Good day, and welcome to this Micro Focus briefing. For those who don't know me, I'm Greg Lock. I 'm the Chairman and have been for just 18 months. No doubt you'll be wondering what I make of my 18 months in Micro Focus, and before we get into the deep material that we're gonna cover today, I'm going to give you some personal observations. First, you all know that the integration of the software assets of Hewlett Packard Enterprise was a pretty large task. I must say I'm extremely encouraged at the position we now find ourselves in. We've been operating for six months or so with a single enterprise-wide systems platform. Secondly, in the 18 months I've been here, there have been some significant executive leadership changes and some significant board changes, and I now believe we are well-positioned from a leadership standpoint with the skills, capabilities, determination, and ambition that we need to take the next steps on our road to the sunny uplands. Now, how sunny will the uplands be, and what you make of our prospects for the future is the subject of today, of course. Let me just give you a few observations about how and why I'm encouraged by the position we now find ourselves in, compared with when I arrived 18 months ago. The systems integration challenge cannot be underestimated, not so much in terms of the work it involved, but as it now positions us for the future. Simply put, it allows us to identify the costs that we are engaged in taking this company forward much more clearly and with a clearer line of sight than we ever had before. That will enable us to decide where to invest and to decide how to organize ourselves in a much simpler way than we were able to do before. That is of a great significance, as Stephen will explain to you, and Matt will follow up with his observations on where we go from here. Secondly, in the recent past, you have seen we announced that we have sold one of our software assets for what we believe to be a healthy sum of money. It now is in a place which is much more fitting for it, with an owner that can operate that business better than we could. It would have taken investment in the business that we could not prioritize, and so the result is cash, which we will use to help pay down our debt, as we have announced, and it is a portent for what we are now able to do across the business as we face the future. Now, there are a couple of other significant things here, and I mentioned organization. We are now in a position where we can choose much more easily where to invest, how to actually support those products which don't require investment, and how to manage the customer expectations and the revenue streams from those products which will never get investment. That's hugely significant, as you will hear, as we decide where we go from here. Today's briefing is about the future. It's about the next two years and about what you can expect from us. The last point I want to make about that is the organizational one. We have been in a position for a number of years in integrating the HP assets, where we had limited degrees of freedom in changing our organization to fit what we believe to be a much more specialized sales operation, and a much more specialized operation in terms of the lines of sight we have over the enterprise and its business units. You'll hear more of that, today as well. I'm glad to be here with you. I find myself much encouraged by the achievements of the past 12 months in stabilizing the revenue stream. As you heard last week, we halved the decline in the revenue stream this year. We increased the license sales by 6%. We have a problem that needs addressing and is being addressed with our maintenance revenues, and you'll hear that as well. Welcome again. This meeting will contain no miracles, no promises, and if you want my summary of where we go from here, sell more, spend less. Thank you. I'm personally delighted to have the opportunity to talk directly with you today. I share Greg's enthusiasm and increasing confidence in the road ahead, and I wanna spend some time taking you through just why I believe that in the next hour or so before we move over and take questions. Firstly, what is the status of our transformation? You know, where are we against the goals that we laid out? Secondly, the core markets in which we operate and why we believe we're positioned well to deliver for customers and be successful in those markets. Thirdly, how we're reshaping the execution of the company to support the delivery of those objectives and within that, very specifically, being able to capture the significant operational savings we're now able to identify. Through the combination of both of those things create a degree of strategic flexibility in the composition of the group as we look forward. Moving to more financial elements, very specifically what are our objectives for the exit of FY 2023 and slightly more longer term, our capital structure priorities and our approach to our longer term investment thesis. In terms of progress against the transformation objectives, we set out to execute in three areas in parallel. Firstly, fixing the systems and the processes of the business so that we can act efficiently and make decisions based on insight and data. Secondly, how we're repositioning our portfolios to be better focused on the growth opportunities that exist in the marketplace, that our customers are able to consume and use the innovation we're delivering, you know, much more practically and quickly. You know, it's in essence getting back to our customer-centric roots. Thirdly, restructuring our go-to-market approach such that we execute more consistently globally and can align the resources of the company better end to end to support that execution. I'd like to give you a little more color on the progress in each of those areas. Starting now with systems and processes. Fixing the core systems and processes of the business. In terms of progress, we've now got a single set of systems and standardized global processes. This has already enabled us to start to simplify the organization and identify very significant opportunities for efficiency and productivity improvements, which Matt will cover in detail later. Secondly, how are we repositioning the product portfolios and revitalizing our approach to delivering customer-centric innovation? Compared to 12 months ago, each of our product portfolios is much better positioned, better positioned competitively, and better positioned to deliver what customers want and need. Now key examples of progress include the extensive removal of dependencies on third-party products embedded in the core of some of our key solutions. We've also completely re-architected many of our products to support new cloud and hybrid deployment options. We've delivered comprehensive artificial intelligence, machine learning, and analytics capabilities in every portfolio. Again in every portfolio, we've introduced new SaaS offerings and improved the existing SaaS offerings. Improving the product portfolio in this way is fundamental to improving maintenance renewal rates as it underpins customer confidence in our ability to deliver what they need now and for the longer term. This has always been a historic strength for the company, and maintenance is so important, I'm going to return to it very specifically in a few moments. Thirdly, how are we restructuring our go-to-market organization such that we can prioritize and align resources consistently to deliver a great customer experience and deliver our financial goals? We've now transitioned the organization from three very distinct geographically based approaches to one consistent global approach. In doing that, we've built deeper, more specialist skills that we now target consistently by product portfolio, but we also run the teams to a common set of standards in terms of