Good day, and thank you for standing by. Welcome to the BAE Systems 2021 preliminary results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded, Thursday, the 24th of February, 2022. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Sir Roger Carr. Please go ahead. Well, good morning, everyone, and welcome to our preliminary results presentation. As always, Charles and Brad will lead the presentation, and Tom will be on hand to participate in the Q&A. For my part, I wanted to emphasize three key points, which I believe continue to underpin the merit of the BAE Systems business model as an attractive and sustainable investment proposition. First and foremost, the business under the leadership of Charles, Brad, and Tom has continued to outperform in the face of extreme turbulence during the pandemic, delivering an uninterrupted flow of growth in sales, earnings, and business cash flow throughout. This performance has reflected both the caliber of the business and the professionalism of the management. Importantly, it continues to underpin our ability to deliver returns to shareholders from our strong cash flows. While there is no certainty that the COVID challenge is over, there is increasing evidence that the severity of the threat has lessened and the risk to the business has reduced. In these circumstances, there is every reason to believe that the momentum we have seen in bad times can be maintained in, hopefully, the better times ahead. Second, the depth of our order book remains a key strength of the business, with an enviable spread of demand across our platforms and service businesses, well-distributed across our wide geographic footprint, with defense budgets supported by widespread geopolitical tensions and pockets of overt aggression. It is this order book that forms the bedrock on which our confidence is rooted for the immediate future, and it is the investment that we are making in new technology in areas such as digital infrastructure for the future battlefield, future combat air capability, and cyber that give us confidence in the longer-term sustainability of the BAE Systems business model. Recent orders that once pushed the boundaries of our capability and technology to new levels, Type 26 surface ships, Dreadnought submarines, and amphibious troop carriers in the United States, now form part of an established rhythm of daily production across the company, and in so doing, strengthen both the quality of our business and profits and secures our reputation for cutting-edge competence on which international partnership decisions like AUKUS can be made with confidence. In an uncertain world, it is this certainty of longer-term contracts that constrain supply chain inflation impacts, permits resource planning, and supports the case for long-term investment. Third, we are an industry that continues to support the first responsibility of government in protecting the lives and livelihoods of those in their care. We are a force for good in providing the security needed by our governments and our allies to fulfill their obligations and the prosperity that a nation derives from the provision of sustainable, high-quality, well-paid jobs. As highlighted in the recent independent report on BAE Systems prepared by Oxford Economics, in the U.K. alone, we contributed over GBP 10 billion to GDP in 2020, around GBP 4 billion to exports, supporting a total tax contribution approaching GBP 3 billion and supporting 143,000 full-time jobs across the U.K. We do this not only in the U.K., but make important economic and societal contributions wherever we are active, in the United States, the Gulf, India, and Australia, and always under the tightest regulation and with absolute adherence to a code of ethics that is deeply rooted throughout the organization. Added to this, we have our 2030 net zero carbon target across our operations, our training of approximately 1,000 apprentices every year, our work in the communities in which we operate, and the rigor by which we oversee our business and business practices. All these commitments underpin our credentials in all the key areas of Environmental, Social, and Governance that are vital to secure the engagement and support of others and to ensure we are comfortable in our own skin. We do, of course, recognize and respect that there are pockets of all communities that do not believe in the need for defense and who seek to persuade the wider population that investment in the industry has an unacceptable moral dimension. It is important, however, that the case for defense is made with equal passion clearly and positively by those that recognize its importance to our security and prosperity, and to ensure that we are recognized as a responsible, government-backed, strictly regulated, and ethically led defense and security company, and not an unregulated and irresponsible alternative model. To confuse these two risks damaging the belief, the support, and the investment in an industry that is essential to our security and prosperity, delivered by some of the U.K.'s greatest companies. This is a confusion of identity and practice that is in no one's interest. In conclusion, at BAE Systems, we are clear that ESG and EPS must work together in close harmony if we are to remain both attractive to investors and true to our dedicated purpose of being performance-driven and values-led. With that, I will now hand over to Charles and Brad to review the performance of the company over the past year. Thank you, Sir Roger, and good morning, everyone. We've delivered a strong set of results with growth across all our key metrics while keeping a clear focus on employee safety and program delivery. Positive momentum was maintained on operational performance, helping us to deliver earnings and free cash in excess of expectations. I would like to thank the outstanding efforts of our employees as we remained agile and adaptable in response to the changing environment. The business is evolving positively as we deliver our strategic objectives, shape the portfolio for value creation, and increase our investments in advanced technologies to deliver capabilities for our customers in the face of an evolving threat environment. We are well-positioned for sustained growth from current programs and franchise positions, and to enhance this outlook, there is a good opportunity pipeline. Our strong cash performance and confidence in the future has allowed us to deliver increased shareholder returns in the year, including completing the current share buyback well ahead of target. We are establishing a track record of consistent operational and financial performance, coupled with a balanced and disciplined capital allocation as we look to both invest in and grow the business and deliver increased shareholder returns. Last year, we laid out our goals for the next three years. I'm pleased to say that a year in, we're delivering against these aspirations. This gives us confidence in our outlook and ability to accelerate our ambitions, targets, and capital deployment, as demonstrated by our near-term cash upgrade, early completion on the 12-month buyback, and the completion and pursuit of Voltan Technologies and acquisitions. Let me provide an update on these input factors, starting with strong, consistent program performance. I've been pleased at the progress, especially against the backdrop of the pandemic, and Brad will cover how this has dropped through to margins. Some of the key highlights for 2021 were as follows: reaching full rate levels on F-35 production, initial flight of the first Qatari Typhoons prior to delivery in 2022, strong program execution in electronic systems and high volume delivery in our GPS business, the launch of Astute Boat 5, a 60% year-over-year increase in U.S. combat vehicle deliveries, and the cyber and intelligence program execution. Pushing operational performance under a sound commercial framework remains central to our strategy to ensure successful delivery of our order backlog and turning that into cash. On efficiency, we are progressing a number of cost-saving programs across the group, building on the lessons learned in recent years. We're using data analytics to benchmark and improve efficiency, as well as investing in new technology and production techniques. Since the interims, we have enhanced the portfolio with the acquisition of In-Space Missions, a company that designs, builds, and operates satellites