Techtronic Industries Company Limited

Good morning, everybody. It gives me great pleasure to welcome all of you to our TTI Group Company 2025 Annual Results Announcement.

Obviously, you can see we are trying to save money. Last year, the table was twice as big.

Anyhow, we are in a semi-war condition. And what I can tell you and deliver you today by our Group CEO, Mr.

Steve Richman; Vice Chairman, Stephan; Group CFO, Frank Chan. I think that we have done fantastic and none of our competitor has duplicated our results over the last 3 years.

And we will go with full confidence ahead. To make it short, we delivered a strong 2025, particularly given the macroeconomic and geopolitical volatility.

We continue driving market share and gained market share and delivered record profit, with the third consecutive year of free cash flow above $1 billion. Now to make it easy to understand, $1 billion means $1,000 million.

So, we're talking about $3,000 million, and that is an achievement. I'm now going to hand over the floor to our Group CEO, Mr.

Steve Richman, to explain and enlighten you about our activities on our future and why we are so bullish looking forward for 2026, with a strong momentum like never before. Please, Steve?

Well, before Steve gives you the most exciting news and prospects, I will start from giving you our results first. So yes, like I said, thank you, Chairman.

2025 indeed was a pretty challenging year, and yet we managed to deliver a 4.4% revenue growth to USD 15.3 billion and a record net profit of $1.2 billion, a 6.8% increase. MILWAUKEE continued to fuel the group's growth with 8.1% reported sales growth.

Excluding the discretionary suspension of some promotion programs in the second half of 2025, on an underlying basis, MILWAUKEE actually grew 10.3% last year. RYOBI business had another outstanding year, with sales grew 5.4% in local currency.

Our 9% non-core business declined by 20.4% due to the planned exit of the HART business and the rationalization of our floorcare sales. Gross profit increased by 6.7% to $6.3 billion, with margins increased by 91 basis points to 41.2%.

The improvement is due to the positive mix of MILWAUKEE and RYOBI business with higher margins, strong EMEA performance and our ongoing focus in improving productivity and operational efficiencies across all business units and manufacturing locations. With gross margins increased by 91 basis points and our SG&A increased by only 80 basis points, our EBIT grew 5.2% to $1.3 billion, with margins improved to 8.8%.

After adjusting the associated cost for the exit of the HART business, our normalized EBIT margin will be at 9.3%, a 57 basis points increase. Net profit increased by 6.8% to close to $1.2 billion as we continue to further reduce our finance costs despite partially offset by slightly higher effective tax rates.

Net profit margin of 2025 was at 7.9%. Earnings per share increased by 6.8% to USD 0.656 per share.

The Board recommended a final dividend of HKD 1.32 per share, an 11.9% increase as compared to the HKD 1.18 per share in 2024. Together with the HKD 1.25 interim dividend paid, subject to shareholders' approval to the recommended final dividend, total dividend for the year 2025 will be HKD 2.57 per share, an increase of 13.7% over 2024, representing a payout ratio of 50.5% as compared to 47.5% in 2024.

We have continued to invest in strategic selling expenses and R&D for new product innovations and to improve our group's performance. In 2025, SG&A as a percentage to sales was at 32.5%, 80 basis points higher than 2024.

Part of the increase was due to the one-time write-off of intangible assets as we exited the HART business, which will not be recurring in 2026 and the associated costs related to the rationalization of underperforming product lines and business units. We have, however, managed to lever down our non-strategic SG&A by 42 basis points.

Admin expenses now account for 9.8% of sales, and we do expect further efficiency improvements can be achieved. Net finance costs reduced by 37.6% to $33.6 million as we continue to leverage our very strong balance sheet, exceptional free cash flows generated to effectively manage our debt portfolio and get very favorable terms from our finance providers.

Effective tax rate was at 8%, 20 basis points higher than 2024 as we continue to take a prudent but proactive approach to the group's global tax strategy. We continue to maintain that current high single-digit effective tax rate is sustainable going forward.

Our balance sheet continued to be very healthy and strong. Shareholders' equity increased by 9.3% to close to $7 billion.

Net current assets increased by 21.8% to $3.4 billion. With this strong balance sheet, we will be able to navigate any changes in this still very challenging global environment.

Working capital as a percentage to sales was at 15.5%, slightly higher than the 14.4% in 2024, and yet we believe this ratio is still one of the best in our industry. Inventory days increased by 4 days to 106 days, mainly on finished goods due to tariffs.

We are comfortable with the current level, but expect there can be further improvements in inventory days going forward. Receivable days was at 46 days, lower than last year by 1 day, while our payable days held flat at 96 days.

CapEx spend was at $289 million, very comparable to the $291 million reported in 2024. The spend mainly focused on new products, automation, quality and productivity across all our global manufacturing units.

We expect the CapEx spend for 2026 will be at the similar level, approximately 2% of sales. We've delivered over $1.2 billion operating free cash flows each year in 2023 and 2024.

In 2025, we've continued to deliver close to $1.4 billion free cash flows despite all the tariff headwinds. We firmly believe we will be able to continue to deliver another $1 billion free cash flow in 2026.

With our very strong cash flows generated and prudent working capital and CapEx management, we ended the year 2025 in a net cash position of $700 million. We have continued to cost effectively manage our debt portfolio.

