Good day and thank you for standing by. Welcome to Aston Martin's first half 2022 results call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star one- one on your telephone, and you will then hear an automated message advising your hand is raised. If you wish to ask a question via the webcast, please type it in the Ask a Question tab available on the webcast link at any time during the conference. Please be advised, today's conference is being recorded. I'd like to hand the conference over to your speaker today, Lawrence Stroll, Executive Chairman. Please go ahead.
Good morning, and thank you for joining us for this, our Q&A on our first half results of 2022. You've had the chance to read the release and also listen to the presentation of the results from Doug and Amedeo that are on the IR section of our corporate website. Before you take your questions, I'd like to share my perspective on the progress we have continued to make in our vision to become the world's most desirable ultra-luxury performance brand.
Since I became Executive Chairman, we focused on fixing the core fundamentals of this company and rebuilding the necessary foundations to deliver on our vision. This has included a significant rebalancing of supply and demand, which today resulted in retails outpacing wholesales, a key foundation to building an ultra-luxury business. Moreover, the underlying fundamentals of Aston Martin have never been stronger.
With robust demand across our product range. Sports cars sold out into 2023, and DBX orders up by more than 40% over 2021. The first new models in an extraordinary pipeline of products developed since I became executive chairman have also started to be delivered. Our combination of the new ultra-luxury high-performance models commenced with our DBX707, the premier ultra-luxury performance SUV on the market, and the highly desirable Vantage V12.
They will be followed by the long-awaited, entirely new generation of our front engine sports cars in 2023. Importantly, all our vehicles are aligned with a minimum 40% contribution margin target, a significant increase from the past and a key driver to our medium-term targets, which we are on track to deliver.
As we enter into the second phase of our transformation, and with an emphasis on product renewal and increased profitability, we have also aligned the business under new leadership led by Amedeo Felisa to fully realize our potential and deliver on the targets we have set. Amedeo brings an exceptional track record and skill set that are perfectly matched to our needs, and we have already made progress in a number of areas that address both the short and long-term priorities of the business.
In addition to appointing Amedeo as CEO, we have separated the CTO organization from its previous structure. We have brought in four new leaders to supercharge our engineering capabilities and drive increased collaboration across our teams. Roberto Fedeli, arguably the best CTO in the industry, joined us in June and has quickly established a new structure to support our development of our next generation of high performance and EV vehicles.
This included the addition of some of the best talent in the industry, including new leaderships in the area of chassis, electronics and infotainment, and the full range of EV technology. However, the first year, excuse me, the first half of the year was not without its challenges. Isolated but impactful supply chain shortages, particularly in Q2, resulted in lower wholesales and significant working capital headwinds. Specifically, we ended June with more than 350 DBX 707s that we had planned to deliver in Q2, still awaiting some final bits.
Combined with elevated receivables, this had a more than GBP 80 million short-term impact on our cash and temporarily limited our ability to meet the strong demand we have. We have now started to deliver these vehicles in July and expect further improvements in the supply chain as we move through H2, supporting the delivery of our full-year targets, which we already have reaffirmed today.
As a result of the working capital build in H1 and our expected second half performance, we now expect to generate positive free cash flow in H2, resulting in a significantly higher cash balance at year-end. Earlier this month, we announced a GBP 653 million equity capital raise, which also see the arrival of Public Investment Fund, PIF, as a new anchor shareholder with a 16.7% stake.
This will transform our balance sheet, significantly improve our liquidity and cash flow profile, provide greater clarity on our pathway to become sustainably free cash flow positive from 2024, as well as creating significant shareholder value. Having spoken to a number of our larger shareholders over the last two weeks, it is clear there is extremely strong support for this raise.
We continue to enjoy a long-term strategic relationship with Mercedes-Benz, evidenced by their proposed investment and our planned deployment of their technologies, accessed via tranche one of the Strategic Cooperation Agreement. As a reminder, this first tranche covers all vehicles we are targeting to deliver in our medium-term plan, including all ICE, Hybrid, and BEV models.
In addition, the agreement with Mercedes provides two key benefits. First, access to world-class technologies and software, allowing us to leverage the significant investments that have been made by them. Second, it removes the cost and risks associated with developing these technologies ourselves and allowing us to focus the investments captured in our yearly GBP 300 million CapEx envelope on other areas to support our growth and further differentiate our product.
