Good morning, everybody, and thank you for joining us for this trading update and outlook call. Before we start, I'd like to draw your attention to the safe harbor statement on slide two. Today, we're going to discuss the outcome of AVEVA's FY 2022 financial year, the FY 2023 outlook, our longer-term targets, and give guidance around the shape of the path towards these targets. I have with me today Peter Herweck, AVEVA's CEO, James Kidd, Chief Strategy Officer, and Brian DiBenedetto, our CFO. Now over to you, Peter. Thank you, Matt. Hello, everybody, and thank you for joining us. AVEVA had a very good close to its 2022 fiscal year. The Q4 revenue growth was 18% for the group on an organic constant currency basis. This was driven by a strong performance from the PI System, which is really a pleasing indication that integration is progressing very smoothly. Overall revenue growth for the year was 7% on an organic constant currency basis. ARR grew 9%. This growth was largely driven by the heritage AVEVA business, although we expect PI to make a much more significant contribution to ARR growth as it moves to subscription. We plan to significantly accelerate ARR growth by 15%-20% per annum from the current fiscal year. This acceleration will underpin our fiscal year 2026 targets. Now notwithstanding this, near term revenue growth will of course, be impacted by timing of revenue recognition and the sanctions in Russia. Margins will be further impacted by the phasing of investment in cloud and some cost inflation. Now taking all these factors into account, reported revenue growth is expected to be lower in fiscal year 2023 than it was in fiscal year 2022. Adjusted EBIT margin is expected to reduce before resuming growth in fiscal year 2024. Moving on to look at our fiscal 2026 targets that we had shared with you back at our July 2021 Capital Markets Day. We've just completed our yearly detailed five-year business plan review, which fully supports our midterm targets for fiscal 2026, as laid out during the Capital Markets Day in July. Today, we want to outline this path in much more detail. Our focus is on growing ARR because it is a substantial uplift in the recurring revenue and cash flow that will drive all of the other metrics. Let's now look at why we expect ARR to accelerate. On slide six, you can see that we intend to accelerate ARR growth to be between 15%-20% per annum out to fiscal year 2026, and there are some key factors that will drive this acceleration from this fiscal year. As we had expected, we're now starting to see stronger demand in several of our key end markets, and we're already seeing early contract renewals and top-ups of our AVEVA Flex tokens. As I'm sure you see in the news each day, industries such as energy, infrastructure, marine, and nuclear have strengthening demand ahead. Now the fiscal year 2023 is also a year in which we expect to see meaningful product synergies kick in as key integrated products are launched. With pricing and business model transition, our products give very strong returns and value to our customers. In this inflationary environment, we will implement price increases. For example, we've raised our list prices by approximately an average 10% on a weighted basis this month. Finally, we're accelerating our business model transition and our move to subscription is ongoing and will accelerate in the PI System business while our cloud products are becoming even more capable. We're implementing a greater focus on driving higher net present value contracts and are driving this through sales commission, which now focus on the uplift of value on existing contracts and new business, as opposed to rewarding simple renewals. Now over to James, who will give you more details on synergies and business model transition. James. Thank you, Peter, and good morning, everyone. Let's start by looking at the revenue synergies. As we previously said, our plan is to have $100 million of revenue synergies by fiscal year 2026, and we've made a good start. We've achieved some initial success in leveraging our global footprint, particularly in Canada and the U.S., to sell more PI System products into existing customers and also in cross-selling our wider portfolio. For fiscal year 2022, we were slightly ahead of plan and saw good examples of cross-selling and contract expansions. We have a good pipeline for fiscal 2023, but it's still early days, and clearly the majority of the revenue synergies are still ahead of us. We expect these synergies to build as more combined AVEVA and PI products come to market, offering incremental value to our customers. We've already developed a Unified Operations Center with the PI System, and the PI System is now available on subscription via AVEVA Flex, which also makes cross-selling much easier, and that will help drive growth in fiscal year 2023 and beyond. Very soon, we'll have Predictive Analytics with PI and Production Management with PI, as well as other products under development, which will be launched later this year and next. Now let's take a look at our three key business areas and where they are in relation to our subscription journey. AVEVA, as it stands today, has come together from three primary complementary business areas, engineering, monitoring and control, and PI System. To be clear, this is not the entire portfolio, but these three account for over 80% of our revenue, so they give a good view of the subscription