Investor Update

May 27, 2021

Slides

Good afternoon, and welcome to Solsys' conference call on the spin off of APS. Today with me is our CEO, Greg Guillaume and our CFO, Jie Lee. For this call, we have prepared a presentation, which you can find on our homepage. As always, I want to draw your attention on the disclaimer on Slide number 2. The call contains forward looking statements, including, but not limited to, projections of financial developments, market activities, future performance Products and Solutions or planned transactions containing risks and uncertainties. These forward looking statements are subject to change based on known or unknown risks and various other factors, which could cause the actual results, performance or events to differ materially from the statements made in the call. Please also take note that on the slide, you see additional disclaimers. So read them through carefully. Having said that, I hand now over to Greg for the presentation. Thereafter, you have opportunity to ask questions. Please, Greg. Thank you, Christophe. Good afternoon, everyone. It's a pleasure for Jody and I to be with you today. I'll walk you through the presentation quickly, and then we'll take questions. As you see on Page 3, the first slide, the bar chart with the Solsys businesses over 2 centuries. Solsys has a Lee. As I said, almost 200 years in which we ventured into new businesses and set them on a path of continued profitable growth, sometimes outside Sulzer. And Solsysor really for 200 years has been an incubator for pioneering technologies. We've done that very successfully, and we believe that Applicator systems would be another chapter of the story. So today, we announced our intention to spin off our applicator systems division, which we've built into a leader for high precision delivery devices over the last 5 years and from the ground up over the last 20 some years. Lee. We believe that it's the right time as the applicator system markets have almost recovered from the pandemic and profitability already close to pre pandemic level. Let me give you an overview of the transaction on Page 4, The transaction summary page. Applicator Systems has leading positions for high precision delivery devices in all its end markets: industry, beauty and Healthcare. Today, Applicator Systems is well positioned to succeed and grow independently. Sulzer itself has made significant shifts in its core portfolio away from oil and gas towards more sustainable sectors such as water, chemicals, biopolymers and recycling. Lee. We also have a unique offering in servicing rotating equipment where we believe we are the largest and certainly the most technically advanced independent service provider. In light of this evolution, Solsara has decided to spin off the applicator systems division under the name Medmix. The spin off will technically take the form of a symmetrical split where Solsys shareholders get 1 megnix share in addition to each Solsys share that they own. Medmix will raise CHF200 1,000,000 to CHF300 1,000,000 of capital at the time of the split. This capital increase will go without subscription rights it's targeted to reinforce the capital structure to fund growth initiatives to increase trading liquidity by increasing free float and to add healthcare focused investors to Medmick's shareholder base. The transaction was unanimously approved by our Board of Directors, including the 3 T Val representatives. As T Val will not participate in the planned capital increase, Medmix free float will be increased. The listing of Medmix on the Swiss Stock Exchange and the concurrent capital increase is expected for late Q3 or early Q4 and is subject to Solsys shareholder approval at an extraordinary general meeting. Moving on to Page 5. The result of the transaction will be 2 focused leaders for attractive end markets. Solzer will be a pure play flow control specialist for water, Chemical, Industry and Energy, with global coverage of its end markets. The company will continue to shift towards water and industrial applications and pumps and focus on its renewable technologies such as biopolymer and recycling technologies in Chemtech. And digital advances will build on our unique offering Li. He'll know how to accelerate our growth in service segment. Medmix is a leader in innovative high precision delivery devices with leading market positions in dental, pharma, adhesives and beauty. In all segments, the company owns its own IP And it's not a contract development manufacturing organization. So not a CDMO. We're really an IP and innovation driven player. Medmix is active in markets that are driven by strong megatrends, allow for significant differentiation based on technology and have high entry barriers and limited price fluctuations. Medmix is increasingly shifting towards high growth health care end markets. On Slide 6, you see how Medmix is set up. The business areas, health care I'm sorry, the business area, known as health care, will include The segments Dental, Drug Delivery and