...those here in the room at J.P. Morgan in London and those joining us online as well to Victrex's full year results presentation for 2025.

I'm Jakob Sigurdsson, CEO of Victrex. Before we turn to the results summary in what has been a particularly challenging year for Victrex and, of course, the chemical industry at large, I want to highlight a couple of slides on slides two and three in the presentation.

We'll call them out as we go along, to put things into perspective. Also tell you a little bit about how we are addressing the challenges we faced in FY 2025 and continue to face.

The underlying of the long-term prospects and opportunity for Victrex remain very strong. We are addressing these ongoing challenges, and we have been doing that in the past couple of years as well.

We are also announcing a profit improvement plan today that builds on our self-help in 2025, but also leverages the recent investments in infrastructure, foundational investments like digital and other things, to make us more efficient. We've now concluded those investments, as you clearly see in our CapEx profile.

Now continue to drive improvements on the back of these in many different areas. It is very important to note that we do remain a world leader in PEEK.

Nobody has more experience with application development in PEEK. Nobody has more data on how PEEK is produced, how it processes, and what needs to be considered when converting it into forming parts and forms.

We have a large addressable market, probably 5x what we're seeing being sold today, and very well aligned to strong megatrends, whether they are metal replacement or striving for clinical benefits on the behalf of patients. With a very differentiated portfolio around which we've built a good intellectual property estate that will give us a sustainable competitive advantage going forward as well.

In what has been a particularly challenging year, it is important that we don't overlook the long-term potential of this business. Turning to slide four, Ian Melling, our CFO, and Andrew Hanson, our IR Director, are with me here today.

A copy of our presentation is on our website at www.victrexplc.com under the Investors tab and by clicking on Reports and Presentations. In terms of format, I will call out the slide number when we are speaking.

I will start the presentation with a headline summary of the results, and Ian will then cover the financial results in detail, our profit improvement plan, and our outlook summary. Towards the end, I will summarize business performance, and finally, we'll finish with a Q&A.

Questions from the room first before we take any questions from those that are on the call. Headlines for FY 2025 ever so briefly.

A strong volume growth in the year, sales volume up 12%, primarily driven by value-added resellers and Energy & Industrial. Momentum was maintained during the second half at volume level overall.

Underlying PBT was impacted by currency, which Ian will cover in detail later on; by sales mix, with stronger VARs and also within Medical, weaker Medical Spine; and also impacted by the annualized startup costs from our new China manufacturing facility. It is worth noting that we did deliver half-two profit before tax in line with half-one and in line with our latest guidance.

On cash conversion, we delivered another strong performance reflecting strong working capital management and resulting in operating cash conversion of 121%. This obviously was impacted by a significant reduction in our capital expenditures as well, which have been coming down ever since FY 2023, and we've talked about it in the past in detail.

Ian will cover our profit improvement plan with a headline of at least £10 million savings being targeted. This further builds on the self-help actions we've implemented in FY 2025 and the recent foundational investments in infrastructure and technology to make us more efficient.

We've also reviewed our capital allocation policy, and Ian will cover that in greater detail as well. Finally, our outlook for FY 2026 is that we're targeting, I would say, solid progress on the top line as well as the bottom line, and we will add more color to that as well when we cover the presentation through Ian and myself.

I'll now hand it over to Ian for the financial outcomes.

Thanks, Jakob, and good morning, everyone. We'll start on slide seven with the financial results in detail.

Then I'll cover our profit improvement plan and the additional actions we are putting in place as we look to drive operational and financial improvement. Finally, we will conclude with our FY 2026 guidance and outlook.

I'll then hand back to Jakob for the business review. Starting on slide seven with the income statement.

As Jakob has noted, it was a particularly challenging year for Victrex at a profit level despite delivering strong sales volume, up 12% at 4,164 tonnes. The volume growth was driven primarily by VARs and Energy & Industrial.

As a consequence of a softer mix and a weaker performance in Medical Spine, revenue was up 1% at £292.7 million or up 3% in constant currency as currency weighed on our full year revenues. I'll come back to sales mix shortly.

The divisional revenue summary is shown in the appendix on slide 26 with Sustainable Solutions revenue up 2% and Medical revenues down 5%, driven by much weaker Medical Spine. Non-spine revenues were up 7% with broad-based growth and a much more diverse range of applications.

Moving on to gross profit, which was 1% lower than the prior year at £132.6 million. This is after the effect of the gain on currency contracts of £3.7 million.

Gross profit in constant currency was up 5%. Gross profit was impacted by currency, by the softer average selling price, by the annualized costs from our new China manufacturing facility, as well as wage inflation.

Our Panjin facility in China accounted for a £3.7 million higher loss year on year, reflecting the annualization effect with this facility coming online in H2 2024. For the year as a whole in FY 2025, this was an £8 million loss, in line with our latest guidance.

I do want to call out how we saw a lower cost to manufacture elsewhere in our asset base, driven by higher asset utilization, along with some raw material savings. I'll cover the detailed movements on the next slide.

Gross margin was down 90 basis points at 45.3%. I'll come back to this shortly with China plant costs, mix, and currency being the key items impacting gross margin.

Turning to overheads. Overheads for the year were up 14% or 2% when excluding the impact of wage inflation, the employer National Insurance increase, partial bonus payments based primarily on strong cash conversion, the first for 3 years.

The largest element was non-cash charges for employee share schemes and employee retention. We retained tight cost control, including on recruitment and discretionary spend, with the areas that did increase focused on customer programs.

