Thank you, Grace. Good afternoon, ladies and gentlemen, and all viewers online.

I would like to share with you the financial highlights of the group for the six months ended 30th of September 2025 compared with the same period of the last year. As you see from the slide, the revenue of the group reduced by 9% to $991.1 million.

It was mainly due to the decrease in revenue in all regions. The gross profit of the group reduced by 8.1% to $315.8 million.

Our gross profit margin, however, improved from 31.5% to 31.9%. The increase in gross profit margin was mainly due to the lower cost of materials, favorable change in product mix, increase in selling prices, stronger European currency against US dollar, as well as the lower freight charges compared with the same period of the last year.

This offset the additional tariffs imposed on the products imported into the US and the higher direct labor costs driven by the increase in minimum wages in China and Malaysia during the period. Our operating profit reduced by 10.8% to $92.9 million, and our operating profit margin also reduced from 9.6% to 9.4%.

The decrease in operating profit and operating profit margin was mainly due to the lower gross profit, as well as the higher operating expenses as a percentage of the group's revenue compared with the same period of the last year. Our profit attributable to the shareholders of the company reduced by 14.5% to $74.7 million, and our net profit margin also reduced from 8% to 7.5%.

The lower net profit and net profit margin was mainly due to the lower operating profit and operating profit margin, as well as the higher group effective tax rate arising from the implementations of BEPS Pillar Two income tax rules with minimum level tax rate at 15% in each of the jurisdictions where the group operates. As a result, our basic earnings per share reduced by 14.7% to 29.5 US cents, and our board of directors has declared an interim dividend of 17 US cents, same as the last financial year.

Turning to the revenue by region, our sales in North America reduced by 12.1% to $398.3 million. The decline in revenue was due to the lower sales of our electronic learning products and telecom products, which offset the higher sales of our contract manufacturing services.

Europe was the largest market of the group, accounting for 43.3% of the group's revenue. Our sales to European market reduced by 7.2% to $429 million.

It was mainly due to the lower sales of our contract manufacturing services, which offset the higher sales of our electronic learning products and telecom products. In Asia Pacific region, the revenue of the group reduced by 5.6% to $150.4 million.

It was due to the lower sales of all our three product lines. Other regions include Latin America, Middle East, and Africa.

The group's revenue in other region reduced by 11.3% to $13.4 million. The decrease in sales in other regions was due to the lower sales of our telecom products, which offset the higher sales of our electronic learning products.

Our stock balance as at 30th of September 2025 increased from $425.2 million to $431.7 million compared with the same period of the last year. Our stock turnover days also increased from 129 days to 138 days.

The higher stock level was mainly to cater for the higher demand of the group's product in the second half of the financial year and the seasonality of most of the group's business. Our trade debtors balance as at 30th of September 2025 reduced from $481.9 million to $429 million, and our trade debtors turnover days also reduced from 63 days to 60 days compared with the same period of the last year.

Our financial positions remain very strong. We were debt-free.

Our net cash balance as at 30th of September 2025 was at $147.9 million, a decrease of 1.5% as compared with the same period last year of $150.2 million. That's all of my presentation.

I will now invite Mr. Andy Leung to share with you our operation review.

Mr. Leung, please.

Thank you, Shereen. Welcome to all of you joining us today.

As usual, we will begin with costs. The group gross profit margin in the first six months of the financial year 2026 was 31.9%, an improvement over the 31.5% recorded in the same period of last financial years.

This was mainly attributable to the lower cost of material, as material prices decreased during the period. A more favorable product mix, increase in product price, stronger European currency against US dollar, and the lower freight charges also contributed to the higher margins.

These gains were partially offset by the higher tariffs and direct labor cost. We now turn to the review of our operation in each region.

We begin with North America, where group revenue decreased by 12.1% to $398.3 million. Higher sales of CMS were offset by decline in ELP and telecom products.

North America was our second largest market, accounting for 40.2% of the group revenues. ELP revenue in the region fell by 25.4% to $167 million.

This was mainly attributable to changes in US tariffs policies. In April this year, the US announced substantial tariff increases on Chinese imports before reducing them on 12 May 2025.