journey. Before we start, just to be clear, we are not stopping selling perpetual licenses at this point, but clearly subscription is our strong preference. The sales commission plan drives the sales force to sell subscription over perpetual licenses. Over time, more product features will only be available under subscription, which will encourage customers to switch. Each of these areas is at a different stage of its subscription journey. With engineering already well established, monitoring control underway since 2019, and the PI System just starting the journey. Let's start by looking at the engineering business, which came mainly from the Heritage AVEVA. As you can see from the pie chart, the engineering business has largely transitioned to on-premise subscription, with the majority of customers on a three-year contract, and it has a very small amount of SaaS revenue today. We do still sell some perpetual licenses, but they represent less than 5% of revenue, and we only sell them really when it's necessary in geographies such as China. The transition for engineering will be from on-premise to a hybrid cloud deployment, principally for our Unified Engineering product, with this transition still being ahead of us. We expect 40% of ARR for the engineering business to come from SaaS in fiscal year 2026, with this largely being driven by the conversion of existing on-premise subscription contracts. This is one of the factors that will impact the timing of revenue recognition. Our monitoring and control business began its journey to subscription in 2019, post the merger between AVEVA and Schneider, and you can see that approximately accounts for 35% of revenue from subscription today, with maintenance at 20%. There's still a reasonably large amount of perpetuals at 30% of the mix, which are mainly coming through our indirect channel. The transition to subscription has been very successful thus far, with increased customer usage of AVEVA's broader product portfolio being achieved through AVEVA Flex. The transformation is ongoing, having focused on our largest accounts such as PepsiCo and Campbell Soup Company, moving those customers from maintenance to Flex subscription. We are progressing each year, moving these maintenance customers to Flex and expect to have converted 40% by fiscal year 2026. In terms of SaaS, we expect a relatively slow transition for the majority of our monitoring and control growth to come from increased functionality that hybrid deployments offer, resulting in SaaS representing 15% of monitoring and control ARR by fiscal year 2026. The PI System business is really just starting its subscription journey and has been built on a traditional perpetual and maintenance model. We'll use our learnings with monitoring and control to help us guide us through the transition. For the PI business, we plan to use perpetuals only for expansions of existing accounts and where regional or industry purchasing restrictions exist, while at the same time gradually converting PI's large maintenance base to subscription. You'll note that the transition of the maintenance base has been conservatively estimated at 15% being converted by fiscal year 2026. Many PI customers install the software and happy to run without really upgrading or adopting additional products. Bear in mind, it's really just since the AVEVA acquisition that customers now have access to the broader portfolio, and we expect broader adoption going forward. Similarly to monitoring control, we're modeling the PI System SaaS to represent 10% of ARR by fiscal 2026. Maybe just give a bit more color on why for both monitoring and control and the PI System, have both got modest SaaS targets. This is really due to the fact that both portfolios contain products connected to real-time and critical operations, where connectivity and reliability are mission-critical, and therefore these products are expected to remain on-premise. We expect customers to adopt a hybrid SaaS solution which combines SaaS applications such as Predictive Analytics in the cloud with the on-premise application. An example would be the runtime version of HMI/SCADA tools, which are generally deployed on-premise and site-specific with a development and configuration environment in the cloud. This enables enterprise-wide standardized configuration to allow deployment of standard input screens, reporting, et cetera, across multiple sites. On this next slide, I've covered the key aspects of the transition for these three business areas. We left the detail in the pack for you to look at in future and to monitor how things progress. With that, I'd now like to hand back to Peter. Thanks, James, and I'm on page ten. What we show on this slide is an example of how AVEVA Flex has grown, which is AVEVA's token-based subscription offer to achieve sustainable growth in ARR. In this instance, with real underlying data at a 15% CAGR. For us, subscription transition is not just about one-off uplifts in pricing. It's all about delivering incremental value to our customers so that they can grow with AVEVA across many years. Here, in this example, we see a composite example of our experience of these transitions. As the customers move to Flex, we achieve an immediate uplift in value, and this uplift builds year- on- year. Often, the customer would transition from the usage of a limited number of products to several. Once on Flex, they grow through the uptake of greater usage