Q2 2026 Techtronic Industries Co Ltd Earnings Call

August 4, 2026

Speaker #1: Thank you for attending TTI's first half 2026 results announcement. We delivered an outstanding first half with record revenue, gross profit, EBIT, and net profit.

Speaker #1: I'm also proud to say we had a strong free cash flow, further strengthening our balance sheet and our net cash position. All of our core businesses delivered solid results with our flagship Milwaukee and Ryobi businesses yielding underlying gross of 8.2% in local currency.

Speaker #1: With our global businesses diversified operation and supply chain, and the best team in the industry, we are well positioned to continue outperforming the market.

Speaker #1: We continue investing in areas that matter, such as product development and R&D, allowing us confidently to maintain our leadership position. The strong first half we delivered is a result of our strengths and dedication of our outstanding team.

Speaker #1: It is a strategic focus and operational excellence that allows us to continue delivering value to our customers and shareholders. I will now hand over the presentation to our group CFO, Frank Chan, who will talk you through the financials followed by our group CEO, Steve Richman, and Deputy CFO, Tai Savitsky, who will walk you through our operation.

Speaker #2: Thank you, Mr. Chairman. We are pleased to report both record sales and profits for the first half of 2026. Our reported sales was at 8.3 billion US dollars, an increase of 5.9% or 4% in local currencies.

Speaker #2: Milwaukee and Ryobi combined delivered an underlying growth of 8.2% in local currencies, only being offset by the exit of HUD and the rationalization of our non-core business.

Speaker #2: Milwaukee grew 10.5% on an underlying basis in local currencies, after adjusting the planned timing impact of our ERP conversion. Ryobi grew 1.7% in local currencies.

Speaker #2: Ryobi Power Tools delivered strong results with sales up mid-single digit only partially offset by a softer outdoor season. Our other 6.6 non-core business declined by 19.4% in local currencies, due to the HUD exit and continued streamlining of floor care and other consumer brands.

[Company Representative] (TTI): Well-positioned to continue outperforming the market. We continue investing in areas that matter, such as product development and R&D, allowing us confidently maintain our leadership position. The strong H1 we delivered is a result of our strength and dedication of our outstanding team. It is a strategic focus and operational excellence that allows us to continue delivering value to our customers and shareholders. I will now hand over the presentation to our Group Chief Financial Officer, Frank Chan, who will talk you through the financials, followed by our Chief Executive Officer, Steve Richman, and Deputy CFO, Ty Sabolsky, who will walk you through our operation.

Horst Pudwill: Well-positioned to continue outperforming the market. We continue investing in areas that matter, such as product development and R&D, allowing us confidently maintain our leadership position. The strong H1 we delivered is a result of our strength and dedication of our outstanding team. It is a strategic focus and operational excellence that allows us to continue delivering value to our customers and shareholders. I will now hand over the presentation to our Group Chief Financial Officer, Frank Chan, who will talk you through the financials, followed by our Chief Executive Officer, Steve Richman, and Deputy CFO, Ty Staviski, who will walk you through our operation.

Speaker #1: May position to continue outperforming the market. We continue investing in areas that matter, such as product development and R&D, allowing us to confidently maintain our leadership position.

Speaker #2: We will have a more detailed sales growth by brand breakdown later. Gross profits increased by 12.6% to 3.6 billion, with margins improved by 258 basis points to 42.9%.

Speaker #1: The strong first half we delivered is a result of our strengths and dedication of our outstanding team. It is a strategic focus and operational excellence that allows us to continue delivering value to our customers and shareholders.

Speaker #2: If we normalize the 2025 first half gross margin adjusting the excess tariffs incurred during the peak level and the dilution effect by HUD, our 2026 gross margins effectively increased by 163 basis points, as compared to the 41.2% normalized margin in first half of 2025.

Speaker #1: I will now hand over the presentation to our Group CFO, Frank Chan, who will talk you through the financials. He will be followed by our Group CEO, Steve Richman, and Deputy CFO, Tai Savitsky, who will walk you through our operations.

Speaker #2: This exceptional 163 basis points improvement mainly attributed to the annualization of tariff mitigation effects, additional margin accretion across EMEA and Australia regions, favorable mixed, strong Milwaukee performance, surfacing the high growth and markets and continued improvements in our non-core business.

Speaker #2: Thank you, Mr. Chairman. We are pleased to report both record sales and profits for the first half of 2026. Our reported sales were $8.3 billion, an increase of 5.9%, or 4% in local currencies.

Frank Chi Chung Chan: Thank you, Mr. Chairman. We are pleased to report both record sales and profits for the H1 of 2026. Our reported sales was at $8.3 billion USD, an increase of 5.9% or 4% in local currencies. Milwaukee and Ryobi combined delivered an underlying growth of 8.2% in local currencies, only being offset by the exit of Hart and the rationalization of our non-core business. Milwaukee grew 10.5% on an underlying basis in local currencies, after adjusting the planned timing impact of our ERP conversion. Ryobi grew 1.7% in local currencies. Ryobi power tools delivered strong results with sales up mid-single digit, only partially offset by a softer outdoor season. Our other 6.6 non-core business declined by 19.4% in local currencies due to the Hart exit and continued streamlining of Floor Care and other consumer brands. We will have a more detailed sales growth by brand breakdown later.

Frank Chan: Thank you, Mr. Chairman. We are pleased to report both record sales and profits for the H1 of 2026. Our reported sales was at $8.3 billion, an increase of 5.9% or 4% in local currencies. Milwaukee and Ryobi combined delivered an underlying growth of 8.2% in local currencies, only being offset by the exit of Hart and the rationalization of our non-core business. Milwaukee grew 10.5% on an underlying basis in local currencies, after adjusting the planned timing impact of our ERP conversion. Ryobi grew 1.7% in local currencies. Ryobi power tools delivered strong results with sales up mid-single digit, only partially offset by a softer outdoor season. Our other 6.6 non-core business declined by 19.4% in local currencies due to the Hart exit and continued streamlining of Floor Care and other consumer brands. We will have a more detailed sales growth by brand breakdown later.

Speaker #2: Our EBIT increased by 15.9% to 822 million dollars, with margin improved by 86 basis points to 9.9%. We believe we are very well positioned to meet or exceed our internal target of 10% EBIT margin by 2027.

Speaker #2: Milwaukee and Ryobi combined delivered underlying growth of 8.2% in local currencies, only being offset by the exit of Hart and the rationalization of our non-core business.

Speaker #2: We will also have a gross margin and EBIT margin walk later in the presentation by Tai. Net profits increased by 17.5% to 738 million dollars.

Speaker #2: Milwaukee grew 10.5% on an underlying basis in local currencies, after adjusting for the planned timing impact of our ERP conversion. Ryobi grew 1.7% in local currencies.

Speaker #2: Net profit margin increased by 88 basis points, due to the lower net finance cost and with effective tax rates remain comparable to that of last year.

Speaker #2: Ryobi Power Tools delivered strong results with sales up mid-single digit only partially offset by a softer outdoor season. Our other 6.6 non-core business declined by 19.4% in local currencies, due to the Hart exit and continued streamlining of floor care and other consumer brands.

Speaker #2: Earnings per share increased by 17.8% to 14.5 US cents per share.

Speaker #1: The board of directors declared an interim dividend of 150 HKD per share, an increase of 20% over last year with a payout ratio of 47.8%, as compared to 46.9% first half 2025.

Speaker #2: We will have a more detailed sales growth by brand breakdown. Gross profits increased by 12.6% to $3.6 billion, with margins improving by 258 basis points to 42.9%.

Speaker #2: During the period, we have changed our segment reporting from the business segments of power equipment and floor care cleaning to professional and consumer, as this reflects how management reviewed the structure and operations from end users and brand platform perspective.

Frank Chi Chung Chan: Gross profits increased by 12.6% to $3.6 billion, with margins improved by 258 basis points to 42.9%. If we normalize the 2025 H1 gross margin, adjusting the excess tariffs incurred during the peak level and the dilution effect by Hart, our 2026 gross margins effectively increased by 163 basis points as compared to the 41.2% normalized margin in H1 of 2025. This exceptional 163 basis points improvements mainly attributed to the annualization of tariff mitigation effects, additional margin accretion across EMEA and Australia regions, favorable mix, strong Milwaukee performance servicing the high growth end markets, and continued improvements in our non-core business. Our EBIT increased by 15.9% to $822 million, with margin improved by 86 basis points to 9.9%. We believe we are very well positioned to meet or exceed our internal target of 10% EBIT margin by 2027.

Frank Chan: Gross profits increased by 12.6% to $3.6 billion, with margins improved by 258 basis points to 42.9%. If we normalize the 2025 H1 gross margin, adjusting the excess tariffs incurred during the peak level and the dilution effect by Hart, our 2026 gross margins effectively increased by 163 basis points as compared to the 41.2% normalized margin in H1 of 2025. This exceptional 163 basis points improvements mainly attributed to the annualization of tariff mitigation effects, additional margin accretion across EMEA and Australia regions, favorable mix, strong Milwaukee performance servicing the high growth end markets, and continued improvements in our non-core business. Our EBIT increased by 15.9% to $822 million, with margin improved by 86 basis points to 9.9%. We believe we are very well positioned to meet or exceed our internal target of 10% EBIT margin by 2027.

Speaker #2: If we normalize the 2025 first half gross margin, adjusting for the excess tariffs incurred during the peak levels and the dilution effect from Hart, our 2026 gross margins effectively increased by 163 basis points, as compared to the 41.2% normalized margin in the first half of 2025.

Speaker #2: Professional segment mainly through Milwaukee brand delivered a sales of 5.9 billion dollars in the first half of 2026, an increase of 9.7% in reported currencies.

Speaker #2: EBIT increased by 16% with margin improved 57 basis points to 10.5%. Sales of consumer segment through Ryobi AEG wax hoover and other brands servicing the consumer channel decreased by 2.5% to 2.4 billion dollars.

Speaker #2: This exceptional 163 basis points improvement is mainly attributed to the annualization of tariff mitigation effects; additional margin accretion across the EMEA and Australia regions; favorably, strong Milwaukee performance; surfacing in the high growth market; and continued improvements in our non-core business.

Speaker #2: The decline mainly due to the continued sales rationalization of floor care and other consumer brands and HUD exit, while Ryobi delivered a 1.7% growth in local currencies.

Speaker #2: EBIT, however, delivered a 15.8% increase with margins improved by 133 basis points to 8.5%. The improvements reflect the benefits of the HUD exit and our focus on profitability across all consumer brands.

Speaker #2: We will also have a gross margin and EBIT margin walk later in the presentation by Tai. Net profits increased by 17.5% to $738 million.

Frank Chi Chung Chan: We will also have a gross margin and EBIT margin walk later in the presentation by Ty. Net profit increased by 17.5% to $738 million. Net profit margin increased by 88 basis points due to the lower net finance cost and with effective tax rates remain comparable to that of last year. Earnings per share increased by 17.8% to $0.405 per share. The board of directors declared an interim dividend of HKD 1.50 per share, an increase of 20% over last year with a payout ratio of 47.8% as compared to 46.9% H1 2025. During the period, we have changed our segment reporting from the business segments of Power Equipment and Floor Care Cleaning to Professional and Consumer, as this reflects how management review the structure and operations from end users and platform perspective.

Frank Chan: We will also have a gross margin and EBIT margin walk later in the presentation by Ty. Net profit increased by 17.5% to $738 million. Net profit margin increased by 88 basis points due to the lower net finance cost and with effective tax rates remain comparable to that of last year. Earnings per share increased by 17.8% to $0.405 per share. The board of directors declared an interim dividend of HKD 1.50 per share, an increase of 20% over last year with a payout ratio of 47.8% as compared to 46.9% H1 2025. During the period, we have changed our segment reporting from the business segments of Power Equipment and Floor Care Cleaning to Professional and Consumer, as this reflects how management review the structure and operations from end users and platform perspective.

Speaker #2: SC&A increased by 170 basis points to 33% of sales, closely in line with the second half of 2025. This increase reflects our continued investment in new products, technology, service levels, and write-off of intangibles related to the rationalization of underperforming categories.

Speaker #2: Net profit margin increased by 88 basis points, due to the lower net finance cost and with effective tax rates remain comparable to that of last year.

Speaker #2: Earnings per share increased by 17.8% to 14.5 US cents per share.

Speaker #2: Strategic selling expenses represent 19.1% of sales, while R&D spend remained comparable to first half last year at 4.6%. We have, however, continued to leverage our sales growth and managed to reduce our non-strategic administrative expenses from 9.5% of sales last year to 9.3%.

Speaker #3: The board of directors declared an interim dividend of HK$150 per share, an increase of 20% over last year, with a payout ratio of 47.8%, compared to 46.9% in the first half of 2025.

Speaker #2: During the period, we have changed our segment reporting from the business segments of power equipment and floor care cleaning to professional and consumer, as this reflects how management refilled the structure and operations from end users and brand platform perspective.

Speaker #2: With the strong and healthy balance sheet and the over 1 billion operating free cash flows generated part three consecutive years, we've been able to continue to reduce our net finance costs.

Speaker #2: Our net finance costs for the of 8.2 million or 29.4%. Effective tax rates remain the same as full year 2025 at 8%. We've continued to maintain that with our proactive and yet prudent tax strategy and plan, the current level of effective tax rate is very sustainable.

Speaker #2: The professional segment, mainly through the Milwaukee brand, delivered sales of $5.9 billion in the first half of 2026, an increase of 9.7% in reported currencies.

Frank Chi Chung Chan: Professional segment, mainly through Milwaukee brands, delivered sales of $5.9 billion in H1 2026, an increase of 9.7% in reported currencies. EBIT increased by 16%, with margin improved 57 basis points to 10.5%. Sales of Consumer segment through Ryobi, AEG, Vax, Hoover, and other brands servicing the consumer channel, decreased by 2.5% to $2.4 billion. The decline mainly due to the continued sales rationalization of floor care and other consumer brands and Hart exit. While Ryobi delivered a 1.7% growth in local currencies. EBIT, however, delivered a 15.8% increase with margins improved by 133 basis points to 8.5%. The improvements reflect the benefits of the Hart exit and our focus on profitability across all consumer brands. SG&A increased by 170 basis points to 33% of sales, closely in line with H2 2025.

Frank Chan: Professional segment, mainly through Milwaukee brands, delivered sales of $5.9 billion in H1 2026, an increase of 9.7% in reported currencies. EBIT increased by 16%, with margin improved 57 basis points to 10.5%. Sales of Consumer segment through Ryobi, AEG, Vax, Hoover, and other brands servicing the consumer channel, decreased by 2.5% to $2.4 billion. The decline mainly due to the continued sales rationalization of floor care and other consumer brands and Hart exit. While Ryobi delivered a 1.7% growth in local currencies. EBIT, however, delivered a 15.8% increase with margins improved by 133 basis points to 8.5%. The improvements reflect the benefits of the Hart exit and our focus on profitability across all consumer brands. SG&A increased by 170 basis points to 33% of sales, closely in line with H2 2025.

Speaker #2: EBIT increased by 16%, with margin improving 57 basis points to 10.5%. Sales of the consumer segment through Ryobi, AEG, WAX, Hoover, and other brands servicing the consumer channel decreased by 2.5% to $2.4 billion.

Speaker #2: Our balance sheet remained very healthy and strong with shareholders' equity at 7.4 billion, an increase of 791 million or 11.9% over that of same period last year.

Speaker #2: The decline was mainly due to the continued sales rationalization of floor care and other consumer brands, and the Hart exit, while Ryobi delivered a 1.7% growth in local currencies.

Speaker #2: Net current assets increased by 25.8% to 3.87 billion. In this very dynamic and challenging macroeconomic environment, we will continue to prudently manage our balance sheet to invest and grow our business.

Speaker #2: EBIT, however, delivered a 15.8% increase with margins improved by 133 basis points to 8.5%. The improvements reflect the benefits of the Hart exit and our focus on profitability across all consumer brands.