Interest was an expense of £2 million in the year compared to £1.2 million in the prior year as our China loan interest was capitalized in H1 FY 2024. We expect interest expense will be at a similar level in FY 2026.

After the £8 million impact to PBT from currency, the resulting underlying profit before tax was £46.4 million, down 21%, down 10% in constant currency. Reported PBT was £33.8 million, up 44% as our exceptional items were materially lower than the prior year at £12.6 million.

These comprise the final part of our ERP investment, business improvement costs aligned to Project Vista, which saw strong volume growth as well as sales pipeline growth and procurement savings, and a non-cash impairment of £4 million for our Surface Generation investment. Underlying earnings per share of 43.9 pence was down 15%, slightly better than the movement in underlying PBT.

The resulting effective tax rate was 23.9% versus 22.2% in the prior year. This reflects the lower proportion of profits being eligible for the Patent Box rate when profits were suppressed.

This rate is above our midterm guidance of 15% to 19%, and the effective rate in FY 2026 is again expected to exceed the top end of this range, unrecognized tax losses in China and the proportion of profits available for UK Patent Box being the key drivers. Turning finally to our dividend.

The board are pleased to maintain the final dividend of 46.14 pence per share. I'll come back to our updated capital allocation policy later.

Slide eight shows the underlying year-on-year PBT movements, looking at the key movements beyond currency, which was £8 million adverse. Thanks to an increase in production volume through the plants, asset utilization saw a £6 million benefit.

FY 2024 saw a significant inventory unwind, which explains the materially lower production in the prior year. Raw materials saw a year-on-year benefit of £4.7 million.

Sustainable Solutions growth drove a £2.5 million year-on-year improvement to profit, net of price and mix. Operating overheads, I already touched on, with the impact of wage inflation and partial reward being the main element impacting profits by £4.8 million.

Employee retention driven share schemes were an incremental £3.7 million following the prior year where release of previous accruals meant almost zero net cost. Our China plant startup and the annualization effect, including depreciation and costs being extant for the full year, was a £3.7 million adverse impact versus FY 2024.

Medical was a year-on-year adverse profit impact of £2.4 million, driven by spine declining as the continued effect of titanium regaining share in the US caused by 3D-printed and expandable spinal cages, as well as some of the volume-based procurement challenges in China impacted us. Jakob will expand on this later, along with the positive progress in non-spine, which is an exciting area for us as we open up even more new applications.

Growth investments of £2.6 million was principally supporting our customer-facing functions, as well as some incremental investment in our Medical acceleration program with our product development center in Leeds. With the resulting annualization of interest expense, this led to PBT of £46.4 million, with H2 PBT being in line with H1 as per our most recent guidance.

Turning to slide nine and ASP. We can see the movements in average selling price, which was down 10% in the year from £78 per kilogram to £70.3 per kilogram, driven by sales mix, end market, product, and customer mix, and currency.

Constant currency ASP was down 7%. Approximately 80% of the total year-on-year movement was due to mix and currency, with mix most heavily impacted by the strength in VARs within Sustainable Solutions and the weakness in Spine within Medical.

VARs and Energy & Industrial were the source of the majority of the price impacts, while like-for-like pricing in other key end markets remained robust. Where price did decline, this reflected some incremental price competition in VARs, as we signaled earlier in the year, or where we targeted regaining business in the likes of Energy & Industrial.

Jakob will cover the key role that VARs play in our value chain to drive new uses for PEEK later. A very brief word on midterm pricing is shown on slide 10, with mix and currency being the main drivers on ASP in FY 2024 to 2025.

If we look over the past 5 financial years, we see a very similar picture, with a very small impact from price, customer, and end-market mix, offset by a positive change in divisional mix. In summary, a medium-term view of our business shows that mix and currency have been the key drivers on our average selling price, whilst we have been successful at price pass-through to customers, particularly following the energy price crisis.

We have also retained or regained business within specific end markets with some impact on price. Moving to gross margin on slide 11.

Starting with the prior year of 46.2%, currency was a 150 basis points adverse impact to gross margin, reflecting the sizable headwind we saw this year. Our China plant startup impacted gross margin by 120 basis points.

Remember, we've seen some gradual operational improvements in this facility during the year, but production volumes were still only around 50 tonnes, a very low level of utilization. Mix and price within Sustainable Solutions dragged on gross margin by 90 basis points, with the adverse mix in Medical being an impact of 60 basis points.

On the positive movements, raw material cost savings added 130 basis points, with the higher asset utilization helping us by 200 basis points. A brief word on the gross margin excluding our China manufacturing facility.

This was 47.7% versus the reported 45.3%. Overall, the China plant is a 240 basis points drag on gross margin for the group, which we will look to overcome in the coming years.

Finally, the chart does show the indicative drivers for our gross margin in FY 2026 based on latest assumptions. I'll cover the overall guidance summary shortly.

Moving on to cash flow, which is shown on slide 12. The main headline is a strong cash conversion at 121%, a key measure of our cash flow efficiency and a positive result for our business.

This is one of our key strategic objectives in the organization, which employees are fully focused on. Looking at the key movements, from operating profit or EBIT of £48.4 million, we incurred depreciation of £25 million, an increase of £1.7 million on the prior year, driven by the new China plant.

Working capital was an inflow of £7 million, driven by a further inventory reduction of £5.4 million. Remember, we had a much higher inventory position at the end of FY 2023, £134.5 million, the reduction in inventory this year, whilst pleasing, was not as sizable as FY 2024.

We do have an opportunity to further reduce inventory whilst noting that our reputation for delivery is valued by our customers and that we have a broader geographic base and portfolio than we had historically. On CapEx, we tightly managed key capital expenditure this year and continue to do so.