and satellite systems, and announced the proposed acquisition of Bohemia Interactive Simulations, a leading developer of advanced military simulation and training software headquartered in the U.S. The benefit from technology investment spans the breadth of the business, supporting operational performance, competitiveness, our ESG agenda, and growth aspirations. We increased our self-funded R&D spend by over 10% as investment in the Tempest program rose, and we look to position the group on future growth areas such as multi-domain operations, data analytics, autonomy, space, and sustainability-driven technologies. Collaboration and partnering is crucial, and we continue to forge long-term relationships with research agencies and our partner universities to remain at the forefront of innovation in our key markets. Reflecting the importance of technology investment, I would highlight two new initiatives. Firstly, in February, we launched the BAE Systems Digital Intelligence Division, which brings together many of our digital transformation, cybersecurity, complex data analysis, and communication information systems capabilities from across the company. We have exceptional talent and world-leading innovation in these areas. The new business will allow greater collaboration across the company and in time, bring a greater range of capability to our customers. Second, to provide oversight and expertise, a new innovation and technology committee at board level was established last year. This is chaired by Dr. Ewan Kirk, our non-executive director, who is an eminent data scientist. Moving next to ESG. We made real strides in 2021 in evolving, accelerating, and integrating our sustainability agenda. We recognize that the way we do business and the actions and behaviors we demonstrate are vital for our future strength. At our ESG presentation in October, we mentioned some of the notable highlights, setting ourselves the target of achieving net zero greenhouse gas emissions across our operations by 2030 and joining the United Nations Race to Zero campaign, driving a bolder set of diversity ambitions to be recognized as a leading employer in defense and security, and also gaining accreditation as a real living wage U.K. employer. The long-term outlook for the group and the defense industry means we need to anticipate change and continually improve. We are committed to building a sustainable future by having a clear framework focused on valuing and developing our people, making a positive social and economic contribution to our communities, developing innovative technology that supports a sustainable society, collaborating with our supply chains, and reducing the environmental impacts of our operations and products. The progress we're making has been reflected with an improvement in our CDP score, and we've maintained our AA class leader rating with MSCI. There is more we can do, and we started 2022 by appointing Karin Hoeing as ESG Director to coordinate and push forward our program at pace. We shall update you on progress later in the year at our annual ESG event. In all, 2021 was a year of delivering for our customers despite global challenges and making real progress across these strategic themes. Moving then to the outlook. I want to remind you of some positive differentiators which are helping us tackle some of the macro challenges and underpin our confidence in growing the group in the coming years. I would suggest that our key competitive advantages are as follows. Multi-year programs with visibility on long-term value generators, a diverse geographic footprint and deep customer relationships, leading defense franchises with incumbent positions, often with high barriers to entry, differentiated technology, and an operating model that drives strong value creation. Today, I'd like to highlight two of these, program visibility and geographic diversity. Starting first with program visibility. We have a large order backlog and exceptional program positions, providing visibility of the key value generators for the group for years to come. We expect 2022 to be a good year of order intake, further enhancing that outlook. As you'll remember, what we book in funded backlog is in many cases just a subset of the long-term program outlook we enjoy. For example, Typhoon support, F-35, submarine, and shipbuilding incumbency positions give us visibility over a decade. Our major franchises are either growing or stable with strong cash generation. This also reads across at a sector level, where we see growth in all our sectors over the coming years from known programs and backlog, while at the same time having an excellent pipeline of opportunities that are incremental to that outlook. Pulling out some of these. In electronic systems, many of the U.S. foreign military sales have our capabilities embedded, and our sustainable technologies have increasing relevance, including their transferability into defense. P&S has a number of near- and medium-term bids in progress, with the advantage of exports of U.S. and Swedish products. Within air, we expect further Eurofighter consortium orders, and there remains several export and sustainment and training opportunities. Maritime is a sector that continues to grow and has some very significant prospects with AUKUS perhaps the highest profile, further Type 26 exports or license sales and the programs identified in the U.K. Defence Command Paper last year. Finally, cyber intelligence has increasing global relevance. Applied Intelligence has an expanding bid pipeline of defense and international prospects. Intelligence and Security through its proposed acquisition is looking to enhance its highly relevant synthetic training offerings. Moving on to our geographic footprint. The positive outlook and wide opportunity set results from us having a uniquely diverse global defense portfolio, which we see as a particular strength at this time, all supported with long-standing customer relationships. Defense and security remains a priority for governments in our key markets, given the threat environment, as well as the real role we can play in the economic progress for the countries concerned. In the U.S., by far the largest defense budget in the world, we're a top 10 defense prime contractor. Our portfolio is well-aligned to enduring customer priority areas with products and capabilities also positioned to benefit from potential export opportunities in the coming years. We await the five-year spending outlook, but markups to the 2022 proposed defense budget provide a supportive backdrop. Here in the U.K., defense spending is increasing, and as the leading defense prime, we have long-term visibility for our major U.K. operations in build and support. The Defense Command Paper identified a number of new capability requirements which will create opportunities in the future. In Australia, BAE Systems is the largest local defense prime and is viewed and valued by the government as a truly Australian business. Defense capability spending is increasing with a substantial focus on local and indigenous content. I've mentioned AUKUS already, and we are well-positioned to collaborate with the Australian government to assist in delivering on this and other opportunities. In KSA, the outlook remains stable under our long-standing government-to-government support contracts. Elsewhere in the region, we continue to build on our relationship with Qatar and are pursuing other opportunities. Our ability to export from the U.K., U.S., Australia, and Sweden, coupled with our positions on Typhoon and F-35 and our shareholding in MBDA, mean we are uniquely well-placed to compete in multiple allied defense and security markets, especially here in Europe. Within BAE Systems, we've evolved, diversified, and strengthened the defense and cyber portfolio such that no one program represents more than 10% of group revenues. We have unique capabilities to design, build, and support air, land, sea, and space platforms, combined with our leading electronic warfare and defense cyber portfolios. This means we're well-positioned to offer differentiated solutions to our customers as the focus moves towards multi-domain and interoperable capabilities. Our operating model remains a key strength. We have a balanced portfolio and a good mix of production and aftermarket services. Our R&D and CapEx is predominantly customer-funded, and many of our contracts tend to be