Today, we are pleased to announce a mutually agreed amendment to that SCA, which extends the timeframe for tranche two shares issuance related to the second basket of Mercedes technology to be accessed under this agreement, which includes everything related to BEV. We're pushing this out till 2024. Importantly, the amendment does not impact our access to the menu of technologies we choose, nor does it change the timeline for our first test BEV, which we will continue to target for a launch in 2025.
At this point, before opening the floor to questions, I just want to state again the strong fundamentals of business, the strong demand for the brand by our consumers, by our dealerships, and once again, my Yew Tree Consortium responding to the capital requirement. Believe me, if I did not believe wholeheartedly in the strength and the success of the business, I certainly wouldn't be putting any more money.
Having the biggest insight into this, I tell you with full confidence that the work of the last 2.5 years, which has not been easy by any stretch of the imagination, has now paved the road for our journey, starting with the 707, coming next year with the full range of our new generation sports cars onto our mid-engine, onto our PHEVs and onto our BEVs.
It was really laying the stones of the last two years on the pathway for this journey to building the ultra-luxury high-performance brand. Please take confidence in what I'm saying. It means a great deal. On that note, I would open the floor to any questions.
Thank you. As a reminder, to ask a question, you need to press star one- one on your telephone and wait for your name to be announced. Please stand by while we compile the Q&A queue. Thank you. We'll now take our first question. Please stand by. First question is from the line of Charles Coldicott from Redburn. Please go ahead. Your line is open.
Hi, good morning. Thanks for taking my questions. I've got three, please. For the first on the DBX, the previous CEO said that there would be six variants of the DBX by 2024. Obviously, the DBX707 is the third variant we've had so far. Is the plan still to have six in 2024? And if it isn't the plan, how do you expect to reach the medium-term guidance given, you know, the derivative strategy obviously was part of how you bridge from three to 4.5 or 5,000 units?
My second question on the 2022 guidance, obviously demand's not a problem because you're sold out of GT and sports cars this year, but production hasn't been able to keep up. You wholesaled, I think 2,700 units in H1. Your guidance implies at least 4,000 units in H2. What are the main bottlenecks that you've been able to resolve that are going to help you achieve that acceleration?
My third question was just on the Valhalla. Can we just get an update on the customer orders for the Valhalla? Are you sold out of all 1,000 units? If you're not, I guess traditionally specials usually sell out quite quickly. Do you think that's because people are kind of waiting to see what happens with the Valkyrie or is there any sort of softness in that segment? Thank you.
As far as the DBX models are concerned, I quite honestly do not remember how many previous managements mentioned we would have. We always knew we were going to have the car we initially launched with. We added the Hybrid, i6, Straight-Six that we sell in China. We always do our third car, which we started working on from the day I came in, was going to be the 707. We do know there will be a PHEV version of our DBX in the future years to come. We also were studying to do a special on a DBX as we used to do historically, like a Zagato model. At one point we were considering, maybe that's how we got to six, which we no longer are.
I stopped when I came in, which was a long wheelbase DBX. The other four or five are still in the plan. The long wheelbase isn't. The production that you described, we had experienced. It primarily started mostly in June, with one particular supplier having an issue, mostly with the rear bumpers. Those quantities have now started to come back in according to plan. We're extremely confident, otherwise we wouldn't be reaffirming our full year guidance, if we were not confident on that delivery.
As far as the Valhalla is concerned, we have approximately 500 orders. Usually when we make specials, we make about 100 or 200 cars. The Valhalla, we've said we're going to make approximately 1,000. Have that large amount of order book for versus the quantity we're making is right on track in our business plan where we thought we'd be.
Okay, great. Thank you.
Thank you. We'll now take our next question. Please stand by. This is from the line of Christoph Laskawi from Deutsche Bank. Please go ahead.
Hey, good morning, and thank you for taking my questions. The first one will be on ASP and what you can do going forward. You already had a couple of price hikes in the last six months, and I was just wondering, do you plan further hikes in the coming quarters? When it comes to the aging sports car lineup, is there still much that you could do on price for that? And related to that, when will be the time where you actually stop taking orders for the current lineup versus the models which will be renewed?
A follow-up on the DBX that is in semi-finished inventories currently. You already said that you are starting to finalize them and going to ship them. If I understood it correctly, a lot of those will be for the U.S. Should we start to see them moving out of the inventory already in Q3? Or given the transit time and time on the ship, could that slip into Q4, just in terms of working capital reversal? Thank you.
