Good day, ladies and gentlemen, and welcome to the 3i Capital Market seminar. At this time, all participants are in listen-only mode. We will conduct a question and answer session after each speaker's presentation through the phone lines, and instructions will follow at that time. Participants can also submit questions through the webcast page using the Ask a Question button located at the top left of the page. I'd like to remind all participants that this call is being recorded. I will now hand over to the CEO of 3i Group plc, Simon Borrows, to open the seminar. Please go ahead. Good afternoon, and welcome to our Capital Markets seminar. I'm Simon Borrows, Chief Executive of 3i. I'm joined today by James Hatchley, our Group Finance Director, and Silvia Santoro, our Investor Relations Director. I'm also joined by some executives from our private equity team, who I will introduce shortly. The main purpose for this Capital Markets Day is to tell you about three of our private equity investments, and the agenda for today is set out on this slide. There will be an opportunity to ask questions on each investment at the end of each session, as well as for more general Q&A at the end. Before that, I intend to give you a brief update on the 3i portfolio. We've completed our September semi-annual portfolio company reviews for private equity and infrastructure. Our investment portfolios continue to make good progress in what are more challenging markets. In our private equity portfolio, assets in the value for money consumer, the healthcare, specialty industrial, and business and technology services sectors have generated strong earnings growth and have good momentum as we head into the second half of our financial year. We also see a sustained increase in demand across the travel-related assets in the portfolio. Assets exposed to discretionary spending continue to see headwinds, but we've been encouraged by the pricing power shown by a number of our more challenged companies and the ability of our management teams to use other levers in their control to partially mitigate rising energy costs, other inflation impacts, and weaker consumer sentiment. Non-sterling international investments account for 87% of 3i's investment portfolio today. Action's impressive performance has continued with very strong sales and EBITDA growth. Year to date, sales at over EUR 5.8 billion are now over 26% ahead of the same period last year, with strong trading continuing across all geographies. The Action team continues to execute its strategy well, and the business continues to attract significant new customer flow through very low prices and good product availability in store. We expect LTM EBITDA to the end of P9 to be circa EUR 1.035 billion, compared to EUR 765 million at September last year, and EUR 506 million at September 2019. Cash generation has continued to be strong, with net debt now standing at less than 2.1x run rate EBITDA. Action has now opened 142 new stores in 2022 and remains on track to open more new stores than in 2021. Finally, Action's energy costs for 2022 are estimated to total less than 0.4% of sales. These are the three investments we plan to cover today, which come from our consumer, healthcare, and business services teams. First up is BoConcept, which will be presented by Boris Kawohl, who is the head of our consumer team and is based in our Amsterdam office. We purchased BoConcept through a take-private transaction in Denmark, which completed in July 2016. BoConcept is a good example of a purchase of an underperforming business where we felt confident in the fundamental strength of the brand and were prepared to make the operational changes necessary to return the business to a high-performing growth trajectory. Next will be a presentation on Cirtec, together with an update on our healthcare portfolio, which will be presented by Rich Relyea, who runs our New York office and leads our healthcare investments. We first invested in Cirtec in August 2017, and given the significant growth since that time, we thought we would bring it back for this session. It is a very good example of how we can scale up a healthcare asset through organic and inorganic growth. Last but not least will be WilsonHCG, which will be presented by Rahul Lulla, who is a partner in our New York office and focuses on the business services sector. We completed the investment in WilsonHCG, a recruitment process outsourcing business, in March 2021. Again, a good example of us having high confidence in the potential of the business and purchasing it in the darkest days of the pandemic. I'll now hand over to Boris for the presentation on BoConcept. Thank you, Simon, and good afternoon, everybody on the call. My name is Boris Kawohl, and as Simon mentioned, I'm a partner in our private equity team and heading our consumer sector team. I'm based in Amsterdam, and I joined 3i 17 years ago. BoConcept is one of the investments I look after, and I am pleased today to go through the case. To start, I would like to give you a quick snapshot of our Benelux office and our consumer investment strategy before then going into BoConcept. The Benelux office was set up in 1998, and we currently have 11 investment professionals in our office. Since 2001, when we started focusing on private equity investments, we have invested EUR 2.4 billion in 24 deals, and we have a pretty solid money multiple and IRR tracker that you see on the slide above. Action is clearly the most stellar investment, but also the rest of our investments have realized strong results. What I'm particularly proud of is that we have not had a loss on any of our investments we did in the last 15 years. On the right side of the slide, you see our current portfolio, where BoConcept is one of them. On the next slide, you see the consumer sector within SVI, which is one of our key sectors, with the total SVI equity value of almost GBP 10 billion. We have realized strong results not only on Nexton, as you see on the top right side, but also on our consumer portfolio generally. Where we today have 12 portfolio companies with a total value above GBP 2 billion, and where we have realized strong returns over the years. On the left side, we try to summarize in a very concise way how we try to invest in the consumer sector. We focus on what we call winning customer proposition. We try to scale what works well with consumers rather than try to fix a consumer proposition. What we are, however, willing to do is being an active owner in improving the operations of our companies, because that allows us to invest in the companies at a reasonable valuation. International growth is a key value driver in almost all our consumer investments as it allows us to compound the returns for a longer period if we are able to create a great company from a good one. Finally, the capital efficiency is for us a key criterion being it for organic or inorganic growth stories. Since otherwise the sales growth doesn't create a long-lasting value growth. Now let's turn to BoConcept, which I think fits well into the criteria I just described. On the next slide, you see a snapshot of the company. BoConcept is a global interior design brand with a franchise business model, which is active in the affordable premium end of the furniture market. The purpose of the company is to transform spaces into extraordinary places, and its vision is to grow the business by bringing inspiration and a better living experience to people's homes, leisure, and workspaces around the world. I mentioned also here, because I wanna make that clear that this is not only about selling a piece of furniture, but BoConcept has a much more integrated approach. The company was founded more than 70 years ago in Denmark. It has today 316 branded BoConcept stores with 140 franchise partners in 67 countries around the world. 93% of our customers have the intent to repurchase again. I think it links to the point I just made that we want to work with winning customer propositions. This concept is working well with its customers. On the financial side, the company realized EUR 200 million of sales with EUR 37 million EBITDA, which is 18% EBITDA margin. Those figures were realized in the financial year ending April 2022. These figures are relevant for the group we invested in, so it's a BoConcept franchisor. On the total system-wide sales, the sales are roughly half a billion EUR across the globe. On the next slide, we go a little bit deeper into the company where we provide a number of splits into the sales. On the left side, you see the products split, where upholstery accounts for the majority of sales, followed by board and chairs, and accessories are only a minor percentage of the total sales. In the middle, you see that the franchise stores are the key value generators or the revenue generators for the company and owned stores only represent 24%, which is mainly Japan, where we have our own stores since franchise models work less well in that market. B2B represents only 10% of our sales. Finally, on the right side, EMEA is the biggest market for us with roughly 60%, followed by the APAC region with 27%, and the Americas, most in South America, was 14%. On the next slide, we summarize some of the highlights of the transaction when we invested in 2016. It was a take private from the Copenhagen Stock Exchange, where SVI invested GBP 130 million into the company. Back then, we saw three key value drivers. One, operational upside. Two, the cash generation of the business driven by its franchisor business model, and the third one, the financial growth. Now we would like to show a short video of our BoConcept CEO, Mikael Kruse Jensen. I'm most proud of delivering contemporary Danish design to all our consumers around the world. What I love about my job is to work with the interior design service. That's really my passion and what I love to do every single day. I love working with people, so to understand what people really want and help them understand what they want, that really makes me tick. I would say you've really seen that the COVID pandemic has changed everything for our consumers. You know, home has become everything. I really think that that's the key, and it's very, very positive for us as a brand because you can see now that the consumers are very open to our interior design service. The aim of BoConcept is really to make sure that we understand the needs of the consumer and their style. The magic at BoConcept really happens when we start to co-create with our consumers. They really like to sit down with us, you know, draw everything up, really understand what different functions that their apartment, their rooms can have at home. There are much more digital demands from our consumers out there today. We at BoConcept have really had to go through a digital transformation, and 3i has really played a key role here. We are continuously working on improving the omni-channel customer journey at BoConcept. You know, no matter where the consumer enters the BoConcept universe, we need to be there to understand their needs and what service we need to provide to them. What we know for a fact is that 90% of our consumers, they start their journey online. What we also know is that they visit the stores on average three to four times before they make a purchase. Sustainable growth is really important for both BoConcept and 3i. It means that we make the right decisions for the long-term, and that means happy consumers, and also that we drive a profitable business for both BoConcept and our franchisees. Growth for BoConcept means that we both need to open a lot of new stores around the world, and we also need to make sure that we grow in our existing stores. Growing with the new stores in BoConcept means that we basically need to penetrate all the countries that we are already in. Growth in existing stores mainly coming from two things. One being our new global brand platform that we have just launched, and this is where we talk about Live Extraordinary. The other part of growth in the existing stores, that's about optimizing what we call our retail toolbox. It's basically a manual for how to operate the BoConcept concept in the best possible way. 3i came on board in 2016, and they have really transformed BoConcept from a furniture retailer to a global interior design brand. 