Good morning. Feels rather odd standing up in front of you guys.

Normally we sit down, but we decided if we sit down in front of the slides, it wouldn't make much sense, and we haven't given you paper copies. We're standing up today.

Look, really delighted to be here. I'll try and organize the slides as we go along.

I'm Ronnie George, Chief Executive of Volution. Me really well by now.

Andy O'Brien, Chief Financial Officer, been with the group for nearly seven years now. We've been doing this for some time.

I thought about this this morning as I came in on the train, another set of half-year results, and we'll take you through it. Look, I think in no uncertain terms, this is a really great set of results.

I'm really proud, along with Andy, to be standing up here this morning taking you through it in what is no doubt an ongoing sort of challenging backdrop. We'd like to take you through our results.

I'll just sort of kick off with some headlines. It is a strong first-half performance and not surprising really.

We had revenue growth of just over 20% on a constant currency basis, obviously benefiting from the acquisition that we made previously. We've had strong volume-led organic growth of 4.2% on a constant currency basis.

All three of our regions have grown organically. Very, very pleased about that.

Adjusted operating profit margin is 22.6%. That's an organic margin improvement of 40 basis points on the prior year.

We had some small dilution because of Fantech, but in actual fact the dilution from Fantech is today far less than you would have expected when we first made that acquisition. Really delighted with our operating profit margin, and we'll spend a bit more time taking you through that in a little bit of detail.

Good cash conversion, 98%. This is at the half-year, typically we would expect cash conversion to be stronger throughout the year, second half is stronger.

So 98% at the first half of the year, debt leverage 1.3 times. Look, one of our metrics around revenue, is to talk about low carbon revenue, and that increased to 72.1% of the total, and that's because of good growth throughout our heat recovery ranges.

This is a sort of post half-year outcome, but we completed the acquisition of AC Industries in Australia at the beginning of February. We'll spend a little bit of time on this one as we move to the back of the presentation, but this is a super exciting new addition to the group that we completed at the beginning of February, strengthens our position in Australasia, very, very pleased about bringing that company into the group.

Look, good organic growth and further organic margin expansion. This slide here, I said to Andy I won't do too much of it.

In actual fact, I think it speaks for itself. These are our long-term sort of key financial targets, and in actual fact if you look at each of them individually, I won't read them out, but we are either ahead or in line with each and every one of those targets.

Very pleased about this. As we go through in a little bit more detail, we'll elaborate.

Look, it's a really good set of results. I'm going to try and elegantly move away now and hand over to Andy, who's going to take you through the financial review.

I'll come back then afterwards and just go through each of our three geographic areas and just spend a little bit of time there. We think this presentation probably takes 25, 30 minutes, and then we'll leave the balance of the half an hour, if you like the hour, for Q&A.

Okay?

Which way are you going?

I don't know. I'll go this way.

Right.

Morning, everybody. As Ronnie said, it feels a bit strange standing up rather than sitting down.

Of course, the downside when you're 5 ft 7 in is people realize that, when you sit down, it's not so obvious. Look, Ronnie's already the the highlights for the period in in large part was the financial performance.

Obviously Ronnie's talked about a number of these pieces already. Look, this we like to look at this obviously, as I'm sure you do, over not just a 1-year basis, but over a over a long-term consistency basis.

I think, if you follow all of those charts over the last 5 years, I think it's a really strong and consistent trajectory on on all of the key things that we want to deliver. It's not just about delivering well in this period, it's about delivering well consistently.

I think, we we'll I'll go into more depth on on each of these key ones sort of as we go. We've on the margin one, we've we've shown you what the margin would have looked like organically as well as in totality.

This is where you can see that actually, there was a nice organic margin improvement. Then, as Ronnie said, the Fantech the Fantech margin is already moving it was already moving in the right direction through some really good initiatives that we're driving, but there is a little bit of inevitable dilution from that.

Look, overall, still a really really strong margin outturn from the business. On the bottom right there, and I will do more detail obviously around cash flow as we move deeper into the slides, but, the leverage there of 1.3 times, full clarity, of course, this is before the completion of AC Industries, we completed that transaction on the 2nd of February.

If you had put that pro forma into our numbers at 31st of January, then that 1.3 times would have become 1.8 times, which is exactly what we'd sort of signposted when we completed the transaction or sorry, when we announced the transaction pre-Christmas. I think what it does also still show is that, 1.8 times is still in a very comfortable position in terms of future M&A optionality, particularly given how strong and consistent and reliable the cash generation of the business is.

This slide actually no- the basically covers what we've already talked about, maybe I'll just draw on a couple of the things that actually aren't there, but just as a sort of I guess help the analysts with with their modeling and with their numbers. Revenue, operating profit, we'll talk about some more as we go into subsequent slides.

Finance costs were of course slightly elevated in this period because of the borrowings for Fantech. The actual yeah, in- interest rate on our debt was slightly down compared to the prior period, but in total terms finance costs increased from £3.6 million in prior year first half to £5.1 million in this first half, as I say due to the Fantech borrowing.

Our tax rate was up ever so slightly, and again we'd indicated that this would happen. Australia and New Zealand have tax rates up at 30% versus sort of low 20s for the f- f- for the group average before that, our effective tax rate nudged up from 21.8% in full year 2025 to 22.5% this period.

You'll also see reference there to the dividends, a dividend of interim dividend of 4p per share, so that's up almost 18%. Then, breaking the revenue a little bit further, as usual Ronnie will go through the regional color and the regional details in in subsequent slides.

