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Welcome to the Victrex Q1 IMS 2022. [Operator Instructions] Just to remind you, this conference call is being recorded. Today, I'm pleased to present Jakob Sigurdsson, CEO. Please go ahead.
Thank you. So good morning, everyone, and welcome to our Victrex' first quarter interim management statement call for our financial year 2022. I'm Jakob Sigurdsson, CEO; and I also have with me today, Richard Armitage, our CFO; and our Head of Investor Relations, Andrew Hanson. So I'd like to firstly summarize the headlines from today's announcement, and Richard will then cover the financials in more detail, and we will then conclude with the outlook before we open up the call for any questions. Firstly, about 2 months ago, we reported our full year 2021 earnings, and we indicated that we have seen a solid and sustainable recovery from the impact of COVID on our business during FY 2020. I'm very pleased to say that our recovery is continuing, and the momentum has remained positive throughout the first quarter. And actually, from what we gather over the first couple of months of the calendar year 2022 that momentum is certainly carrying on into the current year. At a demand level, so across our end markets, electronics, energy and industrial, medical and the value-added resellers, saw good year-on-year growth altogether. Automotive was modestly down year-on-year, reflecting the challenges in the industry right now, although it improved from the final quarter of our FY 2021 financial year. We're also starting to see some slightly more positive signs right now in automotive, looking out over the months ahead, although we'll need to see some of that come through in the recent future when a more near future ifYou know, for example, that I data on both demand and production for '22 have ticked up by a percentage point or so since November. I think it looks like the industry is starting to sail out of the situation created by the chip shortages that are well documented all around. In Medical, we did see a strong performance with double-digit growth both year-on-year and sequentially quarter-on-quarter. This included recovery in the Asia Pacific as surgery rates return to more normalized levels. Medical revenues in the U.S. were slightly lower as the impact of the Omicron variant, impact will be late in the calendar year 2021. But we remain positive on this end market and moving through FY '22, and our surgery rates gradually improve. I'll now hand it over to Richard for detail on the headline numbers. Richard?
Thank you, Jakob. Good morning, everybody. So as Jakob indicated, we have seen continuing momentum and healthy top line demand across several end markets, balanced by headwinds, including currency, higher raw material costs and increasing energy prices. For quarter 1 as a whole, grew revenue of GBP 74.6 million, was 9% ahead of the prior year at GBP 68.7 million, while sales volume of 1,025 tonnes was 16% ahead of 883 tonnes. On a year-to-date basis to the 31st of January, the group volume and revenue remain ahead of the prior year with volume growth still into double digits. Trading in February has also remained positive. It is worth remembering though that Q1 in the prior year had seen a sizable impact from COVID, and it wasn't until we were into our second quarter that we saw a return to more normalized sales volumes. We would also note that we are expecting a more normalized performance from our value-added resellers following the restocking benefit last year and hence, we're unmindful of comparatives in quarter 2 and quarter 3. Overall, though, this has been a good start to the year, and we are pleased with progress. Turning to gross margin. We did note in December that we have seen inflation in the price of U.K. energy as well as some raw materials start to come through early in the financial year. As noted at the time, we have implemented a price recovery plan that is progressing well, and our first half margin has remained stable. Unfortunately, we do now expect to see some further increases again in U.K. energy prices and also in Asian source raw materials, which, if sustained, could impact our gross margin recovery in the second half. Taken together with currency headwinds, this may lead to a small reduction in gross margin versus the first half. We may need to consider additional mitigation plans, and we will provide a further update on these as our interim results. Turning to cash and capital allocation. We have seen a continued strong cash flow performance with available cash of GBP 113.6 million out of 31st of December. This excludes cash ring-fenced in China for our investments there. This is prior to payment of the 2021 final and special dividends on the 18th of February, which will total approximately GBP 84 million. Our cash generation supports our growth plans. And as we have signaled already, FY '22 is expected to be a year of high capital expenditure totaling approximately GBP 60 million, focused on China capacity, U.K. asset improvement and the mega-programmes. Thank you, and I will now hand back to Jakob.