Surgery. The business area Consumer and Industrials will include the segment Industry and Beauty. Common to all segments is that they have a long standing innovation track record and that their devices are setting standards in their respective markets. The customer and product aspect of each segments are managed independently of each other, but the industrial synergies and asset neutralization between the segments Lee. If I go on Slide 7, we show that Medmix has a diversified Li. To grow in end markets and a particular focus on healthcare that will be growing the fastest. Medmix is a leader in attractive and resilient niche markets. Growth is driven by strong macro trends such as aging population. It also has the advantage of operating in markets where there's no large scale competitor. The markets can be qualified as niches to the Lee. Drug delivery can be seen as a niche and they are protected by high entry barriers based on innovation and IP. Medmix, therefore, has a high share of repeat business. Medmix legacy of standard setting innovation, Its recognition as a technology and quality leader in all segments and a growing base of long standing customer relationships make the business a perfect platform for growth. Medmix expects sales of about CHF450 1,000,000 in 2021 and high single digit growth thereafter. Adjusted EBITDA margin is targeted at around 25% in 2021 And at a higher than 26% in 2022. So 25% EBITDA adjusted in 2021, above 26% in 2022, which is really pre pandemic Lee. Midterm objective is to increase the EBITDA margin to a level of around 30% as health care will contribute more and more to revenue, ultimately reaching a level of more than 50% of sales. If I move to Page 8, I'd like to talk about Solsys. Our core business in Solsysor will continue its journey of top line growth and profitability improvements. It will accelerate its growth through its focus on sustainable sectors such as water and pumps and renewable technologies in Chemtech. And our aftermarket revenues, which already represent 50% of Solsysr, will be boosted by our sector leadership in digital and additive manufacturing. The growing service revenue, the shift towards sustainable sectors and new products in the mix will lead to higher margins. Li. For Solsysor, excluding net mix, so post spin, we are targeting an operational EBITA Margin of 9% in 2021 on sales of $3,000,000,000 Without Solsys in 2021, without APS, It's 25% bigger in terms of volumes and 30% bigger in terms of profits than Sulzer was in 2016 with APS. So really, you have to keep in mind that the core of Solzer has grown and has grown profitably over that period. It isn't that we've just invested in Applicator Systems. We've invested in all our businesses. And in the core Fluid Control businesses, it is really Clear that the margin improvement has been driven by operational excellence and the interesting assets that we've added along the way. Midterm, we see operational profitability in the range of 10% to 11% for Solsys. We will continue to look for small to midsize acquisitions in complementary markets with a focus on technology and service to make the offering to our customers even stronger. If I go Page 9, you'll find an indicative timetable of the transaction. We'll give you more insights into Medmix and into Solsys' core Li. In the Capital Markets Day that we've planned for June 15th. Once again, we'll discuss both MEDMIX and Solsys. And we'll publish our H1 results on July 22. We plan an extraordinary shareholder meeting in late Q2, so late in Q2, And the spin off and capital increase as well as the 1st trading day of Medmix at 6 shortly thereafter. I think it's what I said might be confusing. The extraordinary shareholder meeting will call the shareholder meeting in August. And the shareholder meeting will happen in late Q3. I don't know why I said Q2, but I said Q2 and it's Q3. And the first trading dividend that makes is shortly thereafter. So it means end of Q3, beginning of Q4. Hopefully, I didn't confuse you guys. I just got carried away. Key takeaways on Page 10. Solzer will be split into 2 companies with focus on different end markets. Solzer retains its core industrial businesses, While applicator system is spun off and will be listed separately as Medmix on the Swiss stock market. Solr will be focused as a pure play industrial flow control company. MedVix will accelerate its growth in Healthcare and further develop its Industrial and Consumer segments. We believe that the transaction can leverage the full potential of both businesses and provide an attractive value creation opportunity for Solsys shareholders. The capital increase of MedVix of $200,000,000 to $300,000,000 will happen simultaneously with a listing. And they'll reinforce the Medmix capital structure, it'll fund growth initiatives, and it will increase free float, which we think is important. As I said, Capital Markets Day on June 15, we'll give you more details on both companies, their end markets and their strategy. On those words, Jill and I are