I think, what's really pleasing about that block in green is, 4.2% constant currency, so, above the midpoint of our 3% to 5% stated range despite, as I say generally speaking, still unhelpful markets, which, Ronnie said I've been doing this for 7 years, he's been doing it for 18, I think for the 7 years I think I've been saying unhelpful markets for most of those 7 years, but I think it's definitely the case this time around. Actually what's really pleasing, and we did talk a little bit about this at the year end, we said that, the last couple of years we've had really strong organic growth, but there's been pockets of super strength and some pockets that have been tougher, and I think what we'd signposted was that we expected a bit more of a normalization around that around that sort of 3% to 5% range.

Indeed what you see there is, all three of the regions really pleasingly delivering within or in the case of Europe slightly slightly above that range. Bottom in in in the green strapline there, you'll see the sort of how we've analyzed the 4.2% between volume and price.

It is very, very much a volume-driven growth, price 0.6% overall blended for the for the period. Of course, looking back to the margin or indeed looking forward to the margin, that 0.6% price is still clearly I think as this would would demonstrate correctly pitched, because we've been able to continue to expand the organic margins actually of all three regions.

If you look at the if you look at the bottom middle bit there where you've got the regional breakdown of margins for this period compared to half one of 2025, UK now up north of 26%, which is a fantastic margin, but, Europe again 120 basis points growth. Then in Australasia, of course, this is where the Fantech mix effect comes in, but if you looked at the organic margin, that was up again in the period.

Look, a really, really pleasing set of numbers on all of the businesses there. Move to the next slide.

A little bit more detail maybe on this one. Cash conversion, as Ronnie said at the outset, we set ourselves a target of being sort of 90% or above cash conversion on a full-year basis.

We generate cash reliably through the year, but generally speaking, our conversion might be slightly higher in the second half of a of of of a normal year than a first half. Actually 98% I think in that context is a really really pleasing outcome.

If you just look at the waterfall there on the left in terms of how and where we've used that that that cash over the period. Working capital, there was a small increase, a small outflow of £4 million, but that's very much in line with activity growth.

I think, actually our working capital is well managed. Our inventory, over the previous couple of years we'd seen a little bit of optimization, this was where perhaps, 2, 3 years ago when supply chains were particularly difficult, we had, as you'll remember, deliberately increased our inventory, which we think is absolutely the right thing to do for customer service perspective, but we then said that perhaps that had opened up a few opportunities to slightly optimize, and I think over the previous couple of years we've done that.

I think now we've got working capital very much at at the right level for the business, I would expect that typically now to flow in line with with activity, which I think is what you see there. We spent £4.3 million on on CapEx in the period, and we've always talked of a sort of £8 million, £9 million, £10 million full-year spend, it's very much in that range.

It's slightly higher than we spent in the equivalent first half of last year, which was £2.8 million. I think again, we we we our our CapEx is not a big number, but that's not because we hold it back.

We're always keen to invest in things which support and grow the organic business. In the period, some continuing exciting investment around new products.

We spent just under £1 million on new product development projects and initiatives across across the business, a similar number, just under £1 million, in Reading. A number of you have been round our Reading facility.

Those who have been round more recently will have seen some of the some of the big investment that we've done there in terms of injection molding capacity, and that's all about efficiency, future-proofing capacity for for further growth. Then we've also continued with programs such as the capacity expansion in ERI in North Macedonia, which will take place over the next couple of years.

The the acquisition number there, the £30.1 million, that is the deferred consideration for the Fantech acquisition. You'll probably remember that when we when we completed that in in 2024, there was a $60 million, £30 million deferred element of the consideration, so that went out in this period.

As I mentioned earlier, the leverage of 1.3x there is pre the AC Industries transaction, with that it would have been 1.8 times. Return on invested capital, again really what we've sort of said here is our target is 20% and above whilst continuing to invest in really attractive and and value-accretive acquisitions into the business.

This is the f- the methodology we use here is to have last 12 months of earnings and measure that against a three-point average on the balance sheet. This is the fir- so that's, 12 months ago, 6 months ago, and now.

This is the first period where actually you see the complete effect of Fantech in that return on invested capital number there. The fact that it only nudged down slightly from 25% to 24.6% I think is, having done by far the biggest acquisition we've ever done, I think that's that that's sort of really supportive of the strength of of of this metric.

There, as as we said on the third bullet point, if we hadn't had that Fantech effect this time around, again the organic returns for the business would have would have improved. I don't normally take this one, but but in terms of sustainability, as Ronnie mentioned earlier, low carbon revenue percentage continuing to expand in fact quite meaningfully there from just under 68% to just over 72%.

We think this is the direction of travel. Whether this is, as we've said on the bullet point there, continued growth in heat recovery and and actually in the UK it's also been the sort of continuous running solutions, which the regulations have supported over recent years.

Recycled plastics, yeah, we're now off at a very, very strong level, north of 80%. We do we're continuing to work on opportunities and new materials and new ways of nudging that number up, but it does get difficult.

In this period, although we did increase so we increased the tonnage of recycled plastics that we used across our facilities, but in terms of percentages it's come off ever so slightly. There have been a few availability challenges, and this is where we continue to sort of trial and look to develop new sources.