In 2025, we've reduced our total gross debt by $300 million or 23.5%, while increased our cash balance by $446 million to close to $1.7 billion. As a result, we are in a net cash position of $700 million at the end of 2025.

Fixed rate, lower cost debt account for 80% of the group's total debt portfolio, while short-term debt is only representing only 36% of the total debt. With our robust balance sheet and strong cash flows, we've been asked a lot about our capital allocation strategy.

We structured our capital allocation strategy with the primary objective to expand enterprise value and deliver long-term attractive returns to our shareholders. First priority is to invest in our core business to deliver sustainable growth with continued profit margin expansion.

Next is to evaluate high-quality acquisition opportunities that will create growth opportunities and synergies with our current core business to further improve the group's value. We will continue to assess our dividend policy, balancing the payback and internal growth opportunities.

Over the past 10 years, our dividend per share growth has outpaced our net profit growth, with dividend per share delivering a 21.8% CAGR, while our net profit delivered a 14.1% CAGR during this period. Last but not least, share buybacks.

The Board intends to implement a discretionary share buyback plan of up to USD 500 million over a period of 18 months to be administered by an independent leading financial institutions. With that, I would like to pass the floor to our CEO, Mr.

Steve Richman.

Thanks, Frank. Good morning, everybody.

Our journey at TTI has been one based on our bookends of success; our people and our culture. We recruit, retain and invest in the best people throughout the globe.

That is core to who we are at TTI every single day. Now our users, our distribution partners, our shareholders have seen it firsthand what these people need, how they're passionate about our business, how they drive solutions every single day and how they drive the top line and bottom line performance.

Our people, the passion they have and what they deliver has resulted in outstanding performance year after year after year. And that is because of relentless focus on our consumers and our professional end users, delivering outstanding solutions that help their lives every single day.

The end result, another record-breaking year in 2025. Now when we talk about 2025, leading into 2026, there's 3 areas that we really need to talk about.

Those areas all combine from growth, profitability and execution. All of this is based on a one-team performance.

If you think about TTI, it's about the people throughout the company coming together as one team and how do we deliver as one team. Well, our operations people challenge each other based on the manufacturing in the RYOBI business or the MILWAUKEE business.

Our new product development system says what does great look like and how do we get better? How do we improve?

How do we change the game? Our growth engine from our sales and our job site solutions and our commercialization, all challenge each other to say, what does great look like?

That one-team philosophy leads to outstanding results year in, year out. How does that occur?

It occurs clearly through leadership. We talk a lot about leadership.

Do you believe we can have this success without great leaders? And I'll tell you no way.

And we have outstanding leaders from the entry-level leaders we bring into the company and grow and learn and educate to our middle management leaders that have been here 5 years or 10 years that are growing with experience. And those leaders continue to have a thirst for growing and learning and educating and getting better.

And then, of course, there's our senior leadership group. Now, think about this for a second.

How many companies do you know where the senior leaders have been together for over 19 years. Very few.

What does that mean? It's because of our culture.

It's because of these gentlemen up here. It's because of what has been developed year after year at TTI.

That senior leadership group with the relationships they have built over the 19 years is exceptional. But what they have because of that relationship is part of our culture.

They have the candid dialogue, candid communication where they can challenge each other. Alex Duarte, who runs our EMEA business, can challenge Darrell Hendrix and Greg Borland and the rest of the sales team on where do we go from here?

What does great look like? What's the right commercialization plans?

We do the same in the operations side, the supply chain piece, the financial side of our business. And this is what drives excellence every single day.

That is because we are TTI, and we think of these things differently. How does that tie to 2025 and beyond?

When we think about growth, we think about how are we going to grow in the future and what does that look like? Let's start with EMEA.

EMEA and the team dominate in specific markets, both in the consumer side of the business and in the professional business. However, there's also opportunity.

And that opportunity is to take that same domination and expand that domination into new other markets on the consumer front with RYOBI and on the professional front with MILWAUKEE. The next opportunity is where we're at the beginning of our journey of growth?

Asia and Latin America. On the MILWAUKEE part of the business, we've gone from a test and learn to be able to now grow, now invest more, now understand how we drive solutions in those markets in a significant way.

David Butts on the MILWAUKEE side in the Asia portfolio is driving that kind of success as we enter markets like Japan and say, how big can we become? How do we earn the right with that professional end user?

We have that same opportunity in Asia and Latin America now for the first time with our RYOBI business, our consumer business, the #1 brand in the globe. And we have that opportunity to be able to say, how do we test and learn in Asia?

How do we test and learn in Latin America? And how do we drive that success so we become, like in other regions, the dominant brand?

Our success, many of you believe or may believe that how can you grow more in North America? How can you grow more in Australia with both the MILWAUKEE brand and the RYOBI brand?

Well, let me tell you, we believe we're still in the early innings of our journey. Question may be why?

And the why is because we have a relentless opportunity to expand the market, get users into new businesses. And as we build new businesses, the opportunity to grow becomes more and more significant every single day.

That expansion is also how we think of those businesses and how we say, how can we solve the problem of the consumer and the pro in North America and Australia in a different way? Not only taking market share, expanding those markets, launching those new businesses and earning the right from the consumer and the pro to grow.

Next in 2025 and beyond is profitability. We made some hard decisions.

We eliminated the HART business. We made a decision in our Floor Care business to restructure the entire business and start from scratch.