across a wider range of products. Of course, during the period, both in contract and list price increases do also take effect. Of course, this existing customer ARR growth will also be augmented at the group level by new customer wins, new logos. Moving on, I'd like to share a couple of current case studies with you on slide 11. AVEVA Flex drives ARR growth, and the examples here of industrial hybrid cloud deployments are shown with two customers. The first example shown on this slide is an infrastructure company. It's been a long-standing customer and moved to Flex in 2020, and it's important to look at the journey over time. They now use five products from our engineering portfolio, up from two before they moved to Flex. Due to the value that these products have delivered, they burnt through their tokens much faster than expected. This led to a recent early renewal of a three-year contract at twice the level of the original Flex contract, 100% growth. The second example is from a renewable energy company that currently uses AVEVA Flex with United Engineering and our Point Cloud Manager. They moved straight to Flex as a new customer and again consumed our software ahead of initial expectations. This resulted in a contract renewal with a 17% uplift after 12- months. Now having shared some details on, and examples with you, I'll hand over to Brian, who can talk more about the expected shape of our financials. Brian? Thank you, Peter, and hello everyone. I haven't met most of you yet and look forward to doing so over the next few days and weeks. What we show on this slide 12 is how we expect to bridge to our target levels of ARR by fiscal year 2026. As Peter mentioned, ARR drives sustainable growth and cash flows, and while this may not always result in immediate short-term revenue recognition, it is a certain path towards long-term value creation and higher NPV. As we mentioned before, we require ARR annual growth of 15%-20% in order to hit the fiscal 2026 targets. While the growth of 9% in fiscal 2022 was behind our plan, the opportunities we have through pricing, expanding usage, cross-sell, plus the underlying market conditions gives us confidence in our plan to hit the fiscal 2026 targets. Let me walk you through each of the elements of this bridge. The starting point is churn, which we define as the complete loss of a customer. Upsell and downsell are captured elsewhere in this analysis. As many of you will know, AVEVA has historically low churn due to the mission-critical nature of our products and the stickiness that comes with that. In our plan, we're assuming that churn continues at historical rates of 3%. Generally, once our software is installed and being used, it is rarely ripped out. We then take a look at pricing. As mentioned, we've just put through a 10% weighted list price increase across the portfolio, reflecting the wider inflationary environment. This will take some time to feed through to ARR as contracts get renewed and we sign up new business. In addition to this increase, we have contractual price increases built into existing maintenance and subscription contracts, and we'll also implement further annual price rises. All in all, we expect pricing to add approximately 5% to ARR growth per year. Our plan also accounts for the increase in revenue synergies from the OSI acquisition that James referenced earlier. Next, the chart shows an uplift from subscription transition. This incorporates the uplift of converting maintenance to on-prem subscription, which on average we target 25%, and also the uplift from on-prem subscription to cloud, which we target between 25% and 50% uplift, depending of course, on the product and whether it's conversion or a new customer. This part of the waterfall also contains new subscription business that will be sold under a subscription contract rather than a perpetual license. The final bar contains the increase in ARR from higher usage and product expansion from existing customers once they are already on subscription. Peter gave examples of these just earlier. Finally, this bar also contains new customer wins, supported by the improving market conditions and new organic business development. Now let's move on to look at what all of this means for the income statement. You can see from these two graphs on slide 13 that we expect both revenue growth and margins to dip in fiscal 2023 before showing a recovery to achieve our fiscal year 2026 targets. Starting with revenue, in fiscal 2023, revenue growth will be reduced by the timing of revenue recognition as we sign less multi-year on-prem subscription contracts and more SaaS contracts. This relates both to a lower effect of multi-year on-prem subscription contracts at Heritage AVEVA, and also the move away from perpetuals at PI System. Despite the short-term effect, both these initiatives will drive higher ARR and stronger long-term cash flow, increasing NPV. In addition, we expect an approximate 2% impact on revenue from our business in Russia due to the war in Ukraine. We've ceased all new business in Russia and are only supporting existing non-sanctioned customers where we don't have any legal basis to terminate. Moving on to fiscal 2024 and beyond, we expect the underlying growth in ARR to feed through more to revenue supported by the improving market conditions, revenue synergies, pricing, and new business development, all consistent with the waterfall assumptions I just