time, and thank you for your continued support.

FY '25 was a standout year, PBT up 20%, EPS up 25%, margins hit 31%, record contract wins, USD 47 million, a technology platform no competitor can replicate and future sales growth underpinned by direct contract wins.

This presentation and our contact details are on our website. If you'd like to speak with us, please make contact. We are always happy to engage with our shareholders, institutional and private alike.

We look forward to updating you on our progress. I would like to take this opportunity to thank all stakeholders, customers, suppliers, the incredible efforts of our workforce and your continued support of shareholders. Ray and I are pleased to take any questions you may have.

Thank you for updating investors today. [Operator Instructions] For your reference recording of today's presentation be available on Investor Meet Company platform shortly after the meeting has ended. Guys, as you can see, we received a number of questions during today's presentation. Ray, if I may just hand back to you to read out the questions and give responses where appropriate to do so, and I'll pick up from you at the end.

No problem. Thank you, Charlie. So I think there's a selection of questions both on this platform and also previously submitted on to the company's investor website area. So I think if I kick off with Simon, there's some for yourself and certainly some that I can answer as well. So the first one was asking about the takeover of FORVIA, one of our first-tier customers. How does that affect CT Automotive? Is it seen as a positive or a negative?

Is that something -- I'll take it answer that question. I mean there's definitely going to be some rationalization that goes on in the auto industry amongst some of these large big Tier 1s. From our perspective, we see the Apollo initiative being really good with FORVIA. It's roughly about EUR 1 billion debt restructuring, which strengthens the balance sheet. So that's a really great thing for our business and what was for FORVIA as well. In amongst the people that we work with from design engineering to plant level people, there's really been no change at all from that perspective. So we don't really see having any sort of material impact or effect on our business relationship with FORVIA. In fact, we hope we're going to strengthen our position with Apollo. So I think that's it really, nothing else.

Next question was another one for you, I think, Simon, in general, how is the sector evolving? And how do you plan to extend your competitive advantage?

I mean in terms of extending our competitive advantage, it's going to be much of what we've been doing so far to date. So this new AI model that we're building, I think it's going to have real big implications on the fixed cost structure of the business in the direct and sort of semi-direct area of cost of sales, more automation drives down costs, improves the margins in the business and our ability to lower our selling price and become more competitive. I think with regards to Chinese EVs and their impact on the marketplace and EVs in general, I think the Rivian project that we showed in the presentation was like a really great example of how we can increase the value content within the vehicles. And in some instances, making a further improvement in gross profit margin. But in general, to be able to increase revenue by increased content. And I think, one of the most interesting things that's going on in the sector at the moment is that with Chinese EVs coming into play and seeing the pricing pressure that's putting on legacy OEMs at the moment, that is part of the thing that's driven this sort of $45 million (sic) [$47 million] of additional new business from our perspective because OEMs are coming to companies that have really good engineering capability and can drive cost targets down in line with what they're seeing from Chinese OEMs. And CT is one of the most competitive suppliers currently in the world when it comes to that. So as a business, we CT could easily get directly involved with Chinese OEM growth as well because we are at a cost competitive place where we can compete with any Chinese supplier. In some instances, I would say, more competitive. The reason why we've kind of sat out of the Chinese growth area at the moment. It really comes down to payment terms, sometimes going out to 260 days and the working capital requirements to support that level of payment terms. So what we're looking for at the moment is more of a normalization that goes on within the Chinese market before we contemplate entering that sector.