We brought in one leader, a veteran in Floor Care, but understands that we need to change, how we do product development, how we do manufacturing, how we look at supply chain, clearly, how we commercialize. And the focus there is how do we follow what RYOBI and MILWAUKEE has done and understand we have to earn the right with the consumer to win.

And if we do that in a way where we're delivering disruptive innovation, leveraging our technology partners from RYOBI and MILWAUKEE, leveraging the people as one team from both, then this journey, even though it's at the beginning, has a bright future in many, many years to come. Last but not least, is how we think about the globe and how we say, how can we leverage our back office?

How can we leverage our negotiating costs on IT? How can we do the things globally to be able to free up more cash to invest in the 2 most dominant brands in the globe, MILWAUKEE and RYOBI.

And that continues and will be the path for '26 and beyond. Last, just clearly execution.

Now, many people believe that execution is the easy part. We are a paranoid group at TTI.

We actually believe this is the most challenging part of any business. You have to prioritize, you have to execute flawlessly and what do you do?

I can stand up here all day and so could Ty Stravinski and Shane Moll, who are coming up next and talk about our execution throughout the globe in each and every business and all of the regions. I'm going to give you 2 examples today.

One is the foundation of our global manufacturing organization that we put together years ago on the basis that the world was going to change, and we had to have a global footprint. Last year, you combine that with a one-time sales suspension in North America, and that combination allowed us to mitigate tariffs in a way that no one else could.

The second is how many of you have heard of disasters with ERP implementation at companies that shut down distribution, shut down manufacturing, shut down sales. It occurs every single day, and you read about it.

Our teams in North America were relentless about this. They understood the risk.

They put a robust plan together. They understood that project leadership and execution and a one team was absolutely essential.

And they did that in a manner to ensure that we were going to have success. And guess what, they executed flawlessly.

The combination of growth, the combination of the right profitability and the combination of execution is the foundation not only for what we delivered in '25, combined with our people and our culture, but why we're confident about '26 and beyond. Now, our financial focus areas, as Frank just talked about, and Horst, sales growth, absolutely essential for our success.

We all understand that. We are a growth company.

We are a technology company that must grow. How do we do that?

How do we accomplish that? Mid-single-digit growth for TTI.

No question about it. Double-digit for MILWAUKEE, single digit for RYOBI.

Profitability, our internal plan, as we stated, is to grow to 10% EBIT in 2027. And last, which is clear, is free cash flow with a target over $1 billion.

These fundamentals of financial focus are throughout the company. All the leaders understand, and we've all embraced it together to understand this means we are doing the right things for our consumers and our professionals and our distribution partners throughout the globe.

Now, let's talk a little bit about the business in 2025 by brand. If you think about the business today versus where it was many years ago, we have the 2 most dominant brands in the world, the #1 consumer brand in RYOBI, the #1 professional brand in MILWAUKEE, 91% of our sales today in 2025 and growing are these 2 brands.

With that, the results from those 2 brands delivered over 4% growth in 2025, even with the challenges we had with tariffs and other factors, as Ty will discuss and Frank already took you through. The MILWAUKEE business grew over 7.9%.

The RYOBI business had a great year at 5.4%, outstanding results overall and just the beginning. Now, why did we dominate so well with both of those brands?

The relentless pursuit of all of our team members for our consumers and our professional end users. We understand that clearly.

What makes up that dominance? Clearly, cordless leads the way for the dominance with both of the brands.

Why are we unique with cordless? We've been in the cordless lithium ion product lines and product range longer than anybody else.

And part of that is for over 20 years, both in RYOBI and in MILWAUKEE, we have clearly been forward and backward compatible with every product that a user would buy on the consumer space or the professional space. Now, why is that important?

It's the confidence. It's the confidence.

If I'm a pro on a job site, I understand that all of my batteries are going to fit all of the products. If I'm a consumer buying a lawn and garden product today and I had a power tool, I know that they will all fit.

That confidence is unique and something that MILWAUKEE and RYOBI have built year after year after year. Now, let's spend a couple of minutes on MILWAUKEE.

Shane Moll is going to take you through an extensive perspective on the MILWAUKEE business. But let me just cover a couple of facts.

$160 billion opportunity, total addressable market. Now, that's based on the verticals that we're in today, the market segments we're in today, the regions that we are in today.

It is not based on the future. The future is bright because we're going to go into more markets, more regions of the world.

We're adding more businesses throughout. We're adding more verticals.

And what we want to leave you with is we're not a product company. MILWAUKEE is a solution company.

We deliver productivity and safety on the job every single day for our users. That's why the pros trust us everywhere in the world.

RYOBI, $80 billion total addressable market, #1 brand in the globe. Once again, opportunities to expand into new markets and dominate markets, markets in EMEA, markets in Asia, markets in Latin America, add new businesses underneath the RYOBI platform, continue to innovate and disrupt in a significant way.

All of that with RYOBI leads us to success. And the RYOBI brand, what is it?

It's the brand that the consumer is confident in, in their home, in their garage, in their outdoor power equipment and outdoor space and clearly, in their lifestyle space where they can bring it to a soccer field or bring it to the mountains for camping. That is RYOBI.

We combine that like MILWAUKEE that has the best distribution partners in the globe. But in RYOBI, think about our dominance in ANZ and the Americas.

In the Americas, we have the #1 distribution partner in the globe in The Home Depot. In ANZ in New Zealand, we have the #1 distribution partner called Bunnings.