execution, common tool sets, and common levels of accountability. On top of that, we've invested very specifically in building a dedicated customer success team, supported by increased levels of specialist resources, such that we can accelerate customer adoption of that product innovation and those product improvements I've just laid out. Again, these are really important to underpin long-term improvements in our renewal rates. Through the combination of these three initiatives, so systems, product, and go to market, we're building a business that's much more specialist and focused by product portfolio so that our customer engagement is excellent and we compete more effectively in the marketplace. In essence, we're trying to seek the right balance between agility, efficiency, and focus. In summary, we believe that the foundations we committed to put in place are now in place, and that we're at an inflection point. An inflection point where we can now put the challenges of integration and the unavoidable internal focus that this required behind us, so really get that behind us, and turn all the energy of the company and all of our team onto the external market, the tremendous opportunities that we see there, you know, delivering for customers, yeah, and really underpinning our success for the longer term. This is really about getting back to executing the principles by which we've always tried to run the company. Firstly, being obsessed about customer experience, and very specifically, the delivery of customer-centric innovation. What we mean by that is innovation that solves real-world issues today and gives customers confidence in the future direction. Secondly, executing a business model that balances the delivery of revenue, profit, and cash from a portfolio of assets that spans the market opportunity from no or low growth through to very high growth. Looking forward, we're targeting exiting FY 2023 with flat or better revenue trajectory. Within this, we expect that 50% of our portfolio, roughly, will have moved into growth by then, and the rate of decline in the rest of the portfolio will have moderated. Looking by revenue line, that would mean growing in licensed SaaS and consulting, and a very significant reduction in the rates of decline in our maintenance revenue stream. Before talking about the product portfolios in a little bit more detail, I wanna take a moment and set the context for the market more broadly. At a group level, we're focused on a very large market opportunity called digital transformation. Now, that's a really broad category measured in trillions of dollars, so it would probably be more helpful to break it down into the four specific areas that we're focused on within that broader market category. Helping customers such as BNP Paribas build better, more secure software that they deliver faster. Helping customers such as Vodafone run, manage, and secure complex hybrid IT infrastructures. Here, hybrid simply means multiple generations of IT systems that are on a customer's premises or in the cloud or delivered by a service provider. Enabling comprehensive cybersecurity across applications, identities, and data, all delivered at scale for companies such as T-Mobile. Finally, providing analytics capability that delivers insights that can be acted upon in real time for some of the most data-intensive business models such as ad tech. These four areas each cover a number of very attractive and growing markets, and that is true in aggregate at the company level and within each of our portfolios. To deliver on the promise of digital transformation, customers need to balance the often conflicting challenges of running and transforming their businesses simultaneously. This requires that they find the right balance between cost, risk, and agility. Our four focus areas here are aimed at helping customers find this balance, and it's at the core of how we deliver innovation. We already have an installed base which includes tens of thousands of long-standing customer relationships with some of the world's largest companies across all sectors. We've built these relationships on a track record of very direct customer engagement, so that we deliver highly relevant and practical solutions to the challenges they face today and into the future. As we've been heavily internally focused for some time, we've lost some of that direct engagement, which, combined with poorly aligned product road maps in some key areas, has led to elevated levels of maintenance attrition. Our key focus is on re-energizing these relationships through the delivery of highly relevant product road maps and reorienting how we engage with customers to be much more focused by product portfolio. A fair challenge would be if the overall market is growing and your key sub-segments are growing, then why have you not been growing? To help address that, it's helpful to frame the market as a continuum. At one end, you have very high growth with a rapid pace of change in terms of technology and technology adoption, and the customer use case can be very specific or very targeted at a single problem. At the other end, you have decline or very low or no growth, and here, the customer use case is typically mature and static, and it's about protection of investment for the longer term. In the middle, you have lower growth characteristics, but a really strong demand for new innovation that allows existing investments to be leveraged and taken forward into the future. To help understand, you know, the dynamics we have within our portfolio, I wanna take a moment and position key elements of our portfolio on this spectrum. Now we have products in high-growth areas with the really well-positioned offerings that are growing well today, such as our application security portfolio, Fortify. We also have products in these high-growth areas where we've had to reposition and re-architect the product to be able to participate in that growth, such as our big data offering, Vertica. Similarly, in the middle, we have strong portfolios where we're executing well and delivering, you know, for customers, and I would call out our COBOL portfolio in that piece of the market. Similarly, we have pieces of our portfolio with very large and significant customer install bases, where we've had a lot of rework and repositioning to do to get the portfolio fit for the future. You know, here I would call out our OpsBridge and our OutSystems portfolios as areas where we've had to do a particular amount of work to reposition that we now believe we're pretty well advanced on getting done. I won't spend very much time on the low or no growth area of the business. We've always been a tremendous partner for customers there for the long term, and they know they can rely on us to protect their investment. Micro Focus historically has been very effective at delivering appropriate solutions for customers across this market spectrum, and in doing so, executing a business model that optimizes the return of revenue, profit, and cash. Where we've had significant repositioning work to do, we're well advanced in getting that work done. With, you know, a number of key areas we still have more to do. Some highlights I would call out include, you know, we invested in security roughly 18 months ago, and we're beginning to see the output of the actions taken with growth overall in license and SaaS and almost double-digit growth in the areas where we had less repositioning to do and therefore have come out the other end quicker. In Vertica, we've completely re-architected the product for native cloud deployments and launched our first true SaaS solution earlier in October. In Digital Safe, we removed huge amounts of technical debt and re-architected the product for cloud deployments, and you've seen the outcome of that work in the sale we announced earlier this month. We have the