positively funded. Our differentiating capabilities have all contributed to our excellent 2021 performance and underpin our outlook. They have also contributed to how we're managing the macro headwinds of supply chain constraints and inflation. Specifically on inflation, while not immune, we believe we are reasonably well-protected due to a number of factors, including our long-term supplier agreements, combined with the proactive actions of our supply chain teams, the contracting arrangements on many of our major programs, and effective cost management and improved efficiency across our operations. On supply chain constraints, primarily in the area of labor shortages related to the COVID pandemic, our teams did an outstanding job of limiting the impact to our operations and financial results. However, we did experience some impacts in our ES sector in the fourth quarter. We see these challenges continuing in the near term, but should improve over time. While remaining vigilant, we're successfully navigating the current risks. Concluding this section, we are confident in the outlook despite some of the short-term macro headwinds. Strategically, we aim to generate long-term value and leverage core technology capabilities to position the portfolio for evolving customer priorities and future growth areas. With that, I'll hand over to Brad for the financials. Over to you, Brad. Thanks, Charles, and good morning. I'll lead off with the financial headlines and then cover results at the group level before moving to guidance and capital allocation. Comments will be on a constant currency basis as this gives a better picture of underlying business performance. As a reminder, all profit comparables are based on EBIT, as we moved away from EBITDA last year. I'm pleased to report that we made good progress in 2021, beating our guidance for cash and earnings while delivering good top-line growth. Operationally, the business continues to deliver, and I thank our teams for the remarkable job they've done and continue to do. As you can see by the increase in orders, demand for our products and services continues to grow. The strong demand helped us maintain a healthy backlog of GBP 44 billion, which supports the top-line growth outlook mentioned by Charles. We delivered top-line sales growth of 5.3% compared to 2020. While some sectors experienced delays in sales late in the year due to supply chain disruptions, the quality of program execution drove strong returns, resulting in around 13% EBIT growth and a 60 basis point expansion in return on sales, which reached 10.3%. This return on sales figure is also significantly above recent pre-pandemic levels, underlining the progress in our margin expansion, which continues to be a focus for the group. Our determination on delivering the cash targets drove an exceptional performance on free cash flow, which came in at GBP 1.9 billion. This results in a significant beat to the first three-year rolling cash guide we gave in 2019, where we now have delivered GBP 4.1 billion versus our guide of over GBP 3 billion. We're also well-positioned to comfortably exceed the three-year rolling target covering the 20-22 period, and I'll come back to cash target shortly. On cash returns, I am pleased to report that we have recently completed our current share buyback program ahead of schedule, and we are proposing a 6% increase in our full-year dividend, which is covered by approximately 2x earnings. The detailed year-on-year financials are shown here. For reference, the dollar rate averaged $1.38 compared to $1.28 last year, and this has naturally had a headwind effect on the reported numbers. The strong operational performance resulted in underlying EPS of GBP 0.478, up 12% and above the top end of our guidance range. As reported at the half year, the settlement of certain past tax issues resulted in the release of provisions, leading to a one-off GBP 0.029 gain, taking EPS to GBP 0.507. The underlying tax rate for the year rounded to 18%, up 100 basis points compared with last year, excluding the provision release. On pension, the group share of the accounting deficit more than halved versus year-end 2020 and improved materially since the half year. On a technical provisions basis, the U.K. schemes are now fully funded. In line with our proactive actions taken in recent years on the pension, we have already initiated the triennial review, and we will provide clarity for our stakeholders upon completion. Compression of the pension deficit and the excellent cash performance. Our strong balance sheet continues to strengthen. I'll move now to our key group financials, starting with orders. We booked GBP 21, 500 billion of new business in 2021, up 3% over last year and ahead of our expectations. Our U.S. business posted a book-to-bill ratio of just over one, with good order flow and electronic systems supporting continued top-line growth expectations. ES now has a record high order book nearing $10 billion, bolstered by key orders on F-35, Precision Strike, and C4ISR programs. Combat vehicle orders were around $2.7 billion across multiple programs, and ship repair signed close to $700 million in new work. In the air sector, notable orders included the initial Tempest concept and assessment phase, Typhoon awards for upgrades, further awards on F-35, strong demand through MBDA, and the renewal in Australia of long-term Hawk support contract. Our maritime business received ongoing Dreadnought funding and contracts under the U.K. MOD's Future Maritime Support program, while our U.K. land business received the flow-down of work to the RBSL JV for the Challenger 3 main battle tank program. Reflecting national security budgets, Applied Intelligence saw high demand in the government and defense business and contributed close to GBP 600 million to the order book, which is an 11% increase year-on-year for them. Book-to-bill of 1.2 x for Applied Intelligence positions the business unit well for continued expansion. Sales for the year, at GBP 21.3 billion, rose 5.3%, with all sectors posting gains. The broad improvement in the top line emphasized our geographic diversity as well as the depth and strength of our product and service portfolio. In Electronic Systems, sales rose by over 5%, driven by Electronic Combat Solutions and Precision Strike and sensing. The good growth came despite several challenges, including fourth quarter supply chain disruptions, flatter commercial revenue due to the pandemic, and some contracting delays stemming from the continuing resolution in the U.S. We do continue to expect good growth in the sector across the medium term and beyond, as evidenced by the record $10 billion backlog. Our Platforms & Services business grew by 3% on the back of higher U.S. combat vehicle deliveries and ramp up of CV90 upgrade programs. Air was our fastest-growing sector, up by nearly 6% on F-35, Typhoon support activity, the continued ramp in production on the Qatar programs, commencement of the German Typhoon program, and MBDA volumes. Our maritime business was up by 5%, driven by the continued growth in Dreadnought and Type 26 activity. Within cyber and intelligence, I&S was stable as double-digit growth in the government and defense divisions offset the absence of revenue streams from the now disposed commercial businesses. Our U.S. intelligence and security division was up by 3%. Profit levels continued to grow, rising by 13% to reach GBP 2.2 billion. Return on sales at 10.3% was 60 basis points up on last year and also improved on recent pre-pandemic levels, reflecting our focus and progress on margin expansion. Electronic Systems delivered a standout 17.1% on strong operational performance and a significant contribution from the acquisitions. Platforms and Services margins of just under 8% expanded by over 200 basis points with continued recovery and operational improvement in both combat vehicles and ship repair. Air sector delivered a good year of operational performance, coming in at 10.3% and within the guidance range. As expected, the lower year-on-year return on sales was due to higher R&D for the Tempest program and the maturity mix of our projects. The maritime and land sector margin of 8.4% was also in our guided range on the back of continued strong operational performance across highly complex programs. Cyber and intelligence margins expanded by 140 basis points to just under 9% as both I&S and AI delivered impressive