Hello everyone, welcome to the Videndum PLC 2022 full year results. My name is Nadia, and I'll be coordinating the call today. If you would like to ask a question at the end of the presentation, please press star followed by one on your telephone keypad. Please note we will take a short one-minute break before continuing with the Q&A session. I will now hand over to your host, Stephen Bird, Group Chief Executive, to begin. Stephen, please go ahead. Good morning, welcome to our full year results presentation for 2022. Here's today's agenda. I'll begin with a brief summary and then give a market and strategy update. Our CFO, Andrea, will then cover our financial results in more detail, and I'll conclude with a summary. Turning to our results. I'm very pleased to report that we made further good progress during 2022. We delivered record revenue and adjusted profit, which clearly demonstrates the underlying strength of our market drivers, of our brands, and our operational execution. Reported revenue was up 14% to GBP 451 million, and slightly up on an organic constant currency basis. PBT was up 27% to GBP 54 million. These results were achieved despite the operational challenges we faced, particularly in the H1, with capacity constraints and component shortages, and a tough end to the year with softness in the consumer segment. We also saw more retail destocking than we expected due to a lack of business confidence more generally. On top of that, there was some purchase deferral by independent content creators, which mainly affected our Media Solutions division. We completed the acquisition of Audix in January to expand our addressable market further, and the business had a great 2022. We continue to improve the group's margins and are on track to our stated mid-to-high teen goal as we drive revenue growth. We own many of the industry's leading brands, and our premium prices reflect their competitive strength, product quality, and our investment in product innovation. Our vitality index is strong, and last year, again, about half of our revenue came from new products launched in the last three years. Our products are typically mission-critical to our customers with little price elasticity. They are a relatively small proportion of a customer's budget, and many of our products help drive productivity, which I'll talk about later. As a result of all this, the price increases we implemented across the group last year have stuck. These have more than offset inflationary headwinds and will have a further positive impact this year. We remain focused on managing our cost base while continuing to invest in our key strategic priorities. Cash performance is consistently good, and we have a track record of converting profit into cash. As expected, our net debt to EBITDA increased due to the acquisition of Audix and the strengthening of the U.S. dollar. Given our confidence in the group's long-term growth prospects and in line with our dividend policy, we're proposing to increase the total dividend by 14% to GBP 0.40 per share. We have an exceptionally experienced leadership team at Videndum, and I'm really proud of what the business has achieved last year. I'd like to thank all of our employees for their commitment and contribution to these record results. Videndum is in great shape, executing its strategy well and uniquely positioned right at the heart of the content creation market. We'll continue with our program of self-help actions to further streamline our cost base and improve margins. In addition, we identified a number of opportunities to deliver cross-divisional synergies to ensure that the group is even better positioned for long-term growth. Looking forward, the fundamental market growth drivers remain very attractive, and our direction of travel has not changed. However, we're not immune to the current conditions, and the short-term macroeconomic environment may continue to affect some parts of the business. As a result, although operating profit is growing as expected, we expect PBT in 2023 to be stable due to increased interest charges. We're also expecting a higher than usual H2 weighting this year. We're in a really exciting market with strong growth drivers, and we look forward to the future with confidence. Now an update on market and strategy. We're continuing to execute well on our strategy, which we've had for many years, which is to deliver organic growth, improve margins, and grow through acquisitions. I don't believe there is any area that we have not executed well. Let's look at organic growth and margin improvement. Organic growth is being driven by advances in technology and by the four strong structural market growth drivers on this slide, which I've talked to you about before. We see these continuing to be strong growth drivers for our business. The one area I know there is speculation about is the spend on original content. I'd like to reconfirm that we see this continuing to be a strong driver of growth for the business. It's true that some companies like Netflix and Disney have talked about reducing budgets, but investment in original content creation is still huge and expected to continue to grow significantly. Our products are a very small percentage of the overall production budgets. What is driving our growth is the fact that our products have new technology that our customers need and love. Additionally, when companies like Netflix and Disney talk about reducing costs, they see many of our products as part of the solution, as our products reduce setup time, lower operating costs, and ensure that content is captured right first time. Because most of the production cost is in people, being able to be more efficient is enormously attractive. Our technology innovations improve productivity for our customers and drive shorter product replacement cycles for us. A great example of this is onset monitoring, which really reduces setup costs on a shoot and ensures that content is captured right first time. The economic rationale for onset monitoring is stronger now than it's ever been. Other examples are automated robotic and prompting solutions, which reduce the