Thanks very much. Good morning, everybody, and thanks for joining us today.

So hopefully, you've all had a chance to listen to our results presentation, which we published earlier this morning, and I'll just cover a very few highlights before we open the call up for questions. So in summary, we delivered a strong first half, building on our excellent operational and financial performance over recent years with the growth in the half underscoring the strength of our global portfolio as a competitive differentiator.

And so far this year, we've assisted our customers in delivering urgent mission-critical capability. We sustained good operational performance, cash flow generation and contracting discipline.

We've secured GBP 21.1 billion of orders in the first half of the year to set a new record order backlog of GBP 66 billion. We've increased sales and profit and effectively managed our supply chain and cost base in an inflationary environment.

We've invested in our people, R&D and capital expenditure to underpin our growth outlook. We progressed our ESG agenda and engagement across our stakeholders, and we've accelerated our 3-year share buyback program.

And we've also progressed the long-term strategic pillars of the AUKUS Trilateral submarine and technology agreement and the GCAP program in line with important multinational partner agreements now in place. And all of that, while reflecting this year's performance to date and our confidence in the outlook for the group, the Board has declared an interim dividend of 11.5p, representing an 11% half year increase.

And we've announced a further 3-year share buyback of up to GBP 1.5 billion to roll on after completion of the current program, and we've increased all our key guidance metrics for the year. So the business is performing very well, and I see tremendous potential in the coming years as we look to deliver for our customers and position ourselves as a value compounding stock from an investor perspective.

And with that, Brad, Tom and myself are happy to take your questions.

So I think probably start with a question from Rob Stallard of Vertical Research Partners. Robert?

A couple of questions for me. So Charles, you mentioned managing supply chain and costs in the first half.

Other defense companies have been talking about this as well and the margin pressure some of them have experienced on fixed-price contracts in the period. I was wondering if you could comment on the sort of scale if you've been seeing this sort of headwind as well or whether it's starting to improve or alleviate moving forward from here?

And then secondly, with regard to the fresh buyback tranche, does this indicate that you have limited appetite for major M&A at this stage?

So I mean, on supply chains, obviously, that's been a bit of a theme post pandemic and affecting certain areas, electronics and the volume electronics supply more on the ES side. But I think what you've seen from us is we've actually managed it quite effectively.

We haven't been immune from it. And I think, generally speaking, the situation in supply chain is starting to improve.

There are still longer lead times than we'd like to see in certain parts. And there are certain areas of the business where the components are now less of an issue and it's more some of our suppliers on the platforms that roll those components up into equipment.

That -- we're starting to see some of that from a year ago play through into that. But I mean, broadly speaking, we've been able to manage our way through it, and we continue to do that.

We just got better at managing the situation. But I do think that over the next 12 to 18 months, we'll see continued improvements there.

I think when it comes to fixed price and fixed price development, we've obviously been quite careful over the last several years as to the kind of contracts that we've taken and being quite disciplined around that. I mean, largely through some of the challenges of the past.

And we know through some of these fixed-price development contracts that they're hard enough to deliver in a benign inflationary environment. And basically all bets are off when you're in an exceptional inflationary environment.

And what I'd love to say that we saw the exceptional inflation environment coming -- I mean none of us did, but the discipline that we've taken around fixed price contracts and taking only where we were able to really understand and quantify the risk and back it off into our supply chain. That discipline has served us very well in these exceptional inflation conditions that we've seen over the last couple of years.

When it comes to the buyback that you mentioned. I mean just to take a step back, I mean, it's the strong performance of the business that allows us to continue with our balanced capital allocation policy, which, as you know very well, is invest in the business.

invest in our people, invest in facilities and the self-funded R&D, all of which have seen increases in the period. At the same time, give us capacity to do M&A of the kind of areas of interest that I'm happy to go into that we've spoken about in the past and do the increased shareholder returns in the form of increasing dividend in line with earnings and the buyback program that we announced last year and now continues as we look forward.

