Hello and welcome to the Spirax-Sarco Engineering 2020 full-year results call. My name is Josh, and I will be your coordinator for today's event. Please note that this conference is being recorded, and for the duration of the call, your lines will be on listen only. However, you will have the opportunity to ask questions at the end of the call. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero, and you will be connected to an operator. I'll now hand you over to your host, Nicholas Anderson, Group Chief Executive, to begin today's conference. Thank you. Good morning, everyone, and welcome to our 2020 results announcement call. I'm Nicholas Anderson, Group Chief Executive, and I'm joined here today by our CFO, Nimesh Patel. Regarding today's presentation, I will start by sharing the 2020 highlights, and then Nimesh will take you through our financial performance. Later, I will return to cover the operations in 2020 and our outlook for 2021. To finalize, we'll be happy to take questions from the analysts on the call. I'm moving to slide two. The outstanding efforts and contributions of all our employees worldwide were of pivotal importance to continue serving our customers during these unprecedented times and deliver a solid performance in 2020. I'm very proud of all our colleagues and very grateful for their engagement and commitments. We continued to improve the group's health and safety performance and stepped up numerous initiatives to improve employees' well-being, particularly from a mental health perspective. We undertook multiple actions to accelerate the group's sustainability agenda for the benefit of all our stakeholders, as well as strengthen the group's talent management, inclusion, and diversity in its 40 countries. Our robust direct sales model proved to be highly resilient throughout 2020 as we adapted to the changing customer needs regarding site access and face-to-face contact. All manufacturing and warehouse facilities remained operational, with only a few experiencing short temporary shutdowns during the second quarter of 2020. We stepped up our revenue and capital investments to expand our digital capabilities and new product introductions, which will underpin organic sales growth and performance improvements in future years. We also accelerated our capital investments to increase manufacturing capacity and performance across our three businesses, with multiple new state-of-the-art facilities at different stages of construction. This includes an $88 million investment, the largest ever capital investment of the group, to establish a major Watson-Marlow manufacturing facility in the USA. Moving now to slide three. Following a stronger-than-anticipated fourth quarter, and despite the challenging market conditions, we achieved a resilient sales and margin performance in 2020. Sales derived from the customer's operational and maintenance activities were less impacted than sales related to the customer's larger capital expenditures. We also experienced a higher resilience of our sales to the more defensive and less cyclical sectors, such as food and beverage or pharmaceutical and biotechnology, with these defensive sectors now accounting for over 55% of group revenues. The Steam Specialties business achieved resilient sales and margin performance, while the Electric Thermal Solutions business improved its adjusted operating margin despite an organic sales decline. Demand from the pharmaceutical and biotechnology sector strengthened significantly during the pandemic, driving the Watson-Marlow business to achieve 9% organic sales growth. We achieved GBP 22 million of temporary cost savings, which underpinned a strong margin performance without compromising on our revenue investments for future organic growth. Improved working capital performance and the deferral of non-essential capital investments supported our strong cash flow performance in 2020. On slide four, we summarize some of the main initiatives of our ESG agenda during 2020. Sustainability, corporate social responsibility, and strong governance have always been an integral part of our group's culture. Nevertheless, prior to the outbreak of COVID-19, we had already planned an acceleration of our ESG agenda, which we were able to progress, unabated by the pandemic. In 2020, we created a new sustainability organization, appointing a group head of sustainability that reports directly to myself, as well as sustainability leaders for each of our three businesses that report to their respective business executive committees. This organization was tasked with a major sustainability strategy refresh that includes stakeholder engagement exercises, materiality assessments, setting challenging climate change and biodiversity targets, as well as developing the growth roadmap to achieve net zero Scope 1 and 2 emissions before 2040. We also created the new role of group head of inclusion, diversity, and well-being, and accelerated our initiatives regarding inclusive leadership training and female talent development. Women now represent 31% of our group's executive committee and direct reports, up from 20% in 2019. We continue progressing our supplier engagement activities, including the rollout of our supplier sustainability code. We stepped up our community engagement initiatives, with 65% of all group operating companies undertaking at least one project with their local communities. In 2020, we further advanced our agenda and ethnicity diversity, with 45% of our board members being female and 27% being ethnically diverse. Our climate-related financial disclosures are in line with TCFD, and we stepped up our board's employee engagement committee activities during the year. Accelerating our ESG agenda remains a top priority for our group, and I look forward to continue sharing our progress on these matters going forward. I will now move to slide five and hand over to Nimesh to take you through our financial performance. Thanks, Nick, and good morning, everyone. I wanted to start by saying thank you to all my colleagues and to all of you joining us today for the warm welcome I've had to the company. I'm pleased to be presenting my first set of results, which I'd describe as strong against a challenging backdrop. Now, moving to slide six. As always, the numbers we will be discussing today are the adjusted results. Details of the adjusting items are included in the appendix. Sales were 4% lower, reflecting an organic decline of 3% and the currency headwind, partially mitigated by the inclusion of a full 12 months of Thermocoax. Operating profit was also 4% lower, also due to the impact of currency movements and partially offset by the inclusion of Thermocoax. However, the organic decline was 1%, reflecting the temporary cost containment measures which we took to mitigate the impact of lower sales. Our operating profit margin fell by 10 basis points to 22.7%, and on an organic basis, the margin increased by 40 basis points. Temporary cost containment reduced overheads by GBP 22 million through lower travel, marketing, and employee-related costs. This helped to contain the drop-through of lower sales to profit to only 9%. We anticipate that close to three-quarters of the cost containment will not be repeated in 2021. Net finance expense increased due to our refinancing activity in the second quarter. We anticipate a similar charge for the full year 2021. The tax rate decreased by 100 basis points to 27.5%, slightly better than we had anticipated, and we anticipate the rate in 2021 to be slightly lower at approximately 27%, absent a rise in the U.S. federal tax rate. Adjusted EPS of 256.6 pence was 3% lower, less than the decrease in operating profit due to the reduced tax rate. Return on capital employed was 49%, and