Okay, thank you for that. Next question is, will the company consider buybacks considering the current share price, which is perhaps a question that I'll take. So I think we mentioned in the presentation there about the cash generation of the business moving forward gives the Board optionality in terms of what it wants to do with that cash. Clearly, buybacks could be an option that the Board would consider. And clearly, if we do get into that situation, then that would be communicated to the market in the correct way at the correct time. Next question is, will a new CFO be recruited? So again, another question that I'll take. So I think we've previously announced both Anshul Gupta, who's the Group Head of Finance; and Vicki Thomas, who's the Group Financial Controller. They run the business from a day-to-day financial performance perspective. They've got a great relationship with external shareholders, stakeholders, most importantly, including banks. And we've also strengthened the Board as well in terms of the appointment of Gary McGrath to the Board back in March. So Gary brings a wealth of experience as a CFO in a main market listed business. So we understand the concerns that people have. We've strengthened the Board where we can. We look at the talent pool that we've got, and we'll keep an open mind moving forward. But currently, we're reasonably comfortable with where we are. Next question is, given the longer-term duration of production runs, the lead time between contracts and production and the state of your RFQ pipeline, is it possible to give an opinion about revenue prospects in '27 and '28? It's a question for you, Simon.

Sure. I mean Singer Capital Markets has just published its new analyst report, and that gives a good view of like where we see ourselves going out to '26, '27. I mean, obviously, with the additional new business wins that we've done in that $45 million (sic) [$47 million], we do see material growth into '27. Going past that into '28, it's difficult for us to give any information because regulatory constraints to do that. But if we carry on at this rate, I mean, it was an incredible win across '25. It was the biggest win that we've ever had in the history of the business. And I think it pays testament really to the work that the team has done in terms of being able to reduce costs and be able to offer very competitive compelling cases to our customers. With regards to the sort of gross profit margin aspect of the business, I think that we certainly hit a level of 31%, which is perfect for our business model. It allows us to get good returns on capital deployed into CapEx. It allows us to fund our working capital cycles very well. What we, as a Board are strategically thinking is that 31% works very well for our business. As we improve further and further by robotics and AI, we want to capture competitive advantage and leverage that in terms of being able to reduce cost to further drive our topline growth.

I think, Simon, there's quite a few questions that have come in regarding profit margins. I think you've covered them quite well. So I'll skip over some of those. There's also been quite a few questions regarding net debt. So I think maybe we can cover quite a few of these off as well at the same time. So one of the key questions, what factors contributed to the year-end net debt being materially better than forecast?

Well, I think it was just like very good cash control, both with regards to inventory management throughout the whole of the operations, obviously, focusing on profit and good gross profit as a result of that impacts the net debt situation. But one thing that was a factor that came into play is obviously the situation with Marelli's Chapter 11. And as a result of that Chapter 11, meaning that our banks wouldn't support things like invoice finance capability. So that reduces the bank borrowings down and at the same time, us having to request improved payment terms from Marelli as a result to support that.

Moving forward, next question. Approximately what percentage of the contracts are on a cost-plus basis? And therefore, are they safe from cost inflation?

Okay. I mean in answer to that question, in the auto industry, particularly, I'd say, in the type of products that we produce, it is just cost-plus. So I would say 100% of them are in a situation where anything that changes that affects the cost of the business, be that inflation, be it raw materials, be it transportation cost increases are generally passed through. But at the same time, that goes in both directions. And one thing that sort of investors may be sort of thinking about at the moment is that with the situation going on in Iran and the Strait of Hormuz blockages and what the implications of that is relating to oil prices, energy costs. Well, I mean, the reality is, of course, is that it drives inflation, it drives costs up. And we have been seeing some of that coming into play across the material cost element of our business as per the quotation breakdowns that we work on. Those prices have been passed through to our customers and I'd say in the main, most of the customers are well aware of the global economic situation and have been taking them on board.

Okay. Most investors seem to be completely unaware of this company and its competitive advantages. Do you intend to increase awareness about CTA? And if so, how will you do it?

Is that something for me to take, Ray?

I think it probably is actually, Simon.

Yes, sure. So I think what we've been talking about is engaging more with Singers, going to sort of capital market roadshows, making people more aware of our story, because I think for most people who are obviously watching this and you see the underlying performance of the business, the trajectory of the business going forward and even what we're doing with regards to AI. I mean it's an extremely compelling business in my view. I mean it's got good trajectory, good forward profitability, good forward growth. And therefore, for certain, we need to be out there telling our story more. And I think we'll do that through capital markets and engaging with Singers.