North of 80% is is is a really strong number, and I think, I'm sure when we come into the Q&A we might talk a little bit about what's going on in the world right now, but I think, with oil price volatility, I think the benefit of recycled plastics, which is somewhat insulated from that effect, I think is is definitely something that we're we think is important. Health and safety, slight worsening in the metric here, which is a disappointment, and so, we we this is something which we continue to focus on very, very strongly as a group, so, how can we how can we share best practice, how can we support the smaller businesses and the bigger businesses and and improve continue to improve that culture and that methodology here.

We've had a new UK operations director who's joined us in this period, and she's, made a great start in terms of supporting the UK operations, but she's also very, very steeped in health and safety, I think she's going to be a really powerful advocate for continuing that and supporting some of our smaller businesses in how they move forward there as well. With that, I'll pass back across to Ronnie.

Thanks, Andy, for for that. As I say, it's a cracking set of numbers to go through.

We're really very pleased about the performance in the first half. A little bit about what's what's sort of been happening.

Volution at a at a at a glance, and, not surprisingly our proportion of total group revenue in Australasia has has been growing. The important takeaway from this slide is geographic diversity.

I think what we've talked about for some time when we've stood up in the past is we've had some really strong revenue growth in the UK, which I which I know has been sort of counterintuitive to some of you in terms of the overall performance of the market. That was very much sort of regulatory, is regulatory led and benefiting from some share gains and some innovation that we brought to the market.

We're still, look, we're still super excited about the UK market medium term, but we know that it's a little bit more challenging at the moment in terms of, new-build housing activity, for example. What we've got is this geographic diversity, and as as much as Andy and I would love to be standing up here and saying every individual element across all three of our geographies is pointing up at the same time, the reality in life is that that's not always the case.

Clearly what we've got at the moment is some stronger performance in some of the other areas. Look, we we're absolutely nailed to these three geographic areas.

I'll talk a little bit about AC Industries towards the end of the presentation, but of course our proportion of total revenue in Australasia will grow further with that addition. You can see it nicely here.

We we've been listed since 2014. I became Chief Executive in 2012, and this was all about a a classic buy-and-build international expansion strategy, and we've delivered that really well.

We're culminating now with a third of our revenue still in Europe, and not not to spend too much time on on the sort of M&A and the outlook and so forth, but by definition we're underweight here and to a lesser extent here, and of course that's where we continue to focus all of our time and attention in terms of future M&A opportunities. Just going through each of the sort of regional areas in a bit of detail.

I I remember probably I think Andy joined in 2019, we had a UK operating profit margin that had been a little bit subdued through quite a big investment that we'd made in Reading, and we were talking about 18%, 19% operating profit margin. We've just landed at 26.3%, and it's a very established, mature UK operating structure here where we're getting huge economies of scale and running our brands really well in into the market.

The way to think about this is our our residential ventilation grew 4.2% in the year, which we're actually really pleased about. We had a strong very strong residential performance throughout all of FY 2025.

If we look at the moment, we we're still underpinned by regulatory changes, we still see opportunity for share gains. Tactically, we think it's an opportunity there, but we are clearly against a backdrop of, a little bit less certainty around housebuilding, and I think by now we probably hoped that housebuilding was recovering at a faster rate.

Nevertheless, delighted about the performance in the first half of the year, and regulations will continue to be a theme. Of course sticking with that, Awaab's Law isn't so much a regulation, but an awareness issue in UK social housing.

We've seen, ongoing strong social housing demand. We think that's set to continue, but there is also the balance of affordability versus versus the demand.

The demand for ventilation solutions in social housing refurbishment is strong. We see that sort of tailwind being there for many years into the future, but then you come back to the affordability for these housing associations and so forth.

Look, these are areas where we consider ourselves to have a leadership position across residential new-build, social housing refurbishment, and private RMI by some considerable distance. I think that's a good segue into commercial, down 7.3%.

Tough market. We we we don't think the market's been particularly easy.

We're not particularly happy about our performance in UK commercial, and it remains an opportunity. It remains an opportunity because we are subscale, we are smaller.

We made some investments in the year. We we've taken on an additional facility in Dudley in the West Midlands.

We've effectively grown our foot- pin- print two times. That's incorporated in the numbers, our 26.3% operating profit margin includes the facility that we now have and that we're scaling up.

We remain ambitious in this UK commercial market, but I think it will take us some time tactically to actually start eking out share gains and so forth into the future, but it's absolutely an important priority for us. Export, it's a small number, grew really well, 20% revenue growth, a lot of that in Ireland.

Ireland housebuilding trajectory is what we would probably like to see from a UK perspective, but we're not there yet. Strong regulatory drivers, strong market position, quite a bit of innovation, perform really well, and I think the outlook is equally equally quite strong.

I I saw a statistic the other day about whether or not necessarily believe it, but, Irish housebuilding getting up to 60,000 units in the year into the future, and we're probably only running at about 40,000 units at the moment. We still think there's a strong market outlook.

Just finally on the UK piece, OEM, this OEM revenue is third-party customers. A lot of our motorized impellers are increasingly used internally.

We struggled with our OEM proposition a couple of years ago, done some tremendous work closing two facilities into one, improving the quality of the business, and we're really delighted about the contribution in terms of organic and profit growth that the OEM part of the UK business has delivered in the year. Look, overall, 3.8% organic growth, good margin expansion, adjusted operating profit up 6.2%.

Moving to Europe, I think in particular I'm pleased about the Nordics. We, for many years we'd sort of come to these presentations talking about the strength of our Nordic business, and it's it's, undoubtedly been really quite tough over the last few years, but we've seen, really good recovery in our Nordic business.