return on invested capital was 18%, both excluding the impact of IFRS 16. Moving to the sales bridge on slide seven. Currency had an adverse impact of over GBP 27 million on sales, which is over 2%. In recent weeks, sterling has strengthened, particularly against the U.S. dollar and the euro. If February month-end rates were maintained for the rest of the year, we would expect to see a headwind of below 4% for the full year. Coming back to 2020, the contribution from M&A reflects an additional four and a half months from Thermocoax, which was acquired in mid-May 2019. The organic decline in Steam Specialties was 5.5%, with EMEA and North America most impacted, Asia-Pacific also down, but Latin America growing. The organic decline in ETS of 12% was driven mostly by the impact on Chromalox of a weaker market in the U.S. Nick will expand on this and the performance of Thermocoax later in this presentation. But taking into account the organic decline, adverse currency movements, and additional contribution from Thermocoax, ETS sales were 4% lower. Watson-Marlow performed strongly, with the pharmaceutical and biotechnology sector driving organic growth of 9%. The next bridge on slide eight highlights the movements in adjusted operating profit for the full year. Exchange movements decreased profit by GBP 12 million as a result of both translational and transactional impacts. If February's month-end rates were maintained for the rest of the year, we would expect to see a headwind of above 4% for the full year. During 2020, the Steam Specialties business organic profit fell GBP 14.5 million, an organic decline of 9%. But the drop-through from sales improved to 36%, as we realized a higher benefit than originally anticipated from our temporary cost containment measures. ETS saw a fall in organic profit of GBP 2.7 million on organic decline of 11%. A drop-through from sales of only 12% reflected the restructuring actions taken within Chromalox, as well as ongoing operational improvements. Taking into account the organic decline, adverse currency movements, and additional contribution from Thermocoax, ETS's operating profit was flat year on year. Watson-Marlow's strong performance delivered an additional GBP 13.9 million of organic profit, an organic growth of 15%. Central costs were broadly flat as we invested in our sustainability initiatives. The total organic decline in operating profit was GBP 3.4 million, or 1%. On slide nine, as we've done previously, we have set out our adjusted operating profit margin, excluding the two large company acquisitions of Gestra and Chromalox made in 2017, both of which had mid-teen margins. Excluding the impact of these acquisitions, our margin has remained above 25% in each of the past three years. We remain committed to increasing the margins in Gestra and Chromalox to group levels. Our operating profit margin fell by 10 basis points to 22.7%, impacted by currency. On an organic basis, the margin increased by 40 basis points, partly due to our temporary cost containment measures, helping to offset the operational gearing effects of the 3% organic decline in sales. In the Steam Specialties business, the reported margin reduced by 140 basis points to 22.2%, due in part to currency. On an organic basis, the margin was 80 basis points lower, as cost containment could not quite compensate for the fall in sales. And in ETS, the margin increased by 50 basis points to 13.8%. On an organic basis, the margin also increased by 10 basis points, supported by a larger contribution from the higher margin Thermocoax, but also the efficiency gains and cost containment, which lessened the impact of the fall in sales. In Watson-Marlow, the reported margin increased by 160 basis points to 33.4% and by 180 basis points on an organic basis, due to positive operational gearing and targeted cost containment. However, we continue to invest to support future growth, including in additional headcounts and new product launches. More information on the relative drivers of margins can be found in the appendix. Turning now to cash flow on slide 10. Operating profit to operating cash conversion was 102%, up from last year's 84%, principally driven by lower working capital and capital expenditure. We anticipate that cash conversion, which has been above 80% for the last five years, will return to those levels as we step up capital investments and increase working capital in line with revenue. During 2020, lower sales reduced our working capital requirements, and we increased our customer service performance despite holding lower inventory through the ongoing implementation of enhanced stock management practices. Across the business, we also improved our practice around the collection of receivables. Working capital as a percentage of sales decreased by 40 basis points to 21.2%, and we have maintained our Brexit buffer stock of GBP 5 million built up during 2019. Our cash conversion improved to 102% without compromising our capital expenditure, which was sustained at over 4% of sales, consistent with historical spend. We continue to invest in a number of strategically important programs, such as expanding Watson-Marlow's manufacturing capacity, and in Steam Specialties, a new ERP system and our factory modernization initiative. Our spend was lower than last year, which is when we incurred the bulk of the investment in our new facility for Aflex in Yorkshire. Following the investments we have announced in Watson-Marlow, we expect our capital expenditure in 2021 to step up to approximately 6% of sales. We ended 2020 with net debt of GBP 229 million, and net debt equated to 0.7x EBITDA, down from 0.9 x last year. Slide 11 details our 10-year dividend history, showing compound annual growth of 11% over the period. We have a record of 53 years of dividend progress. Over that period, the compound annual growth has also been 11%, while maintaining prudent levels of dividend cover of between two and two and a half times. In respect of 2020, we are proposing a final dividend of 84.5 pence, reflecting our confidence in the outlook for the business. This brings the total dividend for the year to 118 pence, an increase of over 7%, and equates to dividend cover of 2.2 x, down from 2.4 x last year. I'll now hand you over to Nick to take you through the operations and outlook. Global industrial production output, which we refer to as IP, and as you all know, is the best predictor of our markets. This graph offers a different perspective to what I've shared previously, which reflected the year-on-year growth rates by quarter. The blue line represents the latest forecast by Oxford Economics, published on the 24th of February. The red line represents Oxford Economics' forecast six weeks earlier, while the green line is their forecast in early November 2020, when we were building our plans for 2021. The first point to note is the still high forecast variability over a relatively short timeframe, which adds further difficulties to forecasting our customers' demand levels going forward. My second point regards the 4.4% decline of global IP activity levels in the first quarter of 2020, driven mostly by China, followed by a further 6%-8% IP decline in the second quarter when most of the Western world entered their first wave of lockdowns. The global IP expanded close to 9% in the third quarter as the world exited those lockdowns, and still achieved between 2% and 3% sequential growth in the fourth quarter, despite the onslaught of the new lockdowns across the Northern Hemisphere. It is worth noting that as the fourth quarter forecast improved, a return to pre-pandemic industrial production activity levels moved forward from the third quarter of 2021 to the fourth quarter of 2020. My final observation