Okay. Good morning. It's Doug speaking. With regard to your question on ASP, we're obviously happy with how ASP has been evolving. You're quite right, we've taken pricing quite consistently over the last 12 months or so, three price increases. We will continue to monitor the situation, I think, as we move forward. Demand remains strong. Pricing is strong and mix is only going to improve in that regard. In the second half of the year, we've got the ramp up of the DBX707 and the V12 Vantage, so we expect ASP to remain strong.
With regards to, you know, order intake for the sports cars, as Lawrence has said, and as I think we've repeated, a few times so far this year, you know, the order book for those cars remains very strong, ordered until well into Q1 2023. You know, we'll roll the new cars in, but we'll continue to take orders on the current range. On your second question with regards to the DBX, with the inventory held back, awaiting final assembly parts at the end of the quarter. The simple answer to your question is yes. Those cars are starting to be completed, finished, and shipped as we speak. Quite a large proportion of those were bound for the U.S., and we expect to see those wholesaled in Q3.
Thank you. Just one follow-up, if I may, on the Mercedes agreement that you have and now the ability to essentially choose technology that you'd like until mid-2024. You keep the launch rate for the BEV in 2025. I was just wondering, when would it be too late to choose the technology from Mercedes to go into that first BEV? Could it be implemented fairly shortly ahead of the launch of the car, say six months ahead? Or do you need a year to 18 months for that?
Good morning. Thank you for the question. I think, we are working with Mercedes on the content of their proposal at the strategic cooperation. We have a plan run by us, and we are evaluating in details what they are offering us. If you want, we are not looking only on Mercedes because at the end of the day, the best idea is to have a comparison with other proposals. We are looking very carefully what they have inside the tool pack that they are offering to us, going to EV. I think, we have already defined some solution having their proposal in the future architecture of our BEV.
But I think we are continuing to understand better and better their proposal and of course creating every time more understanding by our people. I think the transition to EV will be a tough point, so we have to do it when we know everything in the proper way. I don't think we are late because with the new CTO we have already launched the two teams working on architecture for future EVs. We are working, if you want, understanding the technology and defining what should be the solution.
Understood. Thank you.
Thank you. We'll now take our next question. Please stand by. This is from the line of Philippe Houchois from Goldman Sachs. Please go ahead.
Yeah. Thank you very much also for taking my questions. My first question is just on the contribution margins that you are targeting, 40%+ for both GT and Sports next year. I was just wondering what are the main drivers behind that? Obviously, it's mostly that you're just hoping for higher ASPs or is it more of a cost improvement? And then within the cost improvement, is it the results that you've already done with Project Horizon or are there further levers on the cost side to improve the margins that you are still sort of aiming for 2023? And then the second question is just on the free cash flow and the working capital.
I can imagine that the main driver here is clearly the inventory improvement as you ship the DBX. I was just wondering on the receivable side, are you also expecting a main improvement as you sort of start cashing in on those shipments? Any color there for the second half would be appreciated. Thank you.
Sure. With regards to your first question, hopefully you've had a chance to look at the presentation that we've put up on the website talking about gross margin, our evolution. We're, you know, we're pretty happy with how that's evolving to roughly 35% in the first half of this year. As you point out, you know, all of the vehicles that we're bringing to market from the 707 onwards target that 40% contribution margin. That will be delivered, you know, with a blend of pricing as the products that we're bringing to market are, you know, quite frankly, a step on from what we have today and can command higher pricing.
You know, we'll be looking very, very closely at the BOM and looking at what cost we can optimize, as we bring those cars to market. A combination of the two helps us achieve the 40% as it has or will on the DBX 707, and the refreshes that we're bringing to market next year. Second question on free cash flow. Yes, you're right. You know, we expect that, as we said, to unwind in the second half of the year. The majority of that inventory is starting to move, so we should see that unwinding in Q3. Then with regards to receivables, I mean, it's really the same issue. You know, we're shipping cars late in the period.
I'd like to think that we can return to a more sort of neutral and normal working capital cycle where we don't have the receivable, receivables building at the end of the period. On those two points, yes, we expect them to unwind and help deliver that free cash flow positivity in the second half.
Thank you very much.
Thank you. We'll now take our next question. Please stand by. The question is from the line of Daniel Roeska from Bernstein. Please go ahead.