In response, we put shipments on hold to the US for several weeks. Prices were also raised for product sold to the US market, while retailer delayed their store set for the autumn season.

They negatively impact both orders and in-store sales during the first half of the financial year 2026. Meanwhiles, sales in Canada also posted a decline.

Nonetheless, in the first nine months of the calendar year 2025, VTech maintained its leadership in electronic learning toys from infant through toddler to preschool in the US and Canada. In standalone products, sales declined mainly because of the lower shipment to the US.

Core learning product category and key products all posted sales decreases for both the VTech and LeapFrog brands. Platform products also showed a sales decline.

Those of LeapFrog rose, driven by continuous growth of Magic Adventures Globe and the launch of a brand new product, the award-winning LeapMove. There was also a contribution from LeapStart Reading Buddies.

Subscriptions to LeapFrog Academy were stable. Sales of VTech brand declined, largely still to lower sales of KidiZoom Smartwatch and Touch & Learn Activity Desk.

Telecom product revenue in North America fell by 8% to $84.8 million. Sales of residential phone declined as the market continues to contract.

During the first six months of the financial year 2026, VTech remained the number one cordless phone brand in the US market. Sales of commercial phones were down.

Higher sales of hotel phones and Snom SIP phone were unable to offset lower sales of multiline analog phones and headsets. Growth in hotel phones category was boosted by increasing sales of next-gen product line.

Snom brand SIP phone also recorded higher sales, offsetting a decline in orders from a customer. Multiline analog phones posted sales declines as the product reached the end of their lifecycle.

The transfer of production by customer to the group Gigaset facility in Germany resulted in the lower sales of headsets. Other telecommunication products reported an increase.

As higher sales of baby monitors and IoT products offset a decline in CareLine residential phones. Baby monitors saw sales rise as a result of increasing sales at a major e-tailer, while IoT product posted higher sales of thermostat for hotel channels.

In contrast, CareLine residential phones experienced lower demands. During the first six months of the financial year 2026, VTech maintained its position as the number one baby monitor brand in the US and Canada.

CMS revenue in North America rose by 6.9% to $146.5 million. Growth was led by professional audio equipment as customer worked through their excess inventory and new customer were added.

Especially rebound order was seen in professional loudspeakers. Industrial product also posted growth.

Order for PCBA for vending machine grew as employer began to demand a return to office-based working. Those of IoT products also increased.

This was driven by rising order for smart basketball hoops game console, which have been well received by consumer and are now being sold by major retailers. This was despite lower sales of smart water leakage detectors as the customer experienced over-inventory.

Sales of solid-state lighting is stable. In addition, it was announced that VTech had maintained its position as the world number one contract manufacturer of professional audio equipment in the calendar year 2024.

Turning now to Europe. Group revenue in the region decreased by 7.2% to $429 million in the first six months of the financial year 2026, as higher sales of ELP and telecommunication products were offset by lower CMS sales.

Europe remained our largest market, accounting for 43.3% of the group revenue. ELP revenue in Europe increased by 5.5% to $144.6 million, with higher sales of both standalone and platform products.

The growth was driven by new product launches and the strengthening of European currency against the US dollar. Sales were higher in France, Spain, and the Netherlands, offsetting decline in the UK and Germany.

In the first nine months of the calendar year 2025, VTech remained the number one infant and toddler toy manufacturer in France, the UK, Germany, Spain, the Netherlands, and Belgium. In standalone products, LeapFrog sales were higher, while VTech sales were stable.

Growth for LeapFrog was mainly driven by infant and the Magic Adventures products. This offset declines in the preschool category, while sales of eco-friendly toys held steady.

VTech saw sales increase in preschool product, electronic learning aids, and the Kidi line. This were insufficient to compensate for the declines of infant and toddler products, KidiZoom camera, Switch & Go Dinos, Marble Rush, and eco-friendly toys.

In platform products, higher sales of LeapFrog brand offset lower VTech brand sales. Growth in LeapFrog product came largely from the newly launched LeapMove and LeapStart Reading Buddies, as well as higher sales of Magic Adventures Globe.