is that Oxford Economics' latest forecast predicts a marginal global IP expansion in this first quarter of 2021, improving sequentially by close to 1% by quarter, and exiting the year with global IP activity levels almost 4% above late 2020. This would result in a 7.2% full-year global IP growth rate for 2021. On slide 14, we start the review of our operations with the Steam Specialties business. Organic sales declined 5.5% in 2020, broadly in line with global IP, while organic operating profits declined 8.6%. Sales derived from the customer's operational and maintenance activities declined 4%, while larger project sales related to the customer's capital budgets contracted 12%, impacting the Asia-Pacific region more than others. Strong cost management initiatives reduced operating costs by over GBP 15 million, mitigating the adverse effect of declining organic sales without compromising our revenue investments in digital sustainability and new product developments. The operating profit margin fell 140 basis points to 22.2%, as currency headwinds amplified the 80 basis point organic margin decline. Improved working capital management, including enhanced inventory management practices that improved customer service performance, as well as the deferral of non-essential capital investments, increased cash conversion rates throughout the year. Our robust business model and leading competitive position leave us well placed to achieve strong organic sales growth in 2021, despite an anticipated lower demand from larger capital projects. We anticipate that close to 75% of the savings derived from the 2020 temporary cost containment measures will reverse in 2021, which, combined with our stepped-up revenue investments and performance improvement initiatives, will result in a marginal expansion of the adjusted operating profit margin. Moving now to slide 15 in the Steam Specialties Europe, Middle East, and Africa segment, organic sales were down 7%, which was broadly in line with the 6% industrial production decline of this region. Market conditions were challenging across the whole of the EMEA region. Our core European markets, including the UK, Germany, Italy, and France, experienced close to 6% sales decline, while our Middle East and Africa operations contracted over 20%. The adjusted operating profit declined 18% organically, as inventory reductions across the sales companies compounded lower demand levels at the European manufacturing facilities, which resulted in a 220 basis points organic trading margin decline. Moving to the Asia-Pacific segment on slide 16, organic sales declined 5% compared to 1% industrial production decline, as large capital projects that represent a high proportion of sales in this region suffered a double-digit decline. Sales declined less than 3% in China, with the first half contracting almost 15% compared to a very strong first half of 2019, while the second half of 2020 grew almost 9%. In Korea and Australasia, sales also declined less than 3%, while operations in Japan, India, and Southeast Asia suffered double-digit sales declines. Organic operating profit grew 2% as a result of improved operational performance, a favorable sale mix, and strong temporary cost containment measures. The operating profit margin improved to 120 basis points on an organic basis to 30.9%. Turning now to the Steam Specialties Americas segment on slide 17, overall organic sales were down 3%, while industrial production contracted 7% across the region. Organic sales were down less than 9% in North America, with both Spirax and Gestra adversely impacted by inventory reductions carried out by our distribution network, especially those distributors with high exposure to the oil and gas sector. Latin America achieved over 8% organic sales growth, as we experienced strong organic sales performance in our Brazilian operations of Spirax and Hiter Controls, as well as a positive benefit from Argentina's U.S. dollar-denominated pricing practices. Excluding Argentina, organic sales in Latin America were still up 3%. The Americas' organic operating profit declined 12%, reducing the organic profit margin by 190 basis points. A strong currency headwind reduced the operating profit margin by an additional 210 basis points to 18.6%. Now, moving to the Electric Thermal Solutions business, or ETS, as we call it, on slide 18, organic sales declined 12%, while the full-year effect of the ETS business has a very different market sector exposure and geographical footprint to the Steam Specialties business, which is the main reason for their higher organic sales decline. Thermocoax benefits from strong sales growth to the semiconductor sector and sustained growth in the nuclear power sector, achieving 27% like-for-like sales growth in 2020. As planned, during the third quarter, Chromalox completed the process to reorganize its operations in France in order to eliminate the losses of their European operations by the end of 2021. Organic operating profit was down 11%, as the underlying performance improvements in Chromalox mitigated the adverse effect of lower sales and a loss-making project that was closed out in 2020. The strong full-year profit contribution from Thermocoax fully offset the organic profit decline, as well as the currency headwind. The operating profit margin was up 50 basis points to 13.8%, as the 10 basis points organic margin improvement was compounded by a contribution from the higher margin Thermocoax. Going forward, we anticipate that all the performance improvement actions taken to date, together with the improved market conditions and robust order book, will result in strong sales and margin progress in 2021. On slide 19, we note that Watson-Marlow organic sales grew 9%, with strong contributions from all geographic regions, particularly Asia-Pacific. An exchange headwind decreased sales growth to 7%. The pharmaceutical and biotechnology industry continued growing at double digits globally, with the development and production of COVID-19 vaccines boosting our sales to that sector to achieve over 20% growth in 2020. Watson-Marlow is well positioned to benefit from this industry trend and continues gaining share in that market, which accounted for over 55% of Watson-Marlow's global revenues in 2020. Operating profit increased 15% organically, while currency headwinds reduced the profit growth to 12%. The operating profit margin remained strong at 33.4%. Organically, the margin improved 180 basis points, as operational gearing and efficiency improvements outpaced our continued revenue investments for future growth, which included opening four new sales companies and increased product development expenditures. We have stepped up investments across our manufacturing facilities, particularly in our three U.K. locations, to expand our manufacturing capacity and ensure uninterrupted support to our customers in the face of sustained strong demand. We also initiated a $88 million investment in a state-of-the-art manufacturing hub in the USA, which will start production by the end of 2022. We anticipate continued strong demand for all Watson-Marlow products in 2021, with sales to the Biopharm sector growing by at least 35%. Meeting this extraordinary growth demand in a sustainable manner requires increased operational costs, which, combined with the reversal of the 2020 temporary cost, will moderate the operating margin expansion in 2021. Now, moving to slide 20, we have again added three new customer case studies that help illustrate how our three businesses improve the performance of our customers, help them achieve their sustainability targets by reducing energy expenditure and waste, and contribute to a more efficient, safer, and sustainable world. These case studies are in