I think it's fair to say that that recovery was more pronounced in Q2 rather than Q1, the trajectory is definitely definitely very encouraging. As we come into the more recent months, we're we're seeing that in the start of the second half of the year continue to go very well.

In Central Europe, I think it's a it's a little bit more of a mixed bag with some outstanding performance from ClimaRad with our decentralized heat recovery ventilation. That's continued to perform very well.

The outlook's positive. The order book's been growing.

In Germany, we've probably seen some stabilization, and in Energy Recovery Industries, Andy's already alluded to some of the investments that we are m- have made and are making and our ambitions for that particular revenue stream as we grow it into the future. Actually much smaller from a revenue perspective inside our Continental European business is Belgium and France, but as we always say, it doesn't matter how small or or or immaterial it might be, we we drive each of these individual areas equally well.

We think that the outlook there in the second half of the year is probably slightly better for us in in many respects, some of the self-help and the things that we're doing. Very significant margin expansion, 16% operating profit growth in the first half of the year, operating margins up to 25.3%, very pleased about our Continental European activities.

As I say, Volution is still relatively underweight in this market. There's still white spaces on the map that we would look to tackle into the future.

Then finally, Australasia, organic growth of 3.3%, but we've split this now into residential and commercial across both Australia and New Zealand. New Zealand has been difficult.

We've talked about that for some years, but it's certainly better. I think, clearly, having a leadership position across multiple brands in both Australia and New Zealand, tactically we're able to apply that to try and take share.

This is what it's about for us. Clearly, the Fantech ac- acquisition was super exciting in terms of the size and the scale that it brings, but it's also about having different routes to markets and brands that we can leverage to capture more of the opportunity.

Residential very good, commercial a little bit more difficult, but overall we've talked about an organic margin expansion. I I'd like to think of our Australian Australasian model as being the the sort of the the the steps on the path that are following into what we've established with that mature UK platform, and and certainly working with the local leadership team, I'm actually due to be out in about 3 weeks, but traveling through a slightly different route, but it's about encouraging that team to follow what we've what we've clearly done very well at in the UK.

There's a lot of sharing of of of of knowledge and experience there. Look, op- operationally across the three areas, very pleased about the first half of the year.

Sometimes I do feel we turn up and talk about more challenging backdrops and markets, but but they are challenging, and I think that the performance that we've had in the first half of the year is a credit to our local teams' dexterity and just picking out share gain opportunities and just being absolutely obsessive around customer service, a conversation I had with somebody in the UK more recently, and also that discipline around initiatives and how we track those initiatives that effectively underpin our our margin expansion. Just quickly on our on AC Industries, we didn't have the opportunity to talk to you about this.

We announced it in December, we completed it at the beginning of February. This is an adjacency for us.

It's ventilation systems in the mining sector. It's very exciting.

We've had the first month of revenue in February, and that's performed really well. We're looking at an EBITDA margin here of 35%, clearly it's above our 20% target, and we're in very good shape here and excited about what we can do.

We're spending a little bit of time now just helping the team think about the international growth. We're going through what we call a 200-day plan integration, and that's really important just to bring it inside of the group, and then we'll start working with the local team about how we can grow this proposition internationally outside of Australia where we have a very big market share.

Summary and outlook, we had to get this slide in just quickly. We won't spend too much time on it.

That's what we've talked about for the first half of the year, and as I say, sometimes you have to sort of pinch yourself when you turn up talking about 20% revenue growth and ni- 19% improvement in earnings per share. These these are sort of numbers that over the medium term we couldn't necessarily look to repeat in every half, but really outstanding first-half performance.

Just on to the outlook, and of course we started drafting these papers and materials a few weeks back, and and we've certainly ha- had a sort of self-reflection on, the current state of the world as it were and how that fits for us. I think just not to read it all individually, but there are a couple of important points to pick out of here, and I think it's this one about being mindful of the heightened geopolitical risks, and of course they they are quite fluid.

Remaining agile and proactive to these potentially changing conditions, and I hate hate to mention it, but through COVID we had what we consider to be a good COVID where, from a supply chain and sort of operational customer service performance, it was very strong, and I think that experience that we had is is hugely underpinning for whatever might happen next. We think we're in really good shape, and as a result of that, the board now expects adjusted earnings per share for the year to be at the top end of the range of market expectations, and we think we're in good shape notwithstanding the the wider geopolitical risks.

I think we did manage to do the 30 minutes as as usual. That is the sort of formal part of our presentation.

I think Andy and I will come and sit down now, but we just love to have your questions. I know we get some really interesting questions from the floor.

Okay.

Thanks. Aynsley Lambert from Investec.

I think I got three, actually. Kind of obvious one, I'm interested to hear where you see the kind of direct and indirect risk around the geopolitical situation, energy costs, supply chain, as you mentioned.

Second question, just on the kind of obviously great performance on the margin, I think pricing was only up 0.6%. Just interested how kind of were costs inflation, was it running higher?

Did you take out costs? Kind of how that all fits with the low increase in the pricing.

Then maybe, Andy, I don't know if you could give some guidance around the absolute level of net debt you expect for the end of the year pre any more acquisitions, obviously. Thanks.

On the first one, the geopolitical risk, we had our board meeting on Tuesday, and we put a risk paper together and sort of gone through it in some detail. If you sort of break it down into the constituent parts, of course you've got demand, and I'm not going to sit here and predict in detail what's going to happen to demand other than I did say that if you think about energy security, what I think this does from a sort of low carbon energy transition perspective is it further focuses the mind.