happy to open this up for questions. Thank you. The first question comes from Aurelio Calderon from Morgan Stanley. Please go ahead, sir. Hi. Good afternoon, Greg, Jill. Thanks for taking my questions. I've got 2, if I may, please. So First question is, if you ever considered selling the business instead of spinning it off to investors? And I guess, if that's the case, why have you decided to go down the route of spinning it off? And second question is around kind of your assumptions for MedMex and your Lee. Medium term growth assumption of high single digit. If you could break that down into what you expect of health care because you mentioned that you expect Lee. To be more or less 60% or more than 60% of the met mix business in the future, and I guess that's a faster growing Lee. Segment than the Consumer and Industrial business. So any indication around that would be helpful? Sure. Okay, Aurelio, thank you. The first question, did we consider selling the business? We never considered seriously selling the business for really two reasons. The first one is Sulzer doesn't need the cash. So the idea of selling the business and Having massive capital entering Solsysor is it's not necessary for Solsysor's development. We have a strong balance sheet. We don't need the additional capital at this point. And we felt that, that was in the right mood for that reason. The second one, which is related to some extent, is that We believe that the value creation in Medmix is really only getting started. And we want to give all investors the opportunity to continue the adventure and to take part in that value creation. And from that perspective, we think that Spoon is a much better outcome for investors. They get to have the Soleser portfolio to decide what part they want to focus on. And both businesses have a renewed focus and the ability to fund their own development in a way that's easier to understand for investors. Your second question on health care and the growth of health care for the event mix business, I mean, we'll go through that In a lot of detail at the Capital Markets Day on June 15, Girt and the team will actually speak to you guys directly. What I would point to is If you look at the acquisition that we made of Hasselmeyer, I think we announced at the time that we think we can triple the size of the business roughly in the next 5 years. Hasselmeyer is a really interesting portfolio. It's got good products. It's got the D Flex range, which Had only recently been introduced and is only at the beginning of its commercial development, and we have a few other interesting things that we'll come out with in the near future. So that's what's going to drive it. Anything we can do also in our dental business will also push because That's a very solid business in which there is also still a lot of room to play. You'll see at the Capital Markets Day that we're very present in certain segments in dental, but a lot less than some others. And we believe that we have opportunities beyond the markets that we're operating in today. But Li. For a more analytical answer, I'll push it to the Capital Markets Day. Okay. That's helpful. Li. If I may, I can squeeze one more question. Sure, that is. Is that okay? Yes. So I guess on the kind of Remainco and Solter, I guess, Lee. You have a midterm bargain now of 10% to 11% margin, but you don't have a growth target. Lee. Is that for a specific reason? Or is it just because we are in that process to shrink the energy pumps business And they keep growing the Water business and the parts of the portfolio that have more growth ahead. No, not really. I mean, there's no That wasn't the thinking. Really, we prepared today's communication focused on med mix because that was Lee. The new business, the new instrument that we wanted to make sure you guys understood well, our thinking has always been that we will be more explicit Also on Solter, we had the Capital Markets Day on June 15, and we just didn't want to preempt it. It's very much business as usual for the rest of Solter. And Lee. We'll explain the growth that we anticipate in our water business. I mean that the water market, for example, for pumps is growing 4% to 6% a year. Industry, we have a wide range of segments that all have growth rates that we can detail and We'll allow you guys to do your kind of the sum of the part analysis. You're right. I mean, energy is it has It's contracted. The business has gotten smaller, but that was the objective. And there's a moment where it'll start growing again because We do see that the market will start picking up sometime in the second half of the year. But I think that we have to break these things apart so that you guys don't get confused by the JD. Fluctuation of energy, which now is a small part of our pumps business and that you have the detail on the other segments. As you recall, water is the largest part our pumps business today, not energy. But once again, we'll break all of that down at the Capital Markets Day. Our aim was not to keep you in