Spectris plc (SXS) Earnings Call Transcript & Summary

Good morning, everyone, I'm Andrew Heath, Chief Executive of Spectris, and with me today is Angela Noon, our Chief Financial Officer. Thank you for joining us on this webcast as we present our results for the first half of 2025. We entered 2025 expecting a recovery in a number of our end markets. Clearly, the macroeconomic backdrop has been more challenging than we expected coming into the year, and the uncertainty caused by tariffs has led to continued customer caution. However, we have demonstrated the resilience of the group and delivered a robust first half performance. The improved momentum seen in the second quarter, particularly in Spectris Scientific, is encouraging and provides us with confidence in the outlook for the rest of 2025, and going into 2026. And I'll come back to this on the next slide. So starting with sales, reported revenue was 8% higher in the first half, including 20% growth in the second quarter, recovering the dip that we saw in Q1. While we did have a softer year-on-year comparator in Q2, nonetheless, after a prolonged and largely unprecedented downturn, we are now seeing building momentum in our end market-driven demand. Reported order intake was 5% higher in the first half, including 15% growth in the second quarter with a book-to-bill ratio of just over 1. That led to adjusted operating profit of GBP 65.6 million, which was up 3% on a reported basis. Cash generation and returning leverage back within our 1x to 2x target range remains a key focus for the group. We delivered a very strong cash performance in the first half, with cash conversion of 126%. And we have declared an interim dividend of GBP 0.28 per share, which represents 5% growth on the 2024 interim dividend. Our Profit Improvement Program remains firmly on track to deliver at least GBP 30 million of savings this year. Over GBP 10 million was delivered in the first half with more than GBP 20 million expected to be realized in the second half. Cost synergies have already started to come through. We are seeing the benefits of the new ERP system in Malvern Panalytical and HBK and headcount has been rightsized for current demand levels. Turning to last year's acquisitions. I'm delighted with the integration progress that has been made in the first half. In Malvern Panalytical, we have made great progress in successfully integrating Micromeritics and SciAps, including implementing a new organizational structure and rework sales model. SciAps is our new center of excellence for handheld instruments, which incorporates Malvern Panalytical's existing handheld business, and we are already seeing the benefits of collaboration between these 2 businesses, both in terms of accelerated sales and new products. In Dynamics, again, Piezocryst has been integrated into HBK. The Piezocryst and Dytran teams are already working on developing a new groundbreaking high-temperature accelerometer for demanding applications, and there are a lot more new products in the pipeline. Through the integration process, it has become increasingly clear that the synergy opportunities are greater than those that we outlined in the acquisition business case. There is greater scope for cost synergies, which is a key driver for our upgraded cost savings target and early discussions with customers have given us confidence in respect to greater potential revenue synergies as well. And finally, I just want to provide a summary of where we are regarding the prospective takeover of the group. As you know, on the 23rd of June 2025, the Board announced that they have reached agreement on the terms of a recommended cash acquisition by Advent for the entire issued and to be issued share capital of Spectris for an offer value of GBP 37.63 per Spectris share comprising GBP 37.35 in cash and an interim dividend of GBP 0.28 per Spectris share, and that's to be implemented by way of court-sanctioned scheme arrangement under Part 26 of the Companies Act. Subsequently, we recommended an offer from KKR of GBP 40 per share on the 2nd of July, followed by an improved offer from Advent last Friday at GBP 41. The Board then switched its recommendation again on the 5th of August, following offer of GBP 41.75 per Spectris share from KKR, which again includes an interim dividend of GBP 0.28 per share. This represents a 104.9% premium to the undisturbed share price on the 6th of June, and equates to a 20.3x 2024 adjusted EBITDA for the Spectris' group. So, in terms of the timeline from here, pending the acceptance of the offer from shareholders, completion is currently estimated in or by the first quarter of 2026 once regulatory approvals have been granted. This next slide provides some more color on what we are seeing in our end markets, and also the signs of recovery that are emerging. One of the key indicators we look at internally is the momentum in our quarterly growth rate compared to that in our annual growth rate. When quarterly growth crosses above the annual growth line, this is often a good predictor of recovery. As you can see in the chart on the left-hand side, both orders and sales, the indicators suggest we have been in the early stages of recovery for the past 12 months. Orders have been an accelerating growth territory for the past 8 to 10 months on a like-for-like and reported basis and also moving to positive growth from quarter 4. Clearly, the macroeconomic environment is still challenging. We continue to expect to broadly mitigate the direct impact of tariffs, but at the same time, we're also mindful of significant uncertainty still remaining. It's too early to call a sustained recovery, but this does provide us with a degree of confidence as we head into the second half of the year. Orders at the end of the first half were up on the prior year, the exception of automotive, cleantech and aerospace and defense, which had a very tough comparator. Automotive wsas down double digits as larger CapEx and R&D projects are being delayed by customers due to the ongoing tariff and macro uncertainty. Table on the right-hand side shows the like-for-like sales performance by end market for both the first half and the second quarter. The first thing to note is the significant improvement in sales growth in the second quarter at the group level. Now having been down 8% in the first quarter on a like-for-like basis, we grew by 9% in the second quarter. Part of this is clearly due to the softer year-on-year comparator that we had in Spectris Scientific, but we are seeing improving momentum in a number of our end markets, where we saw a notable increase in sales growth in Q2. Materials, academia and life sciences delivered the strongest growth. And it was also pleased to see pharma getting back to growth by the end of the period. Now 1 quarter doesn't make a trend, so we're not getting carried away, but it's pleasing to see the improving momentum is broad-based across most of our end markets. And with that, I'll hand over to Angela to take you through the financials.