So thank you, Richard. To wrap it up on a brief word on the mega-programmes. We're very pleased that Knee program, the clinical trial now has total of 10 patients with implants. And you will remember that it was about this time last year when we had the first one. And none of those has required any medical intervention, with 8 patients now already having passed the 6-month clinical milestone with, as I said, any intervention. And in fact, we're close to the first patient passing 12 months by this stage, as I said before. This is obviously good news. As you know, this is a very sizable market, around $10 billion overall, and the market opportunity within this is expected to be around $1 billion for us in total. So as a result of this progress, we're working on options for additional partnerships in clinical studies, for example, in different geographies, which could support how any rollout can progress after clinical studies are completed. In Trauma, with the partnership established and commercial launches expected in the second half after 2 U.S. FDA approvals, we're preparing for a next phase of manufacturing scale-up, including partner opportunities in Asia. And across all our other mega-programmes, we're seeing some really good progress against milestones and we will update you on those in detail when we speak together again in May. I'd like to finish again a little bit on the outlook. In summary, the expectations for the full year are unchanged at this early stage. We do know, however, as we've said before, that this calendar quarter that we're reporting on right now is probably one of the best first quarters in the company's history. And the first 2 months of the second quarter are actually ahead of last year also. Therefore, we do see some potential for further volume improvement across several end markets, which may mean an upside to the consensus estimate of around 4,450 tonnes that's out there. But as Richard has indicated, we're mindful about further increasing energy inflation in addition to existing headwinds of raw material costs and currency presents an additional challenge that we are responding to. So overall, we continue on our plan to deliver year-on-year growth for FY '22. This, I think, covers the main points of our statement. And I'd now like to hand it over to the moderator for questions-and-answers.
[Operator Instructions] And the first question comes from Alex Stewart, Barclays.
One on your pricing. Your average selling price was up about GBP 4 a kilo from the end of last year. Could you tell us how much of that is due to these concerted efforts to push prices up to offset energy costs? And whether you expect dilution over the course of the year because of the currency hedges coming in, any comments on ASP would be interesting? And alongside that, is there anything you can say to quantify the energy cost or the raw material cost headwind would be very useful? And secondly, you seem to be more confident about the recovery in auto, which is interesting because a lot of other companies are saying that actually the shortages and issues are going to persist well into 2022. What is it that gives you confidence about that? Are you seeing it in your order book already? Or is this from your conversations with your customers?
Yes, so as we noted in December, we have a reasonable proportion of our business on contracts that would renew on the 1st of January. So we did not, at the time, expect to see any material benefit of price increases in the first quarter. And we'll see those start to take effect in the second quarter. So it's not price recovery. Mix has improved a little. So again, as we signaled in December, Medical revenue has been picking up quite well. So that's had a mix -- a beneficial mix impact. And then in terms of spot rates used to for translation purposes for the revenue line, we have seen a slight improvement, particularly in the U.S. dollar. But bear in mind that our hedging policy means that we won't see the, if you will, the full cash benefits of that until much later in the financial year. I think on energy prices, we haven't been explicit as to have the individual elements of inflation impacts the P&L. We did make the point in December that a price recovery would need to be sort of low-ish single digits. And as that up until now is certainly where we needed to pitch the price increase activity.
Can I just clarify 2 things, sorry, on that, Richard? The lowest single digits, are you talking pounds per kilo, are you talking about percentages? And then secondly, you talked about mix having improved, obviously, because of Medical, which is very accretive to ASP. But you still got the U.S. to come back, does that mean that we should see this level of ASP roughly through the rest of the year or potentially some upside to that?
Apologies, Alex. Yes, percentages. And yes, so certainly in terms of the mix effect, the recovery in Medical is gradual. There is more to come. You're right about procedures in the U.S. So we should be at, at least, this level in the balance of the year probably with a further slight improvement. And then I think you had a question on auto?
Yes. I think that it's a mixture of a couple of things. I think we're cautiously optimistic about the recovery there. I think there is the view out there right now that chip shortages will definitely be with us through the first quarter. But then sort of post midyear, things will start to ramp up again. This is also partially reflected, I think, in industry rate forecast, for instance, from IHS that has recently started to upgrade their estimates for car production for the calendar year 2022. I think we're starting to see a slight uptick in our order book already, which would make sense even if, let's say, chip shortages are with us through the first quarter. If there is an anticipated recovery after the half year, then I think it wouldn't be surprising to see the supply chain start to prepare for uptick in the Tier 1s and the Tier 2s starting to ramp up production to be able to meet that ultimate increase in production rates. So that's -- these are sort of all the signals that we are reading. But as I said, we're cautiously optimistic. But I think we are of the opinion that the bottom sort of has been reached there. And it will be interesting to follow, in particular, the next couple of months or show to see whether hypothesis is validated.