Now that's medium term, that's not going to help us in the second half of our financial year, but there is definitely an increasing awareness around energy security, and this is a stark reminder right now. Look, I think the long-term dynamics underpinning regulations and so forth, this is, dare I say it, a good thing.

In terms of demand and so forth, I don't think it has a material impact on us directly, but of course there could potentially be a widening consumer confidence issue over time. I think that's the sort of macro.

Coming back to individually, what does it mean for us? Look, specifically, we're not energy-intensive as a business.

We're not CapEx-intensive. The two probably go hand in hand.

If you think about issues such as our biggest energy cost is heating and lighting our facilities, we've always taken a long-term view in terms of protecting ourselves on costs. I think Andy reminded me that we're hedged on gas prices to the end of 2027 for all of our UK activities.

Actually it's not that material anyway as a cost relative to other risks. Andy's talked about input costs, materials.

We are long term in terms of hedging and fixing our material input prices. I think that's completely covered off, almost zero risk in half two.

Then beyond that, if there is a wider market implication, then we talked about price elasticity and so forth and pricing power, then we would act. We don't see a need to do that right now.

I don't think things are materially different. The other issue is around logistics and supply chain and so forth.

We've got quite a large sort of Southeast Asia supply chain, but in actual fact, this crisis doesn't really have a huge impact on that. We've already been sailing ships from China and so forth round the Cape for the last 12 months because of the Houthi type dispute or threat.

This for us is maybe some impact on seafreight costs, but probably and nowhere near as pronounced as what we had in COVID. If you look at what happened to 40-ft container rates in COVID relative to where they might potentially go now, I don't see it as a big risk.

I think we're in really good shape. Andy talked about the working capital investment in the year.

Our customer service generally across the group is at exceptionally good levels. We've hired a new UK operations director, been with us for about 3 months.

We talked about that individual in one of the earlier slides. I think from a customer service perspective and operational sort of cadence, we're very, very happy about where we are.

Just moving in, the second question, Aynsley, was around how we delivered the margin expansion. A little bit of price.

I think there has been a little bit of price there. I think price increases had moderated more recently.

I think they were bigger earlier going back over the last couple of years. We are very, very focused around initiatives, whether it be product value engineering initiatives, whether it be supply chain, whether it be operational excellence, whether it be indirect cost efficiencies.

We haven't really talked about technology and AI, but we're starting to apply more technology in the business to drive efficiency. My sense is what you saw there in the operating margin expansion in the first half of the year were the efforts that we've been making over the last couple of years, and what I'm absolutely confident of is the pipeline of issues that we are driving going forwards to continue to underpin that.

This isn't sort of campaign-driven initiatives, this is part of our DNA. I do genuinely believe this is how people operate each and every day when they come to work.

Then just quickly on the net debt, Aynsley. If you don't mind, I will talk excluding leases, just I think that's the best way to do it.

We were £143 million, just under, at the half-year point. Obviously, that was before the ACI spend, which is, give or take, is £75 million.

If you add that on and then you have our sort of normal amount of cash generation in the second half of the year, I think you're ending up sort of close to £200 million, maybe a little bit less than £200 million in terms of net debt. One thing I would say, and so I'm not going to predict it, but just a little watch-out for is how that impacts from currency translation.

Effectively all of our debt is denominated in non-sterling currencies. Most of it now is in Aussie dollars, because we match it with the acquisitions.

When you look through the cash flow detail in the statement here, you'll see that actually in the first half, the Aussie dollar did swing quite a bit towards the end of the period. We actually had a £6 million increase in reported net debt simply because of translation, and it's probably gone a little bit more in the period since then.

Who knows what happens over the next few months? That may skew it slightly, but that's roughly where you are.

Rob. Rob, yes please.

Thank you.

Hi. Rob Chantry at Berenberg.

Thanks for the presentation, guys, as usual. Three questions for me.

Firstly just on AC Industries, clearly mining, specialist industrial, suppose just interested in your experience in the market post acquisition and completion with regards to do you want to do more in specialist industrial? How has the industry responded to kind of a non-mining kind of ventilation business getting involved?

How do you see the scope for more specialist industrial going forward? Secondly, Nordics, I think commentary was around an improvement through the period, clearly many geographies, but just the dynamics there would be helpful and the kind of run rate.

Then thirdly, UK residential, can you just put that 4.2% organic performance into a market context, i.e., how has market share evolved, where are you winning, where are you missing out? Thank you.

The M&A and why AC,

when we first started to look at M&A back in 2012, the available capital to deploy was quite small, and we had a very focused residential-only strategy. What I'd love to tell you with M&A is that we could define what we do and when, but of course the reality is that it takes two to sort of tango in this regard.

We can't be certain when opportunities will manifest, whether or not we'll be successful. Through a sort of a development agenda over the last years, we've widened the scope.

There are some really important factors to consider. It's going to be air quality.

It's got to be air quality, because we believe that we're quite good at providing solutions around air quality, and we don't have any interest, desire to move outside of that. That's absolutely sacrosanct.

When we met the owners of AC Industries, we turn up and we use our public presentation and we talk to them about what we do. The owner said to me, "This feels like us."

Why? They provide healthy, good quality air in mining.

You can't ignore the fact that people work in mining. It's not an AI threat.