Another one for you, Simon, I think how scalable is the Mexican model geographically? And could you replicate this operational blueprint elsewhere over time?

It's very scalable. I mean the way that we actually approached the Mexico factory is exactly the same as what we did in Turkey as well, which is that our technology center based in Shenzhen. We are extremely vertically integrated. So that means that when we build a production line, all of the robotics, all of the fixtures, all of the production line assembly and plant and equipment, everything that we require is in terms of injection molding machines, spray paint facilities all sourced from China. So we use like what we would call like almost like a modular blueprint model. And for that reason, it makes the business very scalable into different regions of the world.

Okay. Next question then, Simon. With 15 new program awards won in FY '25, are you seeing a structural shift in your competitive positioning versus peers, particularly around speed to launch and cost competitiveness?

Well, I think it actually, it's not just about our competitiveness because there's no question that, that in the auto industry it makes a big factor, and we are very competitive. And I think that is a large amount of the result of why we could gain so much traction momentum so quickly throughout 2025. But it's also in this automotive sector at the moment, there's been a lot of stress in the industry dating back to the COVID times and I think what many OEMs are looking for at the moment is not just competitive prices, but companies that have technical capability to execute both at speed with a proven track record of what they're capable of doing. But on top of that, too, is some companies that have good financial structures and strong balance sheet and companies that OEMs believe that they can depend on for the coming years. And I think CT really ticks all of those boxes, and that's why we're starting to see the level of traction that we're getting.

Okay. slightly sort of complex question, the next one, which we will try our best to answer. So did the financial reporting issues arising recently occurred due to the complexity of the company and its accounting? And if so, what actions have been taken to ensure nonrecurrence. So I think, again, if I start this one off, there was a new set of eyes that were involved in looking through the accounts as we went through the year-end close. Those issues that we did identify, we addressed as quickly as we could and some of them were quite complex and additional controls have been put in place. I think, Simon, if you want to add any depth to that question, then it's a good time to add.

Yes. I think for you guys who are obviously tuning in and watching this, we obviously go into some depth on this with regard to our end of year report, and it outlines everything specifically. But in reality, you're just looking at 4 things that were concerns. One of them relates back to almost like 2020 to 2021, which was where a customer made a mistake of really providing us with a too high price compared to what I believe is the purchase order at the time. And how that was accounted in the forward years, it was put on to the balance sheet really as a prepayment and then reduced that across the years on retained earnings. So that really was an accounting policy that was set back then, which quite honestly was incorrect. And so we thought we'd step back and straighten the books out based on that. The other thing that was the major issue, and there's only really these 2, which are the major issues was really the GAAP accounting policy that we used in China, then switching over to the IFRS policy at consolidation level left on a technical accounting calculation error. And as Ray said, we strengthened our systems to make sure that, that can be avoided in the future, that we can pick these things up. But I think what's important for any investors listening at the moment is that we looked at the issues we had. We've checked it, obviously, for our new auditors as well, and we've taken consultants on board to double check those calculations and we've dealt with everything, nothing was left off the table. And I think that sort of honesty and clarity is important on the markets itself. But I hope that to all the investors out there, they realize that it's been dealt with. It didn't make a huge impact. But I'm hoping that the takeaway from here at the moment really is the financial performance of the business throughout FY '25 and what we're looking at into the future because we are super excited about it. I think the numbers in every aspect, whether it's the growth in the profits, growth in the gross profit margins, in the EPS, in the net assets, in every aspect, this is an incredible year.

Okay. So next few questions are actually quite similar in terms of the impact from the war in the Middle East. So I think we've covered the price inflation part of that already, but part of another question, talk about whether we've seen any shortages of plastic feedstocks.

