Senior plc (SNIRF) Earnings Call Transcript & Summary

Good morning. Welcome to Senior plc's 2025 Half Year Results Presentation. Thank you for making the effort to get here, and thanks also go to Deutsche Numis for hosting us here at their auditorium. And a warm welcome to -- for those of you joining remotely. In terms of our agenda this morning, I will briefly cover the highlights, Alpna will run through and comment on the results, and then I will give an update on markets, strategy and outlook. Senior has performed strongly in the first half of 2025. In July, we announced that we've reached a binding agreement to sell our Aerostructures business to Sullivan Street Partners for an enterprise value of up to GBP 200 million. We expect to complete by the end of this year. We will use initial proceeds to reduce net debt and to launch a GBP 40 million share buyback program. With the sale likely to be completed by the end of this year, our Aerostructures business is now classified as discontinued. Our trading performance in our continuing business has been strong, in line with our expectations. And in a few minutes, Alpna will describe the increases in revenue and profit, so I won't go through the detail on that just now. However, I did just want to highlight the performance of Spencer Aerospace, which we've now owned for 2.5 years. Its sales grew very strongly, again, 66% year-over-year, delivering double-digit operating profit, and there is still much more to come. We have a robust balance sheet, and that will become even stronger when we pay down some debt after completion of Aerostructures this year. And given our financial performance and future prospects, the Board is pleased to have approved an increase to our interim dividend of 13% compared to last year's to 0.85p per share. Sustainability is a central theme of our purpose, our strategy and, indeed, our technology road map. And as I've said before, increasingly, it is a key decision-making criteria, which our customers take into account when awarding new business. Importantly, therefore, we're making great progress as an organization in terms of our own sustainability actions. Earlier this year, we announced that for the third year running, we were delighted to have been awarded the prestigious A rating from CDP for our climate disclosure and actions. Since then, we've also been awarded an A rating from CDP for our supplier engagement. We will continue to focus on remaining best-in-class in this area. For the full year, the Board's expectations for the continuing group and the discontinued business are unchanged at constant currency. I'll say more about the different elements of that when I cover outlook at the end of this presentation, and we will also run through a quick reminder of the medium-term financial targets, which we set out at our investor event in March. But before I talk about markets, strategy and outlook, I will hand over to Alpna to take us through the financial results.

