Good morning, everyone, and welcome to today's Spectris plc Conference Call. My name is Seb, and I'll be the operator for your call today. If you would like to ask a question during the Q&A session, please press star one on your telephone keypad. If you'd like to withdraw your question, please press star two. I'll now hand over to Andrew Heath, CEO, to begin the call. Please go ahead. Thank you, Seb, and thank you all for joining the call today. With me is our CFO, Derek Harding. We are really delighted to be announcing the acquisition of SciAps today. It's an exciting, fast-growing business that's based in Boston, Massachusetts, with strong technology that very much complements our existing, excuse me, Malvern Panalytical within Spectris Scientific. SciAps has a track record of high growth, delivering compound revenue growth of over 30% for the past five years. It's also right on strategy for us. It's a great business facing disruptive growth markets with differentiated products meeting real customer needs across a wide range of end markets by providing powerful precision measurement technology in highly versatile handheld instruments. As you know, Malvern Panalytical is renowned for developing manufacturing industry-leading laboratory XRF and XRD systems, as well as benchtop XRF. SciAps brings to the portfolio handheld XRF and also laser-based elemental analysis, as well as portable benchtop XRF for in-field use. SciAps's portable and LIBS instruments allow customers to measure any element, any place on the planet, bringing the measurement even closer to the point of use. Their products have diverse applications across a variety of end markets, from primary materials, NDT, food and environmental, to battery and strategic materials, with the ability to measure conventional materials through rare earth metals and lighter elements. Moreover, SciAps has a strong pipeline of additional sensor technologies, including the ability to combine both elemental and molecular or mineral measurements at the point of use, which further expands the end market opportunity. We've been looking at expanding into the handheld market for some time, and we got to know SciAps very well. They have built a strong reputation based on the ease of use of their technology, but also the pace of innovation. There is no one delivering the quality of X-ray and laser technology in a handheld format that SciAps are doing today. They're also known for their customer centricity and service, and that's delivered through a global network of sales and application specialists. This is exactly the sort of high-quality, high-growth bolt-on acquisition that fits our strategy to compound growth through value-enhancing M&A. This is a highly synergistic combination with the SciAps handheld portfolio used in the field, complementing Malvern Panalytical's range of laboratory and benchtop instruments. Together, this makes a very compelling offering in attractive end markets that we know well, including green metals and mining, recycling, batteries, pharmaceuticals, and agriculture. As such, Spectris is very much the perfect partner for SciAps, and it will enable SciAps's business to scale, as it will benefit from the combination of diverse capabilities and technologies, but also our extensive customer reach in relevant end markets, as well as our existing capabilities in digital and data analytics, where we see particularly strong opportunities for incremental growth through instantaneous point-of-use analysis. The acquisition will be accretive to earnings in the first year of ownership and meets the group's capital allocation policy, as returns are expected to exceed our cost of capital by the end of the third full year post-acquisition. While it is SciAps's underlying growth that is really exciting, as I've said, the acquisition is also expected to deliver synergies from cross-selling of SciAps's handheld instruments to Malvern Panalytical's existing customers and also vice versa, leveraging sales channels in both SciAps and Malvern Panalytical and expanding the distribution network into key geographies, as well as plugging SciAps's products into Malvern Panalytical's digital platform. Following completion of the transaction, which is expected later this year, the group will remain in the net cash position with further balance sheet capacity, and we expect to complete the remainder of our GBP 150 million buyback by the end of the year. We are excited by the opportunities that this acquisition presents, and we very much look forward to welcoming the SciAps team and providing customers with a wider portfolio of market-leading solutions that make the world cleaner, healthier, and more productive. With that, as always, we're happy to take your questions. Thank you. If you would like to ask a question, please press star one on your telephone keypad. If you would like to withdraw your question, please press star two. Today's first question comes from Andrew Douglas at Jefferies. Please go ahead. Morning, gents. Thank you for the detail on the call. I've got three questions, please, if I may. You talked about sales growth being in excess of 30% over the last five years. Is that organic, or does that include any M&A? That's organic. Organic. Okay. Thank you very much. The synergies, the circa GBP 5 million, are those cost synergies, or does that include any revenue synergies? I'm assuming it's cost only, therefore, hence your use of the word conservative. You can get revenue synergies as well. Is that fair? Yeah. I mean, it's a mix of both, but we have a—you're right to use the word conservative. And this acquisition, Andy, is all about growth and all about driving revenue synergies. But as always, we don't price those in, particularly in our thinking. So that's the big opportunity. Okay. So cost synergy for 5, and then everything else above that is revenue? Yeah. I mean, it's