Good morning, everyone. Thank you for being here at short notice, and thank you for being on the webcast if you're listening live or on record. I have to say it's been quite a long year and a short night, but we are now here. I would like to just start by acknowledging that 2024 was a difficult year for TT Electronics. Notwithstanding that, actually, there were lots of positive spots. We had excellent performance in Europe, excellent performance in Asia. Our cash flow has really stepped up and helped our balance sheet. We have completed what I think are very close to the final steps in sealing off and closing down and taking the risk out of our pension scheme. There have been many other achievements as well. On the other hand, we've had plenty of challenges, and a few opportunities to exploit.
I'd like to thank Peter France for all of his contribution in 2024 and before. I'd like to thank the leadership team, and I'd like to thank everyone in TT, for navigating those challenges, and delivering what, in the circumstances, was a good outcome. As you know, the accounts were delayed, but they are now resolved, signed, and we are announcing our results today. That means we can put even more focus on delivering 2025. Eric's kindly agreed to step up as acting CEO. As I'm sure all of you know, Mark is retiring today. He's done an incredible, is it 9 or 10 years service, and overseen the transformation of the company, the pension scheme, and provided us with a platform for growth. On behalf of the company, the board, and all of our stakeholders, I'd really like to express our deep gratitude and thanks.
We wish you well with your non-executive director roles and your extra leisure time. Looking forwards, I think our operations are stabilizing. We still have good end markets, but as everyone knows, we are operating in extraordinary macroeconomic uncertainty. The board is very focused on delivering the 2025 outlook, making the business more predictable, generating yet more cash flow in the year, and exploiting the value drivers that we do have as a business. I am not going to say much more. There will be an update on the 30th of June, when we hold our AGM. I would now like to hand over to Mark for the results and Eric for the business update. Of course, we will all be available for Q&A at the end. Thank you.
Great. Thank you. Thank you. Thank you, Warren. Okay, one second. Yeah, thank you, Warren. Good morning, everyone. I'd like to welcome you, everyone in the room and those on the webcast to the 2024 final results presentation. I'd just like to start, however, by thanking Warren and the board for the opportunity as acting CEO. It is a privilege to lead and serve what is fundamentally a good business with solid prospects, and I fundamentally believe that. I'd also like to thank Mark for the professionalism and effective handover as CFO designate over the past three months. Finally, thank Peter, with whom it was a pleasure to work with and I very much appreciated his support.
There has clearly been a number of challenges that the business has had to navigate this year, and we will cover how we have addressed them and how we are addressing them throughout this presentation. Despite the challenges, we have made good strategic progress against many areas of the business and have implemented a number of changes at the start of the year that have made a positive impact, including reorganizing the management structure, refreshing our strategy, divesting three sites described as Project Albert, and introducing Project Dynamo, our improvement program. The progress we have made leaves us well placed for the future. Looking at the performance of the business overall, we saw a small organic revenue decline but delivered strong operational and margin improvements in Asia and Europe, offset by North America.
European margin was up 440 basis points to 14.4%, driven by operational leverage on revenue growth and good efficiency improvements. The Asian margin was up a similar amount, 410 basis points to 15.2%, again, driven by good efficiency improvements. This positive progress was offset by the North America region, where destocking in the components market led to significant volume and revenue shortfalls. We also had the operational issues in Kansas City and Cleveland that impacted our results more than anticipated. As a result, we have recognized non-cash goodwill and asset write-down costs of GBP 52.2 million and made a prior year negative restatement of GBP 5.7 million. Encouragingly, overall, we saw good order intake in 2024, up 9% organically over 2023, and book to bill in the period was a positive 103%.
The work on inventory has also gone really well, and the inventory work stream delivered a GBP 13 million reduction in inventory, supporting our excellent cash conversion of 117% and leverage of 1.8 times, within our target range of 1-2 times. Our strong free cash flow was boosted by a further GBP 11 million net pension surplus refund to TT Electronics in 2024. Mark has made significant progress on concluding the pension issue, overcoming a huge GBP 270 million buyout deficit over his 10 years within the group. A remarkable achievement. Looking forward now, our focus is to lift profitability and margin through a combination of operational improvement and driving the top line. In terms of operational improvement, we have taken action across the business. In particular, our plans in Kansas have well progressed, and we are seeing the results coming through.