And the next question comes from Mubasher Chaudhry Citi.
Just a couple around the bridge items that I think for 2022 versus '21. You talked about historically, just on the energy headwinds. Are you able to quantify what kind of number we should be expecting as a headwind for 2022? And then overall, previously, you talked about potentially being lower and the under absorption of overheads If you could just update on kind of the quantum of those given that your 1 quarter into 2022 now as well?
Yes. So I think as we said just now, we haven't quantified the individual elements of inflation, at least we not disclose those. And as I pointed out, the current level of inflation, i.e., what we've seen in the first quarter still equates to low single-digit percentage of price increase in order to recover those. We have flagged that there is some more inflation coming through, which we're currently working on. The line just stemmed out when you're talking about overhead recovery, but I think your point was with volumes where are we in terms of overhead recovery. So our production outlook for the year is roughly the same as it was in December. So we would expect to be expecting to produce in terms of total volume, roughly in line with sales. So sales has ticked up, so our overhead recovery is improving a little. So therefore, I think when we get to the interim results, and we'll present some more detail on this as usual, we will be seeing that the vast majority of the overhead recovery impact that we've seen over the last couple of years has or will have substantially reversed. Does that answer your question?
Yes, that does. Just going back to the headwind. I think you haven't -- maybe you haven't quantified the individual components, but as an overall -- because I think the particular focus around the energy headwinds in the commentary this time around was the last time. So I just wanted to get a feel for overall where we should be thinking? I know you talked about high single-digit percentage to offset or to match. Should I assume that pricing increases offset all the headwind?
But ultimately, we will see...
Sorry, within 2022, sorry.
Yes. No, I understand. Yes, I understand that point. I mean ultimately, we will seek to recover the headwinds one way or another. Inevitably, when you're in this sort of ongoing inflationary situation, there is a degree of time lag in implementing, mitigating measures. We'll consider all necessary measures to recover that inflation. Hence, why we're signaling there could be a small negative impact on gross margin in the second half, but that would be a time lag effect with us expecting to enter FY '23 in a better place.
And the next question comes from Kevin Fogarty, Numis.
I guess it's just on -- firstly, on your unchanged expectations, sort of balance with that potential kind of margin decline in the second half of the year, i.e., is this something you're kind of more optimistic on to kind of more offset the second half impact? And just, I guess, in terms of end markets, I just wondered if there's anything in the end market where you're now more optimistic than you were in December?
So I'll take the first one. So I think -- I mean it's a good question about the second half, and there aren't any particularly major sort of bullets. I think we've seen a good start to the year in terms of volume. So we're expecting our second half volumes to be reasonably solid. We will see benefits of the current price mitigation activity starts to come through. Costs are well under control. Therefore, we see a second half that would be in line with expectations. I think 1 point to make on gross margin, and this is where the gross margin explanation we gave at the full results presentations will be helpful is that if you think about our hedging policy, we are hedged between 6 and 12 months on a rolling basis, as you know. Therefore, the presentation of that on the P&L, means that the impact of hedging comes through in the deal releases line. And if we're in a situation as we are in right now, where our effective, let's take the U.S. dollar rate, is around $1.38, even though spot today is probably about $1.34. That's coming through in gross margin and is having a negative presentational impact on gross margin percentage. So we'll give the normal full detail of that at the half year, but there is also bus effect impacting the gross margin percentage in the second half. Does that help?
Yes. Okay. That's helpful. I just sort of wondered if there's anything kind of offsetting the negative drag to sort of keep your kind of full year expectations unchanged? Is there anything we kind of -- we should be thinking about?
Well, no, I think as I said, volume is looking decent. Mix is improving. Medical is coming back gradually as we discussed. Costs are under control. So we would, at the moment, expect to be close to expectations.