And the buyback program that we've announced today or the roll-on of the program with an additional 1.5 over 3 years, we've certainly announced that in the context and keeping in mind any M&A activities that we see on our horizon for the future. So from our perspective, it becomes -- and then invest in the business allow you optionality for M&A options of the can that we are interested in.

And specifically, when it comes to M&A, I just want to be absolutely clear that we have been a disciplined buyer we will be a disciplined buyer looking forward. But we do have a pipeline of M&A opportunities, but the buyback has been -- the approval from the Board has been done in the context M&A opportunities that we see in the future.

This is Ian Douglas-Pennant at UBS. I think I was going to ask another question around what type of acquisition you might look at, but maybe I'll leave that for other people and I'll ask about Dreadnought.

The pulling forward of the revenue recognition that we saw this half year, when do you expect the corresponding weakness to occur? Is this -- we should expect a weak H2?

Or is this demand pull forward spread over a few years? Secondly -- sorry, go ahead.

No, no, no. I'll let you ask your questions, sorry.

I've obviously triggered your emotion here, so I apologize.

No, not so. I thought that was the question.

I was about to go into answer mode, but I'm happy to wait for the questions.

Sure. I'll go on to ship.

There's been a material improvement in ship repair, at least a surprise versus my expectations. Could you talk about the demand outlook here?

Should we just assume that this is back to normal demand situation and what it looks like going forward?

Yes. I mean on Dreadnought -- I mean you'll be aware that the -- when the U.K.

government announced earlier in the year, the extra GBP 5 billion for defense is part of the spring statement. GBP 3 billion was for submarine-related activities and GBP 2 billion for Ukraine resupply.

When it came into the submarine-related activities, what it allowed us to do is start placing long lead items, protect schedule and costs for the customer and some of that came through. I mean Dreadnought, as you know, is a ascertain cost program, traded at relatively low margins but is a long-term, long-cycle part of the business.

So what we've done, as you can see in the sales guidance is we've said for the full year, we've upped our sales guidance from 3% to 5% to 5% to 7%. So we're not expecting the sense that whole 11% to come through as a full year.

So there is a little bit of pull through. But I would suggest that with programs of the submarine size and with Arcus and some of the big things coming through, the submarines is actually well set for steady growth for actual several years ahead of us.

Is there anything you want to add to that, Brad?

Yes, we do think it's stabilized. I think the acceleration was largely in H1 event and we think it's to stabilize for the second half of the year for Dreadnought specifically, but overall, its program submarines should grow across the medium term.

And then on ship repair, I think given that we've got Tom online, who's close to that with us. I mean we would agree it is definitely an improving business, but I'll maybe pull Tom in to give you some more details on that.

Well, thank you, Charles. Yes, Ian, I think if we look back on last year, you'll recall, we talked about some shifts in the Navy's priority as they were moving vessels around in order to respond to the situation in Ukraine and that, that resulted in some delays.

And so what you're seeing is, as you put it, a bit more of a return to normal as the ships come back into port and go through their maintenance process. And so we expect to see that continue.

That said, we're also focusing on margin improvement there. We had, again, reported in previous years.

We had a couple of more difficult ships there. I think the Navy saw it the same way, and that put some pressure on margins in the business that those ships are largely behind us now.

And so again, we expect to see return to normal in that dimension as well. Thanks for the question.

Can I ask one more about a different business line, if that's okay. The Hagglunds business was very strong, again, versus my expectations in the half year as demand seemed to come through earlier than expected.

Is this the start of Slovakian CV90 deliveries? Or is it just a broad-based increase in supply side or demand side?

Or again, just how should we think about that?

Yes. Tom, why don't you carry on with that.

Yes. Well, actually, in these businesses, the CV90 deliveries will not -- actually won't start for some time yet.

We are in the ramp up to those deliveries. We also -- the backlog in that business has grown significantly between Slovakia, the check order and the win in the U.S.

on the cold weather altering vehicle. And so we expect to see those play out in the coming years.