We're obviously pleased to move beyond the period of heavy investment in capacity and capability. CapEx was £21.8 million, a reduction of 33%, meaning that CapEx represented 7% of revenues, below the lower end of our guidance of 8% to 10%.

This resulted in operating cash flow of £58.6 million compared to £68.5 million in the prior year. Cash tax totaled £4.4 million, similar to last year.

Cash exceptional items of £9 million were marginally lower than FY 2024 and primarily related to our ERP system, which includes ancillary systems such as CRM and Project Vista costs. Our digital investment is supporting a number of business process improvements and an ability to support and serve customers better, for example, through digital approaches to R&D.

As a result, free cash flow was slightly lower than FY 2024 at £49.3 million versus £51.4 million in the prior year. For the other movements on dividends, we maintained the FY 2024 final dividend and paid the FY 2025 interim dividend, which represents the £51.8 million shown on the chart.

With exchange movements, our closing position saw us with cash of £24.2 million versus the prior year at £29.3 million, giving a net debt of £24.8 million, £3.7 million higher than the prior year. Net debt to EBITDA was 0.34 times at the end of 2025, an increase from 0.25 times at the end of FY 2024.

Finally, on our RCF, although we did have to draw on this facility during the year, we repaid the facility back by the end of FY 2025. Slide 13 covers our updated capital allocation policy, which I'd like to spend some brief time on.

Firstly, we're reflecting all of our stakeholders' interests by targeting a new net debt to EBITDA range of 0.5 to 1 times. This is a commitment to the strong balance sheet Victrex is known for.

As a result, we are pleased to maintain the FY 2025 final dividend at FY 2024 levels of 46.14 pence per share. Dividends will be maintained at the current level as long as we do not exceed the 0.5 to 1 net debt to EBITDA range.

Any excess cash can be returned via share buybacks or special dividends when net debt to EBITDA moves sustainably below 0.5 times. We've also secured additional term debt prior to payment of the final dividend in February 2026 to reduce the reliance on the RCF to pay the dividend.

As shown on the chart, we will also maintain CapEx at 8% to 10% of revenues, though in the short term, we expect to be at or below the lower end of this range. Investment remains focused on growth or capability, with Medical acceleration a recent example of where we've invested to support specific growth programs or to support customer scale-up.

Overall, we believe this offers a resilient capital allocation framework suited to our business. It allows us to maintain balance sheet strength, noting the interests of all stakeholders.

Turning to slide 14. Alongside our revised capital allocation policy, we will be taking more extensive and incremental actions in FY 2026 to improve operational and financial performance.

In FY 2025, we focused on self-help through our Project Vista go-to-market programs, primarily helping us to improve our sales effort, including through the use of digital tools with customers and sales excellence, delivering strong sales volumes to record a record annual increase in our sales pipeline, which was up six, 18% in the year; to focus on operating efficiency, where we drove a lower cost of manufacture, including £2 million of annualized procurement savings, in addition to those in raw materials. Cost control remained tight, including on CapEx and for discretionary spend.

For FY 2026, we will be going further, focusing our profit improvement plan around three main areas: how we can simplify our portfolio; how we can drive an even better operational performance, not just through volume leverage and efficiency, but by transforming our operational processes; and through our overhead cost base, alongside leveraging our D365 ERP system and thereby reducing SG&A costs. Overall, we're targeting at least £10 million of savings, with the majority of these to be delivered as full year benefits in FY 2027, coming from these three areas.

We will start to implement these actions through FY 2026, with some early benefits in H2 2026. Wrapping up on slide 15, I'd like to summarize our guidance, which mirrors our outlook statement within our announcement.

Firstly, on volumes, whilst mindful of the wider economic environment, we are targeting low to mid-single-digit growth. ASP, we expect to be similar to FY 2025 based on current trends.

Medical Spine remains weak, and Sustainable Solutions is seeing a similar end-market mix as we saw in the final quarter of FY 2025. At a margin level, we will be targeting some additional inventory unwind, meaning that production volumes will be broadly similar to FY 2025 based on our current sales plan.

We will continue to see some modest benefit from continuous improvement and procurement initiatives, including those from Project Vista. The China plant will not be a big driver of margin as it remains significantly underutilized, despite sales starting to ramp.

Consequently, gross margin percentage we anticipate being flat to slightly ahead. On OpEx, we continue to retain discipline, with a lower pay rise in FY 2026, and then starting to see some small benefits from the profit improvement plan in the second half.

On cash flow, we are targeting continued strong cash conversion, with CapEx discipline and inventory reduction. In summary, we are mindful of the macro environment, particularly after a challenging year.

We're targeting solid progress versus FY 2025. Based on our current assumptions, we would anticipate this being second-half weighted, reflecting the usual seasonality in H1, alongside a slightly higher currency headwind in the first half.

With that, I'll hand back to Jakob.

Thank you, Ian. Moving to slide 17.

Sustainable Solutions, good progress in the year, driven by VARs and Energy & Industrial, but with notable progress on milestones in other end markets as well, even if some of these end markets do remain challenging. Let's look at them individually.

Aerospace, at the half year, volumes were up 7%, but we did see supply chain challenges in the second half at the two key OEMs, consequently phasing off some business into 2026. Volumes for the year were 2% down in Aerospace.

As we will cover shortly, the outlook for Aerospace is optimistic for FY 2026. Build rates are forecast to increase in some models, particularly at Boeing with 737.

We also know that COMAC deliveries in China have been slower than anticipated this year. They built 25 planes versus 75 as a target.