suspense. It was just to keep the spotlight today on MEDNIX. Perfect. That makes sense. I Li. I guess I'll go back to the queue and speak on the 15th of June then. Thanks very much. Thanks Aurelio. The next question comes from Patrick Rafaisz from UBS. Lee. Thanks for taking my question. I have 2, please. One is Lee. The use of tons of the performance that happened in the increase for headwinds. I mean, you talked about the growth opportunities here, but can you give us a bit more color on how much is earmarked for strengthening balance Li. The comments is organic growth, not just for M and A related growth. And then secondly, In terms of rental costs and one offs associated with the separation, can you give us some rough guidance on what you're expecting? Okay. Thank you, Patrick. I'll start with the second question and I'll hand the first one over to Jill. The second question is Lee. We don't expect the separation costs to be I guess, Li. What I'd like to address is the additional cost linked to the business is being separated. I think that might have been your Li. And we don't expect that to be significant because today, Medmix Lee. Heater Systems is really operating pretty much as a stand alone business. They do benefit from things like the legal function of Lee. And the treasury function of Solsys and a few other things as well as the oversight that Jill and I provide, Many of these services, treasury and legal, for example, will continue to provide for a transition period As we take the time to calibrate how big they should be in med mix, so I don't expect that in the 1st 18 months, you'll have much of an impact either on Sulzer or on Medmix because that service agreement will be in place. Certainly, over time, Medmix will have its own resources, but that will probably involve some transfer of people from Solsberg to Medmix. We're just taking the time to do that in a thoughtful manner without having to hurry. I mean, there's some one off costs associated to legal separation. Obviously, Lee. The support we're getting on the split and the capital increase and we'll also break that down for you guys if you want. I think most of it will be against equity. Jill? The bulk of it well, the part that's related to share capital increase will be going to equity. And if you are thinking about modeling on the one offs, then I think you can see about RMB6 1,000,000,000 to RMB8 1,000,000, of course, Li. Going to P and L in the combined form, so more on the net mix side and you can plan like around $5,000,000 to $6,000,000 on net mix Li from that perspective. And in terms of the support costs, frankly, I think we are fairly lean. So It's not a big amount of central cost that we have and it's actually less than RMB10 1,000,000 that we're talking about Of the support cost that is common between the two units and as Greg rightly pointed out, this will be something that goes through Lee. Period of 18 to 24 months whereby both companies will have a very small phase in and we don't expect that to be a drag on anybody's Li. Use of funds, Jill? Yes. So on the use of funds, dollars 2,000,000 to $300,000,000 as we mentioned, we have in mind the three objectives, which is to Reinforce the capital structure, fund growth initiatives and increased free flow. And they are really quite connected. But Let me walk you through the thinking we have around the capital structure. If you look to Solsys' pre spin, We have a net debt to EBITDA of about 2x if you exclude the Lee. Tvelo's cash and I know that most of you calculate with Tvelo's cash excluded because if you include that then it's around 1.3x and 0.4x And if we exclude that, we are at 2 times. So when you take a scenario of $300,000,000 of capital increase, essentially it brings the Combined company pre split to a net debt to EBITDA of around 1.4x. Li. We expect net mix after splitting and capital increase to have a net debt to EBITDA of one time that would make it comparable with peers In the industry and it's also giving it a solid basis to finance its growth both organically as well as Li. Other thoughts on that may come in the future. And when you do the math of pre split minus What I just mentioned of net mix with it one time, then you end up with the rest of solar having around 1.5 times. And I think that's something you can use for your modeling. And I think with this capital structure, both companies are on Very solid basis and good comparable against peers in the industry. And thank you, Jill. And I would Lee. We have an active M and A pipeline for Medmix at All Science. We continue to look for opportunities to strengthen our businesses, particularly in healthcare. And we certainly don't want to have money burning our pocket, but we want to make sure that we're able to execute our strategy. We answer your question, Patrick? Li. Moderator, are you still on the call? Yes. I suppose Mr. Patrick disconnected his line. Okay. I'll take the next question. Okay. The next question comes from Vera Bonte from Generali. Please go ahead. Yes. I guess one is