Speaker #2: Working capital as a percentage of sales was at 16.6%, 20 basis points improved when compared to same period last year. Total inventory days decreased by 3 days to 100 days.

Speaker #2: SC&A increased by 170 basis points to 33% of sales, closely in line with the second half of 2025. This increase reflects our continued investment in new products, technology, service levels, and the write-off of intangibles related to the rationalization of underperforming categories.

Speaker #2: Finished goods inventory reduced by 6 days, while raw materials increased by 4 days and work in progress decreased by 1 day. Receivable days reduced by 5 days to 55 days and payable days also reduced to 94 days.

Frank Chi Chung Chan: This increase reflects our continued investment in new products, technology, service levels, and write-off of intangibles related to the rationalization of underperforming categories. Strategic selling expenses represent 19.1% of sales, while R&D spend remained comparable to H1 last year at 4.6%. We have, however, continued to leverage our sales growth and managed to reduce our non-strategic administrative expenses from 9.5% of sales last year to 9.3%. With a strong and healthy balance sheet and the over $1 billion operating free cash flows generated past three consecutive years, we've been able to continue to reduce our net finance costs. Our net finance costs for H1 was $19.6 million, representing 0.23% of sales, a reduction of $8.2 million or 29.4%. Effective tax rates remain same as full year 2025 at 8%.

Frank Chan: This increase reflects our continued investment in new products, technology, service levels, and write-off of intangibles related to the rationalization of underperforming categories. Strategic selling expenses represent 19.1% of sales, while R&D spend remained comparable to H1 last year at 4.6%. We have, however, continued to leverage our sales growth and managed to reduce our non-strategic administrative expenses from 9.5% of sales last year to 9.3%. With a strong and healthy balance sheet and the over $1 billion operating free cash flows generated past three consecutive years, we've been able to continue to reduce our net finance costs. Our net finance costs for H1 was $19.6 million, representing 0.23% of sales, a reduction of $8.2 million or 29.4%. Effective tax rates remain same as full year 2025 at 8%.

Speaker #2: Improving working capital efficiencies has always been our primary focus, and we believe we can further improve it going forward. CapEx spend was at 92 million, comparable to that of last year, with capacity expansions planned in Midland and Mexico for the next 12 to 18 months' time.

Speaker #2: Strategic selling expenses represent 19.1% of sales, while R&D spend remained comparable to the first half last year at 4.6%. We have, however, continued to leverage our sales growth and managed to reduce our non-strategic administrative expenses from 9.5% of sales last year to 9.3%.

Speaker #2: We've continued to project that our CapEx spend to be broadly stable as a percentage of sales to in the coming years. In this current business environment, we focus very much in free cash flow generation.

Speaker #2: With the strong and healthy balance sheet and the over 1 billion operating free cash flows generated part 3 consecutive years, we've been able to continue to reduce our net finance costs.

Speaker #2: In the first half of 2026, we've delivered an operating free cash flows of 753 million, an increase of 285 million compared to same period last year.

Speaker #2: Our net finance costs for the first half were $19.6 million, representing 0.23% of sales, a reduction of $8.2 million or 29.4%. Effective tax rates remained the same as full year 2025 at 8%.

Speaker #2: For the full year, our internal target is to deliver approximately 1.3 billion US dollars operating free cash flows, and we are very confident achieving this target.

Speaker #2: We’ve continued to maintain that, with our proactive and yet prudent tax strategy and plan, the current level of effective tax rate is very sustainable.

Frank Chi Chung Chan: We have continued to maintain that with our proactive and yet prudent tax strategy and plan, the current level of effective tax rate is very sustainable. Our balance sheet remained very healthy and strong with shareholders' equity at $7.4 billion, an increase of $791 million or 11.9% over that of same period last year. Net current assets increased by 25.8% to $3.87 billion. In this very dynamic and challenging macroeconomic environment, we will continue to prudently manage our balance sheet to invest and grow our business. Working capital as a percentage of sales was at 16.6%. 20 basis points improved when compared to same period last year. Total inventory days decreased by 3 days to 100 days.

Frank Chan: We have continued to maintain that with our proactive and yet prudent tax strategy and plan, the current level of effective tax rate is very sustainable. Our balance sheet remained very healthy and strong with shareholders' equity at $7.4 billion, an increase of $791 million or 11.9% over that of same period last year. Net current assets increased by 25.8% to $3.87 billion. In this very dynamic and challenging macroeconomic environment, we will continue to prudently manage our balance sheet to invest and grow our business. Working capital as a percentage of sales was at 16.6%. 20 basis points improved when compared to same period last year. Total inventory days decreased by 3 days to 100 days.

Speaker #2: When compared to first half 2025, our net cash position increased from 126 million to close to 1.1 billion in 2026, demonstrating our cash flow generating capabilities prudent working capital and balance sheet management.

Speaker #2: Our balance sheet remained very healthy and strong, with shareholders' equity at $7.4 billion, an increase of $791 million or 11.9% over the same period last year.

Speaker #2: We are confident that we will continue to be in a net cash position by end of 2026. In the first half of 2026, we've increased our cash balance by 281 million or 17.5% to close to 1.9 billion, while reduced our total borrowings by 659 million or 44.5%.

Speaker #2: That current assets increased by 25.8% to 3.87 billion. In this very dynamic and challenging macroeconomic environment, we will continue to prudently manage our balance sheet to invest and grow our business.

Speaker #2: Working capital as a percentage of sales was at 16.6%, 20 basis points improved when compared to same period last year. Total inventory days decreased by 3 days to 100 days.

Speaker #2: The reduction in borrowings were mainly by paying down 418 million the more expensive floating rate working capital borrowings and 241 million longer tenure fixed rate debts matured during the period.

Speaker #2: Finished goods inventory was reduced by 6 days, while raw materials increased by 4 days and work in progress decreased by 1 day. Residual days reduced by 5 days to 55 days, and payable days also reduced to 94 days.

Frank Chi Chung Chan: Finished goods inventory reduced by 6 days, while raw materials increased by 4 days, and work in progress decreased by 1 day. Receivable days reduced by 5 days to 55 days, and payroll days also reduced to 94 days. Improving working capital efficiencies has always been our primary focus, and we believe we can further improve it going forward. CapEx spend was at $92 million, comparable to that of last year. With capacity expansions planned in Vietnam and Mexico for the next 12 to 18 months time, we've continued to project that our CapEx spend to be broadly stable as a percentage of sales in the coming years. In this current business environment, we focus very much in free cash flow generation.

Frank Chan: Finished goods inventory reduced by 6 days, while raw materials increased by 4 days, and work in progress decreased by 1 day. Receivable days reduced by 5 days to 55 days, and payroll days also reduced to 94 days. Improving working capital efficiencies has always been our primary focus, and we believe we can further improve it going forward. CapEx spend was at $92 million, comparable to that of last year. With capacity expansions planned in Vietnam and Mexico for the next 12 to 18 months time, we've continued to project that our CapEx spend to be broadly stable as a percentage of sales in the coming years. In this current business environment, we focus very much in free cash flow generation.

Speaker #2: Lower cost fixed rate debts now account for 80% of our total debt portfolio. We will continue to leverage our strong balance sheet for opportunities to increase our long-term fixed rate borrowings with the most cost-effective courses, to support our long-term growth strategy going forward.

Speaker #2: With that, I would like to pass the presentation to our CEO, Mr. Steve Richman.

Speaker #1: Our journey at TTI has always been built on our two bookends of success: our people and our culture. We recruit retain and invest in the best people around the world, and that is core to who we are every single day.

Speaker #2: We've continued to project that our CapEx spend will be broadly stable as a percentage of sales in the coming years. In this current business environment, we are focused very much on free cash flow generation.

Speaker #2: In the first half of 2026, we've delivered an operating free cash flows of 753 million, an increase of 285 million compared to same period last year.

Frank Chi Chung Chan: In H1 2026, we have delivered an operating free cash flow of $753 million, an increase of $285 million compared to same period last year. For the full year, our internal target is to deliver approximately $1.3 billion operating free cash flows, and we are very confident achieving this target. When compared to H1 2025, our net cash position increased from $126 million to close to $1.1 billion in 2026, demonstrating our cash flow generating capabilities, prudent working capital, and balance sheet management. We are confident that we will continue to be in a net cash position by end of 2026.

Frank Chan: In H1 2026, we have delivered an operating free cash flow of $753 million, an increase of $285 million compared to same period last year. For the full year, our internal target is to deliver approximately $1.3 billion operating free cash flows, and we are very confident achieving this target. When compared to H1 2025, our net cash position increased from $126 million to close to $1.1 billion in 2026, demonstrating our cash flow generating capabilities, prudent working capital, and balance sheet management. We are confident that we will continue to be in a net cash position by end of 2026.

Speaker #1: Our users are distribution partners, and our shareholders have all seen firsthand the passion these people bring. How they drive solutions every single day. How they drive both the top line and the bottom line.

Speaker #2: For the full year, our internal target is to deliver approximately $1.3 billion in operating free cash flow, and we are very confident in achieving this target.

Speaker #1: That passion is exactly what delivered another record first half in 2026. Now, what sets TTI apart is that we perform as one global team.

Speaker #2: When compared to first half 2025, our net cash position increased from 126 million to close to 1.1 billion in 2026. Demonstrating our cash flow generating capabilities, prudent working capital, and balance sheet management.

Speaker #1: Our operations are new product development. Our commercialization teams challenge each other constantly to define what great looks like. And how we improve how we get better every single day.

Speaker #2: We are confident that we will continue to be in a net cash position by the end of 2026. In the first half of 2026, we've increased our cash balance by $281 million, or 17.5%, to close to $1.9 billion, while reducing our total borrowings by $659 million, or 44.5%.

Frank Chi Chung Chan: In H1 2026, we've increased our cash balance by $281 million or 17.5% to close to $1.9 billion, while reduced our total borrowings by $659 million or 44.5%. The reduction in borrowings were mainly by paying down $418 million, the more expensive floating rate working capital borrowings, and $241 million longer tenure fixed rate debts matured during the period. Lower cost fixed rate debts now account for 80% of our total debt portfolio. We will continue to leverage our strong balance sheet for opportunities to increase our long-term fixed rate borrowings with the most cost-effective costs to support our long-term growth strategy going forward. With that, I would like to pass the presentation to our CEO, Mr. Steven Richman.

Frank Chan: In H1 2026, we've increased our cash balance by $281 million or 17.5% to close to $1.9 billion, while reduced our total borrowings by $659 million or 44.5%. The reduction in borrowings were mainly by paying down $418 million, the more expensive floating rate working capital borrowings, and $241 million longer tenure fixed rate debts matured during the period. Lower cost fixed rate debts now account for 80% of our total debt portfolio. We will continue to leverage our strong balance sheet for opportunities to increase our long-term fixed rate borrowings with the most cost-effective costs to support our long-term growth strategy going forward. With that, I would like to pass the presentation to our CEO, Mr. Steven Richman.

Speaker #1: And that one team philosophy is anchored by a senior leadership group that has been together for nearly two decades. As well as the next generation of leaders that are coming up, that have been together for over a decade.

Speaker #2: The reduction in borrowings was mainly by paying down $418 million of the more expensive floating rate working capital borrowings, and $241 million of longer-term fixed rate debts that matured during the period.

Speaker #1: All of them together understand that they have to have candid dialogue and trust that come from those relationships that they have built and this is a genuine competitive advantage and a core part of our culture.

Speaker #2: Lower-cost, fixed-rate debts now account for 80% of our total debt portfolio. We will continue to leverage our strong balance sheet for opportunities to increase our long-term fixed-rate borrowings in the most cost-effective ways to support our long-term growth strategy going forward.

Speaker #1: As we look at the first half of 2026 and beyond, there are three areas I want to focus on. Growth, profitability, and execution. Let's start with growth.

Speaker #2: With that, I would like to pass the presentation to our CEO, Mr. Steve Richman.

Speaker #1: Our journey at TTI has always been built on our two bookends of success: our people and our culture. We recruit, retain, and invest in the best people around the world, and that is core to who we are every single day.

Steven Richman: Our journey at TTI has always been built on our two bookends of success, our people and our culture. We recruit, retain, and invest in the best people around the world, and that is core to who we are every single day. Our users, our distribution partners, and our shareholders have all seen firsthand the passion these people bring. How they drive solutions every single day. How they drive both the top line and the bottom line. That passion is exactly what delivered another record H1 in 2026. Now, what sets TTI apart is that we perform as one global team. Our operations, our new product development, our commercialization teams challenge each other constantly to define what great looks like and how we improve, how we get better every single day.

Steve Richman: Our journey at TTI has always been built on our two bookends of success, our people and our culture. We recruit, retain, and invest in the best people around the world, and that is core to who we are every single day. Our users, our distribution partners, and our shareholders have all seen firsthand the passion these people bring. How they drive solutions every single day. How they drive both the top line and the bottom line. That passion is exactly what delivered another record H1 in 2026. Now, what sets TTI apart is that we perform as one global team. Our operations, our new product development, our commercialization teams challenge each other constantly to define what great looks like and how we improve, how we get better every single day.

Speaker #1: In EMEA, our teams dominate specific markets on both the consumer and the professional business. And the opportunity ahead is to extend that same domination into new markets.

Speaker #1: With Ryobi on the consumer front and Milwaukee on the professional front. In the first half, EMEA delivered outstanding double-digit growth in Milwaukee. In Asia and Latin America, we are still at the beginning of our journey.

Speaker #1: Our users are distribution partners, and our shareholders have all seen firsthand the passion these people bring—how they drive solutions every single day, and how they drive both the top line and the bottom line.

Speaker #1: On the Milwaukee side, we have moved from test and learn to an invest and grow approach. And for the first time, we now have that same runway opportunity for Ryobi.

Speaker #1: That passion is exactly what delivered another record first half in 2026. Now, what sets TTI apart is that we perform as one global team.

Speaker #1: The number one consumer brand in the world. And even in our most established markets, North America and Australia, we believe we are still in the early innings.

Speaker #1: Our operations are new product development. Our commercialization teams challenge each other constantly to define what great looks like and how we improve, how we get better every single day.

Speaker #1: Because our relentless focus is on expanding the market, launching new businesses, and earning the right every day with our consumer and pro to grow.

Speaker #1: And that one-team philosophy is anchored by a senior leadership group that has been together for nearly two decades, as well as the next generation of leaders coming up, who have been together for over a decade.

Steven Richman: That one team philosophy is anchored by a senior leadership group that has been together for nearly 2 decades, as well as the next generation of leaders that are coming up, that have been together for over a decade. All of them together understand that they have to have candid dialogue and trust that come from those relationships that they have built, and this is a genuine competitive advantage and a core part of our culture. As we look at H1 2026 and beyond, there are three areas I want to focus on. Growth, profitability, and execution. Let's start with growth. In EMEA, our teams dominate specific markets on both the consumer and the professional business.

Steve Richman: That one team philosophy is anchored by a senior leadership group that has been together for nearly 2 decades, as well as the next generation of leaders that are coming up, that have been together for over a decade. All of them together understand that they have to have candid dialogue and trust that come from those relationships that they have built, and this is a genuine competitive advantage and a core part of our culture. As we look at H1 2026 and beyond, there are three areas I want to focus on. Growth, profitability, and execution. Let's start with growth. In EMEA, our teams dominate specific markets on both the consumer and the professional business.

Speaker #1: Now, the second is profitability. I have never seen us more aligned as one team than we are right now. In the first half, we expanded gross margin to a record 42.9% and grew EBIT margin to a record 9.9%.

Speaker #1: All of them together understand that they have to have candid dialogue and trust that comes from those relationships that they have built, and this is a genuine competitive advantage and a core part of our culture.

Speaker #1: All of this comes from discipline portfolio choices. The mixed benefit of our two dominant higher margin brands and the annualization of our tariff mitigation work.

Speaker #1: As we look at the first half of 2026 and beyond, there are three areas I want to focus on: growth, profitability, and execution. Let's start with growth.