presented. I should also note that fiscal 2024 is a significant contract renewal year for AVEVA, and this will likely lead to some revenue recognition benefit despite the ongoing move to over time revenue recognition via SaaS contracts. Now turning to EBIT margins. The reduction in fiscal 2023 revenue from the move to SaaS and fewer multi-year on-prem contracts will impact margin in the short- term. The impact of the Russia situation will also largely drop through due to our fixed cost base. As compared to fiscal 2022, we're also facing higher costs due to wage inflation and some costs coming back in a post-Covid context, such as travel and in-person customer events. We're also pulling forward some of the planned investments in cloud to help accelerate the transition with the fiscal 2023 cost impact being approximately GBP 20 million. This will be spent in the area of R&D, cloud sales, and cloud operations. Although an element of this was all assumed in our previous plans, lower revenue growth and some pull forward of investment in cloud in addition to the impact from Russia now means that the fiscal 2023 EBIT margin will be lower than fiscal 2022. For fiscal 2024 and beyond, we start to see EBIT margins improving each year, driven by the revenue growth and positive operating leverage as the SaaS deployments increase in scale. Now, while not shown on the slide here, I should also mention that our planning assumptions on SaaS conversion and the related revenue recognition and billing profiles should result in significant cash flow conversion improvement starting in fiscal 2023, putting us on track against our cumulative 100% cash conversion target by fiscal 2026. In essence, we expect contract assets to remain broadly in line with fiscal 2022 levels and contract liabilities to increase over the period, resulting in a positive working capital contribution to cash flow. Moving on to slide 14, before we move to Q&A, I'd like to look at our longer-term EBIT margin bridge. As you would expect, the margin driver, the main driver, I should say, is the revenue growth expected over the period. Gross margins are expected to remain high over the period, but there will be some impact from cloud hosting costs. This will be partly offset by services which have a relatively high cost of sale, reducing as a proportion of overall revenue. We also expect cloud hosting costs to become more efficient as scale increases. In terms of operating costs, we expect inflation to be more than offset by pricing over the longer- term. Although we're making substantial investment to grow the business, the level of overall revenue growth that we expect to achieve will lead to significant positive operational leverage. Thank you very much for your attention, and we'll now take questions. Thank you. If you would like to ask a question, please press star one on your telephone keypad or press star two to withdraw your question. The first question comes from Michael Briest from UBS. Please go ahead. Yes, thank you. Good morning. A couple from me. I guess the first one, Peter, would be, you know, nine months ago, ten months ago, you gave the outlook. I appreciate things like Russia, Ukraine clearly wouldn't have been in anyone's minds, but the PI subscription to shift would have been anticipated. Flex was already known about. Why is the sort of short- term outlook so different from what you said nine months ago? I've just got a follow-up on pricing. Well, thanks very much for the question. I think one of the things we said for this fiscal year is what our growth profile is gonna be and how we're gonna be driving synergies with the PI System. From that perspective, I think fiscal year 2022 is exactly in line with what we said with a very strong performance of the PI System, and that was of course driven also in Q4. The journey to subscription will now accelerate on the PI System and, you know, we're following the journey that we've done in engineering and partially already in our monitoring and control business. Now, as we started this fiscal year, the perpetual on-prem license business of PI, as it relates to new contracts, will go away as much as we can, and that will further accelerate ARR above what we had expected before, and that will give a little bit of a revenue compression in fiscal year 2023. Now we also said, our fiscal year 2026 targets remain intact. From that perspective, I just see an acceleration of what we had said earlier. Okay. Just in terms of the sort of pricing differential between license subscription and SaaS. At the Capital Markets Day, I think you're talking about a 30% average uplift in on-premise subscription from maintenance and 50% for SaaS versus to on-premise. Are those still the assumptions? 