a follow-up question for Joe. Could you explain how you're at the 1.5x net debt to your EBITDA, excluding TWAIL Post transaction given that you're coming from 2.1 times as of the end of last year. And the second question regards The potential bond buybacks, I guess, I read a note on the demerger plan that you may be required to buy back the bonds It's the bondholders' request. So given that you have €1,700,000,000 of bonds outstanding, I was wondering if you have any backup funding Li. What is or if you don't expect this to happen? No. We don't expect at all to have any bond buybacks to do. We believe that The conditions for bondholders, given the legal nature of the symmetrical split, fully protect the bondholders. And we have no anticipation that we'll have to buy back in bonds. Jill? Yes, that's right. And the financial liabilities that we have today remain in Lee. So there's actually no change of the entity as well from that perspective. Now, Vera, on your question regarding, I think you were taking the balance Li. From last year and naturally that is a year where we have Li. The pandemic effect and we also had restructuring last year, which we have done on the energy Li. So when I speak about the 1x and 1.5x, I'm already giving you a sense of Where we are seeing in 2021 and obviously we see ourselves trading well. We have also alluded to that in our Q1 Li. Release order release that we are significantly up on profitability this year. Okay. So this is a forward looking ratio? Li. Perfect. Understood. And then a technical question on the ratings. I mean, you currently have 3 ratings. Li. The Pedersen 1 is sub investment grade. And then you have 2 Swiss bank ratings, of which one may be restricted because They're acting as advisors for this transaction. For the SBI rules, would the restricted ratings still Count or do you risk leaving the SCI? Well, actually, I think When you look to the rating, Zekta Bay and Credit Suisse, which add that they are still putting us on investment grade. Li. So 2 out of 3 have put us on that. We have actually also had discussions with Fethafen. And I think once more for Fethafen, they have referred to the balance sheet that was coming out of 2020. At the same time, I think we had to clarify Some of the considerations that they took in terms of the item within the balance sheet. And I think when we come out with our H1, we would be able to also show the state of our balance sheet in this year and Li. Once again, I see that that should have no bearing on the investment grade rating because it's just A point in time that the Delfin has done this. Yes, I discussed it with Christoph Lardner already, and I understand the rationale behind. I was just wondering that I may investigate the 6 stock exchange If they still count the restricted rating by Credit Suisse because then we won't be on the safe side presumably. Lee. We think we will be anyway because as Jill said, we think the Fetifin analysis was done at a very unfavorable point, which was Right when our balance sheet was reflecting the impact of the pandemic. We think that as we come out with our numbers Lee, at the mid year in July that this will all fall into place. So we're not concerned. Jill? Yes, right. And for example, when I say about the balance sheet item, We have a financial asset, reflected as financial assets, but essentially they are bank deposits that are More than 3 months, less than 12 months. And you all know that in the Suez market, we have also to think about how we can Li. Not be subject to the negative interest with the good liquidity that we have on our balance sheet. And in the calculation of Fadelphine, they have Li. We excluded that, and they have not treated it as equivalent to the cash and cash equivalent item. Okay. So look, We don't want to do sort of a debt rating course on this call. What we're saying is that We respect the opinion of Fetifin. We've engaged with them to explain why there's Different ways of looking at things and the timing of their analysis was probably unfavorable. And we think this will fall into place as we come out with our H1 numbers JD. And as we they reflect the good discussion that we had with them. So we don't think there's an issue on this side. Lee. The next question comes from Dominik Felgus from NTT. Please go ahead. Yes, hello. Well, does this med mix really have Critical size to survive on its own? Or is it rather likely to end up then sooner or later? We saw it with Lee. Maybe also a bit of a health conglomerate like Danaher or 3 ms or whatever. And what we know about The competitors of Sult in its core business and the pumps business. But what about net mix? Lee. I mean, more what's I mean, how fragmented is this market there? Maybe who which are the main competitors? Li. Hi, Dominik. In terms of Medmix as a target, We don't think so. I mean, we think that, first of all, this is an attractive business that is It will generate $120,000,000 $130,000,000 of EBITDA. It's a growing business. Lee. It's certainly able to sustain its