a blended synergy. We've got some synergy in there of that 5, but the bulk of it will be revenue in the future. So we're not getting a specific split, but the bulk of it of the opportunity is revenue going forward. Okay. Cool. The difference between EBITDA and EBITA, I'm assuming it's similar for you guys, so there's not really a huge amount to do? It's not a lot. It's a capital-light business. Yeah. Cool. And the last one for me, and I'll let you go. Is there any reason this thing won't complete? I mean, there's no issues from a legislative or market position perspective that you— No. The The only issue is competition, and that's the view we need to do, but we see the risk is very low. I mean, there's not a big overlap, so this should be hopefully quite straightforward over the next couple of months to complete. Okay. Cool. Okay. Thanks very much, guys. Well done. Thank you, Andy. The next question comes from Mark Davies Jones from Stifel. Please go ahead. Thank you very much. Morning, both. Congrats. Good to see you spending some of that large pile of cash. Two questions for me. Firstly, clearly it's been growing very strongly, but some of the end markets there sounds as though they're related to some of the end markets that have softened a bit for the core Malvern Panalytical business. So are they also seeing some slowing in activity in the sort of battery materials area in particular? Is that a consideration as we look forward? And then secondly, just on timing, you say you've been talking to these guys for a while. Timing-wise, I guess the one complicating factor here is that Malvern Panalytical has got quite a lot to do at the moment with the ERP, with trading conditions changing. Is that less than optimal, or is it just a question of being opportunistic in terms of when you could close this? Yeah. Mark, I'll take your first question. Let Derek talk about your second one. So in terms of the growth, I mean, yes. I mean, this business, as we said, has been growing really strongly organically. And there's a number of factors to that. I mean, one is that this business was formed back in 2012. It's relatively new to the industry. It's taken a very different approach, I think, to sort of some of the traditional providers in the handheld market. It's really thought hard about how it creates the user interfaces, the applications to suit different end markets, different use cases, and very much tailored to individual customers, whether that's in sort of the primary materials, the metals and mining, whether it's in agriculture, or whether it's looking at sort of rare earth metals and into sort of other sort of specialty materials. So that's certainly one. It's also thought about how it puts the designs together. So these are typically the highest accuracy, highest quality, but also they've done a lot of work in terms of making sure that they're also the lightest weight, which the handheld market is really important. So typically, they offer the highest quality with the lowest weight, which makes it, again, ease of use much better for customers. And they've also introduced the laser-induced breakdown handheld device, which is the first in the market. And conventional X-ray fluorescence is useful for sort of more of the heavy metals. But if you want to really sort of get into rare earth metals, the lighter elements, even through the hydrogen, then you need to use a laser-based solution, and they've been first into the market with that. So it's a combination of all those things that have been able to grow really strongly and take share. And they're now sort of what? Somewhere between a sort of 15%-20% market player. So that growth has come through very much in their overall market share as well. So that's sort of really what's driven the growth, as we said, organic. Your point about sort of slowing end markets, yeah, I mean, in the first half of this year, they've seen a similar slowdown in sort of battery materials and a bit in China. However, they're not as exposed in China as much as Malvern Panalytical today. That's a smaller part of their sales. As we've said before on batteries and sort of clean energy tech and the materials that support all of that, we see this as a very long-term attractive growth segment that we're very focused on. We see great opportunities and prospects over the future. I mean, in terms of your question on timing, Mark, I mean, I think sometimes there's a perception that these M&A deals are kind of going into a supermarket and just picking something off the shelf. As you know, these things take a long time. There's the whole kind of the wooing and the early conversations and then quite a significant period of due diligence. The timing is what the timing is. This is the point at which we've brought it to a head. I think your comment on Malvern Panalytical having a lot to do at the moment, I mean, to be honest, we have a lot to do all the time. I mean, it's a growing business, and we've got a fantastic team. So the people that are focused on the end markets at the moment are different people to those that are focused on the ERP implementation and different people that are focused on the integration. So between the team, we've got plenty of capacity to bring this business into the fold. Okay. Thanks very much. Our next question is from Rory Smith at UBS. Please go ahead. Hi. Good Good morning. It's Rory at UBS. Thanks for taking my questions. Congratulations on the deal. I just wanted to come back to the comments earlier on synergies, just to make sure I haven't misunderstood anything. And I guess the questions fall into three areas. First of all, on expected completion, when do you think that is? Yeah. So So Rory, I'll take that. I mean, it depends on the review, but we think probably between 6 to 8 weeks. So where are we now? So that's probably at some point in September, end of September, as a working