number of operators, LED lights, which are more versatile and have lower energy costs, video live streaming solutions which enable remote collaboration, and the new Avenger lighting stands which make lights easier, quicker, and safer to set up. On top of this, a key focus for us is continued operational excellence. Videndum is a well-managed agile business. This enables us to adapt quickly to market and technology changes and constantly innovate. We have a continuous improvement culture. Our divisions are targeted with making year-on-year productivity improvements. They're also highly experienced at delivering acquisition synergies and restructuring. We've identified a number of additional opportunities to drive even more efficiency across the group and have appointed Marco Pezzana as chief operating officer to work with me to execute these self-help actions to ensure that the group is even better positioned when the economy starts to improve. These actions include capital allocation, delivering cross-divisional synergies, and maximizing operational and organizational efficiencies. We'll update you in our future reporting as appropriate. Moving to briefly discuss each of our three divisions, and first Media Solutions. The market drivers are still very relevant for Media Solutions. This division has been impacted by the weaker global economy. About 25% of the division is completely unaffected, with strong growth in the high-end professional area. Where we have exposure to cine, professional audio, broadcast, and streaming, our business is extremely healthy. The consumer segment, which is about 20% of the division, has been very tough, and this mainly affects our JOBY and Lowepro brands. Consumers are obviously spending less, and this has been compounded by destocking in the channel across all consumer electronics products, so a double impact. The mid-ground is a more complex story and is where the economy, lack of business confidence, and lower digital advertising spend has been impacting more than just the consumer segment. Here, some independent content creators have delayed purchases if they can, and retailers are also holding less inventory in this area. Despite the short-term issues in the division, the overall drivers going forward are just as valid. We're in the right segments with market leading products, and we help our customers capture exceptional content. During H2 last year, we implemented a number of self-help actions in the division to ensure that the business is well-placed when the economy recovers and new cameras start to sell through more. We're also focusing our resources more on the high end, for example, with our Avenger lighting stands. We continue to invest in developing innovative new products across the division to shorten replacement cycles and, for example, an exciting new Manfrotto tripod similar to flowtech will be available in the next 18 months. I feel very positive about Media Solutions as we expect things to bounce back pretty quickly as they have in the past after a period of destocking, and we're already seeing our business in the U.S. starting to improve. Our Savage and Audix acquisitions have been well integrated, and I'd now like to show you a short video to explain more about our exciting audio strategy. Testing, testing. Testing one, two. Testing. Testing one, two. Today, the best visual content comes with great audio and capturing that audio is critical. Whether you are one of the 40 million monetizing bloggers on TikTok or YouTube generating sales on an e-commerce platform, or you are a gamer live streaming to your fans, could you imagine seeing the Lionesses lifting the cup without the roar of a crowd? Trophy for the first time ever. Watching your favorite streaming service on mute? We've all switched off our video from time to time to maintain the quality of our audio during a Microsoft Teams call. Videndum is the leading supplier of accessories to enable the capture and sharing of visual content. Last year, we announced our exciting new audio strategy along with the acquisition of Audix, which increased our total addressable market for audio by GBP 300 million to GBP 800 million. What a first year it has been. Audio capture now represents one of the most significant growth opportunities for Videndum. We aim to become the leading supplier of on-camera microphones, a market that's growing at 8% CAGR. We have three dedicated brands. First, JOBY focuses on monetizing bloggers. In 2022, we launched six new JOBY microphones, including the Wavo PRO, our top of the range microphone with active noise reduction. This was launched in conjunction with YouTube megastar Casey Neistat. I have to say, it's been the only microphone I've used for, I don't know, my last 20 videos, and the thing is stellar. It's stellar. It's a perfect YouTuber microphone. Our second brand is Rycote, which is a market leader in the professional broadcast audio sector. It launched five new microphones at the end of 2022. Third, we have fully integrated our latest brand, Audix, selling Audix products through Videndum's global distribution network, which helped it to deliver a record 2022 performance. The acquisition of Audix has expanded Videndum R&D capabilities and accelerated product innovation. It's also given us an audio production facility in the United States, where we will produce microphones for all the three audio brands later this year. Supporting the creation of great visual content is our specialty, audio is just the perfect adjacency. We know and already serve this customer base through the same sales channels. We've both integrated two great audio businesses, Rycote and Audix, giving us the in-house competencies and the audio professionals to make market leading microphones. Our ambition is to build our audio business to $100 million, and we are on track to achieve this goal. As Marco said, audio is a significant and exciting growth opportunity for the group, and we're making good progress. Let's look at Production Solutions. Production Solutions is a really important part of the group and is performing very strongly, driven by demand for original content, automated