The combination of that gives us a clear competitive advantage versus everybody else in the market. And then you combine the opportunities for our other distribution partners everywhere in the world today and into those new markets.

Now when we think of innovation, we at TTI think about disruptive innovation every single day. Disruptive innovation, many of you remember what we talked about last year.

Disruptive innovation clearly comes from Clayton Christensen's Harvard Professor's model about The Innovator's Dilemma. How do we disrupt what we are doing?

Many of you may believe this is about product. And what you see is just the product we introduced in 2025.

And we clearly believe our ability to deliver disruptive product for the consumer and the professional is better than anybody else in the globe. No question.

However, disruptive innovation for us is not just product alone. It's how we leverage AI in the supply chain.

It's how we use AI to leverage quality and manufacturing inside our facilities. It's how we disrupt what we are doing.

It's how we think about our service strategy throughout the globe and what matters in one country versus another as we disrupt the current formula. Disruption is not about product alone.

Although it's important, and we believe we're best in the world in delivering those solutions to our consumers and professionals, we believe that disruption is part of our DNA in TTI and leads to our success year in, year out, and that's what we are dominating with TTI. Now, let me turn this over right now to 2 of our other outstanding leaders, Ty Stravinski, who's going to take you through after Frank, some in-depth analysis on our financials going forward.

and Shane Moll, who's going to take you through some information you've been asking for in the MILWAUKEE brand and the detail behind where we're taking the markets to disrupt with MILWAUKEE going forward throughout the globe. Ty?

Great. Thanks, Steve.

I'm super excited to be here today, and I'm going to go through a little bit more of in-depth into the financial results that Frank mentioned upfront. So, we're going to start off with our first slide, which is the sales growth -- full-year sales growth for TTI.

Our 2 leading brands, MILWAUKEE and RYOBI, delivered solid results in 2025. MILWAUKEE reported 7.9% in reported growth, but a 10.3% in underlying growth when adjusted for the non-recurring events.

RYOBI reported 5.4% in local currency. Our other non-core businesses, as Steve mentioned, represent 9% of our total global revenue.

That declined 20.4% due to that planned exit of our HART business, along with the market softness and rationalization of our Floor Care business. After adjusting for the non-recurring MILWAUKEE events, the TTI adjusted full-year sales growth was 5.7% versus the reported 4.1% in local currency.

Let's dive a little bit deeper into that MILWAUKEE underlying growth, so you can get some clarity there. Full-year sales growth was impacted by our decision made at peak tariff times to suspend certain product sales and promotions in the second half that were disproportionately affected by tariffs.

MILWAUKEE reported a global sales growth of 7.9% in local currency, but the estimated underlying sales demand of 10.3% after adjusting for the 4.2% of the reduction related to the sales suspension, offset by the 1.8% of pricing actions that we had. The underlying MILWAUKEE demand remains strong and consistent with our multi-year growth trajectory and reinforcing our confidence in our continued growth in the future.

Turning to our RYOBI sales. The RYOBI business had an outstanding year, growing 5.4%, marking the second consecutive year of single-digit growth off of the high pandemic levels.

Power tools grew single -- high-single-digits, and our outdoor products grew low-single-digits as certain storm events from 2024 did not reoccur in 2025. As the business is more closely tied to our consumer spending and weather, these results demonstrate the strength of the RYOBI platform, and they reinforce its ability to deliver sustainable long-term growth.

When you look at our other business, Steve hit on it a little bit, but looking at the other areas of business, we're really focused on driving profitability and improvement and stabilization. We reduced the all other business sales, which now make up 9% of the total global revenue by 20.4% in local currency in 2025.

The planned exit of the HART business contributed 40% decline to this decrease and the $156 million of sales will not repeat in 2026. Now, I want to take a little bit of time and talk through some of the color and clarity around the first half and second half sales growth for TTI.

When you look at how the non-recurring items impacted the first half and second half sales growth, you'll see the adjusted sales growth is well balanced across both halves with a slight acceleration into the second half as sales were reported 5.6% in the first half and 5.7% in the second half. The main driver of the adjusted sales growth relates to the major ERP conversion that Steve mentioned that we did in the MILWAUKEE business on July 1.

This required the pull forward of sales from the second half into the first half, and this inflated the first half sales by 1.9% and impacted the second half sales. The second non-recurring item relates to the MILWAUKEE sales suspension I mentioned in the prior slides.

This impacted the second half sales for TTI by 3.2 points in the second half. Clearly, this demonstrates that the strong demand continued for our products across both periods within 2025.

Gross margin walk. So, looking at our full-year gross margin compared to 2025, we saw a 91 basis point accretion.

The main contributors were outperformance and growth in our higher-margin businesses of MILWAUKEE and RYOBI, which now make up 91% of our total global revenue. This drove a 55 basis point margin improvement.

Our strong performance in our EMEA and Asia regions, which have higher gross margins, drove 57 basis points of margin accretion for the business. The work the teams did to really leverage costs in our factories and work with our supply base to drive down costs and move and mitigate tariff activities, but we still saw a 21% drag even over these efforts in our -- after our pricing actions.

Overall, TTI continued its overall year-over-year increase in gross margin in a challenging tariff environment and landscape. Looking at our EBIT.

We delivered a normalized EBIT margin before the HART exit cost of 9.3%, which is a 57 basis point increase versus 2024. The main drivers were the work that we've done to take out the structural corporate, admin and G&A costs and really leverage synergies, AI and leveraging our assets.