In Cleveland, the improvement plan is underway, but the full benefit will take longer to realize than originally anticipated. I'll add more color on a later slide, along with further details of operational improvements and cost savings at that site. Project Dynamo continues to provide the catalyst for operational efficiency improvement, growth, and innovation, and I remain confident that this will support our financial plans. We have a clear action plan driving performance towards delivery of our medium-term financial framework. However, in the short term, components demand improvement remains difficult to forecast. We have seen the evolving tariff arrangements by the U.S., as well as potential retaliatory actions by other nations create more uncertainty in the market. As a result, we now expect adjusted operating profit to be in the range of GBP 32 million-GBP 40 million.
Furthermore, the board has concluded that it is prudent to pause the dividend and will not be recommending a final dividend for 2024. We've also announced this morning we're conducting a strategic assessment of the components business and looking at options to maximize shareholder value. The management team and the board are committed to driving group performance towards our medium-term goals and taking the necessary actions to deliver long-term value creation. I'll now hand over to Mark for the final time to take you through the financial results.
Thank you, Eric, and good morning, everyone. Clearly, it has been a challenging year, and I will set out clearly the performance of the North American region. I also want to make sure you do get a clear understanding of the things that Warren alluded to that have gone really well in the year: the performance of the other two regions and the cash generation. Here we have set out the financial, the overall financial metrics for the business. As we did at the half year, we have shown you the numbers both including and excluding the contribution from the Albert divestment. Revenue was down by 13% on a constant currency basis, but 5% excluding the divestment. If you adjust for the impact of pass-through revenues, down 2% on a like-for-like basis.
You can see the moving parts in the bridge on the bottom right-hand side of the slide. Adjusted operating profit declined by 17% at constant currency and 13% excluding the divestment. The comparison to 2023 reflects the restatement of the comparator year that Eric just referenced, and as we highlighted in our announcement of the 25th of February. The adjusted operating profit is net of GBP 2.3 million of severance costs, split roughly 75% in the first half and 25% in the second half. Adjusted operating margins dropped by 60 basis points at constant currency to 7.1%, and excluding the divestment, we were 7.4%. Earnings per share declined by 30% at constant currency due to the reduction in operating profit, together with a small increase in interest expense due to higher interest rates and a slightly higher tax rate of 28.3%.
On a more positive note, there was a GBP 27.7 million free cash inflow with significant improvement in the second half of the year. Full-year cash conversion was 117%, supported by discipline over capital expenditure and a GBP 13 million reduction in inventory. We also received a further pension surplus refund earlier than planned. The U.K. refund net of the U.S. buyout that we discussed in the first half contributed GBP 9.4 million to free cash flow. GBP 18.3 million of free cash generation from trading performance and GBP 9.4 million from the good work we've been doing on the pension schemes. As a result, leverage has remained within our target range despite the reduction in EBITDA. As cash generation continues, we expect to see further reduction in leverage by the end of this year. Return on invested capital declined to reduce the reduction in operating profit.
Finally, as Eric has just said, the board has decided to pause the final dividend given the current broad macroeconomic uncertainty and associated business risks. Before we move on to the performance of the regions, this is the end market growth, which shows very similar themes to the half year. This slide shows the revenues and growth by market, excluding the divestment of the Albert sites from both periods. Healthcare was down 14% at constant currency. Roughly half of the reduction relates to the unwind of zero margin pass-through revenues, all affecting the Asia region. As in the first half, the balance of the reduction impacted Europe and North America, reflecting softer life sciences demand and the end of certain contracts in North America as we've prioritized certain aerospace and defense customers.
Aerospace and defense continues to grow strongly, albeit not quite at the 40% that we delivered in the first half, with the main benefit in Europe, but we did also see growth with some key customers in North America. Automation and electrification declined by 1% at constant currency, but was marginally up, excluding pass-through revenues, with Asia benefiting from growth in metro rail and semiconductor equipment demand, while Europe and Asia were both down on components demand. Finally, distribution, which is where we have continued to experience our main challenges. The 27% decline is very consistent with what we saw in the first half, with the biggest impact in the North America region. Inventory levels did reduce in 2024, but as we've said previously, we anticipate a longer recovery path and aren't assuming any revenue growth in components in 2025.
Moving on to the regional performance, as of the half year, in the appendix, you'll find the results based on the old divisional structure. Starting with a real bright spot, the European region, which built on a strong first half performance to deliver a 14% revenue increase on an organic basis and a 64% increase in adjusted operating profit, excluding the divestment. Adjusted operating margins in the prior prior year were reported at 7%, but have now improved to 14.4%, excluding divestments. 290 basis points of that improvement was a result of the divestment, but the vast majority, 440 basis points, came from organic improvement. That splits roughly one-third, related to operational leverage on growth and two-thirds from substantial efficiency improvements, evidence of Project Dynamo in action.