Thank you, Andrew, and good morning, everyone. I'm delighted to be here this morning to run through our H1 financial results. Let's jump straight into the numbers. I'll start with some of the key highlights for the first half of 2025. Orders were 2% lower on a like-for-like basis. As you heard from Andrew, we saw improved momentum throughout the period, such that our like-for-like order intake in the second quarter was up by 4%. Our book-to-bill ratio was just over 1x in the period. Sales were 1% higher on a like-for-like basis with a very strong second quarter where sales grew 9% like-for-like, albeit helped by an easier comparator in Spectris Scientific. And of course, our reported numbers were even stronger due to the acquisitions made in 2024. Profit largely followed the sales performance with flat growth on a like-for-like basis, equating to an adjusted operating margin of 10.3%. Moving on to cash. I am very pleased with the first half cash performance of the group. Adjusted cash flow was a very strong GBP 82.4 million, resulting in cash conversion of 126%, which is the highest in many years outside of COVID. This was driven by a strong working capital performance in the period, mainly from the reduction in customer debt and improved management of creditors. There is scope for further working capital improvement certainly in the second half. Our return on gross capital employed fell to 12.2% as a result of the increase in debt associated with the acquisitions. Net debt overall stands at GBP 546 million with leverage of 2.3x on a covenant basis, both broadly unchanged from the end of 2024. Given the typical seasonality of our cash flow, this is a very strong cash performance, and I would expect material reductions in net debt and leverage in the second half. The next table provides a bridge between adjusted and statutory operating profit, as well as profit before tax. Costs associated with our profit improvement program totaled GBP 12 million. I am pleased to confirm that the program is moving at pace and is in line with plan. My expectation is that we should exceed our original savings target of GBP 30 million by the end of the financial year. A credit of GBP 16.8 million includes an GBP 18.1 million fair value adjustment, which relates to the release of deferred consideration, partially offset by related fees. Public offer related costs, which refers to takeover costs incurred by Spectris thus far was GBP 7.9 million in the first half. Software implementation costs were GBP 13 million, down from GBP 22 million last year. We have now reached stead-state in Malvern Panalytical and for the first phase of Dynamics. So, our ERP project costs have reduced substantially. We expect to see improved cost effectiveness from here. Our recent acquisitions have led to an increase in amortization to GBP 24.7 million. As a result, statutory operating profit was GBP 24.8 million, broadly the same as last year. Further down the table, I want to remind everyone of the GBP 210 million gain that we had on the disposal of Red Lion last year. We also incurred GBP 22.9 million of net interest costs in the period, which reflects the current net debt position of the group after the acquisition of Micromeritics, SciAps and Piezocryst. This next slide shows the main drivers of our sales and operating profit performance in the first half. The disposal of Red Lion in April 2024 meant that GBP 20 million of sales and GBP 3.7 million of operating profit that were reported in the first half of '24 did not reoccur in the first half of '25. We saw good operating leverage in the period, driven by strong contribution from price and pass-through of tariff to end customer. The increase in overheads is a net number with savings from our profit improvement program of approximately GBP 10 million being offset by other items, including higher variable compensation year-on-year. Foreign exchange was a headwind in the period due to the strength of sterling against the dollar, the euro and the Chinese renminbi. As you can see, our recent acquisitions have had the biggest impact on our P&L performance in the first half, while slightly softer than we anticipated, we expect an improved profit contribution in the second half of the year, which I'll come back to later. If we can now turn to cash and net debt. As said, I was very pleased with our first half cash performance with our net debt unchanged despite the payment of the final dividend. Our focus on working capital helped to deliver GBP 15 million inflow in the first half, driven by receivables and payables. Our focus is now on further improvement in inventories with detailed group reduction plans fully underway. We tend to build inventory in the second quarter ahead of our stronger second half. Hence, we expect larger working capital gains in the second half of the year. Capital expenditure, restructuring, ERP costs and interest costs were all in line with expectations and our full year guidance. We received a GBP 1.9 million tax credit in the period, as a result of rebates in the U.K. and Germany in particular. This was fully expected, and we have left our full year cash tax guidance unchanged. The largest outflow was the 2024 final dividend that was paid out in June, whilst a foreign exchange translation inflow of GBP 26.2 million reflects sterling strength against the U.S. dollar and to a lesser extent, the euro. Taking these movements altogether, we finished the period with net debt of GBP 546 million, as said, again, largely unchanged compared to the financial year past. Coming on now to our divisional performance, starting with Spectris Scientific. Orders in the first half were 2% higher on a like-for-like basis, with 14% growth in the second quarter. On a reported basis, orders grew by 17% in the first half and 32% in the second quarter. The book-to-bill ratio was 1.04. As the chart in the bottom right shows, like-for-like order growth has been positive in 3 of our last 4 quarters, and this building momentum is encouraging as we look ahead to the second half of this year and on to 2026. Sales in Spectris Scientific were 3% higher on a like-for-like basis, again driven by a strong second quarter where like-for-like sales grew by 19%. This was due in part to an easier comparator. On a reported basis, sales were 21% higher in the first half with 38% growth in the second quarter. Adjusted operating margin increased by 70 bps to 11.1%, driven by operating leverage and cost savings. Turning now to Spectris Dynamics. Order intake in the first half was 7% lower on a like-for-like basis, driven by continued weakness in automotive. This was compounded by a tough comparator as we booked a number of large simulator orders in Virtual Test last year. On a reported basis, orders were 3% lower in the first half. Book-to-bill was slightly below 1x. You can see the impact of the automotive downturn in the order chart in the bottom right. Encouragingly, after a prolonged downturn, we continue to see good momentum in machine manufacturing with aerospace and defense remaining robust. Sales in Spectris Dynamics were 3% lower on a like-for-like basis, again impacted by automotive weakness. On a reported basis, sales were flat to the first half. Adjusted operating margin was resilient, increasing by 10 bps to 12.4% despite lower sales volumes due to a very strong execution on cost savings. This next slide shows the 3 key profit drivers in the second half that gave us confidence in meeting our full year expectations. Firstly, our Profit Improvement Program. In our April trading update, we communicated that we saw potential upside to our original cost savings target of GBP 30 million for 2025. We can now confidently say that, we expect to realize savings of over GBP 30 million this year. With over GBP 10 million of savings in the first half, we will also expect to deliver at least GBP 20 million of savings in the second half. The program was always expected to be second half weighted and potentially even more so given the upgraded cost saving target. Another driver of profit growth in the second half will be the contribution from the 3 acquisitions we made last year. Their profit contribution in the first half was slightly lower than we had expected, largely due to timing and delays due to export control, as a result of tariff regimes. These orders will be delivered in the second half. In addition, the order intake in the 3 acquisitions has been strong in the first half, particularly SciAps, which has seen order growth of over 30%. Their combined order backlog gives us confidence in their second half profit contribution, which we now expect to total approximately GBP 20 million. This is a greater second half weighting than we originally anticipated. And then finally, as Andrew highlighted earlier, we are building momentum in the business particularly in Spectris Scientific. Our Q2 performance, even allowing for the easier comparator was encouraging and whilst we are mindful that macroeconomic uncertainty stemming from tariffs remains elevated, the underlying organic improvement that we are seeing gives an element of confidence for the second half. But to be clear, we are not relying on a strong recovery in the second half to meet our expectations. Our Profit Improvement Program and the contribution from the acquisitions will be the most significant drivers of profit growth in the second half. And with that, I'd like to hand back to Andrew.