Remember that Victrex has a sizable set of volumes in each 919 aircraft, deliveries have been rained back for the current year. We see these factors are short-term supply chain driven and know that COMAC is expected as an example to increase deliveries over the next couple of years significantly.

On Advanced Air Mobility, I do also want to flag that we won new business in this area during FY 2025. Now this is all based on our composite technology as well as our parts capability at our Rhode Island facility.

All of which are driven by our low-melt PEEK technology in several applications where specially designed polymer for easier processing has really been getting very strong attention. The potential in Advanced Air Mobility using Victrex PEEK and the aim of some of these being launched in time for the Los Angeles Olympics in 2028 as an example, the certification progressing well in different global regions, positions ourselves exceptionally well for future technology developments in the area.

Turning to Automotive. As most companies have signaled, we know that uncertainty driven by tariffs and global demand has had an impact in this market.

Our volumes were down 1% after a better second half in Auto for us. Half-two volumes were actually up 1%, but reflecting some of the challenges in the industry.

If you look at the market data, S&P is forecasting a production of around 98 91 million cars in 2025, a modest increase on the year before and a similar increase going into 2026. This is in contrast with 2018 when you had roughly 96 million cars being produced, we're quite far away from that peak yet.

We do remain closely aligned to auto growth in China, particularly. Just as a recap, our auto business in China in 2019 was around 11% of our overall volumes in Auto that year.

It's now close to 27%. If we include Korea and Japan, the corresponding figures between 2019 and 2025 have moved from 43 to 55%.

Our auto business in China has roughly tripled since 2019. We remain well placed across a number of different platforms and applications, but also in the geographic shift that we're seeing in the automotive industry.

Briefly on E-mobility, we didn't see the quicker adoption of the new 800-volt platforms this year, E-mobility revenues were actually down slightly year on year. The long-term opportunity to increase PEEK penetration across these new platforms does remain strong, however, and in fact, we've got qualifications on several new platforms during the year that will be coming through to support midterm growth.

If we then move to Energy & Industrial, volumes here up 17%, and activity levels have increased in this space during the year, particularly in the second half. It's worth keeping in mind that Energy is around 40% of this end market overall with Industrial being the majority.

As it relates to Energy, rig count was actually down at a global level by around 101 or around 10% since October '24, but we have continued to enjoy good business across oil and gas equipment, whether it's in valves, pumps, seal rings, and the like. On the Industrial side, PMIs have remained just above 50 for both China and the US for the year, and this is a good sort of correlating factor with our end demand in the manufacturing side.

It did dip a little bit in Europe below 50 in November, but still indicated an improvement in business conditions for the 10th time in the past 11 months. PEEK benefits from being in all kinds of machinery on the industrial side, whether it's food processing, chemical processing, and we continue to see good progress and growing interest in replacing PFAS in various applications, both on the industrial side that's reported in this segment, and on the medical side as well.

On Electronics, good progress here despite the softer second half in semiconductor. Volumes were up 2% for the year, which is in line with J.P.

Morgan's own semicon forecast of 2% growth in CapEx in 2025. Remember that PEEK has good exposure to semicon and smart devices where durability and reliability remain key drivers.

On the smartphone side, we are part of a number of innovation in smart devices, which offer good medium-term growth opportunities, particularly around the move towards 6G, for example, or how metals are used differently in handsets. If we look at industry data, J.P.

Morgan forecast chip demand to be around 3% in 2026 and a significant growth as it relates to CapEx in semicon as well. Moving on to VARs.

I will cover a recap on their very important role that VARs play in the value chain in my next slide. VARs were up 21% in volumes and 13% in the second half.

Remember, their business is highly correlated with conditions in both manufacturing and engineering and Energy & Industrial as well as semicon. Finally on sales pipeline, up 10% in the year, record annual increase.

If we look at the key driver of the increase in the pipeline, they are coming from Aerospace and Energy & Industrial. Were key drivers of the increase, with Aerospace around 1/3 of the total sales pipeline right now.

This is based on mature annualized revenues, which we would need conversion of all the pipelines to deliver the £404 million in revenue numbers. Conversion rates are typically much lower than that, and over the cycle, we'd use to be seeing around 30 to 40% conversion of this particular number.

It gives a good outlook the scale of our sales pipeline and the opportunities that we have for growing the business. On value-added resellers on slide 18, spend a moment on those because they do play a key role in our supply chain.

You already heard that our VAR volumes were up 21% during the year. They are a key part of growing the markets for Victrex PEEK.

They serve aligned end markets like Auto, Energy, and Electronics, I've said before. They do process high volumes of PEEK for compounding with other materials or into stock shape to sell to other manufacturers, and they actually carry a wide range of polymer in all forms as well.

The key message here is that VARs get a significant pull for the customer for Victrex PEEK. If you go onto the website of some of the larger ones there, you'll see that they do brand Victrex 450G as a main grade and often leverage our brand in their promotional activities as well.

These were Victrex's first customer when Victrex went into market, and they've been a very valuable set of customers for us all along, and they spend a significant time on innovation and market development as well. Customers are specifying Victrex PEEK, an example, 450G from value-added resellers, and that supports how we're building the PEEK market.

Remember also that VARs do see cyclicality. If you look at the 5-year growth CAGR, it's around 6% on volume, healthy growth rates even if we see variability through the cycle.

Within VARs this year, we have continued to build on a long-term standing relationships that's built on quality, security of supply, and our well-respected brand to name key factors. Turning on to Medical on slide 19.