most work to do in ITOM, where in essence, we had to fully reposition and replan the product roadmap. We're now very well advanced on that and delighted with the progress. We've introduced, you know, really significant new capabilities in artificial intelligence, machine learning, you know, new cloud monitoring capability, and are launching a suite of SaaS offerings. More to do, and we expect to complete the repositioning work during this fiscal year. In SaaS, we have delivered new offerings in every portfolio, improved the existing offerings, and invested significantly in our delivery capability to improve the customer experience. The very significant improvements we've made in each of the product portfolios and in our SaaS capabilities are critical elements of our plan to improve maintenance renewal rates, and this is such a critical area. I want to take some time and go deeper on it right now. We're executing a comprehensive set of actions aimed at delivering improvement across the board and material improvement in areas where we have heightened levels of attrition. Firstly, better and much more proactive customer engagement throughout the life cycle. We're doing this through the addition of more specialist skilled resources and the investment in the customer success team I referenced earlier. Our goal is to get much more direct feedback on issues so that we can act with urgency to correct the situation. This is showing encouraging progress in our larger renewals, where we have a growing list of customers that we've managed to turn around, and we're now working to scale this for the volume of sub-$50K renewals. We're also working to be much more proactive in ensuring customers understand the innovation available to them today, are actively upgrading to new versions of our products, and building us into their plans for new projects looking forward. The combination of getting them onto the latest versions and showcasing the innovation available now and that we have planned will drive improved renewals and lay the foundation for SaaS or license revenues from new customer projects. Our plans are granular, and we've added extra leadership capacity, changed compensation plans, and refocused more broadly across the company to drive the detail. We're confident we can drive material improvements, but progress will not be linear or overnight, and we're working to accelerate this wherever possible. I would now like to recap our priorities by product portfolio. With such a broad overall portfolio, I'm going to be very targeted in my remarks. Firstly, in every portfolio, we're executing plans to improve maintenance renewal rates, increase levels of recurring revenue through our subscription and SaaS offerings, and consolidate the progress made in license. On top of that, in security, we've repositioned the product portfolio to focus on cyber resiliency and have rebranded it as CyberRes. Within this, we focus on three critical areas, applications, identities, and data. Importantly, in addition to having really strong, highly competitive offerings in each area, we're able to help customers solve the challenges at the intersection of these three areas. This combined with the extensive AI and analytics capabilities we've added mean our solutions can deliver at scale for customers. Both of these factors, scale and being able to look across the three areas in an integrated fashion, differentiate us from point competitors in this area. As we look forward, our priorities are simple, accelerate where we have the foundations for growth already in place and complete the repositioning of ArcSight. On ArcSight, having delivered very significant product improvements, we're now focused on explaining this to our customers and helping them revitalize their existing but often dated implementations. In AM&C, we continue to deliver for our COBOL, host connectivity, and CORBA customers. On top of that, consolidate and strengthen our leadership position in helping some of the largest companies in the world modernize their mainframe applications and workloads to the cloud, which we do both directly and through strategic partnerships such as AWS. In ADM, we have a proven track record, deep capabilities, and a large installed base of customers who depend on our ADM solutions every day. Firstly, we're focused on helping them fully adopt the innovation we already deliver in this area. Additionally, we'll continue to deliver on our SaaS roadmaps and helping customers to transition to these offerings where that's the right answer. Looking forward, we're focused on delivering solutions for the next phase of how software gets built, which is called value stream management. We have great technology and experience from which to build leading solutions for customers in this area. In ITOM, our priorities are to deliver AIOps at the core of our service assurance portfolio, cloud native and hybrid capabilities in service management, and accelerate the delivery of our SaaS roadmaps in both these areas. We're well on track to get this done during FY 2022, and again, this is core to our goal of improving maintenance performance. Looking forward, our approach here to AIOps and the delivery of highly flexible service management capabilities represents what we believe are key foundational and differentiated elements of being able to deliver solutions for customers as infrastructure, network, and applications continue to converge. Finally, in IM&G, this portfolio is broad, so to split it into its parts. In information management, this is about supporting our existing customers who rely on our solutions every day. They need highly focused and practical solutions and a safe pair of hands for the long term, and that's exactly what we are. In big data, we've delivered a completely new platform that's designed for the cloud and hybrid implementations and delivered our first native SaaS solution in this space. We're confident in our ability to deliver strong growth here in the medium term. To build on the progress that we've made in repositioning our product portfolio and changing our go-to-market approach, the next phase is to evolve our business model to be much more product portfolio-centric end-to-end. By end-to-end, I mean from how we think about competitive positioning and product strategy through how do we deploy resources and prioritize the allocation of those resources right through to how do we deliver customer support. You know, we believe by moving that way, we'll deliver a much more effective level of customer engagement, and our ability to get the innovation that we're delivering into the hands of customers will improve significantly. We've already started this journey in cyber and Vertica, and we're beginning to see good signs of progress from better alignment and better engagement. We're now going to take the same approach across the rest of our portfolios. Now, the degree and depth to which we do that specialization and the speed with which we do it will be tailored to the requirements and the opportunities in the market, but we will shift the weight of the company to be much more product centric end to end. By being more focused and specialized by product portfolio combined with a return to our customer-centric roots, we believe we can deliver the innovation our customers want and need today and into the future and do so in the way that they want to consume it, whether it's licensed, SaaS, or subscription. We will be more agile in responding to the opportunities and challenges unique to each of the portfolios as their markets continue to evolve and be more competitively positioned as a result. Now to see how this translates into the financials, let me hand over to Matt Ashley. I joined Micro Focus because I could see a large value opportunity. We have many customers in many attractive markets spending record levels on enterprise