3i really helps with their international experience. You know, being a global brand like we are, they really challenge what works where, what works in which countries, and that's really their international experience helping us here. Since the ownership of 3i, we've actually opened more than 100 stores around the world. That's really something to be proud of. We work very closely with 3i, and I'm very impressed with both how long-term a view they have and how hands-on and in the details that they are. They are definitely not in it for the quick win. We feel very excited about the future. We have a global proven business model already, so we want to do more of what already works. Our CEO at BoConcept, and hopefully you now have a good understanding of BoConcept's customer proposition and the business. What I would now like to do is focus on the investment side. On this slide, we have summarized the key features we see in this investment, and then on the next slides, I will go deeper into each of them. First of all, it's a global affordable premium furniture brand. It's a best-of-breed franchisor with a globally proven appeal. It has stable, low risk, and a highly cash generative business model. It's asset light and highly scalable. It operates in a large and growing addressable market. It has a strong management team with a proven growth roadmap, and it has a long-term growth track record, and demonstrated global white space. Let's start with the first one. On the next slide. The leading global affordable premium furniture brand. The company works with leading designers, which you see some of them on the left side, where BoConcept specifies the products that are needed that fit into the overall collection, including price points. The designers with who BoConcept works often for many years already have a commercial incentive to design towards these specifications to come up with products with a global appeal. In the stores you see there, the customizable approach, where the customers can select what fits them well. It's not about selling one piece of furniture, but really to help our customers furnish their houses and apartments. On the right side, you see a picture of the service we provide, where interior design service is a key feature, and where we offer services that include delivery and assembly at people's home, which are included in the prices they pay for the products. On the next slide, we look at the end customer angle, where we have done a recent survey with OC&C to understand our customers even better. It came out as very positive, where our customers ranked BoConcept very positively, which is also interesting given that we have a homogeneous approach for our global business. In the middle chart, you see that BoConcept scored really well on almost all of the key purchase criteria of our end customers. That translates on the left side to the high repurchasing intent, but also to the very high global net promoter score of 49. On the next slide, you see a summary of the features of the franchise model, which is strong for the franchisees, but also for BoConcept as a franchisor. For the franchisee, it gives them regional exclusivity for the sales of the BoConcept brand. They have access to a proven global working model. They have access to best in class tools that helps them to support the business. It requires low upfront investments since it's a standardized approach with a standardized store format across the globe. It has minimal net working capital needs since the products are made to orders and the customer prepays for them. They realize the high gross margins, which gives them a strong commercial upside and incentive to grow. For the franchisor, this, the revenues are very stable since the company sells at the margin to the franchisees. In essence, they get a profit share or a sales share rather than a profit share. It gives BoConcept global growth options due to the model that has proven to work in so many countries. Growth is highly attractive here due to limited CapEx and working capital investments required to realize the growth. The platform is highly scalable as it's a homogeneous concept. This delivers a stable and growing franchisee base, where 100% of our franchisees said they would resign with the company. On the next slide, we go in a little bit more detail about the stability and low risk feature of the cash generative business model. First of all, the company is very diversified, which mitigates the risk factor of this industry. The second one is the focus is on the wealth of customer base, where spending is less volatile. The third one is this franchise business model, where we have the strong partners, but which also requires no investments from the BoConcept side while it is highly cash generative. The production is largely outsourced, again, requiring no investments into the growth num ber five and six refer to the business model of made to order products, where there is no inventory in the business model. That reduces risk of obsolete stock and also minimizes any cash requirements to facilitate the growth. A good proof point on the cash generation of the business is that we have almost fully returned our initial investment despite a low entry and current leverage of the business of below 3 x EBITDA. The next slide shows the asset light and highly scalable character. What I already mentioned is that the production and retail execution are outsourced with our suppliers and the franchisees. The light blue parts is what is done in-house, which is the collection management, the part of the design and the retail format and marketing approach. This gives BoConcept a very high return on capital and a very little CapEx requirements on an annual basis. The next slide illustrates the large market BoConcept is operating in. What you see here is on the left side, a global furniture market has a size of more than EUR 100 billion. That compares to customized system-wide sales of BoConcept of roughly half a billion. On the right side, you see the key countries on a global basis, where BoConcept today is present in all the key countries which you see on the right side. The business has done a bottom up analysis of the white spots and has identified more than 700 of them. The next slide shows us current management team, and we are very proud that we have been able to select this team. As you see on this slide, many of them have joined after we have invested, and we have been able to attract them and are very proud that they today operate the business. On the right side, you see two of our board members with Sanna as our Chairwoman, and both of them have part of our journey since we invested in 2016. Finally, on the next slide, the long-term growth track record of the company, where sales have grown from EUR 122 million in 2011 to EUR 200 million in the year just ended in April 2022. What you can see here that there has been an attractive high growth and sometimes we get a question if we can't grow the company faster. What is critical for us is that we have a very strong franchise partner, and we don't wanna compromise on the strength of the people we work with, would increase the volatility of the performance. At the same time, we also don't wanna increase the number of stores we run ourselves because we want to remain a highly cash generative business model with a low risk on our cash we could generate. With that, I would like to continue on the next slide with what we have done since our investment in 2016, where we have fundamentally improved the operations of the business. The top left one is the management team, which we just discussed and we have introduced since our investment. On the operational side, we have focused on improving the franchise base. We have strengthened the retail processes and tools available. We have built an omni-channel expertise in the company, and we have refined store format to facilitate the omni-channel approach. On the right side, you see the result of that. It's not only that the NPS score is very high at +49, but it also has materially improved from 27 in 2017. In our own 3i valuation, it has taken some time before this became visible, but we believe we have really increased the strengths of the business and have built a better business for the future. I will now briefly go into each of these levers on the next slide. Our franchise partners are key to our operations. In the first phase, we had to focus on changing some of the franchisees as they were not strong enough to continue the journey with us, or since they did not want to comply with the requirements and agreements we have in that place. That meant that we had to let some of the franchisees go and that we had to close some of the locations. This clearly has an impact on the sales and EBITDA performance since every sale from a franchisee generates a profit for BoConcept as a group. We believed that this is the right thing to do to create a strong base to further grow in the future. That's what we have done as the next phase. With the strong partners we have here today, who have a strong business themselves, we are accelerating as a growth and driving the growth by opening more stores and the like for likes in their stores. On the right side, you see that the share of multi-unit franchisees has increased since we do grow with our existing partners. This allows them not only to scale their operating skills, but also some of the back office that is involved with running our franchise. The next slide shows some of the tools that we have introduced over the last couple of years. I wanna highlight two of them here. The first one is sales staff management, where we help and provide tools to the franchisees to hire, retain, and incentivize the right sales people who can help the customers in the best way, but also drive profit for our franchisees and ourselves. The second one is in the top right corner, chasing excellence, which we do through our virtual academy, where we have all tools available to train our franchisees, to help our franchisees train their people. We continue to add new tools to that toolbox so that we continuously develop our business. The next slide shows some of the features that we have introduced, and Mikael just referred to them in the video, where we have put a focus on the omni-channel experience for the customers, which is an omni-channel approach, not an online approach. We could just sell our products, but that's not our focus. We try to be present in the early phase of the orientation of the customers. That's what you see here with the Pinterest numbers, where we have more than 10 million visitors per month. At the end of the day, we try to get customers into our stores to have them talk to our salespeople and preferably have an appointment with one of our interior designers in the stores. On the next slide, you see some pictures of the new store concept that we have created, and that is homogeneous across the globe. As I mentioned, you see in the middle here, the customized approach is a key element where the customer chooses the furniture they prefer and which is then made for them on order. Going forward, there are clear strategic priorities of the company, which we have on the next slide. We want to continue to scale with our strong partners that we have today. We wanna create and to maintain the fans the brand has across the globe. We will continue to raise our retail proposition by continue to work on what we have done over the last couple of years. We will continue to strengthen our affordable premium offering by working on our designs and continuously update our products. Finally, to further grow in the B2B segment, where we have the partnership with Haworth, where we are working together with them on a global basis to penetrate that market. We believe that we are on a journey to evolve BoConcept to an extraordinary retail franchisor. ESG is at the heart of BoConcept, and it's in the DNA of the company, as you see on the next slide. It's an integral part of BoConcept in our discussions with the board and with the management team. BoConcept has joined the UN Global Compact to build a more sustainable and inclusive global economy and has published its first CSR report this year. The key pillars for the company are environment, suppliers, customer, society, and employees. On the environmental side, the first priority of the company is to produce high quality