program performance, high levels of utilization, and more efficient cost structures. Finally, at headquarters level, Aristana returned to profit. There are further sector details in the backup materials. Operating cash flow at GBP 2.3 billion improved by half a billion and was significantly ahead of in-year guidance. Conversion levels across the board exceeded expectations, reflecting our sharp focus on liquidity, good operational performance, and improved working capital management, including some accelerated collections. The headquarters improvements of GBP 457 million reflects the sale of Filton and Broughton facilities and the absence of lump sum deficit pension contributions. To complete the cash analysis, the movement in net debt is broken out here, starting with the opening balance of GBP 2.7 billion. The operating cash flow, net of interest and tax, resulted in a near record high free cash flow of GBP 1.9 billion. Dividend payments totaled GBP 777 million, and we had completed GBP 368 million of our GBP 500 million buyback program at year-end. As previously mentioned, the full GBP 500 million program has now been completed this month, taking out 3% of shares outstanding. A total of GBP 1.1 billion of cash was returned to shareholders, leaving net debt down by half a billion to close at GBP 2.2 billion. In all, an excellent cash performance, which meant that we significantly beat our first three-year guide, increased returns to shareholders, accelerated our investment in the business, and maintained a strong balance sheet, all of which gives us good strategic flexibility as we look forward. Moving now to 2022 guidance. With a strong year behind us, we look forward to another year of top-line growth with margin expansion and good cash delivery against our rolling targets, all reflected in our group guidance, which is provided here using the same rate we averaged in 2021 of $1.38. As a reminder, the sensitivity to reported EPS is around GBP 0.01 for every five cent movement. We expect sales for the group to increase between 2% and 4%, with gains across the majority of the portfolio and a stable outlook in P&S. We started 2022 with 75% of sales already in the backlog. In terms of profitability, we expect EBIT to improve by 4%-6% as we see scope for continued margin expansion at the group level coming from improving performance in P&S and Air in particular. We expect underlying EPS to increase at the same 4%-6% range as a higher expected tax rate of 20% will be more than offset by a lower minority interest and the lower share count after the buyback effects. Free cash flow in 2022 is expected to be greater than GBP 1 billion. As mentioned, we had about GBP 400 million of timing benefits in 2021, which will unwind. We will also have some higher CapEx over depreciation, a higher cash tax charge, and of course, the absence of the Filton Broughton proceeds. Looking at 2021 and 2022 combined, the run rate of close to GBP 1.5 billion per year represents strong conversion. We're updating our next three-year cash target to once again exceed GBP 4 billion. As you can see, we are routinely hitting higher conversion levels across the three-year horizons. To help with modeling, the other below-the-line items are listed here, and the sales and EBIT margin expectations per sector to reach the group guidance are listed in the back of the deck. Sticking with cash here, we want to reiterate the progress we are making on expanding cash conversion. We originally set out the rolling three-year cash flow targets to help demonstrate improved cash flow over time and take out some of the in-year volatility. As you can see, we have now completed our first three-year rolling target, 2019 to 2021, and delivered GBP 4.1 billion of cash in that time and more than GBP 1 billion above earlier guidance. Our enhanced cash performance has allowed us to upgrade our 2020 to 2022 cash flow target, which was set originally at GBP 3.5 billion-GBP 3.8 billion. This is now expected to be in excess of GBP 4 billion. Our free cash flow as a% of earnings continues to improve as a result of our emphasis on cash generation, and we are delivering against the rolling targets. The culture in the business on driving cash has evolved, and our alignment with incentives on cash brings further support to our improving conversion journey. To wrap up guidance, when I came into the business, I spoke frequently of the need to work on our three Ps, performance, portfolio, and pension. I emphasized the importance of improving our performance as ultimately measured by profit and cash conversion, enhancing the portfolio as we have done with the acquisitions and divestments, and the need to continue to de-risk the pension exposure. As you have seen, we are making good progress on our margin expansion with further runway ahead. The main drivers for this margin expansion in 2022 will be improved program performance, particularly in P&S on both ship repair and combat vehicles and in Air, where we will see programs retire risk and across the group, where we are making efficiency improvements to our delivery models. Our constantly improving program performance and focus on operational excellence has meant that we can retire risk and release corresponding contingencies, which further improves margin. Regarding the portfolio, we continue to build for value creation and divest non-core. We have increased self-funded R&D, and our selective M&A has had a particular focus on the high-end technologies that deliver accretive revenue streams. Previously mentioned, we have delivered strong cash conversion, aided in part by the progressive measures we took on pension in 2020. With a fully funded scheme from a technical provisions perspective, our pension risk has compressed significantly. Our margin expansion flows to cash, and together with the gradual reduction in CapEx over the medium term, efficient working capital, we should see steady growth in our long-term cash generation. In total, I believe we are delivering on our three Ps. Finally, let me turn to capital allocation. As you've seen, the business is delivering higher cash and improving long-term cash generation from operations, meaning we have increasing amounts of capital to allocate to maximize value for our shareholders. Through investment in R&D and CapEx, we continue to prioritize growing and investing in our business. We recognize the importance of the dividend to our shareholders, and I note that this marks the eighteenth year in a row that we have increased our dividend. We will also continue to allocate capital to grow our business through value-enhancing M&A. The buyback we just finished ahead of schedule shows that when there is surplus cash available, we are willing to make additional shareholder returns when appropriate and within the capital allocation framework. It is board practice not to review material allocation decisions while a triennial pension review is ongoing. I want to emphasize that we remain committed to efficient and fair capital allocation, and we will update you further at the appropriate time. In summary, we've had an excellent year financially, and the business has strong momentum as we move into 2022 and beyond. With that, back to you, Charles. Thank you, Brad. Wrapping up, we have already come a long way, but we don't intend to cap our ambition here. There are significant opportunities for further improvement built on strong foundations and a track record of reliable delivery. We have long-term strength from our programs, technologies, and customer relationships, with continued demand for our products and services. We have a sales growth trajectory from our order backlog and program positions, and we see that being enhanced by a year of good order intake in 2022. We're investing in technologies to amplify the growth outlook, and we have good opportunities in all our sectors. We see room for further margin expansion, and we're generating significant free cash flow, allowing for strategic flexibility on capital allocation and delivering attractive shareholder returns. Thank you all for listening on a busy day. We shall now turn it over to questions. Thank you. As a reminder, to ask a question, please press star one on your telephone. To withdraw your question, please press the hash key. Once again, if you do wish to ask a question, please press star one on your telephone. Your first question comes from the line of Robert Stallard