Good morning. Thanks for taking my question. Amedeo, could you talk a bit about how you think about the development of the Aston brand, and specifically, how you can achieve kind of meaningful differentiation from the competitors above your positioning, like Ferrari, or moving up from below, like the Mercedes brand or Maserati, and kind of what's the key measures you want to put in place, for that?
On the transition to BEVs, maybe could I ask you, Lawrence, on your broader view on the wider luxury car segment, kind of how you view the opportunities and the risks for luxury car OEMs like yourself moving into full BEV?
I'll let Amedeo answer first, and then I'll answer the BEV second.
About the characterization of the future or the Aston Martin product. I think we have the first example with the DBX 707, which is slightly different, would be of the actual Aston Martin product. This was, if you want a good test, because we understood that the Aston Martin customers are not only the one that likes style, super luxury and elegance, but they like also performances. In the future, we want to continue in that direction. We will continue to have product that, as expected, very well placed inside the Aston Martin brand, but with some evolution in the direction of feeling of driving.
This will be something that we will, in a proper way, preparing what will be the characteristic of the EV that has to be in some way maintain the characteristic of the actual Aston Martin product. I think Aston is very well placed. We have a very good brand strategy. The customers are well accepting that. I think I do not compare too much Aston with Ferrari. They are two luxury brands, but one in a very well-defined position, which is Ferrari. I think Aston is covering his own position again, on luxury and performance, but with some specific characteristic that Ferrari cannot have.
As far as the BEV is concerned, we are going to continue and have continuity to what drives an Aston Martin purchaser today? Those are several attributes. One is the beauty of our cars. I don't think whether it's an electric vehicle or a combustion engine, one is always attracted visually to how a car looks. I think that's the first impulse we get as consumers. Secondly, we're very well known for our vehicle driving dynamics.
Everyone knows or talks how well an Aston Martin handles. It's been an attribute of Aston Martin for, I don't know, 20, 30 years. In addition, what Aston Martin is very much known for is the luxury bespoke Savile Row tailor-made interiors, craftsmanship, what have you, which we're turning the notch up on that. We're bringing more of what we're calling our tailoring program to the cars.
It still needs to look like an Aston Martin to differentiate us, drive and feel like an Aston Martin, sound and smell like an Aston Martin, with whether it's the radio, whether we do our own e-motors to make it feel more special. Whatever it might be, there'll be some personalization to our Aston Martin BEV program that will be unique to Aston Martin, in addition to bringing forward our legacy attributes that I just mentioned.
Thanks. Very clear. Maybe if I could follow up on technology, you just mentioned the tranche two from Mercedes, but have you had discussions with potential other partners, possibly also thinking through the PIF angle, to evaluate possibly also other routes on electrification for you?
Yes. We've spent the last two years visiting most companies, including the ones you mentioned. You know, we have an extremely close, tight, and incredible partnership with Mercedes-Benz. You know, in tranche two, it seems like our direction is to take their overall ride and handling architecture, electronic architecture, that they spend billions and billions of dollars developing that we have access to.
Well, you know, if you look at the EV, it's not one thing called EV. You know, I look at it like a menu. You know, there's everything from e-motors to cells to battery packs to electronic architecture to, et cetera. You know, there'll be a menu. We clearly need the overriding electronic architecture.
As I just said, answering your last question, we will be looking to personalize our Aston Martin EV and differentiate us from the competitors via a few things we manufacture in-house and have our own in-house competencies to manufacture. But, the overriding basket two delivers us the core of what we require.
Excellent. You wouldn't be opposed to getting the inverter from Lucid, doing parts of the motor in-house and kind of taking the wider system architecture from Mercedes.
At this moment, we're very open-minded. We're not at the point of making that decision, but what you said is a distinct possibility.
Thanks, Lawrence.
Thank you. We'll now take our next question. Please stand by. This is from the line of Horst Schneider from Bank of America. Please go ahead.
Yeah, thank you, and for taking my question. John, I only have got one left that's maybe for Lawrence . When we look at the recent EU CO2 regulation, and by surprise, basically, they opened a window of opportunity that the combustion engine could stay alive if the cars were using synthetic fuels. As you outline, you want to electrify the fleet a lot more completely by 2030, isn't there now a window of opportunity also for the combustion engine cars? And is there a need to accommodate that also to a stronger extent in your strategy? Thank you.