We're still going to send people down into mines, and they got it. It was just really exciting, and I think that's why we got the deal away.

We won't disclose it here, but we know that there were two very big industrial trade suitors, and we don't believe we paid the highest price, but we were the best partner. That's where we create a lot of value.

We acquire a business at a multiple of earnings that is super exciting with an EBITDA margin that's above the group average, that we think has organic growth capabilities potentially beyond our 3% to 5% in a sector that is exciting. There's everything to like, and we do bring some synergies.

We'll bring some synergies in terms of I think how we can help them grow internationally, part of our wider infrastructure in Australasia. We've already got above-ground mining activities, it's not that far away really.

Does it mean that now the next acquisition will be mining-related? It could be, but it might not be.

What I'm saying is that the scope, and this is what's attractive for us, Andy and I don't see any reason why in the coming years our cash conversion is any lower than it has been. In actual fact, there was quite a nice article written about us recently, and they'd looked at it from just a purely cash generation perspective, and the bars growing materially over time.

The risk for us over time is not being able to deploy that capital into M&A and creating that compounding performance that we believe now after delivering sort of 13% compounding nearly for 12 years, it should start to shine through. Long answer to the question, but it is really important.

We've got wider scope of opportunities. We've got areas obviously we're underweight in terms of Continental Europe that we'd like to address.

We think the Australasia market is very attractive, and you get that economies of scale and back-office synergy effect because when we buy brands or our assets in geographies where we've got scale, then we're able to incorporate them really well. I think that hopefully covers off where it will be, but it will absolutely always be around air quality.

Just on the Nordics then, Rob. Just a reminder, we are very much residentially oriented in the Nordics, but more RMI, but a bit of new-build as well.

I guess over the last few periods where we've talked about it being a difficult market, the refurbishment had been reasonably resilient through that period, but it was probably the new-build that was absolutely the toughest. I think what we've seen in this most recent period is actually the refurbishment has not just stabilized, but hopefully is starting to sort of nudge upwards, but also the new-build is getting better.

I think whether that's a function of interest rates there, because of course a lot of consumers in the Nordics are on purely variable rates, typically when rates are going up, they feel it first, and then when rates are moving in a hopefully a more favorable direction, again they feel that first. I think the new-build order book has got better.

Refurbishment has continued to perform well, the residential is coming through nicely. Over the years to come, a bit like the UK really.

Commercial is another opportunity for us where we're currently relatively minor to perhaps try and eke out a bit more gain there as well.

Third was UK. Sorry, what

UK resi.

Was resi, yes. I think I covered it off probably quite well in the presentation.

UK residential new-build, regulations changed in 2022, Part F, L, and O all very supportive in terms of regulatory growth, and we've seen that benefit. We've certainly seen a huge benefit through 23, 4, and 5.

Our sense is that there is still a further regulatory benefit to be had, but we probably have hoped by now that we would have seen a volume growth. I think it's probably fair to say in the period that we've just talked about, volumes you could probably argue at best flat and probably slightly down.

There's been quite a lot of consternation around things like apartment builds and some of the approvals under this so-called Gateway 2. Our sense is that residential new-build, notwithstanding the wider backdrop, but mortgage rates had been becoming more competitive, had been.

How long that's offset by, we don't know. We've certainly seen others talk about the recovery being delayed.

We're still optimistic about our own position. We always talk about this internally.

The market will be what it will be, but if we just wait for the market to recover, that's not acceptable and that's not the way we work anyway. We've got some really good innovation.

We think we can take further share gains in terms of what we're doing. We've made quite a bit of investment in our Reading facility and a further investment that goes live in about 6 weeks to increase our capability and our responsiveness with an ambition to grow share.

We've got a couple of segments in the UK market in that that we think we're underweight in that we can go after. I think what I'm saying is it's going to come largely down to self-help rather than the market necessarily being strong.

I don't think the RMI market is necessarily any weaker. I think it's reasonably okay, but I'm not arguing that the consumers are ultra confident and spending more in the next 6 months.

We can certainly do more.

Over to Christian next. Thank you.

Thanks very much.

Thanks. Christen Hinderaker from Deutsche Bank.

Just two questions for me. Maybe just sort of something slightly technical on ACI, just what is the contribution to EPS in your guidance for FY 2026, just to understand that piece.

Then secondly, sticking maybe with UK housebuilding, are your products there at the same margin as the UK overall? I suppose, do you get any sort of housebuilders struggling with affordability, do you get pushback on the level of margins that you make, or actually is the solution you're providing, is that the sales point, not necessarily the price per se?

Thank you.

I'll take the first one, and then I'm sure Ronnie will take the second one, Christian. When we started talking about this back in December when we announced it, we said that, look, if you put in the sort of the revenue of ACI, it's very strong margin.

It's north of 30%, as Ronnie mentioned. Of course, then you put in the £75 million debt that we're drawing down to use it.

You basically end up at around 1p of additional EPS in FY 2026. Of course, then you go into FY 2027, you're paying the debt down and hopefully the business is continuing to grow.

As a quick reminder, we did say at the time of acquiring that it had been consistently growing low double digits over the preceding years, this is a business we're very excited about.

UK residential new-build or product margins more generally, they're plus minus very very similar. We could pick out outliers and so forth, but the story in residential new-build for us was it started a couple of years before we really started to see the revenue.

We looked at the regulations and we could understand that the market would go A little bit technical. Continuous decentralized with certain performance requirements in the product around specific fan power and controls.