production, and on location news and sport. In the cine market, we're seeing growth and we expect to bounce back from China as the country recovers from the pandemic and lockdown. Technology advancement is driving growth across the division, first in LED lighting, where virtual production is increasing and there is strong demand to enhance virtual environments with real lighting. We're also innovating in mobile power and have a groundbreaking, environmentally friendly portable battery generator launching in the H1 of this year. This will replace portable petrol generators, which will be banned from sale in California shortly. The new e-generator will significantly reduce setup times and costs, as well as noise on set and emissions, helping productions to become more environmentally friendly. This is a really big opportunity. Our market leading robotics and prompting technology drives cost efficiencies in broadcast TV studios. This is another important growth opportunity for the division, particularly as customers look to reduce production costs. Our prompting business, driven by our new voice activated products, had an excellent year, and the pipeline is the highest it's ever been. This is another great example of technology advancement driving shorter product replacement cycles. We're also benefiting from growth in major sporting events and have recently been awarded the contracts for both the 2024 and 2026 Olympic Games. We're also developing new player tracking software to be used by sports broadcasters. In summary, in Production Solutions, their core business continues to grow, and we're continuously involving innovative new technology to drive shorter product replacement cycles. On to Creative Solutions. Creative Solutions is growing strongly. In cine, sales of our 4K HDR products are going well. We estimate that we're only about 40% through the replacement cycle. Our SmallHD monitors had a great year with the new large production monitors gaining share. They recently launched a small on-camera monitor for high-end cinematic cameras. Our cine customers are demanding more remote access. We're investing to evolve our monitoring technology to the cloud so it can be used both on-set and remotely. In the enterprise market, we expect continued growth in our high-end Teradek IP-based live streaming solutions. There are also significant growth opportunities in the medical segment where our Amimon wireless video solutions are being used in operating theaters. The medical segment was up significantly in 2022. It has a large order book and growing pipeline of leading medical equipment manufacturers who want to integrate our zero delay solutions into their products. ART, or Adaptive Reliable Transport, is the video-aware, ultra-low latency streaming protocol jointly developed by our Amimon and Teradek engineers. It delivers secure, ultra-low latency, broadcast quality video and audio for mission critical video transport over public networks. We've now had feedback from customers on the initial product and the feedback is extremely encouraging and we're working on miniaturizing the product for volume production. We'll be integrating ART into our live production products for customers who need to send robust video over the internet. In 2024, our Bolt products will be ART enabled so that they can connect to the internet and the cloud. In summary, in Creative Solutions, the core business is growing strongly, and we have significant growth opportunities both in new vertical markets and with our ART technology. Now I'll hand over to Andrea for more details on our financial performance. Thank you, Stephen. For the financial review, I will go through a top-level overview before focusing in a bit more detail on the performance of each division, turning then to cash and debt. I'll also provide a recap on our track record of delivering operating cash flow and efficiencies and our performance against the midterm goals that we set out with the 2021 results. Finally, I'll provide guidance on a number of financial items for 2023. Turning to the full year results. In 2022, we achieved record revenue and profit. Revenue grew by 8% on a constant currency basis, driven by the acquisitions of Savage and Audix. On an organic constant currency basis, growth was 1% despite the challenging macroeconomic environment in the H2 of the year. Gross margin stayed at 44% and in fact increased by 40 basis points when stripping out Litepanels royalties, which were particularly high in 2021. Pricing more than offset inflation following price rises in early and mid-2022. The price rises in June benefit both 2022 but also have a larger effect on 2023. We are confident that our pricing strategies will keep us ahead of inflation in 2023 as well. Operating expenses rose by 9% on a reported basis, but on an organic constant currency basis, they actually fell by 1% as we closely monitored the cost base. Operating profit was up 30% on 2021 and up 12% on our previous record year of 2018. As expected, net finance expense increased, but we also benefited from net FX translation gains, resulting in a lower figure than we had previously guided. In summary, we achieved an operating profit of GBP 60 million and PBT of GBP 54 million, our highest ever performance. EPS grew by 29% to GBP 0.901. I am pleased to report that the board is recommending a final dividend of GBP 0.25 per share, which takes the total dividend for 2022 to GBP 0.40 per share, covered 2.3x by EPS. This is in the middle of our previously communicated range of 2-2.5 cover and is 14% higher than the total dividend of GBP 0.35 per share of 2021. ROCE improved to 18.8%, up 80 basis points on 2021, returning towards historic levels and reflecting higher profits despite the initial effect of recent acquisitions. Turning now to the divisions. All divisions grew revenues and margins in 2022. The macroeconomic environment most significantly impacted Media Solutions, where 20% of revenue is for consumers. Retailer destocking compounded this effect and also impacted revenue from our professional independent content creators. Revenue from our high-end professional