Speaker #1: But what excites me most is underneath those numbers, we are unlocking leverage and global alignment at a scale coordinating across brands and regions and functions in a way that lets us drive down costs to reinvest in the business.

Speaker #1: In EMEA, our teams dominate specific markets in both the consumer and professional businesses. The opportunity ahead is to extend that same domination into new markets.

Steven Richman: The opportunity ahead is to extend that same domination into new markets with Ryobi on the consumer front and Milwaukee on the professional front. In H1, EMEA delivered outstanding double-digit growth in Milwaukee. In Asia and Latin America, we are still at the beginning of our journey. On the Milwaukee side, we have moved from test and learn to an invest and grow approach. For the first time, we now have that same runway opportunity for Ryobi, the number one consumer brand in the world. Even in our most established markets, North America and Australia, we believe we are still in the early innings because our relentless focus is on expanding the market, launching new businesses, and earning the right every day with our consumer and pro to grow. The second is profitability.

Steve Richman: The opportunity ahead is to extend that same domination into new markets with Ryobi on the consumer front and Milwaukee on the professional front. In H1, EMEA delivered outstanding double-digit growth in Milwaukee. In Asia and Latin America, we are still at the beginning of our journey. On the Milwaukee side, we have moved from test and learn to an invest and grow approach. For the first time, we now have that same runway opportunity for Ryobi, the number one consumer brand in the world. Even in our most established markets, North America and Australia, we believe we are still in the early innings because our relentless focus is on expanding the market, launching new businesses, and earning the right every day with our consumer and pro to grow. The second is profitability.

Speaker #1: We are also deliberate about where that margin comes from. In our consumer businesses, we are at the beginning of a journey on a radical approach to cost.

Speaker #1: Reengineering our products so they are designed around what the end user, what that consumer actually needs delivering the features that matter while taking cost out of everything that does not.

Speaker #1: On the Milwaukee side, we have moved from test and learn to an invest and grow approach. And for the first time, we now have that same runway opportunity for Ryobi.

Speaker #1: And in Milwaukee, we still have significant room to capture value. Because of the productivity and safety, our solutions bring to our end users every single day on the job.

Speaker #1: The number one consumer brand in the world. And even in our most established markets, North America and Australia, we believe we are still in the early innings.

Speaker #1: We put that together and this is why our confidence in reaching our 10% EBIT margin target by 2027 has only grown. Third is execution.

Speaker #1: Because our relentless focus is on expanding the market, launching new businesses, and earning the right every day with our consumer and pro to grow.

Speaker #1: And this is clearly the hard part. Execution takes leadership and grit. It is where companies separate themselves. The first half of 2026 tested exactly that.

Steven Richman: I have never seen us more aligned as one team than we are right now. In H1, we expanded gross margin to a record 42.9% and grew EBIT margin to a record 9.9%. All of this comes from disciplined portfolio choices, the mixed benefit of our two dominant higher-margin brands, and the annualization of our tariff mitigation work. What excites me most is underneath those numbers, we are unlocking leverage and global alignment at a scale, coordinating across brands and regions and functions in a way that lets us drive down costs to reinvest in the business. We are also deliberate about where that margin comes from.

Steve Richman: I have never seen us more aligned as one team than we are right now. In H1, we expanded gross margin to a record 42.9% and grew EBIT margin to a record 9.9%. All of this comes from disciplined portfolio choices, the mixed benefit of our two dominant higher-margin brands, and the annualization of our tariff mitigation work. What excites me most is underneath those numbers, we are unlocking leverage and global alignment at a scale, coordinating across brands and regions and functions in a way that lets us drive down costs to reinvest in the business. We are also deliberate about where that margin comes from.

Speaker #1: Commodity pressures ramped up meaningfully. Oil and metals and the cost of freight all moved against us. And managing that was generally a complex job for our operations team.

Speaker #1: All of this comes from disciplined portfolio choices, the mixed benefit of our two dominant higher-margin brands, and the annualization of our tariff mitigation work.

Speaker #1: They delivered. Protecting our margins while keeping our factories and our supply chain running. And that is the kind of discipline execution that never makes a headline but shows up in outstanding results.

Speaker #1: But execution is about offense as much as defense. We have to execute for the consumer. Bringing the innovation they actually want so we keep on growing the business.

Speaker #1: And we have to execute on expanding the highest growth professional and markets. Like the vertical supporting data centers energy utilities and critical infrastructure. Where demand for productivity and our safety solutions delivering is only accelerating.

Speaker #1: We are also deliberate about where that margin comes from. In our consumer businesses, we are at the beginning of a journey on a radical approach to cost.

Steven Richman: In our consumer businesses, we are at the beginning of a journey on a radical approach to cost, re-engineering our products so they are designed around what the end user, what that consumer actually needs, delivering the features that matter while taking cost out of everything that does not. In Milwaukee, we still have significant room to capture value because of the productivity and safety our solutions bring to our end users every single day on the job. We put that together, this is why our confidence in reaching our 10% EBIT margin target by 2027 has only grown. Third is execution, this is clearly the hard part. Execution takes leadership and grit. It is where companies separate themselves. The H1 of 2026 tested exactly that. Commodity pressures ramped up meaningfully.

Steve Richman: In our consumer businesses, we are at the beginning of a journey on a radical approach to cost, re-engineering our products so they are designed around what the end user, what that consumer actually needs, delivering the features that matter while taking cost out of everything that does not. In Milwaukee, we still have significant room to capture value because of the productivity and safety our solutions bring to our end users every single day on the job. We put that together, this is why our confidence in reaching our 10% EBIT margin target by 2027 has only grown. Third is execution, this is clearly the hard part. Execution takes leadership and grit. It is where companies separate themselves. The H1 of 2026 tested exactly that. Commodity pressures ramped up meaningfully.

Speaker #1: Doing both of these at once, under real cost pressure, is a hard and it is exactly what our teams delivered in the first half.

Speaker #1: And in Milwaukee, we still have significant room to capture value because of the productivity and safety our solutions bring to our end users every single day on the job.

Speaker #1: Our financial focus areas remain clear at TTI and our shared by every leader in the company. First of all, sales growth is a non-negotiable.

Speaker #1: We put that together, and this is why our confidence in reaching our 10% EBIT margin target by 2027 has only grown. Third is execution.

Speaker #1: We are a growth company and a technology company that must grow. Our internal cadence is mid to high single digit growth for TTI overall.

Speaker #1: And this is clearly the hard part. Execution takes leadership and grit. It is where companies separate themselves. The first half of 2026 tested exactly that.

Speaker #1: Double digit for Milwaukee and single digit for Ryobi. On profitability, our internal plan is to reach a 10% EBIT margin in 2027. And after delivering 9.9% in the first half of 2026, our confidence in meeting or exceeding that target has only increased.

Speaker #1: Commodity pressures ramped up meaningfully. Oil and metals and the cost of freight all moved against us. And managing that was generally a complex job for our operations team.

Steven Richman: Oil and metals and the cost of freight all moved against us, managing that was generally a complex job for our operations team. They delivered, protecting our margins while keeping our factories and our supply chain running, that is the kind of disciplined execution that never makes a headline but shows up in outstanding results. Execution is about offense as much as defense. We have to execute for the consumer, bringing the innovation they actually want, so we keep on growing the business. We have to execute on expanding the highest growth professional end markets, like the verticals supporting data centers, energy, utilities, and critical infrastructure, where demand for productivity and our safety solutions delivering is only accelerating. Doing both of these at once under real cost pressure is hard, it is exactly what our teams delivered in H1.

Steve Richman: Oil and metals and the cost of freight all moved against us, managing that was generally a complex job for our operations team. They delivered, protecting our margins while keeping our factories and our supply chain running, that is the kind of disciplined execution that never makes a headline but shows up in outstanding results. Execution is about offense as much as defense. We have to execute for the consumer, bringing the innovation they actually want, so we keep on growing the business. We have to execute on expanding the highest growth professional end markets, like the verticals supporting data centers, energy, utilities, and critical infrastructure, where demand for productivity and our safety solutions delivering is only accelerating. Doing both of these at once under real cost pressure is hard, it is exactly what our teams delivered in H1.

Speaker #1: And on cash, we are raising our internal free cash flow target for 2026 from over US 1 billion to over US 1.3 billion. And we're comfortable with sustaining similar levels of cash flow on a medium term basis.

Speaker #1: But execution is about offense as much as defense. We have to execute for the consumer. Bringing the innovation they actually want. So we keep on growing the business.

Speaker #1: Beginning this period, we have realigned our reporting into two segments, professional and consumer, which better reflects how we run the business every single day.

Speaker #1: And we have to execute on expanding the highest growth professional end markets, like the verticals supporting data centers, energy utilities, and critical infrastructure, where demand for productivity and our safety solutions delivering is only accelerating.

Speaker #1: Professional is led by Milwaukee, consumer is led by Ryobi, together these core brands now represent 93% of our sales. And both delivered exactly what we expect of them in the first half of 2026.

Speaker #1: Doing both of these at once, under real cost pressure, is hard, and it is exactly what our teams delivered in the first half.

Speaker #1: Let's start with Milwaukee. On an underlying basis, Milwaukee grew 10.5% in local currency. With double digit growth in every region throughout the world. The Americas up 10.5% on an adjusted local currency basis.

Speaker #1: Our financial focus areas remain clear at TTI and are shared by every leader in the company. First of all, sales growth is non-negotiable.

Steven Richman: Our financial focus areas remain clear at TTI and are shared by every leader in the company. First of all, sales growth is a non-negotiable. We are a growth company and a technology company that must grow. Our internal cadence is mid-to-high single-digit growth for TTI overall, double-digit for Milwaukee, and single-digit for Ryobi. On profitability, our internal plan is to reach a 10% EBIT margin in 2027, and after delivering 9.9% in the first half of 2026, our confidence in meeting or exceeding that target has only increased. On cash, we are raising our internal free cash flow target for 2026 from over $1 billion to over $1.3 billion, and we are comfortable with sustaining similar levels of cash flow on a medium-term basis.

Steve Richman: Our financial focus areas remain clear at TTI and are shared by every leader in the company. First of all, sales growth is a non-negotiable. We are a growth company and a technology company that must grow. Our internal cadence is mid-to-high single-digit growth for TTI overall, double-digit for Milwaukee, and single-digit for Ryobi. On profitability, our internal plan is to reach a 10% EBIT margin in 2027, and after delivering 9.9% in the first half of 2026, our confidence in meeting or exceeding that target has only increased. On cash, we are raising our internal free cash flow target for 2026 from over $1 billion to over $1.3 billion, and we are comfortable with sustaining similar levels of cash flow on a medium-term basis.

Speaker #1: EMEA up 10.5% and the rest of the world up 9.9%. Now, Milwaukee, as you know, is not a product company. It is a solution company.

Speaker #1: We are a growth company and a technology company that must grow. Our internal cadence is mid- to high-single-digit growth for TTI overall.

Speaker #1: Addressing roughly US 160 billion market and delivering productivity and safety on the job every single day. Structural labor shortages, across the trades we serve from mechanical and electrical and plumbing and transportation maintenance and utility.

Speaker #1: Double-digit for Milwaukee and single-digit for Ryobi. On profitability, our internal plan is to reach a 10% EBIT margin in 2027. After delivering 9.9% in the first half of 2026, our confidence in meeting or exceeding that target has only increased.

Speaker #1: Keep increasing demand for exactly the solutions we build every single day. In the first half, we brought breakthrough innovation to those trades. A few of them the MAT fuel striker, the world's first cordless hammer chisel.

Speaker #1: And the MX fuel electrofusion processor for gas utility work. All connected through one key, the industry's largest IoT platform. Milwaukee is also dedicated to creating innovative solutions that help our users stay safe.

Speaker #1: Beginning this period, we have realigned our reporting into two segments, professional and consumer, which better reflects how we run the business every single day.

Steven Richman: Beginning this period, we have realigned our reporting into two segments, Professional and Consumer, which better reflects how we run the business every single day. Professional is led by Milwaukee. Consumer is led by Ryobi. Together, these core brands now represent 93% of our sales, and both delivered exactly what we expect of them in the first half of 2026. Let's start with Milwaukee. On an underlying basis, Milwaukee grew 10.5% in local currency, with double-digit growth in every region throughout the world. The Americas, up 10.5% on an adjusted local currency basis. EMEA, up 10.5%, and the rest of the world, up 9.9%. Milwaukee, as you know, is not a product company. It is a solution company addressing roughly a $160 billion market and delivering productivity and safety on the job every single day.

Steve Richman: Beginning this period, we have realigned our reporting into two segments, Professional and Consumer, which better reflects how we run the business every single day. Professional is led by Milwaukee. Consumer is led by Ryobi. Together, these core brands now represent 93% of our sales, and both delivered exactly what we expect of them in the first half of 2026. Let's start with Milwaukee. On an underlying basis, Milwaukee grew 10.5% in local currency, with double-digit growth in every region throughout the world. The Americas, up 10.5% on an adjusted local currency basis. EMEA, up 10.5%, and the rest of the world, up 9.9%. Milwaukee, as you know, is not a product company. It is a solution company addressing roughly a $160 billion market and delivering productivity and safety on the job every single day.

Speaker #1: Our new dipped gloves with wear defense protection expands our robust glove product offering, delivering the longest glove life while providing high dexterity for demanding applications.

Speaker #1: Professional is led by Milwaukee. Consumer is led by Ryobi. Together, these core brands now represent 93% of our sales, and both delivered exactly what we expect of them in the first half of 2026.

Speaker #1: We are a solution company driving solutions and productivity on the job every single day. On the consumer side, Ryobi, the number one consumer brand in the world.

Speaker #1: Addressing roughly a US 80 billion market. Grew 1.7% in local currency to 1.9 billion. Our power tool business grew mid single digits while outdoor was roughly flat against the software weather affected season across EMEA and parts of the United States.

Speaker #1: EMEA was up 10.5%, and the rest of the world was up 9.9%. Now, Milwaukee, as you know, is not a product company; it is a solution company.

Speaker #1: Addressing a roughly $160 billion market and delivering productivity and safety on the job every single day. Structural labor shortages across the trades we serve, from mechanical and electrical to plumbing, transportation maintenance, and utility.

Speaker #1: And the timing of seasonal load-ins. Our platform has never been stronger. We hold the largest installed base of users in the world across USB lithium.

Steven Richman: Structural labor shortages across the trades we serve, from mechanical and electrical and plumbing and transportation maintenance and utility, keep increasing demand for exactly the solutions we build every single day. In the first half, we brought breakthrough innovation to those trades. A few of them, the M18 FUEL STRIKER, the world's first cordless hammer chisel, and the MX FUEL™ Electrofusion Processor for gas utility work, all connected through ONE-KEY, the industry's largest IoT platform. Milwaukee is also dedicated to creating innovative solutions that help our users stay safe. Our new dipped gloves with WEAR-DEFENSE protection expands our robust glove product offering, delivering the longest glove life while providing high dexterity for demanding applications. We are a solution company, driving solutions and productivity on the job every single day.

Steve Richman: Structural labor shortages across the trades we serve, from mechanical and electrical and plumbing and transportation maintenance and utility, keep increasing demand for exactly the solutions we build every single day. In the first half, we brought breakthrough innovation to those trades. A few of them, the M18 FUEL STRIKER, the world's first cordless hammer chisel, and the MX FUEL™ Electrofusion Processor for gas utility work, all connected through ONE-KEY, the industry's largest IoT platform. Milwaukee is also dedicated to creating innovative solutions that help our users stay safe. Our new dipped gloves with WEAR-DEFENSE protection expands our robust glove product offering, delivering the longest glove life while providing high dexterity for demanding applications. We are a solution company, driving solutions and productivity on the job every single day.

Speaker #1: 18 volt one plus and our 40 volt platform. And in the first half, we extended that lead with new technology. 18 volt one plus edge capless batteries.