Quite frankly, we nailed it from a development perspective, not just in terms of the performance, but also the cost, because you know that sector really well, it wasn't for us to be able to turn up and say, "We've delivered this solution that ticks all of your boxes from an install reliability, from a noise objection, from a specific fan power and approval perspective in SAP, but it's going to cost you x, and x is too much." We had a cost price target to deliver against that, from an engineering and operational perspective, we got there.

We were able to go to the customer and say, "Here's a solution." They went, "That's great.

It's actually a little bit cheaper than some of the other ones I'm taking that ticks all the boxes, and we make what we believe is an appropriate and fair margin for all of the effort that we've made." That's just a really good example of being totally joined up across the business.

That's where we are. I just thinking about one specific product, I'm not going to mention it by name, but that was the example and we did it really well.

For me it's about value-based pricing. If we solve customers' problems efficiently and competitively, then if we make a better margin than somebody else, they're not really interested in that.

It's about what we do for them, and it's about customer-centricity. That I think is what we do phenomenally well all over.

I could take you to the Netherlands and we've got operating profit margins generated in our decentralized heat recovery solution that's growing phenomenally well that are above where we're at here because we solve the problem really efficiently and there is a total cost of ownership payback that the customer buys into. That's really important.

Every product development that we talk about, we had a really good session at the board on Tuesday with the technical director talking about this. I just think we're really good at it, and we coordinate those resources group-wide.

Every time we make an acquisition, we learn something new, because every company we acquire has something about them that we don't know. Oh, Charlie was just first, Charlie Campbell (Stifel):

Thanks. Charlie Campbell at Stifel here.

A couple of questions really around margin. You I think alluded in the presentation that Fantech's margin's gone up because you said it's less dilutive than it would have been, I guess that's what you mean there.

Just wonder what you've done to improve the margin there. That'd be really interesting to see in the context of M&A.

If we think about Australasia and really this is a question kind of before adding in AC, margin obviously is lower than the rest of the group because I'm guessing that commercial's a higher share of the revenues than anywhere else. Is that the right way to think about that structurally that Australasian business ex-AC stays at that 20% and can't really get to 25%, or would you challenge yourself to hit it even with more commercial?

Then a

little feedback to Ronnie taking the first one, which is more detail around Fantech. Look, if you actually looked at the previous presentations prior to the Fantech acquisition, Charlie, I think you'd have seen that actually the businesses that we'd had there since 2017, 2018 were very, very much on a par or, in fact, in some periods slightly above the UK European margin, we were starting from a very, very strong position.

Fantech, which Ronnie just elaborate a little bit more on some of the initiatives, we've said consistently throughout it started life about 6 percentage points lower at both a gross and an operating margin level. I don't think that's intrinsically because it was commercial.

I think 60 Well, first of all, again what we always said, 16% is not a bad margin, and a lot of other competitors would love to have that, but we could already see that there was an opportunity to move it up, which I guess Ronnie will sort of touch on. AC will then come in and move the mix in another direction again.

Look, I guess in a nutshell, as long as we can do what we think we can and are already starting with Fantech to nudge it towards and hopefully ahead of the 20%, what we won't do in periods to come is talk explicitly about Fantech margin or this margin or that margin because, as Ronnie mentioned earlier, where we really want to get to here is having a really well-run, integrated region like the UK where we've got multiple different brands and multiple channels that the customer sees and recognizes. Behind the scenes, how can we pull that all together into a really coherent and efficient and integrated sort of back-office setup.

We're not going to say, "Well, this cost belongs here, and this cost belongs here." Look, long story short, it's not resi commercial, it's, where ACI is commercial.

I'm smiling because my answer to your question one was to explain how we would run a very integrated and Andy's already done that, I won't repeat it, but that is the approach. Look, I think this is a confidence in our ability.

If we make an acquisition somewhere, it has to be on the basis that we can create some additional value, and those value levers that we pull are not the same in every acquisition. With AC, it will be different.

We won't make material differences to the cost price of the product. We think they're very good at it, high-density polyethylene textile material.

We think that we might increase the robustness around the supply chain and some protection because it's a key material, but we won't. In the case of Fantech and what we're doing in that local region at the moment is it's on that treadmill of initiatives as with everything else.

Our sense is that we've got really good, strong technical and procurement capabilities group-wide that we're able to leverage into the local region. Our product management knowledge is really strong.

I can see the sorts of things I was sitting last night, and the local regional leader, Anthony LoPresti, who might be listening now, sent me a picture of a new product that we're introducing and said, It's really good attention to initiatives, and I applaud that. We're not setting a margin target for Australasia.

We are being conservative about more than 20%, but we're already in a good place and think we can enhance things over time. I think Andy's answer was the sort of backbone, the structure that helps deliver that.

Okay. David?

Those were my questions. No, yeah.

Just question in terms of kind of the shape of the first-half organic revenue. Obviously, first 4 months was 5%, kind of implies that the last 2 months were kind of below 3%.

Kind of what's going on there, what's kind of working against you. Obviously, some of your peers have called out weather in the UK.

Then I guess as you kind of look into the second half of the year, what could kind of lift that exit run rate up higher? Then my second question was just a little bit more detail in terms of kind of what's going in commercial in Australia, obviously down during the period, kind of how you're seeing that market.

Obviously, I think we're all quite aware of what's happening in UK commercial, but the Australia outlook would be helpful.

Okay.

If I take the first one. You you're quite right.