VTech saw sales of KidiZoom smartwatches, children educational tablets, and Touch & Learn Activity Desk decline, while those of KidiCom were stable. Revenue from telecom products in Europe increased by 24.5% to $105.2 million.

Sales of residential phones, commercial phones, and smartphones increased, while those of other telecommunication product remained steady. In residential phones, growth was mainly driven by increasing sales of Gigaset's products.

The COMFORT 550 and E690 models continues to sell well, as their industrial design and feature set meet market needs. Sales performed especially well in Germany, France, and Italy.

We also started selling Gigaset residential phone in Eastern Europe. As a result, Gigaset increased its market share, and retained its number one position in the DECT phone market in Europe.

To broaden the brand residential phone portfolio, we have developed a new entry-level phone models, which began hitting the shelf in the major European country in September. Sales of commercial phones and smartphone also increased, driven primarily by higher order from a customer and rising sales of Snom-branded SIP phones, which benefited from the introduction of D8 series.

Sales of Gigaset multi-cell DECT system were stable, while Gigaset smartphone registered growth. Sales of other telecommunication products in Europe held steady during the period.

Higher sales of CAT-iq headsets offset lower sales of baby monitors. The growth in CAT-iq headset was driven by higher orders from a customer.

Sales of baby monitor declined, mainly because of lower sales of the UK market. CMS revenue in Europe decreased by 25.5% to $179.2 million, mainly because of lower sales of hearables.

The hearable customer faced keen competition and market demand had dropped substantially since the end of COVID pandemic. Sales of medical and health products trend lower as demand for hearing aid returned to normal after strong growth in the previous financial year, while that for hair removal products held steady.

Home appliance sales were lower, driven by fewer order for PCBA for washing machine. IoT products were affected by lower order for smart meters and interconnected thermostat and air conditioning controls.

Sales of smart energy storage system declines as order reduced following the removal of subsidies by the Swedish government. By contrast, sales of communication products rose as order for Wi-Fi router increased following new launches and a reduction in customer inventory.

Orders for automotive products also increased as we captured additional EV chargers business from a competitors. Sales of professional audio equipment, meanwhile, remained stable.

I will now turn over to King. Thank you.

Thank you, Andy. Good afternoon, ladies and gentlemen.

In Asia Pacific, group revenue fell 5.6% to $150.4 million, representing 15.2% of overall group revenue. All three product lines declined.

ELP's revenue decreased 5.6% to $33.4 million. Sales in Australia were flat.

LeapFrog grew, but VTech declined. During the first nine months of 2025, VTech remained the number one learning toy brand for infants through toddlers and preschool in Australia.

In China, sales dropped mainly due to lower orders from a major customer. Telecommunication products revenue fell 8.2% to $8.9 million.

This was driven by lower baby monitor sales in Australia. Sales in Japan were stable.

CMS revenue declined 5.4% to $108 million. Sales increase in professional audio equipment were insufficient to offset decreases in medical and health products, as well as communication products.

In professional audio equipment, sales increased as a major customer pulled orders forward amid tariff uncertainties. In medical and health products, sales declined as customer for diagnostic ultrasound systems lost market share.

In communication products, sales of marine radios fell as Japanese customer further moved production in-house to capitalize on their weak currency. Other regions saw revenue down 11.3% to $13.4 million, representing 1.3% of overall group revenue.

ELPs rose 5.3% to $8 million, with higher sales in Latin America and Africa. Telecommunication products fell 28% to $5.4 million.

Sales dropped in Latin America, the Middle East, and Africa. CMS revenue in this region was immaterial.

Next, we turn to our outlook. Global business conditions remain challenging.

Saddled with geopolitical tensions, tariff uncertainty, and fragile consumer confidence, customers are cautious in placing orders. As a result, full financial year group revenue is still forecast to decline.

Nevertheless, second half sales are expected to improve over first half, led by ELPs and telecommunication products. Full financial year gross margin is expected to stay stable.

ELP's revenue is forecast to improve in the second half, supported by a rebound in the US and continued growth in Europe. Full-year sales, however, are still expected to be lower than last year.