Speaker #1: We keep increasing demand for exactly the solutions we build every single day. In the first half, we brought breakthrough innovation to those trades. A few of them are the M18 FUEL Striker, the world's first cordless hammer chisel.

Speaker #1: And all new line of the highest performing 40 volt mowers and outdoor products. And further expansion into cleaning and lifestyle and recreation. With great examples of innovation such as our pull vacuum.

Speaker #1: And the MX FUEL Electric Fusion Processor for gas utility work, all connected through one key. The industry's largest IoT platform. Milwaukee is also dedicated to creating innovative solutions that help our users stay safe.

Speaker #1: And our outstanding fan portfolio. With the best distribution partners anywhere. The Home Depot in North America, Bunnings in Australia and New Zealand. And our early expansion into Latin America, Asia, Ryobi keeps on growing even against modest housing turnover.

Speaker #1: Our new dipped gloves with wear defense protection expands our robust glove product offering delivering the longest glove life while providing high dexterity for demanding applications.

Speaker #1: The other half of the portfolio is discipline. Our non-core businesses now represent just 6.6% of global revenue. And we deliberately brought them down 19.4% in local currency versus last year.

Speaker #1: We are a solution company driving solutions and productivity on the job every single day. On the consumer side, Ryobi the number one consumer brand in the world.

Steven Richman: On the consumer side, Ryobi, the number one consumer brand in the world, addressing roughly an $80 billion market, grew 1.7% of local currency to $1.9 billion. Our power tool business grew mid-single-digits, while outdoor was roughly flat against a softer, weather-affected season across EMEA and parts of the United States and the timing of seasonal load-ins. Our platform has never been stronger. We hold the largest installed base of users in the world across USB Lithium, 18V ONE+, and our 40V platform. In the first half, we extended that lead with new technology, 18 Volt ONE+ Edge tabless batteries, an all-new line of the highest performing 40V mowers and outdoor products, and further expansion into cleaning and lifestyle and recreation with great examples of innovation, such as our pool vacuum and our outstanding fan portfolio.

Steve Richman: On the consumer side, Ryobi, the number one consumer brand in the world, addressing roughly an $80 billion market, grew 1.7% of local currency to $1.9 billion. Our power tool business grew mid-single-digits, while outdoor was roughly flat against a softer, weather-affected season across EMEA and parts of the United States and the timing of seasonal load-ins. Our platform has never been stronger. We hold the largest installed base of users in the world across USB Lithium, 18V ONE+, and our 40V platform. In the first half, we extended that lead with new technology, 18 Volt ONE+ Edge tabless batteries, an all-new line of the highest performing 40V mowers and outdoor products, and further expansion into cleaning and lifestyle and recreation with great examples of innovation, such as our pool vacuum and our outstanding fan portfolio.

Speaker #1: The largest piece is the planned exit of heart. About 156 million US dollars of our 2025 sales that will not repeat. And the balances that continue revitalization of our floor care and our other consumer brands.

Speaker #1: Addressing roughly a US$80 billion market. Grew 1.7% in local currency to $1.9 billion. Our power tool business grew mid-single digits, while outdoor was roughly flat against a softer, weather-affected season across EMEA and parts of the United States.

Speaker #1: While we are walking away from unprofitable revenue and rebuilding floor care the right way, applying what Ryobi and Milwaukee have taught the teams about us earning the right with the consumer.

Speaker #1: And the timing of seasonal load-ins. Our platform has never been stronger. We hold the largest installed base of users in the world across USB lithium.

Speaker #1: Driving disruptive innovation, technology, and best cost. These are hard decisions. But they are the right ones. Shrinking the non-core is precisely what lifted our consumer segments EBIT margin 133 basis points to 8.5% and freed us to invest more into the Milwaukee and Ryobi brands.

Speaker #1: 18 volt one plus and our 40 volt platform. And in the first half, we extended that lead with new technology. 18 volt one plus edge tapless batteries.

Speaker #1: And an all-new line of the highest-performing 40-volt mowers and outdoor products, and further expansion into cleaning, lifestyle, and recreation—with great examples of innovation, such as our pool vacuum.

Speaker #1: Let me spend a couple of minutes on Milwaukee and the size of the opportunity in front of us. What you see on this slide is 160 billion plus global opportunity.

Speaker #1: And our outstanding fan portfolio. With the best distribution partners anywhere. The Home Depot in North America Bunnings in Australia and New Zealand. And our early expansion into Latin America, Asia Ryobi keeps on growing even against modest housing turnover.

Speaker #1: And I want to make clear about what that number is and what it is not. It is based on the trade verticals, we serve today.

Steven Richman: With the best distribution partners anywhere, The Home Depot in North America, Bunnings in Australia and New Zealand, and our early expansion into Latin America, Asia, Ryobi keeps on growing, even against modest housing turnover. The other half of the portfolio is discipline. Our non-core businesses now represent just 6.6% of global revenue, we deliberately brought them down 19.4% in local currency versus last year. The largest piece is the planned exit of Hart, about $156 million U.S. dollars of our 2025 sales that will not repeat. The balance is the continued revitalization of our floor care and our other consumer brands. We are walking away from unprofitable revenue and rebuilding floor care the right way, applying what Ryobi and Milwaukee have taught the teams about us earning the right with the consumer, driving disruptive innovation, technology, and best cost.

Steve Richman: With the best distribution partners anywhere, The Home Depot in North America, Bunnings in Australia and New Zealand, and our early expansion into Latin America, Asia, Ryobi keeps on growing, even against modest housing turnover. The other half of the portfolio is discipline. Our non-core businesses now represent just 6.6% of global revenue, we deliberately brought them down 19.4% in local currency versus last year. The largest piece is the planned exit of Hart, about $156 million U.S. dollars of our 2025 sales that will not repeat. The balance is the continued revitalization of our floor care and our other consumer brands. We are walking away from unprofitable revenue and rebuilding floor care the right way, applying what Ryobi and Milwaukee have taught the teams about us earning the right with the consumer, driving disruptive innovation, technology, and best cost.

Speaker #1: The market segments those trades work in today and the regions we operate in today. It is not based on the future. And the future is bright.

Speaker #1: Because we are going into markets more and more and more regions of the world. Adding more businesses, adding in more verticals every single year.

Speaker #1: That opportunity is anchored in our core trades. Today, Milwaukee is building deep relationships across 10 key trade verticals. Mechanical and electrical and plumbing and remodeling and utility and transportation maintenance and general contracting, landscaping and tree care.

Speaker #1: The largest piece is the planned exit of HAARP. About $156 million of our 2025 sales will not repeat. The balance relates to the continued revitalization of our floor care and our other consumer brands.

Speaker #1: Energy and mining a level of scale and focus that is simply unmatched by any other company in the industry. And this is not marketing.

Speaker #1: While we are walking away from unprofitable revenue and rebuilding floor care the right way, we're applying what Ryobi and Milwaukee have taught the teams about us earning the right with the consumer.

Speaker #1: It starts with more than 1600 highly skilled job site solutions team members embedded with the trades. Every single day. Understanding the rapidly changing needs and developing solutions with them.

Speaker #1: Driving disruptive innovation, technology, and best cost. These are hard decisions, but they are the right ones. Shrinking the non-core is precisely what lifted our consumer segment's EBIT margin 133 basis points to 8.5% and freed us to invest more into the Milwaukee and Ryobi brands.

Steven Richman: These are hard decisions, but they are the right ones. Shrinking the non-core is precisely what lifted our consumer segment's EBIT margin 133 basis points to 8.5% and freed us to invest more into the Milwaukee and Ryobi brands. Let me spend a couple of minutes on Milwaukee and the size of the opportunity in front of us. What you see on this slide is $160 billion-plus global opportunity. I want to make clear about what that number is and what it is not. It is based on the trade verticals we serve today, the market segments those trades work in today, and the regions we operate in today. It is not based on the future, the future is bright because we are going into markets more and more and more regions of the world, adding more businesses, adding in more verticals every single year.

Steve Richman: These are hard decisions, but they are the right ones. Shrinking the non-core is precisely what lifted our consumer segment's EBIT margin 133 basis points to 8.5% and freed us to invest more into the Milwaukee and Ryobi brands. Let me spend a couple of minutes on Milwaukee and the size of the opportunity in front of us. What you see on this slide is $160 billion-plus global opportunity. I want to make clear about what that number is and what it is not. It is based on the trade verticals we serve today, the market segments those trades work in today, and the regions we operate in today. It is not based on the future, the future is bright because we are going into markets more and more and more regions of the world, adding more businesses, adding in more verticals every single year.

Speaker #1: Solutions they not only trust but specify and demand to drive productivity and safety in their work. This is what makes Milwaukee different. We are not a product company.

Speaker #1: We are a solution company delivering productivity and safety on the job every single day. And that is why the pros trust us everywhere in the world.

Speaker #1: Let me spend a couple of minutes on Milwaukee and the size of the opportunity in front of us. What you see on this slide is 160 billion plus global opportunity.

Speaker #1: Today, that pipeline shows up as more than 17 distinct global businesses. Each built for a specific core trade. And led by subject matter experts who understand the problems those trades face.

Speaker #1: And I want to make clear about what that number is and what it is not. It is based on the trade verticals we serve today.

Speaker #1: The market segments those trades working today and the regions we operate in today. It is not based on the future. And And the future is bright.

Speaker #1: And because we solve the problems of today, while anticipating the problems of tomorrow, we do not just enter markets, we create entirely new ones.

Speaker #1: Because we are going into more and more markets and more regions of the world, adding more businesses and adding more verticals every single year.

Speaker #1: Which is exactly how we keep expanding this 160 billion plus opportunity well into the future. You saw that again in the first half of 2026 with over 200 plus breakthrough new products aimed squarely at these high value trades.

Speaker #1: That opportunity is anchored in our core trades. Today Milwaukee is building deep relationships across 10 key trade verticals. Mechanical and electrical and plumbing and remodeling and utility and transportation maintenance and general contracting landscaping and tree care.

Steven Richman: That opportunity is anchored in our core trades. Today, Milwaukee is building deep relationships across 10 key trade verticals: Mechanical, electrical, plumbing, remodeling, utility, transportation maintenance, general contracting, landscaping and tree care, energy, and mining. A level of scale and focus that is simply unmatched by any other company in the industry. This is not marketing. It starts with more than 1,600 highly skilled job site solutions team members embedded with the trades every single day, understanding their rapidly changing needs and developing solutions with them. Solutions they not only trust, but specify and demand to drive productivity and safety in their work. This is what makes Milwaukee different. We are not a product company. We are a solution company, delivering productivity and safety on the job every single day, and that is why the pros trust us everywhere in the world.

Steve Richman: That opportunity is anchored in our core trades. Today, Milwaukee is building deep relationships across 10 key trade verticals: Mechanical, electrical, plumbing, remodeling, utility, transportation maintenance, general contracting, landscaping and tree care, energy, and mining. A level of scale and focus that is simply unmatched by any other company in the industry. This is not marketing. It starts with more than 1,600 highly skilled job site solutions team members embedded with the trades every single day, understanding their rapidly changing needs and developing solutions with them. Solutions they not only trust, but specify and demand to drive productivity and safety in their work. This is what makes Milwaukee different. We are not a product company. We are a solution company, delivering productivity and safety on the job every single day, and that is why the pros trust us everywhere in the world.

Speaker #1: From our new dip gloves with wear defense protection to the M18 fuel striker, the world's first cordless hammer chisel. For transportation maintenance. And the MX fuel electrofusion processor for the gas utilities.

Speaker #1: Energy and mining—a level of scale and focus that is simply unmatched by any other company in the industry. And this is not marketing.

Speaker #1: All connected through one key. This is the engine behind Milwaukee. A purposeful strategy. The deepest relationships with the trades in the industry. And a runway to grow this opportunity for years to come.

Speaker #1: Change here this slide with you last time. And we are showing it to you again this time because it is simply that important. The key takeaway is where Milwaukee's demand is anchored and even more importantly where the growth is today and where is it going.

Speaker #1: Solutions they not only trust, but specify and demand to drive productivity and safety in their work. This is what makes Milwaukee different. We are not a product company.

Speaker #1: Let's start with technology and energy and manufacturing. Which is 32% of our demand. This end market is taking off. The sector is growing at a 20% rate.

Speaker #1: We are a solutions company, delivering productivity and safety on the job every single day. That is why the pros trust us everywhere in the world.

Speaker #1: This is data centers, high tech manufacturing. And power, water, gas and telecom utilities. All supported by heavy investment in AI, re industrialization, grid monitorization and electrification.

Speaker #1: Today, that pipeline shows up as more than 17 distinct global businesses, each built for a specific core trade and led by subject matter experts who understand the problems those trades face.

Steven Richman: Today, that pipeline shows up as more than 17 distinct global businesses, each built for a specific core trade and led by subject matter experts who understand the problems those trades face. Because we solve the problems of today while anticipating the problems of tomorrow, we do not just enter markets, we create entirely new ones, which is exactly how we keep expanding this $160 billion-plus opportunity well into the future. You saw that again in H1 2026 with over 200-plus breakthrough new products aimed squarely at these high-value trades. From our new dip gloves with WEAR-DEFENSE protection to the M18 FUEL STRIKER, the world's first cordless hammer chisel for transportation maintenance, and the MX FUEL Electrofusion Processor for the gas utilities, all connected through ONE-KEY.

Steve Richman: Today, that pipeline shows up as more than 17 distinct global businesses, each built for a specific core trade and led by subject matter experts who understand the problems those trades face. Because we solve the problems of today while anticipating the problems of tomorrow, we do not just enter markets, we create entirely new ones, which is exactly how we keep expanding this $160 billion-plus opportunity well into the future. You saw that again in H1 2026 with over 200-plus breakthrough new products aimed squarely at these high-value trades. From our new dip gloves with WEAR-DEFENSE protection to the M18 FUEL STRIKER, the world's first cordless hammer chisel for transportation maintenance, and the MX FUEL Electrofusion Processor for the gas utilities, all connected through ONE-KEY.

Speaker #1: And because we solve the problems of today while anticipating the problems of tomorrow we do not just enter markets we create entirely new ones.

Speaker #1: And consider this. The work required by the mechanical and electrical and plumbing trades inside a single data center is roughly double the work of a traditional non residential construction site.

Speaker #1: In a market where skilled labor has never been more constrained. Which is exactly why their trades partner with us on safety and productivity. Next is service and maintenance.

Speaker #1: Our largest and most durable end market at 47% of demand. Which tends to grow at a 10% rate. This is work that has been done regardless of the economic environment.

Speaker #1: From our new dip gloves with wear defense protection to the M18 FUEL Striker, the world's first cordless hammer chisel for transportation maintenance, and the MX FUEL Electric Fusion Processor for the gas utilities.

Speaker #1: Residential and commercial services transportation maintenance and mining. Driven by aging homes, aging commercial buildings. Aging industrial facilities. And an aging vehicle fleet. All creating steady surge of retrofit, repair and upgrade business, home remodeling, new home construction and other non residential.

Steven Richman: This is the engine behind Milwaukee, a purposeful strategy, the deepest relationships with the trades in the industry, and a runway to grow this opportunity for years to come. Shane shared this slide with you last time, and we are showing it to you again this time because it is simply that important. The key takeaway is where Milwaukee's demand is anchored, and even more importantly, where the growth is today and where is it going. Let's start with technology and energy and manufacturing, which is 32% of our demand. This end market has taken off. The sector is growing at a 20% rate. This is data centers, high-tech manufacturing, and power, water, gas, and telecom utilities, all supported by heavy investment in AI, reindustrialization, grid modernization, and electrification.

Steve Richman: This is the engine behind Milwaukee, a purposeful strategy, the deepest relationships with the trades in the industry, and a runway to grow this opportunity for years to come. Shane shared this slide with you last time, and we are showing it to you again this time because it is simply that important. The key takeaway is where Milwaukee's demand is anchored, and even more importantly, where the growth is today and where is it going. Let's start with technology and energy and manufacturing, which is 32% of our demand. This end market has taken off. The sector is growing at a 20% rate. This is data centers, high-tech manufacturing, and power, water, gas, and telecom utilities, all supported by heavy investment in AI, reindustrialization, grid modernization, and electrification.