Thank you, Angela. Over the past 7 years, we have repositioned Spectris as a leader in precision measurement, and have made great strides in advancing our purpose-led strategy, enabling our customers to make the world cleaner, healthier and more productive. We have simplified and refocused the group through 8 divestments at attractive valuations, redeploying the cash into 16 complementary acquisitions. We have also delivered strong capital returns to shareholders with over GBP 1 billion returned through dividends and share buybacks alone. Through careful portfolio management, disciplined execution of strategy and exceptional people, Spectris has become a more focused, high-quality and higher-performing company. Our commitment to innovation, sustainability and customer-centric solutions, compounded by our acquisitions, has positioned us as a leader in our markets. We have built a business geared for long-term growth in exciting structurally growing end markets. The company's commitment to operational excellence and sustainability is not only improving margins, it is also enhancing our brand and position with customers as well as creating a positive and lasting impact to the planet and society. During the global pandemic, we took the decision to establish the Spectris Foundation to support and empower the next generation of innovators, particularly in underrepresented groups. To date, we've improved access to a high-quality STEM education for over 50,000 students, and I'm pleased to say the foundation's impact continues to grow year-on-year. I am very proud of the transformation of the group since 2018. From the beginning, we have sought to create an environment where great talent can thrive in a healthy, high-performance culture, aligned behind a clear strategy and encouraged to aim high in our delivery. Thanks to the continued hard work of all my colleagues, Spectris today is a high-quality business, well positioned for sustained success. So in summary, it is pleasing to see the clear momentum coming through in our first half results. We have delivered a robust first half performance in a tough economic environment. Encouragingly, momentum improved through the period with a very strong second quarter, particularly in Spectris Scientific. And we delivered strong cash conversion in the first half, underlining the group's highly cash-generative nature and our focus on deleveraging. Looking ahead to the rest of 2025, we now expect over GBP 30 million of savings from our profit improvement program for the full year, with most of that still to come in the second half. We anticipate a strong second half performance from last year's acquisitions with high levels of synergies than our business case. We do see signs of recovery in many of our end markets. And while tariff-related uncertainty still remains, our second quarter performance was encouraging. And as ever, positive operating leverage will always help support our second half profit performance. With continued focus on working capital improvement, we expect to deliver another strong cash performance in the second half providing confidence in bringing leverage back down within our 1x to 2x target range by year-end. And finally, turning to our guidance. We continue to expect adjusted operating profit to be in line with management expectations. With that, thank you for listening. Angela and I will be very happy to take your questions whilst recognizing that we are still in an offer period. And as such, when it comes to prospective takeover of Spectris, we can only comment on what is already in the public domain.