products that are long-lasting, without any obsolete inventory throughout the value chain. The company has done Scope 1 and Scope 2 CO2 reporting this year. It's in place, and the company has communicated its ambition to reduce emissions by 25% by 2030. Another element on the environmental side are the products itself and the packaging are used, where key initiatives include the increased use of FSC certified wood and the reduction of certain materials in the packaging that is used. On the supplier side, the code of conduct needs to be followed by all of our suppliers. They are controlled by it through an audit process that is in place. Finally, on the employee side, we have regular surveys with our employees, and also there, in a similar way to our franchisees, we measure the NPS scores and see a very positive and a good development there. That brings us to the recent results of the company, which are shown on the next slide. The company has just communicated those internally, and the last year has realized the best numbers in the history of the company. The company now has 316 stores in 67 countries on six continents. The company recorded the highest revenue and earnings ever, with sales at DKK 1.49 million and EBITDA of DKK 275 million, which is an increase of sales by 23% year-on-year and EBITDA by 8%. The company communicated that it has successfully completed a number of strategic initiatives, which I just have talked us through, and has realized the highest number of store openings, which provides a very strong basis for the growth in the coming years. On the next slide, we also have mentioned a number of the challenges because I think it is clear to everybody that this industry is also faced by some headwinds. Overall, we believe that BoConcept is well-placed to weather the storm, as it has shown in the last years during the COVID crisis. There are still some remaining COVID impact in the business, although it is largely overcome. There are still some potential for store closures, especially in Asia. Today, there are still some supply chain bottlenecks with inflated costs, but we see that the situation starts to normalize. BoConcept has traded well through COVID. The global diversification has mitigated the impact, not only on the sales side, but also on the supply side, where BoConcept has key suppliers in Asia, in Eastern Europe, and also in Mexico. BoConcept was able to use its virtual selling tools to react to store closures, but also the management in general has reacted really fast and successful on the fast-changing environment. Finally, there's an economic downturn, the current consumer sentiment and the inflation. This will provide short-term headwind to the business. But at the same time, we believe BoConcept is well-placed here compared to other companies operating in the same industry. First of all, as I mentioned a couple of times, there's a global diversification of the business model. There's a franchisor business model, which provides more stability to the business compared to an integrated model. The focus on the affluent customer provides some protection. We have a made-to-order business model, where we won't suffer from inventory that is becoming obsolete. The company is generating very strong cash flows and has a track record of doing so. Finally, the company has a 70-year track record of successful long-term growth on sales, but also bottom line level. With that, I would now like to open to any questions you might have. Participants can submit questions in written format via the webcast page by clicking the Ask a Question button. If you are dialed into the call and would like to ask a question, please signal by pressing star one on your telephone keypad. We will pause for a moment to assemble the queue. Our first question is coming from Bruce Hamilton from Morgan Stanley. Please go ahead. Hi, yes. Afternoon, and thanks very much for the presentation. Just two questions from me then. In terms of some of the challenges looking forward, in terms of sort of, you know, input costs, and inflation there, how are you managing that? Is it because of the diversified costing or is there something else? Secondly, just to understand your sort of source of competitive differentiation relative to other furniture stores that may be struggling. I'm thinking Made, for example. I mean, is it principally to do with the franchise model and the fact that it's made to order? Or what is it that you think really sets apart BoConcept from some of the other, you know, operations out there? Thank you. Thanks, including questions. The first one is input cost. We have realized price increases over the last 24 months. And they were double-digit plus if you combine them. I said that we were able to pass on the raw material and supply cost increases to our franchisees and then to the end customers. And that's also what I just mentioned. The EBITDA has been on the highest level ever. Also, let's be clear, the EBITDA includes the higher cost that the company was faced with over the last 12 months leading up to April 2022. That's included in the numbers, and I think it's fair to say that the numbers have been very strong. The source of competitive differentiation compared to Made.com, and I think a lot here is in the business model to start with. First of all, Made.com is very much focused on the lower end of the market, where in essence, people are shopping for a blue couch and they go on the internet and look at three, four different places, what the price is of a blue couch. That is a very transparent and very competitive market. We focus, therefore, and we have always focused on getting people into the stores, to have a kind of like integrated approach to them on a more customized level. Once you're with an interior designer describing your home how you want it to look like, it is just much less logical to try to do the same with, as we offer different suppliers. At the end of the day, with our customized approach, we can also offer you something that fits you and that is not available with other competitors. That is one. The second one is then with our franchise model. We are generating very strong profits. Where you specifically refer to Made.com, they have never realized a profit. They have grown very strongly, but without being able to make any profits. That is clearly very different for us. Given that they have an integrated model where you don't work with the franchisees, the operating leverage is a lot higher. If the sales goes down, also the impact on the bottom line is of course much bigger. If you have never made a profit and then the sales goes down, clearly you're in a very difficult situation. Thank you. Very helpful. Our next question is coming from Luke Mason, from BNP Paribas. Please go ahead. Yeah, good afternoon, guys. Just two quick questions. Just firstly, on the potential challenges in like an economic downturn, I'm just wondering if you can give any color on how BoConcept has held up in recent months just in terms of customer behavior or how BoConcept held up during the last financial downturn. What kind of impact would you expect for this business in that kind of scenario? And then just secondly, I'm just wondering if you can give any detail on the capital structure of the business. I think you mentioned 3x net debt to EBITDA today. I'm just wondering what that was at entry, and I think you've taken some proceeds over recent years from 3i Group reports. I'm just wondering if you could talk about that and the capital structure. Thanks. Okay. Thank you. Economic impact, I think it is a little bit very glass half full, but we are very confident. As I mentioned, there's economic uncertainty. A lot of that is focused on Europe, but we see also some softer trading. Nevertheless in the trading up to the recent months, we have seen trading which was roughly in line with what we have seen a year ago. In Europe, we see some softness as the global diversification helps BoConcept here. As I mentioned, due to the franchise setup, we have less operational leverage in our model. If the markets go down, our profits go down less than for an integrated model. On leverage, as I mentioned, current leverage is just below 3x. When we invested into the company, given that the company had a mixed track record in the public markets, we also starting with a moderate level of leverage, which was a little bit less than the current leverage we have. On the proceeds we have taken out, as I briefly mentioned, we have roughly returned our original investment now, where the company still at the moment has a moderate level of leverage. Thanks. There are no further questions on the conference line. I will now hand over to Silvia Santoro, Group Investor Relations Director, to address the written questions submitted via the webcast page. The first written question is from Samarth Agrawal from Citi, and it is, "What is the typical break-even period for a new store? The break-even period differs by region and if it's a new franchisee or if it's an existing franchisee which has the back-office operation already in place. For an existing franchisee, it would be around one to two years. I have a written question from Kim Burgo from Numis. He said, "You mentioned that the pandemic has had a significant impact on demand for BoConcept products. Is this sustainable post-pandemic? Well, it differs by region how strong the impact was. What we have seen is in the last two years that part of the impact was some increased customer demand due to people staying at home. On the other side, we have realized some very strong operating improvements which also drives the performance. Also, what I mentioned that we are today still faced with some COVID lockdowns in some of our Asian markets. It's not that the COVID impact is already fully out of the numbers on the negative side. Silvia, sorry, on the previous question, was the question about break-even or payback? That might have confused that. About break-even. Okay, break-even. The break-even level for an existing franchisee, that will be a very short. That's two to three months. The payback is one to two years for an existing franchisee. We have another question. Just what's the thinking behind only having 2% of sales online? Well, the thinking behind is that we always struggle to see how we can make a good and stable profit out of the online sales. I think we just had the question on Made.com, which I think has realized strong growth but never made any money out of that. That is just something we wanna stay away from. We wanna have the approach working with our customers to come up with an individual solution to their needs, since that is allows us to generate sales and sales growth, but also profit for our franchisees and ourselves. There are no further written questions. Operator, do you have any more on the phone line? There are no further questions on the conference call either. Okay. No further questions, then I hand over to Rich. Thanks, Boris Kawohl, very much. Good afternoon. My name is Richard Relyea, and as Simon Borrows mentioned, I lead our PE business in North America as well as our global healthcare sector team. It's a pleasure having an opportunity to speak to you all today, and I'll be providing an update on our healthcare investing approach generally, as well as on one of our platform companies in the sector, Cirtec Medical. Next page, please. By way of background, we've been actively investing in the US private equity market since roughly 2007. Our team focuses on the healthcare, the business technology services, and the industrial technology sectors. Since opening the office, we've been very active in those markets, put to work over $2 billion across roughly a dozen platform companies, as well as completed numerous add-ons to help build those businesses. Next page. Our proactive efforts in healthcare are very narrow. We focus on what we call the support ecosystems in pharma biotech, in med tech and in life sciences. What that means is we invest in businesses that provide products and services across the value chains in those markets to enable pharma biotech sponsors, in other words, the drug owners themselves, as well as medical device OEMs, to bring their life-saving or life-changing therapies to market, as well as in the upstream life sciences research segment that supports those markets. Now, examples of services