Clearly, North America has faced a far more difficult year with the challenging market backdrop related to the industry-wide destocking in components, along with our own execution challenges in Kansas City and Cleveland. The loss of high contribution components margins, along with factory inefficiencies and roughly GBP 2 million of severance costs taken above the line, meant the operating profit dropped by 115% on a 17% revenue reduction. This equates to around a 50% operational leverage impact, excluding the severance costs. It is these challenges, along with an updated view of recovery, that resulted in the GBP 52 million non-cash write-down of goodwill and fixed assets in this region. Order intake in year was 10% up on 2023, giving book to bill of right around one times. As a result, we are not anticipating revenue growth in North America in 2025.
This is in part linked to the deferral of some revenues in the Cleveland order book out of 2025 into 2026. That said, we do expect improvements as a result of our self-help actions. Eric will update you shortly on the status of the operational improvement activities for the Kansas City and Cleveland sites. Finally, Asia, which, like Europe, again delivered very strong profit improvement. On a constant currency basis, revenue was down by 7%, but adjusting for the divestment and the unwind of zero margin pass-through, revenues were up by 6%. Pass-through revenues reduced to GBP 5 million in 2024 and are expected to drop to nil in 2025. Adjusted operating profit increased by 26% at constant currency and 34%, excluding the divestment. Operating margins improved by 410 basis points, excluding the divestment, with a similar profile to Europe in terms of growth versus efficiency benefits.
With pass-through revenues now much lower, the impact on margins is far less pronounced, down to about 40 basis points. As we look into 2025, already well into 2025, it will be a busy year for the region as we prepare to transfer, prepare to transfer some revenues from China into Malaysia at the request of one of our customers. All of the preparation work will be done in 2025, and that will entail incurring around GBP 2 million of one-off costs in adjusted operating profit in the year. These one-off costs are expected to offset additional efficiencies we would otherwise see in the year. Finally, to end on a positive note, I've shown here our cash flow waterfall. I said at our interim results that there were the signs of structural improvement in cash flow that we've talked about previously.
This has been borne out in our second half cash performance. You may recall that in the first half, we had a working capital outflow of GBP 21 million. We said at the time we expected to get back to a modest working capital outflow for the year, supported by inventory reduction. That is exactly what has happened. We generated a GBP 15 million inventory reduction in the second half, giving us a GBP 13 million reduction in inventory for the year overall. This, combined with discipline over capital expenditure, resulted in full-year cash conversion of 117%. Exceptional cash costs were only GBP 0.6 million. In a difficult year, free cash flow from the base business was GBP 18.3 million. This was complemented by a GBP 9.4 million inflow related to pensions.
In the first half, we completed the buyout of the larger U.S. defined benefit scheme, which dealt with that exposure at a cash cost of GBP 1.8 million. In December, we received a further refund from the U.K. scheme of GBP 15 million gross or GBP 11.2 million net of tax. This follows the GBP 3.2 million net payment received in December of 2023. At the end of December, there was still a surplus on the balance sheet of GBP 7 million, which is expected to cover any remaining true-up payments to the insurer, Legal & General, and the remaining costs of the scheme through to wind up, which should happen over the next 12 months, give or take.
Net debt, excluding leases, reduced by GBP 25 million to GBP 80 million, and we ended the year with a leverage of 1.0x within our target range, and we expect to see further improvement by the end of 2025. This is my 21st and last set of results with TT. The business has changed an awful lot over the last 10 years. From a business when I started making GBP 21 million of profit with a GBP 270 million pension deficit to one which, even with its challenges, is more profitable, is cash generative, and with good opportunity for improvement, I will continue to follow TT with interest. With that, I'll hand back to Eric.
Thank you, Mark. Clearly, there's a lot of uncertainty in the world right now, but I want to explain the five key areas of focus for the group that we believe are in our control that will help us deliver margin improvement and shareholder value. We have our arms firmly around the operational issues in North America, and we need to complete the action plans that are in place to improve our performance. In April 2024, we introduced Project Dynamo and explained that our strategic focus would be on improving efficiency, growth, and innovation. This needs to continue and deliver on the stated aims of the project. At the end of 2024, we've made significant progress in achieving the benefits that will help offset cost inflation and other headwinds, with the aim of achieving the GBP 17 million benefit by the end of 2026.