Yes. We will continue to believe in and manufacture combustion engine cars as long as there is a consumer demand. We think there will be a consumer demand for a longer duration with a company like Aston Martin, because we deal with much more of a car enthusiast. In most cases, it's not their only car. It's a sports car, could be their second car, it could be their third car.
We believe whether it be independently ICE or whether it be ICE PHEV or a combination of. We believe that will carry further in our business plan than most. We also, to your point, potentially, we're starting to look at e-fuels. As you know, we're bringing e-fuels into Formula 1 in 2026. I'm not sure if you were aware.
We're also looking at the feasibility and practicality of how to bring that into road cars. So, also a study, very early days, that we're looking into. Yes, the plan would be to carry forward a combustion engine in a few vehicles for as long as the demand remains, which I think will be longer as a small volume manufacturer, a specialist manufacturer than most.
But that means then in the end that when you say you can use them for longer, you don't have to do additional development for that, right? You can just use the existing technology, and then you just, I mean, the customers, they use a different fuel, but that does not affect your R&D. That's correct, right?
That is correct. As far as the rulings, I don't believe are clear, and I think Amedeo could probably answer it better than myself.
If you want, as all the other manufacturers, we are keeping under control what should be the way to continue with the internal combustion engine. If you want today, we are concentrated in the transition of the actual product versus PHEV and then EV. Especially because for the small volume will be for sure a special regulation and timing, I think we are looking also at other alternatives.
I think, as you know, this is anyway asks for small changes on the actual engine, so it's not exactly a utilization as it is. We are looking with some partnership in understanding what should be the opportunities. Frankly speaking, in that moment, we are more concentrated on making the evolution of the actual and then looking to the electrification.
As you know, it's always better to test the hypothesis on every solution and then understanding, comparing the different alternative, which should be the best one. As Lawrence was saying, for sure our customers are not so keen to have EV cars, so we have to test under control the situation in order to, if you want, utilize every solution that makes the continuation of the actual engine. I think it's to be discussed in the future, looking especially what will be the regulation.
Okay. Thank you.
Thank you. We'll now take our next question. Please stand by. This is from the line of Thomas Besson from Kepler Cheuvreux. Please go ahead.
Thank you very much. It's Thomas . I have two, kind of helicopter questions, and I apologize in advance if this is not necessarily a topic you want to cover. First, I'd like to come back to questions that have been made earlier on the competition. I think when we look at the profitability of some of the luxury companies that have reported earnings for H1, and we anticipate what Ferrari will show. We've seen very substantial progress, whether it's British luxury within the Volkswagen Group, Italian luxury or we are going to see probably a still near-record of earnings from Ferrari.
Can you just come back to explaining the magnitude of the gap in terms of returns between Aston with the progress that has been achieved and these companies? Given the challenges ahead from a macro and electrification perspective, explain how you intend to close the gap. I know it's a very wide question, but it's still, I'm still a bit puzzled by that gap. The second question is also and I apologize, not necessarily one that you would expect on this call, but I still ask it.
Could you explain what fundamentally for Aston was negative in the alternative solution to the one you choose with the proposed rights issue, namely the project that was supposedly bringing the net debt of Aston close to zero for the first time bec ause basically for me, the main issue Aston has been facing for a very long time is an excessive level of debt, which is not solved by the proposed rights issue? Thank you.
Let me start with the second question first. The proposed rights issue completely addresses Aston Martin's current financial needs. As I have said previously, and I continue to say, Aston Martin did not need money to see our business plan through of getting to 10,000 cars. Let me reconfirm that. The purpose that we did this capital raise was threefold. One, me and my board getting very frustrated with the share price, and the share price is clearly where it is, not because of the fundamentals of business. Because the fundamentals of business never been stronger. We went from 2,000 cars to 4,000 cars to 5,000 cars this year. We'll do close to 7,000 cars.
The fundamentals of the business and the consumer demand, most importantly, most important of any fact at all, is that we are retailing more cars than we're wholesaling. That really shows the power of the brand Aston Martin today. That is the first sign of a luxury company when you retail more than you wholesale. Having said that, we did not require cash to see our business plan through.
What we did require cash for was threefold. One, to give comfort to the investment world that the company was never going to run out of money. This extra money that we're putting on the balance sheet, approximately half of the capital raise will go into the company, will always give the company a cushion and be in a position that will always have between GBP 400 million and GBP 500 million on the balance sheet. Point one.