Some clear headwinds here in Spine, but continuing good progress in non-spine, and we're now a much more diversified business than it used to be. Just to put it into context, in 2015, 75% 75% of our revenues were coming from Spine and 25% non-spine.

That's pretty much reversed in 2025 where we're now 74% non-spine 74% non-spine and 26% Spine. A quick recap, in 2023, our Medical business achieved a record year post-COVID and when elective surgeries rebounded.

Meanwhile, in 2023, the Chinese government implemented its volume-based procurement, or VBP, as it's called, policy within the spinal industry, aimed at controlling healthcare costs. This policy had already impacted other sectors on the medical device industry where small number of domestic companies won government tenders that guaranteed high third volumes, but at average selling prices that were significantly lower.

In 2024, many large medical device companies began to signal concerns around profitability in general. While revenues continued to grow, rising interest rates and inflationary pressures, particularly staffing and raw materials, led to declining profits.

In response, companies took decisive action reducing inventory levels and containing costs. What is clear though is that industry destocking appears to be over in non-spine, but in Spine, titanium-based 3D printing has been significantly more advanced than PEEK-based methods, enabling US companies to develop porous cages using titanium, and this has been happening all the way back to 2018.

We have seen our first approval for porous 3D cage last year, and we expect to see them in the market over the next year. PEEK has still strong evidence of clinical benefit and in imaging in spinal devices, but 3D-printed methods gained more traction in the US at the expense of PEEK.

We have the opportunity now to start to reverse that with our 3D-printed cages having been approved. Remember that the US has been our main region since starting our Medical business back in the early 2000s.

As I said before, Spine was around 75% of our revenues in Medical in 2015 versus 26% today. Clear headwinds for growth.

The good news is that we're now a much more diversified medical business with more applications, including great opportunities in pharma and cardio. We noted that J&J, as an example, report that PEEK was already used now in around 500,000 heart devices.

What do we need to see for Medical revenues to grow again? Some stabilization in Spine, number one.

Remember, this is principally impacting the US. Together with continuing non-spine growth, obviously, opportunity for Medical growth to restart.

Then obviously, that will be layered onto with the progress of the knee program on one hand and trauma plates on the other. On slide 20, a brief one on knee.

We now have 85 patients that have gotten PEEK-based knee implants over the past 4 years, including 20 in the US. Really, really good progress.

We continue to work towards additional collaborators and partners and are in active conversations with some of the top four. We're also preparing regulatory pathway in other regions beyond the submission in India and should expect good progress and potential registration in Europe in FY 2026.

Slide 21 on Magma, as a quick recap, at the half year, we communicated that TechnipFMC had secured a technological contract from Petrobras. This enables them to develop qualification pipes that are the route to full commercialization of the hybrid flexible pipe.

Remember that a hybrid flexible pipe is 50% lighter than steel in water based on Victrex PEEK and know-how, and our pipe and our composite tape as well, all specifies Victrex materials. To put this in perspective, every kilometer of a 6-inch pipe contains around 8 tonnes of PEEK.

This is a very sizable, long-term opportunity. Our facility in Portsmouth will be key for the scale-up and has been busy during the final qualification stages.

The vision is that longer term, the production will be shifted to Brazil, and that will be done then in Technip's facilities, we will not be incurring CapEx into those scale-up phases. We've developed several 2-kilometer sections of pipe with TechnipFMC over recent months, and we await news flow in 2026 for the next steps towards commercialization from TechnipFMC and Petrobras for their ongoing requirements.

Slide 22, end-market summary. I think Ian has already covered the main outlook on the guidance.

Guidance slide two provides an indicative view of the end market as we see them currently. Ever so briefly, Aerospace, optimistic based on forecast build rates and new business wins.

On Automotive, like the rest of the industry, we are neutral to cautious in this end market given the supply chain risks and demand uncertainty. Electronic, neutral, with semicon and smartphone forecast being positive for 2026, but likely to be second-half weighted.

On Energy & Industrial, neutral to optimistic. We do see some additional opportunities on the industrial side, and energy activity remains very positive.

Activity and growth here is very much evolving around PFAS replacement and robotics. On VARs, neutral.

It reflects that we saw a strong year in FY 2025, and demand across some of the aligned markets is still uncertain, although they should be exposed to the same drivers that we see for Energy & Industrial and Electronics as well. Finally on Medical, clearly, Spine remains challenging for the reasons we discussed, we're cautious there.

Non-spine, we're optimistic. It was up 7% in FY 2025, and we do see further opportunities across a very attractive range of applications.

Pricing will reflect a broader range of ASPs now, but very high-value applications in cardio, in active implantables, alongside with some non-implantable business in pharma, and non-implantable revenues were up 12% actually in FY 2025. This concludes the formal presentation, and we will now hand it over to Q&A.

We'll start in the room here, and I'd be grateful if you could state your name for the benefit of those that are listening in on the line and will be asking questions later on. Need the mic up here, please.

Thank you.

Morning. Vanessa Jeffriess from Jefferies.

Just wondering if you could clarify what's going on in China. I guess a year ago you thought you'd do 100 to 200 tonnes...

Yes. ...and then you had the startup issues, and now you've done 50, which is in line with customer demand.

Yes.

I guess in '26, it feels like you should be doing 200, but it will still be loss-making. Has the demand profile changed, or are there startup issues ongoing?

I think we're working well through the startup issues, we delivered what we said we would deliver in FY 2025. We do still need to scale this up with customers as well.

I'm getting used to materials being shipped from our plant. I do want to take the opportunity as well to put this in a broader context also in the sense that China is the fastest industrial market in the world these days.