[Operator Instructions] The first question is from the line of Mark Davies Jones from Stifel.

In the circumstances, Andrew, I think probably we can just ask you about some of the end markets trends you're seeing, particularly the life science pharmaceuticals, which is obviously very important for you. The commentary is still relatively muted, but the Q2 was very big. I know that's partly the comps. But are you seeing any willingness to invest back into instrumentation? Or is this other parts of that broader segment that is picking up? And likewise, academia was, I guess, surprisingly strong given what's going on in the U.S. So, could you comment on that, too?

Of course, Mark, thanks for your question. So yes, I mean, it's great to see pharma getting back into growth in the first half of this year after what's been a really prolonged sort of depressed market. We've seen really pharma improve across Europe and Asia, in particular, with sort of North America remaining relatively flat. But we are seeing an increased demand for instruments starting to come through, which is really pleasing. And I think if you compare that to some of our peers, there's been similar commentary in the latest quarterly reported from the American peers. And on the academia side, again, we had a very strong quarter on academia after a bit of a weaker Q1. But if you remember, we also saw a big order uplift in Q4. So it's proving to be somewhat lumpy. And I think that's really driven by some of the uncertainty that's been caused by government supports in various countries around the world and sort of customers having navigate that and deciding when they're going to place their orders. But again, we saw academia up strongly in Europe in the first half. In Asia, it was pretty flattish, sort of down in China. But even in North America, we were up double digits in academia. So despite some of the withdrawal of support in North America, we are still seeing demand coming through. And I think a lot of that is from the fact that a lot of the academic research institutes in the U.S. have really over the last decade or so recognized that they can't rely so much on U.S. government support. I mean, that has been slowly diminishing over the years. Clearly, there's been a bit of a disruption more recently. But I think a lot of it is now funded through sources other than the U.S. government.