Speaker #1: Sells into a space that is essentially flat. Put it together. And our two anchor end markets are about 80% of demand worldwide. Which greatly overweights our exposure to the traditional residential construction and remodeling markets.

Speaker #1: Let's start with technology, energy, and manufacturing, which make up 32% of our demand. This end market is taking off, and the sector is growing at a 20% rate.

Speaker #1: That is the whole point of this chart. We are purposely entrenched in the fastest largest and most resilient segments in the world. And it is why we remain so confident in Milwaukee's 10% plus growth well into the future.

Speaker #1: This is data centers. High tech manufacturing. And power, water, gas and telecom utilities. All supported by heavy investment in AI reindustrialization, grid monitorization and electrification.

Steven Richman: Consider this: the work required by the mechanical and electrical and plumbing trades inside a single data center is roughly double the work of a traditional non-residential construction site. In a market where skilled labor has never been more constrained, which is exactly why their trades partner with us on safety and productivity. Next is service and maintenance, our largest and most durable end market at 47% of demand, which tends to grow at a 10% rate. This is work that has been done regardless of the economic environment. Residential and commercial services, transportation maintenance, and mining, driven by aging homes, aging commercial buildings, aging industrial facilities, and an aging vehicle fleet, all creating steady surge of retrofit, repair, and upgrade work. The rest of our business, home remodeling, new home construction, and other non-residential, sells into a space that is essentially flat.

Speaker #1: And consider this: the work required by the mechanical, electrical, and plumbing trades inside a single data center is roughly double the work of a traditional non-residential construction site.

Speaker #1: Here we are driving innovation specifically for the users that care about productivity and safety on the job every single day. With 20% and 10% end markets.

Steve Richman: Consider this: the work required by the mechanical and electrical and plumbing trades inside a single data center is roughly double the work of a traditional non-residential construction site. In a market where skilled labor has never been more constrained, which is exactly why their trades partner with us on safety and productivity. Next is service and maintenance, our largest and most durable end market at 47% of demand, which tends to grow at a 10% rate. This is work that has been done regardless of the economic environment. Residential and commercial services, transportation maintenance, and mining, driven by aging homes, aging commercial buildings, aging industrial facilities, and an aging vehicle fleet, all creating steady surge of retrofit, repair, and upgrade work. The rest of our business, home remodeling, new home construction, and other non-residential, sells into a space that is essentially flat.

Speaker #1: This is where we are focused on adding over 200 new products alone in the first half of 2026. Now I want to spend a moment on something that does not always get enough attention.

Speaker #1: In a market where skilled labor has never been more constrained which is exactly why their trades partner with us on safety and productivity. Next is service and maintenance.

Speaker #1: Our distribution partners. Because a great brand is only as strong as a partners who bring it to the world. What you see on this slide are the best distribution partners in the industry.

Speaker #1: Our largest and most durable end market, at 47% of demand, tends to grow at a 10% rate. This is work that has been done regardless of the economic environment.

Speaker #1: All around the globe. And the message is simple. Milwaukee is the brand that distribution counts on. We are intentionally selective about who sells Milwaukee.

Speaker #1: Residential and commercial services transportation maintenance and mining driven by aging homes aging commercial buildings aging industrial facilities and an aging vehicle fleet all creating steady surge of retrofit repair and upgrade work.

Speaker #1: And we partner with a very best and every single market throughout the globe. From the Home Depot in North America to the leading industrial and electrical and plumbing distribution partners across North America and Europe and Asia and Australia and Latin America.

Speaker #1: The rest of our business home remodeling new home construction and other non-residential sells into a space that is essentially flat. Put it together and our two anchor end markets are about 80% of demand worldwide.

Speaker #1: These are not vendor relationships. They are true partnerships. Built over many years. Where we grow together in win together. And the reason these partnerships endure is that we deliver for our partners.

Steven Richman: Put it together, our two anchor end markets are about 80% of demand worldwide, which greatly overweight our exposure to the traditional residential construction and remodeling markets. That is the whole point of this chart. We are purposefully entrenched in the fastest, largest, and most resilient segments in the world. It is why we remain so confident in Milwaukee's 10%-plus growth well into the future. Here we are driving innovation specifically for the users that care about productivity and safety on the job every single day with 20% and 10% end markets. This is where we are focused on adding over 200 new products alone in H1 2026. I want to spend a moment on something that does not always get enough attention, our distribution partners.

Steve Richman: Put it together, our two anchor end markets are about 80% of demand worldwide, which greatly overweight our exposure to the traditional residential construction and remodeling markets. That is the whole point of this chart. We are purposefully entrenched in the fastest, largest, and most resilient segments in the world. It is why we remain so confident in Milwaukee's 10%-plus growth well into the future. Here we are driving innovation specifically for the users that care about productivity and safety on the job every single day with 20% and 10% end markets. This is where we are focused on adding over 200 new products alone in H1 2026. I want to spend a moment on something that does not always get enough attention, our distribution partners.

Speaker #1: Which greatly overweights our exposure to the traditional residential construction and remodeling markets. That is the whole point of this chart. We are purposely entrenched in the fastest largest and most resilient segments in the world.

Speaker #1: Both sales and profitability. When Milwaukee is on the shelf we bring demand with us. Our teams in the field create the pull through. And we back our partners with a service and support that protects their margin and their reputation.

Speaker #1: And it is why we remain so confident in Milwaukee's 10% plus growth well into the future. Here we are driving innovation specifically for the users that care about productivity and safety on the job every single day.

Speaker #1: We add value to their business. And they help us grow ours. This is what the best partnership in the industry's looks like. That is the whole story of the slide.

Speaker #1: Strong support for our core trades. Delivered through the strongest distribution network in the world. It is a genuine competitive advantage. And it is one more reason we are so confident in where Milwaukee is headed in 2026 and beyond.

Speaker #1: With 20% and 10% end markets. This is where we are focused on adding over 200 new products alone in the first half of 2026.

Speaker #1: Now I want to spend a moment on something that does not always get enough attention. Our distribution partners. Because a great brand is only as strong as a partner's who bring it to the world.

Speaker #1: Now let me turn to Ryobi. And the 80 billion plus global opportunity in front of the number one consumer brand in the world. What this slide lays out is our do it yourself user strategy.

Steven Richman: Because a great brand is only as strong as the partners who bring it to the world. What you see on this slide are the best distribution partners in the industry all around the globe. The message is simple: Milwaukee is the brand that distribution counts on. We are intentionally selective about who sells Milwaukee, and we partner with the very best in every single market throughout the globe. From The Home Depot in North America to the leading industrial and electrical and plumbing distribution partners across North America, Europe, Asia, Australia, and Latin America. These are not vendor relationships. They are true partnerships built over many years, where we grow together and win together. The reason these partnerships endure is that we deliver for our partners, both sales and profitability. When Milwaukee is on the shelf, we bring demand with us.

Steve Richman: Because a great brand is only as strong as the partners who bring it to the world. What you see on this slide are the best distribution partners in the industry all around the globe. The message is simple: Milwaukee is the brand that distribution counts on. We are intentionally selective about who sells Milwaukee, and we partner with the very best in every single market throughout the globe. From The Home Depot in North America to the leading industrial and electrical and plumbing distribution partners across North America, Europe, Asia, Australia, and Latin America. These are not vendor relationships. They are true partnerships built over many years, where we grow together and win together. The reason these partnerships endure is that we deliver for our partners, both sales and profitability. When Milwaukee is on the shelf, we bring demand with us.

Speaker #1: What you see on this slide are the best distribution partners in the industry. All around the globe. And the message is simple. Milwaukee is the brand that distribution counts on.

Speaker #1: And the idea behind it is simple. We serve the DIY user across their entire life. Not just one corner of it. From light do it yourself first to heavy do it yourself first.

Speaker #1: We are intentionally selective about who sells Milwaukee. And we partner with the very best in every single market throughout the globe. From The Home Depot in North America to the leading industrial, electrical, and plumbing distribution partners across North America, Europe, Asia, Australia, and Latin America.

Speaker #1: Transportation maintenance, lawn and garden, lifestyle and recreation, and cleaning. Ryobi is the brand that consumer reaches for in their home in their garage in their yard and everywhere in between.

Speaker #1: The power of this strategy is our platform. We hold the largest install base of consumer users in the world. Across USB lithium. 18 volt one plus.

Speaker #1: These are not vendor relationships. They are true partnerships, built over many years, where we grow together and win together. The reason these partnerships endure is that we deliver for our partners.

Speaker #1: And 40 volt. And for over 20 years. Those platforms have been forward and backward compatible. So every tool user. Understands. Whatever product they have bought.

Speaker #1: Both sales and profitability. When Milwaukee is on the shelf, we bring demand with us. Our teams in the field create the pull-through. And we back our partners with service and support that protects their margin and their reputation.

Steven Richman: Our teams in the field create the pull-through. We back our partners with a service and support that protects their margin and their reputation. We add value to their business. They help us grow ours. This is what the best partnership in the industry looks like. That is the whole story of this slide. Strong support for our core trades delivered through the strongest distribution network in the world. It is a genuine competitive advantage. It is one more reason we are so confident in where Milwaukee is headed in 2026 and beyond. Let me turn to Ryobi and the 80 billion-plus global opportunity in front of the number 1 consumer brand in the world. What this slide lays out is our do-it-yourself user strategy. The idea behind it is simple.

Steve Richman: Our teams in the field create the pull-through. We back our partners with a service and support that protects their margin and their reputation. We add value to their business. They help us grow ours. This is what the best partnership in the industry looks like. That is the whole story of this slide. Strong support for our core trades delivered through the strongest distribution network in the world. It is a genuine competitive advantage. It is one more reason we are so confident in where Milwaukee is headed in 2026 and beyond. Let me turn to Ryobi and the 80 billion-plus global opportunity in front of the number 1 consumer brand in the world. What this slide lays out is our do-it-yourself user strategy. The idea behind it is simple.

Speaker #1: It works with a batteries they already own. That confidence is what pulls a do it yourselfer deeper. Into the Ryobi system. Adding to their collection year after year.

Speaker #1: We add value to their business. And And they help us grow ours. This is what the best partnership in the industry's looks like. That is the whole story of the slide.

Speaker #1: And it is what lets us keep expanding into entirely new categories. Most recently cleaning and lifestyle and recreation. Reaching consumers of every type throughout the world.

Speaker #1: We combine that with the best distribution partners in the world. The Home Depot in North America Australia and New Zealand. We're our dominance is unmatched.

Speaker #1: Now, let me turn to Ryobi and the $80 billion-plus global opportunity in front of the number one consumer brand in the world. What this slide lays out is our do-it-yourself user strategy.

Speaker #1: Together with our top European retail partners. And we are still in the early innings. We are just beginning to expand Ryobi into Latin America and Asia.

Speaker #1: Exactly the kind of runway that keeps this 80 billion plus opportunity growing well into the future. You saw the strategy at work in the first half of 2026.

Speaker #1: And the idea behind it is simple. We serve the DIY user across their entire life, not just one corner of it—from light do-it-yourself at first to heavy do-it-yourself at first.

Steven Richman: We serve the DIY user across their entire life, not just one corner of it. From light do-it-yourselfer to heavy do-it-yourselfers, transportation maintenance, lawn and garden, lifestyle and recreation, and cleaning. Ryobi is the brand that consumer reaches for in their home, in their garage, in their yard, and everywhere in between. The power of this strategy is our platform. We hold the largest installed base of consumer users in the world across USB Lithium, 18 Volt ONE+, and 40 Volt. For over 20 years, those platforms have been forward and backward compatible. Every tool user understands whatever product they have bought, it works with the batteries they already own. That confidence is what pulls a do-it-yourselfer deeper into the Ryobi system, adding to their collection year after year.

Steve Richman: We serve the DIY user across their entire life, not just one corner of it. From light do-it-yourselfer to heavy do-it-yourselfers, transportation maintenance, lawn and garden, lifestyle and recreation, and cleaning. Ryobi is the brand that consumer reaches for in their home, in their garage, in their yard, and everywhere in between. The power of this strategy is our platform. We hold the largest installed base of consumer users in the world across USB Lithium, 18 Volt ONE+, and 40 Volt. For over 20 years, those platforms have been forward and backward compatible. Every tool user understands whatever product they have bought, it works with the batteries they already own. That confidence is what pulls a do-it-yourselfer deeper into the Ryobi system, adding to their collection year after year.

Speaker #1: Ryobi grew 1.7% in local currency. To a US 1.9 billion dollars. Led by mid single digit growth and power tools as we extended our lead with a new 18 volt one plus edge tabless batteries.

Speaker #1: Transportation, maintenance, lawn and garden, lifestyle and recreation, and cleaning. Ryobi is the brand that consumers reach for in their home, in their garage, in their yard, and everywhere in between.

Speaker #1: And an all new line of the highest performing 40 volt motors and outdoor products. And a growing lineup of cleaning lifestyle and recreation products.

Speaker #1: The power of this strategy is our platform. We hold the largest install base of consumer users in the world. Across USB lithium 18 volt one plus and 40 volt.

Speaker #1: From the most powerful misting fan as part of our leading portfolio fans. To our new pull vacuum. That is the Ryobi user strategy. Serve the DIY consumer across every part of their life.

Speaker #1: And for over 20 years, those platforms have been forward and backward compatible. So, every tool user understands that whatever product they have bought, it works with the batteries they already own.

Speaker #1: Keep them on our platform. Keep on giving them reasons to grow with us every day everywhere in the world. Ryobi's growth strategy comes down to a single idea.

Speaker #1: That confidence is what pulls a do it yourself or deeper into the Ryobi system. Adding to their collection year after year. And it is what lets us keep expanding into entirely new categories.

Steven Richman: It is what lets us keep expanding into entirely new categories, most recently cleaning and lifestyle and recreation, reaching consumers of every type throughout the world. We combine that with the best distribution partners in the world, The Home Depot in North America and Bunnings across Australia and New Zealand, where our dominance is unmatched. Together with our top European retail partners, we are still in the early innings. We are just beginning to expand Ryobi into Latin America and Asia. Exactly the kind of runway that keeps this 80 billion-plus opportunity growing well into the future. You saw the strategy at work in H1 2026.

Steve Richman: It is what lets us keep expanding into entirely new categories, most recently cleaning and lifestyle and recreation, reaching consumers of every type throughout the world. We combine that with the best distribution partners in the world, The Home Depot in North America and Bunnings across Australia and New Zealand, where our dominance is unmatched. Together with our top European retail partners, we are still in the early innings. We are just beginning to expand Ryobi into Latin America and Asia. Exactly the kind of runway that keeps this 80 billion-plus opportunity growing well into the future. You saw the strategy at work in H1 2026.

Speaker #1: It is owning the consumer. And we earn that position through three reinforcing engines. Number one consumer innovation. Number two enabling technology. And number three demand generation.

Speaker #1: Most recently cleaning and lifestyle and recreation. Reaching consumers of every type throughout the world. We combine that with the best distribution partners in the world.

Speaker #1: They all work together. To turn a first time buyer into a lifelong Ryobi loyalist. Let's start with consumer innovation. Bringing the products consumers actually want.

Speaker #1: The Home Depot in North America and Bunnings across Australia and New Zealand. We're our dominance is unmatched. Together with our top European retail partners and we are still in the early innings.

Speaker #1: In the first half of 2026 alone. That meant the new 18 volt one plus edge batteries. And all new generation of the highest performing 40 volt motors and outdoor products.

Speaker #1: We are just beginning to expand Ryobi into Latin America and Asia. Exactly the kind of runway that keeps this 80 billion plus opportunity growing well into the future.