within those include CDMOs in biotech pharma, as well as other pharma services such as CROs, and medical device outsource manufacturers or what I'll refer to as MDOs through the presentation, as well as the providers of single-use systems, reagents, and other consumables used everywhere from the upstream side of research through downstream, into commercial manufacturing. Within these large markets are numerous sub-segments that are growing rapidly. Importantly, they're underpinned by themes driving structural change in their industry, such as the shift to biologics from small molecules, increasing regulatory complexity, and that really applies across both pharma and med tech. Data proliferation, same, very universal across both markets, and increases in outsourcing and evolutions in research tools and technologies to help bring innovative therapies to market. Exciting areas, but very focused. Next page, please. The approach we take within these is what we call an ecosystem approach. That means that we seek to build portfolios of companies that can interact with and benefit from each other, and which can leverage each other's perspectives, resources, relationships to help advance their own growth and their own development. We've been very active acquirers in these spaces as this page would illustrate, with four current platforms, two each in biotech, life sciences, and in MDO, and with over 20 acquisitions in total over the last roughly seven years. This has resulted in cumulative $675 million in capital deployed across these particular platforms, which today are marked at a blend of roughly 3x as of June 30th. We believe they provide attractive further upside over the coming years. Next page. Just stepping back into terms of the markets, pharma biotech market has, needless to say, experienced a substantial amount of activity in the last years. Resources shifted heavily to COVID programs. There's been substantial evolution in emerging modalities like cell and gene therapies, other biologics, which are as a group making their way through the clinicals and in some cases into commercial production. Supply chains have undergone substantial volatility, in particular, given broader market supply chain constraints and surges in demand for vaccine-related products and services. We do think, however, and we see within our businesses that COVID's impact on the market is subsiding. There is a return to normal volumes coming, and supply chain dynamics is occurring and should continue to occur over the coming years. There will be some normalcy, but there will certainly be some volatility in that as customers manage their own inventories and activities as they go from the COVID environment into a more normal environment. Through this, the market overall, however, continues to offer many areas of rapid ongoing growth. Areas like biologics, CDMOs, bioprocessing consumables are all growing high single- to mid-double-digit% plus. When you look at the impact of the decline from the 2019 peak in biotech funding, you know, they're certainly causing shifts in behavior patterns. nonetheless, we remain at very high levels of absolute funding in any case for biologics whose access to capital is constrained, the emphasis is on partners capable of helping them advance their programs with the greatest balance of cost, speed, and probability of success, which in our ecosystems presents tremendous opportunities. Now, the valuation environment's come off a bit like the broader market, but there remains very strong appetite for leading companies in this space. We see M&A demand, particularly for premium companies, remaining very robust for a long time, given the strategic and financial appetite for exposure to these sectors, and in particular, to the highest end areas of these sectors. Next page, please. To that end, our focus is on building platforms in our ecosystems that are exposed to the fastest-growing and most innovative areas within their markets. Yeah, in biotech and med tech, there are many of these. Examples in biotech include viral vectors, which provide a means for delivering instructions for therapeutic protein production into cells. mRNA therapies, such as the Pfizer and the Moderna vaccines. Areas like bispecific antibodies, which offer the potential for enhanced targeting and cytotoxic efficacy versus traditional monoclonal antibodies. Our portfolio companies are actively exposed to each of these and a number of the other, innovative areas within pharma and biotech. Next page. Similarly, on the med device and the MDO side, the market backdrop offers good growth, with pockets of particularly strong growth in innovative areas. Procedure volumes are returning to normal as well, albeit still impacted by staffing levels in hospitals. Outsourcing continues, with more value being placed in the hands of key partners capable of delivering real value to the OEMs. And there continues to be robust valuations in the market and strong appetite by strategic and financial buyers. Next page. Also similar to biotech, we focus within the med tech market on the fastest-growing and most innovative areas. Our companies are exposed to segments like neurostimulation, the structural heart market, so TAVR, tricuspid, mitral valve replacement, and areas like robotic surgery. We'll touch more on this in the context of Cirtec in the coming pages. Next page. In summary, when stepping back to look at our approach within healthcare, it is to focus on areas we understand well and which build well off of one another. We leverage the knowledge from one investment and the relationships and resources gained in that investment to identify the most attractive areas in other segments of our ecosystems and to find and unlock opportunities for additional platforms or strategic add-ons. This ecosystem approach also benefits our companies. It gives them advantages in their markets and access to resources they wouldn't have independently. We are ambitious. We try to be visionary alongside, of course, our company leaders. What this means is we tend to back our companies to grow significantly with an eye towards becoming market leaders in their segments, both via organic investment and through acquisitions. Over these journeys, they strengthen their operational foundations, including their people, their processes, their systems, and we support them actively to invest as needed to do so and to bring in resources who can help as and when needed. Importantly, we cultivate an ownership mindset. We create incentive plans that enable our leaders and employees to benefit from the value creation they deliver, and this really aligns our interests and helps everybody be excited about the businesses that we're building and the value creation that occurs. Next page. Each of Cirtec, SaniSure, ten23 health, and Q Holding are examples of this approach. Employee counts as a proxy for growth have risen between 100% and 700% during our ownership in each of these cases. We've made substantial investments in facilities and capacity to support growth, with footprints increasing between 100% and 200% in each case. Importantly, each of the companies capabilities has expanded significantly with an eye towards being ahead of our customers' needs and to making each of these companies leaders in their fields. Next page. As noted previously, in a number of cases, the increased capabilities have been added via strategic acquisitions, albeit, you know, only in some instances, 'cause we certainly invest very ambitiously in organic development and capabilities. What this has meant in terms of our acquisition program is that over the last number of years, we've been one of the most active acquirers in our spaces. Importantly, we do not acquire within our portfolio for scale. We don't believe that adds value in the same way that acquiring strategically to enhance our company's capabilities, their market presence, and their geographic reach does. Reflecting this, the vast majority of these acquisitions have been with founder-owned businesses, where the owners shared our vision for the opportunities in their segments, saw what we were trying to build, and were excited to have their companies be a part of that, and that's something we are really proud of. Next page. So on from our healthcare approach to Cirtec. Cirtec, which we presented a number of years ago, some of this will be an update and some of this will be a refresh. Cirtec is one of the leading medical outsourcing manufacturers in the world. It focuses primarily on complex, generally Class II or Class III devices, as well as highly specialized components that go into those devices. Its markets include many of the most attractive in medical technologies, including neurostimulation, structural heart, the artificial pancreas for continuous glucose monitoring. It's grown into a true global leader with operations throughout North America, as well as now Europe and Germany, and Latin America and Costa Rica. Its management team is one of the most experienced in medical devices, in particular medical device outsourcing, and they bring, you know, world-class strategic and commercial capabilities. Including our CEO, Brian Highley, who we've known for over 10 years and with whom we partnered in 2017 in acquiring Cirtec. Next page. Cirtec's end market mix is one of the most attractive in the industry. The vast majority of its revenue comes from rapidly growing end markets or device categories, which as I mentioned, include neurostimulation, structural heart, diabetes, but also other areas including micro stenting for glaucoma and other minimally invasive therapies, as well as related delivery systems and interventional. This mix has been cultivated very intentionally, both through organic investment in capabilities and people and via targeted acquisitions to provide for a tailwind of organic growth that allows Cirtec to deliver leading growth consistently year in, year out, as well as puts us on the front end of innovation, which matters quite a bit to our customers as we become truly a partner of choice in these critical areas for them. Next page. This growth is reflected in the significant expansion of the business over time with Cirtec in 2022 delivering roughly 8x the revenue that it did in 2015. This has been a combination of organic and acquired growth, but organic alone has been strong double digits over that period of time. Noted in the detail of this slide, which we won't get into in each case, but we've created substantial capacity over this journey through investing in greenfield facilities in areas like Costa Rica, Brooklyn Park, Minnesota, Santa Clara, California, as well as creating material expansion of capacity and capability in many of our other facilities, which has been necessary to support the growth that we've undergone, as well as positions us very well with substantial capacity to support the future growth that we anticipate. Next page. The company's double-digit CAGR through the 2019 to 2022 period, we feel is a testament to its strength, delivering very resilient performance and growth in each year, including in the challenging 2020 period in which many of the peers in our industry declined due to hospital labor shortages and deferral of elective procedures, excuse me. The medical industry generally tends to be resilient. Now, it was not immune to many of the fluctuations that occurred in the last year that impacted other markets like labor shortages, like supply chain constraints, and in this year, increased inflation. In each year we face different headwinds, but the management team, with our support, has helped navigate these through the changing landscape of challenges and has truly provided excellent service and importantly product delivery for its customers, which has been critical, especially as the supply chain has been so difficult. That performance for our customers has been recognized. It's put us in a place to win new programs at a disproportionate level, and makes us truly one of the critical suppliers for our customers. These last couple of years, we feel have truly helped to differentiate Cirtec relative to the market, and our customers recognize that. We're very proud of that. Next page. In terms of our investment thesis, to recap and provide a bit of an update on the thesis which we laid out several years ago when we first introduced Cirtec in a past capital