segment continued to thrive, driven by our lighting support products, which included the launch of the Avenger Buccaneer in September, which is a unique, groundbreaking lighting stand. Audix and Savage were successfully integrated into the business. Audix had their best ever year in 2022, benefiting from plugging into the Media Solutions distribution network. The acquisitions drove a 150 basis points improvement in the operating margin for the division. It was another excellent year for Production Solutions. Revenue grew by 6% on a constant currency basis whilst maintaining the high operating margin they delivered in 2021, and in fact, improving it by 80 basis points when excluding the impact of Litepanels royalties. The broadcast segment returned to pre-pandemic levels, significantly increasing studio spend year-on-year, driving high growth in studio supports. Our voice-activated prompting, launched in 2021, continued to drive growth in this area as well. Outside of the studio, our market-leading flowtech tripods and active fluid heads helped drive material growth in non-studio supports. The Litepanels Gemini 2x1 Hard, launched in May, was very well received by the market. Camera Corps provided bespoke cameras to the Winter Olympics in the H1 of the year. Although H2, year-on-year comparisons are unfavorable given the Summer Olympics was in the H2 of 2021. Finally, Creative Solutions had a fantastic year of growth with significant increases in the cine/script TV market following the continued 4K HDR rollout. All our Bolt transmitters and receivers are 4K, as are 1/3 of our SmallHD monitors. Revenue from medical products continues to grow significantly, although elsewhere in the enterprise market we saw a decline in revenue due to less remote working than in 2021. The repositioning of our brand towards the higher margin, higher end of the market. This repositioning was part of a wider reorganization announced in November, arranging our sales and marketing teams into vertical segments to maximize the division's growth potential. Operating margin improved by 240 basis points as the revenue growth dropped through to the bottom line. Now that we've looked at the P&L, let's turn to cash. Working capital increased by GBP 19.4 million in 2022. Inventory was up by GBP 12.2 million in the H1 of 2022 due to cost inflation, capacity constraints, and component shortages. It then fell by GBP two million in the H2 as we managed our cash position carefully. Receivables increased by GBP five million, in part due to price rises, and payables decreased by GBP 4.2 million, mainly due to year-on-year movements in accruals. Investment in PP&E was GBP 3.7 million lower than in 2021, when we insourced some of JOBY production to Feltre. We maintained our investment in R&D at around 6% of sales to continue to develop our next generation products and deliver future growth. Cash conversion of 83% exceeded our financial goal to be greater than 80%, and overall operating cash flow was in line with 2021. Below operating cash flow, interest payments were higher than in 2021 due to the rising rates, but also due to borrowings and related fees incurred for acquisitions. Free cash flow of GBP 28.5 million was GBP 4.6 million lower than in 2021. Let's now turn to the movement in net debt. Net debt increased by GBP 48.3 million, primarily due to the acquisition of Audix that was completed in January 2022, and the translation effect of the dollar strengthening against the pound. The ratio of net debt to EBITDA was 2.1 at the end of 2022, which remains comfortably within our bank covenant of 3.25. I'd like to take a moment now to look at our track record of turning profit into cash and driving efficiencies. This graph shows a rolling three-year view of our cash conversion and so smooths out the phasing of receipts and payments between years. As you can see, we have a consistent track record of turning profit into cash. Our financial goal is to deliver greater than 80% cash conversion, which we have consistently achieved. In November, we announced the reorganization of our Creative Solutions division. This is the most recent example of restructures that we have successfully carried out. Across 2019 and 2020, we implemented a transition in Media Solutions to take advantage of the higher margin e-commerce channel by setting up a digital center of excellence in the division HQ at Cassola and reducing headcount in lower margin local direct channels located around the world. As previously mentioned, at the end of 2022, we reorganized the Creative Solutions sales and marketing teams into specialist vertical segments to maximize the growth and potential of the division. Having started in 2022, throughout 2023, we are looking to increase synergies from our recent acquisitions and rationalize our site portfolio. Outside a specific restructuring project, continuous improvement is in our DNA, with all divisions targeting 3% year-on-year productivity gains. Finally, our ESG initiatives are also driving cost efficiencies as we look to reduce the group's carbon footprint. Hopefully, that provides a good feel for how the group is structured for success. I'd like to now touch on how we're doing against our financial goals before providing some selected guidance for 2023. You can see here the eight midterm goals we set out at last year's result presentation and that underpinned our capital market day strategy. I won't go into detail on each, as they have been covered by the previous slides. As you can see, we are already delivering against the majority of our goals. Constant currency organic revenue growth was not where we wanted it to be in 2022 as a result of the macroeconomic environment, but we are confident this is a short-term effect. Similarly, the net debt to EBITDA, whilst this is higher than we would like, we remain confident and we expect it to reduce below 1.5 by 2025. Turning to 2023, we'd like to provide some selected guidance as usual. We expect challenging conditions to continue in the H1 of 2023, and as such, this year will be more H2 weighted than usual. Our depreciation and amortization will be GBP four million higher