the appendix one of this presentation, and I would encourage you to read more about them at a later moment. So, moving now to the summary and outlook slide 21. In 2020, revenues declined 4% to reach GBP 1.193 billion. Over half the revenue decline was due to the currency headwind. Organically, sales declined 3%, with the full-year effect of the Thermocoax acquisition adding more than 1% growth. The group operating profit also declined 4% to GBP 270 million. Organically, profits declined 1%, with the currency headwind reducing profits by over 4%. The group's operating profit margin was 22.7%, 10 basis points below 2019, but 40 basis points higher on an organic basis. Excluding the contributions from the 2017 acquisitions, the group's underlying operating profit margin remained at 25.1%. Watson-Marlow's strong sales growth was driven by exceptional demand from the Biopharm sector, while performances across the steam specialties and ETS businesses remained resilient against unprecedented market conditions. We anticipate that a recovery of global industrial production growth rates, a sustained strong demand from the Biopharm sector, and enhanced order books will drive strong organic sales growth in 2021. Our continued revenue and capital investments in support of sustainable organic growth, the short-term operating cost headwinds required to meet the extraordinary Biopharm demand, as well as the reversal of the 2020 temporary cost savings, will temper the expansion of the group's operating profit and result in a close to 30% drop-through from the organic increase in sales to operating profit in 2021. That concludes today's presentation, so we'll now be pleased to take questions from the analysts on the call. I would request that, before asking your question, you please state your name and that of your organization for the benefit of the other listeners on this call. Please press star one on your telephone keypad. To withdraw your question, please press star two. Please ensure your line remains unmuted locally, and then you'll be advised when to ask your question. So that is star one on your telephone keypad now, please. Our first question comes from the line of Andrew Wilson from JP Morgan. Andrew, please go ahead. Your line is now unmuted. Hi, good morning, Nick and Nimesh. Thanks for taking my questions. I've got a couple if that's okay. Maybe start on the Watson-Marlow side, where clearly you saw very strong Biopharma sales in 2020 and a guidance to a very similar dynamic in 2021, if not even stronger. I guess the kind of question is really around the sustainability of, I guess, some of that demand, given that clearly some of it, as you said, is vaccine and COVID-related, and just how confident you are that, I guess, Biopharma can continue to be a very good market for you outside of just the vaccine dynamics. Maybe if you could sort of help us understand that, please. Okay. Happy to cover that. And look, Andrew, nice to speak to you. Look, we're not giving any guidance for 2022. I think your question is very pertinent because after a very strong 2020 and 2021 demand in Biopharm, I think that your question is logical. We are, however, despite not giving any guidance for 2022 or beyond, we are confident, based on the information that we have and the understanding that we're getting from our own customers in this sector and in the other sectors that Watson-Marlow covers, we are still confident that going forward, Watson-Marlow will still be able to achieve mid- to high-single-digit organic growth despite the high jump-off point of 2021. That's very clear. Maybe if I can switch on to ETS, and I guess kind of a question both for businesses maybe. On Chromalox, clearly you mentioned in the year that some of the restructuring actions had been completed or at least agreed and are in progress. So I guess on the Chromalox side, just interested in terms of how you see that business developing against ultimately what will be the longer-term potential and kind of the confidence in terms of delivering on that. And then on the Thermocoax side, performance has been super strong since joining the group. And again, just trying to get a sense of, probably same question again as Watson-Marlow, but just sustainability of that, because clearly that has been very, very impressive since the acquisition in May last year or May 2019 even. So a couple of questions, I guess, on ETS and how you see that developing. Yes, thanks, Andrew. Happy to cover that. Look, on Thermocoax first, as you started with them, or sorry, on Chromalox. Yes, as I explained, Chromalox's exposure to end markets and market sectors like oil and gas and power generation is higher than steam, for example. And equally, steam has a much higher exposure to food and beverage, pharmaceuticals, and those kind of more resilient sectors than the ETS. And that's the nature of the kind of applications that require electric heating as opposed to the steam heating, okay? So it's to do with the requirements of the end markets and the kind of heating requirements that the end markets have. And that's what's made Chromalox and ETS in general slightly more impacted. Also, the geographical footprint. There's still a strong two-thirds, more or less, of ETS business as a whole. 70% of Chromalox is based out of the USA, which, as you know, had also a strong industrial production headwind in 2020, so those higher exposures to certain geographies and certain markets is what really explains the higher decline of organic sales in Chromalox. Having said that, we've always been telling you before, and we've confirmed again today that we've been working very hard on fixing those underlying performance issues that we've identified at the time of the acquisition and that have been more clear for us since then, and we've been acting on those and making very good progress, and that progress is very visible in the very low drop-through, for example, of sales to profits in Chromalox in this year. So that tells you the underlying performance improvements are coming through, a bit masked when you look at the margin because of the strong decline of the top line. But that gives us the confidence, and all the actions and the restructuring in Europe, everything that we've taken, is that we are confident that we are on the right path to return or, sorry, to get Chromalox back to group levels of trading margins, as we said when we acquired the company. So our confidence going forward remains absolutely more than ever confirmed that this is a business just like steam and operates in a similar way with similar characteristics, has the same capability to grow organically, albeit with a little bit more variability, as I've just explained, but through the cycles still is able to sustain organic growth in line with IP and still can operate at margins similar to the rest of the group. You can see that because in the North American operations, the Chromalox are already at over 20%. So there's no doubt that as we fix the underlying operational issues in Europe, for example, we will get the Chromalox margins up to group levels, and we're fully confident of that. Regarding Thermocoax, yes, it's a fantastic company, and we're very pleased, and they've had a cracking year. But again, it's not a one-off event because it's driven by market share gains. In a big part, it's market share gains in very specific applications, high-demanding, high-quality applications where the price of the solution that we're providing the customer is very small in relation to the value of the equipment where that solution is going into, for example. So that gives a high stickiness for the customers, allows us to achieve good margins on the sales of our products because of the high technology and the really