markets day, we've made substantial progress against each of our primary goals, and these included delivering on and continuing to grow a large pipeline of complex customer programs, many of which involved industry-leading and cutting-edge technologies coming to market to deliver novel and impactful therapies for patients. We have vertically integrated to provide greater value to our customers and supply chain stability, and this has been really key and actually one of the most important parts of the performance we've delivered in the last couple of years, where we've helped to minimize supply chain complexity for our customers because of what we can do in-house. We have diversified both our end markets and our geographies, and the company has strengthened its foundation to support its growth and evolution into a true leading partner for its customers in areas where they have real needs, given the complexity of the products that we work with. Next page. As noted a few times, this journey's involved growing from a strong base of markets where we were in neuromodulation and precision machining at the outset to include a number of new and differentiated products such as the world's best nitinol tubing, which creates the scaffolding for structural heart, thin film electrodes, which are utilized in the artificial pancreas, the CGM devices we serve, and complex devices such as electrophysiology devices. There's been a substantial growth in enhancement of our capabilities, and that has led to an enhancement of our various market segments from the time of acquisition. Next page. This is demonstrated, I think, in a good case within interventional, where we've added via three highly strategic acquisitions, as well as substantial organic investment, a leadership position in many of the most complex interventional device categories and therapeutic areas. I've mentioned structural heart on a couple of occasions, and this is a particularly strong area for us, as well as a particularly strong growing part of the market and strategic to our OEMs. Other delivery systems and devices include areas like ablation, neurovascular applications. These give us the ability to support our leading OEMs and innovators in the places that they are particularly focused on driving their own growth and differentiation. This expansion into interventional has, you know, both added to our value to our customers, but it's also created a very large additional addressable market for Cirtec, which will help us to provide, you know, many ways to continue our strong growth for the foreseeable future. We think that's a great case study of how we've been able to drive into a new market. Next page. Neurostimulation, I think similarly, would be a great case study in how we've been able to use vertical expansion for the benefit of our customers. At the time of our acquisition of Cirtec, the business had a small engineering team, but a small engineering team. Did assembly work, but limited, and had defined machining operations. Since that time, you know, through the strategy of the leadership team, really to build out a fantastic presence within neurostimulation, we built an extensive engineering team of over 100 engineers, which serve a wide range of disciplines that get utilized throughout the neurostimulation design, development, and engineering requirements. Our vertical component capability has expanded to include the most comprehensive range of processes and components in the industry. That includes areas like lead design and manufacturing, IPG or implantable pulse generator design and manufacturing, hermetic sealing, welding, testing, and a wide range of precision machining and stamping and other areas that allow us to make the components that go into our devices. We've also acquired one of the strongest chip design capabilities in the market, allowing us to engage with our customers at the very earliest stages of their activities when they're working to put their waveforms on a chip for preliminary testing of their therapies, and that occurs well before clinicals or commercial production. This provides us a wonderful advantage in getting in early, and it allows us to serve the full life cycle of our customers, where we can then go from chip design to product engineering to clinical supply to commercial supply and real life cycle management. This is a great example in neurostimulation of our ability to verticalize and offer the, you know, full life cycle management for our customers. Along this way, we've also acquired a proprietary FDA-approved and commercially proven platform. Now, we are not intending to, and we do not serve this platform as a therapy itself, but we instead offer it to our customers so that they can leverage the approved features, and they can customize it or any of its components for their therapy. What this means is that they take material risk out of their own development process. It saves them years of development because they're working off of a proven platform, and it saves them millions of dollars in connection with that. That, and very importantly, it gets their therapies to market more quickly and cost effectively so that they can serve more patients more rapidly. Neurostim would be a great example of how we've tried to take a vertical and comprehensive approach to a given therapy area that we think is fast growth and one where we can distinguish ourselves. If we go to the next page. I mentioned the importance of geographic growth. Vascotube helped us to establish our European presence. Recently we have greenfielded a facility in Costa Rica, which is now up and running and operating and providing areas like coil winding, IPG leads assembly, device assembly, and microcoiling. Importantly, the Costa Rican market offers us access to a number of the OEMs that are in that market. Very high quality labor pool, low cost, you know, good engineering and leadership resources. It expands our ability to offer a life cycle of management to our customers, whether that be mature products that are looking for an opportunity to move to a lower cost production region or that be, you know, supporting them in their own development of their products, which they are producing in markets like Costa Rica or other areas of Latin America. This gives us the opportunity, again, to really reinforce our life cycle management capabilities for our customers, as well as serve a broader set of their needs in the markets geographically where they are working themselves. We're excited about this as a development area, but it's only one of the many greenfields that we have, we've undertaken over the course of the last number of years. It's important in that it gave us geographic growth. On to the next page. In terms of 3i's role, I mean, I think importantly, you know, the most important thing is strategic alignment with our management team. When we talk about the concept of being ambitious to grow ahead of the markets, when we talk about the concept of trying to build leaders in the industry that are serving their customers at the front end, that strategic alignment really is critical. It's also critical that we have a nimble approach to evolving that perspective, as the market trends evolve, as our customer needs evolve, as opportunities present themselves to us. We need to be able to be close enough to our businesses working in alignment with our management team so that we are able to tailor our approach to really make sure that we continue to be ahead of the markets. That strategic alignment from the outset and really that proximity to the businesses is absolutely key in making sure that we're making the right decisions quickly, efficiently, and we are acting as a nimble player in the space. We absolutely support our companies in M&A, whether it be execution of add-on acquisitions or helping to facilitate and support the integration process. We provide leadership and site GMs with additional resources when they need them in order to drive business improvement and productivity initiatives. Bringing resources from our network outside of the companies, really when that's a pull model and the leadership teams know they need the support, and they want the support and the experience that we can help bring. Certainly governance and risk management is an important area of our contribution to all of our companies across 3i. You know, where we assist with kind of making sure the right governance process is in place, controls are in place, and particularly given the evolving global risk landscape that we find ourselves in, really across all of our industries. Where areas like cyber and international regulations require that you move quickly. As I mentioned with the both European and the Costa Rican footprints, international expansion's been another area where we've been closely aligned with our management teams to help drive the business. Next page. ESG, yeah, thematically, I think as you guys are hearing across all of our companies is incredibly important to 3i. It's also very, very important within the medical devices industries. Our OEMs are placing a more substantial focus on this, and they're expecting it out of their suppliers, so being on the front end of that really is critical. Needless to say, by nature of the products that we serve, the customers that we're serving, we have a daily impact on people's lives. You know, our products address a number of the most challenging and impactful chronic diseases in the world, and we find that really exciting. Areas like heart disease and diabetes, you know, chronic pain, motor function, stroke, sleep apnea, incontinence, Alzheimer's. I mean, being part of the value chain to help address these incredibly impactful conditions or diseases is something that, you know, in addition to obviously the value creation that really excites our team as well as our management teams of our companies. It provides a lot of energy. As a leading provider in the space, I mean, Cirtec has fantastic systems that help to drive waste out, which creates efficiency both in energy and material utilization. You know, we regularly review opportunities to continue to improve areas like our emissions levels as well as other sustainability and reach other sustainability targets. ESG is a core part of the mission within the med tech industry as well as within Cirtec. Onto the next page. Looking forward, you know, our goal has been and continues to be to really create the leading MDO within the market in Cirtec, which we feel we've made a tremendous headway in doing. We wanna serve the most cutting edge and innovative technologies. We wanna help our customers bring those to market more cost effectively, faster, so that they can help have an impact on their patients. We seek to support our customers through their life cycles, as mentioned, and that includes everything from design, development, engineering, you know, through commercial production, component production, and supply chain management. Help take complexity out of their system. We continue to vertically integrate to do this and to provide true supply chain security, and that's obviously an important theme in today's global environment. We'll continue to pursue select strategic acquisitions in order to help facilitate this journey. You know, we have to date, and we certainly expect to continue to build a business that we're very proud of and that we or would be proud to own for the long-term. Along that journey, that will help us to deliver top tier returns to 3i as well as to the management teams that are driving the business, and the other employees and shareholders of Cirtec. With that, I will pause and turn it over for Q&A. As before, participants can use the ask a question button to submit written questions. If you are dialed in, please signal by pressing star one on your telephone keypad. We will pause for a moment to assemble the queue. Our first question is coming from Philip Middleton from Bank of America. Please go ahead. Yeah, thank you so much. That was really interesting. You talk about a business you'd be interested in holding for the long-term. To do that, presumably you'd need a lot of white space to expand into. Could you give us some idea, please, of what you see the addressable markets you have here, how those are growing, and what sort of growth rates they can therefore sustain? Sure. Yeah, I appreciate the question. Thank you. On page 13 of the presentation, we outline a couple of the markets that we are serving as well as their growth rates. Areas like neuromodulation and continuous glucose monitoring are substantial markets. Interventional, which is, you know, catheter-based delivery systems of various devices. Very substantial markets. The microstenting markets, neurovascular markets, these are substantial size areas within medical technologies. All of which are growing high single digits to, you know, to well into the double digits, and expected to do so for some period of time. I think I highlighted the interventional market entry that we undertook in the last number of years. That alone provides a substantial white space for getting into, again, areas like neurovascular, you know, peripheral stenting, structural heart, electrophysiology. These are massive markets. I think when we look at Cirtec and its ability to help its customers be successful in some of these very fast growth markets, we think that the white space and the opportunity to continue to drive growth for 3i and for Cirtec over a long period of time is very substantial. I think if you look at pages 13, 18 as examples, those will help give an indication. Okay. Thank you. There are no further questions in the queue, so just a quick reminder everyone, please press star one to queue up for questions. There are no further questions on the conference line, so now I will hand over to Silvia Santoro, Investor Relations. Yeah. One quick correction. 