It's a good question. Obviously, potentially somebody who knows the marketplace. It's true. We have seen some material shortages. And one of the things that our engineering teams are dealing with as well as OEMs is the ability to be able to change plastics over, which as people who might be aware of the industry means quite a lot of testing and validation in order to do that. But it really kind of depends on which region of the world. Some regions of the world are being impacted at the moment by shortages leading to shortages in polymer supplies other regions of the world, you could say that are buying their natural resource materials from areas that are unaffected by this are not seeing those issues. And so we're dealing with that. I don't think it's something that -- if the real question is that do I think that this could impact demand on -- not demand on vehicles, but the OEM's ability to manufacture to demand. I don't think so. I think OEMs are reacting very well to it.

Yes. Okay. In a related way, a question about whether increased energy costs will affect profit margins?

Well, at the moment, we're not seeing that coming through, in most regions of the world. I mean we have seen some impacts in Turkey. We certainly haven't seen any impacts in China, which is where a large amount of our manufacturing is done. And so far to date, we haven't seen impacts in Mexico. But what I would say it's like everything else in the cross and what was demonstrated certainly during the COVID period of time and you know the Russia-Ukraine war and that was driving energy costs, is that if we see energy cost increase, it's just part of the normal cost pass-through for us, and that's something we've done historically. It's something that, if necessary, we'll do again. But I can say at this point in time that we've not really seen any issues relating to it.

And in a related way, one of the other questions is also asking about whether any currency volatility is causing any problems?

Yes, a good question. I mean when it comes to our factories in Turkey, we have currency escalators. So that doesn't make an impact. When it comes to our facilities in Mexico, again, with most of the customers, we've got currency escalators. So again, it doesn't cause any issues for us. In China, we're running some pretty long-term hedges. So we're not really seeing much of an issue relating to the U.S. dollar to the Chinese yuan, which obviously is moving, but our hedge is covering that at the moment. But once we fall outside of hedges, then we would have to escalate our FX policy with our customers in Europe, which we can do. We have done historically. And all these things, whether it's currency or whether it's materials or energy, the objective of the escalation systems and the pass-through systems we have is specifically designed for the auto industry to be able to maintain margins, because for most people, as you know, in the auto industry, it's a tough business. Profits are tough, margins are tough. And these systems are designed so that suppliers can actually maintain margin.

I think one last question. So what do you think the market is misunderstanding about your business? What's the biggest gap between perception and reality?

I think there's a few things that's going on really. I think one is what the previous investor said, I think we need to get more marketing material out there for people to understand what the CT is actually about. I think if I was looking at this business externally as an investor myself, I would have probably been saying that across the last 3 years, these guys, they execute really well from an operational perspective, and that is in the numbers in terms of gross profit margin improvement, fixed cost reductions, let's say, creating more profit out of reducing revenue. So if I'm looking at it externally as an investor, I'd be saying, well, guys, you operate well, but I don't see any topline growth. And what I would say now is that that was deliberate. We wanted to get our house in order. We wanted to get our operations under control. And having achieved that goal, we put into motion the sales growth strategy in '25, and we were like blown away. We didn't expect to win that level of business. So now I think we have all of the key ingredients. I think we have the growth. I think we have the operational control. I think we have like incredible AI technology that we're deploying. And you've got to hope that investors see that.

Another question has popped in. Why are you not working with the Chinese OEMs?

Okay. I did speak about it earlier, but I would say this is that we have the absolute capability of working with the Chinese OEMs. Ultimately, a large amount of our manufacturing footprint exists in China. We compete against Chinese Tier 1s on a regular basis, and we beat them, from a price perspective and an execution perspective. The main reason why we're not working with the Chinese OEMs at this point in time, and I do believe that this will change in the future, is the working capital cycles. We have got a huge demand, obviously, from legacy OEMs and our general customer base that we have. And at this point in time, we don't want to be like going into the Chinese OEMs because you have working capital cycles of 280 days, and that takes a lot of funding to fund the situation like that.

Another question, which I'm sure is going to be close to your heart on this one, Simon. So could you expand on your AI strategy? And why do you say that competitors would not be able to replicate this?