top performance that is achieved by our products for our customers. And so we're confident that the end of that now, we're not expecting 27% growth, of course. That was a very strong year because we're displacing some incumbents in some applications and that kind of stuff. But we're still confident that Thermocoax will continue to progress organically at lower rates, but still going forward and maintaining high margins. So that's why overall we are guiding to a strong year because the combination of Thermocoax and Chromalox for 2021 looks very positive. Thank you very much, Nick. Very clear. I appreciate it. Our next question comes from the line of George Featherstone from Bank of America. George, please go ahead. Your line is now unmuted. Hi, Nick. Hi, Nimesh. Thanks for taking my questions. My first one would be on ETS. Given the strong margin expansion, when would you expect margins to close to the group? And now that the Chromalox restructuring is complete, what are the remaining items that bridge the gap to the group margins? Hi, George. Good to speak to you. Look, you just heard the explanation I gave to Andrew before, so you're going to understand where we're going. Your question was, when do we see those margins coming closer? We have said since when we acquired Chromalox back in 2017, and the same applies when we acquired Gestra, that we believe these businesses can get back to group margins by applying to those acquired businesses the same management tools and activities that we've applied to our own businesses. We've also said, and you've just heard me reaffirm our confidence in that statement. We've also said since the beginning that we would give ourselves 10 years to get there. Therefore, latest 2027, right? Now, we're on track to that, and obviously, we'd be delighted if we can get there earlier, but we're not about to change the statements that we made three, four years ago because we think they're still good. Despite the ups and downs of the cycles and the pandemics and all that, we're still confident that we can get those businesses to the ETS business to group margin levels within that timeframe. Okay, great. Thank you very much for that. And then cash generation has obviously been strong this year. Outside of the organic investment that you're making in areas like Watson-Marlow, how should we think about the opportunities to deploy the balance sheet for M&A? What's the pipeline looking like here? So look, we've got a pipeline of potential opportunity of targets, potential companies that we would like to see that we think could fit well with our business and could reinforce all three of our businesses. So there's a pipeline that we continue to refresh and look at for all three of our businesses. We have very strict conditions that we want any potential bolt-on to any of our group businesses to achieve, not only financially, but it has to be consistent with our direct sales model, has to be consistent with the capability to grow organically at similar rates to the group, and have margins that, if not already at group levels, can get there within five to 10 years. So we're very selective, very careful that we will only add in businesses that really reinforce the organic growth and margin capabilities of our existing businesses and that we can see add value strategically for us. And therefore, on that basis, we're continuously looking, and we've got this updated pipeline of opportunities. And in the background, we're working. We never give any forecasts regarding M&A because you never know if these opportunities will materialize or when they will materialize. And if they do materialize, if we'd be able to get them at an acceptable price level. But I can confirm that we remain optimistic that we can land in the coming years other M&A opportunities for all three of our businesses. Okay, that's great. Thank you very much. Our next question comes from the line of Jonathan Hurn from Barclays. Jonathan, please go ahead. Your line is now unmuted. Hey, guys. Good morning. Just a few questions from me, please. Firstly, just on Watson-Marlow, obviously, you're guiding to strong growth in 2021. And obviously, you're putting in extra capacity in terms of Aflex hose and BioPure. But as we look to 2021, are there any sort of short-term bottlenecks for you in terms of actually meeting that sort of sales guidance, maybe in terms of production, but also in terms of inputs? That was the first one. Good question, Jonathan. Nice to hear your voice. Jonathan, you're absolutely right. Such a spike in demand, particularly in, we're estimating as much as 35% or more growth in the Biopharm sector this year on top of 20% last year. So it's a very strong shock to the supply chain, our internal supply chains, and that gets more concentrated on some plants than others. We have been investing in the past, and we're already investing, as you saw before the pandemic, to expand our capacity so we could sustain double-digit growth rates into that sector over the few years. Now, inevitably, with such a strong short-term spike, it does put extra strain on us, and so our team is working very hard in that sense to avoid the creation of any of those bottlenecks in specific plants or in specific processes within those plants. They're scrambling to add shifts and some parts that we could outsource to supplement capacity in the short term until those longer-term solutions of the new plants that we're building come on stream. There are other actions being taken. That's why we referred to the fact that all of those extra actions will have an impact of incremental costs. When you're growing at faster than a healthy rate, you inevitably will need to deploy incremental resources at a cost to make sure that you satisfy your customer's demand. You don't lose any business, and you don't fall short on meeting the customer's requirements, especially when it's something so important as COVID vaccines and pharmaceutical Biopharmaceutical products. So yes, we are aware of the risk, and we're working very hard, and we're confident that we can deliver on those numbers that we stated with all the actions that we're taking. Great. That's very helpful. Thank you. And the second one, just staying on Watson-Marlow, if we kind of look at the two main sectors, obviously pharma, Biopharma, and then call the other side industrial, is there a big margin differential between the two? I would think that probably sort of Biopharma and pharma probably has a higher margin. It's probably more sort of single-use, probably more aftermarket within that maybe than there is in industrial. So yeah, essentially, the question is, is there a difference in margin between essentially the two big sectors within Watson-Marlow? Jonathan, just as a reminder, we do not disclose that information, but I'm happy to say that there is a slight difference, but nothing for you to start writing home about, okay? Yeah, there are always differences between different product lines in all of our businesses. But you don't have to start adjusting your model for that effect. Right. That's very clear. And then maybe just one final one, just in terms of the steam business and maybe just on the Americas. Obviously, you talk about destocking within your distributors. I mean, as we look to 2021, do you think there is potential for a restocking event? And if there is, is that actually captured in your guidance, or would it be incremental? Thanks. Yes. We've been through this before, right, Jonathan? So we know that when economic activity cools off, then distributors will naturally destock, and when it picks up, they'll naturally rebuild. So that's been part of what we saw in 2020, and it's part of what's already baked into our forecast in 2021. Great. That's very