Speaker #1: And continue to expansion into cleaning lifestyle and recreation. We are constantly giving the consumer a reason to reach for Ryobi first. Underneath those products is our enabling technology.

Speaker #1: You saw the strategy at work in the first half of grew 1.7% in local currency. To a US 1.9 billion dollars. Led by mid single digit growth and power tools as we extended our lead with a new 18 volt one plus edge tablets batteries.

Steven Richman: Ryobi grew 1.7% in local currency to a $1.9 billion, led by mid-single-digit growth in power tools as we extended our lead with the new 18 Volt ONE+ Edge tabless batteries and an all-new line of the highest-performing 40 Volt mowers and outdoor products and a growing lineup of cleaning, lifestyle, and recreation products. From the most powerful misting fan as part of our leading portfolio of fans to our new pool vacuum. That is the Ryobi user strategy. Serve the DIY consumer across every part of their life. Keep them on our platform and keep on giving them reasons to grow with us every day, everywhere in the world. Ryobi's growth strategy comes down to a single idea. It is owning the consumer. We earn that position through three reinforcing engines. Number 1, consumer innovation. Number 2, enabling technology. Number 3, demand generation.

Steve Richman: Ryobi grew 1.7% in local currency to a $1.9 billion, led by mid-single-digit growth in power tools as we extended our lead with the new 18 Volt ONE+ Edge tabless batteries and an all-new line of the highest-performing 40 Volt mowers and outdoor products and a growing lineup of cleaning, lifestyle, and recreation products. From the most powerful misting fan as part of our leading portfolio of fans to our new pool vacuum. That is the Ryobi user strategy. Serve the DIY consumer across every part of their life. Keep them on our platform and keep on giving them reasons to grow with us every day, everywhere in the world. Ryobi's growth strategy comes down to a single idea. It is owning the consumer. We earn that position through three reinforcing engines. Number 1, consumer innovation. Number 2, enabling technology. Number 3, demand generation.

Speaker #1: The batteries the motors the electronics. That most users never see. Our new 18 volt one plus edge tabless battery is the perfect example. It gives every one plus user an instant upgrade.

Speaker #1: And an all new line of the highest performing 40 volt motors and outdoor products. And a growing lineup of cleaning lifestyle and recreation products.

Speaker #1: More power more run time while running cooler charging faster and lasting longer. And it is fully compatible with a platform they already own. That technology developed and protected across USB lithium 18 volt one plus and 40 volt is what makes owning the end user possible.

Speaker #1: From the most powerful misting fan as part of our leading portfolio fans to our new pull vacuum. That is the Ryobi user strategy. Serve the DIY consumer across every part of their life.

Speaker #1: Keep them on our platform. Keep on giving them reasons to grow with us every day everywhere in the world. Ryobi's growth strategy comes down to a single idea.

Speaker #1: The third engine is demand generation. Getting those solutions in front of our consumers and pulling them into the system. That is where our distribution advantage comes in.

Speaker #1: The best partners in the world. The Home Depot and Bunnings and our top European retailers. And a growing digital and in store present. That builds awareness and drives trial across every one of our categories.

Speaker #1: Put the three engines together. And you get the outcome at the center of this slide. Owning the consumer. And creating a Ryobi loyalist. We already hold the largest install base of consumer users in the world.

Speaker #1: They all work together. To turn a first time buyer into a lifelong Ryobi loyalist. Let's start with consumer innovation. Bringing the products consumers actually want.

Steven Richman: They all work together to turn a first-time buyer into a lifelong Ryobi loyalist. Let's start with consumer innovation, bringing the products consumers actually want. In H1 2026 alone, that meant the new 18 Volt ONE+ Edge batteries. An all-new generation of the highest performing 40V mowers and outdoor products, and continued expansion into cleaning, lifestyle, and recreation. We are constantly giving the consumer a reason to reach for Ryobi first. Underneath those products is our enabling technology. The batteries, the motors, the electronics that most users never see. Our new 18 Volt ONE+ Edge tabless battery is the perfect example. It gives every ONE+ user an instant upgrade, more power, more runtime, while running cooler, charging faster, and lasting longer. It is fully compatible with a platform they already own.

Steve Richman: They all work together to turn a first-time buyer into a lifelong Ryobi loyalist. Let's start with consumer innovation, bringing the products consumers actually want. In H1 2026 alone, that meant the new 18 Volt ONE+ Edge batteries. An all-new generation of the highest performing 40V mowers and outdoor products, and continued expansion into cleaning, lifestyle, and recreation. We are constantly giving the consumer a reason to reach for Ryobi first. Underneath those products is our enabling technology. The batteries, the motors, the electronics that most users never see. Our new 18 Volt ONE+ Edge tabless battery is the perfect example. It gives every ONE+ user an instant upgrade, more power, more runtime, while running cooler, charging faster, and lasting longer. It is fully compatible with a platform they already own.

Speaker #1: In the first half of 2026 alone that meant the new 18 volt one plus edge batteries. An all new generation of the highest performing 40 volt motors and outdoor products.

Speaker #1: And millions of new users join every single year. Adding to their Ryobi collection over time. That is the flywheel. The more we innovate. The more users we win.

Speaker #1: And continuing to expand into cleaning, lifestyle, and recreation, we are constantly giving the consumer a reason to reach for Ryobi first. Underneath those products is our enabling technology.

Speaker #1: The more of the platform they own. The more loyal they become. And the more durable Ryobi's growth becomes for years to come. Now let me turn it over to Tai and he's going to take you through and give you some color on the financials.

Speaker #1: The batteries, the motors, the electronics that most users never see. Our new 18-volt ONE+ EDGE tablet battery is the perfect example. It gives every ONE+ user an instant upgrade.

Speaker #1: Thanks Steve. I have the pleasure to be here today to provide more detail and clarity into the financials of the business. Let's start with sales growth by brand and the main point on this slide is our two core brands.

Speaker #1: More power, more run time, while running cooler, charging faster, and lasting longer. And it is fully compatible with a platform they already own. That technology developed and protected across USB Lithium, 18V ONE+, and 40V is what makes owning the end user possible.

Speaker #1: The combination of Milwaukee and Ryobi delivered underlying local currency growth of 8.2% in the first half. Milwaukee grew 10.5% on an underlying basis in local currency.

Steven Richman: That technology, developed and protected across USB Lithium, 18 Volt ONE+, and 40V, is what makes owning the end user possible. The third engine is demand generation. Getting those solutions in front of our consumers and pulling them into the system. That is where our distribution advantage comes in. The best partners in the world, The Home Depot and Bunnings, and our top European retailers, and a growing digital and in-store presence that builds awareness and drives trial across every one of our categories. Put the three engines together and you get the outcome at the center of this slide, owning the consumer and creating a Ryobi loyalist. We already hold the largest installed base of consumer users in the world, and millions of new users join every single year, adding to their Ryobi collection over time. That is the flywheel.

Steve Richman: That technology, developed and protected across USB Lithium, 18 Volt ONE+, and 40V, is what makes owning the end user possible. The third engine is demand generation. Getting those solutions in front of our consumers and pulling them into the system. That is where our distribution advantage comes in. The best partners in the world, The Home Depot and Bunnings, and our top European retailers, and a growing digital and in-store presence that builds awareness and drives trial across every one of our categories. Put the three engines together and you get the outcome at the center of this slide, owning the consumer and creating a Ryobi loyalist. We already hold the largest installed base of consumer users in the world, and millions of new users join every single year, adding to their Ryobi collection over time. That is the flywheel.

Speaker #1: After adjusting for the 2025 timing impact of the Milwaukee America's ERP system conversion. And Ryobi grew 1.7% in local currency to 1.9 billion US dollars led by mid single digit growth and power tools with a softer weather affected outdoor season across the globe.

Speaker #1: The third engine is demand generation. Getting those solutions in front of our consumers and pulling them into the system. That is where our distribution advantage comes in.

Speaker #1: That 8.2% of core brand growth was then offset by the deliberate exit of the heart business and the continued rationalization of floor care and the other consumer brands.

Speaker #1: Which together brought our non core business now just 6.6% of global revenue down 19.4% in local currency. Net of all of that TTI delivered record first half revenue of 8.3 billion US dollars up 5.9% in our reported basis and up 5.9% on an underlying basis in local currency.

Speaker #1: Put the three engines together and you get the outcome at the center of this slide. Owning the consumer and creating a Ryobi loyalist. We already hold the largest install base of consumer users in the world.

Speaker #1: And millions of new users join every single year. Adding to their Ryobi collection over time. That is the flywheel. The more we innovate the more users we win.

Speaker #1: Now let me spend a moment on Milwaukee sales momentum. Because I want everyone to understand the magnitude of what we are working towards. Our 10.5% underlying growth in the first half is right in line with our internal goal of low double digit sales growth for Milwaukee.

Steven Richman: The more we innovate, the more users we win, the more of the platform they own, the more loyal they become, and the more durable Ryobi's growth becomes for years to come. Now let me turn it over to Ty, and he's going to take you through and give you some color on the financials.

Steve Richman: The more we innovate, the more users we win, the more of the platform they own, the more loyal they become, and the more durable Ryobi's growth becomes for years to come. Now let me turn it over to Ty, and he's going to take you through and give you some color on the financials.

Speaker #1: The more of the platform they own, the more loyal they become, and the more durable Ryobi's growth becomes for years to come. Now, let me turn it over to Tai, and he's going to take you through and give you some color on the financials.

Speaker #1: And that is a goal that we have been telling you about and delivering against for a number of years. But here is the point I want to really land.

Ty Sabolsky: Thanks, Steve. I have the pleasure to be here today to provide more detail and clarity into the financials of the business. Let's start with sales growth by brand, and the main point on this slide is our two core brands. The combination of Milwaukee and Ryobi delivered underlying local currency growth of 8.2% in H1. Milwaukee grew 10.5% on an underlying basis in local currency after adjusting for the 2025 timing impact of the Milwaukee Americas ERP system conversion. Ryobi grew 1.7% in local currency to $1.9 billion, led by mid-single-digit growth in power tools with a softer weather-affected outdoor season across the globe.

Ty Staviski: Thanks, Steve. I have the pleasure to be here today to provide more detail and clarity into the financials of the business. Let's start with sales growth by brand, and the main point on this slide is our two core brands. The combination of Milwaukee and Ryobi delivered underlying local currency growth of 8.2% in H1. Milwaukee grew 10.5% on an underlying basis in local currency after adjusting for the 2025 timing impact of the Milwaukee Americas ERP system conversion. Ryobi grew 1.7% in local currency to $1.9 billion, led by mid-single-digit growth in power tools with a softer weather-affected outdoor season across the globe.

Speaker #1: Growing Milwaukee at low double digits now represents more than 1 billion dollars of sales growth every single year based on our scale. And all of it is organic.

Speaker #1: The combination of Milwaukee and Ryobi delivered underlying local currency growth of 8.2% in the first half. Milwaukee grew 10.5% on an underlying basis in local currency after adjusting for the 2025 timing impact of the Milwaukee America's ERP system conversion.

Speaker #1: None of it comes from acquisitions. This is no easy feat and our team has done a phenomenal job delivering to these high expectations and making Milwaukee the number one professional productivity solution provider in the industry.

Speaker #1: Now let's walk the gross margin for the first half. And I want to do this in two steps. Start with the first half of 2025.

Speaker #1: And Ryobi grew 1.7% in local currency to 1.9 billion US dollars led by mid single digit growth and power tools with a softer weather affected outdoor season across the globe.

Speaker #1: On a reported basis gross margin was 40.3%. But that was a number that was held down by two things worth normalizing out. One the drag on gross margin from the heart business.

Speaker #1: That 8.2% of core brand growth was then offset by the deliberate exit of the heart business and the continued rationalization of floor care and the other consumer brands.

Ty Sabolsky: That 8.2% of core brand growth was offset by the deliberate exit of the Hart business and the continued rationalization of floor care and the other consumer brands, which together brought our non-core business, now just 6.6% of global revenue, down 19.4% in local currency. Net of all of that, TTI delivered record H1 revenue of $8.3 billion, up 5.9% on a reported basis and up 5.9% on an underlying basis in local currency. Now let me spend a moment on Milwaukee sales momentum because I want everyone to understand the magnitude of what we are working towards. Our 10.5% underlying growth in the H1 is right in line with our internal goal of low double-digit sales growth for Milwaukee, and that is a goal that we have been telling you about and delivering against for a number of years.

Ty Staviski: That 8.2% of core brand growth was offset by the deliberate exit of the Hart business and the continued rationalization of floor care and the other consumer brands, which together brought our non-core business, now just 6.6% of global revenue, down 19.4% in local currency. Net of all of that, TTI delivered record H1 revenue of $8.3 billion, up 5.9% on a reported basis and up 5.9% on an underlying basis in local currency. Now let me spend a moment on Milwaukee sales momentum because I want everyone to understand the magnitude of what we are working towards. Our 10.5% underlying growth in the H1 is right in line with our internal goal of low double-digit sales growth for Milwaukee, and that is a goal that we have been telling you about and delivering against for a number of years.

Speaker #1: And two the excess tariffs we were absorbing at the time when we saw global tariffs peak at their highest in Q2 of 2025. Normalizing the first half of 2025 for both of these brings our comparable base to roughly 41.2%.

Speaker #1: Which together brought our non core business now just 6.6% of global revenue down 19.4% in local currency. Net of all of that TTI delivered record first half revenue of 8.3 billion US dollars up 5.9% in a reported basis and up 5.9% on an underlying basis in local currency.

Speaker #1: From that normalized base of roughly 41.2% the walk to our record 42.9% begins with one headwind in the period. Higher commodity prices. As oil metals and freight all moved against us.

Speaker #1: We more than offset that through our 2026 activities annualizing our tariff mitigation actions which include optimizing production productivity gains and a strong supplier partnerships margin accretion across EMEA and Australia favorable mix towards our higher profitability core businesses the strength of Milwaukee and the high growth technology energy and manufacturing and markets that Steve mentioned in his section.

Speaker #1: Now let me spend a moment on Milwaukee's sales momentum, because I want everyone to understand the magnitude of what we are working towards. Our 10.5% underlying growth in the first half is right in line with our internal goal of low double-digit sales growth for Milwaukee.

Speaker #1: And that is a goal that we have been telling you about and delivering against for a number of years. But here is the point I want to really land.

Ty Sabolsky: Here is the point I want to really land. Growing Milwaukee at low double digits now represents more than $1 billion of sales growth every single year based on our scale. All of it is organic. None of it comes from acquisitions. This is no easy feat, and our team has done a phenomenal job delivering to these high expectations and making Milwaukee the number one professional productivity solution provider in the industry. Now let's walk the gross margin for the H1, and I want to do this in two steps. Start with the H1 of 2025. On a reported basis, gross margin was 40.3%, but that was a number that was held down by two things worth normalizing out.

Ty Staviski: Here is the point I want to really land. Growing Milwaukee at low double digits now represents more than $1 billion of sales growth every single year based on our scale. All of it is organic. None of it comes from acquisitions. This is no easy feat, and our team has done a phenomenal job delivering to these high expectations and making Milwaukee the number one professional productivity solution provider in the industry. Now let's walk the gross margin for the H1, and I want to do this in two steps. Start with the H1 of 2025. On a reported basis, gross margin was 40.3%, but that was a number that was held down by two things worth normalizing out.

Speaker #1: Growing Milwaukee at low double digits now represents more than 1 billion dollars of sales growth every single year based on our scale. And all of it is organic.

Speaker #1: And continue to prove it in our non core business. Net of the commodity headwind those activities delivered 163 basis points of expansion to a record 42.9% gross margin.

Speaker #1: Or 258 basis points on a reported basis versus the first half of last year. Let me be clear. Our first half gross margin had no favorability for IEPA tariff refunds as we did not receive any meaningful refunds and do not have any clarity on how much we will be receiving in the future.

Speaker #1: Now let's walk the gross margin for the first half. And I want to do this in two steps. Start with the first half of 2025 on a reported basis gross margin was 40.3%.