13 was actually referring to 45, and 18 was supposed to refer to 50. So apologies for the pagination point. Well, I think we're gonna turn it over at this point to Rahul to talk us through Wilson. Thanks, Rahul. No, we have a couple of questions from the website, Rich. Okay, great. Sorry. We have a question from Johan Söderström at SEB. Who are Cirtec's main customers, its main competitors, and what are its key competitive advantages? Sure. Cirtec's main customers, I think one of the appeals of Cirtec is that it is diversified across the landscape of OEMs. We serve all of the major med tech OEMs, whether that be the Medtronic, the Edwards, the Abbott, the Boston Scientific of the world. We serve a number of the most innovative players within areas like neuromodulation. I think if you look into that space, you'll see that there are a number of therapies that are in market in areas like pain or sleep apnea, and we're serving a number of those OEMs. We really serve across the spectrum of medical device OEMs and emerging innovative medical device companies. In terms of competitors, that would be, you know, the landscape of medical device outsourcers, and it will vary a little bit based on market. You might have areas like in neurostimulation, you'd be competing with Integer, in areas like interventional, perhaps with TE, Creganna, or with Confluent, in areas like certain areas of machining of someone like Resonetics. There are others out there like the Teleflex OEM, MDO segment. There's a reasonably defined set of providers of kind of high-end, med device outsourcing componentry and full device activities. They really fragment as you get down into the end market, where there are typically only a few within any given end device category capable of serving the highest end applications, and that's truly where we want Cirtec to establish itself. Is there anything else on that? Thank you. Yes. We have one further question from Greg Knox at Numis. He asks, "The build and buy strategy in healthcare has been working. Can you talk a little about the potential end state on this? Yeah, absolutely. Well, I think that, you know, I'll refer back to my point that we don't buy and build for scale. I mean, the end state truly is to create the most comprehensive suppliers of products and services for the particular end markets and customer bases that we're seeking. So again, back to the concept that we identify what, you know, through our ecosystem approach, you know, the highest growth, highest value areas within our markets, whether that be on the biotech side or be on the med tech side. We, you know, we seek to build out our capabilities through acquisitions really to support the companies to offer their customers the absolute top service or product capabilities within those markets. I think the case study, you know, with regards to what we've done within neuromodulation, where we have acquired, for example, a number of the processing capabilities that allow us vertical production capabilities on, you know, stamping or machining, as well as the chip design, which was an acquisition, as well as the platform, which was an acquisition, actually two acquisitions. They are good examples of really trying behind the, you know, the perspective and knowledge of our leaders, as well as the others in our ecosystem, to play ahead of the curve of what our customers are looking for strategically and to create a truly comprehensive offering. Yeah, I hope that helps to address the point. Our acquisition, our buy and build program, I mean, the nice thing about that, as we continue to edge out into new innovative areas, there will always be opportunities to continue to strengthen or to edge out and expand our comprehensive capabilities. You know, while again, you know, we certainly are not looking for scale for scale's sake, there's no shortage of opportunities to continue to augment our platforms with strategic acquisitions that enhance their capabilities and their customer propositions. Looks like we have no further questions. We can move on to Rahul's presentation. Thank you, Nick. Thank you, Rich. Thank you. Thank you, Silvia. Good afternoon, everyone. I'm a partner at 3i based in New York. I've been at the firm for 10 years, and I'm here today to tell you a little bit about our investment in WilsonHCG. Let's start on page 58, where we provide a high-level view of the company and the transaction. WilsonHCG is a provider of end-to-end talent solutions on a global scale. The company offers a range of services, including HR strategy and consulting, recruitment process outsourcing or RPO, contingent search, and executive search. The majority of WilsonHCG's revenue comes from RPO. Both RPO and contingent search are largely contract-driven businesses with recurring and recurring revenue and contribute a large majority of the business. WilsonHCG is headquartered in Tampa, Florida, with office presence in 14 locations across four continents. Three on the page and one more soon to come. The workforce of 1,500 recruiters is growing rapidly, having more than doubled since 3i invested in the business around 18 months ago. Wilson's expertise is functional. It focuses on roles in sales, engineering, technology, customer service, finance, HR and legal, among other roles. The markets it serves are very diverse as these roles are required within most companies. While we won't be discussing specific customer names today, the customer base is largely blue-chip global companies, many of whom are within the Fortune 500 or Fortune 1,000. With regards to our investment, after tracking Wilson for nearly four years, dating back to a first meeting with the CEO and founder in 2017, 3i invested in the business in early 2021. We were able to find common ground on financial terms with the Wilson management team and their lead investor without the involvement of an investment banker. Since our investment, the business has performed strongly in 2021 and 2022, materially ahead of our investment case. Moving to the next page, I will summarize our investment thesis in four key points. The rest of this presentation is largely organized around these points. Firstly, Wilson's core market, the RPO market, is one we have strong conviction in. It is a market we have tracked since I was in my third year at 3i back in 2015. This is a double-digit growth market with enduring growth drivers and one we have been looking for exposure to since 2016. Secondly, Wilson is one of the leading players in the market today. Over the years, we have watched the business transition from an emerging player to a leading player driven by a number of factors, most notably its relentless focus on driving the best outcomes for its customers. This has allowed the business to grow roughly 2x market growth levels. Thirdly, this is a very scalable business. Wilson had an attractive margin and cash flow profile when we invested in the business in early 2021. However, given the growth potential, ability to scale margins was a critical due diligence area for us. We found that Wilson's scalability comes from three attributes: great people, great processes, and great use of technology, whether third-party technologies or proprietary. While we are still early in our ownership, Wilson's scalability has been put to the test, given the revenues and employee count has more than doubled over this period. We have seen the bottom line grow substantially in excess of revenue growth. Finally, we have backed a terrific management team. When I say this, it not only relates to the senior leadership team, but people at every level of the Wilson organization. This is a team that does for itself what it does for its customers. It attracts A-plus talent, knows how to train them quickly, and ultimately how to motivate and retain them. There is a relentless focus on understanding the customers, their goals, and what makes them tick, and then on driving the best outcomes for them. Let's move on to the next page and start with the market. The human capital market is one we like. There are three broad buckets. Talent acquisition, where the RPO industry sits, talent retention, and then finally, payroll benefits and other services. There are several key trends impacting these markets. Many of these have accelerated or have been heightened by the pandemic, but existed back in 2015 when we first started to look at the human capital space. Firstly, employee expectations have been evolving progressively over the last five to seven years. A company's mission, its vision, what it stands for matter more to employees and candidates with every passing year. Employees have strong opinions on culture, work-life balance, location, and more recently, an ability to work in hybrid or remote environments. Baby boomers have proven to be a lot more loyal than millennials, who in turn are much more loyal than Gen Z. With the continued retirements of baby boomers, inherent employee churn in companies continues to tick up. The pains of recruiting and retention and the burdens on in-house HR teams are all too clear today. Secondly, over the last several years, there have been shifts in the global workforces with the growth of freelance workers and independent contractors. This has come at the cost of permanent employees who are harder to hire with every passing year. Thirdly, skills gaps. The requirements of what are needed from people have been rapidly changing. With the proliferation of data, the skills of knowledge workers have needed to move towards providing insights. With increased automation, roles are increasingly focused on hard-to-automate workflows and one that require increasing judgment. Fourthly, digital transformation. Similar to other functional areas in companies such as sales, marketing, and IT, HR is going through its own digital transformation. However, the use of applications and technology in recruitment and retention are far behind other areas, such as marketing as one example, where digital tools have proliferated over the last 10-15 years to attract, manage, and retain customers. We think the same should be used to do for employees. Finally, outsourcing. As duties become more complicated, specialization is required, outsourcing is becoming more common. The first generation of HR leaders often came from backgrounds in payroll benefits and other administrative HR tasks. Talent acquisition and retention is often not a core skill set, and several business models have emerged to help attain the specialization needed. When you look at these trends, all the above have led to the elevation of the HR leader's role. There is increasing seniority in the role, with directors transitioning to VP and SVP roles, senior VPs transitioning to CHRO roles. Over the last five to seven years, we have seen the growth of the chief people officer role dedicated toward attracting the best candidates and engaging employees. Finally, HR budgets are on the up in totality, whether spent in-house or on outsourcing providers. Let's move to the next page where we talk about the recruitment process outsourcing market in particular. This is the market that drives the majority of Wilson's revenue. RPO comes in various forms and had an evolving role over the last 10 years. 