helpful. Thank you. Our next question comes from the line of Michael Tyndall from HSBC. Michael, please go ahead. Your line is now unmuted. Morning, gentlemen. Mike Tyndall from HSBC. A couple of, if I may. First one's just around the self-generated sales piece. And I wonder, given the restrictions of 2020, where are you in terms of customer relationships? Are you eager to get back out and into the plants? Is there a degree of pent-up demand there because you've had those restrictions? And then I guess that sort of follows into my second question. And it's around ESG. If I think about what you've said in your presentation today, there was a slide very much at the front of the presentation. It's been a consistent trend across all the results presentations. Is that manifesting itself in customer behavior? I would have thought operational efficiencies would have always driven a degree of wanting to save money. But are you seeing a change in behavior in terms of people's focus on what they're buying and how much they want to save energy? Thanks. Hi, Mike. Thanks for those questions. Very good ones, of course. Organic sales, pent-up demand. On the margins, probably. And we've factored this into our forecast as best as one can in these circumstances. We were very pleased. You remember our previous discussion throughout the course of last year and in previous announcements where the importance of walking the plant for us is very great. So when you suddenly couldn't do that, it was a concern. But what we learned through the pandemic last year was really a testament to the strength of the relationships that our direct sales organization has built with customers around the world. Because when the customers couldn't allow us on their sites, they still stayed in contact with us and, in fact, probably even strengthened our relationship by the fact that when you're in trouble, you call your friends, right? And that's exactly what we felt. And we were getting lots of calls. And so our guys working with our customers found ways of not letting our customers down, of continuing to support them even if they couldn't access the plants. Now, and you can see that reflected in the results of 2020. Now, inevitably, if we did have full access to walking the plants, we'd probably have been able to find a few more self-generated opportunities. That's inevitable. So we are confident that as the situation normalizes, and by the way, how eager are we to get out there? I think everybody is pulling at the lead. We're all desperate to get back and visit customers, etc. But we're confident that not having let our customers down, once we do manage to get out, we'll be able to find some opportunities that maybe we would have uncovered over the course of 2020 and we didn't uncover. So there might be a little bit of pent-up demand. But I wouldn't. I'd caution against factoring that into your models because it's so difficult to measure that, that we've got it kind of factored in already given the way we do our forecast. So I would caution against putting extra boosts into it. Okay. Now, on the second point about customer behaviors around ESG and how we're seeing that, that's a very good point. Look, many of our customers have been pursuing emission reductions, carbon footprint reductions, and waste reductions and water savings and all of these things for a long time. It's taken a higher prominence in the financial markets and investors for good reasons. But in a sense, and I hope you don't take this statement poorly, the financial sector is kind of catching up with where the industrial sector was already looking at. Okay? Now, inevitably, all of this conversation is encouraging some of the maybe smaller companies to act a bit more strongly. The larger companies, our customers were already there. I mean, we've been working with Nestlé, for example, with the sustainability team for more than 10 years to help them on their sustainability. But I think it does help the smaller customers that haven't kind of managed to get to it. I think the larger prominence of those discussions in the press and in the financial markets, I think, does encourage those other smaller customers to also get on that journey. So I think it is positive. We've been working strong on it. We've got lots of great solutions, and we're very, very competitive, well-placed to capitalize on this trend. We're very excited because it's been part of our DNA since the company started 130 years ago, saving energy and water savings and all of these things. So we are very, very excited about the opportunities, and we feel that we have a corporate duty to lead in that sense in our sector. So we do see this as a very exciting, not only the right thing to do, but exciting opportunity for the group going forward. Got it. Thank you. You're welcome. Our next question comes from the line of Robert Davies from Morgan Stanley. Robert, please go ahead. Your line is now unmuted. Yes. Thank you for taking my questions. I had a few. First one was just around the Chromalox business. I noticed you won a $14 million order from the U.S. Navy. We're just wondering what the delivery timeline on a project like that was and if there was a lot more of those type of larger projects around. I know that's quite unusual in terms of size. The second question was around the other industrial part, Watson-Marlow. I saw in the outlook statement you're expecting growth to go in line with industrial production. I just wondered why the growth outlook for that other industrial segment wasn't sort of stronger or more positive given the potential for market share gains across those other segments. And then the final one, it may just be a rule of sort of small numbers, but I was just interested within the EMEA sort of section. The Middle East and Africa growth was down 20%. We're just curious there. Was that a comp effec t, or was there something specific going on there above and beyond? Those are my three questions. Thank you. Sorry, Robert. I didn't quite get the third part about Middle East being down. What a comp effect, you said? Sorry, just within the EMEA business. So the European market was down 6%, but the Middle East and Africa was down 20%. I was just wondering what was going on in the Middle East and Africa bit. Was that a comp effect, or was that sort of a regional anomaly? Just was looking for an explanation, please. Got it. Got it. Thank you. I hadn't managed to hear correctly the back end of that third question. Okay. Robert, nice to speak to you. Look, starting in the order you list your questions, Chromalox, $14 million order for the U.S. Navy. It's a fantastic order. It is really the largest because our business is typically small orders, and we're very pleased with that. We do get occasionally larger orders, but going into the millions of dollars order, it would be a few in the year at most, and $14 million in one single order, we've not had, so it is significant, and we're very pleased and proud. Also because these are very interesting heaters, electric heaters that go on the next generation of aircraft carriers in the U.S. Navy. Okay? Now, Chromalox has been supplying to the U.S. Navy for many, many years, so the well-established supplier into the U.S. Navy, our heaters already on the other existing aircraft carriers and other vessels, and so these are heating applications within the vessels, and so this is very well established. This is a technology. These heaters are products that we've supplied before, so we haven't had to reinvent the wheel for any specific more complex applications. But it is a very nice and strong order, and I think it just shows you the quality and the opportunities that Chromalox business can capture going forward. Regarding those deliveries, they're