We're now going to look at the second overall segment in Keon, which is Supply Chain Solutions.

And you may recall this is the warehouse automation part of the business.

This is much longer cycle with multi-year projects.

This is going to have a much bigger time lag and behave quite differently from trucks which tend to get delivered within a year of being ordered.

The basics are the same as before.

We're going to take the closing backlog.

We're going to grow or shrink the order intake, and we're going to calculate the revenue separately down here by growing or shrinking last year's revenue.

We're then going to take that revenue and deduct it from the backlog as it's delivered contracts.

And we're going to roll the backlog forward carefully to find out what's happening there.

We're then going to look at the relationship between book and Bill, which we can roll forward from the historical, and you can see the same sort of relationship happening where the backlog is being cleared in 2024.

Now, the reason the backlog is being cleared here is very different from trucks.

These are multi-year projects with a long lag.

The order intake shrinkage here, okay, which is really pronounced in 2022, doesn't start to make itself known in revenue growth until later.

And then the recovery in orders isn't felt until again sometime later, and that's because of the lag between the orders and the revenue due to this being multi-year projects.

This means that SES will in certain years be able to generate revenue despite having lower orders, and that's because its revenue being released from historical orders.

This on the whole being longer cycle will be somewhat smoother than short cycle, which is more responsive to demand.

This in some ways is quite desirable as you will have less volatile revenues in this part of the business.

There'll be a number of inputs into this, which are quite complicated.

There's the book to bill, there's the overall length of the cycle, there's the growth of the business volume and price terms.

There's a mix of product, and these could all be key drivers Examining the backlog and the order intake like this can help us to start looking at what factors are important to segments like this.

Once we're done with that, we can then move over to the ebitda.

We have an overall margin, which we can multiply by the revenue.

We can then roll that forwards.

And what we find is this is a part of the business that is predicted, predict, and has historically improved quite a lot.

Initially, at the start of our model, Kon is under significant cost pressures.

This is getting better because Kon is selling higher margin mix of products within SCS.

It's perhaps taking on more lucrative contracts with better margins, and it's getting better at providing this service, which is relatively new for Keon.

And so you can see that the EBITDA has gone from almost nothing to a predicted quite healthy ebitda, although still relatively low mix compared to their core business, which is providing trucks.

And then the backup service to those trucks management are very keen on supply chain services and see Keyon as an automation company.

Increasingly for that to be true, you would expect the mix to be a bit higher than it is in this model.

So perhaps our model disagrees somewhat with the ambitions of management when they communicate within the financial statements.

Again, we can't do EBIT because we need an overall depreciation to allocate to this segment, and we can't do that until we get to the overall model.