'Cause I think the slide shows 25% for maintenance to subscription, and what you're expecting on subscription to SaaS. I think that number is broadly in line with 25%-30%. I think what's also, when you go from on-prem to subscription, and then once you're on AVEVA Flex, I think that's important to note, is that we're bringing in incremental products and will drive usage. That was the example that I've given earlier in that respect. Okay. Just finally, on contract assets, what will happen to them after this year? They're gonna be flat. Will they start to go down or continue to be flat as renewals come in? Yeah. Over the planning period, we forecast that they will remain flat. However, with the SaaS transition, we'll start to see an uptick of, and a pretty significant uptick in the outer years of contract liability. Net-net, we should see a positive working capital contribution. Okay. Thank you. Our next question comes from George Webb at Morgan Stanley. Please go ahead. Morning, Peter, James, and Brian. Thanks for taking my questions. I have a few also quite financial questions for you. Firstly, look, clearly there's a lot of moving parts you've outlined. Can you talk about your confidence in being able to forecast contract asset movements for FY 2023 and SaaS revenue growth is, you know, to an extent how much of that being driven by customers' decisions and how they choose to consume the software? I mean, again, how much confidence do you have on FY 2023 contract asset movements? That's the first question. Secondly, as you go through FY 2023, looking to move ARR into that 15%-20% range, can you talk about your expectations on the trajectory for licensed revenue through the year, in the context of that ARR acceleration? Thirdly, with contract assets flattening out in FY 2023, sounds like that should be quite supportive for cash conversion. Is there any reason that we shouldn't be thinking about cash conversion being closer to 100% this year? Thank you. Okay. I'll take all of those in order. Just taking a note here. Firstly, from a confidence level in the forecast, I mean, clearly as you articulated, there's lots of moving parts. We've built a pretty substantial bottoms-up plan, taking into consideration all the different movements and all the different assumptions in the business. There are three main aspects to the financial movements year-on-year. One is the subscription and SaaS transition as you articulate. The second is the impact from Russia, and the third is the investment acceleration in cloud. When we take all of those into account, we feel fairly confident in the forecast that we put forward today. Secondly, on your question on license evolution. In our model, we see more or less licensed business, perpetual license being fairly flat year- on- year from a revenue recognition standpoint next year, if not slightly down. Then finally, from a cash flow conversion perspective, yes, your assumption is very much in line with our model. We see about 100% cash conversion in fiscal 2023. Great. Thank you. What's important is once we get beyond fiscal 2023, we should start to see a ramp up in the cash conversion, and then what we're forecasting on a cumulative five-year basis to fiscal 2026 is 100%, which makes up the negative cash conversion we've seen in fiscal 2021 and fiscal 2022. I understand that. Actually, can I just tag one on as well? On the Russia side of things, 2% of sales being the headwind, where you've got maintenance customers today, is the expectation that once those contracts end, you won't renew the maintenance contracts or, you know, I would have thought that, for example, where you've got a maintenance customer and they are still paying you, that you will still get that revenue recognized. Is that not the way it's gonna go? What we've said, you know, any new business we've ceased in Russia and we have some contractual obligations with non-sanctioned customers. We will fulfill those obligations. Once they come to renewal, I can tell you the process is very, very complicated to do it, and we've decided to cease new business. Now, that's the view today. You would appreciate, of course, that we don't know how the situation is gonna evolve going forward. What we do see is with the situation there, we've quite some movements in the energy market that play also in our favor. Net at the moment, we don't see an impact to the fiscal 2026 target. some of the business that goes away will pop up somewhere else, our current assumption. Okay. Thank you. Our next question is from James Goodman at Barclays. Please go ahead. Morning. Thank you. At least we just switched to the cost side, a little bit, given some of the challenges and predictability of the top line. Can you talk about the OpEx development, specifically, and also with reference to 2026 over 2024? Because the margin uplift shown on your charts between 2024 and 2026, while I appreciate revenue's strongly into double- digit territory by that point, haven't fully worked through the numbers, but the drop through looks pretty high. Just extra context there would be helpful and maybe also a comment on where you are on the SaaS gross margin and how that changes in those outer years. The second question, just switching away from this completely for a second, is just to understand the changes that you've made within the shape of the guidance beyond the transition effect. Russia, clearly, you know, you've been clear on. It feels like if anything, you've added into the outlook for inflation pricing opportunity. But can you talk a bit about macro? I mean oil and gas, more positive, but any potential kind of customer hesitancy in other areas given the macro backdrop? Thank you. Okay, James, I'll take the first couple of questions there and then ask Peter to comment on the macro environment. I think if I understood your question correctly, the OpEx cost evolution in the outer years of the plan, we do see the positive leverage impacting the EBIT margin improvement that you see in the graph. This is coming from the fact that we're seeing the ARR growth, which we're forecasting at 15%-20%, start to translate into revenue recognition