Our holiday products have already been shipped to the US. New launches, including LeapMove, LeapStart Reading Buddies, and Explore & Write Deluxe Activity Desk, are on shelves, backed by strong marketing.

In Europe, momentum is expected to continue in the second half. In Asia, China is forecast to improve in the second half.

Australia is projected to remain stable. Telecommunication products is on track for full-year growth.

Drivers include residential phones, commercial phones, and smartphones in Europe, as well as other telecommunication products in the US. In residential phone, new entry-level Gigaset phones are now available in key European markets.

In commercial phones and smartphones, new products and higher orders from customer drive growth. Sales of Snom SIP phones are forecast to remain stable.

In other telecommunication products, AI-enabled baby monitors will launch in the US in the fourth quarter. CMS revenue is forecast to decrease for the full financial year.

Many product categories are expected to remain in decline in the second half. We're expanding our manufacturing capacity in Malaysia.

A new building is being added at the existing Muar site to be completed mid-2027. At the same time, we are also exploring ODM opportunities.

This concludes our presentation. We're now glad to answer your questions.

Dear all managers, thank you for the opportunity to ask questions. I'm going to raise about two questions.

The first one is about the new electronic learning products. We observed that the LeapMove products and some new products have launched in this quarter in 2025, and it's happy to see that the growth came largely from this new products.

I want to ask how do you see the growth prospects of these new offering going forward? Is there potential for them to become a larger core products?

Also, are there any flagship new products launch pipeline to share in the future? It's the first questions.

The second questions also come about electronic learning products. I want to ask, could future products potentially integrate with AI, and are there any strategic development goals or visions for the AI electronic learning products development, and what stage is the development of AI currently in, and are there any progress updates to share?

Thank you.

I will ask Mr. King Pang to answer your questions.

Thank you, Mr. Lu, for your questions.

If I have picked up accurately, your first question is about the new ELP products launched this year. We are reporting that they're driving growth and your question was whether we expect them to drive even higher growth in the future.

The answer is yes. Okay.

Most of these new products, they are what we call platform products. The LeapMove, for example, normally we launch the first year with the hardware and as much content as we can.

Then in subsequent years, we will refine, improve the hardware and then keep pumping out contents. In our history, with this kind of products, once we have a successful launch, it will have several years of good sales and especially good content sales.

Let's hope LeapMove is in such category. Whether there are other new products, every year we launch many new products.

I'm not at liberty to specify exactly how many, but we're talking about close to if not exceeding 100 new products. We would definitely continue to launch new products, and some of them are major products like LeapMove.

Normally, our new products they will be the first time we announce them would be at the major toy shows. I'm sure Grace and our PR and corporate marketing colleagues will share with our investors as soon as information is available.

Yes, we have a slew of new products that are waiting to be launched next year. The second question is about AI.

Continuing on my point, okay, it's too early for me to say whether we're launching new products with AI next year. Hopefully in a few months, we can tell you about it.

What I can assure our investors is that we have been working on using AI to develop products, writing codes, doing creative design, as well as products that have AI features in them. We have products like this in our development lab, and some of them have actually reached a stage of maturity that they can actually be launched.

Like I said, I'm not at liberty to say whether we are already in the process of launching one and how many are we launching, but hopefully in a few months we can share with you more about it.

Thank you. Two questions.

One, toys in the US, to what extent can you recover lost sales in the second half? Do you see any gain in momentum?

The second question is phones in Europe. From my memory, turnover is still below, say, the half of the annual Gigaset sales historically.

To what extent do we see further sales growth in phones in Europe in the second half? Maybe you could comment of the integration of Gigaset and the raising of synergies, where we stand.

Okay. Hi.

You answer the first one. Hi, Lutz.

How are you?

Far so good, thank you.

We were a bit worried that you may not show up. Glad to see you.

Good. Thank you.

Toys in US, like we have reported, when the first round of, quote unquote, "additional tariffs" came, there was actually a period of several weeks that we shipped almost none or very, very little products. That's what drove the rather substantial drop in first half sales.

Fact is that retailers in the US they have actually delayed their store set. Normally store sets happen in July and August, and this year stores are actually set in late September.