software. Our problems are well documented, but a lot of the heavy lifting has been done. Those problems are behind us as we begin to turn the corner. I see that we can become more efficient in our back office, which will help us generate more cash. That combined with our attractive assets in attractive markets means there's more than one route to value creation. First priority is to support Stephen and his investment in products and revenue trajectory. We see that improving, and I want to be very close with him on that. Secondly, our new enterprise-wide platform has given me new insights into our cost base, the processes, the inefficiencies. I think we can drive a lot of costs out, unnecessary cost. Thirdly, then cash generation. We take the revenue improvement, the cost reduction, and look at the level of cash we generate and that make sure we use that efficiently. Firstly, to support our customers and invest in the product. Secondly, to pay dividends. Thirdly, to pay down our debt and reduce our gearing as appropriate. We spend $600 million-$700 million on product development each year. I want to continue to support Stephen in that and the product development. It's really important we continue to put the customers at heart of everything that we do. Secondly, with the cash we generate, we're committed to our reinstated dividend of five times cover. Thirdly, I'd like to see the debt balance reduce and repay some debt. Currently, we're four times geared. In the medium term, I'd like to reduce that to three times, but the most important thing is we have the appropriate level of debt for the size and trajectory of our company. Recently, we sold Digital Safe, and we'll use the proceeds to pay down debt. We get inquiries from time to time for our assets, and we would only consider selling them if they meet strict criteria, both for the customer, the employees, and financially. My perspective is that Micro Focus was an acquisitions vehicle that never really had time to bed in an acquisition before it moved on to the next one. This summer, we turned on our enterprise-wide platform, and we closed two quarters on it. These quarters have gone smoothly, particularly when you consider the fourth quarter is our big quarter for sales. For the first time, we have much of our data in one place, which as CFO is particularly exciting. We have full visibility of our end-to-end processes, which reduces the need for reconciliations. This will give us many benefits, as it's the first major step for us reducing the complexity of our business. Today, we're already seeing tangible benefits from the new platform. To pick a few data points, we've moved from six quoting systems to one. Overall, we've reduced the business applications from 2,000 to 500. We've already decommissioned over 225 applications with a significant number expected over the next 12 months. We've reduced our SOX processes from 667 to 256 process maps, and these are just some of the examples which demonstrate the level of complexity we've already removed from our business. We are now well-positioned to identify inefficiencies and drive further productivity improvements. Now we are taking out these inefficiencies, we are starting to see the cost savings come through. In total, we are targeting gross annual recurring cost reductions of between $400 million and $500 million over the next two years. These cost savings will be delivered across all of our functions and are based on well-developed plans being led by Stephen, me, and our transformation office. A number of our actions have already been taken, and we will provide progress of these when we report again in February. In terms of the key drivers for the cost reduction, we are streamlining processes by reducing the number of systems and interactions with people, optimizing the balance of work done locally and centrally in low-cost locations, and reducing the production of customized reports when standard reports already exist. These actions are designed to simplify everything we do and are intended to improve our ability to respond to customers and deliver innovation. As a result, these actions are not expected to negatively impact revenue performance, and in some instances, we believe will be a driver for further moderation in the rate of decline as we become a simpler business to transact with. Turning to our financial reporting, I'd like to move our financial KPIs closer to our statutory results and also the metrics that our debt providers utilize. Let me set out for you how I intend to improve our transparency. Revenue will not change. We will continue to provide constant currency revenue performance for each of our product groups and revenue streams as this is the clearest indicator of group performance. On exceptionals, as a philosophy, I don't like them, investors don't like them, and I'm certainly going to seek to reduce them and minimize them. Going forward, I expect that we'll have M&A costs and some costs of reduction that I mentioned earlier, the $200 million I expect we'll spend over the next couple of years. What I can say is we won't have any more HP integration costs. We'll seek to minimize those, but those we do have will take through normalized OpEx. Adjusted EBITDA has historically included the add back of capitalized product development. I've looked into that. We spend, as I said, between $600 million and $700 million on product development. Some of those products are developed for the future, don't generate revenue in the current period. To the extent they meet the criteria for capitalization, we will capitalize them. I don't intend to deduct them from EBITDA, and that's certainly consistent with our banks' credit agreement. I think that is the correct thing to do. Net debt, the definition remains the same, as does free cash flow, which is after interest, and is therefore available for equity holders. The leverage ratio remains the same calculation. Net debt divided by adjusted EBITDA will be a slightly different definition of EBITDA. Going forward, we're going to provide more granularity against our cost base and progress against the $400 million-$500 million cost reduction target. I've talked a bit about our cost aspirations. I'd now like to talk about how we see revenue developing over the next couple of years and beyond, and what that means for cash. I'd like to start with maintenance revenue and set the context of our recent performance. One of the things I have learned from the last six months and looking back at the data is that the revenue trajectory of the business is not linear. One month can look quite different from the last, as can the quarter and the half. I looked into the six-month rolling average, and the chart showed how the actions Stephen discussed earlier are getting traction and that we are beginning to arrest the decline of this significant revenue stream. This slide shows how we expect to exit 2023 with flat revenues. The one thing I do know is that we won't get there on a smooth glide path. With the actions Stephen described earlier, we know we are making real progress. As we look to the more medium term, Stephen explained that we are transitioning to a business unit-centric model. We believe we have a business that will deliver revenue growth from 2024. These growth rates reflect our portfolios as they sit today and the weighting of products against the growth spectrum presented by Stephen previously. As each portfolio evolves, these growth rates will also change as the mix of products changes. This is an important point, and looking further ahead, the moderation in ITOM and ADM would be expected to continue and ultimately return to low growth. This chart shows how our previously guided 2021 results, combined with the disposal of Digital Safe, hitting our targets of stabilizing revenue and reducing our annual cost base by $200 million-$300 