Great. And if I can just check on one of the weaker markets, obviously, automotive is very tricky. But are you still seeing decent demand for the virtual testing side of things because there have been some suggestion people are focusing more on that as a lower cost way of doing R&D.

Yes. So it's a bit of a mixed picture. I mean, I can give you sort of just sort of a flavor. I mean, really, we saw North America down in auto last year. There's quite a correction in North America with the move away from the EV platforms, particularly in the U.S. And that -- so our sales and orders into -- well, our orders into North America are actually flat year-over-year, and we sort of -- we are seeing a slightly improving trend. And that's really as a consequence if the OEMs decided to cancel or change any of their platform programs, it then takes some time for the new innovations, new platforms to start to come through for us to then benefit from the orders associated with those. So North America, against an easier comp was flat in the first half, but we did see China down, because I think a lot of that sort of more of the electric battery investment that was made through to the end of '23. There's been less repeat orders on that side of things in China. But the big downturn is in Europe, particularly in Germany where we are seeing quite a disruption amongst our OEM customers. And as a consequence of that, that's not only leading to overall lower demands for our products and services, but it's also impacting some of the -- particularly the larger CapEx projects associated with Virtual Test, some of our large simulators are EUR 3 million, EUR 4 million in terms of the cost to customers. So, we are seeing those -- some of those projects being delayed and customers just taking longer to take decisions. I think the positive side to it, though, is that we are still seeing a good pipeline of prospective orders. It's just taking us longer to convert those orders as customers are managing their CapEx budgets and keeping an eye on what's happening in the wider market.

We do have another question in queue. We have a question from the line of Bruno Gjani with UBS.

The first one is just on the medium- to long-term outlook for the group. I appreciate there's uncertainty in the market today. But if we take a step back, how do you think about the 3- to 5-year outlook for Spectris? Have the drivers changed all that much compared to the CMD 3 years ago? Has something changed in terms of how you structurally view the market in light of recent policy uncertainty? Or perhaps are you just as confident or perhaps even more confident given recent acquisitions in terms of the group's growth and margin potential in the medium term? Just some thoughts there would be interesting.

Yes, Bruno, nice to hear from you again. Thanks for your question. Look, I think the strategy that we laid out in October of '22 at our last Capital Markets Day absolutely remains in place. I think, if you sort of reflection since then, we've been through quite an almost unprecedented period of not just prolonged weakness in end markets, but also we're really seeing -- we saw weakness really across nearly all our end markets at the same time, which is very unusual for us. I would say that, given what I said in the presentation earlier and just looking at our growth rates over the last 12 months, you can see that we've been in accelerating growth since the middle of last year and then crossed into positive growth in Q4. And that's the same story, whether you look at it on a reported basis or on a like-for-like basis. The graphs look very similar. So, I'm very confident in the strategy that we laid out that we are in attractive long-term sustainable growth markets. And I'm still very bullish about the future for the group based on the fact that we have been executing a consistent strategy. We've been investing in very much customer-backed innovation. We have elevated our R&D levels. We had a record year for product launches in 2024. That continues into '25. Our Vitality Index is improving. And innovation is really key for driving future demand for the group. So, I remain both confident in our end markets that they have got very good structural drivers. And given our strategy has been to very much target those structural drivers in our end markets where we have leading positions with our technology and where we're innovating to create leading positions and we have a pretty strong moat around those, the prospects for the group remain very positive.

That's very clear. And just interested in the Q2 book-to-bill. It appears that orders grew well year-over-year and quarter-over-quarter. However, book-to-bill was modestly below 1x. I suspect that this was perhaps due to some customers pulling forward orders in light of tariff uncertainty, which explains the strong Q2 sales performance. So I guess, I'm just wondering if you did see any pull forward in Q2 from Q3 or later quarters? And could you perhaps just discuss customer behavior and attitude in recent months and how they're navigating tariffs?