planned 50% this year. So we received the order at the back end of last year with a schedule of deliveries of about 50% in 2021 and 50% in 2022. It's about $7 million per year over two years. As you can imagine, a large order like this, it's planned deliveries throughout the next 24 months, and that's what we've got planned. And that's the number that's in the forecast that we've given you is around $7 million. Are the others of that nature? Not of that magnitude, of course. But there's lots of very exciting projects. The medium voltage technology solutions that Chromalox is a patented technology. It's very exciting. We're getting lots of interest, especially decarbonization opportunities. We just secured a few weeks ago a very attractive project. I won't disclose the customer name, but it's in Canada. It's, again, for decarbonizing, for converting existing gas-fueled boilers to electric boilers because the customer there wants to reduce their carbon footprint. So we've got some fantastic opportunities. None of them we would anticipate as large as $14 million. I have to repeat that before to be very clear. But yes, there are many opportunities across all of the business, and particularly in Chromalox, exciting opportunities to come, but of smaller magnitude. Moving on to Watson-Marlow and the outlook. Look, forecasting is a very difficult task. Always, and in the current circumstances, crystal ball is even hazier, right? So we are confident that the industrial, the non-Biopharm side, the industrial, as you call it, and we also call it internally, the industrial, the other segments would continue to grow in line, at least in line with global IP, as is the case of those same sectors, food, beverage, and water, wastewater, those sectors. Also in steam, if you look at the guidance we're giving for steam, it's a little bit more than IP. And so those same sectors in Watson-Marlow, it's that same dynamic or a little bit more. So let's not get too carried away with the precision of multiple to IP, but it's guidance in terms of directional. Okay? And that's consistent with historical growth patterns where we've seen those sectors in Watson-Marlow growing at those kind of IP-related rates. Of course, the Biopharm side of Watson-Marlow running on its own with different parameters. That's consistent with before. Finally, a third question on steam. Yes, the EMEA sector, sorry, the Middle East and Africa sector, was hard to hit. You would have seen other parts of the world. We also had some nations that were more affected, so not just in EMEA. Are they high comps? Yes, actually, that's a good point. There were slightly higher comps in 2019 in that region. Middle East, in particular, had secured some interesting projects. So there's a little bit of an effect of that. But I think the biggest effect, like in other parts of the world, you look at how each economy around the world has reacted to the onslaught of the COVID-19 pandemic and the actions that the governments have taken. And you look at the end markets that those economies are more prevalent in the different economies and how those end markets have reacted. And that combination tells you mostly how each of the sales in our different economies around the world have reacted. Here and there, you've got comps that might be better or worse, but the biggest drivers of those variability of sales across the different geographies come down to the end markets that are more prevalent in those geographies and how the governments of those countries in those geographies have reacted to COVID, better or worse. Yeah. And I think specifically the point you're also getting out there is the level of government stimulus, which we know has been potentially a bit weaker in those regions. But the Middle East has got a high dependency on the oil and gas sector, and I don't need to tell you what's happened to that sector. So that's the point I'm trying to make. That's great. Thank you. Thanks. You're welcome. Our next question comes from the line of Mark Jones from Stifel. Mark, please go ahead. Your line is now unmuted. Morning, guys. This is Mark Davies Jones at Stifel. So a couple of steam questions for Nimesh, and there may be one for the management team. But starting with steam, I think in your commentary, you said you weren't expecting a return to more project activity on the steam business this year. Can you just give some kind of why that might be? Is it because it takes a while for companies to rebuild or just the lead times on those? And then on the U.S. for the steam business, I know a couple of years back you were looking at driving more direct sales and changing the sales management within the U.S. part of the steam business. Obviously, all trends distorted by what's been going on this year, but in terms of getting the structure in place, are you happy that that business is now where you want it to be? Hi, Mark. Good to hear your voice also. Happy to take those questions. Look, the more CapEx-related business activity, let me give a bit of color on that. The kind of applications where our products go in a large capital investment, so if you're building a new plant, our products, irrespective of which business you're in, but particularly in steam, the steam system is going to come in right at the end of the project, right? So inevitably, the steam systems will be the last items or towards the end of the project when all the infrastructure of the project, the main equipment, all of those are in, then we're coming in at the end. So what happens when you have these fluctuations in economic outlook is that those projects that we're really getting orders for are typically too far advanced by the customer for them to be stopped. So we end up delivering, and you see what happens is that the pipeline of new projects gets delayed, right? And you can see it. And therefore, that means that the projects that we're shipping will not be replaced at the same rate because the outlook has worsened, and therefore, customers are reviewing the projects they were thinking of starting and might be delaying some projects or canceling others or something. But they rarely cancel orders on us because the orders that they place on us are ready to go into plants that are too far advanced to stop. But what it does do is that it might delay them placing new orders because they're reviewing their portfolio of future investments. And that's why that bit of CapEx lag. And we've felt it already in 2020 where we had actually in 2019 very strong demand. You remember when this time a year ago we were talking about the 2019 results, and we called out that particularly China and Korea had had very, very robust, higher than usual, actually, project orders in 2019, which made it a very tough comp for 2020. And therefore, also those new projects not coming in. We started feeling that the order intake we had in the order book, but the order intake was down for large projects in 2020. And we think it's probably going to start rebuilding in 2021, towards the end of 2021 or 2022. But that's why we're anticipating at this stage, and hopefully I'm wrong when it comes sooner, but at this stage, we think that we won't see a stronger pickup in the sales to those large capital projects in 2021. Okay? So most of the recovery we think is going to come in from the operational side, the OpEx side of our business. With regards to the USA and the direct sales model, yes, we've been working very hard. Yes, we're very pleased with the management, with the team, with the programs that are putting in place. Yes, we did make progress, in fact. It's interesting. The decline of our sales in the USA, Spirax USA business, the three quarters of the business that goes through distributors was the part that was