Okay. Okay. No, that's
a little bit sort of more, Kevin, on the end markets. And I think we addressed automotive in answering Alex's question earlier on. But if we look at it sort of sector by sector, aerospace for us has been improving month after month right now after it reached the trough sort of just before the midyear last year. And we see the build rates increasing, particularly at and then sort of slowly at Boeing as well. So this is also a high-margin sort of end market for us. So that gives us sort of a continued source of optimism in U.S. Automotive, as I said, forecasts are increasing for car production as we go through the year, there is this view that chip shortages are coming to an end after the first quarter and definitely by the half year, that will lead to more activity in that entire supply chain. If we look at the electronics market, I think we will definitely see continued growth in semicon during the year. And I think if I recall correctly, the latest stats there, we call for around 9% growth of the sector in the year. Under electronics, we also report all kinds of smart devices and electrical appliances. And that's where we've been growing [ 90 ], particularly in the last year where we had a record year in Electronics, and there is a continued growth into this year there and a healthy underlying sort of macroeconomic drivers in electrical appliances, in general. Energy & Industrial, we've seen rig count increase now. I think just at the end of January, it was well above 800, which was 10% above at least last month's figure, roughly. Oil price is, again, a key indicator there for us, with WCI way above 80 these days and not necessarily expected to come down. So that bodes well for energy. And then if we look at sort of the best indicators for bars, well, they're highly correlated according to our estimates with PMI indexes, surely enough in the U.S., PMI has dropped a little bit down in January, but still at a healthy level of around the mid-50s-or-so. China PMIs are increasing again, being just above 50 [indiscernible] below 50 at the end of the year. And the euro area seems to be very strong right now with PMIs of around 59. And this correlates, I think, well with some more demand patterns for the value-added resellers in particular. And then on the Medical side, yes, we are gradually improving. There was a little bit of a step backwards in the fourth calendar quarter, and I think we associate that mainly with the Omicron impact there. But as we sail out of the Omicron peaks, if you wish, across the world, then I think we see -- we should see stronger recovery again, and you'll be well aware of what that means for our margins, as an example. I think that gives you a rough color of sort of the key drivers behind the key sectors that we have and our subject to. And the fact that we saw a very strong first quarter volume-wise, that momentum seems to be continuing into the second financial quarter. And then if you couple that with the indicators that I sort of covered ever so briefly, then I think that gives you the underpinning for why we'd be optimistic about the demand outlook. And demand outlook is important for us, obviously, because as you know, we are a relatively sticky business. So we're going into critical applications, and it is not a situation or a market where you go in and out that easily. So the fact that our core is now reaching this size and continue to grow gives us a source of optimism, all but with the caveat that Richard touched upon as well, that we would expect some of the stock build that has characterized the strong demand, particularly with the value-added resellers to start to level off sort of in the second half. And that's something we gave guidance on when we talked about the full year. And I think we're expecting to see that sort of cruising altitude, if you read sort of just above the midpoint of our financial year.
And the next question comes from Henry Carver, Peel Hunt.
Most answered. Just on pricing. But a very straightforward one. Can you just remind me what your sort of pricing policies are in terms of structured put through mechanisms or not or to what extent you manage price recovery as we go through this inflationary environment?
Thanks, Henry. Yes, I mean, like any commercial business as a whole range of pricing mechanisms out there. But we have noted that we do tend to have a reasonable proportion of business on annual contracts that often starts on the 1st of January. Therefore, the price recovery discussion becomes part of the annual contract renewal, and they are commercial negotiations. They're not other forms of commercial contract like cost plus or that kind of thing. They're any normal type of commercial negotiations. And that's probably the best way to describe it, if that helps?
Yes. So nothing that's directly linked to a particular raw material cost increase, and that just gets automatically pushed through. It's not that in writing, but forms part of the negotiation, presumably?
Correct. And that's normal in this industry. And as always, with us, bear in mind, we're not a bulk chemical business where there is a strong direct correlation with 1 base material or another. And as we've noted before, actually, our inflation is more influenced by the extent that materials are coming from Asia, for instance, by local inflationary effects of energy, actually, in China, transport and labor and all those sort of things.
That's very clear.
It's a very different, Henry, from what you see in, let's say, the C2 chain or C3 chain or anything that is related to, let's say, There's no sort of index mechanism for pricing in -- neither in the way that we buy nor in the way we sell.
The next question comes from Sebastian Bray, Berenberg.
I have 2, please. The medical business these days, what is the geographical split. From memory, this used to be about 2/3 U.S. Given the growth in Asia, I'm interested if this is still over 50% U.S. and if the incremental Asian sales are primarily being made in spine, i.e., this market is taking the U.S. trajectory or if it's other products like sutures which are selling well? That's the first question. My second one is on CapEx. Can you remind me, is the U.K. debottleneck completely done by the end of this fiscal year? Meaning that CapEx reverts from GBP 60 million to GBP 30 million or should in 2023?