than in 2022, primarily due to R&D amortization increasing following investments in recent years to drive growth. Offsetting this, our restructuring plans are expected to generate a benefit of GBP four million in 2023. In 2023, an average of 65% of our borrowings will be fixed at a blended interest rate of 4%. Our floating borrowing is currently at 6%. As a result, net finance expense, which also includes interest on lease liabilities and amortization or loan fees, will be around GBP 13 million. We expect our effective tax rate to increase slightly to 24%. As for cash items, we will continue with our policy of gross R&D investment of between 6% and 7% of revenue at a similar level of capitalization as in 2022. Cash tax will rise as a result of higher profits in recent years and rising tax rates. Lease additions are expected to be around GBP seven million following the lease renewal for our Media Solutions HQ in Cassola. Net debt to EBITDA is expected to increase at the half year but to materially decline thereafter. Let's recap. 2022 was a record performance for Videndum. We are managing the impact of inflation well and more than offset it with price rises that will also benefit 2023. We continue to control our balance sheet, converting profit into cash. Whilst macroeconomic conditions are still expected to be challenging in the H1 of 2023, going forward, we remain well positioned for growth. I'll now hand back to Stephen. Thank you, Andrea. To summarize, we achieved record revenue and adjusted profits in 2022. The group is executing its strategy really well, and we're uniquely positioned right at the heart of the growing content creation market. The fundamental market growth drivers remain extremely attractive. Everything that we can control ourselves, we're managing very well, and I'm really pleased with the way my very experienced team is running the business. We've got great people and great products. We're offsetting inflation with pricing, driving operational excellence, launching innovative new products, and have integrated new businesses. Our customers are increasingly looking for ways to reduce their costs and improve their productivity, and our products are seen as part of the solution. We are delighting our customers. Our program of self-help actions will further streamline our cost base, and we're also executing on a number of cross-divisional synergies to ensure that the group is even better positioned for long-term growth. The one thing we can't control is the world economy. Clearly, we saw a sharp slowdown in H2 last year, and we expect that to continue in H1 of this year. My experience of previous slowdowns going back as far as 2009 is that we manage the downturn really well, and then we bounce back extremely strongly and quickly when the market picks up. I am increasingly confident that this is exactly what is gonna happen. Of course, predicting the timing of that is very difficult, but we're starting to see early signs of sell-out picking up in the U.S. To conclude, we're in a really exciting market with strong growth drivers. The business is in great shape. We have numerous exciting strategic opportunities in all three of our divisions. We remain committed to our previously stated organic strategic ambition. However, the timing is likely to be delayed due to the current macroeconomic environment. We expect operating profit in 2023 to grow as expected. However, PBT will be stable due to the increased interest charges, and we do expect a higher than usual H2 waiting. We are well placed to deliver growth and value for our shareholders. We're now going to move on to our question and answer session, so I'd like to hand over to our operator, and dial-in details are shown on this slide. Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad. If you choose to withdraw your question, please press star followed by two. When preparing to ask your question, please ensure your phone is unmuted locally. Please note we will take a short one-minute break before continuing with the Q&A session. Thank you for your patience, everyone. As a reminder, if you would like to ask a question, please press star followed by one on your telephone keypad. Our first question today goes to Sash Tusa of Investec. Scott, please go ahead. Your line is open. Thank you. Thank you champs for the presentation. My first question is about the strategic ambition and building on your closing comments. How confident do you really feel about that? Also, on the other hand, given what's happened recently, is there any things that you can point us to that sort of enhances your confidence in a way? Clearly, there's external factors at play, but... Just have you learned anything new in the current environment and your confidence on the ambition? That's the sort of first question or first topic of discussion. The second question is, could you just give us an update on ART and where we are with that and the traction that you're seeing there? Thank you very much. Hi, Scott, it's Stephen here. Thanks for your questions. In terms of strategic ambition, we laid out our ambition at the capital markets day back in May, June last year. We remain, and I remain absolutely committed to that. We believe that we can achieve more than GBP 100 million operating profit in the medium term. We talked about achieving that in 2025. That probably looks a bit more difficult than previously. So I think it's more likely now to be 2026. We continue to be extremely enthusiastic and committed to that. The long-term drivers that we talked about at the capital markets day are all still there. In fact, you know, some of them I think are even, are even stronger. Some parts of our business are actually trading ahead of where we expected to. For example, Production Solutions, which is benefiting from the growth in the cine market and is doing extremely well in the broadcast market and driving good productivity. Production Solutions actually is ahead of where we expected. Creative Solutions is about where we would have expected. As we said, BMS is behind. Why am I confident? You know, what can I point to? I can point to the fact that first