Speaker #1: Let's now turn to the EBIT margin walk for the first half. And it follows the same logic. We started the first half of 2025 at 9.1% EBIT margin.

Speaker #1: But that was a number that was held down by two things worth normalizing out. One the drag on gross margin from the heart business and two the excess tariffs we were absorbing at the time when we saw global tariffs peak at their highest in Q2 of 2025.

Ty Sabolsky: One, the drag on gross margin from the Hart business, and two, the excess tariffs we were absorbing at the time when we saw global tariffs peak at their highest in Q2 of 2025. Normalizing the H1 of 2025 for both of these brings our comparable base to roughly 41.2%. From that normalized base of roughly 41.2%, the walk to our record 42.9% begins with one headwind in the period, higher commodity prices as oil, metals, and freight all moved against us. We more than offset that through our 2026 activities Annualizing our tariff mitigation actions, which include optimizing production, productivity gains, and strong supplier partnerships, margin accretion across EMEA and Australia, favorable mix towards our higher profitability core businesses, the strength of Milwaukee in the high-growth technology, energy, and manufacturing end markets that Steve mentioned in his section, and continued improvement in our non-core business.

Ty Staviski: One, the drag on gross margin from the Hart business, and two, the excess tariffs we were absorbing at the time when we saw global tariffs peak at their highest in Q2 of 2025. Normalizing the H1 of 2025 for both of these brings our comparable base to roughly 41.2%. From that normalized base of roughly 41.2%, the walk to our record 42.9% begins with one headwind in the period, higher commodity prices as oil, metals, and freight all moved against us. We more than offset that through our 2026 activities Annualizing our tariff mitigation actions, which include optimizing production, productivity gains, and strong supplier partnerships, margin accretion across EMEA and Australia, favorable mix towards our higher profitability core businesses, the strength of Milwaukee in the high-growth technology, energy, and manufacturing end markets that Steve mentioned in his section, and continued improvement in our non-core business.

Speaker #1: From there the 258 basis points of gross margin expansion I just walked you through was by far the biggest driver. Partially offset by 173 basis points of higher SG&A as we deliberately invested in our new product development field resources and commercialization activities along with some write off of intangibles tied to product categories we were rationalizing.

Speaker #1: Normalizing the first half of 2025 for both of these brings our comparable base to roughly 41.2%. From that normalized base of roughly 41.2% the walk to our record 42.9% begins with one headwind in the period.

Speaker #1: Net it out and we finished at a record 9.9% EBIT margin up 86 basis points. And with 9.9% already in hand at the half we're firmly on track towards our internal target of 10% EBIT margin in 2027 with further upside beyond.

Speaker #1: Higher commodity prices. As oil metals and freight all moved against us. We more than offset that through our 2026 activities annualizing our tariff mitigation actions which include optimizing production productivity gains and a strong supplier partnerships margin accretion across EMEA and Australia favorable mix towards our higher profitability core businesses the strength of Milwaukee and the high growth technology energy and manufacturing and markets that Steve mentioned in his section.

Speaker #1: Let me close with cash. Because this is what ties it all together. We generated 753 million dollars of free cash flow in the first half.

Speaker #1: Up 285 million year on year. And ended the period in a net cash position of 1.066 billion dollars. That balance sheet strength gives us the confidence to raise our internal free cash flow target for 2026 from over 1 billion to over 1.3 billion US dollars.

Speaker #1: And continue to prove it in our non core business. Net of the commodity headwind those activities delivered 163 basis points of expansion to a record 42.9% gross margin.

Ty Sabolsky: Net of the commodity headwind, those activities delivered 163 basis points of expansion to a record 42.9% gross margin or 258 basis points on a reported basis versus the H1 of last year. Let me be clear, our H1 gross margin had no favorability for IEEPA tariff refunds as we did not receive any meaningful refunds and do not have any clarity on how much we will be receiving in the future. Let's now turn to the EBIT margin walk for the H1, and it follows the same logic. We started the H1 of 2025 at 9.1% EBIT margin.

Ty Staviski: Net of the commodity headwind, those activities delivered 163 basis points of expansion to a record 42.9% gross margin or 258 basis points on a reported basis versus the H1 of last year. Let me be clear, our H1 gross margin had no favorability for IEEPA tariff refunds as we did not receive any meaningful refunds and do not have any clarity on how much we will be receiving in the future. Let's now turn to the EBIT margin walk for the H1, and it follows the same logic. We started the H1 of 2025 at 9.1% EBIT margin.

Speaker #1: And we're putting that strength to work for shareholders. In June we commenced our 500 million dollar share buyback plan and through the end of July we've already repurchased 41.5 million US dollars of stock.

Speaker #1: Record first half sales. Record gross and EBIT margins. And record profit together with 753 million dollars of free cash flow and the healthiest balance sheet in our history is exactly the combination that lets us keep investing in the business while increasing returns to our shareholders for years to come.

Speaker #1: Let's now turn to the EBIT margin walk for the first half. And it follows the same logic. We started the first half of 2025 at 9.1% EBIT margin.

Speaker #1: With that I'd like to hand back to the chairman to close thank you.

Ty Sabolsky: From there, the 258 basis points of gross margin expansion I just walked you through was by far the biggest driver, partially offset by 173 basis points of higher SG&A as we deliberately invested in our new product development, field resources, and commercialization activities, along with some write-offs of intangibles tied to product categories we were rationalizing. Net it out, we finished at a record 9.9% EBIT margin, up 86 basis points. With 9.9% already in hand at the half, we're firmly on track towards our internal target of 10% EBIT margin in 2027, with further upside beyond. Let me close with cash, because this is what ties it all together. We generated $753 million of free cash flow in the H1, up $285 million year on year, and ended the period in a net cash position of $1.066 billion.

Ty Staviski: From there, the 258 basis points of gross margin expansion I just walked you through was by far the biggest driver, partially offset by 173 basis points of higher SG&A as we deliberately invested in our new product development, field resources, and commercialization activities, along with some write-offs of intangibles tied to product categories we were rationalizing. Net it out, we finished at a record 9.9% EBIT margin, up 86 basis points. With 9.9% already in hand at the half, we're firmly on track towards our internal target of 10% EBIT margin in 2027, with further upside beyond. Let me close with cash, because this is what ties it all together. We generated $753 million of free cash flow in the H1, up $285 million year on year, and ended the period in a net cash position of $1.066 billion.

Speaker #2: As you can see from our presentation of our results I'm extremely excited and confident about the remainder of the year and the future of our company.

Speaker #1: Netting it out, we finished at a record 9.9% EBIT margin, up 86 basis points. And with 9.9% already in hand at the half, we're firmly on track towards our internal target of 10% EBIT margin in 2027, with further upside beyond.

Speaker #1: Let me close with cash because this is what ties it all together. We generated 753 million dollars of free cash flow in the first half.

Ty Sabolsky: That balance sheet strength gives us the confidence to raise our internal free cash flow target for 2026 from over $1 billion to over $1.3 billion US. We're putting that strength to work for shareholders. In June, we commenced our $500 million share buyback plan, and through the end of July, we've already repurchased $41.5 million US dollars of stock. Record H1 sales, record gross and EBIT margins, and record profit, together with $753 million of free cash flow and the healthiest balance sheet in our history, is exactly the combination that lets us keep investing in the business while increasing returns to our shareholders for years to come. With that, I'd like to hand back to the chairman to close and look forward to your questions. Thank you.

Ty Staviski: That balance sheet strength gives us the confidence to raise our internal free cash flow target for 2026 from over $1 billion to over $1.3 billion US. We're putting that strength to work for shareholders. In June, we commenced our $500 million share buyback plan, and through the end of July, we've already repurchased $41.5 million US dollars of stock. Record H1 sales, record gross and EBIT margins, and record profit, together with $753 million of free cash flow and the healthiest balance sheet in our history, is exactly the combination that lets us keep investing in the business while increasing returns to our shareholders for years to come. With that, I'd like to hand back to the chairman to close and look forward to your questions. Thank you.

Speaker #1: With that I'd like to hand back to the chairman to close and look forward to your questions. Thank you.

Speaker #2: As you can see from our presentation of our results I'm extremely excited and confident about the remainder of the year and the future of our company.

[Company Representative] (TTI): You can see from our presentation of our results, I'm extremely excited and confident about the remainder of the year and the future of our company. We thank you for your attendance today, and we express our deep appreciation for your continued support of the group.

Horst Pudwill: You can see from our presentation of our results, I'm extremely excited and confident about the remainder of the year and the future of our company. We thank you for your attendance today, and we express our deep appreciation for your continued support of the group.

Speaker #2: We thank you for your attendance today, and we express our deep appreciation for your continued support of the group.

Speaker #3: Thank you Mr. Pudwill. Ladies and gentlemen we will now begin the question and answer session. If you wish to ask a question now please press star 11 on your telephone and wait for your name to be announced.

Operator: Thank you, Mr. Pudwill. Ladies and gentlemen, we will now begin the question and answer session. If you wish to ask a question now, please press star one one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star one one again. One moment for our first question. Your first question comes from the line of Tim Wojs from Baird. Please go ahead, Tim. Your line is open.

Speaker #3: If you wish to cancel your request please press star 11 again. One moment for our first question. In your first question comes from the line of team voice from Barrett.

Speaker #3: Please go ahead. Team, your line is open.

Tim Wojs: Good morning, everybody. Nice job, and thanks for the time. With you guys doing 9.9% EBIT margins in H1, what are the puts and takes to getting to that 10% EBIT margin in 2026 or a year earlier?

Speaker #4: Hi good good morning everybody. Nice nice job and and thanks for the time. Maybe just the first question and and I'm not sure who wants to take it but you know with with you guys doing 9.9% EBIT margins in in the first half what are the puts and takes to getting to that 10% EBIT margin you know in 2026 or or a year earlier?

Speaker #1: Yeah Tim this is Ty. You know I think we're we're we're constantly looking at what the back half and modeling out what that looks like.

Ty Sabolsky: Tim, this is Ty. We're constantly looking at what the H2 and modeling out what that looks like. As we spoke in the EBIT margin walk, we do have some commodity pressures that we're working to offset in the H2 as we look forward to that and trying to balance that out with the continuation of delivering the results. We have extreme confidence in delivering it in 2027, and we're working towards delivering that and taking a look at what that means. Just note that any forecast that we do have and any projection that we're looking at right now doesn't bake in any tariff refunds or anything of that nature. We could potentially see some of that in the H2.

Ty Staviski: Tim, this is Ty. We're constantly looking at what the H2 and modeling out what that looks like. As we spoke in the EBIT margin walk, we do have some commodity pressures that we're working to offset in the H2 as we look forward to that and trying to balance that out with the continuation of delivering the results. We have extreme confidence in delivering it in 2027, and we're working towards delivering that and taking a look at what that means. Just note that any forecast that we do have and any projection that we're looking at right now doesn't bake in any tariff refunds or anything of that nature. We could potentially see some of that in the H2.

Speaker #1: You know as we as we spoke in the the EBIT margin walk you know we do have some commodity pressures that we're working to offset in the back half of the year.

Speaker #1: As we look forward to that and and trying to balance that out with the continuation of delivering the results. But we have you know extreme confidence in the delivering it in 2027 and and we're working towards you know yeah we're working towards you know delivering that and and taking a look at what that means.

Speaker #1: And and and just note that any any forecast that we do have and any projection that we're looking at right now you know doesn't bake in any tariff refunds or anything of that nature.

Speaker #1: So so you know we could potentially see some of that in the back half so.

Speaker #4: Okay. Okay. And and then just kind of stepping back on on kind of the the the high tech and and data center and kind of large job site business.

Tim Wojs: Okay. Just kind of stepping back on kind of the high tech and data center and kind of large job site business, could you just give us a little bit of an overview of how embedded you guys are on these job sites? Because it's my understanding that you guys have a lot of people in the fields that's hard to replicate, and you've obviously been investing in that market for a very long period of time. If you could just give us a little bit of flavor in terms of people out in the field, relationships, and then how those job sites actually function from a tool demand standpoint. Thanks.

Speaker #4: Could you just give us you know a little bit of an overview of like how embedded you guys are on these job sites because it's my understanding that you know you guys have a lot of people in the field that's hard to replicate and and you've obviously been investing in that market for for a very long period of time.

Speaker #4: So if you could just kind of give us a little bit of a flavor in terms of you know people out in the field you know relationships and then how those how those job sites actually function from a tool demand standpoint.

Speaker #4: Thanks.

Speaker #1: Thanks for the question Tim. This is Steve. No no question. This has been part of our long-term journey as you're well aware and and many other people are.

Steven Richman: Thanks for the question, Tim. This is Steve. No question, this has been part of our long-term journey as you're well aware, and many other people are. Let me just frame it this way. For 20 years+, our strategy throughout the globe is to become those exclusive partners with the best mechanical and electrical contractors throughout the globe. As you're well aware, and everybody is aware, that that is the biggest piece of the data center builds, and our relationships are from the top level of the owners of the companies and the trade associations, all the way to the people in the field and the safety directors, as well as how we approach the builders or the companies themselves that are driving that demand.

Steve Richman: Thanks for the question, Tim. This is Steve. No question, this has been part of our long-term journey as you're well aware, and many other people are. Let me just frame it this way. For 20 years+, our strategy throughout the globe is to become those exclusive partners with the best mechanical and electrical contractors throughout the globe. As you're well aware, and everybody is aware, that that is the biggest piece of the data center builds, and our relationships are from the top level of the owners of the companies and the trade associations, all the way to the people in the field and the safety directors, as well as how we approach the builders or the companies themselves that are driving that demand.

Speaker #1: Let me just frame it this way. For 20 years plus our strategy throughout the globe is to become those exclusive partners with the best mechanical and electrical contractors throughout the globe.

Speaker #1: As you're well aware, and everybody is aware, that is the biggest piece of the data center builds, and our relationships are from the top level of the owners of the companies and the trade associations all the way to the people in the field and the safety directors, as well as how we approach the builders or the companies themselves that are driving that demand.

Speaker #1: The other piece that ties to that is how myself and Shane and the entire Milwaukee team globally Alex in Europe Mike Brindle in in Australia Craig Baxter in in Canada David Butts in in Asia every one of us is committed to be on those sites.

Steven Richman: The other piece that ties to that is how myself and Shane and the entire Milwaukee team globally, Alex in Europe, Mike Brendle in Australia, Craig Baxter in Canada, David Butts in Asia, every one of us is committed to be on those sites. This is not about us showing up and visiting one site or one location and saying that we're trying to learn it. We have been in the sites from the conventional data centers to the AI data centers. We just finished trips in the past six months. We were in Milan. We were in Frankfurt. We've been in the Canadian market. I just finished Canada, and Japan last week, all over the US with our partners from the builders and the construction companies, all the way to the largest mechanical and electrical companies throughout the globe.

Steve Richman: The other piece that ties to that is how myself and Shane and the entire Milwaukee team globally, Alex in Europe, Mike Brendle in Australia, Craig Baxter in Canada, David Butts in Asia, every one of us is committed to be on those sites. This is not about us showing up and visiting one site or one location and saying that we're trying to learn it. We have been in the sites from the conventional data centers to the AI data centers. We just finished trips in the past six months. We were in Milan. We were in Frankfurt. We've been in the Canadian market. I just finished Canada, and Japan last week, all over the US with our partners from the builders and the construction companies, all the way to the largest mechanical and electrical companies throughout the globe.

Speaker #1: So this is not about us showing up in a and visiting one site in one location and saying that we're trying to learn it.

Speaker #1: We have been in in the sites from the conventional data centers to the AI data centers we just finished trips in in the past six months we were in Milan we were in Frankfurt we've been in the Canadian market.

Speaker #1: I just finished Canada and Japan last, last week. All over the U.S. with our partners from the builders and the construction companies, all the way to the largest mechanical and electrical companies throughout the globe.

Speaker #1: And each and every one of our job site solution team that has responsible for those sites understands how to show productivity and safety on that job.