TT is a cash generative business, and we have plans in place to deliver further reduction in debt and leverage in 2025. We also announced this morning a strategic assessment of the components business and are reviewing the options around that. It is important that we deliver profitable, disciplined growth that ultimately will lead to improved shareholder returns, and that is the focus of the whole team. I want to go into a little more detail on the operational issues that we've identified in Kansas and Cleveland and how we're effectively and actively addressing them. The main issue was that productivity was lower than expected and where it should be. We set out to really understand the issue and put in place clear remediation. We are pleased with the progress we're making in Kansas. The operational improvement plan is substantially complete, with the results coming through.
We are already seeing benefits from the factory layout improvements, and the strong order book provides good visibility for the year. The new management team are focused on continuous improvement throughout the year. For Cleveland, as previously noted, we have completed a deep dive to fully understand the issues, and the improvement plan is underway, but the full benefits will take longer to realize than originally anticipated, in part due to the revenue deferral that Mark had mentioned. The leadership team at the site is expected to be in full strength during this current quarter, and the key work streams such as cost reduction, a thorough overhaul of demand, production, and resource planning, and inventory control is being rolled out. There will be further improvements to come in due course from lean process learning.
As you also announced this morning, we are seeking specialist resource and capability to be deployed at pace at Cleveland to accelerate the required turnaround program. All of these measures will improve the efficiency and streamline our processes to address the issues we have identified. Based on the progress we have achieved in Kansas, I'm confident that we'll achieve the required improvements in Cleveland. Alongside fixing some of the operational issues, as I've said earlier, we're still focused on delivering a range of improvements across the business as part of our self-help program, Project Dynamo. I'm really pleased with the progress we have made. It is far-reaching and covers many areas of the business. I therefore wanted to give you a flavor of the type of activities underway across the three pillars of efficiency, growth, and innovation, picking out some of the points on the slide.
In efficiency, we are well advanced. We have taken a number of actions, such as negotiating energy contracts centrally for the U.K. We have locked in annual savings of close to GBP 1 million. In growth, we have spent time analyzing our low-margin contracts and seen significant improvements in a number of them. We either tackle our cost of production or contract pricing. There is still more to be done in this area, but great progress has been made. In innovation, we are working much closer with our customers to develop joint technology roadmaps and leverage our experienced sales and engineering teams. This will be a long-term driver for growth, but will be vital in the delivery of a sustainable business model.
However, the most pleasing part of Dynamo is the way it has been adopted across all levels of the organization and how it is driving a positive culture across the business of collaboration, and the belief that everyone can make a difference. I have seen that with my own eyes firsthand in the number of sites I have visited. Another positive impact from Dynamo is on inventory. It is another work stream where we have made good progress. As shared previously at the interims, we undertook a deep dive on inventory levels across the group and took a number of short-term mitigating actions. We have implemented a number of process improvements, as shown on this slide. This has worked really well.
Our actions in this work stream have delivered a GBP 13 million reduction in inventory levels in 2024, and we expect a further GBP 15 million cash benefit by the end of 2026, as inventory turns improve further, driven by enhancements of planning and factory loading. The actions that we are taking in North America, along with our self-help program, will make us fundamentally better business. We remain focused on driving performance towards our medium-term financial targets. Although we have indicated that we no longer expect to achieve the 12% margin target in 2026, as you can see from the bridge on the right, there remain substantial elements on the journey to 12% that are within our control. Clearly, we still require some recovery in our end markets to provide top-line growth and drive operational leverage. As we think about the outlook, we've reflected on what attracted me to TT.
The positive is that the fundamentals that are attractive still hold true, and our focus remains on operational improvement and delivery of the benefit from our efficiency and growth initiatives. The end of the destocking cycle for our components business remains difficult to predict, and the increased market uncertainty arising from the implementation of tariffs by the U.S. administration and retaliatory action by other countries increases this uncertainty. The board therefore sees a wider range of potential outcomes for 2025. We remain resolutely focused on our operational improvement plan and on improving operational efficiency and productivity. However, the current uncertainty has increased the downside risk for the group, and the board now expects adjusted operating profit to be in the range of GBP 32 million-GBP 40 million. Strong free cash flow generation is expected to continue, with leverage reducing further by the end of 2025.