million, gives us an underlying cash flow generation of $500 million as we exit 2023. I hope I've shown you how by stabilizing revenue, by using our enterprise-wide platform to take significant cost out of our business, will return us to an underlying recurring cash flow generation of $500 million as we exit 2023. Thank you, Matt. As I said at the beginning, we now believe we're at the point where we can put the challenges of integration and the inevitable internal focus that that required behind us and turn our attention fully onto the external market and our customers. Our goal remains to exit FY 2023 with flat or better revenue trajectory. Within this, we're targeting growth in CyberRes, AM&C, and IM&G, and to deliver a more balanced performance in both ITOM and ADM, where the growth elements of the portfolio accelerate and the rest of the portfolio continues to stabilize. In support of this, we're building and executing specific plans by portfolio and often sub-portfolio that deliver the right strategic positioning with clearly defined investment priorities that balance both the short and the long term. Supported by a more specialist and product-focused organization to ensure that the innovation we're building is fully adopted by customers and underpinned by an improved operational model that seeks to balance the delivery of agility with efficiency. Looking beyond 2023, we believe we will have the platform to deliver an optimized performance in terms of revenue, profit, and free cash flow through an optimized sum-of-the-parts performance, which will create flexibility in the structure of the group. To this end, we're now back to being focused on the core principles we know deliver success. For customers, our commitment to delivering the innovation they need in the way they want to consume it over the long term. For employees, creating a rewarding and inclusive environment so they can do their best work, grow and develop. For shareholders, consistent returns built on sustainable foundations of free cash flow and efficient capital allocation. Thank you for your attention today. I'd now like to open up the call for questions. If you would like to ask a question, please press star one on your telephone keypad. Please ensure your line is unmuted locally, as you will be advised when to ask your question. Once again, that's star one if you would like to ask a question. The first question comes from the line of Gautam Pillai from Goldman Sachs. Please go ahead. Hi. Thanks for taking my questions, and thanks for the detailed presentation. I've a couple of questions. First, while I appreciate that the revenue and the free cash flow trajectory will not be linear, can you give some kind of indication or some kind of metrics we should be looking for, which will indicate that the improvement is happening, especially on the maintenance line? How early can we start to see those? That's my first question. Second, on attrition, clearly a lot of software and services companies are commenting about higher level of attrition in the market. Where are you seeing that right now? Are there any particular measures you have taken to hire and retain talent in your ecosystem? The next question I have is on the SaaS portfolio. What percentage of your product portfolio is now on SaaS? And is there a specific target you have, you know, over the medium term? And does it mean that there will be a kind of a natural pressure on licenses because some of the applications are moving to SaaS and subscriptions? And finally, on Matt's comments about R&D capitalization of the $600-$700 million product costs, development costs you commented about, can you give an indication of what percentage of that would be capitalized or in a particular year? In your free cash flow build, you show a $100 million CapEx run rate. Is that including R&D capitalization? Thank you. Hi, it's Matt here. Thanks for that question. I think there's probably a few more than two questions in there, but I'll try and unpick it. Let me know if I've missed anything. I'll start with the easy one. On the capitalization, yes. We spend on product development about $600 million-$700 million. In 2021, we spent $20 million on product development that was capitalized. This year we're looking to spend double that. So it's relatively small beer. Essentially, I just find it a bit odd when, you know, we're looking at developing things with AWS, we're looking at investing in SaaS, and we're building our products for the long term. We capitalize them. We've always capitalized them. It was just that adjustment to GAAP, which to EBITDA, which just looked a bit strange. Then when I looked into the bank arrangement, they don't do that bit. It was just cleaning that up really. It's one less reconciling item. On the cash flow, the $100 million, it's included in there. You've got the assumption for that. In terms of revenue, this is always tricky to answer this, so I'm not gonna give you the answer you want. I'd love to be able to tell you, going from a 5% decline to flat and give you some percentages now by quarter, by six months, by month. That isn't what I've seen. As I said on the video, it's very choppy. If you think about it for a moment, and you clearly understand the industry, then you understand why. It's because we have a unique portfolio of customers. We have contracts that come up for renewal, and it simply depends on what we renew with them, and the tenure, the price, and it's quite variable. What I was looking to was a trend, and over time, I've seen that trend flatten, but of course it's at the mercy of any particular portfolio of customers on any particular period. I would guess my message is don't worry too much by a short-term set of results quarter or half year. If you look at that trend, then we can certainly see it flattening. I think the other thing is, Stephen's put in his presentation. If you look at the steps we're taking for the product development, the way that we're going to market, we believe they're all the right things to flatten the revenue. It's just a matter of timing when they get traction. It's not something that you know, we feel they are all the right actions, but it's just not exactly linear or straight or homogeneous. Each customer is unique, and that's why we've got this kind of bumpy effect. Then, I'll hand over to Stephen to talk about attrition and SaaS. Yeah. Hi, Gautam. As I talk to customers and, you know, colleagues across the industry, irrespective of the sector, no one's really seen a labor market or a dynamic that we're seeing at the moment. So many different moving parts as we all try and deal with, you know, what's going on in the world. So there's no question that this is a volatile time, and we do, like everyone else, have areas of attrition that are troubling. We are, you know, doing what we should be doing there to address that through all the means that you would expect us to do, being very targeted. We're also increasing our ability to recruit and bring new talent into the company, and we're doing, you know, a good job there because this is a place where people can learn a great deal, contribute a great deal, and, you know, and be very successful, both financially and in terms of personal development. We're working hard on the, if you like, the employment proposition that would allow us to, you know, to continue to step up our game there. We are also looking more broadly at just how we drive more effective employee engagement through communications, expanding our employee resource groups, because increasingly, ESG is important to our workforce in the same way it's important to our customers and to us as a company. We've got, you know, a multifaceted response to what is, we think, a pretty unique set of circumstances. No question, like everyone else, we are experiencing it. On SaaS, it'd be tough to give you a percentage of