of all, the headwind that we faced in BMS is largely around quite a small amount of the business. The consumer segment, which is only 10% of the group. The real impact has been from destocking. I've seen this three or four times before at Videndum. When we see a bit of a downturn in the economy, if retailers feel that they are a bit overstocked and they start to have their own working capital pressures, then we see a very, very severe reaction. Even if our products are selling out reasonably well, which they generally are, if they are overstocked, let's say they're in consumer electronics, they're overstocked with TVs, or if they're more of a specialist, they're overstocked with cameras, which is actually what's going on at the moment, then the impact on us is pretty severe. The encouraging signs are that we think we're through that V-shaped effect. We think we've probably seen the worst of it, and certainly in the U.S., which tends to be a bit of a lead indicator. It tends to be ahead of the other parts of the world economy. If we look at, for example, at Amazon, we can see that first of all, Amazon sellout has started to pick up and turn up positive. Most of last year it was, you know, negative, so the trend was negative, and we saw Amazon numbers that were down sort of 10%-15%. We are now seeing some year to date for this year, which is admittedly only six weeks. We're seeing that Amazon is up 8%. We also know that Amazon are now running on stock levels that are pretty much as low as they can get to. They're all Amazon in the U.S. is running on three weeks inventory, which is probably unsustainable as they get into more of the more of the growth phase of the market in April and May. We feel pretty confident about that. Clearly it's hard to predict the world economy, but certainly if, as we, as we can see, if the market starts to pick up in the H2, then we believe that we'll be back on track and be able to achieve that ambition. In terms of ART, good news here. We've been doing exactly what we said we're going to do, which is we have got pro-products out with customers, and they love it. I've actually got Marco Pezzana here today. Marco's with me. We're talking through some of the programs and projects that we're working on from a group point of view. Marco, as you've probably seen, has been appointed Chief Operating Officer to help me with some of the group projects that we're looking at, particularly around what we're doing with Creative Solutions, where we think we've got very interesting options in terms of what we do with that business. Marco, maybe you can briefly talk about ART and what you've seen out in the U.S. and where we are there. Thank you, Stephen, and good morning. Yes, I've just been visiting Creative Solutions, and I can confirm that the protocol performance and development is now complete. As we speak, we are installing ART on our Prism encoders and decoders that actually bring the technology directly to the end user and makes it accessible to system integrators and our largest customers. We are planning to launch the integrated product at NAB. This is very exciting because the addition of ART makes Teradek very relevant again to the live production segment of our business, in addition to what we've been doing successfully on Cine. Great opportunity for our incremental growth. Okay, Scott, is that helpful? That's very helpful. Thank you very much. Great. Thank you. Thank you. The next question goes to Andrew Douglas of Jefferies. Andrew, please go ahead. Your line is open. Thanks, everyone, and morning. Can we just keep on the ART topic? You talk in the presentation and the prepared remarks that next step is miniaturization in terms of kind of volume stuff. How difficult is that from a technical perspective? I'm assuming because I'm an idiot who sits in an office in London, that's kind of reasonably straightforward. Is that fair or are there actually some technical challenges which make that a bit more complicated? Secondly, on... I guess these are all a bit CS related. Apologies. Can you give us an update on the progress you have made with regards to medical? Clearly a big opportunity there. Be interesting just to hear your thoughts there. Last on CS, just in terms of the strategic review. No comment in the statement, clearly, which I suspect is the answer to the question. Can you just give us some thoughts on the optionality from where you see it and just whether that's changed in the last kind of 12 months? Last but not means least, M&A. Clearly, the M&A has gone well for you. I recognize the balance sheet's not quite where we need to be in terms of, you know, large scale M&A, but just thoughts on M&A over the next kind of one, two years, please. Is this more of an organic stroke recovery story? Thank you. Great. Thanks, Andy. If it's okay, I might answer those in reverse order. Yeah, sure. I'll probably ask, probably ask Marco to answer a couple of the questions. I mean, in terms of M&A, quickly, we're certainly not ruling out M&A. I mean, clearly at the moment, you've referenced the balance sheet. We want to get our net debt to EBITDA below where it is at the moment. It's higher than we'd like it to be, although, you know, we're actually pleased that we've managed to beat the forecast. We've got. Yeah. As you know, net debt to EBITDA down to 2.1x. By the end of the year, we will get it down below two times, certainly by 2025, as we said, we will get it down trending well below one and a half times, closer to one times. At that point, you know, clearly the opportunity to do more M&A will be there. We haven't got anything in the funnel at the moment of any significance, but the one area that we are hugely pleased with at the moment, as I hope you saw, the video with Marco, is Pro Audio. Audix is a gem. We think we can grow Audix out potentially through other acquisitions. That would be the area that we would particularly look at. Okay. In terms of strategic review, i.e., what are we doing with Creative Solutions? I can't say a lot more than we put in the statement, except to say that, as Marco's about to tell you, progress in medical is really exciting. We're