assumption. So we should get the full quarter in our ownership this year. Brilliant. Okay. Thank you. Then from that point, what actions have you identified that get you towards that $6 million of synergies that by on December 2024 numbers, you can claim an EBITDA multiple of circa 14x versus the higher numbers? Yeah. So that isn't a 2024 number, Rory. I mean, that's looking through the journey of the next year or so. So it's not something you do overnight. So the synergies and the actions, the business itself needs to come in initially and really learn from Malvern Panalytical. The big opportunity that we see here is giving the SciAps team access to our sales channels, giving them access to the complementary products and technologies that we have, plugging their equipment into our kind of cloud data analytics capability. So in many ways, the synergies kind of reverse in the first instance, where we can really accelerate the growth opportunity for SciAps, really give the SciAps team a boost of R&D capability and a boost of sales channel activity. Then behind the scenes, there will obviously be back office synergy and capability that we can roll out over the following 12 months or so. The through market numbers just give you a guide of what's available. I mean, we actually think there's a lot more available, but we're being conservative this morning with respect to the fact this is a growing business. Relative to us, it's a lot smaller, and therefore, the opportunity for synergies is quite significant over the long term. Okay. That's clear. Thank you. And then the third part of the question is. Sorry. No, go ahead. Yeah. Sorry. The third part of the question is just if we look at the Spectris portfolio over many years, there's been inbound M&A, but there's also been mergers of different companies within the portfolio, right? So I guess could you just give us an example or two of where that's happened and revenue synergies have emerged? Yeah. Well, yeah. Let me take this, Rory. So I mean, I think we have a clear track record. I mean, we combined Malvern Panalytical and the analytical business back in, what, 2018? And that business has grown on a sort of pro-forma basis, sort of around that 6% CAGR, even with COVID in the middle of all of that. Likewise, we combined the HBM and the Brüel & Kjær Sound and Vibration business into HBK with Spectris Dynamics. And again, that business has grown about 5% CAGR over that same period as well. So I think we've got plenty of track record and examples where we've been able to sort of bring businesses into the group, where we've merged businesses within the group as well, that's been able to deliver that sort of level of growth. And I think just to go back to the synergy point, the synergies are helpful. But I mean, ultimately here, we see this as a high-growth acquisition. Clearly, SciAps has got five years, for the last five years, 30% compound growth. We don't have to be at that level continually. I mean, it's been a fast mover in this market, but we certainly expect it to deliver strong double-digit growth going forward over the next few years. And clearly, that's where a lot of the value is driven from the acquisition. Brilliant. Understood. Thanks very much. Thank you. Our next question is from Jonathan Hearn at Barclays. Please go ahead. Morning, guys. Just a few questions for me. Firstly, just on the business itself, I mean, can you give us a breakdown of the split between sort of OE and aftermarket? Does it have any aftermarket within that? And also, just in terms of the dynamics of the business, is it an order-book-driven business? And if so, what's the kind of visibility you have in the business? Yeah. So Jonathan, I'll take the second one first. It's a relatively short-cycle business. So we don't have the order books are shorter than, we'd say, the traditional multiple analytical business. So in that sense, it doesn't give us better visibility on trading. The one thing it does do, though, is it gives us some sort of stickiness with the customer because the volume of products is much greater with the customers. So whereas you might buy one benchtop or two benchtop machines to then send your samples back to the lab or send your samples into the center, obviously, here you're giving operatives in the field a handheld gun, essentially. And these things, you can go on their website and look. They They sort of look like those kind of handheld guns that say a speed camera policeman might hold. So they can go back to sort of the size of the device, and they'll be able to then go out in the field and take the measurements there and then. So it's a sticky, more repeatable business than a long-order-book business in the first instance. And yes, there is service revenue. So it's not dissimilar, actually, to the traditional business that we have around about 70/30. But these devices need calibrating. Sometimes they get dropped, and they need to get sent back to be repaired. And then they get replaced more regularly as well than our equipment. They're out in the field, predominantly being used by people on a daily basis. Okay. That's clear. And the second one is just coming back to the sort of profitability of it. Obviously, if we look at it, it's probably doing kind of a mid-teens type margin. Obviously, that's below scientific. I mean, just looking ahead, I mean, how fast can we get that margin back to where scientific is? Is there opportunity for companies to include stuff like the Spectris Business System? Is the margin growth going to be driven by volume? How are we going to get that margin back up? Yeah. I mean, this will be a volume margin growth opportunity. It's a high-growth margin business. And clearly, as the volumes increase, then it comes back to Rory's question, I guess, on revenue synergies. We're today, and just to use an example, if you're—I don't know—take a mining example. If