Thanks a lot, David. Good morning, everyone, and thank you for joining us today. I'm Alpna Amar. I'm delighted and honored to be here as the Chief Financial Officer at Senior at this key inflection point for the company. Before we go through the financial results, I thought I would take a moment to share my initial reflections, having taken up the CFO role at Senior on May 16. Since joining and visiting our sites, I've been deeply impressed by the group's strength. We have built a strong reputation over our 90-year history, delivering engineered components across a number of sectors including defense, aerospace, land vehicles and energy. The company has an experienced and dedicated team. The half year 2025 results reflect both the resilience and positive momentum in the business. One of the reasons that I joined Senior is because I believe it is well positioned for success. We are financially robust and strategically positioned to capitalize on opportunities in our end markets. Our end markets are expected to grow in the medium term, and we are seeing increased demand for our products. There is a significant opportunity to realize the benefits of operating leverage as volumes increase over the medium term. In terms of focus areas as well as driving margin improvement, the priority will be to maintain balance sheet strength, improve cash generation and continue allocating capital to maximize shareholder returns. With that, let's go to the half year financial results. Here we set out the group results for the first half of 2025. Those that have had a chance to look at the release will have noticed the changes in our accounts, reflecting the Aerostructures business sale. Aerostructures is shown as being held for sale, and our go-forward pure-play fluid conveyance and thermal management business is our continuing business. So for our continuing business, the first half of 2025 can be summarized in one in which we delivered strong -- strongly across the business with revenue, profitability and cash conversion growing period-over-period. Now let's look at the results in more detail. Now this slide and the next one are a bit technical, but I do want to take you through the accounting changes before I come back to the business performance. Let's take Aerostructures first. As David mentioned, we agreed a sale of the Aerostructures business to Sullivan Street on July 18. The accounting reflects our position at June 30, when it became highly probable that the sale would be complete within 12 months. So for the income statement and the cash flow, we have separated out Aerostructures into discontinued operations. Not only do we have separate continuing and discontinued for the current accounting period, but we also do so for the prior period and hence restate those prior year numbers. Discontinued operations are shown as a one-liner post tax in the income statement. The balance sheet shows Aerostructures in 2 lines: assets held for sale and liabilities held for sale. However, under the accounting standards, you do not restate the balance sheet for prior periods. So that's enough about the accounting transitions. With the exception of net debt and leverage, everything I'm going to talk about from Slide 8 onwards relates to continuing operations only, and I'm pleased we are showing margin expansion and delivering strong results. So this slide sets out the continuing group's performance, excluding Aerostructures. We delivered revenue of GBP 371 million, up 5%, and adjusted operating profit up 14% at constant currency. Adjusted operating profit margin increased 60 basis points to 8.4%. After taking account of FX, adjusted profit before tax increased 10% to GBP 25.3 million and adjusted earnings per share increased 8% to 5.07p per share. I'm pleased to say we generated free cash flow of GBP 10.6 million, a 43% increase on the prior period, and our return on capital employed was 11.9%, reflecting the higher earnings and lower capital base of the continuing business. Moving to the financial results slide. This sets out the results for the total group including Aerostructures. So this simulates the old basis, if you like, but not numbers that you will see in the primary accounts, and I will walk you through these. After the impact of FX, revenue increased 4% to GBP 519 million, and adjusted operating profit increased 26% to GBP 32 million. Adjusted items amounted to GBP 46 million, of which GBP 40 million was an impairment related to Aerostructures held-for-sale assets. This was noncash. We also had GBP 4 million of disposal costs in the first half of the year. I will go through net debt and leverage in more detail later. So this slide sets out the revenue bridge. Group revenue increased by 3%, or GBP 10 million, from GBP 362 million to GBP 371 million,, despite an adverse impact of GBP 9 million. On a constant currency basis, revenue was up 5%. Looking at divisional performance. Again, on a constant currency basis, Aerospace revenue increased by 7% to GBP 209 million. Civil aerospace was up 2%. In the first half, we saw civil OEM production rates increasing, although there continues to be some rebalancing of inventory across the supply chain. We also saw sales in Spencer Aerospace, our acquisition in 2023, grow strongly, up 66% on the prior period. David will talk through this in more detail in the market section. Defense had the strongest growth, up 14%, as we continue to see increased sales for the F-35 program and other military programs. Revenue from adjacent markets increased by 17%, largely driven by demand from the semiconductor equipment market. In Flexonics, revenue at constant currency was up 2% to GBP 163 million. In the first half of the year, there was a softening in the North American and European heavy truck market. But despite this, our land vehicle revenues increased 5% with the ramp-up of new programs. Again, David will expand on this later. Revenue from power and energy markets decreased by 2%. Higher demand in our downstream oil and gas and nuclear business was offset by lower revenue in upstream oil and gas and other industrial sectors. Moving forward to the adjusted operating profit bridge, starting with half year 2024 on the left-hand side of GBP 28 million. We had an