products that are now SaaS. What I would tell you is that wherever we believe a SaaS offering is required, we've either now got one in market or we have a roadmap to get one in market this year. In security, we're pretty much there. We've got one area we want a new set of SaaS capabilities. In ITOM, we have a full suite, being developed for launch this year. In ADM, we're broadly complete. In some of our other portfolios, it's less about SaaS and more about consumption model around subscriptions. In AM&C, we've got subscription offerings, you know, already in place. I mentioned in the video, we've launched a full SaaS capability in big data. We're either there or we've got clear roadmaps to get us there, and it's now really about ensuring customers understand that, you know, and are able to build it into their future plans. Our revenue expectations from it, we've discussed previously seeking to try and double, you know, close to the 20% mix dynamic across the piece. Broadly speaking, we're looking for that to be incremental to our license and maintenance models as it's really new function, new capabilities and extensions. Of course, over time, as it gets bigger, there will inevitably be some element of substitution as customers prefer one model versus the other. In the timeframe that we've laid out today, we've modeled in the shift to SaaS, that we believe we will see and we will execute. We've modeled that within the numbers. Of course, if we go faster, then we'll, you know, explain that and we'll show you it. We'd all be, I think, quite happy with an accelerated build of recurring revenue. Yeah, that makes sense. Just one quick follow-up on the AWS partnership. Can you give a bit more color on the pipeline and how that is developing? Do you expect to see that contributing to revenues meaningfully in fiscal 2022? We're absolutely on track with the plan, Gautam. It was never intended to contribute revenues in 2022. The first phase of the work together was more about a build phase. We're really pleased with how things are developing. The next major milestone actually is getting announced this afternoon by, you know, by AWS at their re:Invent conference. You know, obviously it's their announcement, so I would like to point you to their You just said, though, revenue 22. Just recap, there was never an expectation of meaningful license or subscription revenue in 2022. There'll be some consulting revenue in 2022. We'll seek to try and accelerate that. The business plan was always a multi-year business plan, and the launch is later. As I said, the next phase of the work is being launched by AWS later this afternoon. I think I would point you there and encourage you there. Got it. Thank you so much, and all the best. The next question comes from the line of Charlie Brennan from Jefferies. Please go ahead. Thanks so much for taking my questions. I'm gonna go with the theme of a multi-part question, I'm afraid. Just on the first one, can you just clarify your comments around restructuring charges? It sounds like you're against restructuring in general. Should we assume that if you deliver on this plan and you get to revenue stability, the $200 million of restructuring costs is gonna be the last sort of restructuring cost we see for Micro Focus and cash flows should be clean of restructuring going forward? The second question is just around portfolio optimization. You flirted with the topic through the prepared remarks, but can you just clarify whether the path to revenue stability can be achieved on the existing scope? Or are you implicitly assuming some trimming of the portfolio to deliver that? Thirdly, can I just touch on the topic of renewals, and maintenance? Maintenance is obviously the biggest part of the revenue pie and the trajectory there is obviously key. Can you just tell us where renewal rates are today and where they need to get to for you to deliver your plan? Thank you. Hi, Charlie. Let's start with your portfolio optimization and your renewals point. The operating agenda we've laid out in the remarks you've just watched assume the portfolio that we have today and the actions that I outlined directly against each one of those revenue lines, and you'll see the portfolio moderation effect as we grow the pieces where we're already growing, and we moderate the other pieces play through into a stabilized revenue performance in the low single-digit arena. In terms of maintenance revenue specifically, we're not sharing granular level of detail on the actual rates by portfolio for commercial and competitive reasons. I would tell you that there are portfolios where we're exactly where we need to be and in the high 90s, and we've got portfolios in the low 80s where we believe we need to drive those back towards the 90% level or above. That's particularly fueled by some I mentioned in my remarks, some sub-portfolios with heightened levels of attrition. The plan I've laid out really covers the five things or the key things that we need to get done. There's investment in specialist skills and leadership resources and the customer success team I talked about. There's more leadership attention and more investment in leadership. The biggest single determinant is the portfolio improvements and the new capabilities around SaaS that we're introducing, 'cause that gives people conviction and courage, confidence in the encouraging of convictions in, into the future in terms of we have a portfolio going in the direction that they want it to go. I talked about detailed plans and, you know, and this is not the call for detailed plans, but I do wanna give you just a little bit color around those detailed plans. In those heightened areas of attrition, you know, there's one in ADM, and we've now moved almost $90 million of that portfolio to the latest versions of our product. There's one in CyberRes, and we've moved almost $80 million of that troubled portfolio to, you know, the latest versions of our product. There's one in ITOM, where we've moved $70 million and got the percentage of people on our latest version from less than 25% to north of 80%. This is very specific and granular at those sub-portfolio levels, and we do expect it to yield. The rate at which it yields will determine the progress during the next 12 months as we head into 2024 and exit 2023 stable. That's a little color around your question. Let me ask Matt to come in on restructuring, and we can follow back up, Charlie, if there's clarification you want. Hi. Hi, Charlie. On the restructuring, the first thing I wanted to say was that I just wanted to draw a line under some of the things that we've had in exceptional and just make it really clear what we're aiming for to get this forward to 500. $200 million is our best bet, split over the two years at the moment. I imagine that to be relatively 50/50 in terms of proportion. In terms of do I know what the exceptional charges will be in more than two years from now, you can imagine my answer to that, which is no. Certainly my intention is based on what we know today, that I want to minimize things like exceptional and restructuring because as you quite rightly point out, it damages the cash flow. Certainly if we're gonna get to $500 million of free cash flow, we're not gonna do it with large amounts of exceptional costs. However, we look at the business case of each of these actions at the time, and if the payback is as attractive as $500 million of savings or $200 million of costs, then there will be more of that. That isn't my intention at the moment. Right. Thank you. The next question comes from the line of Michael Briest from UBS. Please go ahead. Yes. Thanks. Good afternoon. Three from me as well. Just Stephen, could you elaborate a bit more on the go-to-market changes, how significant this is in terms of is every product now run globally as a single division? Are we no longer gonna