Strategic assessments of components are in the very early stage, but we believe that is a route to unlocking further shareholder value. We have a clear action plan and the building blocks in place to hit our medium-term financial targets. Despite the challenges, I believe we have an improving business with good market exposure, with strong barriers to entry and long-term contracts that, with improved execution, will deliver a strong business for years to come. We're now happy to open up for questions, initially from those in the room, but also as a facility for those on the webcast to submit questions, which we'll cover after those in the room. Thank you.
Thank you, Eric. Thank you, Mark. I'm told that the younger members of the team are sitting down for the questions, and I'm standing at the podium, right? And you're gonna orchestrate questions. Do we start with the room? Yep. Obviously, if you could say who you are and where you're from for the benefit of others.
Hey guys, good morning. Yes, it's Jonathan Hurn from Barclays . I'll kick off. I just have a couple to start with. First is just in terms of obviously Project Dynamo. You're saying you're gonna continue to run it, and it's still on the plan, but you know, obviously you've had a change in management. If you look at Project Dynamo, are there things that you could do better? Are there certain things which are in that plan that you would rather not do? I mean, are we gonna get a sort of a fresh perspective in terms of the group when, obviously from the change?
Yeah, thanks, Jonathan. I think Dynamo is a really good, healthy initiative as a process and structure for driving improvement and initiatives at all levels of the business. As I mentioned earlier, I've seen that, lots of examples firsthand across sites, where people, for example, having initiative ideas boxes that are aggregated across sites, to more larger sort of centrally coordinated programs around going through contracts, low-margin contracts, looking at pricing and group-wide spending initiatives and so on. I think it's a useful tool, and it sort of gathers hearts and minds around continuous improvement. In effect, it is a continuous improvement type of process. I think we should continue to do that.
I think people should keep in mind whilst we've quantified the value of that, that is, you know, that is a building block within itself. We continue to identify additional opportunities on that. Of course, that is, it's to some extent offsetting headwinds that inevitably you get with the business, including inflationary pressures and so on. I think it's a really good internal tool to help with the mindset of continuous improvement.
The same question just for Mark, just in terms of that bridge 25 on 24, can you just talk us through the main parts in terms of the profit bridge? Obviously, we can probably see some more savings, incremental savings coming through, and just sort of other things that we should be aware of when we're kind of looking at that.
Yeah, absolutely. I mean, I think the main things to be thinking about are, from a profit perspective or from a revenue perspective, first of all, the Albert divestment, that contributed GBP 16 million to revenue in 2024, that clearly goes to zero. From that, that has de minimis profit impact. Again, from a revenue perspective, I touched on past three, there's about GBP 5 million in 2024 going to most likely nil or a very small number. And then the organic, sort of growth, you know, that will kind of rather depend on, or that's the thing that will drive the range. At the upper end of the range, you're probably looking at sort of low single digit organic growth. The midpoint is probably flat from an organic perspective.
The other moving parts, you know, we, I guess from a profit perspective, we're expecting some efficiency improvements to come through in North America from the work that we've talked about. I touched on the fact that we've got this activity in Asia moving product from China to Malaysia that has some one-off costs associated with it of the order of a couple million GBP. You know, we would normally expect the efficiency improvements in Asia, but that will offset that. I think those are really the main things. There will be some Dynamo benefit, but there's also some discretionary cost to rebuild within the numbers as well.
Okay. Those two net each other out? which is
probably, probably, yeah.
Front row.
No, I don't. [audio distortion]
So questions come in from Vanessa at Jefferies. I'll do it in three parts.
Number one, can you please give more detail around the state of your customer relationships in North America and how you are retaining these as you continue to fix operational issues? As it appears, they are being very patient. Is this because of the complexity of the work you are doing for them? Should I, should I take that one? Probably you both make a comment. It's quite an important question.
Yeah. [crosstalk] I'll answer first. No, this, this is, this, you know, this question we've been asked on a relatively consistent basis over the last sort of six, nine months. I think, I mean, and actually Vanessa alludes to the answer in her question.
I think the simple answer is that the work we've done over the last few years to establish ourselves with a customer base in high complexity products, long-term programs that require a lot of qualification, that does mean that, you know, we've got very close relationships with these customers. We've all put a lot, a lot of effort into bringing the products into the facilities. That does mean that we are retaining these customers. We retain the activity. The challenges are more that it's impacting the profitability that we're realizing from that activity. And it's not adversely impacting the customer relationships. We haven't lost any customers.
Yes. I, I very good. It's a very similar response. I mean, I think if you look at the metrics such as on-time delivery, and customer experience, it's, it's, that isn't the issue.