adverse FX impact of just under GBP 1 million. Aerospace increased by GBP 2.5 million and Flexonics by GBP 1.1 million. I will go into more detail on the next slide. In addition, our joint venture in China performed strongly in the period with an increase of GBP 1.1 million. Central costs were up by GBP 0.9 million in the first half, primarily due to the increase in national insurance contribution costs in the U.K. And these strong results increased the management incentive plan accrual. We ended the first half with adjusted operating profit of GBP 31 million, an increase of 10% compared to the prior period. Turning to divisional performance. In Aerospace, book-to-bill increased from 1.03 to 1.05, driven by increasing build rates. Adjusted operating profit increased 13% at constant currency to GBP 21 million. And the adjusted operating margin increased 50 basis points to 10.3%, reflecting increased pricing and higher volumes. Overall, the division continued to make good progress strategically and operationally. In Flexonics, book-to-bill was 0.94, reflecting the end market dynamics in land vehicles and more lumpy order flow in the energy market that we talked through earlier. Adjusted operating profit increased 6% at constant currency to GBP 18 million, and the adjusted operating margin increased 40 basis points to 11.3% benefiting from favorable mix and performance, particularly from our downstream oil and gas business. Now this slide shows the reconciliation of adjusted operating profit to the statutory reporting profit for the period for the continuing business. It also highlights our interest and tax charges. Net finance costs increased by GBP 0.6 million due to higher interest rates on variable rate debt and high average net debt in comparison to last year. IFRS 16 interest charge on lease liabilities increased by GBP 0.3 million, and we had net finance income from our pension plans of GBP 1 million. A tax charge of GBP 4.3 million was recognized in our adjusted profit before tax related to the continuing business. We currently expect an effective tax rate of 23% for the full year 2025. In terms of reconciling adjusted profit to statutory profit, we had just under GBP 1 million of amortization, which was noncash related to acquisitions, site relocation costs of GBP 1.4 million for the transfer of manufacturing from the U.S. to our cost-competitive facility in Mexico as well as costs related to the relocation of our U.K. innovation center in Wales and a new site in India. We had GBP 0.3 million related to the fair value change on contingent consideration for the Spencer acquisition and a GBP 2.5 million tax benefit on adjusting items. Moving to cash flow generation for continued operations. We can really see the key drivers here. Starting from the left, we have our adjusted operating profit of GBP 31 million. We add back depreciation and amortization of GBP 14 million and just under GBP 3 million of other items. Working capital outflow was GBP 13 million, of which GBP 9 million related to inventory build to support customer demand and the balance being from receivables of GBP 16 million and payables of GBP 12 million. Working capital was 16% of sales in the first half. For the full year, we expect it to be slightly higher at 17% to 18% of sales to support the customer demand in Aerospace. CapEx of GBP 14 million relates to 1.3x depreciation, excluding the impact of IFRS 16 depreciation. For the full year, CapEx is expected to be slightly higher at 1.5x to support growth in both divisions, where we have secured contracts and where we are opening new facilities, notably a higher capacity site in India and the U.K. innovation center, which I just referenced. Operating cash flow amounted to GBP 21 million. We paid interest of GBP 6.5 million and tax of GBP 3.6 million, giving us GBP 10.6 million of free cash flow. So what does that mean in terms of net debt for the group, including Aerostructures? You see the opening net balance of GBP 230 million on the left-hand side, the free cash flow I talked about of GBP 10.6 million, we then have GBP 12 million of free cash outflow for discontinued operations, dividends paid of GBP 7 million, share purchases the Employee Benefit Trust of GBP 1.6 million, joint venture dividends received of GBP 1 million and other items of GBP 3.5 million, predominantly FX, giving us our closing balance of GBP 235 million. In terms of balance sheet structure, where are we? Net debt of GBP 162 million, if we exclude GBP 73 million of IFRS 16 leases. That equates to net debt to EBITDA of 1.9x at June 30. In the first half of the year, we issued USD 40 million of private placement notes carrying interest of 5.46% maturing in 2029, and we extended the maturity of our USD 50 million revolving credit facility out to June 2027. The weighted average maturity of the group's facilities was 2.5x at the end of June. In July, we issued a GBP 30 million term loan for 6 months carrying a rate of SONIA plus 1.75%. This increases the group's headroom until we complete on the disposal of the Aerostructures business. Turning to Slide 15 on capital allocation. Again, as a reminder, this is for the continued operations. We aim to deploy capital to enhance shareholder returns. Well, what does that mean? We plan to continue supporting organic growth given increasing volumes. Over the medium term, we expect to invest 2% to 3% of revenue in R&D. In terms of CapEx, this is expected to be 1.1x depreciation. We continue to follow a progressive dividend policy, maintaining earnings cover of 2.5x to 3.5x. We plan to maintain a strong balance sheet by targeting net debt to EBITDA of 0.5 to 1.5x. This leaves us with optionality to return cash to shareholders and to invest in value-accretive bolt-on acquisitions. In recognition of our balance sheet and the confidence in the group, in July, we announced our intention to return GBP 40 million of net cash proceeds from the sale of Aerostructures to shareholders by way of a share buyback program. The program will commence once the sale is completes. The remainder of the initial cash proceeds will be used to reduce net debt. A decision on the earn-out cash will be made when the quantum is known. And with that, I will hand back to David.