from Vertical Research. Please ask your question. Thanks so much, and good morning. Morning, Rob. First question is probably for Charles. I was wondering if you got any initial thoughts on the Ukraine news that we've seen today and what sort of implications that could have across the portfolio, particularly with regard to defense exports, sorry. And then secondly, for Brad, you mentioned that a further discussion on share buybacks depends on the pension review being wrapped up. When should we expect that pension review to be done? Thank you. Yeah, I mean, obviously, the situation in Ukraine is evolving rapidly, and I think we're all very disappointed to see that the intense diplomatic efforts have you know so far failed to prevent the actions that we've seen this morning. Rob, I would actually draw your attention to the last couple of years now we've been talking about under sort of successive U.S. administrations you know European allies have been increasing defense spending in the face of an increasing threat environment. You know, we've seen that come through in our numbers largely through the Hägglunds business and exports of combat vehicles such as the CV90 and the upgrade programs and, as I say, new awards that have been coming through. We've also seen it with additional European orders, such as Quadriga for the Eurofighter consortium, and I think there's, you know, more to come for that. Indeed, our shareholding in MBDA, our 37.5% shareholding in MBDA. I mean, Europe has been increasing its defense spending, and we have seen some of that come through in our 2021 numbers. On the particular point that you had, over to you, Brad, maybe for the Yeah, Rob, I think your question was on timing on the triennial process. I mean, as I mentioned, we started the process ahead of schedule, and so, you know, we're quite keen to move through that process. We certainly will have an update for you by the half year. We expect to have it finished before then. That's great. Very helpful. Thank you. Thanks. Your next question comes from the line of George Zhao from Bernstein. Please ask your question. Yes. Hi, good morning, everyone. I guess first question on ES. You know, the 17% margin for the year, I know that's a notable improvement from what we've seen the prior years. I guess when you think about the recovery, you know, of the commercial business within the growth of the military GPS, offset by some investment spending, you know, is 17% a reasonable target going forward, or was there any, you know, one-time benefit from risk retirement that drove the margins higher this year? Second question, you know, earlier this week, we got the Defence Equipment Plan publication, and, you know, in it, the Astute, Type 26 were both called out for, I guess, cost increases and, you know, specifically for the Type 26, they also cited some, I guess, program slippage. I guess what are the key issues for you to resolve any of this, and does that affect any of your revenue margin or cash? Thanks. Yeah. I'll maybe get Tom Arseneault in on the ES margin question, and then I'll tackle the Astute Type 26. Over to you, Tom. All right. Thank you, Charles. George, how are you? We're very pleased with the outcome at ES, the 17.1% RoS that you mentioned. You know, that is, bluntly, really driven by the acquisition, right? The accretive impact of the acquisitions we made back in 2020. You also see a bit of just mix. I mean, toward the end of the year, we did have, as Brad mentioned, a little bit of a slowdown driven by supply chain and, you know, some of the Omicron effects. That drove the sales mix in the direction of a bit higher margins. You'll see from the guidance, we're guiding the 16%-17% RoS for ES going forward, and we feel that upgrade from previous guidance years is, you know, sort of indicative of where we are, if that helps. Thank you, Tom. On the shipbuilding submarine programs that you referenced, George, I mean, you can be sure that we're working very hard to, you know, improve performance on those programs. When it comes to Type 26, on the first in class, there were some, you know, initial delays as a result of the COVID impact, and a couple of, you know, one particular technical problem that we've now worked through, that has had an impact on the first in class. I'm pleased to say that, you know, overall the batch one, the first program, the first batch of ships, you know, we're confident we can deliver that within the, you know, contracted timeframe that we're being asked to do that by the MOD. We're working hard. You know, obviously it's a high area of focus for us. I think generally speaking, our operational performance over the last several years has steadily improved, and you've seen that come through in the numbers, both in terms of the top line earnings and cash performance. All right. Thank you. Your next question comes from the line of Aymeric Poulain from Kepler Cheuvreux. Please ask your question. Yes. Good morning. My question is on capital allocation. I think you answered the one on the buyback, but wondered on the M&A if you could give us some color on the pipeline and the main priorities for portfolio announcements. Yeah. I mean, on M&A, I think we've been relatively clear the kind of areas that are of interest to us. The adjacencies around electronic systems continue to interest us. Obviously, we did the two excellent, you know, deals the year before, which, as Tom already alluded to, have come through strongly in the ES numbers. If we can find similar opportunities, we're certainly very interested in that. At the Capital Markets Day last year, we outlined the three areas, space, you know, multi-domain, and sustainability driven programs and products, which we already have a good portfolio within. Those three are, you know, active areas for us. We did the In-Space Missions deal at the second half of last year, but we know we're actively looking in those areas. I would say that the kind of things that we're looking at are very much in the bolt-on category, but we do have a portfolio of opportunities around those sort of technology fairways as we describe them. Thank you. Thank you. Your next question comes from the line of Charlotte Keyworth from Barclays. Please ask your question. Morning, gents. Thanks for taking my questions. I've got three. First one's just on the macro, in the U.S. I mean, there's a few things going on with an extended CR, I think to the 11th of March now, and we've got the NDAA adding $25 billion to fiscal 2022, and some chatter from the press on a 4% increase for 2023. Are you seeing opportunity to outperform the budget given your portfolio alignment? That's the first question. Secondly, on cash guidance, came in GBP 700 million ahead, and I— there's a few moving parts there. But in terms of the timing, could you just break down what that is exactly and why you're assuming total unwind in your 2022 guidance? Finally, on the F-35 and the plateau to full runway, I wondered if you could comment on how you see that program for you in the outlook, given it represented a haircut to some of your U.S. peers. Thank you. Well, maybe I'll just do the F-35 first and then hand over to Tom on U.S. budget environment and you Brad on cash. I mean, F-35, the production outlook is now you know relatively stable, having reached a full rate. But we still see growth in that program you know driven by some of the Block 4 retrofit capabilities of electronic warfare and so on and so forth. I think you know we still have a very important program for us and a good degree of optimism around that. I'll now pull Tom in on the macro U.S. budgets. Thanks, Charles. Hi, Charlotte. Yeah, we are encouraged by the trajectory of the budget discussion. As you pointed out, the CR extended to March 11, but we are optimistic that Congress will pass an omnibus prior to that date. Our guidance reflects the CR through that date. Beyond that, you know, there might be some mild timing pressure, but nothing material. With respect to the increase in the budget, the $25 billion or so, and then the potential for another increase in FY 2023 that you alluded to, you know, some of that will be offset by these broader inflationary pressures, but again, the trajectory is good. As we've stated before, we are very happy with the alignment of our portfolio around the priorities of the administration in the DoD, and we think that as the National Defense Strategy converges and is