The issue is our, internally in terms of yield, cost of poor quality, and inventory management, which ultimately impacts our margins. We see the effect of these operational inefficiencies more than our customers. The customers are very sticky. They're very long-term contracts. Seen evidence of issues with them. We referred earlier to some contracts pushing to the right. That's due to their own circumstances, not due to any movement to the competition. I would also add we actually have a very strong commercial and marketing leadership capability, particularly in North America. As a board and a leadership team, we're very focused on net promoter score and tracking how well we are delivering for our customers.
Okay. Second question from Vanessa.
Could you please outline the percentage of US revenue manufactured in the US versus elsewhere and detail where our product is coming from, what percentage of sales is coming from each region, and how difficult is it to transfer manufacturing to more favorable locations if needs be?
I mean, to start with the second part of the question, it's absolutely that certainly within the old GMS business, it's absolutely possible to move activity around the world. A lot of what we do, for example, in Asia, is for multinational customers that has often originated initially in North America. It is possible. It just takes time. I described the fact that we're moving activity right now from China to Malaysia. We do do these things.
For component, the components businesses, and the power business, more typically that is a site-specific technology capability. I think it's more typically in the contract manufacturing business that you would see customers moving things around, and we can do it with the passage of time. On the very specific question of percentages of activity going from, I'm gonna, I might have to come back on that, on that question, I think.
Okay. Part number three, from Vanessa. She understands transferring production from China to Malaysia will take a while, and this is especially difficult in medical. How should she think about the impact on demand in the short term while this manufacturing is still residing in China? On a more general level, are we seeing any end to the medical destocking at this stage?
On the transfer, this is a planned program of work that we are doing in collaboration with our customer. We are working on all of the revenues for 2025 being delivered out of China. In the meantime, we are ramping up capability in Malaysia. That is what is driving the GBP 2 million of one-off cost that I referred to. We are gearing up to then be ready to deliver revenues out of Malaysia in 2026.
Just to pick up on the tariff point, perhaps a more sort of general response. I mean, overall, you know, we have got a portfolio with options as the question led to, which is helpful. It does give us the ability to transfer over time. China to Malaysia is one example.
Most of our contracts have Inco terms, which means that the customer effectively picks up any additional tariffs. Obviously, over time, that can raise questions about competitors versus other regions. Our exposure is relatively limited in the sense that if you look at our seven sites in the U.K., a very small proportion is exported to the U.S. Obviously, you've got a large scale within the U.S. And our two plants in Mexico do not suffer any import tariffs into the U.S. based on the latest changes. Our exposure is less than it could have been.
We've got another question in from Harry Phillips at Peel Hunt. His words in the context of the planned components exit.
Is 2024 revenue of GBP 100 million the right level to assume as a base, particularly given the GBP 10 million revenue slippage into 2026? Is it possible to give the revenue for Kansas and Cleveland and the rest of components?
In terms of the perimeter we're contemplating for components, and we've put that in the footnote in the announcements. That is Juarez, Plano in Texas, Mexicali, the components side of Mexicali, and the components side of Bedlington. In aggregate, those four P&Ls are roughly 15% of current revenues, which we said in the announcement. So GBP 100 million is high for that. It does not represent the full, what was previously the SNSC division. It is a majority of it, but it is a subset of that.
I don't think we'll give specific revenue figures for other individual sites.
Also, I don't think we want to jump to any conclusions on the strategic assessment either. All options are on the table, to use the cliché.
Yeah. Just to be clear, the GBP 10 million revenue deferral isn't in relation to the components business. It's for the Cleveland site.
Yeah.
Yeah.
Okay. I'll keep going. Joel from Invest ec asks,
Can we elaborate a little bit on the growth in A and D in the year? Is this related to a specific defense platform or customer, or is it diversified across customers and regions? On a, and I'll do the next bit of this question after you've answered that one.
The answer is, it is pretty diversified. I mean, Europe was the, is, has been the biggest beneficiary of growth in aerospace and defense.
That is across multiple sites and multiple programs across those sites. That's something that clearly has been building, you know, for some time. As I referred to, North America did see some benefit from A and D growth as well. Next part, why do you have to pick up the cost of 2 million relating to shifting production from China to Malaysia? Why shouldn't this cost be borne by the customer? That is all part of a sort of contractual negotiation. Clearly, what we do is consider what are the economics of the whole program over life. We are happy that what we're doing is, you know, the economic benefits are the right thing for TT.
That's all I've got on the webcast.
Okay.
No more questions online. No more questions in the room. Once again, thank you for all attending and have a good rest of the day.