I'll take ASP up there and ask just given the after the balance sheet and the extension of the buyback, what level of leverage you'd be comfortable moving up to if the right acquisition target became available? That's the first one.

And secondly, the 3-year rolling cash guidance, up GBP 500 million, but the FY '23 guidance is up to GBP 600 million. So anything to read into there?

And if I can ask one more, please. Just in August.

Any views on some recent resistance in the U.S. providing ITAR exemptions to the U.K.

and Australia and where you think that could impact out on the program.

Maybe the first 2, I'll hand over to Brad, too.

Yes. So Ross, yes, look, we don't give guidance on target leverage or anything like that, as you know.

But you've seen us continue to delever across the last several years. And together with that, you've seen the pension go from a [indiscernible] into a surplus.

Our net debt at GBP 1.8 billion against the context of EBITDAs that are north of GBP 3 billion, just, I think, underlines the strength of the balance sheet. So everything that we do in terms of capital allocation decisions, disciplined M&A, share buybacks, all of those decisions we make with a clear trend line around investment-grade credit.

And that's just how we look at leverage. And as you can kind of do your own math, you can see that we've got plenty of strength in the balance sheet to do the things that we want to do.

So I'm not going to give you a target on leverage, but I think you can see that we're probably stronger now than we've ever been with our balance sheet. And what was your question on free cash?

I'm not quite sure I caught the question there.

Yes. So the FY '23 guidance is up GBP 600 million, but the 3-year rolling cash guides, which includes FY '23 are only up to GBP 500 million.

So I'm just wondering if there's anything through that.

Well, our 3-year guidance are greater than sort of targets. So over 3 years, a lot can happen.

So I think that's just in the noise levels. But we just want to point out that when we started giving those guys back in 2019, we've exceeded every single 1 of those 3-year guides.

And now with the guidance that we've given today for in-year cash flow, a lot of that beat is coming from advances that we don't typically guide for. So as you know, that's just an element of our business that is very hard to predict.

And so those 3-year guides help us to iron out some of that volatility and noise. And I think it's a better way to look at our overall cash generation.

You're always going to have variability in year. But from the buildup of our 3-year guys, you can see that the business is just generating consistently higher levels of cash, which we're very pleased about.

And then just very briefly on AUKUS. I mean, I think there's been good momentum since the announcement between the 3 nations on the various enablers that will need to happen to make this multi decade program and the success that we all know it can be, and in fact, needs to be.

And I would suggest, again, that the footprint of our business across the 3 nations means that we are well positioned to help and at least highlight to national governments, the various enablers that do need to be in place to make sure that we can, as a defense community, deliver on the aspirations.

I'll ask the program-specific questions. I guess, first, on your U.K.

munitions business, I think that generated about GBP 300 million of sales last year. You had the order recently for up to GBP 400 million and the MOD is talking about additional GBP 2.5 billion through the upcoming decades.

So how significant can this business be for you over the upcoming decade? And do you have the capacity to meet that demand?

And the second one is on Hunter Class Frigate. Given Australia's ongoing review of the DB surface fleet needs, what do you think that means for the prospect of this program?

And given the delays on the program, does this have any impact on your margins? Or is this fully a cost-plus contract?

I mean U.K. munitions, as you saw, I mean, we got the contract last month for the step-up on [indiscernible] and some other various pieces.

We've been building the capacity. I mean, that is a business that will grow over time.

It will take time to build that capacity and for that to play in. So I think I'm not going to give a long-term guidance on it, but I do believe that there's good momentum in the business.

As we see in other parts of the business where you have ammunition-related activities like our MBDA business. On the Hunter Class Frigate well, yes, you've alluded to the review that's going on.

And I think this is in the light of the August announcement, what is the requirement of ASW frigates given the additional and now more capable attack subs that will be going into the mix in the next couple of decades in Australia. And -- but I've also been reassured, as you'll have seen in the announcement, down in Australia about the continuous shipbuilding in Osborne.

So the question becomes if the number of ASW specific holes is changed from the original aspiration of 9, what follows? And how can we assist with those?