The second thing it does, which was also an overhang on the share price, was the debt level. Clearly, we inherited this debt from the previous shareholders, and I think we've done a pretty good job in trying to deal with it in the 2.5 years and realized it's time to raise equity to repay, hopefully more of the expensive than less expensive debt. Regardless, whichever piece it is, significantly reduce interest rates by GBP 30 million-GBP 40 million a year.
It gave the money that the company required and takes away the overhang and hopefully gives the confidence to the investment community, analyst community should have of what I said on the cushion that it puts on the balance sheet. As far as the other offer, the board and its bankers studied it unanimously, completely rejected it.
It was a camouflaged backdoor offer disguised as a rights issue. It was really a disguised takeover offer with heavily diluting all shareholders massively for no reason and no need in order to buy the company very cheaply rather than coming in the front door and making a proper takeover offer, which of course would require a premium to the share price. The banks actually laughed. They thought it was quite astonishing.
One that said, I'd never seen anything like this my whole banking life. The board and the banks unanimously rejected it on the grounds of what I just described. I want to answer your third question. Comparing to the other, whether it's Ferrari or the other British brands, let's be very clear. We've been at this for 2.5 years.
The others have been at it for five, 10, 15, 20. We've been at this for 2.5 years. I took over a company that was a wholesale manufacturer- driven company, that made cars without orders, or less than 10% had orders. We transformed this business and i n 2.5 years, from the day I took over, I said, we will not make a car without an order. Since I took over 2.5 years ago, we haven't.
That's why you see the retails outpacing the wholesales. In addition, we've gone to 65% of our order book is what's called retail pad. 65% where customers go in and spec their car. That was less than 10% when we took over. That's an incredible statistic. Thirdly, most importantly, in duration.
I think you must know a lot about the automotive business. This business moves, it's like watching paint dry. To bring a new model to life takes two, in most cases, three years. We started on DBX 707 when I came. We started on all our next generation sports cars when they arrived. When I say next generation sports cars, they're new cars. They're new power units, new interiors, new technology.
Everyone always said Aston Martin makes the most beautiful sports cars, but it's behind on the three-year-old Mercedes technology it was going to do on the interior. Well, that was true. That no longer will be the case with the next generation of sports cars. There's nothing in the car that looks, or feels, or touches, like a Mercedes.
It's all specifically designed with Aston Martin fascias, and sounds, and visuals and wrapping a little leather button with white stitching. No plastic. This was a process that has taken 2.5 years, and quite honestly, 2.5 years is quite astonishing to have accomplished what we've done in the period we'll do it. In a couple of years, we'll be up to 12 cars with a full portfolio of the new SUVs, whole new next generation front-engine sports cars models, the full mid-engine program, including Valhalla, and continue with our heritage.
Every year, we do 100 or 200 or 300 specials. We have the perfect product portfolio for whatever position we bring in the next full lineup in another couple of years to have within a year and a half after that. I think it's quite remarkable what we've been able to accomplish in the time for this current management team we have been together.
Thank you. As a reminder, if you would like to ask a question, please press star one- one on your telephone keypad. We'll now take your next question. Please stand by. This is on the line of Charles Coldicott from Redburn. Please go ahead.
Hi. Yeah. I just actually wanted to clarify one thing on the cash interest charge after you repay the debt with part of the proceeds from the rights issue. I know it's not certain yet, obviously, which notes you'll pay off and at what price. I guess I was thinking that whether you, A, pay off the GBP 300 million of the second lien debt that's got a cash coupon of 9%, or B, you trigger the claw back on the first lien debt at the premium that is required. I was thinking the reduction in cash interest charge should be about GBP 27 million rather than not sort of up to GBP 40 million. Is that correct or am I missing something?
I think, yeah, Charles, it's Doug. Yeah, I think of it as a minimum of around GBP 30 million in terms of cash interest that we'd save year on year.
Okay, great. Thank you.
Thank you. At the moment, we have no further questions, so I'll hand back to the speakers.
Are we done? I'd like to thank everybody for joining the call today and look forward to please follow the company with all the exciting new products that we've upcoming in the very near future. If any of you get a chance, I would highly recommend coming to visit Gaydon. Now that hopefully COVID is behind us, you could really get into the design room, get into the studio, and see in life everything we've just described. Thank you again.
Thank you. That does conclude the conference for today. Thank you for participating, and you may now disconnect. Speakers, please stand.