Yes. So look, I think on the tariff situation, we continue to broadly pass on -- pass through the tariff-related costs. I think customers are accepting of that and our peers are doing things -- acting in a very similar manner. It has clearly caused some sort of disruption to sort of -- to recognize the revenue against some of those orders. We had some of that at the end of Q1 where customers were effectively waiting to see what was going to happen with the tariffs. And then over the last few months, as tariffs have swung in various jurisdictions against various countries, we have had customers asking us to delay shipping product, which has created some lumpiness. We're still seeing some of that. And certainly, for some of the acquisitions, Micromeritics has had some of that in Q2 where we were -- customers asked us not to ship orders because of the tariffs. And that -- but those orders will get delivered in the second half now. So, it's being disruptive, but I think the world, certainly as we're seeing it, is sort of, I wouldn't say taking it in its stride necessarily, but it's accepting of it. And it's good to see that we are seeing the order momentum coming through in Q2. And as I said earlier, the fact that we've been through this quite unprecedented prolonged and broad weakness in end markets, we are seeing quite a lot of, I would say, pent-up demand from our customer base where they -- our sales or order pipeline look really very positive. We have lots of opportunities to go after. It's just the time it takes to convert those orders continues to take longer than it has if you look at it on a historic basis. So I think there's certainly reasons for optimism there.

Understood. That's very clear. Could we just touch on the underlying profitability of the group in the first half and particularly Scientific? Because last year, you had a comparative that included a nasty impact from ERP, so circa around GBP 15 million. So, if we adjust for that, there's an underlying deterioration of around, I guess, 200 basis points on the group level and around 300 basis points in Scientific despite some modest organic sales growth and a strong contribution from cost savings. So could you perhaps maybe just elaborate a little bit in terms of whether there was something unusual that might have impacted underlying margin in H1, if it's just seasonality around acquisitions or contributions from acquisitions, that would be helpful.

Thanks for the question. There's nothing -- there's no unusual impacts in H1 that have affected the margin quality at all. So probably just more the volume that Andrew has just alluded to, we've had some delays in revenue as we exited Q2. I think looking forward, however, trying to get confidence around the profit margin in H2, there's a number of building blocks that I think we've touched on, which is -- don't forget, we've not just got the acquisitions themselves, we've also got sales synergies from the acquisitions that are on top within the Scientific business, and those are progressing at pace. We've already got identified sales synergies of between GBP 10 million and GBP 15 million. So we're actually exceeding the business plan and most of them are actually second half weighted. We've touched on the Profit Improvement Program itself, has always been second half weighted, and that is a full impact on to profit margin. So the margin quality lifts up substantially. And then I'd say, lastly, we've just got the general trend of the business where it's historically also always been 65% to 70% in the second half. We did have softness in some of our acquisitions in H1 and we expected revenue to be slightly higher. As Andrew said, some of that is export control topics related to tariffs. Those orders are sitting in the backlog, and we're expecting those to execute in the second half as well. So again, contributing to the volume and ultimately the drop-through on our operational gearing. So yes -- no, we're very confident in the path to the operating margin quality. I hope that answers the question.

And follow-on, sorry, Angela. In terms of -- you mentioned in the presentation, circa GBP 20 million of incremental profit from those acquisitions in the second half. I guess, that might imply a margin north of 30%, but I'm not sure what we penciled in, in terms of incremental sales. So could you perhaps either speak to the margin on those -- on that incremental profit contribution or I guess, the absolute contribution from acquired sales or the incremental contribution from acquired sales in the second half?

I mean, it's a bit of a mixed bag in all honesty. We've got a business like SciAps, who have got very, very high margins. There's a lot of software in the business. So they've got double-digit margin drop-through, but Micromeritics slightly less. So we haven't given color on the breakdown of those 3 acquisitions. We always talk about them as a group. And I'd prefer not to get into the detail of it today. And I think the only thing you should take away is that we are exceeding the business plan and the margins themselves are performing as we expect.

There are no additional questions waiting at this time, I would like to pass the conference over back to the management team.

All right. Well, thank you, everyone, for joining. I appreciate given our circumstance, relatively limited questions today. I understand that. But thank you for joining. Just by way of closing, I just want to emphasize some of the points I made earlier. I mean, really since 2018, we've transformed the group into a portfolio of really high-quality businesses with attractive growth and margin profiles that really positions the group for sustained success. Our expectations for this year are very much supported by our order momentum and an improving sales outlook, along with the expected benefits from the recent acquisitions and efficiency programs that we've talked about. In the long-term, our confidence in the group's continued success stems from our strategic investments, but also the strong execution track record that the group has demonstrated as underpinned by exceptional people, and a really healthy high-performance culture. Spectris is now extremely well-placed to harness the power of precision measurement in solving its customers' toughest challenges. Thank you very much for joining, and I'm sure we'll speak soon.

Thank you.