But I mean, let's be clear, that those are decisions that will play out into the -- really into the second half of the 2030s. So that's quite some way down the track.

And you spoke about Hunter Class Frigate. I mean at the moment, it is really on a sort of ascertain cost basis, early development phases.

There was a delay that was really a knock-on from the first year of the pandemic in the U.K. on the Type 26 where we had to readjust our shipyards to be able to work through a pandemic, get people back to work safely.

I mean that did have an initial impact on the productivity of the program. That, combined with some of the challenges, which are well known to everyone on this call around the gearbox and the fact that the gearbox being a key part of the capability, we had a lot of work to do to make sure it met the requirements and that took longer than expected.

That combination had about a year's impact on the first in class U.K. Type 26 program.

So this was all played out in 2020. And there was a knock-on effect.

I mean since then, I might say that the U.K. program has been stable.

And once that immediate knock-on was taken into account on the Hunter-Class program, that program has been stable, too. And in fact, in my last visit down to Osborne, I was delighted to see the progress on the program.

So good momentum down there in Australia.

I have three quick ones. The first one is, could you comment on the order intake in H2?

What will be the main moving parts in the second part of the year? Then on the guidance upgrade, what are the moving parts at the divisional level?

I mean, in terms of sales and EBIT in particular? And the last question on M&A.

Why is the transformational deal in your definition? I'm asking because some of your peers have changed their definitions or the scope of their acquisition.

So just wanted to have an update on your definition of a transformational deal.

On orders, I mean there's still quite a lot to go for in the second half. I'm I wouldn't be necessarily drawing on all of them.

But I mean, it could be circa another up to another GBP10 billion probably in the second half. I mean, as you know, in our business, some of them might slip into next year.

But I mean what we are seeing is another strong year of order intake with a book-to-bill of significantly in excess of one. I mean there's further orders potentially expected on submarines in the second half.

There's more to come on MBDA. I think on combat vehicles, potentially the full rate production on AMPV in the second half.

So there's quite a lot coming through. And then, yes, and whilst it's a lot of small order flow comes through, we're expecting continued momentum there.

So I think there's definitely more to go for in the second half. But some of those big ones, as you know, in the nature of our business, if it doesn't happen in the second half, it will be first half of next year.

So I'd be a little careful about being too specific on numbers. but still plenty of momentum out there in the business.

You wanted a bit more granularity on the segment by segment. I was going to maybe you and Brad or Tom to on the ink side, but do you want to do.

Yes, sure. Chris, just -- can you reframe your question on sales and EBITDA.

What were you looking for there?

No. Just trying to understand where the guidance upgrade in sales and EBIT was coming from in terms of which division?

Is it more in Maritime in terms of sales and EBIT is more air driving the upgrade?

Yes. I think -- I mean, obviously, the Dreadnought H1 performance is a big part of that increase in the sales number.

I think all the other sectors are going to be at the higher end of our original guidance ranges. So collectively, that also helps.

But I mean, the big skew on sales is clearly Dreadnought. And then across the board, I think all of the sectors are more or less in our guidance range on Ross.

I think Maritime is the one that's challenged simply because Dreadnought, as you know, in that single-source profit environment. So having higher Dreadnought sales is a challenge to the mix overall.

But we've guided, as you can see, for a modest margin expansion for the full year. And that's in spite of having that big increase in Dreadnought.

So we're pleased at how the portfolio is performing, but obviously have Maritime is a big skew from Dreadnought. And maybe Tom can build out some of the stuff.

Yes. Tom, do you want to add anything on the inside?

Not a heck of a lot more to say than what's been said. I would just point out the growth we're experiencing is remarkably broad-based.

I mean all -- across all 3 sectors in the U.S. and effectively across all of the business areas below.

And so it's a really good, strong broad-based growth as we see continued demand across the portfolio. And we've spoken in recent years about the work we've done to align around the priorities of the budgets that we are associated with.

And I think this is a testament to that.