As I mentioned earlier, the gross margin performance from our EMEA and Asia regions drove additional EBIT margin accretion of 18 basis points after the investment in resources to drive the growth in those regions. Finally, the mix towards higher-margin businesses aligned with the leverage of the global initiatives that Steve mentioned before, really delivered another 19 basis points of improvement.

These combined brought our normalized margin to 9.3%, which is where we're using as our basis as we build towards our internal target of 10% EBIT margin in the near future. As Frank mentioned in his section, we've delivered 3 consecutive years of over $1 billion in free cash flow generation, and our gearing is now negative 10%.

This performance, along with our confidence in our future plans, allows us to continue our increased dividend trend and to announce our intended stock buyback plan of USD 500 million over the next 18 months. We anticipate that the combination of our plans, along with these actions will further increase shareholder returns for years to come.

Thank you very much. And I'd now like to turn it over to Shane Moll, Group President of MILWAUKEE Tool to go through some more exciting details regarding the MILWAUKEE business.

[Presentation]

All right. MILWAUKEE Tool employees throughout the word are united by a single mindset that is to disrupt everything we do for the greatest outcome for our users.

As you saw in the video there from Dan, Max and Tony, leaders at the center of our innovation engine, we challenge the status quo in what we do every single day. Our expertise in machine learning and AI is reshaping how we're bringing new solutions to market.

We continue to extend our capability to increase the safety, productivity and quality of our users throughout the world. MILWAUKEE continues to expand our capability to address the problems that are being approached in the field every single day.

Today, I will share with you how MILWAUKEE remains unique in understanding the distinct problems that are encountered by the trades throughout the world and how we're leveraging technology to increase safety and productivity. I'll share with you how MILWAUKEE is purposeful and intentional in the verticals that we serve and the end markets that we compete in.

We serve in end markets that are not only recession-proof, but are also delivering the highest growth in the world. And finally, I will share with you how we continue to invest in innovation that's purposeful to keep MILWAUKEE in a leadership position, to expand our profitability and accelerate our growth.

Today, MILWAUKEE is developing deep relationships within 10 key trade verticals, a level of scale and focus unmatched by anybody in the industry. MILWAUKEE continues to compete in these trade verticals with execution that begins with over 1,600 highly skilled job site solutions team members that are embedded deep, building partnerships with the trades to understand the rapidly changing needs.

The workplace is simply becoming more complex, and MILWAUKEE continues to engage in the field to better understand the challenges that they face every single day. Our partnerships enable us to develop solutions with the trades that we partner together, solutions that they not only trust but specify and demand in their work, creating an opportunity for MILWAUKEE to increase our position in the market and expand our profitability.

Solving the challenges today, in addition to anticipating the problems that will occur in the field together, enables us to continue to expand our $160 billion total addressable market. MILWAUKEE's pipeline of innovation is evidenced by over 17 distinct global businesses, each catered specifically for our core trades and aligned with the problems that they're facing in the field every single day.

Each of these businesses are led by subject matter experts, experts that understand the challenges that we are facing together. These subject matter experts work together to address this $160 billion total addressable market that is bound by our understanding of the trades unlike anybody in the industry.

As the job sites continue to evolve, we ensure that we stay ahead by continuing to address the problems that the trades face every single day, and we address them together. Not only does this allow us to enter businesses, this allows us to create entirely new businesses to continually increase our progressive opportunity for growth well into the future.

This results in a cycle of innovation, business creation and partnerships that make MILWAUKEE the brand of choice. Now, I would like to thank the investment community for this next topic we're going to address because this is something that we've been asked for quite some time.

And the question is, what is MILWAUKEE's end market exposure? Well, before I get into the detail, a couple of key takeaways.

Number one, our exposure to our end markets is purposeful. It ties to the trade verticals that we're focused on, the segments that they work in, the solutions that we deliver.

So, this is intentional in the markets that we serve. We serve markets that are both recession-proof as well as high growth.

So if you look at MILWAUKEE's end market exposure, the key takeaway is that we are anchored by the highly durable market of service and maintenance work that is work that requires to be done regardless of the economic environment, in addition to taking advantage of the high-growth opportunities that are in the markets of technology, energy and manufacturing. So, MILWAUKEE is anchored to both durable markets that are recession-proof as well as these high-growth markets, is one of the reasons why we continue to be very confident in our 10%-plus growth well into the future.

Now, let's talk a little bit about each of these markets. Service and maintenance, as I shared, is highly durable.

It's one of the most robust and fastest-growing segments of the market for MILWAUKEE. This represents residential services, commercial services, transportation maintenance and mining.

And if you think about this aspect of work, it's around us everywhere; aging homes, aging commercial buildings, aging industrial facilities and aging vehicle fleet and increasing demand in transportation and mining throughout the world is resulting a surge in retrofit, repair and upgrade work. In addition, electrical efficiency mandates in addition to smart building adoption as well as labor that's being outsourced as the trades exit in a lot of these facilities where the work needs to be done.

That's why MILWAUKEE is partnering with these trades within service and maintenance to deliver safety and productivity solutions that we can address the problems together. This is why MILWAUKEE continues to invest in this very robust and fast-growing segment of our market.

Next, technology, energy and manufacturing. It simply is hard to ignore.