We have grown China almost 2.5 times since 2019. It was 12% of our revenues or of our volumes back in 2019.

It's around 18% right now, and it grew 18% last year. The plant is incredibly important from a strategic perspective.

All the business that we have been growing has been imported into China until now, and this allows us to expand our product portfolio and bolster our position that we have been building up systematically since 2018. First by adding to our technical service capabilities, augmenting the sales force as well, then building this plant and our compounding facility as well.

Both of these facilities that we have built along with the infrastructure and the human capital that we've invested in the labs as well, I think positions ourselves very well to compete in a rapidly growing market in a tough competition as well. To your point, I guess we are moderate in our outlook for China this year.

We're still working through the issues, but we are aiming at always being a step ahead of demand, and I think we're progressing well on that journey. Then

ASPs, you're saying broadly stable for '26 and down 7% this year. You've talked about reducing pricing to regain share and in response to competitive activity in Energy & Industrial.

From everything you're saying about '26, the mix would be similar, and then Medical will reflect a more diverse range of prices. I guess I'm just wondering that why would pricing not be down 7% again and why is it stable?

Because it just, yeah.

The majority of the 7%, Vanessa, was mix, right? Stable if we have a more stable mix, which is what we're forecasting this year compared to last year, then we wouldn't expect to see that significant mix impact that we saw this year.

There is some price pressure out there, particularly in the VAR space, and I think the actual overall piece that we end up with maybe somewhat dependent on the volumes, right? The stronger the volumes tends to drag the mix down because it tends to mean higher VARs, Energy & Industrial.

Based on a similar mix, I think what we've said on ASP is deliverable. We also don't have the big currency headwind, at least at current exchange rates, that we had last year on ASP.

Then,

sorry, just one quick one. In VARs, you just talked about it being the lowest cost to serve on the slide, and but there's that pricing pressure as well.

Would you say that there's opportunity to reduce that cost to serve? Because I guess if it's the lowest cost of business, that would suggest to me there's less opportunity than other segments.

I think the cost to serve is very low with VARs. We don't have a big sales force that supports VARs.

It's a very small number of people, very close relationships. I think the opportunity to reduce cost in serving VARs is limited.

That being said, we do work with them, given the significant volumes that they buy, we do work with them on how they take that volume, how we do that the most operationally efficient way. That does bring us small benefits as we go forward, but not ones that you'd want to call out in terms of the overall margin for the group.

Okay. Thank you, and good luck with everything.

Thank you. Hi, good morning,

gents. Jens Lindqvist at Investec.

A couple of things on Medical if that's okay. On the knee, 85 patients recruited so far into the program, 65 back in July.

It was 20 all in the US if I'm understanding correctly. Is there anything that can be done to accelerate that recruitment rate a bit?

It's 20 in 6 months. It's a relatively high-volume procedure.

Also on the knee, could you remind me just what number you need to get to for US and European approval? You're talking about a filing in Europe next year.

Right. I think it is sort of a phase start in the US, and this is clearly sort of Maxx's thing to comment on, we have a limited ability to influence that.

It is a relatively slow start with an expected ramp-up, probably in 2026, I think you'll see increased recruitment rates in 2026 compared to what we've seen here. The bigger picture is, we are awaiting approval in India, and Maxx is expecting that to happen relatively soon.

That clinical trial was huge success, I would say, without any interventions, after 4 years. On the back of some of that data and data that has been developed in Europe, the plan is to launch in Europe in 2026 or file for registration in Europe in 2026 as well.

To answer your question bluntly, can we impact recruitment rates? No, we can't.

This is sometimes one of our dilemmas with the mega programs that we're not the ones all the time that can control the rate of adoption, and this is one example of that. There is a relatively slow phase in the early phases of the trials in the US, and then that's expected to ramp up, probably in 2026.

Thank you. Just one on the trauma plates, it seems to be lagging a little bit, both in terms of business development in the US and the regulatory process in China.

Again, in China, is there an option to partner with a Chinese orthopedics business? Instead of...

If I look at trauma, I think you're right, Jens. I think it's been a slow year in terms of revenue in trauma, having had approvals previously in the US and having launched products in the US.

I think two things to speak about there. One in the US, our launch partner, which was In2Bones, was acquired.

That's certainly had an impact in terms of kind of their focus on kind of growing into new plates and the like, and whenever there's an acquisition, then strategy comes into focus, and people are thinking about whether which way they go going forward, so that's been an impact, and we're looking pretty hard for new customers in the US, and we have some promising leads, but too early to talk publicly about new customers in the US for trauma plates. China, you're right, regulatory has been a big hurdle.

We're pretty confident that we will get over that hurdle in the next few months here, and then we should be full speed ahead with a launch with I think we talk in the announcement about six plates in China, which is a broader range than we have today in the US through a significant player in the Chinese orthopedic trauma space.

Thank you. Sorry to hold the mic, just one quick one.

Just on R&D expenditure, you're talking about 5 to 6% of sales, I believe. Is that a realistic number to assume also going forward, and how does that split between Medical and Sustainable Solutions, please?

I don't have the split Medical to Sustainable Solutions to hand, Jens, but we do spend a good amount, particularly as a result of Medical acceleration program on the Medical R&D, kind of focused on knee and trauma, but we do have other programs in Medical as well. We also have a core piece of R&D which supports our kind of core manufacturing facility kind of capability, which would support the whole business, it's kind of Medical, Sustainable Solutions agnostic.

There is an important part of manufacturing kind of R&D there that we shouldn't overlook in terms of making ourselves more efficient. I think the number, in terms of a target going forward is a sensible one.