So yes, back on M&A, just to close out on that last question. So well, first of all, I'll just reiterate again, disciplined approach to pricing on M&A.

And the question was really around what do we mean by transformational. So I'll just back for a second.

The areas we've spoken about for M&A before that are interest to us are things like multi-domain electronics. So that takes you into the electronics adding to our electronics portfolio.

I mean, ES has proven to be -- well, it's a brilliant business in its own right, but also a fantastic integrator of additional capabilities. The 2 rating UTC deals that we did just before the pandemic.

Yes, we've integrated them superbly well. We've delivered very well for us, and they were great additions to the portfolio.

and that encourages us to look for more in that space. And I think as a sort of an aggregator of defense electronics has proven itself to be very strong.

So the other area that is clearly of interest for us is expanding our space portfolio. We did the in space missions deal a couple of years ago here in the U.K., which is a small U.K.-based small sat provider.

But across defense portfolios, and we've seen, in fact, the relevance of space in the ongoing conflict in Ukraine, and it's definitely an area of growth for many of our military customers. So that is an area of interest for us.

And we've also spoken about building out our some of our sustainability-driven portfolio around the pound propulsion solutions and broadening that as we look to reduce carbon footprint in other transport streams, building on the already very successful hybrid bus business that we have. So those are some of the areas that we've looked at.

When it comes to what do we mean by transformational. So for me, we always said that we'll build out into adjacencies of where we already are.

And I would suggest that a transformational M&A. And to be clear, we're not interested in transformational M&A.

Would take us into sort of significant new sectors or they'd be large enough and the risk of plugging numbers at a thin air, more than 30% or 40% of market cap for the business, I would suggest would be -- that would be a transformational M&A. And to be absolutely clear, we are not interested in those kind of deals.

So I think we've been now hopefully, relatively clear on the kind of deals that we are interested in doing and the ones that we're not interested in doing.

A couple of small questions. First, on the tax at 19%, what do we expect now for subsequent years?

Is there any change there? And what was the Air Astana contribution in H1, please?

And then a question for Tom, maybe. For the budget in the U.S.

in 2024, what is the assumption that you've made? How do you see the discussions in the coming months in this?

Do we get a very long continuing resolution as a result of what is happening there?

I think that's the first 2 for you, probably, Brad, and then over to Tom for the U.S. budget.

Yes. So your question, Olivier.

By the way, we did have a lower tax than what we expected in the year. So we do see a step up though.

And so we're going to see a higher corporate tax in the U.K. In general, I think at 21%, circa 21% ETR is probably good for your models.

So it's always going to be mix dependent, so it fluctuates with that, but it's going to be ranging around there. And then on Air Astana for the half year, we had just over GBP 200 million in sales.

And so that's a business that has performed extremely well and continues to come out of the COVID period, and we're very pleased with how that business performed.

No. No.

I was going to ask, do you have a contribution at EBIT level as well?

Yes. I mean it's running about sort of circa 10%.

Okay. Then Tom, on the.

On U.S. budgets.

Well -- and so Olivier, as you know, the U.S. is expecting to land on a budget that's about 3% higher than fiscal year '23.

That's made its way through the committees was largely supported at that President's budget line that's $842 billion for defense, the largest in history. I think the political debate that has ensued is likely to drive a continuing resolution.

Remember, the government fiscal year in the U.S. ends on September 30.

And so the likelihood that this will be resolved before then, we think is pretty remote, still a possibility, but we do expect the continuing resolution of some duration. We are hopeful and it's our best guess that will be a modest duration, not unlike we've seen in recent years.

And so we are preparing for that. That said, a lot of what happens in continuing resolution has to do with how many new program starts that you have.

you're effectively held to the budget of the previous year. And given the modest growth, in fact, when you account for inflation relatively flat growth in the budget, we don't expect that to have much of an impact on performance in the year.

I hope that's helpful.

It does help.

Yes. Congrats on the results.

So I've got 3 questions, please. The first one is on your Slide 8, which it's not a new slide, but all those arrows going straight up is quite rare for a company to have every major line pointing up.