This is areas of the market and the fastest-growing markets across the developed regions throughout the world. This includes data centers, high-tech manufacturing, power utility, water utility, gas as well as telecom utilities.

These are simply put the fastest-growing segments of construction throughout the world. They're supported by heavy investment throughout the world, led by artificial intelligence, reindustrialization, grid modernization and electrification.

And if you look at these segments of work, why we like them a lot is we've been focused on our trade verticals coming up on 2 decades. And if you look at a job inside of a data center, in a data center, the work required by the mechanical, electrical and plumbing trades is double the amount of work in a traditional non-residential construction site.

So simply put, in a market where the constraints on labor have never been more challenging, that's why they work with us to develop these safety and productivity-driven solutions. So as you see, as you look at these 2 end markets combined, these end markets represent about 80% of the demand for the solutions of our product worldwide.

These greatly overweigh our exposure to residential construction and remodeling. This is why MILWAUKEE is so confident in our growth as we move forward to deliver 10%-plus growth because we are anchored to in a purposeful strategy to the fastest, largest and most resilient segments in the world.

Now in order for us to be relevant in these end markets requires a continued investment in innovation. Now, you see this innovation as we release hundreds of new solutions every single year.

But the true matter of differentiation for MILWAUKEE is not just the solutions that we deliver, it's the manner in which we innovate. Because we're deep, tied partner to the trades, we have unique insight unlike anybody in the industry, solving the problems with them.

So, we're able to pinpoint our investment in R&D and our investment in innovation to maximize the safety and productivity of the trades. You could see this in 3 key areas throughout our business.

First is the physical solutions that we deliver to truly interrupt workflows. One of the unique solutions that we delivered this year is the M18 Branch Conduit Bender.

This is an application that's done in data centers and high-tech manufacturing throughout the world. It's one of the largest consumptions of labor on job sites, period.

And why is that the case? Because today, it's being done by manual tools.

MILWAUKEE innovated by bringing powered intelligence to this application that brings a high level of quality, drastically increases productivity on the job site as well as in pre-fab environments to provide a safety and productivity solution that is unmatched in bringing productivity to the job site. Another example is in a newer end market that we're servicing, which is the natural gas technician.

MILWAUKEE just introduced the MX FUEL Electrofusion Processor. That is a unique product that provides portability and capability unlike the industry has ever seen.

In addition, it provides the intelligence to deliver traceability and quality of work that MILWAUKEE can only deliver. These solutions let these end markets know that we are focused on delivering solutions specifically for them.

If you look at the area of PPE, one of the fastest-growing segments of our business, what we've done with our BOLT Safety program worldwide in our helmet program simply is remarkable. We recently received accolades by receiving the top 2 spots of the 5-star Virginia's Tech Gold Standard Safety study that have reaffirmed to us independently that we are leveraging innovation to increase the safety of workers throughout the world.

Coupled with this, MILWAUKEE continues to invest in innovation across our platform technology, the things that are hard to see unless you crack open our tools. What we're doing to innovate in areas of motors, batteries, electronics and sensors to truly bring intelligence and productivity unlike anybody in the industry.

And last but not least, is that MILWAUKEE is very well known for our physical solutions, but we probably have not talked a lot about our digital solutions as well. MILWAUKEE continues to invest in software, connectivity, AI and machine learning to create digital unified ecosystems like what we delivered with AUTOSTOP, deliver safety to the world that has never been seen before by leveraging machine learning and the largest connected tool platform in ONE-KEY.

ONE-KEY is the largest digital enterprise-wide inventory management system that allows unmatched investment and productivity for trades throughout the world. So as you see, MILWAUKEE is not only adjacent and tied to the end markets that deliver resilient growth, we also are delivering solutions that is the reason why they continue to ask and partner with MILWAUKEE on job sites throughout the world.

I think you see MILWAUKEE has been executing a very unique strategy over the past 20 years. It's a strategy that enables us to have unmatched insight into the challenge that the trades face every day.

It enables us to not only deliver new solutions, but also create new market opportunities for growth and purposely aligned to the end markets that are recession-proof and are the highest growth in the world. MILWAUKEE continues to invest in innovation to provide safety and productivity that will enhance our profitability and enhance our growth well into the future.

But as Steve noted, all of this is anchored by remarkable people and an exceptional culture. Thank you.

All right. Thank you, management team.

We'll now go to the Q&A session portion of the presentation. Fast, maybe if everybody can just say their name and firm and try to keep it to one question and a follow-up to give everybody an opportunity.

Karen?

Yes. This is Karen from JPMorgan.

Thanks a lot for the management team once again making efforts to fly to Hong Kong. I know it's a lot of effort flying from the U.S., particularly given the current situation.

And then congratulations on the solid results. I do have -- I can ask only one question, is it?

So, maybe I think my first and foremost question will be regarding your revenue growth. I hear you regarding, I think, mid- to high single-digit blended revenue growth for MILWAUKEE plus will be low teen for MILWAUKEE in 2026.

I think that is certainly very solid, particularly given a lot of uncertainty going on in the world, including the U.S. But how do we actually think about while we've been talking about in terms of TAM expansion, a very solid demand driver?

I think Shane is highlighting, and thanks so much for sharing the breakdown in terms of the end demand for MILWAUKEE. We are definitely seeing the data center and so on is now forming a big part of that.

But how do we think about how this is playing into our numbers? And particularly, yes, Home Depot, which is our partner is also talking about the TAM expansion.