We've obviously got the profit improvement plan where we'll be looking at things going forward, but I wouldn't expect us to be spending materially less on R&D going forward.

Chetan.

Hi. Morning, Chetan from J.P.

Morgan. I had a few questions.

Just one on you mentioned record increase in sales pipeline. When do we see record earnings for Victrex?

In other words, when does that translate into proper earnings inflection at Victrex? Maybe we take one by one.

I take this one first. The metric here is derived as follows.

This is the mature annualized revenues of the opportunities that we have identified. That's the totality of that sum.

If you look at historical conversion rates, they can be somewhere between 30 and 40%. They clearly in the first year will not translate into the maximum annualized revenue feature of them.

I think that's a good proxy for how this should be flowing into the pipeline. There's probably some cannibalization in those numbers as well, you've got to account for that also.

I think the good news is that we continue to find new opportunities that are of sizable magnitude that should underpin the core business, that's sort of drives the business, above and beyond what we see as an upside potential from the mega programs. Headline, this is mature annualized revenues, conversion time probably between 2 and 3 years, conversion rates somewhere between 30 and 40%, and then it depends on the ramp-up profile and the cannibalization as far as what the end number out of that formula might be.

That's a gross number without cannibalization impact, basically?

That's a gross number, but there could be cannibalization in that to some extent. Okay.

Good. The second question, maybe for Ian, your second-half gross margin was 46.5%.

You're guiding for full year next year to be between 45.5 to 46.5. We would have hoped that there would be progression from second half into next year.

Was there any one-off in second half which is not recurring into next year, or you just want to be cautious not in extrapolating that second-half improvement?

I'm a CFO, I always want to be cautious, Chetan. I would say, half on half, yeah, there's some relatively modest impacts in there.

The majority of the increase that you see in the second half versus the first half is coming through from the manufacturing and procurement efficiencies that we've delivered this year. In the second half, we started to sell products that we made in the first half.

In the first half, we were selling primarily product we'd made in the second half of last year when we had lower volumes. We're not forecasting really any volume increase through the plants next year as we continue to hold on inventory, I think that's part of the caution.

Obviously, we talked about some of the price pressure in VARs and places as well, we've got to be a little bit cautious about that impact on the margin. I think a margin, between our full year number this year and our second half number this year, which is kind of the range you talked about, is a sensible place to be.

Okay. The last question I had was anything on current quarter?

Typically, it tends to be sequentially lower versus September quarter. Would you expect normal seasonality, or is there something that you see particularly in any of the end markets?

Just last point, sorry, on your comments on pricing, we saw raw material benefit. Do you expect any more next year, or you now see raw material prices flattening out, basically?

I think there's a little bit of raw material benefits still to come based on what we've negotiated in the last 12 months, but I don't think it'll be as dramatic as it was in FY 2025, albeit we continue to push, obviously, for everything we can get on that front.

I think, and you know us better than most, Chetan, and you're right, seasonality is there. Q1 is always historically the lowest quarter, and it will be the same this time around, there will be a drop-off from Q4.

Nothing that is dramatic, I would say, in terms of Q1 versus Q1 comparisons year on year. We had a good Q1 last year, and we will have a reasonable one for sure this year, although there's plenty to go yet.

Okay. Thank you.

Hi, good morning. Christian Bell from UBS.

I'm just following on from the previous question. You've got your volume guidance for low to mid-single digit.

Can you just give a sense of what the growth phasing might look like across the first half and in the second half across each segment? What gives you the confidence that you are expecting a stronger second half?

I think we're seeing reasonable momentum heading into the year to begin with, and that's on back of weak Aerospace as an example, and relatively weak Electronics as well. I think if you look at industry forecasts, which have been pretty reliable as it relates to Electronics as an example, chip growth production expected to be around 3% year on year.

CapEx sort of starting to come up again for semicon as well based on J.P. Morgan's forecast of reference here.

I think that gives us confidence in the fact that Electronics will rebound as we head into the new calendar year. VARs are correlated with the electronic picture also, remember.

We're not expecting the growth that we saw in VARs this year, but we're expecting modest growth for VARs in the year overall. On the Medical side, we will see a better year there than we had last year as well.

When you look at these key drivers, I would say the Aerospace getting back to normal, and I would say good confidence in the fact that we're growing build rates at Boeing, the supply chain issues easing at Airbus, and also with a new Advanced Air Mobility contract, we'll see growth there that is visible and reliable, if I can say that, if anything is reliable these days in this world. Then as I said, on the Electronics side, I think we've got a reason to believe based on forecasts and how they correlated with business in the past that that's to be picking up as we head into the new calendar year.

Sorry, just to add. I think it's worth saying, when you get into a kind of business area and a quarterly forecast, our order book is relatively short.

It's a little bit of a mug's game getting into trying to forecast, I certainly wouldn't want to sit here and say this is going to grow by that and this by that quarter by quarter through a year. We present a view for the year as a whole, and there'll be some ups and downs versus that.

We have an order book typically of around 6 weeks in this business, it's not like we know what we're going to have through the year sat here today. I think, it's worth bearing that in mind when you look at how we position our forecasts.

That's why I'm also pinning my comments on sort of expected demand based on statistics from Aerospace in terms of build rates on one hand and then the outlook for CapEx and chip production for the coming year as well, which has historically not been too bad.

If I could just push a little bit harder on that, to get to your sort of full year low to mid-single digit, very general sort of ballpark type of thing, is the profile kind of like a -3% +7% across, first half, second half, is that the type of profile that you're expecting, or is it more like a -1% 4% type of thing?