So I just wondered if there's any granularity on that. Are any of those double up?

Should any of those really be diagonal, bottom left to top right? If you could just maybe just give us a little bit of a high-level view there.

The second question is -- the last point on Slide 11 about discussing potential increased production on ammunition in the U.S. I think we all saw the decision of Biden to send cost ammunitions to Ukraine a few weeks ago.

There's clearly a huge shortage of traditional ammos. Just wondered if you could give us a bit of color on that.

And then the third one is if I can have another crack at this M&A issue. What I thought was interesting on Slide 4 was the strap line that you say 5 core technology areas supporting growth beyond core defense markets.

I think that's new. I don't think we've had a slide like this in your presentations before.

So could you just speak to that a little bit, for example, space. Would it be commercial space that you'd look at?

And I know Brad didn't want to give a leverage target, but we are in a world of higher interest rates and so forth. So just any thoughts you have on the financial criteria for any potential deal would be helpful.

So the first question, at the risk of overthinking these arrows. I mean, basically, in the coming years, we expect growth across all our sectors and that's the message from the slide.

But particularly, we would pull out electronic combat and electronic systems, the commercial -- both the defense side of that and the commercial portfolio, in particular, submarines and global ships for all the reasons, some of which we've covered already but are in the presentation, combat vehicles, in particular, especially from the Swedish facilities and this traveling of output from glands that we've called out already. And then I mean, generally speaking, the munitions and weapons restocking.

So I'm just going to pull out a few there that they're double up arrows or not, but they're definitely growing faster than some of the other parts of the business. But I mean, it is a broad brush growing portfolio across pretty much all areas of the portfolio.

On Slide 11, the -- that was the U.S. [indiscernible] .

Yes. So that was the [indiscernible].

[indiscernible] Yes.

Yes, exactly. So maybe I can get Tom to just say a little bit about that because, I mean, clearly there given the situation and the fact that we've now got this terrible situation of a grand war in Europe and the requirements that everybody is now rethinking what are the stock levels needed for things like 155 shells and stuff.

And here in the U.K., but also in the U.S. ramping production for that.

And those 2 plants are obviously a very important part of the supply chain within the U.S. So maybe over to you, Tom, just to bring a bit of color to that.

Thank you, Charles. David, as you know, our contribution to the munitions production stream is pretty far upstream, and we do the chemical production for energetics and for Propellants.

And those businesses operate out of our 2 Army GOCO in Houston, Tennessee and Raptor Virginia. These businesses are largely built around chemical production and the capacity of those various chemicals.

Our customers ultimately determine which of the munitions these chemicals will be used for. Many of them are multipurpose.

And so the discussions around where can we ramp production? How do we change the mix of where these propelynergetics ultimately go has been an ongoing discussion, and there are -- we presented the army with a number of options of ways that those production rates can be increased, and we would expect a decision on that in the coming months.

And that will result in some modernization, some redirection across the variety of products that are made there. I hope that's helpful.

Thank you, Tom. And -- Sorry, David, you were going to say?

Well, I was just going to -- I mean we've seen some massive numbers on ammunition in Europe, for example, going to Rheinmetall. I just wondered on whether -- are you able to size the opportunity here?

I mean, it seems to me it could be quite significant on the ammunition.

Yes. I think it's a little early to say, David.

But I mean you can imagine, just based on what you said, the demand across the portfolio. I mean there's certainly an interest in 155-millimeter shells and opportunities for us to contribute further to that.

We're sort of on the doorstep of that.

And then on the M&A area. So the slide that you referenced, Slide 4 in the presentation, I'm glad you like the slide.

But it's -- to be clear, those areas that we highlighted, the 5 areas there were also in the annual report. There's been the areas that we are investing in.

And as always, when it comes to between defense and civil whilst we have a good civil business in Commercial Air, it tends to be where we find adjacencies to some of our military activities and space being an obvious area that if you've got a space business and there's some clear adjacencies in the civil area. Those are obviously things that would be sensible for us to look at.