Thank you, Alpna. So let's turn our attention to markets. In H1 2025, Aerospace represented 57% of the group's continuing operations revenues, and Flexonics was 43%. As Alpna has mentioned, Aerospace division sales grew 7% on a constant currency basis and Flexonics grew 2%. Aerospace and defense is now 48% of the group, with civil aerospace being around 66% of that and defense 34%. And both these represent good growth opportunities. Sales to adjacent markets from our Aerospace businesses was 9% in the first half of the year, with revenues from semiconductor equipment customers increasing. Our business is facing into land vehicle at 27% of continuing operations revenues, and power and energy, 16%, continued to perform well against a mixed market backdrop. Civil aerospace was 32% of the group's continuing operations revenue in H1 2025. So this includes large commercial, regional and business jet sectors. Growth in the end market measured in revenue passenger kilometers, or RPKs, was healthy at just over 5%. We expect long-term growth of 3% to 4% in this end market, driven by the growing middle classes in Asia as well as fleet modernization and aircraft replacement. We have very good positions on all single-aisle and wide-body platforms as well as most regional and large business jet programs. We expect this market will continue to grow strongly as long-haul travel and short-haul travel demand levels continue to increase. In the first half of 2025, our civil aerospace sales grew 2%, a bit lower than market, which was expected given the rebalancing of inventory across the supply chain we previously discussed. And for those of you who followed the Airbus and Boeing results calls, you would have heard them describing remaining supply chain hotspots. As inventory normalizes and rates increase, Senior will benefit from higher sales levels. You will be aware that many countries are committing to higher defense spending. Senior has good content on key U.S. and European military aircraft platforms. In H1, our defense sales grew strongly, 14% year-on-year. That was driven by higher sales to C-130, F-35, typhoon and military aftermarket. Turning now to Flexonics. We've had a strong performance in H1 relative to end markets. In land vehicles, the new contracts we have won over the last couple of years are now reaching peak production, which is why our passenger vehicle sales growth is 42% year-over-year compared to market growth of 5%. We knew coming into the year that truck markets would be slower, and that has proven to be the case. Nonetheless, our European truck sales still grew 1% in H1 2025 compared to a market decline of 15%, and our North American heavy-duty truck sales declined 13% compared to a market reduction of 19%. ACT Research are expecting truck markets to continue to be weak in the second half of this year before stabilizing and then starting to grow next year. In power & energy, a strong performance at our Pathway business in Texas led to strong downstream oil and gas and nuclear sales, while upstream oil and gas sales continued to be subdued. Moving on to strategy. So on July 18, Senior announced it has reached a binding agreement to sell its Aerostructures business to Sullivan Street Partners, a U.K.-based mid-market private equity investor for a total enterprise value of up to GBP 200 million. This represents 13.1x EBITDA. Initial net cash proceeds are expected to be approximately GBP 100 million before transaction costs of approximately GBP 12 million. An additional consideration of up to a maximum of GBP 50 million will be payable in H1 2026, contingent on the 2025 EBITDA performance of Aerostructures, and completion is expected by the end of 2025. With almost a century of relevant experience, we can genuinely claim to be experts in fluid conveyance and thermal management, or FCTM. FCTM is very relevant for our customers as our components and systems contribute to fuel efficiency and emissions reductions in aircraft and vehicles, as the world continues to transition to a low-carbon economy. We intend to capitalize on that expertise to deliver value for our shareholders. We have truly differentiated products with rich background and foreground intellectual property, coupled with expert design and manufacturing know-how. We have a good track record of outgrowing the structurally resilient end markets in which we operate, so we are well positioned for sustained profitable growth over the medium term. Margins have been improving in recent years. And indeed, they have again in the first half of this year, but as I've said previously, there is so much more to come. That will be driven by better pricing and a relentless focus on improving operational efficiency. We've always been a cash generator business. As a pure-play FCTM business, cash conversion is expected to be even stronger, which in turn supports investment in growth and shareholder returns. I previously described the markets in which we operate. Our aim is to outgrow these end markets by 50% through the cycle by taking market share and with new product introductions and innovation. Based on that, our expectation for mid-single-digit organic revenue growth through the cycle. That revenue growth supports these medium-term financial targets, which we set out at the investor event in March. Group operating margins are expected to expand from under 5% in 2024 to at least double digit in the medium term, with Aerospace margins increasing to at least mid-teens and Flexonics margins in the 10% to 12% range. Senior's business model is intrinsically cash generative, and we expect our operating cash conversion to be greater than 85% through the cycle. And our target return for capital employed, ROCE, is now 15% to 20% in the medium term. These targets are underpinned by maintaining a strong balance sheet. Our leverage target remains unchanged, aiming to keep net debt to EBITDA between 0.5 and 1.5x. Achievement of these financial targets will deliver consistent value creation for all our stakeholders. So let me finish by talking about the outlook for Senior. For our continuing business, our Aerospace division sales and profitability have grown with good performance in the first half of the year. Our outlook for the full year is unchanged. Flexonics delivered a strong set of results in H1, outperforming end markets. And for the full year, we continue to expect performance to be broadly similar to 2024. Overall, on a constant currency basis, the Board's expectations for the continuing group for the full year are unchanged. Aerostructures delivered an improved performance in the first half of 2025 compared to H1 2024. We continue to expect Aerostructures' operating profit in the range of GBP 9 million to GBP 11 million for the full year at constant currency. Looking ahead, we're delivering on our strategy, which gives us confidence in our ability to achieve these medium-term financial targets. So with that, we'll open the floor for any questions, which Alpna and I will be delighted to answer.