And then can I ask, Steven, what is the underlying assumption for that revenue growth in terms of interest rate fiscal policy in the U.S.?

Go ahead, Steve.

Clearly, as you heard from Shane and from Ty and from Frank, we clearly believe that the TAM expansion as we add new businesses and as we go into more depth in the verticals that, that opportunity becomes very, very relevant for us on the MILWAUKEE side as well as on the RYOBI side of the business. Both of them have geographical expansion opportunities as well.

The one thing you have consistently seen from us is, as we add new businesses, our current TAM for each one of those verticals continues to grow and our opportunities that we see globally continue to grow as well. Underlying demand is extremely positive.

And that's positive because of our ability to drive market expansion. It's our ability to be able to go deeper and partner with our core users.

It's clearly the ability on the MILWAUKEE side where there's a shortage of labor everywhere in the globe of that talented labor, and they are looking for more productivity solutions and more safety solutions every day. And that's why our confidence level for double-digit growth continues year after year and our investment in disruptive innovation to be able to accomplish that.

Are you assuming any interest rate cut for the year behind that 10% to 15% level?

We are not assuming anything dramatic in terms of interest rate cuts or changes. As you saw from Shane, the majority of our business is not based on residential construction.

And that's why we are so confident in terms of the verticals we're in, the users we supply every single day.

This is Jacqueline Du from Goldman Sachs. First of all, I just want to say, I think this is TTI's best ever results presentation.

And thank you so much for the very detailed top line breakdown as well as the performance attribution analysis. Super helpful.

I just have one question. I think you have a slide on EBIT margin walk.

If we take a forward-looking perspective, you have this 10% OP margin target by 2027, right? I just want to know what are the detailed measures to deliver that target?

Can you do a forward-looking attribution analysis as well?

Yes. First off, I think if you take a look when we back out the HART business, right, and you take a look, you can get to that 9.3%, from that perspective, it's a continuation of what we do as a business, right?

It's a continuation of what Shane talked about. And as we look at new product verticals to get into additional trade verticals to get into where we see higher profit margins from those products, as we continue to expand our geographical regions, right, into different parts of EMEA into Latin America, as we get into the Asia markets more, those tend to be higher gross margin regions of the world for us, both from the RYOBI and the MILWAUKEE side of the business.

And that really helps us drive that gross margin side. And then from an SG&A side, we've continued to look at ways to leverage costs, leverage the back-office operations, leverage technology, AI, continue to work as one team globally to try to leverage in those costs, too.

So, we have the plan put forth, I mean, to get to the 10% internal target. And as Steve mentioned, it's a matter of execution, which is what we do really good.

This is Johnson from Jefferies. Thank you for giving me the opportunity to once again meet you guys.

It feels like every 6 months, we see all the friends and the whole investor community all here at the TTI results presentation. So from the set of results, I get the sense that TTI is very focused on profitability, which is something I really like to see.

And exiting that HART business was, I think, one way to go to that path. So, what was the reason though?

Why we exited the HART business? Because I remember a few years back, sitting in the same room, we were very excited about the HART business.

So, was there a relationship breakdown with Walmart that led to this? What was the lessons that we took away from this exit of the HART business?

So, that would give us some clarity on that.

Thanks, Johnson. Let me be real clear.

As we stated, yes, we're focused on profitability. But we are a technology company based on growth.

And our growth drivers are the 2 most dominant brands in the globe, one being MILWAUKEE on the professional side and the other being RYOBI on the consumer side. Overall, it was our decision that as we have this most dominant brand in RYOBI, the ability and the need to be able to compete with ourselves was not strategically the right approach versus us to, say, how do we leverage and increase innovation in the RYOBI brand?

How do we take that brand and develop more market opportunities with that? How do we expand into new markets?

And how do we look at all of that together? And that led us to the conclusion that the strategy to exit HART was the right call.

So the RYOBI products will now be sold in Walmart or that will not?

No, that's not what I'm saying. What I'm saying is that we believe in the RYOBI brand.

We believe in our distribution strategy that we have today for the RYOBI brand. And we believe that there's additional new markets for us to attack from Asia to Latin America, as well as delivering more and more innovation and more and more new businesses under the RYOBI brand and the RYOBI platform.

This is Xiao Feng from CITIC CLSA. So, 2 quick questions.

I think this is a very interesting presentation regarding the downstream market exposure breakdown for the MILWAUKEE Tools. So the first one is, what do you expect a potential change of the exposure?

I'm very glad to hear that you guys are very recession-proof, but do you think the breakdown between manufacturing, energy, technology, manufacturing versus maintenance, repairment, will that breakdown change potentially in the future based on your outlook? The second question is, what is the downstream exposure of RYOBI?

How does that look like?

I'll take the MILWAUKEE question. So, one of the exciting things about these end markets that we serve that represent a majority of our demand is on the technology, energy manufacturing side, there's a very significant backlog of work that needs to get done and a lot of the challenges are driven by the access to labor and the shortage of labor.

So, we think that the current relationship between those 2 end markets for our business is going to be very consistent into the near future, driven largely by the stability and the durability of what's happening in the service and maintenance side as that continues to -- it's hard to ignore the aging infrastructure and what's happening. And then also technology and energy and manufacturing, you see the investment there continues.