Our products are there, like we have reported. They are now on shelves and we are seeing products like LeapMove having very good momentum with very good week-by-week sell-through growth.

We have very, very big expectations for the coming several weeks, five, maybe six weeks. Whether we are going to be able to recoup all the lost sales, I am not at liberty to say, but we have reported that overall in ELPs, we're still expecting full year financial sales lower than last year.

Have I answered all your questions related to the ELPs? Oh,

yes. Just phones now, phones in Europe.

Let me answer this, Lutz. You rightly pointed out you don't see a lot of growth from the first half, particularly when you pointed out that the first half of last year of Gigaset is basically a startup sales.

Then for this year, we have the advantage of having consolidating a kind of a normal sales. As we have said in our chairman statement, one of the most important product we will be launching will be the opening price point product already on the shelf, and that would drive sales for the second half, particular on Europe phones.

You will see that the second half of phones we will see a bigger growth as compared to the same period last year. Okay.

Also, you also mentioned that how is the consolidation going on. I think the consolidation between Gigaset and VTech is doing extremely well.

In particular, the commercial phone section, we have signed quite a number of new contracts that would show up in terms of sales, again, starting in the second half. That would be our biggest potential going forward.

Thank you.

No, all good. Thank you.

Yes, thank you so much. I have three questions.

The first question is, can you elaborate a bit on how you're dealing with the shift to Malaysia, like the update on Malaysia production? Question number two is, can you quantify the tariff impact, what is the rate that you are paying now?

How much is it impact your overall? The third question is, the current peak season cycle, how is the company doing during the peak season?

Thank you so much.

Okay. Maybe I will answer the questions.

If other directors have any supplement, please chip on. Our shift to Malaysia is doing well.

Following the announcement of the Trump tariff in April, we have already in the process of moving some of the production of not only the telecommunication products, but also the ELP products to Malaysia. Of course, as you all know that during April, when the tariff has gone up to astronomical level, we have stopped shipment to the US from China, and that basically we have outlined that in our chairman's statement that this one was the reason why we have lost sales in the first half.

The Malaysian plant is up and running, okay, for our both VTT and also the ELP division. Of course, I also have to mention that the CMS has been operating in Malaysia for the last five years, doing extremely well and has been increasing production and is also in the process of building new facility that would eventually increase production even more.

We are in the best position now in case if there's anything happened to China, although at this point in time, the tariff of most of our product going to US from China is 20% after Trump met with Xi a few weeks ago. Of course, we all know that I don't know how long it will last or Trump may change it overnight in short notice.

Nobody knows. We are in a best position that in case anything happens to China, we can quickly relocate our manufacturing from China to Malaysia in short notice.

That is the advantage that we are a fully integrated, self-contained manufacturer. Your second question is regarding the tariff impact.

Now, I give you a general concept of what the tariff looks like, because in April the tariffs was up to 145%, and that is when we stopped our shipments to the US altogether. The tariff has since then been reduced to 30% from 135% for most of our products.

Then subsequently at some point earlier, Trump announced that he will increase it to 100% again after eventually reducing it back to 20% after meeting with Xi. At this point in time, most of our products, particular also the toy product going from China to the US is 20%, which is very similar to what Malaysia is having.

Malaysia's product going to US is 19%. Maybe I don't know whether Shereen have anything to add on this.

Regarding tariff impact, we also increase our price to offset part of the tariff impact. In the P&L, we will flag as we mentioned the gross profit margins even though we have an improvement in gross profit margins, but there's still some negative impacts on our tariff.

At the same time, we also increase the price for our products sold to the US already.

Your third question is how sales going on during the peak selling season. We are watching it closely on a day-to-day basis on the POS sales so far, as King have mentioned earlier, the ELP sales is looking good.

Then the telephone sales, because we introduced an OPP products in September, we are also expecting higher sales coming from the telecommunication products. We are looking up the peak selling season should be so far, touch wood, we should be doing fine.

Okay?

Good afternoon, respected management team. I am Xiangming Tao from Zheshang Securities.