I would say it's not that in volume terms, it's not that skewed in terms of growth between the first and second half. I would say, we had some strong growth in the first part of last year as we were recovering from a depressed period.

I think we've had more stable volumes over the last year, I don't think we've got a significant skewing to the second half. When we talk about the profit being skewed to the second half, that's more due to profit-related pieces rather than volume, I would say.

Cool. Just one final question if I could.

I think I saw in your commentary talking about a more sort of focused business going forward. How should we read into that in terms of prioritization over your end markets, capacity thinking going forward?

Is there a reprioritization of your end markets, and how are you thinking about your capacity?

I think you look at, over almost the entire lifetime of Victrex, Victrex has at times invested in downstream capabilities to drive the adoption of PEEK, sometimes with the intention of staying in that function and sometimes looking at it as a catalytic activity, meaning proving that things can be done, and then once you've proven that and you've generated end demand, you might exit that production step as an example or that downstream activity. I think we might simplify our downstream portfolio a little bit in light of that.

We will definitely stay with our current positioning in certain aspects, but we might pair down our presence in others as we go forward. As relates to mega programs as an example, the allocation of resources for the mega programs is a dynamic process.

Building on Jens's point before, where we see opportunity to potentially spend more if that correlates with faster adoption, we will. If we see that, almost regardless of what we can spend, we're not able to accelerate that, we will not do that.

We do allocate our resources based on what we can do to shorten the time to commercialization, what we can do to eliminate barriers to adoption, and at the very least, make sure and ensure that we are not the barriers for adoption, having been the ones that have been pushing these innovations through for a long, long time. We very much sort of manage our portfolio in a dynamic way in that sense, and we regularly capture the essence of that by saying where is there a return to spend.

If we can spend more, we will. If we see that we're not going to be impacting the time to adoption, we won't.

That's a dynamic portfolio allocation decision, but I do think you'll see a simplified footprint in some downstream activities going forward.

Cool. Thank you.

Maybe taking questions from the audience online if there are any, and please state your name before asking the question.

Hi. Thanks very much, and morning, all.

Just if I could start with a couple. In terms of the mix within Medical, appreciate the kind of revenue and volume shift towards sort of non-spine.

Could you just remind us of the sort of value contribution the spine versus non-spine? My assumption was spine was much more valuable to you guys.

Secondly, from a planning perspective, I just wonder if there is any sort of change in your kind of visibility or guidance you're getting from customers this time of the year compared to perhaps 6 months ago. Is there anything that gives you a bit more confidence in terms of the outlook?

If I could just have those two questions, please. Sure.

I'll

I'll start with the first one, Kevin, if I can. Firstly, I would say our our whole Medical business is incredibly valuable to us, right?

I think it's really important for everyone to understand that, our our ASPs in Medical right through from the most the highest ASPs, which are actually not in Spine, they're in they're in other applications, all the way down to the lowest ASPs, which are in non-implantable medical applications, they're all accretive to our group ASPs and drive high-margin business. Yes, the non-implantable business is a bit lower than the implantable business, but certainly within the implantable space, it's all hugely valuable.

Typically, gross margins on implantable medical business will run 70% plus, up into up into much higher numbers. There's there's huge value in all our Medical business.

I think I gave an example previously, but I'll I'll just repeat it because it bears repeating. If you look at, for example, a spine one spine procedure versus one CMF procedure, that's craniomaxillofacial procedure, which is a procedure where you're making a plate out of out of PEEK to repair the skull, in terms of the amount of PEEK we sell for one procedure in CMF can be 10 times what it is for more than 10 times what it is for a spine procedure.

The ASP per kilogram, might be might be 1/3 to 1/2 of what it is in Spine, and the gross margin will be correspondingly a little bit lower. Because you're selling more than 10 times the volume, the actual gross profit generated from one procedure will be higher in CMF than it is in Spine.

It is a it is important to think about the Medical business from a revenue point of view and from a gross margin point of view, and focusing too much on the ASP per kilogram can can miss the point. Some of our highest ASPs in Medical, which I repeat again, are not in the Spine space, are actually in in applications where a fraction of a gram is used per per device or per procedure, whereas as I said, in in something like CMF, you could be you could be selling hundreds of grams into one procedure.

There's a huge broad range in medical procedures, and I think that's what's that's what's really positive about our Medical business going forward, that we have that breadth and range of opportunities. Brilliant.

Thank you. Then

on the second question, visibility is probably wishful thinking in many ways these days. Ian has alluded to it, that our tangible order book is relatively short, and always has been, and we have a sort of a high service model, if you wish, in the sense that we do offer short lead times, which is of high value to most of our customers.

I get back to the point that we discussed before, the fact that we are targeting moderate growth next year is very much based on these key contributors or factors reversing or three, you could say. The Aerospace forecasts and build rates, and we see the improvement in build rates starting to happen, and they are relatively reliable.

Secondly, it's the forecasts for Electronics and semicon in particularly, broken down into chips on one hand and then CapEx on the other. Thirdly, we will continue to see positive momentum on the Medical side.

As it relates to detailed visibility, Kevin, it's not there, and it never has been.

Sure. Thanks for the color.

Thanks, Kevin.

Thanks, Kevin.

Thank you all for coming and joining us here today, those on the line as well, and wish you all a very happy ending of the year and a peaceful holiday period. I want to say as well, this is my last, and I want to thank you all for your interest over the years and intense interest in Victrex and our company and what we do and what we have to offer.

It's been a pleasure to engage with all of you, and I thank you for that. Thank you all.