now in a new phase where the products we're building are, you know, rather than being OEM are products in their own right, which we think are gonna be very exciting to various medical customers. The medical opportunity is very exciting. A nice figure. It's one of the few places where we have a very clear visibility going forward. We've got a very good order book there. You know, medical looks very exciting. Marco will talk about it in a second. And also, obviously, the technology is phenomenal. The customers love it. The opportunities to take that technology and potentially take it into other markets and so on, I think is even more enhanced. I think both medical and ART are opening up new options for us. And all I can tell you is that we are working on that actively. It's something that we are, you know, looking at right now, and when we can update you with further progress, we will. Marco, do you want to just talk a bit about, first of all, about where we are with medical, 'cause you've been over in the U.S. working with our team, and then also just a little bit about ART and the fact that, you know, miniaturization is kind of what we do. It's what we at Teradek have done for the last sort of 10, 15 years. They are experts at it, maybe you talk a bit about that. Yes, indeed. Thank you, Stephen. The progress I was able to see was actually pretty similar for medical and ART, in that in both instances we're pioneering the technology and where we are now is integrating the technology into finished products that the end user can capitalize on. When we look at medical, great order book on OEM, but we are now ready to launch a range of products called FALCON that integrate the Amimon technology into a finished product that will provide effectively the full network solution to our customers, enabling us to talk to system operators in the industry and not just OEM customers. This is obviously a game-changing step forward for that opportunity. Very similarly, with ART, we have successfully miniaturized the technology. This is now embedded, as I said earlier, into our Prism encoders and decoders. The challenge was there, but it has been resolved, and the product is coming to market at NAB. NAB is in April. Correct. You know, it's, you know, it's not absolutely done. You know, to your point, Andy, you know, this is what we're good at. The original Teradek Bolt product was originally quite big and, you know, the team in California are world experts at miniaturizing this sort of technology, and that's what we're doing, and we'll be able to show that to everyone at NAB, and that's gonna be a big deal. That will make ART, you know, available to a very wide market. Okay. Does that help? Yeah, perfect. Thank you very much. Great. Awesome. Thanks, Andy. Thank you. The next question goes to Henry Carver of Peel Hunt. Henry, please go ahead. Your line is open. Thanks. Yeah, morning, guys. just. Go ahead. A couple from me. First of all, on the R&D spend and the capitalization, can you give us roughly the split of R&D spend? I mean, I'm guessing it's fairly, sort of focused on what we've just been talking about in Creative Solutions, but sort of split across the divisions would be useful. Secondly, it, in terms of this, you know, the H1, H2 split, if you just give us. What you think that's gonna be on a revenue and a, and probably an EBITDA line for 2023. Lastly, just to the debt, you know, obviously we're in, it's hopefully gonna, you know, the debt to EBITDA is gonna improve over the H2. Just if you could give us an idea of what sort of debt to EBITDA multiple you think is the kind of peak point in, I guess June, and yeah, any sort of thoughts and comments around that would be useful. Thanks. Right. Thanks, Henry. First I've got Andrea here, so he will probably jump in if I get this wrong. In terms of R&D spend and capitalization, you're right. That is very much weighted towards Creative Solutions. You know, I don't think we've been too specific exactly what we've said before, but the spend on R&D in Creative Solutions is, you know, more of the other two divisions put together. You know, that gives you the sort of idea of the scale of it. In terms of, you know, if you need more information, I'm sure Andrea can provide that. In terms of H1, H2 split, in terms of revenue and profit, we think that's going to be, you know, probably as, as extreme as it's ever been. We've seen, you know, H1, H2 splits as at sort of 40, 60 before. I think that's what, you know, broadly we would expect. You know, as we said, we see a continuingly difficult situation with destocking in the H1, but as I said, I'm confident that we're gonna see us bounce out of that, certainly in the H1. You know, by June, we think we'll be bouncing out of that, and we think retailers are gonna have to, you know, start to buy inventory again. That doesn't affect all of the group. You know, it's worth emphasizing that, you know, we're focusing a lot on consumer, which is only 10% of the group. We're talking about destocking, which clearly only affects really about 40% of the group. 60%, 65% of the group is pure professional, pure B2B, where the business, I mean, it's, you know, dangerous to say it's untouched or unaffected by the economy, but we're seeing growth in all those areas. You know, you look at the products like Avenger Lighting, which has just sold into the film industry and into, you know, Netflix and Disney. That's up, you know, in 2022, that's up about 50%-55%, which is incredible. SmallHD, which is, you know, monitors just used again on sets, is up about 30%-35%. Onset monitoring is up. Prompting is up. Manual supports like flowtech being sold into the broadcast and on location businesses is up significantly. We can't make enough flowtech at the moment. That part of the business feels very solid, and we expect, you know, good progress there. The big debate is, you know, what's gonna happen around destocking and the economy and, you know, our expectations are we'll start to see things improving. When that does, then we'll see a big bounce back. In terms of debt, and then I'll let Andrea maybe jump in on anything. As I