Straight in there, Andy.

It's Andy from Jefferies. I've got 3 questions, and I'll come back for a second go. Can we start please with Spencer? 66% growth in the period is fantastic. Can we just make sure that we are seeing a nice improvement in profitability? And can you just talk about the opportunities in Europe and where we are with there? Because that's still something that we've cracked, hopefully, over the next kind of few years, because there's a big upside there. And the second question is on pricing. I just want to make sure that you're happy with how the pricing improvements have come through in the period, and we're set for '26 and '27 to see improvements as well. Can you just remind us where you are on the negotiations for that -- for those 2 increases? And then one for Alpna. You talked about working capital to sales nudging up a little bit to fund the growth, which we all understood. Can you just talk about kind of maybe the medium-term opportunity for getting that working capital sales ratio down a little bit and just let us know kind of wait your thoughts there, please?

Okay. Thanks, Andy. So I'll start with the Spencer, yes, 66% growth. So we bought this business November '22, and we've grown very strongly each time. And what's the reasons for that? I think I've described to some of you that it's almost like a conveyor belt of products that we have coming off there. It takes 2.5 to 3 years to qualify every one of these highly engineered hydraulic fittings. But as they are qualified, they're added on to our Boeing LTA. And as they're added on to Boeing LTA, everybody through the Boeing ecosystem can buy those products. So we knew this when we bought the business, and it's fantastic to see that being borne out. We're also winning new customers. Yes, profitability is continuously improving. It's comfortably in double digit now and will continue to go up as volumes come through. We're confident of that as well. So pleased with the profit performance, not just the sales performance. And yes, you asked a great question. You remember quite rightly that part of the business case was to open European markets to Spencer both directly, but also by Spencer helping our metal business in France to expand their range of fittings and sell both -- sell those into Europe as well. Both of those are working out very well. We have a big European OEM working with us to qualify the Spencer product for their ecosystem. So we didn't anticipate any sales synergies until the end of this year, and we're on track for that. So that will open up a whole new market for Spencer. So very pleased with the performance of that company. And the other reason, I should say, the team there are doing a brilliant job in terms of on-time delivery, quality, responsiveness, and that sets them out from the competition and why we're taking market share. So all good on that front. On the pricing side, yes, pleased to report we are exactly in line with the progress we anticipated making. You may remember at the investor event in March, I think Bindi set out, in Aerospace, in particular, how we move from the margins we're at, at that time to the at least mid-teens, and half of that was coming from pricing. And I think at the time we said for the long term agreement element of that 80% of that pricing was done, that's still the case. We've got 2 additional large contracts that we're in the middle of completing. And that's going fine, amicable discussions. So yes, by the end of this year, we'll be in very good shape for that. Now the price increases don't all cut in immediately. Some of those were at the start of this year. Some now, second half of this year, some at the start at '26, and some of that at start at '27. So we'll see that gradually improving. And then we do have a chunk where we -- it's order to order. So those are spot priced, and we're taking the appropriate actions there as well in terms of market-based pricing. So yes, very happy with the contribution that pricing is making, but we're also making good progress on the operational efficiencies, which is an important element, too.

And then, Andy, just on your question regarding working capital. So if I look at working capital, it was about 16% for the half year. We are guiding to 17% to 18% for the full year. And we do have a bit of inventory build in certain parts of our business, particularly in North America. So it's not across the entire company. It's just a certain number of plants. And we're very much focused on it. We have a plan in place to bring that inventory down, and that should bring that working capital percentage down over the medium term.

Yes, Rich?