Here I have two questions. The first one is the tariff impact and how is the progress of our overseas capacity construction?

The second question is how to forecast the dividend payout ratio in the future? Thank you.

These are my questions.

Shereen. As Mr.

Wong has mentioned and then you all knows that right now the tariff rate in China imports to US is 20% and then Malaysia is 19%, just 1% delta. We still have a factories in Malaysia expressly for contract manufacturing services, but we will still keep our Malaysia factories for toys and for telecom as a backup because we don't know what will happen in the next, say, 12 months or beyond the next 12 months.

We have this kind of, say, backup plan as our production capacity next to our China factory. As for our dividend payout ratio, we keep the interim dividend, 17 US cents, same as last year.

As for the full year, we still need to announce the full-year result before we determines how much is the dividend payment. Based on our historical, say, dividend payout ratio, it's talking about around, say, 98% or 99% our dividend payout ratio for the full year.

For the interim, we just keep the US cents same as last year, 17 US cents.

okay? Thank you.

Thank you so much.

Yes, good afternoon. What guidance can you give us on capex spend for financial year '26 and financial year '27?

Second question, how would you describe your M&A appetite post-Gigaset, and are you making any changes to your sourcing and evaluation process for acquisitions?

Capex, maybe Shereen can answer this.

Okay. In the first half of this fiscal year, our capital expenditure is $17 million, and our full-year forecast capex for this fiscal year is talking about, say, $42 million, including the land and building and the leasehold improvement expressly for our Malaysia factories for our contract manufacturing services.

Okay. Your second question is, if I hear correctly, is about M&A opportunities.

Is that right?

Yes, that's correct.

We are always looking for good M&A opportunities. We, like what we did with Gigaset last year, anything that would add to our product breadth, technology, and also additional distribution channel, we will be interested.

We will constantly be looking for good deals.

Thank you.

Just a questions with regards to margins and hopefully a restoration of profitability. Obviously, you've always had for quite a long time the Malaysia versus China production facilities, but ultimately there's got to be a little bit of duplication at the moment to allow for that agility that you are putting in place.

Just wanted to find out whether structurally now margins are likely to be lower based on the fact that you are going to be running parallel lines in China and Malaysia. Thank you.

Yes. I think it's a good question.

At this point in time, when the tariff and Malaysia going to the US is almost the same, China is 20% and then Malaysia is 19%, and then Malaysia generally has a little lower productivity compared to what we have in China. The comparison is usually generalized to be about 6% difference in terms of cost of manufacturing.

For products going to the US at this point in time, because of the same tariff generally so we will be making most products out of China going to the US. Of course, for Europe, where there's no tariff situation, everything will be manufactured in China.

For CMS, maybe I will ask Andy Leung to say a few words on the Malaysian manufacturing and the cost difference between Malaysia and China.

Yes, for the case of CMS, we acquired a factory in Malaysia from Pioneer in 2018. As a result of the geopolitical conflict and US tariffs, it has been in the expansion mode in the past few years.

We are expecting the global trend of supply chain diversification will be continuous. For this reason, project of further expansion of the facility was started.

Regarding the cost of running between China and Malaysia, I would say the cost is getting level and the cost difference getting level. If we really want to tell a figure about the cost difference, I would say the overall cost in Malaysia is around 5% higher than that in Malaysia.

In fact, the cost of running is not the major difference between China and Malaysia. The major difference is the productivity between the two area, as China has a skillful labor and experienced management team.

The production efficiency is a lot better for the case in China. After running the factory in Malaysia for a few years, we can see a gradual improvement in the productivity over there.

Your second point about whether there's any margin impact between having a Malaysian plant and China plant, I would say is a minimal. The impact is minimal.

Thank you so much. Can you help me give some colors, what is the capacity of Malaysia as opposed to China's plant?

How different is the capacities?

Okay. I think we can generally look at the Malaysian plant if fully operational, we will be about 25% to 30% of our total group capacity.

That's the general concept.

Hi, management. Sorry, actually I'm in Shanghai and I joined the call late.

Probably I'm not sure some of the question has been covered already. Say for the Gigaset sales, how much was it for the first-half period?