said, we got debt down to 2.1x at the end of 2022. We will get debt down below two times by the end of the year. It may, you know, season-seasonally, it moves up at the end of June. It always does that, so it may be up a little bit, a couple of points and maybe to 2.2%-2.3%. You know, trust me, we take this incredibly seriously. I don't like having this level of debt. We will drive it down as fast as we can. Andrea, do you want to add anything there? Yeah, I think you've got that covered, Stephen. Just to point worth noting is that we're very focused on inventory in particular. That's come down in the H2, as I just said. Particularly in Q4 we had quite a large reduction. We're well on top and managing that very closely. If it goes up a little bit in the same, in the, at the end of the H1, it's because we by then will be looking to drive growth in the H2. It's a seasonal thing. We know it's gonna happen and, you know, it's in the region of that point to points up and then it will revert back down as we approach year-end. Just to the inventory. Oh. Sorry. Carry on. Sorry, Henry. Does that answer your questions? Yeah. Yeah, no. I think I just, following on from that, the inventory level as it is now, because obviously you invested quite a lot in that, to, you know, the last year. Does that mean that you don't need to spend as much to sort of, fund growth in the H2? You shouldn't see that have to increase further to fund growth in the H2? No. Inventory, we've got it down in December. It's about GBP 107 million. We are pretty much holding that stable as it goes, as it goes across the H1. You might see the usual, you know, little bit of a movement, but that is well controlled and managed. Got it. Okay. No, that's useful. Thanks very much. No problem. Thanks. Thanks, Henry. Have we got any more questions? Yes. Our final question today goes to Tom Fraine of Shore Capital. Tom, please go ahead. Your line is open. Thank you. Good morning, all. Quite similar to the last set of questions. I think now we're looking at free cash flow here, it's maybe in high single digits. If you could just give us a bit of guidance on the working capital. Obviously we saw a GBP 19.4 million cash outflow in 2022. How do you expect that to either potentially reverse or soften for 2023? Any guidance on the CapEx going forward, and/or any other material items in cash flow for 2023 would be much appreciated. Thanks. Thanks, Tom. Thanks for the question. Some of the movement in working capital in 2022 is down to the cut-off position of receivables and payables. We have higher pricing reflecting in our receivables, and there is cut-off issues at year-end which usually happen. The good thing is that we've controlled inventory in the H2 very closely, as I just mentioned, and we don't therefore expect working capital to increase that significantly in 2023. We are targeting, as you just saw in one of the slides there, we are targeting 100% cash conversion. We did 80% this year. We did slightly more last year. You know, ballpark, it's gonna convert and continue to convert. We're gonna continue to convert properly into cash at a very, very healthy rate and managing working capital through that. Okay. That's great. Thank you. Just on the CapEx, have you got any guidance going forward and for the immediate future? Yeah. If you look at CapEx as a whole, GBP 20 million was investment, this year including the R&D development costs. We expect a slightly higher number next year as we drive through our ambition of developing new products, and getting up to that GBP 600 million of revenue over the next few years. There's gonna be a little bit of investment in CapEx, but again, you know, it's part of the 100% cash conversion I just mentioned. It will be in a controlled manner. Okay, great. Thank you very much. Tom, I mean, while you're on, I know you've got concerns, and we haven't maybe spent any time on this, concerns about, you know, the noise around Netflix and Disney, reducing costs and so on. You know, as we discussed, you know, clearly there may be a little bit of disruption because I think we expect that some production will move out of higher cost areas like California to lower cost areas. In the U.S., for example, we're seeing huge growth in the amount of production being built in, for example, Georgia, in Atlanta, and also more production moving out of the U.S. However, you know, the overall spend on original content is absolutely huge. In total, it's about $100 billion. It's growing. It's gonna grow this year about 10%, we think. We are obviously a tiny bit of that. you know, we're 0.001% of that. What we are excited about and why we are, you know, don't see this as a major concern, in fact we see it as a driver of our business, a driver of growth, and that's, you know, that. If you look at the areas that we're doing well on, that gives us good evidence. What we're excited about is that we're part of the solution. When Netflix want to save costs, the main cost is in people. About half the cost of any production is in people. A lot of the time you have a lot of people standing around not doing very much. If you can reduce the amount of time it takes to set up each shot, and if you make sure that you shoot it right first time and you don't have to come back and shoot it again, then that saves you an awful lot of cost in productivity and so on. Our products are absolutely essential to that. We expect our products like on-set monitoring, which allows you to set up quicker, 4K because it gives you a true representation of what the camera is seeing, monitors so that you can make sure everyone can see what's going on. Those products, we believe are gonna grow through this period. We see original content as a big driver of the growth going forward. I think that's the end of the questions. I'd like to thank everybody for listening. I'm sorry that probably was a bit longer than usual. Hopefully you've all made it through. I really appreciate you listening and we'll no doubt talk soon. Thank you very much. Thank you. This now concludes today's call. Thank you so much for joining. 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