So just on the medical side, the mix U.S. right now, this is what I'm looking at year-to-date figures is just around, I think, around 53-odd percent-or-so -- 50, let's say. Asia is around 20, and it's actually growing quite nicely. And then Europe is obviously then constituting the balance, which would be whatever, 27%-or-so.
That is helpful. And is it a similar type of product that's being sold in the Asia? And is it mainly spine or is it more diversified to set than is the case for the U.S.?
Yes. So Spine is actually not as big in Asia. In Spine, it is actually stronger in the trauma area and craniomaxillofacial applications, as an example, and in arthroscopy and some trauma-related activities. So it's a bit of a different mix. Actually, quite a bit of a different mix in Asia than it is in the U.S., actually, but Spine is growing there now.
That is helpful. And just quickly before moving on to CapEx for 1 more there. Are there major differences in selling prices by geography for the U.S. versus Asia versus Europe? Because we I look at the recovery in mix and the difference between the revenue and the volume growth of the group? And I think this relates to Alex's question earlier. And given the recovery in Medical, one would think that the revenue could track a bit closer to the volume line on an FX adjusted basis? Am I right in saying that the products in Asia are sold at a cheaper price?
So I think the mix will mean that the average selling price is a little lower. So would you expect to see volume track closer to average selling price of medical over time? I think you probably would, to a degree. It's not necessarily going to be visible in the group results. But yes, we probably see some degree of that, Sebastian, I think.
That's helpful. And the final one on the CapEx. Are we effectively done with everything after fiscal year 2022 in terms of the growth projects, especially the U.K. debottleneck?
So we -- first of all, in terms of the U.K. debottlenecking, that has turned into an ongoing program. And I mean this is only a good thing. So we found ways really to sort of break the thing up into a number of sort of incremental projects. And that has the benefit, one, of smoothing out the capital; and two, of reducing the impact on the production schedules. So that will sort of disappear into the annual CapEx allowance. We have seen that this year's CapEx will be about GBP 60 million and that's still the case, primarily due to our investments in China and then falling back, absent any new opportunities, to probably at the order of GBP 30 million. So a slightly higher ongoing level of capital, partly because of those U.K. -- ongoing U.K. debottlenecking projects, partly because we're allowing for some expenditure in relation to achieving our carbon net-0 targets, a little more IT expenditure coming along, given digital opportunities, that kind of thing.
The next question comes from Sam Perry, Crédit Suisse.
I've got 2, please. On pricing. Historically, has this largely been led by -- my understanding was are the ASP changes have largely been led by mix. Can you give us a flavor of when you've historically put through pricing? How difficult are these conversations customers? I mean you alluded to that, you're not a bulk chemicals company. If our customers look at your margin profile? Does that make it difficult to pass the pricing through? And I'll leave it there and ask a second question after.
Yes. I mean you're right, historically, that the movements have primarily been around mix or currency. So I think whenever there has been periods of inflation in the past, Victrex has responded appropriately, sought to sustain margins and take an appropriate mitigating action. Clearly, the period of inflation we're going through at the moment is of a magnitude that broadly we haven't seen for a number of years. Therefore, to find a comparable event, you would have to go back a number of years to see what happened at the time.
And then just a clarification question. In the release, your comment around year-to-date volumes. Are you talking double-digit growth financial year-to-date or your -- or calendar year-to-date? And I guess, either way implies 2Q volumes are pretty good. If I look at the 2,100 tonnes for the first half in consensus, today's print would imply that if it was to reach that number, it would be down 16% volumes in Q2. That doesn't sound like it's going to happen from your release today. So is there sort of some upside to that?
So Sam, it's Andrew here. I think what we're saying in the release is essentially financial year-to-date, we are still double-digit ahead on volume. January was ahead. I think we've said that. And actually, February is tracking ahead. March last year was probably the best month, I think, of the quarter last year. But I think actually, we are expecting that based on that January is strong and February is looking strong. The Q2 number, I think, has a chance to sort of beat Q2 of last year as well.
Yes, and I think that would definitely fit with the consensus expectations. And we -- obviously, the release was about the financial year-to-date, so the year beginning of October. To your question about calender year, well, we've indicated, January has remained in growth, February is looking okay. So actually, it's both calendar and financial year, I guess, you could say.