10-15 years ago, the first generation of RPO buyers would define RPO as a service that provided just tactical support to in-house recruiting teams to enable them to be more efficient. As one example, this could mean sourcing and screening of candidates and then quickly passing them back on to the internal recruiter to focus on the highest value candidates to interview. If you turn to the next page. Over the last seven to nine years, the industry definition has evolved to more end-to-end recruiting, beginning with creating talent pools proactively to moving towards several rounds of interviewing, assessing, and ultimately passing back to the hiring manager for a final round of interviews. Also, RPOs are increasingly helping with post-offer support, including reference checks and pre-employment onboarding. Let's move to the next page. Today, the definition of RPO is further extending upstream to involve offerings such as helping employers manage their brands for candidates, defining the recruitment strategy and not just executing on it, and finally, recommending the technology stack for recruiting, which could involve 20+ technology point solutions. Wilson plays across this value chain on an end-to-end basis. The offerings are backed by long-term contracts, and the service has high visibility within the client's organization. In delivering its RPO solutions, Wilson acts both as a strategic advisor and an executor on all activities related to talent acquisition. The Wilson recruiter is often the face that the candidates see most during the interview process. Moving to the next page, let's hit on industry growth. The RPO industry has grown 14% over the last decade. After a brief negative spell in 2020 during the first year of the pandemic, the industry has delivered a similar growth rate in the last three years as one it would have experienced from 2012 to 2019. The drivers of growth are several of the drivers impacting the broader human capital space that I discussed a few pages ago. First, RPOs are highly specialized. Wilson in particular specializes at the functional level and knows what good looks like for the role. The company can bring this specialization to bear to be better, faster, and much more cost-effective than an internal talent team. Specialization has driven more companies to outsource talent acquisition. Secondly, RPOs are at the forefront of digital transformation. In the case of Wilson, we have a large innovation team that spends all their time trying, testing, and implementing various technology solutions. There are hundreds of point solutions used in recruiting from various recruitment marketing technologies to attract candidates to assessment tools to assess them, and automation and background checking and referencing to validate them prior to an offer. RPOs such as Wilson have the scale to sort through and continue to implement the best-in-breed tools and also invest in some proprietary technology. In-house HR teams often don't have the scale and wherewithal to do this. Thirdly, employee churn. With evolving employee expectations and skills mismatches, employee churn has continued to tick up. In-house talent teams are not able to keep up with the levels of churn and replacement needed. Finally, recessions. The Great Recession back in 2009 was a great driver for the market in the subsequent years. Has been the first year of the pandemic in 2020. In recessionary periods, in-house talent acquisition teams are often the first to be laid off. Companies make short-term decisions. This leads to more exploration of RPO as a solution. As one comes out of recessions, companies enjoy the variable nature of costs from RPOs combined with the better outcomes they are seeing and continue to retain and expand the work they do with RPOs. Let's move on to the next page and talk a little bit now about Wilson. Founded in 2002, Wilson is celebrating its twentieth anniversary this year. The company organically developed its core RPO business, which contributes a majority of revenue. In 2015, Wilson expanded into Europe and Canada through acquisitions. The Canadian acquisition, bringing the contingent search business. These were very small tuck-in acquisitions, and Wilson has substantially grown its Canadian and European businesses over the years. In 2019, Wilson acquired a business in Asia, giving it exposure to China, Singapore, and Hong Kong. Over the years, the business has heavily invested in processes and systems, both an ERP and an applicant tracking system, among a number of other tools. We spent a good amount of time diligencing this as well as the overhead and shared services capabilities in the business, which are very well invested and best in class. We believe these provide a great foundation for future growth. Let's move to the next page. Wilson has delivered close to 30% compounded annual growth over the last eight years. The business has grown in every single year, with the exception of 2020, the first year of the pandemic. The drivers of growth have largely been all the drivers driving the market, including, 1, adoption from new clients. Two, growth from existing clients including increasing the scope of their work, whether new geographies, business units, or role types. Third, underlying customer growth driven by growth in jobs and in employee churn. An added fourth driver of Wilson's growth are its offerings in contingent search and executive search. It has used these business lines to get through the door in RPO, as well as upsell RPO customers into these offerings. Let's now move to the next page to talk about Wilson's success, which has been well-recognized in the industry. I won't go through this page in detail, but here's a sampling of industry awards across three major categories. First, excellence in talent services, which is a vote of confidence from customers. Second, excellence as a workplace, which is a vote of confidence from employees. Third, excellence as an organization in upholding the highest levels of DE&I principles. Let's move to the next page. On this page, I will cover key elements of Wilson's RPO model. As I discuss these, please note that several of these are also key differentiators of the business versus other players in the market. Firstly, Wilson's relationships often exist at the C-level with the CHRO getting involved. They sometimes start there, but if not, they always end up there, given the quality and criticality of the work. Second, the client trusts Wilson to represent its brand to candidates. Candidates often don't know they're talking to a Wilson employee. Wilson's net promoter scores are among the highest we have seen in the market, and having seen this market across various players over the last six years. Fourth, Wilson is a thought partner in technology. Clients are increasingly looking to Wilson to help them make decisions on technology. There are five to 30 different point solutions that are integrated into the core applicant tracking system or used as standalone solutions in a recruiting workflow. Wilson has a dedicated team that spends all their time researching and implementing the latest technologies. Often, Wilson will use a product on itself before passing it on for use to a customer. Fifth, proprietary analytics. With the recent acquisition of Claro, Wilson has added a proprietary workforce analytics offering. Claro is a tool that provides a score on every candidate and predicts whether they are demonstrating job-seeking behaviors, or simply speaking, whether they're looking to switch their job. This is a powerful tool not only to help Wilson's customers understand what talent pools they have access to in a geography, but also helps Wilson's client base on talent retention as they look at their own employee base to understand the risk of employee departures. Next, long-term contracts. The business is based on contracts that are renewed either annually or once every two to three years. These contracts have a significant fixed-fee component. Next, a customer-centric and flexible approach. Wilson, unlike a number of RPOs, has a flexible approach on recruiting workflows and technology. It does not make a customer adapt to the Wilson way. It works on a recruiting workflow that best suits the customer's needs and incorporate the technologies that Wilson and the customer agree are the best, are the best fit for the work. This is one of the hallmarks of the business and a reason it has been able to grow faster than the market. Next, defined processes and a commitment to excellence. This is one where the results show up in our ability to hit and exceed key customer KPIs and the customer satisfaction levels. Finally, a customer and employee-driven referral model. Wilson's best source of new customers come from referrals from current and past users. Wilson's best employees come from referrals from existing employees. This is not just the case for most players in the market. Let's move to the next page and talk a little bit about management. Led by CEO and founder, John Wilson, this team is one of the best in its market. Several members of the team have received awards and recognition for their excellence in their industry. One out of eight members of this team came through an acquisition. Six out of the remaining seven have been working together for nine-plus years. This is a team that is deeply motivated to be the best in its industry. Moving to the next page. Excellence in various areas of ESG is core to how the Wilson team operates. I will touch on a few elements of this today. First, Wilson has a limited carbon footprint with limited use of office space and travel to and from offices. Many companies moved to remote and hybrid workforces since the pandemic. This approach has been core to how Wilson operated for several years before the pandemic. This resulted in far less time and cost to travel relative to most of its RPO peers. Next, a veteran and spouse hiring program. Wilson has an emerging recruiter program which helps veterans upon their retirement from the military and military spouses to look for a career in recruitment. Participants come from all backgrounds of military service, including Air Force, the Army, Marines, and the Navy. We have 30+ employees and growing that have come out of this program. Finally, we have a highly diverse high-performing workforce. 