Well, we've researched this a lot in terms of this sector. And it's a very sort of -- it's a little bit of a complex question to answer in such a short period of time. But we have taken on 4 AI engineers in India. We've got an additional 6 in the data validation team. We are looking, first of all, we've built a system already that we have already deployed. It's created incredible results in terms of line efficiencies, control over quality and scrap rate efficiencies. And what we've taken away really from that is that how do we make it more all-encompassing. And when I talk about all-encompassing, it starts an intelligence level. So we are currently building the brain level of the business, which effectively takes it right from the start from the moment you design a product, which then goes through like design failure mode effect analysis, engineering like movements, then into process control plans, KPIs, KC values, the whole thing that constructs how a product is developed within our engineering team. And I guess what you could say is that competitors have the ability to do it. But I would say that for most people who have been watching CT, we've been sort of running at the front end of AI. We have a really good understanding of what AI LLMs can do, agentic AI can do, how we can incorporate vector databases to ensure that we create really good learning models through things like Google Sheets synced into those vector databases. And honestly, I don't think most manufacturing companies understand all of that. And the talent that we've recruited from our India offices from companies like Google as well to create this. Our kind of view is that we're building something like absolutely exceptional that no one else is building that the automotive industry needs but doesn't know it yet. And so our plan is to build this out at an MVP level throughout '26, deploy it across all of our factories, improve on it. And then one thing I'd say that the Board is contemplating at the moment is that I think this has the possibility of being like a product that other manufacturing companies will want because when they see it in action, there's no question it will make a meaningful difference to our business.

Okay. Thank you, Simon. A couple of questions about customer concentration and any associated risk that goes with that.

Yes. I mean I think our customer concentration is dropping significantly now with regards to what was Marelli and Nissan. We are starting to -- one of the guidance that goes on with the sales function team is obviously to reduce that level of risk all the time. And certainly, within the $47 million of new business wins that occurred in '25, that really does help the reduction in concentration. Whilst we talk about concentration, you've got to bear in mind that we serve 65 vehicle platforms that are across multiple continents and not just multiple continents, but multiple vehicle model types and styles. So we're quite robust from that perspective. I mean if we were to be honest about the risk, I guess the risk it really exists in the fact that if you're concentrated with a customer, what happens if one of those customers fail. And in a stress situation, in the auto industry, it can happen. But at the same time, if you look at, say, the recent situation with Marelli and their Chapter 11, the auto industry as a whole is very interconnected. If you have a company like, for example, like Marelli failing, it can't fail. If Marelli fails, it brings down so many OEMs, it would be an absolute disaster. So what inevitably happens is you have new capital structures that are deployed, new people are prepared to fund these companies, restructuring that goes on. So the only thing at a concentration level that could potentially be a risk is that failure at an OEM level. That could be the main risk. But even in instances like that, the OEMs that we deal with tend to become restructured as well. So I hope that answers the question.

Okay. I think that's probably covered most of the questions that haven't already been addressed within the presentation. So I think, Charlie, back to you.

Thank you both for answering those questions from investors today. Before we ask investors to share their feedback, which I know is particularly important to the company, Simon, can I please just ask you for a few closing comments?

Yes. I mean just to thank everybody who's tuned into our investment presentation. I mean, of course, like I ended last time, it's just to really sort of thank our customers for their ongoing support, our suppliers. I would really like to put a big shout out and thanks to the CT team because what they achieved in '25 is, like, truly outstanding. The work they did. And then, of course, to thank our shareholders for remaining and staying supportive. I hope that what you've seen in the presentation in '25, the profit growth and everything else you're pleased with and particularly the forward trajectory. I hope you guys are pleased with that as well. So thanks, everybody.

Thank you both once again for your presentation this morning. Could I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback, which will help the company better understand your views and expectations. On behalf of the management team of CT Automotive Group plc, we'd like to thank you for attending today's presentation, and good morning to you all.