But those areas, I might say, have been something that we've been relatively consistent on even if it hasn't been in the investor deck, it's certainly been in the annual report.

And does Brad want to take the one on financial criteria for M&A?

Yes, David. So yes, we always said with M&A, what's important is First of all, is there a good strategic fit with any target we might be looking at would we be good owners of this business and be able to make it something better by owning it.

So that's 1 of the key tests. Obviously, when we look at price, we need to make sure that whatever the price we pay that we've got NPV positive pathways so that overall, the deal is NPV positive.

And we certainly will depend on the target and sort of what cycle it's in. High growth, medium growth, whatever the case may be, there's different variables.

But we certainly like the types of deals that we did a couple of years ago, which were accretive and earnings straight out of the gate, but it depends on growth cycles. But yes, I would say a very short time of earnings accretion in the horizon of acquiring it is important.

I think being cash accretive is important. And I think having a return on invested capital greater than cost of capital within a reasonable time frame, those are the types of things that we look at.

But overall, across the entire horizon of cash flows of the target. We want to make sure that those in present value terms are greater than whatever it is we pay.

Thank you. Thank you, David, for the questions.

Everything is going well and across the whole group as far as I can see even things that have been difficult in the past. There was one fly in the ointment.

It seems a bit churlish to raise, but I think we have to which is that you didn't get down selected for OMFV. And that's a segment that's been a BAE franchise.

So I wondered if you had any sort of post-match analysis of why you didn't get down selected and what the implications are for the [indiscernible] business skyline over the coming years? Does it matter in other words?

And then also in the U.S., [indiscernible] finally emerged into the daylight to the extent that your colleagues at Northrop were willing to comment on their approach to it. And do you have any thoughts on whether you'll bid as a high-level partner is either on F-35, for example?

Or will you focus on being a subcontractor on the subsystems? And and perhaps the same question for [indiscernible] , if you can comment on that.

And then finally on that, so we can judge over the next few years and how you're doing -- where do you see your real strength in terms of what you can offer on those next-generation platforms? In other words, what should you be aiming to win on those?

I think, Tom, it looks like over to you on those questions.

All right. Thank you, Charles.

We're certainly disappointed by the outcome on OMFV. You probably read, we decided not to protest the Army's decision.

I mean this was a fixed-price 5-year program ahead of an arrow where the Army's budget is under a bit of pressure. And so in the big scheme of things, certainly disappointing, we're going to continue to focus instead on what's been a really remarkable buildup in backlog for the combat vehicles business.

I mean I think the book-to-bill in the half for P&S exceeded 2.0 -- we're on track to deliver well over 500 vehicles this year. And as I mentioned earlier, we're just preparing for the ramp in CV90 for Slovakia and the Czech Republic, those deliveries will begin out in 2025.

On top of that, you may have read very recently, the Army has reached its full rate production decision on AMPV. Their stated objectives there over the next 20 years is just short of 3,000 vehicles and so some good long-term visibility there.

We expect a contract on that program here in the second half. And then all while we're continuing to focus on operational excellence and margin expansion in that portfolio.

And that business has been on a good margin expansion journey. We expect that to continue.

On [indiscernible] , this is a sensitive program, as you know. And while there has been some truffle amongst the primes, and an ultimate there, I mean our contribution is solidly in the second tier as a subcontractor in the traditional areas that you would expect, where we have been strong in fighter aircraft electronics in the past, in places like electronic warfare of the like.

And so I guess -- I think I'll just leave it there, but that's something we are smack in the middle of on all of these next-generation programs. I hope that's helpful, Nick.

Could I just follow up on OMFV. I mean it's going to be an extended time line on that and probably more extended than currently planned as these things often are.

Does AMPV become a sort of de facto badly M113 backfill replacement such that you end up getting more volume on AMPV than, if you like, the current outlook would suggest?

Great question. I think it's anybody's guess what will happen over the coming decade.