growth from a reported basis. We'll start to see double-digit increase in reported revenue. From an OpEx perspective, we continue to invest in the business. I would say we could model something in the range of sort of mid- single digits, and that's where the positive operating leverage is coming from in the outer years of the plan. Your second question on SaaS gross margin, what I would say to give some color is, surely there's a little bit of dilution from the impact of cloud hosting costs. As we get to scale from a SaaS perspective, we should be able to see more efficiency there, and we're forecasting our gross margins to remain fairly stable in that 80% range throughout the planning horizon. In respect to end markets, James, I think you see this all over the place in the news. I think, and we talked about the investment into the energy market, which is substantial. It has created first pop-ups of tokens already in fiscal 2022 Q4 infrastructure markets. Our marine customers are very busy. We do see investments, of course, coming into nuclear and in renewables in that regard. That these are all positive effects and will contribute to grow the ARR base and allow us for new customer wins. Now, of course, we also see the situation in China, and we also see the situation on some of the stressed supply chain that exists in electronics, some of which may impact from a timing perspective, some of our clients. From the materiality, at the moment, we're not concerned. Okay. Thank you. Our next question is from Toby Ogg at Credit Suisse. Please go ahead. Yeah. Hey, good morning, and thanks for taking the question. I just wanted to zoom in on the margins for 2023. Appreciate you've given the guidance that the margins will reduce relative to the 2022 margins. From the presentation on 2023 specifically, it looks like that fall is fairly steep. I guess, you know, what would you see as a reasonable floor for the EBIT margins in FY 2023? Then secondly, just on the pricing uplift, you've talked about 10%. You know, how do you think that pricing uplift compares relative to the level, perhaps of the industry? I guess based on what you've seen so far in April, appreciate it's still early, you know, what's been the reception to this price uplift from customers? Thank you. Toby, I'll take question one, and then Peter can talk to the pricing uplift question. From a fiscal 2023 EBIT perspective, again, let's remind ourselves that the growth acceleration we're seeing in the business underlying from ARR should be in the 15%-20% range. Now, from a reported revenue perspective, which is gonna obviously have an impact on EBIT margins, let me repeat the three main levers, if you will, impacting the reported results will be firstly, the transition to SaaS, with contract assets staying relatively flat as a revenue recognition headwind. Secondly, being the Russia 2%, and third being the acceleration of cloud investments in our operating costs. All in, as we model these effects, we see the EBIT margin dilution, which is your question, in the range of 400 basis points versus fiscal 2022. In respect to pricing uplift, we've taken an average at the moment, initiated April first of 10% over the portfolio. Of course, that will go into new contracts and also into renewals. So far from what we've heard from the customers, this is not totally out of line with the market. Of course, there are gonna be differences on portfolio elements to also encourage to move to our cloud offers or our hybrid cloud offers, if you will, in existing maintenance contracts. To a large extent, we have price increase clauses that are somewhere in the neighborhood of 3%. With that, you know, this is not gonna be a one-time effect, but this is gonna go across the cycle, if you will, from that perspective. On average, including phasing, we see 5% contribution to ARR to the fiscal year 2026. Great. Thank you. Our next question is from Charles Brennan from Jefferies. Please go ahead. Good morning. I've got two questions, if that's possible. The first is a more general one, which is we've had lots of discussions here around contract terms and revenue recognition. How do we know that that's the heart of the problem here? Maybe the problem is something else, like just simple sales execution. How do we get comfortable that this change in contract terms is the heart of accelerating the growth profile here? I guess aligned to that, if you try and back out the contract assets and look at the growth profile, I'm not too sure you've delivered double-digit growth in any period since the Schneider deal. What gives you comfort that the business is capable of double-digit growth? Just as a separate sort of financial follow-up, I think you started 2022 expecting contract assets to remain broadly flat, and they've obviously ended up increasing substantially to March 2022. What's been the primary driver of that contract asset build in 2022? Thank you. Charlie, let me start off with question one. I think if we're talking about an ARR growth of 15%-20%, which we have outlined also in much more detail in the presentation, I think we cannot talk about a problem. I think we ought to be talking about an opportunity that's there. I can tell you in our sales kickoff, the team is quite excited to move as much as we can to AVEVA Flex because it gives opportunity of expansion and moving away from a point in time revenue recognition that we've had before. Now, if you look at the