have the regional reporting? Can you also address on application modernization, I mean, 5% growth would seem to be higher than anything that's been achieved, you know, since Micro Focus re-IPOed in the early 2000s. You know, there was a brief period when it was far higher than that. But what's driving that? Or if AWS doesn't deliver, can you say what it would look like? And then finally, in terms of cash flow, can you sort of walk through working capital, CapEx, and tax over the next few years? I mean, one would assume as you shrink that releases working capital, so that's good for cash flow, or should we assume that the cash flow is much lower than $500 million until we get to 2024? Thank you. Hi, Michael. The go-to-market changes, they're really a blend. The first phase of what we've done, that's the part we've just completed, is we've moved from three completely geographic models where the decisions on resource deployment were made in the geography, not from a product lens all the way through. That created the type of situation where we could have a product growing materially in one geography and declining in another because of the vagaries of, you know, of local sales decisions in terms of putting weight behind the product and not putting weight behind the product. The first phase was to get the planning and the execution consistent and aligned globally by product portfolio, so we could actually make consistent resource deployment decisions. Which is pretty fundamental to what I've just laid out in terms of we're running a portfolio, a portfolio of products, multiple products here. We've got a portfolio effect where we're growing and accelerating the areas we can grow, and we're moderating the areas that we believe we need to decline. That requires consistency of resource deployment, which is the piece that we've now got done. The next phase of that, by the way, within that we've moved levels of specialization where, you know, someone would be a generalist maybe across two or three products. We've moved that from the low twenties to more than half of our team now globally are specific to a product or a very small group of aligned products. We intend to go further as we go into this next phase. Where we're going to now is just getting that much more consistent and effective end to end. If we decide that we have a leadership position in the application security portfolio, then what does it take to win and consolidate that position globally? Which markets are we going to be in? What are the resources and the channel dynamics we need for that market? Then let's build that piece of the plan and aggregate up from there. It's less a revolution and more an evolution. We won't have a single global sales force. We will have specialist sales forces by portfolio that will all be managed through a consistent management system, a consistent set of expectations in terms of what the goals that they need to deliver are. We'll use a common set of tools so we can actually get insights and data across the business. We've lived through a period where, you know, things as basic operationally as the definition of a pipeline would be different geography to geography. Getting a lens on whether we were actually doing what we've said we would do in terms of growing those pieces of the portfolio was just incredibly difficult to do. That's really what we're trying to evolve to. Much more weight consistently behind the arrowhead on the objectives that we've laid out by product portfolio. In terms of AM&C. Yes, 5% is a rate that would be punchy compared to what we've done previously. It's underpinned most strongly by the market-based opportunity to modernize mainframe workloads to the cloud where we genuinely have a leadership position. That market is not nascent in that it's new. It's nascent in that it's beginning to really be front and center, not only to customers, but to hyperscalers like the AWS situation that we've talked about previously, and to the systems integrators who have moved from the rewrite model into the modernizing model. Success in mainframes modernization is fundamental to delivering that 5% growth. AWS is a big piece of that, but not the only piece of that. To your question, if the AWS partnership didn't yield, which we see the opposite signs of. If that did happen, then we have leadership capability ourselves and an ability to execute ourselves that we would have to step up. Matt, do you want to take the cash flow and tax point? Sure. On the cash flow, I put a slide in the deck in the video where if you just start with EBITDA and your assumption there and subtract Digital Safe, clearly adjust that for, you know, how you see revenue and then the cost savings coming out, then the cash conversion is pretty attractive I think. It's certainly 95%, you know, generally. In terms of specific working capital, we went over to the new enterprise-wide system this year, which meant we were a little slower getting some of the invoices out than we might ordinarily be. I'd hope to see a bit of a pickup on receivables and collections as we go forward. I've noticed looking at the historicals that you tend to get more of a positive in H1 because you have a big billing peak in Q4. It obviously varies between halves. I'd certainly, you know, looking forward just this year, want to see a bit of an improvement on the working capital. You know, no worse than 95% in any particular year. Interest, you know, if you assume $200 million based on the amount of debt we have at the moment. CapEx, as I said, $100 million. There's finance leases of $50 million. And then to the profit before tax number if you apply around about 30%, I think that's a good assumption. We had quite a bit of catch-up, as you know, this year in tax. Having caught up, I don't think we will see that again in the next couple of years or so. I think, to answer your question, we're not a million miles away from the $500. I think the thing that makes the difference, we know we're a little bit off in the next couple of years. The thing that makes the difference is the exceptionals. We've got a bit of a runoff of those that were incurred this year, and then we've got $100 million in the next two years. Certainly, I don't see us being far off the $500 million at the end of the period, just depending, as usual, on the timings. I certainly feel very confident about it after 2023. Thank you. Just to follow up on sort of the midterm debt targets. I mean, once you get to three times, can you talk about would that allow you to raise the dividend? Would you look to pay down debt more aggressively, more M&A? I don't know. Anything you can say on that, Stephen? It could be any of those three things, Michael. It's not intended in any way to be a glib answer. We've got clear priorities through to the end of 2023. You know, Matt references having a debt profile that is appropriate for the revenue trajectory and ambitions of the business. That's what we'll do. When we get to that point, we believe this optimization of some of the past performance that I talked about is going to open up opportunities and optionality. It would be silly of me at the moment to speculate what the right way to respond to that optionality is before we've actually created it. Our whole focus here is, you know, improving the product portfolios, delivering value to customers. Through both of those actions, we stabilize revenues. From that, it gives us optionality as we look forward. Understood. Thank you. Thank you, Michael. The next question comes from the line of Tintin Stormont from Numis. Please go ahead. Good afternoon, guys. Just a couple from me. Just on the go-to-market changes again. Are you making any changes to sales commission plans? Slightly late on the being allowed into the call. What proportion of your product portfolio has a current SaaS alternative? And where do you expect that