really badly hit, as typically happens in these cycles with destocking from distributors. But the other quarter of the business that is related to the direct sales and had secured some very interesting self-generated sales and projects and did very well. And that part actually grew modestly, but it had positive growth. The problem is the three quarters of the business was down by so much that the overall business was contracted. But yes, we think it's on the right pace. Of course, there's still a lot to do. This is a long journey. It's not a one or two-year activity. It is a 10, 15, 20-year journey that we're talking about. And therefore, we're happy that it's on the right tracks. We're always looking to see how we can accelerate it, but we think we're on the right track. We're getting the right traction. Thank you very much. And just the tax one for Nimesh, if I may. The step down in your tax rate is somewhat against the sort of global trend at the moment. So can you just give us some color on why that's happening? Is that just regional mix, or is something else happening there? Yeah, it's a good question. I mean, as you've rightly noted, we're a little bit below where we had guided, which is 28%, but by about 50 basis points on the tax rate. And just to put that in context, that's about an additional GBP 1 million- GBP 1.5 million. So essentially, that's coming off a higher level of deductions. We've really focused in on looking at where we can drive tax relief on things like innovation and R&D and making sure that we're maximizing the way that we're set up to realize those benefits. So I mean, it's literally just that, which has really driven the lower ETR. Right. And a bit more of that coming through in 2021 from what you're saying. Correct. Yeah. And of course, the one thing we haven't reflected in there, as I said in my commentary earlier, is the potential increase in U.S. tax rate. Now, the U.S. fiscal year, as we know, is from 1st January. So hopefully, that won't impact 2021. But that rate increase is something to watch out for, and we will guide further when we know where that lands. And of course, we've also had the guidance from the Chancellor here in the U.K. in terms of the tax increase coming in from April 2023, which will impact our ETR further out. So in thinking about future forecasts, it's worth reflecting on that. Thank you very much. Our next question comes from the line of Andrew Douglas from Jefferies. Andrew, please go ahead. Your line is now unmuted. Good morning, gents. I hope you're all well. Just a quick question on Asia. Second half, sorry, in Steam. Asia had an extraordinary second-half margin. I'm working on the assumption that given your previous comments for Mark's question on capital projects, that positive mix will remain in 2021, so there's no real reason for that margin to unwind. Is that a fair comment over and above you guys pulling some costs back in and temporary costs going back in? And then, the second question is on digital. And apologies if I've missed this because I was a little bit late on the call. But clearly, digital as a productivity tool and potentially data capture and kind of usage of that data is clearly something that's all the rage. How far are you down that route? And more importantly, how far are your customers down that route? And do you see that as potentially a significant opportunity for Spirax in the future? Thank you. Hi, Andrew. Good to hear you. We're doing fine. Hope you're doing fine also. So look, regarding APAC and Steam, yes, we had a very good profile. It was really a story of two halves, right, as you saw with and you know the importance of China and Korea in that sector. They make up about three quarters they made up in this year. Over 70%, I think, was from memory within that sector. China and Korea, which were down less than 3%. Interestingly, for China, the big impact was in the first half, down 15%, unsurprisingly, because they started with a lockdown at the end of January and had almost all of February locked down, and so therefore, the first quarter, but particularly the first half, was the more affected, and China was down 15% in the first half, but bounced back, as of the second quarter, they started coming back strongly, and in the second half of the year, they were up 9%, so that's very, very exciting. What you do get, of course, is a very attractive operational gearing when you're containing all the costs and you're trying to save everything you can without compromising your ability to grow and respond to customer needs. Then you get a good bounce back from demand. You really get a benefit of that drop through in the short term. You see that coming through in China, and you see that coming through in the second half. But then, of course, as soon as you see that and you're confident that the demand is going to sustain, you start scrambling to put in the costs that you deferred or that you contained. And therefore, there's a bit of a lag between when you see the demand coming back and the cost coming back. Okay? And that's what you're seeing. So going forward, that's what we factored in going forward. Okay? On the digital side, your question is, are we happy? No, I'm never happy. I'm always unhappy. I'm always wanting more and faster and sooner. But I think we're very well positioned. As you know, Andrew, we've been working on this. This is not the flavor of the moment. We've been working on digitizing our products and interconnecting our devices and the customer sites and having system management, steam system controls integrated and capturing data and analyzing, interpreting those data so we can give customers more predictive insights and all of those things, as well as looking to accelerate the digitization, not just of our products and our services, but services also another area, which the pandemic helped us because it kind of helped us find ways of providing service more remotely, and that was also helpful, but we're also looking to digitize manufacturing processes. We're looking to digitize our interaction with customers a lot more. Virtual training went on, and that was a real test. The investments we've made over the last six, seven years in the academy were really leveraged because we had this fantastic digital platform to disseminate training to customers and to all of our people in 18 different languages around the world, and we deployed that even faster, and suddenly, the customers couldn't be driving to visit, the salespeople couldn't be driving to visit their customers, so they're at home, and they could spend more time in their own training and development, so we're looking at digital in all of its aspects, not all of the processes. I would say both in the customer targeting processes and on the operational effectiveness processes, on the innovation processes, in the R&D and developments. And so we're looking to bring digital into all of those new product developments and obviously digitizing new products and also on our people and talent processes in terms of training and such. So look, we have an ambitious digital agenda on all of those four big spaces. And no, I'm never going to be happy that we're there. I don't know that one will ever be there, the proverbial there. It is a long journey, and we think we're well positioned, and we just want to move as fast as we can. Okay. That's really clear. Thank you very much. Okay. We have no more further questions, so I'll hand back over to the hosts. Okay. Well, thank you very much, everybody, for your questions. All very good questions. Thank you for joining us today. We hope you all stay safe, and hopefully, we can catch up with you soon. Thank you. Thank you very much for joining today's call. You may now disconnect your handset.