Number two is I'm quite surprised Europe actually the sales decline more than mid-single digit, even though low tariff impact, right? Then, even though I add back the Gigaset sales to Europe, actually probably the underlying European business dropped even more than North America.

I'm not sure is this the case. Why the Europe is so bad, right, over the first half?

Then, you mentioned the second half actually the sales full year still decline, but second half could be better. Say for the second half, actually should we expect the absolute dollar should be higher than the first half?

Because actually usually the second-half sales should be lower than the first half because of the seasonality. For this year, should we expect the second-half sales should be higher than the first half?

Thank you.

Maybe Shereen can answer this.

As explained in our, say, presentations regarding why in Europe the whole group revenue is dropped by around, say, 7.2%, it's mainly because of the decline in revenue in contract manufacturing services. For our telecommunications product in Europe, actually it increased by around, say, 24.5% including Gigaset.

As for our toys divisions, our sales in Europe also increased by around, say, 5.5%. Actually after the acquisitions of the Gigaset, in the first half of the years, the Gigaset revenue actually contribute the growth of our telecom division, especially in Europe.

Can I have an idea what was the Gigaset sales during the first half?

Normally we would not disclose this kind of, say, segment in, say, telecom, Gigaset, VTech, and AT&T. I can tell you that you can see for Europe, our telecom division's revenue increased by around, say, 24.5%, it's mainly driven by Gigaset.

Of course, our business phone also increased in revenue in Europe using, say, Snom brand. Okay.

Actually virtually all of the Gigaset business actually in Europe, right?

Mainly in Europe, but they have some small sales in other regions, but the majority of the sales is in Europe.

Right. Okay.

Can I project the second-half sales absolute should be higher than first half, right, for the FY26?

You mean the whole group, right?

Yeah. Yeah.

As what we have explained in the outlook, we also expect in the second half our revenue would be higher than first half, mainly driven by the sales growth for our telecom and toy and ELP divisions. For contract manufacturing services, we expect that the decline will continue.

Okay. Sorry, my follow-up question is, you said actually 20% tariff on China, which include, I know toys, no Section 301 tariff, but how about the telecom product?

Also has no Section 301 tariff, right?

For toys, well, before 10th of November, the tariff from total products import to the US is 30%. Only after, say, 10th of November, it reduced to 20% for toys.

For telecom product, most of our telecom product tariff is 30%, and then we now reduce to 20%. Some of our telecom products, we have around, say, 7.5% higher than the normal, say, 20% tariff.

For those kind of product, we have already moved to Malaysia factory already.

All right. Okay.

Thank you. No more question.

Thank you.

Regarding the euro exposure of the group, to what extent does VTech now produce phones that are sold outside of Europe in Germany by Gigaset? How is thus affecting the euro exposure of the group?

Historically, you are long euros.

Yes, Lewis. After we acquired the Gigaset factory last year, we are starting to produce Gigaset-branded cordless phone in Europe, and they have been doing it for years.

These are mainly limited to the middle and a middle-high type of products. They're doing it very well.

The cost difference between producing in Europe and China is very similar. It's very similar.

Because of the automation they have in the factory. They also produces mobile phones, smartphones in the factory.

Also we are starting to produce other products in the factory. Some commercial phones that some of our customers wanted to be produced in Germany for security reasons.

Those are also produced in Germany. In other words, the Gigaset factory is working out very well.

As you produce phones or products in Germany and sell it to the US or to Asia, you're reducing the euro exposure of the group. VTech used to be long in euros because of the toy business.

Now with the integration of Gigaset, I would expect that this euro exposure will shrink. Is this correct, and if so, by how much?

Correct. In fact, we have more euro exposure, but we are still by net income of euros, too, because the ELP sales is much larger than the expense we have in Gigaset.

Gigaset exports, even let's say in 2, 3 years out, will not compensate the euro exports out of China?

It's too far out. I don't foresee that happening.

China will still be our largest manufacturing site, unless there are other factors affecting that. In the absence of any geopolitical uncertainty, we will still produce bulk of our products in China, which at this point in time is still the most efficient manufacturing site.

Thank you.