underlying growth, I think it'd be unfair to say that there was no double-digit growth from since the merger between the two companies. You know, happy to have James chime in since he was there the whole time. On the contract assets, I'll have Brian comment. Yeah, I think, Charlie, when you look back over time, you know, certainly the contract term has changed and, you know, the change in rev rec rules has caused some, you know, some fogginess, I guess, in terms of revenue transparency. Underlying, the business has definitely been delivering double-digit growth in some of those years. You know, we feel confident that, you know, with the broader portfolio we have now, particularly the PI System and the integration that we offer with our SaaS offerings, that we can deliver double-digit growth or double-digit ARR growth in the remaining years of the five-year plan. Brian, do you wanna pick up on this? Yeah, I'll pick up on the third question relative to contract asset evolution in fiscal 2022. You're right in your observation that the contract asset balance did grow. It grew at an extent higher than what our initial forecast would have been. I'd say there's two aspects to that. One being that the Schneider Electric OEM deal that we booked in calendar Q4 2021, fiscal Q3, contributed about 50% of the overall growth, and that's just the mechanics of that contract being mostly an on-prem deal. The remainder, quite frankly, is just the output of our overall mix of business. Now, what it points to and what we need to acknowledge is that our cloud business in fiscal 2022, while it grew by a nice headline percentage of 25%, still remains relatively small at only 2% of the overall portfolio. Hence, this is really what's driving our decision to accelerate. We see this as a big opportunity to drive the ARR growth going forward, and that's exactly why we're accelerating, both in terms of pushing the momentum of our sales force in that direction and also making the decision to accelerate our investment to support that acceleration. Just one clarification. Was there a sizable Schneider deal in Q4 as well as Q3? No. We wouldn't point to any sizable deals in fiscal Q4, which is good. The underlying growth was quite broad in the portfolio, but also driven on the back of quite significant growth in PI System. Perfect. Thank you. Our next question comes from Kathinka de Kuyper from JP Morgan. Please go ahead. Hi, thank you very much. Kathinka, we cannot hear you. Operator, are you able to hear us? Please check you're not on mute. Yes, we can hear you. Unfortunately, if we're not having anything from this line, we will have to move on to the next question. In that case, the next question comes from Nay Soe Naing from Berenberg. Please go ahead. Hi, good morning, everyone. Thank you for taking my call. I've got a question on the midterm target. You know, clearly it's encouraging to see that you're keeping the FY 2026 targets intact. On that, the 10% CAGR top-line growth. I was wondering if you could maybe break it down into, you know, how much of that is you expected to come from the value uplift that we would get from the transition to subscription and cloud, and how much of that 10% growth you would expect to come from the structural trends in the underlying business. If you could share your thoughts on that would be great. I've got a follow-up question on the accounting of the contract assets. Yeah, I'll take that one. I mean, it's very difficult to precisely sort of put it into buckets, but as you said before, pricing we think is gonna give us roughly a 5% benefit to ARR over the projected period. And if you look at the bridge graph that Brian covered earlier, you see the other parts in there with the, you know, subscription uplift, you know, being a material part of the ARR growth. Then the final major block is the expansion with new customer wins and increased usage and product adoption, principally through Flex and subscription. We see those are the main building blocks behind the 15%-20% ARR growth over the period, which in turn drives the 10% revenue growth. Right. Okay. Understood. Thank you. On the contract assets, I suppose if you could help me understand the progression maybe beyond 2023, because we're expecting flat in 2023. I think one of the slides you mentioned that FY 2024 will be another significant contract renewals year. Should we be expecting an uptick in contract assets in FY 2024, which then might. Yeah, I think the simple way to think about it is across the five-year plan horizon, contract assets will remain broadly flat with where we're ending fiscal 2022. While you might have expected a more significant decline, they will remain flat as we still will have on-prem subscription business driving that in the future. The important thing to take into consideration is as the SaaS revenue recognition scales, contract liabilities will increase significantly in proportion with that, and the net of the two will be what drives the positive working capital contribution. Right. Understood. Thank you very much. We have time for two more brief questions. The next question comes from Gianmarco Conti from Deutsche Bank. Please go ahead. Hi. Yeah. Yeah, I have about three short ones on my side. The first one is, could you perhaps give some color on what is the target percentage of revenues that you're expecting from SaaS in your FY 2026 targets, and whether that will have a material impact on your