published later this year, we'll see it largely similar to that published in 2018, again pointing to good alignment of our portfolio. We have, you know, for example, the only vehicle in the Next Generation Combat Vehicle family currently in production. Budgets look good there. You know, and we like our positions in space, you know, our supply chain position in hypersonics, and then electronic warfare has been mentioned a number of times. We think that bodes well for us in the future. Again, we'll see how inflation impacts the ultimate buying power, but certainly the increases are encouraging. Thank you, Tom. Cash, do you wanna unpack that one a little bit, Brad? Yeah, Charlotte. You'll recall that we had a guidance of GBP 1.2 billion on free cash flow for 2021. Obviously as you point out, that GBP 1.9 billion is a pretty significant beat there. That GBP 700 million beat really kind of breaks down into two broad categories. The first one is the timing events, and there's about GBP 400 million of those. It's really primarily just advanced collections. We got paid in advance. We didn't expect some of these collections to be received until early 2022, and they came way ahead in 2021. You know, I think there's a lot of different timing elements of that, but it's predominantly accelerated collections. You know, that's why it unwinds because it's simply we expect it to happen in 2022, it happened in 2021. The other component of that GBP 700 million is GBP 300 million of improvements. That's a combination of higher profits, as you've seen, and also just better working capital management. You know, I think that GBP 700 delta really comes from, you know, 400 timing and 300 just better management. Which is part of the reason that we give the three-year guidance. Yeah. I think, you know, because of that, some of that lumpiness from year to year. It's a good point. I mean, just to highlight, you know, that the GBP 1 billion guide we have in 2022, I mean, really that should be looked at in combination with the 2021 outperformance. If you take those two years and divide by two, you're seeing a pretty high run rate. Then if you look at the guidance going forward, that GBP 4 billion for the next three years, given the GBP 1 billion that we're showing for this year, you can imply that we're running at GBP one half billion a year in free cash. That's a very high conversion rate, especially when you look at our sort of after-tax earnings. You were converting almost everything to cash now. It just shows the, you know, the higher conversion rates we're on. Yeah, the strategic flexibility that that gives us. Yeah. That's really helpful. Thank you. Thank you, Charlotte. Your next question comes from the line of Ben Heelan from Bank of America. Please ask your question. Thank you guys for taking the question. So I had two. First one on the U.S. supply chain. I know you talked about it, Charles, but are there what areas of the business do you think are the most exposed at the moment to those pressures? Just maybe if there's a little bit more color. Is it land vehicles? Is it on the ES side, shipbuilding? That would be super helpful. And then secondly, on taxonomy, and I appreciate the comment at the beginning from Sir Roger Carr. Obviously, these views seem to be coming from the EU in that draft legislation around Social Taxonomy. So I'm interested, you know, is there a U.K. government view on social taxonomy and the potential implications that has for the industry? Just any color you may have there would be super helpful. Thank you. I mean, on U.S. supply chain, we did allude to ES, but I will bring Tom in to comment a little more detail on that. Over to you, Tom. Thank you, Charles. Hi, Ben. Yeah, Tom, as you will have heard from a number of others, I mean, supply chain certainly was an impact on us, particularly for us later in the year. You know, I'd say the dominant impact came at ES, where our dependence on microelectronics obviously was the greatest. So that, you know, chip shortage, as it's called, was a big play. We did see, I'd say across the board, some of the impact of the pandemic as it continued to create, you know, absenteeism in the factories in our supply chain. I'll say that, you know, in the latter half of the year, we really stepped up efforts to maintain vigilance over that, make sure we understood the multiple layers of risk there, and look for ways to both anticipate and offset that risk, encouraged by, you know, some of that outcome later in the year. I mean, we're working on things like inventory practices here temporarily in order to reduce that effect. You know, in a nutshell, ES. Now, of course, on the defense side of our business, I mean, we have the defense prioritization in acquisition that gives us some priority over, you know, other industries, and that's helpful. Of course, that applies across the industry. Obviously, we're taking advantage of that wherever we can. I hope that's helpful. I would just also just add one thing, too. I mean, it's important to note that you know, we're not talking about any sales that have been lost here. These are just sort of delays, you know. Timing, yeah. Just timing really more than anything else. Yeah. With respect to the Social Taxonomy, I mean, yes, we do count on strong support from U.K. government for this. Also I would just draw your attention to the work that's being done. We're members of the European Aerospace and Defense Industries Association, ASD. As you can imagine, there is a lot of effort being done across all of the defense and aerospace companies across Europe to try and make sure that the case is made on this front. Okay. Very clear. Thank you. I mean, just to be clear, the argument very much is that you need a strong defense and security environment, you know, in a sense, as a prerequisite to start, you know, driving an ESG agenda. That's something we firmly believe in. Okay. Thank you. Your next question comes from the line of Will Turner from Goldman Sachs. Please ask your question. Hi, everyone. I just have two questions. The first one is on the pensions. I don't want to front run the review too much. But given the payments that you've made, and also we know we've got interest rate expectations are increasing, and sadly, you know, I think some of the latest data points has pointed towards lower life expectancies in some of your key pension regions. Can you give. Is it reasonable for us to assume that there's going to be a significant reduction in payments going forward? Like I said, I know I don't want to front run it too much, but I think, you know, should that be our base case from here? Then the second question is on cost inflation and your sales guidance. When we look across, like many different cost items, the cost inflation rate's running a lot higher than 4% per annum. I know you have contractual kind of mechanisms to manage with higher cost inflation, but then looking back at your sales guidance, you're only expecting 2%-4% increase. Could that just be from pricing alone? The question is, what are you assuming for pricing? I would expect in this kind of more cost inflation environment, it would be higher than 2%. Yep. I think we'll get Brad in on the pension. I think you also take the question on the cost inflation as well there. Yeah. Yeah, thanks, Will. You know, I think on the pension, I mean, clearly you've seen and noted a significant compression in the pension deficit. Then as we said on a technical provisions basis, which uses an asset-led discount rate, you know, we are fully funded. Certainly the various sensitivities to pension have been constructive for our deficit position. So we do enter this triennial period and, you know, in a very strong position from that perspective. So, you know, we're certainly speaking with the trustees and putting that case forward, and of course, the triennial just goes down into lots of detail about return assumptions and the rest of it. We're, you know, we're very confident having been on a, you know, a journey that started back in 2006 where we agreed to deficit reduction program, which extends to 2026, that we've actually fulfilled all of our obligations, four years ahead of schedule. The agreement was by 2026 to have that deficit neutralized on a technical provisions basis. We've done that already. So when we sit down with the trustees, those are the types of conversations we have. But, you know, of course, I don't want to, you