to be by the end of FY 2023? And would you expect SaaS to cannibalize some of your perpetual license sales in any material way over the next two years? Tintin, for the benefit of others on the call, I won't 'cause I answered very specifically your three points on your second question. Oh, sorry. Yeah. Yeah. With your agreement, me or Ben will follow up with you. Of course, come back to me. Yeah. To answer. Yes. In terms of go to market, yes, of course, we've changed sales compensation plans. We have many more people paid on maintenance now than used to be paid on maintenance. We have maintenance as a fundamental piece of every leader in the company's compensation system, every sales leader in the company's compensation system. The management system we run starts with questions on maintenance, then does questions on SaaS, and then does questions on license, not the other way around. Very specifically on your point to the balance between SaaS and perpetual, we've got multiple flavors of that depending on the market, where SaaS carries a multiple to the license value, so that within any given period, the sales person is not materially advantaged or disadvantaged from selling one or the, you know, other. Where we have a lead with proposition, then clearly they are advantaged to lead with the proposition we would like them to lead with. Again, this move to product portfolios helps us get much sharper at deciding those answers because they differ from the security business to the AM&C business, and we should be making them with the market and the opportunity context front and center rather than more of a blended response. Stephen, just to be clear, you know, at what point were sort of, kind of these changes implemented? I, you know, I expect some of this are rolling changes, but, you know, if you could give- It's very difficult to change sales compensation parts of the way through a fiscal. The sales force tend not to assume that you're not trying to disadvantage them if you make those changes in the middle of a cycle. We always make them at the start of a new fiscal. We made significant moves at the start of the previous fiscal, and we've made further. We've learned from some things that worked and tweaked some things that didn't work, and we made another suite of changes that got implemented as we went into the November fiscal this year. Okay. Thanks, guys. There are currently no questions in the queue. As another reminder, please press star one if you would like to ask a question. Just by the way, some questions. I've got some from the live chat. The first one comes from Investec. $400 million-$500 million of costs sounds like a lot. Will any of this come from client-facing roles or largely inefficiencies as you have outlined? We're targeting every line of the P&L for inefficiencies. We're gonna be systematic in working our way through those. We have a lot to go after because we're now getting that line of sight that Matt talked about that allows us to get after those. We also have a huge amount of productivity improvements that we can focus our attention on because we had a situation where the sales force was spending, you know, less than half the time in front of customers talking about our products and our portfolios and much more of their time internally, you know, trying to deal with systems complexity. How we're trying to harness and get that momentum and that energy out in front of customers is really the emphasis here. As we go through this transition to more specialization, then we'll be recruiting people with skills that we don't have, and we'll be rebalancing and remixing where, you know, where we have too many skills in one particular area. Thanks, Stephen. A follow-up as well, also from Investec. Can you please comment on any potential asset sales, and any specific areas of the portfolio where this might be relevant? Sure. The key thing here is we're not actively looking to sell things. We're actively looking to improve the product portfolios, deliver for customers, and create flexibility and optionality for value creation and accretive actions for shareholders. That's the single focus of what we're trying to do. If by creating that flexibility, the opportunity presents itself where we can make sure that the customer is really well served for the long term, you know, with a home that will be specialist and focused and other and complementary, and it's a value accretive opportunity for us, for the shareholders, then we'll take it. You know, there are no sacred cows here other than the pursuit of that flexibility to create value. We will always have a customer lens at, you know, at the front of it. As you saw with the action that we took on Digital Safe, where, you know, bluntly, when I took the job, I had a very, very dissatisfied Digital Safe customer base. I spoke to, I think 17 or 18 of them in the first three days of taking the job. When we announced, we made a series of commitments. When we announced the sale, I spoke to many of those customers again. They're actually delighted with what we've done to the product portfolio over the intervening period, and were really pleased with the action taken. I would encourage you to think about that as a template for how we approach developing product, adding value, and trying to create strategic flexibility for shareholders. Thanks, Stephen. This next one comes from Citi. Citibank have asked, "Does the outlook for your continued maintenance decline despite growth in licensing, factoring in conversion of existing customers to subscription? And is there any color you can provide on why maintenance should be more stable with improving licensing trajectory? The subscription answer is similar to the SaaS answer I gave earlier. There will be a blend of three things when customers look at license, SaaS, or subscription. There'll be customers that have made a SaaS strategic decision, and all of their future energy is on SaaS. In the instances that that's the case, then it would clearly be substitutional to a license or a maintenance sale because the customer has moved their mindset and their business strategy that way. There'll be customers who are very happy on the existing model, but want to know that as the market continues to evolve and develop, that we are building for them strategic alternatives that are SaaS and subscription, such that they can choose to move to those at some point in the future. Clearly, there's zero substitutional element to that. Of course, there's always shades of gray between the two. What we've modeled into the numbers presented today are the best views of how that will play out over the next two years. As I mentioned earlier, if it happened faster, and we were more successful in building that recurring revenue stream, then yes of course, I think we'd all be pleased with that as an outcome. Thanks, Stephen. I'll hand back now to the operator. That's the last of the questions on the online chat portal. We have no further questions on the call, so I will now hand the call back to your host for some closing remarks. Thank you very much, operator. Thanks again to everyone for your engagement and your questions today. Matt, myself and Ben are available for specific follow-ups should you have that. I'll just close by reiterating that, you know, we have increasing conviction on our ability to deliver an FY 2023 exit rate that is flat or better revenue trajectory, from which we can build very strong levels of sustainable free cash flow and create that strategic flexibility through and optimize some of the parts performance that I alluded to. We look forward very much to giving you a further update on that in our full-year results in the February timeframe, and then subsequently thereafter. With that, let me wish you a good day, and thank you again. Thank you for joining today's call. You may now disconnect your lines.