development and to finance itself and to grow successfully. So we're not worried about it as as a standalone entity. Otherwise, we wouldn't spin it off. We've got no particular pressure to spin it off. We just think it's the right time for them and for Solsysr. But it's a very solid business and very resilient. The pandemic's been very an unusual event in the sense that it Closed dentists and retailers, but that's kind of a one off. In any other situation, the businesses that you have in Medmix are businesses that are very solid. Is it an attractive business? Yes, it's an attractive business. And therefore, It has an attractive investment case, but I wouldn't comment on any speculation about a takeover. And I'd also remind everyone that Lee. There's an initial dilution where we do a capital increase that doesn't have preferential rights, which means that If you look at T Val, they're going to go down in the capital structure, but they remain with a significant stake, which means that Until they're further diluted, there's really nothing that anybody can do to Medmix. That Medmix doesn't want it to be done to I think that pretty much guarantees that the business has a little bit of runway in front of it to executed strategy, and I think I'll execute the strategy really successfully. Did I answer your question, Tommy? TK, one more. Apart from the competition, maybe you could elaborate a bit on who is what are the competitors in this market or What market share it is. And I mean, yes, I mean, we've heard in the past that it is a Li. It's a bit of a problem for you to have Mr. Wechselberg still as your main shareholder, but Lee. This is a bit of a can be a deterrent to certain investors. I mean, Is this now going to improve, at least in the case of MEDMIX? Well, to the second part of your question, as Part of the capital increase given the fact that T Val is not taking part in the capital increase because of restrictions that they have, It means that naturally they'll be diluted and that dilution will make them a smaller player in the capital structure. And the fact that they're supporting this transaction also tells you that they're okay with being a smaller player Lee, in the governance. So I don't think it's going to be an issue. I think on the contrary, the fact that we're able to spin off to announce that we have an unanimous board vote to support a spin off, including the T3 T Well representatives, despite the They're going to be diluted tells you that they have at heart the best interest of the business and that they'll be what they've been for us Certainly, in the 5 years that I've been here, which is fairly passive but supportive shareholder. In terms of competitors for MEDMEX, We'll have a detailed analysis segment per segment in the Capital Markets Day on June 15. But The companies you should think about are a company called Nordson, Nordson, in the U. S. They compete with us on multiple segments. You've got Ipsomed that competes with us on the drug delivery device segment, competes with Hasselmeier. You've got Aptar Group that competes with us on the beauty side of things. So those are just Li. Three direct competitors on either 1 or multiple segments that I would point to. But if you want a more detailed analysis, We'll make that available on June 15. Or if you have questions before that, Christophe is happy to field calls and to answer all the Dominico, I'm sorry, happy to field calls and answer all these questions. Yes, sure. The Aptor Group, what was the name of the last Li. Aptar, Aptar, Aptar Group. Thank you. Aptar. It's another U. S. Company that it's U. S. And European, they're really global, and they compete with us on multiple segments, particularly the beauty one. But They do all sorts of delivery devices similarly to what we do. And Nordson, the first one, I think, NOR, DSON, Also a U. S. Company, and they compete with us on multiple segments, including the industrial segment. Ipsomed, I don't have to spell it to anybody. You guys all know that. And once again, if you want more or an analysis per segment, Domenico can share all of that with you guys at any time. Thank you. Thank you. The next question comes from Christian Arnold from Stifel Li. Yes. Good afternoon. Finally, I do have an oil and gas question. Sorry if I pass the mic. No, it's okay. Lee. But nevertheless, I mean, you're writing that you expect accelerated growth of services segment, the services segment. Last year, looking at the sales fleet, I mean, there was still, let's say, 40% exposure to toil and gas. And we can reach these days everywhere that investments will be lower in this end market. Li. And also, you have reduced your pumps equipment business in that end market. And I wonder, how do you want to accelerate growth in your service Lee. Yes. Look, it's a very fair question, and I'm happy to take an oil and gas question. Our Service business is multi market. It covers pumps and other equipment, ours and other people's in a bunch of different markets. If you have a look at our performance