I mean the OMFV is not due to field until first part of the next decade, at very end of this one, the first part of next. And so there's a lot of time between now and then.

We'll see how -- which way budgets sway. In the meantime, again, we're focused on delivery, by the way.

I should also mention that AMPV production, in addition to the Army's requirement, we're seeing the backfill of M113 that had been sent to Ukraine, measured in probably hundreds that will feather into the production line here in the near term as well. And so you really have to have a crystal ball to get a sense of where things will be 10 years from now.

But we've got what we think is a pretty enviable backlog and our focus is on delivering that and delivering margin expansion to our shareholders.

I have 2, if I may. The first one is on free cash flow because at the end of last year, you said you had about GBP 0.5 billion of timing effects that boosted free cash flow.

So I was just wondering if all of them have now been actually reabsorbed. The second one is on air.

If you could help us understand the phasing of the Qatar Typhoon headwind on sales. But also over H1 and 2, I mean, and also the -- how the end of the contract and the risk retirement impacts margin in the division.

I think Brad, you probably do both of those?

Yes, Chloe. I think your first question was on the advances and phasing of those from last year.

So some of those have been consumed in 2023, but not all of it. So some of those advances go out across several years as we build our programs but there was significant consumption so far in the year.

And then just your question on, I think, air phasing, I'm not quite sure I caught the question specifically. Maybe you can remind us.

Yes, sorry. On the Qatar Typhoon contract because you said you would obviously have a headwind to sales in and also for the 4 years.

So if you could help us understand the phasing between the 2 halves and also the impact on air margin as you retire risks on this contract?

Yes. I mean, as you know, we -- across these long-term contracts, we are very prudent in how we trade.

So we assume that all risks materialize. And then as we hit milestones, we're able to retire risk.

And so as programs mature, what that means is you then have improved margins, if you're able to retire is rather than consume it. And that's been a big part of, I think, the last 3 years, margin expansion.

We've grown margins by over 100 basis points in the last 3 years. And a lot of that is because we've been able to release risk rather than consume it.

So Qatar is part of that story. So we do expect to be able to retire risk as we continue to mature that program.

And we are seeing a sales drop off last year compared to this year, we said that we would experience a significant drop off, and that's just normal based on the maturity of the program. And I think that -- I don't know if we've given a number on that specifically, but it's in the GBP 200 million, GBP 300 million range in terms of a drop-off -- so that is part of the comparables.

When we look at full year sales versus last full year, a lot of the air growth is informed by that drop-off in Qatar. And if you look at all the rest of the air programs, apart from Qatar, they're actually growing significantly.

So the air sector would be having a pretty high growth rate apart from Qatar.

Just 2 questions for me, please. On the Typhoon program, please, can you comment on the outlook for further orders on the Typhoon, particularly those where you are the prime contractor.

And the second question, just in terms of the transition from the Eurofighter to the Tempest. How should we think about the combined revenue profile of these 2 programs as we move from the end of this decade to the next.

I mean there are a number of other export opportunities that we're pursuing. I wasn't going to go into the details of them.

But between additional sales to European partners, which are somewhere in the pipeline, obviously, we wouldn't be prime on some of those and then additional Middle East opportunities, there are a number of additional on opportunities that we're pursuing. Our general outlook is stable at the current levels for several years ahead of us based on things that we already have.

But as we look forward in the second half of the decade, I mean I think that the outlook is actually quite positive as we transition stable typhoon into Tempest, I mean the outlook is obviously growing because we -- as we segue from one into the other, we do see a step up. I mean, this is a long-term end-of-the-decade type opportunity, but definitely an increase in revenues through the end of the decade and into the next decade.

I think operator, this will be our last question for the day, time-wise, I'm thinking.

Charlotte are you there? I can only assume she's having some technical issues.

Very good. Well, look -- thank you, every -- we will circle back with Charlotte and make sure we address the question.

But thank you, everyone, for joining, and I look forward to meeting many of you on the road show after the summer holiday period. And yes, I look forward to seeing you all.

Thank you very much.

Thank you.