know, bias the triennial discussions, but we certainly are very pleased with the direction the pension's gone to. Oh, on your question on inflation- Sales, yeah, and inflation. Yeah. I mean, I guess I would just point to our contract structure. I mean, I think a third of our contracts, you know, are cost plus, but the majority of our contracts are fixed price. In a fixed price environment, you have, by the nature of our contract, we have very long-term contracts, and so we're able to have long-term buy agreements at fixed prices with our suppliers at back-to-back arrangements. You know, there's no, you know, uplift in revenue that comes from that because we've already got secure pricing for the vast majority of our work. So, you know, hopefully that answers your question. Of course, you know, we're all looking at inflationary pressures across the board, but we feel we're pretty insulated for the most part on that. The big focus that we've had on taking cost out and the efficiency improvements, that sort of second pillar of our strategic priorities, I think, you know, really, you know, helps us to, you know, tackle some of these inflationary pressures. It's something that we're managing aggressively. Great. Thank you both. Your next question comes from the line of Jeremy Bragg from Redburn. Please ask your question. Jeremy, are you there? Jeremy Bragg, your line is open. Please ask your question. He may have dropped off because he's dropped off the list here. Oh, no, I've got him. Let's go to the next one. Let's go to the next one, and maybe Jeremy could come back on that. Of course. The next question comes from Chloé Lemarié from Jefferies. Please ask your question. Yes, thank you for taking my question. I have a couple of clarification, if I may. I think, Charles, you mentioned good order intake expected for 2022. Could you quantify this in terms of book-to-bill? Are you confident it can remain above one for this year? Building on, I think it was Rob's question earlier, are you not seeing any short-cycle accelerated order in relation to the development in Ukraine? On the free cash flow outlook, you gave some color, but if I compare it to the 2021 performance, even if I take out the GBP 400 million of a timing impact, you'd be closer to GBP 1.4 billion free cash flow. 2022 should see improving earnings. Are you just being very conservative in guiding to above GBP 1 billion? Or if not, could you quantify the key moving part that would bring the performance down closer to that GBP 1 billion? Thank you. On the book-to-bill, yes, I did mention that we see a year of strong order intake and, you know, yes, that would support a book-to-bill in excess of one. On the free cash, do you want to take that one, Brad? Chloe, I think you know, in the 2021 number, of course, we had GBP250 million for Filton, Broughton. You know, obviously that's a non-recurring one-off type item. You know, again, back to the earlier comments, we had guided to 1.2, we did 1.9. Again, that GBP 700 million difference is really GBP400 million at timing and GBP 300 million is just better working capital management. Okay, thank you. I hope that helps, Chloé. Did that help? Okay. Yeah. Yes, it does. Okay. Thank you. Thanks for the question. Your next question comes from the line of Christophe Menard from Deutsche Bank. Please ask your question. Yes. Good afternoon. I had two quick questions left. One is on supply chain, and thanks for the update on this. But more specifically in the US on labor and labor shortage in terms of skills, not COVID. Are you experiencing any shortage on that side? Should we expect some salary inflation related to labor in the U.S.? The second question is on cyber intelligence. Obviously, a very strong margin in 2021, 8.9%. You're guiding to 8%-9% in 2022. You had a remarkably strong performance in H1 2021 at 9.8%. What could be the optimum margin in this division? Could it be at close to 10% mid-term? I mean, on cyber and intel, I think, you know, we are seeing margin progression. It's probably fair to say that the U.S. I&S business is, you know, has been pretty steadily at 8% margins with some incremental improvements. I mean, the overall opportunity to expand margins, I'd say is from where we are today is somewhat limited. I'm looking across at Tom here. With the U.K., what was Applied Intelligence business now going into Digital Intelligence, I think there is actually continued margin progression there. You know, whether it, you know, gets us into the low double-digit range, I think that would certainly be our ambition, you know, over, you know, a few years period. On the supply chain and particularly labor shortages and challenges, I think I'll maybe pull Tom in on that. Yeah. Tom, do you wanna do that? Thank you, Charles. Christophe, hello. One thing I'd just add, Charles, to the point on I&S, I mean, the acquisition, you mentioned Bohemia Interactive Simulations software company. Yeah. I think the margins will be accretive there as well once we're. Yeah, good point. Good point. ... closely closed on that later in the quarter. With respect to your very good question, Christophe, about labor, something we have been tracking for some time, certainly, the Omicron has aggravated the situation. The absenteeism was up substantially in the U.S. in the very last part of the year into January. Tracking that, you know, that again aggravated the sort of labor shortage situation. As the case rates come down pretty quickly here, we're hopeful that that will temper out. There is, you know, the war on talent continues. It has been the case now for a couple of years. We've stepped up our efforts on the talent acquisition side, and we expect to be able to fill our needs. On labor inflation, that is something we are also watching carefully and doing everything we can to try to offset that through operational efficiencies, where possible. Something that is factoring in to our future expectations. Thanks for the question. Thank you very much. Thanks, Christophe. Thank you. Your next question comes from the line of Harry Breach from Stifel. Please ask your question. Yeah. Good morning, Charles and Brad, Tom. Can you hear me okay? Yeah. Very clear. Very clear. Good. Largely, I think most of my questions have been answered, maybe just a couple if I can. Firstly, just early on in the presentation, Charles, you talked about Type 26 medium-term export opportunity. I don't know, you may not be able to say a lot, but can you throw any color onto that on Type 26 export? Secondly, maybe just moving a little bit to the semiconductor shortage specifically. Can you give us some sense of whether that, for you, it's a sort of a problem that's worsening longer lead times, it's improving? Any sort of way you can give us to think about how that's trending? If you can, sort of, I don't know, throw some light on the kind of specific areas that affects. Just finally on SSRO, I know we don't talk about it a lot, it's mainly an issue at Maritime, but can you give us some sense about where SSRO regulated margins are trending and roughly what percentage of revenues they reflect for the group now? Yeah. On Type 26, I mean, obviously we've got already a sort of privileged position with Australian Hunter class and the Canadian CSC programs, bringing the sort of total numbers to in excess of 30 ships in total. There are a couple of, I think, good and live export opportunities, as I mentioned in mine. For competitive reasons, I don't particularly wanna go into the details on the call, but I think there are some opportunities to add to that partnership. I mean, on semiconductors, I'll pull Tom in on that. I mean, that really is more of an issue specifically around the ES business. Yes. It's probably fair to say that we're seeing it stabilizing. Yes. Would that be fair, Tom? Do you wanna just, That was the word I was gonna use, Charles. We, you know, we've been tracking that very closely, and Charles is right. I think we've seen it stabilize of late. It's very difficult to predict. However, you know, we're seeing it, you know, the range of lead times start to narrow. You know, just timing-wise, we expect that to continue certainly here in the first half of the year, and then hopefully to moderate as time goes on beyond that. In the specific areas of this ES, it tends to be the more sophisticated electronic devices, processors, field programmable gate arrays, that kind of thing. And as I mentioned earlier, we're