last year, what was striking about our service business is in order intake, they're really a reflection of the market. Service at Sulzer was up 1%. It wasn't down. So what it tells you is despite a market where some customers were cutting investments, where some sites were not accessible, where it was JD. Where some sites were not accessible, where it was difficult to send service people to location, We still managed to grow 1% in a market like that, which tells you that business is extremely resilient. Our service business, if you look at the last 4 years, 5 years, I think actually, our service business has been every year between 13.8% and 13 point JD. And 14.1 percent of up EBITDA or of operational profitability. And a good year for that business is anywhere between 5 Lee. 7% growth and a bad year is 1% growth. So last year without the pandemic, we certainly would have been on the higher end of the range. This year, we'll recover because the market is reopening up. And even in oil and gas, we see customers that are reinitiating Lee. And then the final two points that I would make is the way that we grow is, 1, we regain some of our installed base. Solsysor has 200 years of installed base. And over periods of our history, we've done a various well, a more or less good job of retaining that installed And our initiatives over the last few years have been how to reclaim that installed base and make sure that any soldier pump out there is serviced by soldier. And we still have ways to go on that. That's the first point. The second point is we increasingly do something that I think Sulzer does much better than anybody else. We do these retrofits where essentially we take somebody else's pump. We keep the casing. So we keep the outside shelf Shell, I'm sorry, the outer shell, which is the big metal stuff that you see when you see a pump. And we changed everything inside. We changed the impeller. We changed the hydraulics. We changed the seals. We changed a bunch of things. And we actually make it a solesor pump. So if you look at our business from last few years in service, we've gone from having almost no third party work in pump service to Having something like I think we're close to we're around $100,000,000 of service on other people's pumps. And we do that better than other people because we've been doing it on turbines And compressors for decades. Our gas turbine service business is really a third party service business where we reverse Engineer and improve GE Siemens gas turbines or other people's turbines. And if you can do that on a gas turbine, it's actually pretty straightforward to do on a pump Lee. Because the pump is much simpler than a gas turbine. So we can grow even in a market that is not growing. We've shown that last year. The market contracted very significantly in service. I mean, all you have to do is have a look at FlowServer, some of the other competitors that we have, have a look at their service revenue. You'll see that they contracted and we didn't. And when the market is Normal to good. We should be growing faster than 5%, as I said, 5% to 7% in the service business. Hopefully, I answered your question. Yes, very helpful. Thank you very much. There are no more questions on the call. Maybe last chance to have one. Otherwise, we will just wrap up and close the call. Lee. No more questions. All right. So I'll wrap up. It's a very exciting day For us at Solzer and whether it's the Solzer people, part of the Flow Control business or the applicator systems, med mix people, I think everybody is energized by today's decision. We think that this is a great way to focus these businesses and to accelerate growth And to also become more readable to investors in terms of what we do, what we stand for and what the value drivers are, Lee. We believe that will be a positive story going forward. And what we have to convince you of it because it's a significant change, but it's a significant change that, as you know, have been part of our strategy for a number of years. I've Talked about it before, and today it happens. We've chosen a mechanism to do it, which is a very transparent mechanism with a consultation period with a super majority shareholder vote of 2 thirds. And this transaction essentially will be executed if we have shareholder support, as we hope so, at the end of September. So we have a lot of time to Get ready for it and to educate the market, to answer questions and to make everybody comfortable that this is going to be creating value. We thank you for your time today. We remind you that on June 15, we have a pretty exhaustive Capital Markets Day, Exhausted to the point where we probably have to take a few slides out because it's on the heavy side, but we will answer all these questions Lee. In as much detail as we can in order to make you believers that not only is Medmixed an exciting business, But that Solsys itself has never been stronger and has exciting days ahead of it. On those words, I thank you for your time today and we'll talk to you soon.