you're buying a desktop device and we have a clear customer channel into the big miners for their analytics, what this enables us to do is immediately add the SciAps suite of products to that offering. And then we can go out and market those. So we'll be able to buy all the handheld equipment. We will, over time, be able to get our behind-the-scenes software talking to each other so that your desktop device and your handheld device, the data from that will end up in the same analytical cloud to give the customer better insights, both from what they can see on the ground and what they can see in the lab. So that volume will come through, we believe, relatively quickly and continue to come through over the next couple of years, such that we're confident of getting the margins back to or up to the scientific level. And as a reminder, our hurdle is that we cover our cost of capital by the third full year. So again, you can sort of reverse engineer, if you like, into that what we anticipate the profitability to be in three years' time. Yeah. Very clear. And then just the last one, obviously, the assumption of the share buyback, the GBP 100 million. I mean, how can we read that? Does it kind of mean that in terms of sort of future bolt-on and M&A, there's nothing imminent in the pipeline, or does it not sort of impact that at all in terms of what you're going to do going forward? Yeah. No, Jonathan, as I said in my opening look, we've still got plenty of balance sheet capability. It gives us plenty of optionality, even with recommencing the buyback program. We have other targets that we are talking to in other opportunity areas. But I would say that at the moment, we're very much more focused at the sort of tuck-in bolt-on end of the spectrum in terms of our M&A pipeline. Very clear, guys. Thank you very much. Yeah. I think, Jonathan, just to add on what Derek said in terms of, again, back to your sort of earlier point on sort of service visibility. I mean, one of the real sort of attractions of this acquisition for us is also the digital play. We've profiled at the full-year results one of our other handheld devices in our current portfolio, which is on near-infrared technology, where we're measuring the health of sort of high-value food crops, things like banana plantations, etc. We certainly see there's lots of parallels with SciAps in terms of getting that sort of point-of-use measurement out in the field and being able to link the analysis and the data up into the cloud, into our analytical cloud that we run. Certainly, in the agriculture space, we see the opportunity to measure sort of soil quality, the total organic compounds in the soil, the critical minerals that drive the health of the plants as well. So we can combine that with our digital offering Agri-Analytics today. But equally, there's lots of parallels when you get into mining and get into that point of view so that actually at the ore stream and you're analyzing what you're about to extract, first and foremost. And as Derek says, you can then link that to the instruments that we already supply our customers in their laboratories, their QC labs, and provide much greater insights and to drive that productivity and efficiency for our customers. And we see that as a particularly high potential for a sort of forward growth on top of what SciAps has been able to achieve today as well. Very interesting. Thank you. For any final questions, please press star one on your telephone keypad. We have a question here from Tom Fraine at Shore Capital. Tom, please go ahead. Thank you. Just in terms of the geographic expansion opportunity, can you give us a bit of an insight whether SciAps is more kind of U.S.-focused currently and what the scope is to expand sales overseas? Yeah. It is, but. For Tom? Oh, go ahead, Andrew. Sorry. Derek and I are in different locations today, so apologies. Yeah. Tom, look, I mean, if we look at sort of SciAps's market on a geographic basis today, they're sort of more skewed to North America, less so into Asia than our sort of current profile. So we clearly see that as an attraction, both in terms of boosting our sort of North American sales, but also we see it as a great opportunity to help accelerate SciAps's sales through our existing channels into other parts of the world as well. Okay. Great. And you mentioned in the statements you expect the future growth to be significantly ahead of the 6%-7% through-cycle target. Can we expect it to be anywhere near the current trajectory of close to 30% going forward, or is there any reason aside from the near-term market slowdown why it could be below that rate? As I said earlier, Tom, I mean, the business has clearly grown really strongly over the last five years for all the reasons we talked about. As it gets bigger, it's going to be hard to sustain that sort of 30% growth rate, but it's certainly going to be strong into the double-digit territory is our expectation over the coming years. That's great. Thank you very much. We have no further questions on the call. I'll hand the floor back to Andrew. Yeah. Thank you. Thank you again for joining the call and for all your questions. As we've said, SciAps will be a very strong addition to the group. It's a great strategic fit. Just the sort of high-growth, accretive, and synergistic acquisition we look for as part of our compound growth model. We're very much looking forward to welcoming the SciAps team and providing our customers with a wider portfolio of market-leading solutions, very much helping them to enhance their processes and their productivity. We will profile SciAps further at our upcoming half-year results. I look forward to providing a bit more color then, but also speaking to you further at the end of July. Thanks very much for joining the call. This concludes today's conference call. Thank you all for joining, and you may now disconnect.