It's Richard Paige from Deutsche Numis, and the mandatory 3 questions from me as well, please. On the Aerospace, obviously, you mentioned supply chain disruption continuing in there. But have you got a sort of time line as to when you think that will start easing and helping out, given particularly OEM build rates ambitions for this year? Back at the CMD, you mentioned there were 2 businesses at sub-double-digit margins. You obviously achieved double-digit margins in the first half in Aerospace. Are we still on the time line for the turnaround of those 2 businesses, please? And then, obviously, a standout is the land vehicle performance. Could you just give a bit more detail behind that? And also what sort of additional maybe new contracts might be kicking in the second half to keep that dynamic going for the rest of the year, please?

Yes. Okay. So firstly, on the supply chain situation, I mean, firstly, it's a lot better than it was a couple of years ago. And if you've cast your mind back, it was a nightmare, and it's -- but improving. So raw material supply is improving. The issues we had, getting things like flanges and so forth, improved dramatically, partly because we're making our own. But there are still some hotspots. To get right back up to the top of the supply chain, you heard [indiscernible] the CEO of [indiscernible], "We need engines, engines, engines." They've got 60 gliders, CFM International, and Pratt & Whitney working very hard to deliver enough engines into the program. And there's some confidence that will happen in the second half of the year. And what that meant was that other parts have got slightly ahead of where the engines were. We talked about this last October, and we talked about it again at our full year results. So notably, we supply a lot of stuff into the wings, and the wings were ahead of the engine. So I think the OEMs just taking the opportunity just to rebalance that inventory. And then that flows through the supply chain. I think by the end of this year, that will be pretty much normalized. So it'll be a bit better in the second half of the year, I think. So we expect to see our civil aerospace growth rates probably a bit higher in the second half of the year than the first half of the year. And then once we get into next year, I would -- look, you're always going to hear about the odd hotspot, but I think it will be much more normal. So -- but this is unexpected. I think it's where we thought we'd be. The second point, yes, the 2 businesses are both improving. I think one of the larger ones, we didn't say it was or the trajectory, but one of the reasons that we're -- we've always said it will take the medium term to get to those target margins was because of that. So look, all the great actions there in terms of pricing, operational efficiency, volume are starting to bear fruit, and it's starting to improve, but more work to do. And in land vehicle, yes, so our humble land vehicle business has performed really well in the first half of the year. Firstly, on the truck side, we've done better than market. And you'll all be aware of -- well, you may or may not be aware of what's happening with the potential emissions regulation change in North America. So if you go back a year, there was anticipated emissions regulation change in '27, which had been a big prebuy because the engines are cheaper at the end of this year and into next year. That's probably not going to happen. So that's why we're not seeing that prebuy this year. We kind of thought that was the case. Coming to the year, we guided North American heavy-duty truck to be down, and it is. But what it does mean is it will probably stabilize, and we won't have the big coming off a cliff and then growing again. So ACT Research, who we tend to listen to, are saying big fall on demand in North America this year, sort of flat next year and then picking up. So by the second half of next year, we should see it start to pick up. We've outperformed because we've got good market share, because we've won new contracts. But the standout was actually passenger vehicle. And remember, we don't go chasing the highest volume, low profit passenger vehicle business. We go after specific niches that are profitable. We won new contracts for our businesses in the Czech Republic, our businesses in India,and supported by our business in Cape Town. And as well as the joint venture, which Alpna mentioned, which is its best performance ever, and that's really passenger vehicle business as well. So we are demonstrating operational performance, quality levels, responsiveness that perhaps our competitors have not been able to do. And because we're able to offer both parts for internal combustion engines as well as hybrid vehicles and electrical vehicles, our customers really seem to like that. So that's why we have taken market share. That's why passenger vehicle business grew 42% in the first half of this year compared to market of 5%. It's those new programs, and it's also where CapEx is a bit higher. We had to naturally invest to meet that demand. So those are the principal reasons.

Thomas Rands from Berenberg. Three questions, again, if I may. The first two are slightly linked. So just on the profitability of Aerostructures, you mentioned GBP 9 million to GBP 11 million for this year is kind of the guide. Is that enough to get the -- for the full payout on the earn-out of GBP 50 million, just as a sort of a modeling point of view? Second question, given how well Spencer's done, what's the M&A pipeline like? We'd like some more -- the more kind of Spencers out there that you would love to acquire, even if the timing is slightly unpredictable. And then the third one is slightly different, but land vehicles opportunities within EVs for the kind of the cooling elements and how you can kind of move along with the transition for light passenger vehicles or even heavy as well if there are applications on the kind of cooling of batteries, please.