working inventory practices to try to build buffers where we can and to offset that effect on the business. I hope that's helpful. Yeah, on the SSRO. I mean, you're absolutely right in the way you put the question that it is mainly in the maritime space and specifically more in the submarines area. Under the sort of current SSRO guidelines, I mean, that does tend to limit your profit range to somewhere in the sort of 8%-9% range, which is where we, you know, trade maritime and land. You know, whilst there are, you know, complicated mechanisms for actually evaluating the baseline profit rate, there are, you know, inevitably year-on-year changes. It's, as you know, a rolling average of the last three. I mean, the upshot of all of that basically means that I don't think it will be changing much from the kind of profit range across those businesses that we've been seeing in the last few years. Great. Thank you very much. Thank you. Thank you. Your next question comes from the line of David Perry from J.P. Morgan. Please ask your question. Yes. Hi, Charles. Hi, Brad. Two questions. Hi, David. Good morning. Firstly, just on the ES, sales guidance for 2%-4%, this coming year 2022, would you be able to unpick that for us? I'd just be interested in what you are seeing for the commercial snapback versus the defense sales. And the other one, Brad, I've asked you this before and you didn't really want to go there, but I'm gonna try and be persistent. The margin improvement is 20 basis points, I think that you're guiding for, and I know you didn't want to give medium-term guidance last time I asked you. Could we extrapolate forward? Do you think you can do 20 basis points improvement for a few years to come? I mean, the surprise for me, I guess, is ES, which seems to have a step change in margin relative to what was quite a stable trend. Thank you. Thank you, David. I think on ES, Tom, do you wanna unpack that one a little bit? Sure. I mean, as we look ahead to 2022 and beyond, I mean, much like our peers on the commercial side of the industry, I mean, we are tracking to an improvement in domestic demand here, mid-year and beyond. I mean, Omicron obviously had its hopefully temporary impact. We'll see that pick up. You know, we're projecting international, it'll be probably 2023, mid to late 2023 before we're back to pre-pandemic levels here. You know, again, we're largely tracking to our peers with respect to that. On the defense side, I mean, it's driven by continued demand in electronic warfare. You know, of late, it was announced recently that our EW system will be on the new Japanese F-15 Super Interceptor, for example. These kinds of programs you know are at the core of some of the growth on the defense side. Brad, I'm gonna have to restrain you from giving too much detail on margins here. We like your persistence, David. I mean, first of all, just to go back to the 2021 number, I mean, 10.3% does demonstrate that our margin expansion is working. You know, you compare that to the COVID impacted year of 2020. Even beyond that, before COVID hit, you know, this is a good 30 basis points expansion over where we were in 2019. In 2022, you're right, we are expecting further expansion in margin. As I said, that's gonna come from two main sources. You know, the Platforms & Services sector, especially in combat vehicles and ship repair. You know, we exited the year at rates that are far higher than the reported numbers for the year. We expect for the full year in 2022 to have much stronger performance, much in line with our exit rates. That means we're gonna have margin expansion for Platforms & Services in 2022. The other one I would point to is Air. You know, we know that just the maturity of the programs means in Air, we're very comfortable with how that's going to evolve. We do see margin expansion happening in Air in 2022. We're constantly looking at efficiency opportunities, so we can deliver our products and services at a much better cost efficiency rate. That also is a you know, overriding force across the group. We do think that there's runway ahead of that. You know, what I've mentioned in 2022, we think there's further runway to go. I certainly won't give you an end target. But we think that the expansion that we're guiding to here has a little bit more room to run. Is that okay, David? Yeah. I'll keep trying. Thank you. Thanks for the question, anyway. Your final question comes from the line of Jeremy Bragg from Redburn. Please ask your question. Hi, guys. Can you hear me this time? We can indeed, Jeremy. Yeah. Good to hear you. Apologies for that. A couple of questions, please then. Firstly, on capital allocation, do you have a target net debt number or target net debt to EBITDA level that you're aiming for? Can you talk a little bit around the math of a buyback versus, say, M&A? Yeah, particularly given the share price is now higher, thankfully. Second question is around revenue growth expectations, particularly in electronic systems. I wonder, Brad, if you'd call out the organic growth number because there was a big contribution obviously from M&A. So am I right in saying that was mildly negative in 2021? Could you talk to your sort of confidence in that inflecting for 2022, please. The third point was a follow-up on the inflation question really, which was that if you have agreements now for these fixed cost contracts with suppliers, does this later become a problem down the road once those agreements with suppliers roll off if the underlying costs have indeed inflated? Thanks. Thank you. Yeah. I think on CapEx allocation, I'll hand it over to you, Brad. Yeah. Jeremy, I'm very comfortable with where we're at right now on our leverage. You know, we're generating EBITDAs that are far ahead of our net debt now. You know, excluding leases and including, we're pretty close. You know, that's a good place to be. Our balance sheet is so strong that it gives us lots of optionality and flexibility to do, you know, whatever we want to do, frankly. I think we're in a really good place, you know, with our leverage ratios. Of course, we're always just aiming to be an investment-grade rating that we're at. You know, I think that's really important to how we look at our leverage. I think you had a question on how we look at M&A, for instance, and buybacks and some of the math there. I would just take you back to the hierarchy that we follow in terms of how we prioritize our investment decisions. We are increasing R&D double digits. We did it in 2021 and double-digit percent, and we're doing it again in 2022 and embedded in the guidance that we're giving. We continue to really grow R&D because we think we have really great opportunities in some of these new technology areas. Then of course, CapEx, you know, we're wanting to make sure we have a very modern footprint across the operations. The dividend we talked about and M&A, we've done some really good M&A. Tom touched on, you know, the quality revenue we brought into the group through M&A with those acquisitions we did a couple of years ago, and that is showing up in very high ES margins that we see. Those acquisitions are now fully integrated, by the way. To your other question on ES, we're, you know, the ES portfolio has performed well, and we did get good growth out of it. A lot of it did come from the acquisitions. Those acquisitions are fully integrated into all of ES. That portfolio is performing well. I think just on your capital allocation, it's back to that hierarchy again. You know, that's how we guide our and prioritize. Thank you. On inflation, I mean, you know, this is a situation that obviously we're, as I said earlier in my comments, that we're managing aggressively. I mean, we do have the benefit of a very, very capable global procurement organization, contractual protection, you know, in some places, and also these long-term supplier agreements. Rest assured that we're managing this effectively so far, and we're managing it hard. The efforts that we're also taking through our competitiveness and efficiency drive are also, you know, helping us to offset some of these effects. I think that's just about it for questions from what I can see here. With that, I think we'll wrap it up. I know many of you will be talking to us soon, when we're out on the road, so look forward to that. Thank you all. That does conclude today's conference call. Thank you for participating. You may now disconnect.