65% of Wilson's employees are women. Greater than 50% of employees belong to ethnic minorities. Finally, we have a senior leadership team that is split evenly between men and women. Let's move to the next page and talk a little bit about the process. We started coverage of this market back in 2016. We met John Wilson, the CEO, in 2017. At that time, Wilson was a third of its size it is today. From our discussions with various CHROs and market participants back in 2017, we knew that this was one of the most promising businesses in the market. We stayed in touch with the Wilson team over the subsequent years. In the second half of 2020, as the labor markets were showing signs of troughing, we proactively approached the management and the majority investor, a private equity firm. A wise investor once said, "Be fearful when others are greedy, and greedy when others are fearful." We knew that given the market uncertainty, this was the right time to pursue the business. While Wilson was not actively looking to sell, we were aware that there were strategics that were also pursuing the business at the time, and so a decision on a future path was going to be taken. We were able to convince management on the back of our sector experience and our global platform that to pick 3i over the strategics, and in turn, they convinced their lead investor. We had a creative transaction structure, one that offered a lower upfront value to the business than the strategics, but an additional contingent payment if Wilson achieved certain revenue and profit metrics in 2021. Wilson ultimately ended up materially overachieving the revenue and profit thresholds. We had a highly aligned management team who took most of their proceeds, if not all, from the contingent payment and reinvested it back into the business. Let's move to the next page and talk about the first 18 months of our ownership. The business has performed well ahead of our investment case, outperforming across various metrics, whether new customer adoption, existing customer land and expand, gross and net retention metrics. We are already a few years ahead of our investment case. On the people front, we have had no changes to the senior leadership team. Wilson is currently at 1,500 employees and growing, and this is up from the 600 employees it had in March 2021 when 3i invested. The management credits productivity from new employees is at the same level as existing employees, which is a testament to how well Wilson is able to hire capable people, train them, and get them up to speed quickly. On strategy, we have a multi-year value creation plan with clear prioritization across initiatives agreed upon with the management team. We continue to further extend our capabilities so we can better serve our customer base. This involves launching presence in new countries as one example. On the systems front, we have a terrific base and are continuing to increasingly adopt more functionality in our ERP and other systems to drive scalability. Finally, on acquisitions, we have an exciting organic plan. The team's approach has always been to build first rather than buy, but there are a few areas where we are looking to supplement our growth through acquisitions. Finally, let's move to the last page to discuss our ambitions. Our ambitions are exactly the same as management's ambitions, which are to build the market leading provider of total talent solutions. First step of this is capitalizing on existing momentum. Even with the market for hiring softening in certain sectors, given rising interest rates, the company is seeing growth in its pipeline of new potential customers looking to explore RPO. The North American market, in particular, continues to serve up exciting new opportunities. six to seven years ago, this was an industry that had a six-month to two-year sales cycle. Today, with increased sophistication of HR leaders, many of whom have tried RPO before, the sales cycle can be weeks and months. Second, it's expanding our footprint in low-cost countries. Wilson already has footprint in Poland and Romania, but is looking to expand to a few other countries. This is largely to support some of our North American and European customer base. Thirdly, it is to strengthen our top of the funnel strategy and consulting offerings. The definition of RPO is continuing to evolve. Our customers want us to be partners, not just executors. We are spending more and more time with them on defining the strategy for recruiting, enhancing their brand value for candidates, and helping them explore and deploy the best technologies. This upfront work positions us to be a partner and allows us to be far more sticky in the long-term. Fourth, expanding the breadth of roles covered in North America. There are certain markets and job roles we want more exposure to. Wilson will first try to build these in-house, but over time, also consider acquisitions. Fifth, expanding our RPO capabilities in Asia. With an acquisition completed in 2019, Wilson has a market leading executive search business in China, Hong Kong, and Singapore, which we will be using as a platform to organically build our RPO capabilities in Asia. Sixth and final, executing our playbook in a recession. This means being ready for the worst, but keeping our eye out on the long game and the fact that RPOs have demonstrated strong growth for years to come, coming out of recessions. North America is our largest market. Today, even if we see some hiring soften, this is being offset with increasing scope of work with our existing customers and several new opportunities in our pipeline. Both these latter elements are driving the business to double-digit revenue growth year- over- year, even in the second half of 2022. We continue to encourage management to invest in the business and its capabilities even when labor markets are softer, because these are the times when we do see increasing pipeline from outsourcing. Converting on this positions us well for the medium to long-term. With that, thank you for your time, and I'll open it up to questions. As before, participants can use the ask a question button to submit written questions. If you are dialed in, please signal by pressing star one on your telephone keypad. We'll pause for a moment to assemble the queue. There are no questions on the conference plan. I will now hand over to Silvia Santoro. I'm sorry, one question just came in from Bruce Hamilton from Morgan Stanley. Please go ahead. Thank you, and thanks for the presentation slides. Just a quick question. Obviously, you gave lots of comments around the sort of revenue growth opportunity, the market and also Wilson's growth ahead of that over past years. But I didn't see much reference to EBITDA and profitability. Could you give us a sense of how sort of profitable this business is and how that's moving forward and how you anticipate that will move from here as you develop the plan? Thank you. Sure. You know, I won't discuss specific margins, Bruce, but it's safe to say that this is a highly profitable business when we owned it. The profit margins have grown 60% in our first two years of ownership, primarily driven by operating leverage as we've doubled revenue. While revenue growth has been roughly 2x, profit growth has been substantially more than that. Could I just butt in? Sure. I think we lost sound when you said that the business was significantly ahead of investment case. For some reason, the sound cut out. I'll just repeat the answer. I think the question was to give you a sense for the level of profit in the business. You know, the business, Wilson is a highly profitable business. The margins have just grown over the first two years of our ownership. Our profit margins have grown by 60% in the first 18 months, and a lot of that is driven by revenue growth, which has doubled. I won't give you exact margins, but it is a profitable business. Because of the strong processes and systems, we continue to see nice operating leverage accrue to the bottom line. Great. Thank you. There are no further questions on the conference line, so Silvia, please go ahead. Rahul, I think what happened is we lost sound during the webcast while you were talking about the first 18 months of our ownership. Perhaps if you could just summarize that slide again, and then I'll move on to the next question we have. Sure. The first 18 months of our ownership, the business has performed well ahead of our investment case, and it's outperformed across all metrics, whether it's new customer adoption, existing customer land and expand and gross and net retention. We are a few years ahead of our investment case today. You know, on the people front, we you know, we have the same management team that we backed you know, 18 months ago. There have been no changes to the leadership. We are at 1,500 employees and growing, and this is up from 600 employees back in March 2021 when we invested. Productivity is at the same levels with new employees as it was with existing employees, which is just a testament to the scalability of the platform. On strategy, we have a multi-year value creation strategy we've agreed on with the team. We just continue to build our geographic footprint and enhance our systems as they drive our scalability. The final point is on acquisitions. We've completed one acquisition in a technology business, a workforce analytics business a few months ago, and we continue to look at a few more acquisitions where they supplement our organic growth. Thank you. We have another question from Kim Berger at Numis. He's asking about key competitors. Sure. You know, our competitors, there are a number of RPO players out there. Broadly, you know, two major buckets. The largest staffing companies own RPO divisions. Secondly, there are a number of pure play RPO players similar to Wilson. There are probably about 15 players in the market out there. You know, practically, we don't compete with more than two to three. A large amount of the revenue is through referrals. It goes outside of RFP, which is uncommon for the space, which is a largely RFP-driven space. This is because when Wilson does a good job for its customer and the CHRO leaves the business, they often bring Wilson to the new customer, and we tend to avoid RFPs. I'd say there's, you know, a handful of other pure play RPOs we compete with. These are also, a couple of them are private equity-backed. I'd say at least 50% of our business tends to avoid RFPs and we don't compete. Thank you. There are no further questions, I believe, so we can move on to Simon's closing remarks. Okay. Thanks, Rahul. I hope you found today's three presentations useful. Three very different companies, but all are high return, low capital intensity businesses with strong cash flows and significant scope for further international growth. With that, I'll just open it up in case there are any final questions from anyone. We have an incoming question from Luke Mason from BNP Paribas. Luke, please go ahead. Yeah. Thanks for the presentation, guys. If I could just sneak in some questions on Action after the statement this morning. Just first on the EBITDA margin, seems like a strong EBITDA margin reported for Q3. Just wondering what's going on there. As we're looking for 2023, potentially some headwinds in terms of wage increases, energy, FX. I'm just wondering how you see the development of EBITDA margin into 2023 and beyond. Just secondly, in terms of the top line, I think you previously talked about less discretionary spending offset by customers trading down to Action. Just wondering what you're seeing there in terms of continuation of trends, basically. Just last question on store openings. I think it's running slightly down what we might have expected at this point in the year. Quite a bit of work to do in Q4. Just wondering what you're seeing. I think before you've spoken about some property market disruptions. If you give any update on what's going on there and conviction for the store openings for the rest of the year. Thanks. Okay. Thanks, Luke. I think on the EBITDA margin, it is running ahead of what we budgeted it to be this year, and that's really principally because sales growth is running ahead of cost inflation. We are seeing some very good sales leverage, which is having a significant impact on profitability. That's really the answer I would say. There's no letup in that footfall. In fact, we've just got last week's numbers, and that was a very strong week indeed. Very strong footfall driving very strong sales, which is giving us very strong leverage over and above the cost inflation that we've been seeing in the business. I mean, I think it's too early to say on 2023. We will be getting into our budgeting exercise in the last quarter. You're right, energy, the dollar, although dollar purchasing for us is only about 14% of COGS. Energy is not a huge COGS, but it's obviously gonna be seriously more than it was this year. We'll be looking at that in the budget. I can't really say more than that at the moment. In terms of the top line, it's really being driven by footfall. We're still seeing smaller baskets. We are definitely capturing people who are trading in our stores probably before they go into supermarkets. We're seeing very strong sell-through in every country, and we're seeing very strong sell-through in every category. The essential categories have been particularly strong this year relative to last year. Finally on store openings, we flagged, I think in March or May that we had stopped, say in Poland, and we had other property interruptions elsewhere. We have caught up quite a way. We always have a busy final quarter in store openings, and we're still confident we're gonna hit the number that we want to hit this year, which will be ahead of last year. Great. Thanks very much. Okay. There are no further questions on the line. It looks like there are no further questions through the webcast. Okay. Well, thanks everyone for phoning in and I'd like to say thank you to the three presenters as well. Much appreciated. Have a great day. Bye-bye.