ability to basically negotiate the hyperscalers' cost and volume? Second question is if you could perhaps give some color on the interchangeable tokens. Are you seeing any resistance from Flex interchangeable tokens with some of the larger customers? And, maybe if you could give a sort of a sense of the proportion of the customers that you're targeting to move to this type of business model in FY 2023. And then I'll give some follow-ups after that. Thanks. Thanks, Gianmarco. I'll take the first question on SaaS. In our model, and consistent with what we've said at Capital Markets Day, we're forecasting a mix of 25% of our overall revenues to be coming from SaaS. Now, certainly that should give us more leverage to your question around negotiation from a cost, from a cloud hosting and infrastructure perspective. And what I've said earlier on the call is we've taken that into account. While we see a sort of short-term dilution effect in margin as we reach that scale, the cloud hosting cost and the revenue scale should keep us in line with our overall 80% gross margin over the five-year plan. I'll take the second question on the interchangeable tokens. Today we've barely had any revenue from contracts where tokens are interchangeable between on-premise and cloud. The plan for FY2023 is, you know, we'll see some of that maybe starting with customers, but so far it's very small. We're not seeing huge uptake as yet. In FY2023, we'd expect maybe one or two of the bigger customers to look at that. It's still relatively early days. Just to be clear what it means, for our Flex contracts today, where there's cloud and on-premise products, we ring-fence the number of on-prem and cloud products, so the revenue recognition is different for each of those buckets. When we say interchangeable, we mean that basically the on-prem and the cloud tokens can be interchangeable. As I say, it's still very early days on that and it's, you know, we're not really seeing a huge demand yet from customers to go for those sort of contracts. That's it. Thanks. Just two quick ones. One is, have I understood that correctly that in FY2023, the outlook on the margin dilution is roughly 400 basis points from FY2022? Just another one around your. I was looking at the chart that you were showing around your base case assumption on the volume growth. For when you reach ARR for FY2026, what exactly is that base case assumption? i.e. you mentioned the examples of how, you know, in 2020, you had that one customer that shifted to Flex and had incremental product consumption. What is your base case assumption for the incremental volume, from this ARR growth for FY2026? Okay. The first question on EBIT is straightforward. Yes, you understood correctly. In our model, based on all the different moving elements, we're forecasting around 400 basis points of margin dilution versus fiscal 2022. Not sure how to exactly answer your second question other than to say what James said earlier, which is we've modeled the overall 15%-20% per annum uplift in ARR based on the elements in the waterfall bridge that I discussed earlier, and then modeled that back into revenue recognition based on the different parts of our portfolio and the different, you know, underlying assumptions of revenue mix, if you will. Maybe if I can add, there is not only one customer. These were customer examples. If you go into the presentation, you can see how far we're down the journey with the different portfolio elements. We've taken the three largest portfolio elements that make roughly 80% of our business. From their perspective, the values we have given in the theoretical example, they are based on a variety of customer examples. There is solid evidence on our side to be able to build this plan forward. That makes sense. It makes sense. Perfect. Thanks. As we are short on time, we just have time for one final question. Our last question comes from Will Wallis from Numis. Please go ahead. Good morning. I just have a question on the new SaaS investment or the incremental SaaS investment of GBP 20 million. What's the nature of that investment in terms of is it external staff, external contractors coming in? Is it new R&D staff? What makes you confident that this is not a sort of permanent increase in R&D spend as a proportion of the total? What makes you confident that this will be enough to do what you need to do with your product set? Yeah. Thanks very much for the question, Will. As we said, it's a pull forward. Those of you who followed the company for a little bit longer- time, we have quite a balanced R&D workforce with also quite some staff in India. I've been there just recently together with our head of R&D, and we're very confident that we can ramp up respective resources fairly quickly. It is an assignment that goes into clear acceleration as it relates to our engineering portfolio to drive digital twin, where we see a huge demand of our energy clients, and then the industrial visualization and operations and control that we wanna bring much faster to an industrial hybrid cloud architecture. Those projects are pretty clear what needs to be done. They have been in the roadmap before. We're just trying to pull them in earlier. With that, once done, we'll be able to compensate as we continue to grow. Thank you. Thank you very much, everybody, for joining us. We've got to go now, but we will be available throughout the rest of the day to take your questions.