The backlog is incredibly strong. We're very close to our trade partners that are completing the work as well as the owners that are investing in these projects.

So, we feel confident with the mix into the near term in terms of our end market exposure. So, we don't expect that, that is going to change drastically moving forward.

On the consumer front, let's talk a little bit about RYOBI and why we're so confident in the brand. There is the future piece of new geographical expansion.

There is the ability to be able to say, we're going to enter new businesses under RYOBI. But the core is real clear.

When you have an installed base of millions and millions of batteries and products that are out with individuals throughout the globe. And that platform is backward and forward compatible for over 20-plus years.

And people have already invested in that platform and that system. The ability for them to continue to buy and acquire more and more products into that platform that will help them solve their needs in the house, in the garage, in the yard, in the lifestyle that they live is absolutely unbelievable in terms of long-term growth and long-term opportunity.

You combine that within the Americas and Australia, as I said, with the 2 largest, best understanding consumer-driven distribution partners with The Home Depot and Bunnings. And that's why we are confident on top of the rest of the growth opportunities that we have nothing but growth in the future.

Eric?

Eric from Citi. Actually, a big congrats to the management for the excellent result.

And then thank you so much for the great presentation. May I have just a follow-up question about the top line growth like Karen just asked?

You said the top line growth mid- to high single digit. And then my question is, why don't we set higher, right, high single-digit, then assuming MILWAUKEE, not low teens, but should be mid-teens?

Because the point is we see a couple of tailwind this year. You just mentioned you are going to reduce the tariff exposure, right.

Suppose this speed up the industry consolidation. And then the second is the -- you just mentioned AI machine also improve their R&D, speed up the new product development.

And then more important is the largest customer, Home Depot and then the competitor, Lowe's also speed up the same-store sales growth this year, around 2% as maximum, right, versus flat last year. So, why don't we set mid-teen for the MILWAUKEE growth this year?

Eric, you always have an optimistic...

So my point is concern...

No, let's walk through it a little bit. I mean, when we think about what that looks like for 2026, we continue to charge forward with the double-digit 10% to 12%, let's use that range for the MILWAUKEE side.

RYOBI is always going to -- we're looking at a low single-digit to mid-single-digit growth from that side. We're exiting the HART business, which won't be repeating.

So, you're going to have a drag, right, in '26 from that aspect. And we're still working on that stabilization and improving the profitability of the all other business right now.

So, we're going to continue to have that as a continued shrinking piece of the business as we go forward. So when you model all of that together, I think when you get to -- that gets you to a mid-single digits with a stretch to get higher, but obviously, mid-single digits from that perspective.

Yes. I know.

My point is why don't you set a little bit higher for MILWAUKEE growth, I mean, say, mid-teens rather than low teens, I mean?

10% and 12% on a -- really big number, is a big number, Eric. Right?

It's a lot of new companies, Eric. Lot of new companies.

I mean, what's your concern or growth constraint for this year? Can you share a little bit more color here?

Growth constraint or concern? We don't have concern.

We do not have concern. We believe everything that Shane talked about in MILWAUKEE is why it will continue to grow, while the new dominance in new markets and regions will continue to grow, that the Asia and Latin America are opportunities.

All of that is opportunities for continued growth. The level of growth that you want is we love the passion that you always have about the business and the growth expectations.

At the same time, we are -- believe that we are very prudent in terms of saying this is where our numbers are as we go forward into 2026.

Yes. And Steve, internally, we do have a higher target for our business units.

There's always a stretch.

There's always a stretch, Eric. Always a stretch.

This is Terence Chang from Macquarie. So, I just want to kind of ask management about -- obviously, last year, the company did a great job in mitigating the tariffs.

And obviously, a week ago, we have the Supreme Court ruling on the tariff. So, I guess it's a 2-part question.

In terms of first part, on the U.S. business, what exactly is your sourcing exposure by region, hopefully?

And also with the tariff rate currently at 10% as compared to 20% for Vietnam specifically, are we going to see some potential tailwind going into the second half of the year, while maybe first half, you will see some sort of tariff headwinds? So, maybe it will be helpful if you can walk through the sourcing part and also on the tariff cadence -- impact of the tariff cadence.

So as we discussed years ago, we made a strategic decision to have a global manufacturing strategy, which clearly means China, clearly means Vietnam, Mexico, U.S., Germany, throughout the globe and many other parts throughout the globe as well. That plan was clearly executed, as we said, by the end of last year, which leaves us in a situation to supply the U.S.

market that we will not be shipping product from China for the U.S. portfolio and the market today for 2026.

Now, you say what's next? What does it mean with all the rulings?

There's clearly not clarity. We are in a fluid situation that changes sometimes daily, sometimes weekly, sometimes monthly.

And because of that, we cannot give you any distinct clarity on what that's going to look like for the rest of this year until we have some final clarity ourselves on what that means for ourselves and our distribution partners.

Good. Why don't we wrap it up there?

Let me hand it back to the management team for some closing remarks.

It's not getting boring. Don't worry.

I think the strength of TTI is that we have accumulated cash. We are ready for opportunities.

And I'm very proud to say of our management. We have a succession plan, and you have seen that our business has been growing from strength to strength in the last years.

And I assure you the best is still to come for TTI. If you have watched what was presented by Shane Moll and by you, Ty, you are not wrong, why keep an eye on TTI and invest.

And I will be one of the first one who will lead the coup. Thank you very much for attending.