And the next question comes from Chetan Udeshi, JPMorgan.
A few questions. The first question was, I'm just sort of intrigued, I have to say, with the comment of when you say in the release [ 3% ] incremental energy inflation because I think the energy costs have been quite high already in second half of last year. And I guess when you guys spoke to us last time in December, the prices were actually higher than where they have today, if anything prices have come off. So I'm just curious what changed in the last 2 months and why we are talking about incremental inflation now when frankly the prices were already high back in December? That would be my first question. The second question was, if I heard you correctly, it seems the price increases that you guys are pushing through is only going to be applicable or seen in the numbers from Q1. So if you think, okay, the margins are flat sequentially gross margin-wise, why should the gross margin come down because you've clearly not seen the full impact of price increases at least for the last quarter? So I'm just curious around the commentary on gross margin in second half, given that we've not seen the evidence of or let's say, the benefit of price increases in Q1 numbers yet. And the third question is, just broadly speaking, it seems the 60 percentage gross margin target just gets slipped to the right. I'm just curious how internally are you guys thinking about maybe doing something within the corporate level to make sure it comes forward rather than just keep going to the right?
So firstly, on energy, I mean, certainly, it's true there's energy prices and energy forwards dipped in, I don't know, the first couple of weeks of January, but then they went up again. So I think the key point here is this is very volatile. And probably, there is a degree of new news in our expectation that the peak in energy prices is going to be sustained for longer than might have been imagined. So we're anticipating a small seasonal dip in energy prices, as you always see in the U.K. in our second half in the summer, but not by as much as one we normally see. So I think it's a combination of those factors in the U.K. And then bear in mind also, we do buy intermediates from Asia, and particularly in China, inflation continues to move ahead in China. And there is a new sort of band of energy-driven labor cost driven commodity price-driven inflation going on over there that is starting to have an effect. So I suppose those are the 2 new elements. You're right that about the timing of pricing. So we are indicating that just a little bit of caution around the second half because of these new inflationary impacts some of which we're still evaluating. So this news from China really has only emerged in the last week or 2. But also, again, don't forget the presentational impact of currency and the impact of deals on the gross margin line, which also has a negative effect on reported gross margin. And it's that, I think, that's causing the potential for that slight decline in the second half. Again, we will show the normal the half year, which hopefully will give good clarity on that. I think on the 60% target, totally get your point on that. We're very focused on this. And we do have a reasonably clear path to get back close to 60%. We have indicated that this year, we are impacted by commissioning costs in China that of itself has a negative impact of about [ 2 ] percentage points on gross margin. Those will reverse, not completely in FY '23, but certainly going into FY '24, there will be commercial volumes coming out of those investments. So that problem will go away. Mix is recovering, as we already described. And then we have embarked on a whole program of various operational improvements, which will also have a good positive impact on gross margin. So we do have a route map back towards 60%.
If I just follow up with the last question. If I look at the Q1 revenue, if I look at the momentum you guys are indicating on pricing and volumes, and if I take same gross margin of 54% as of second half of last year, I don't -- I mean I think we can quite easily get to GBP 50 billion of PBT or even maybe slightly higher. Do you see that to be a sensible maths?
Well, we'll be adding in that direction.
And the next question comes from Rob Hales, Morningstar.
Most of my questions on the release have been answered. So can you just remind me your opportunity in EV, e-mobility, is any of that near term or is it all like kind of significantly in the future?
No, I think there is a significant opportunity for us, particularly around the motors themselves and the next generation of products that are sort of starting to emerge there. So this is not on the same time scale as some of the mega-programmes that we have talked about in the past. And actually, this is progressing more rapidly than we thought a few years ago. So I think we would be aiming at seeing a revenue impact that will be noticeable from opportunities around EVs, and as I said, particularly around motor applications. And that's obviously putting aside the fact that many of the applications we're in on the eyes will translate over into the EV world. But our opportunities mainly are associated with an increased demand for better insulation, whether it's for thermal properties or electrical insulation and/or dimensional stability around the motor and particularly with the movement towards higher voltage charging, and I would expect to see an impact on the top line from those in the coming financial year and then growing, hopefully, quite rapidly thereafter.
And we haven't received further questions at this point. I will hand back to the speakers.
So thanks, everybody, for attending the call this morning. and we look forward to speaking to you again at the half year. Take care.
This now concludes our conference call. Thank you all for attending. You may now disconnect.