So 4.2% for the 6 months, we were circa 5% at the 4 months. Yes, by by definition, December and in particular January were tougher.

I'd loath to call out the weather, but certainly everything I read and see suggests that January was a pretty difficult month for a number of people in a number of different industries, and I think we sort of saw and felt that. We have talked, and again back to what I was saying earlier about the perhaps the normalization of the growth levels across the three regions, we said we said back at the year end and before that, the regulatory kicker and the share gains and all the good stuff that had very much underpinned our UK residential, that was that was in.

The share we're still continuing to look for share gain opportunities, don't worry about that, but in terms of the mix effect, we said that that was largely going to have played its way into the numbers during the course of the first half of this year. That's no longer a year-over-year impact in the way that it was.

What, of course, we now all I think hope for in UK new-build is the volume piece. That's definitely leveled off somewhat.

Then, as again as we move through the period, we talked about the Nordics being better in Q2 than Q1, so that's going in in the alternative direction. Look, I mean I think wouldn't want to over-predict what the second half looks like, but I think, you've seen where we've where we've sort of guided it to.

I think we're still confident that, that that portfolio effect is going to come through really, really nicely and that we can continue to deliver, good organic growth relative to market for sure.

Commercial Australia and New Zealand, I think that if you look at the New Zealand market more generally, I think that'd been tougher, and certainly if we look at, it's only a couple of months, but we're seeing some signs of recovery. Our commercial share in Australasia is very significant, there is always a risk around markets tough, how do you mitigate that?

Some new product introductions at the moment that I think will be helpful. Certainly as a result of our wider group experience, there's a couple of things that we're launching that we think we can help us.

The last couple of months have probably been a little bit better. The December, January issues always slightly amusing for us in terms of Australasia, because of course we talk about how good the summer is and how much longer it takes after Christmas for people to come back to work and so forth.

There is an element of that. Overall, I think we're pleased about the direction of travel in the last couple of months.

Any other questions in the room? Very happy to take any.

No, we have a couple of questions online, I believe.

Yes, okay. The issue around recycled plastics is that because of course it's a recycled source, is it's not reliant on oil going into that material.

It's effectively recycling a material that's there. We have a couple of really good, and one in particular, long-term strategic partnerships that we've tied into.

The use of that material is in itself quite difficult, we think we are, in the sense of a partnership, we're tied to the supplier and I think the supplier is tied to us in terms of being able to utilize that material, and we've committed that long term. One of the things that was disappointing for us in the first half of the year is we had a slight reduction in the percentage of overall plastics recycling we used, but it was an absolute increase in volume, okay, because our volume had grown, but we had used slightly less percentage.

We've actually had a few breakthroughs more recently, one last week. Group procurement director has found an additional source to supplement that, and the good news for us is that the use of recycled plastics versus virgin is a significant saving.

We think we're very well sort of hedged and supported around plastics. Wider material input costs, in actual fact before this crisis more recently, I was citing metals commodity prices as being the bigger risk to input costs over time and expected that to probably manifest towards the second half of this calendar year.

Look, we remain agile both in terms of the sourcing and the commitments, and of course any offset through value engineering and initiatives, and then of course the ability or the requirement to maybe nudge prices up if necessary during the course of the year. Don't have a concern about gross and operating profit margins as we go forwards.

Just to add to that, in terms of sort of direct cost to ourselves from energy, we are a very, very low user of gas and electricity. To the extent that we are a user still, gas in the UK, we're fixed pricing through to September 2027, electricity we're fixed through to the end of this year.

As I say, because of the nature of our process, we're a very, very low direct user anyway.

One more?

Yes. Actually, I'm sort of pleased in a way that we hadn't called out wage inflation and so forth, but Volution isn't immune to that.

We've certainly had wage inflation very similar to other companies in our space, but I guess one of the reasons why we didn't call it out in so much detail is that clearly the operating profit margins haven't been impacted because of it. We didn't need to sort of cite the fact that that had been a drag on our results.

Of course, we would expect labor inflation to continue. It may have moderated more recently, but nevertheless it's something.

We always try to target operationally to mitigate any labor inflation through efficiency. That's got to be the annual improvement target.

Quite a lot of initiatives going in at the moment that we think probably haven't fully manifested the benefits yet. I think from a material perspective, that's in good shape.

Florence, a really good acknowledgment around people, probably an opportunity now for me to just credit the wider senior management team and the wider employee base for the great results in the first half of the year. We're investing for the future.

We're building stronger teams to underpin our ambitions. The appointment in the UK around operations was that I think we've performed really well operationally and customer service-wise, but we know we can do better, and I'm delighted that we have a new leader in that role who in the first few months is having quite a profound impact, not just in terms of the operations, but also the leadership and developing the team.

I think that's really exciting. The appointment in Germany I think, quite honestly, we've had a situation in Germany where the market's been really tough for some time.

We had a local leader who'd been with us since we acquired the business in 2014, and I think it just came to a natural point where maybe freshening up and changing for both was a good place to be. That's part of our regional structure under one of our two regional managing directors for Europe, and we're really excited about the new individual joining us at the beginning of April.

That's underway, and we think that can just help reinvigorate the opportunity in Germany. The German market is tough, but we again believe that there are share gain opportunities, and we think that new leadership will be really helpful.

Okay. I think we've just gone slightly over, but thank you very much for your attention.

Thank you for your questions. Look forward to seeing you next time.

Thank you. Thanks very much.