Steven Richman: Each and every one of our job site solution team that is responsible for those sites understands how to show productivity and safety on that job. We have a deep relationship throughout that part of the business, and it just didn't start yesterday, as you're well aware.

Steve Richman: Each and every one of our job site solution team that is responsible for those sites understands how to show productivity and safety on that job. We have a deep relationship throughout that part of the business, and it just didn't start yesterday, as you're well aware.

Speaker #1: So, we have a deep relationship throughout that part of the business and it didn't just start yesterday, as you're well aware.

Speaker #4: Great. Thank you so much. Look at our backing queue.

Tim Wojs: Great. Thank you so much. I'll hop back in queue.

Speaker #1: Thanks Tim.

Steven Richman: Thanks, Tim.

Steve Richman: Thanks, Tim.

Speaker #3: Thank you. We will now take our next question from Karen Lee from JP Morgan. Please ask your question.

Operator: Thank you. We will now take our next question from Karen Li from J.P. Morgan. Please ask your question.

Karen Li: Okay. Congratulations on the fantastic set of results. I'm really glad to see that TTI is back on track for growth and beat. Steve, you mentioned the Eddy presentation about the technology, energy, and manufacturing revenue growth. You got here that Kareli is growing at over 20% rate. I believe this is mainly driven by AI/DC-related revenue. Is it possible to share how much this revenue now sitting within this segment? Just to confirm, I think previously we heard it's about half of this technology segment. How is this going to actuate in H2 this year, more importantly, going to the next few years? The reason why I'm asking is because we noticed Quanta Services, which I believe is one of the key partner, for data center build-out.

Speaker #5: Okay. Congratulations on the fantastic set of results. I really glad to see that TTI's back on track for growth and beat. Steven you mentioned the AD presentation.

Speaker #5: I thought the technology energy and manufacturing revenue growth. If I hear that correctly is growing at over 20% rate. I believe this is related revenue is it possible to share how much these revenue now sitting within this segment just to confirm that in previously we heard it's about half of these technology segment.

Speaker #5: And how is this going to accelerate in second half this year more importantly going into the next few years. So the reason why I'm asking is because we noticed Quanta services which I believe is one of the key partner for data center build out.

Karen Li: They have, just a few days ago, upgrading their technology and load center revenue growth guidance to 220% to 240%. I believe this is for full year 2026. This has just been lifted from 100% to 120% in Q1. I believe there's a strong issue to TTI this part of revenue, but I definitely want to hear about this from you. This is the first question.

Speaker #5: They have just a few days ago upgrading their technology and load center revenue growth guidance to 220 to 240%. I believe this is for full year 2026.

Speaker #5: This has just been lifted from, like, 100% to 120% in the first quarter. I believe there's a strong issue to tie these parts of revenue to TTI, but I definitely want to hear about this from you.

Speaker #5: Yeah this is the first question.

Speaker #6: Hi. This is Shane Mald. I thank you for the question. So hey we we're excited about the the growth that's happening in that that segment of of the end market that we're deeply engaged with as as Steve noted on a global basis.

Shane Moll: Hi, this is Shane Moll. Thank you for the question. We're excited about the growth that's happening in that segment of the end market that we're deeply engaged with, as Steve noted, on a global basis. We see roughly half of that segment of technology, energy, and manufacturing is tied to work we're seeing in data centers, and that continues to be a robust part of our business. We expect that to continue in the future.

Speaker #6: And we see roughly half of that segment of technology, energy, and manufacturing is tied to work we're seeing in data centers, and that continues to be a, you know, robust part of our business.

Speaker #6: And we expect that to continue in the future.

Speaker #5: Thanks so much Shane. Is it possible to probably just get some idea like you know what would be the related AIDC revenue like say like in 2030.

Karen Li: Thanks so much, Shane. Is it possible to probably just get some idea, what would be the related AI/DC revenue line, say in 2030? We see Quanta Services, for example, is painting, I think, a big pie, as big as I think $800 something billion for revenue ten related to AI/DC. How is it going to translate to TTI's revenue, particularly I think Steven mentioned again, Milwaukee's ten is looking at $160 billion plus.

Speaker #5: We see Quanta Services, for example, is pending, I think, a big pie—as big as, I think, $800-something billion US dollars for revenue. Ten relates to AIDC.

Speaker #5: How is it going to translate to TTI's revenue particularly I think Steve I mentioned again their work is 10 is looking at 160 billion US dollar plus.

Speaker #6: Well based on where we we we see that end market today that's it's outpacing the growth of our of our total business at at the current rate and we we expect that to continue in the future based on what we have line of sight to today.

Shane Moll: Well, based on where we see that end market today, it's outpacing the growth of our total business at the current rate, we expect that to continue in the future based on what we have line of sight to today. We remain deeply engaged with the contractors that perform the work with the owners and the hyperscalers, we're building partnerships, those partnerships continue to strengthen every single day. This is all business that we've continued to earn, as Steve noted, for a very long time with our partners. That end market demand remains

Speaker #6: We are deeply engaged with the contractors that perform the work, with the owners, and with the hyperscalers. We're building partnerships, and those partnerships continue to strengthen every single day.

Speaker #6: So, this is all business that we've continued to earn, as Steve noted, for a very long time with our partners. That end-market demand remains very strong, and we expect that to continue as we move forward.

Shane Moll: Very strong, we expect that to continue as we move forward.

Karen Li: Got it. I don't know whether I can ask one quick question.

Speaker #5: Got it. So I don't know whether I can ask one quick question. Does it count too that I just asked? Okay. Is it possible can can I probably just quickly chat with Tai?

Karen Li: Does it count the two that I just asked? Okay, if it's possible, can I probably just quickly chat with Ty? Ty, I think you highlighted very well. We are really adding a strong free cash flow generating machine. The net cash balance at end of last year, I believe, I think is panning out to a historical, from context, very high level. We are starting our buyback, and then we are actually raising the payout. I think with this pace of free cash flow generation, what are we going to do, I think, next few years?

Speaker #5: Tai I think you highlight very well. We are really I think a strong free cash generating machine. The net cash balance as end of last year I believe I think is piling up to a historical you know from contacts very high level.

Speaker #5: We are stepping out on buy by and then we are actually raising the payout. But I think with this pace of free cash generation we we're going to do at the next few years.

Ty Sabolsky: I think the question's around the capital allocation strategy, right? What we're looking to do with the free cash flow.

Speaker #1: So I think the the the questions around the the capital allocation strategy right and and what we're looking to do with the free cash flow and you know I I think our policy is is what we've laid out in our our previous earnings where we continue to see a strong healthy balance sheet.

Ty Staviski: I think the question's around the capital allocation strategy, right? What we're looking to do with the free cash flow.

Karen Li: Yes.

Ty Sabolsky: I think our policy is what we've laid out in our previous earnings, where we continue to see a strong, healthy balance sheet. We see strong cash generation from operations. We're executing the buyback that we're doing. We continue to increase the dividend payout in accordance to that. We're also making sure that we've got enough cash on the balance sheet as we look for any potential maybe acquisitions that we see out there that may be small in nature and fit within our businesses. We'll continue to keep looking as we, in reevaluating, the board has agreed that we'll continue to assess the buyback on the future, and take a look at how we continue to return the cash to shareholders.

Ty Staviski: I think our policy is what we've laid out in our previous earnings, where we continue to see a strong, healthy balance sheet. We see strong cash generation from operations. We're executing the buyback that we're doing. We continue to increase the dividend payout in accordance to that. We're also making sure that we've got enough cash on the balance sheet as we look for any potential maybe acquisitions that we see out there that may be small in nature and fit within our businesses. We'll continue to keep looking as we, in reevaluating, the board has agreed that we'll continue to assess the buyback on the future, and take a look at how we continue to return the cash to shareholders.

Speaker #1: We see strong cash generation from operations. We've we're we're you know executing the buyback that we're doing. We continue to increase the dividend payout in accordance to that.

Speaker #1: And then we're also you know making sure that we've got enough cash on the on the balance sheet as we look for you know any potential maybe acquisitions that we we see out there that may be small.

Speaker #1: And and in nature and fit within our businesses. And then we'll continue to keep to keep looking as we and reevaluating the board has you know agreed that we're will continue to assess the buyback on the future.

Speaker #1: And take a look at how we continue to return cash to our shareholders.

Speaker #5: Got it. Thank you so much. I'll be back back to the queue. Thank you.

Karen Li: Got it. Thank you so much. I'll be back to the queue. Thank you.

Speaker #3: Thank you. As a reminder before we take our next question please press star 11 on your telephone keypad if you wish to ask a question.

Operator: Thank you. As a reminder, before we take our next question, please press star one one on your telephone keypad if you wish to ask a question. We will now move to the next question. Your next question comes from Sky Hong from UBS. Please ask your question.

Speaker #3: We will now move to the next question. Your next question comes from Sky Home from UBS. Please ask your question.

Speaker #7: Thank you. First of all, congratulations—like always, you guys never disappoint. Great job again. Can you hear me all right?

Sky Hong: Thank you. First of all, congratulations. You guys never disappoint. Great job again. Can you hear me, right?

Sky Han: Thank you. First of all, congratulations. You guys never disappoint. Great job again. Can you hear me, right?

Speaker #1: We sure can. Thank you.

Steven Richman: We sure can. Thank you.

Steve Richman: We sure can. Thank you.

Sky Hong: Okay. I think, Steve, you mentioned, right, compared to traditional non-infrastructure kind of spending, right? The AIDC 10 tool density is 2x, right? For example, for one AIDC investment, total investment, what percentage will go for tool related? I mean, Milwaukee related tools?

Sky Han: Okay. I think, Steve, you mentioned, right, compared to traditional non-infrastructure kind of spending, right? The AIDC 10 tool density is 2x, right? For example, for one AIDC investment, total investment, what percentage will go for tool related? I mean, Milwaukee related tools?

Speaker #7: Okay. Okay. I think I think Steve you mentioned right compared to traditional sort of non-infrastructure cost spending right the AIDC you know that tool sort of density is two tons right.

Speaker #7: So for example like for one like AIDC investment total investment what percentage will go for tool related from Milwaukee related to.

Speaker #1: Sky Sky maybe you you could you repeat the question. Are you asking what percentage of like a typical project a typical data center project might might be allocated to to tools?

Ty Sabolsky: Sky, maybe could you repeat the question? Are you asking what percentage of a typical data center project might be allocated to tools?

Ty Staviski: Sky, maybe could you repeat the question? Are you asking what percentage of a typical data center project might be allocated to tools?

Speaker #7: Yeah. Correct me if I'm wrong, but I think Steve mentioned, you know, AIDC tool spending being like two times that of traditional, you know, non-infrastructure spending, right?

Sky Hong: Yeah. No, correct me if I'm wrong, I think Steve mentioned AIDC tool spending, two times of traditional non-infrastructure spending, right?

Sky Han: Yeah. No, correct me if I'm wrong, I think Steve mentioned AIDC tool spending, two times of traditional non-infrastructure spending, right?

Steven Richman: Yes.

Steve Richman: Yes.

Speaker #7: I think Steve mentioned that number right.

Sky Hong: I think Steve mentioned that number, right?

Sky Han: I think Steve mentioned that number, right?

Steven Richman: Yes. That's correct. I think you need to think about this a little bit differently in that you can't look at the dollar spend of the billions to be able to put a data center up. What you can say is that the more complex, from mega job sites and data center and infrastructure and utility, the more complex the build is, where the type of worker that is required is more concerned about productivity and safety and getting that job done faster and more efficiently. What the end user wants at that point in time are tools that will enable them to be able to complete that task faster. That's where we fit in. If you talk about a drill driver as an impact, there's a lot of great products out there. Yes, we think we have the best product in the world.

Steve Richman: Yes. That's correct. I think you need to think about this a little bit differently in that you can't look at the dollar spend of the billions to be able to put a data center up. What you can say is that the more complex, from mega job sites and data center and infrastructure and utility, the more complex the build is, where the type of worker that is required is more concerned about productivity and safety and getting that job done faster and more efficiently. What the end user wants at that point in time are tools that will enable them to be able to complete that task faster. That's where we fit in. If you talk about a drill driver as an impact, there's a lot of great products out there. Yes, we think we have the best product in the world.

Speaker #1: Yes, that's correct. I think you need to think about this a little bit differently, and that you can't look at the dollar spend of the billions to be able to put a data center up.

Speaker #1: What you can what you can say is that the more complex from mega job sites and data center and infrastructure and utility the more complex the build is where the type of worker that is required is more concerned about productivity and safety and getting that job done faster more efficiently with with the end user wants at that point in time are tools that are will enable them to be able to complete that task faster.

Speaker #1: And that's where we fit in. So, if you talk about a drill driver and an impact, there's a lot of great products out there.

Speaker #1: Yes we think we have the best product in the world. But if you talk about a roll groover if you talk about a cutter and a crimper.

Steven Richman: If you talk about a roll groover, if you talk about a cutter and a crimper, if you talk about our BOLT Helmets, if you talk about our Made in America hand tools, if you go through the extensive array of products that we have that solve problems of those users, that is why we are the brand of choice on those difficult, challenging jobs where productivity and safety are very important.

Steve Richman: If you talk about a roll groover, if you talk about a cutter and a crimper, if you talk about our BOLT Helmets, if you talk about our Made in America hand tools, if you go through the extensive array of products that we have that solve problems of those users, that is why we are the brand of choice on those difficult, challenging jobs where productivity and safety are very important.

Speaker #1: If you talk about our bolt helmets if you talk about our made in America hand tools. If you go through the extensive array of products that we have that solve problems with those users that is why we are the brand of choice.

Speaker #1: On those difficult challenging jobs where productivity and safety are very important.

Sky Hong: Mm. I see. Do we have any rough percentage of, for example, AIDC total investment? What percentage are we talking about? Below 1%, 0.5%? Do we have any sense? Do you guys have any quantitative numbers?

Sky Han: Mm. I see. Do we have any rough percentage of, for example, AIDC total investment? What percentage are we talking about? Below 1%, 0.5%? Do we have any sense? Do you guys have any quantitative numbers?

Speaker #7: I see. But do we have any like rough percentage of like for example one AIDC total investment what percentage like are we talking about like what below 1% 0.5 do we have any sense like you guys have any like quantitative numbers?

Speaker #1: No we don't we don't look at the percent of the cost of a data center build or a a new fab build and look at the cost of tools accessories safety hand tools and all of the other businesses we're in today and the potential businesses we're in the future.

Steven Richman: No. We don't look at the percent of the cost of a data center build or a new fab build and look at the cost of tools, accessories, safety, hand tools, and all of the other businesses we're in today and the potential businesses we're in the future.

Steve Richman: No. We don't look at the percent of the cost of a data center build or a new fab build and look at the cost of tools, accessories, safety, hand tools, and all of the other businesses we're in today and the potential businesses we're in the future.

Sky Hong: Okay. Thank you.

Sky Han: Okay. Thank you.

Speaker #7: Okay. Okay. Thank you.

Speaker #1: Sky I think. Sky I think the other I think the other thing you might just want to consider too is just the positive mix impact you get from the business that you're referring to and and certainly some of the if you look at the gross margin expansion that we had in the first half of the year one of the the very key drivers of that was the outgrowth that we saw in our high growth markets which you know account for about a third of the the global Milwaukee business.

Ty Sabolsky: Sky, I think the other thing you might just want to consider too is just the positive mix impact you get from the business that you're referring to. Certainly, if you look at the gross margin expansion that we had in H1, one of the very key drivers of that was the outgrowth that we saw in our high growth markets, which account for about a third of the global Milwaukee business.

Ty Staviski: Sky, I think the other thing you might just want to consider too is just the positive mix impact you get from the business that you're referring to. Certainly, if you look at the gross margin expansion that we had in H1, one of the very key drivers of that was the outgrowth that we saw in our high growth markets, which account for about a third of the global Milwaukee business.

Speaker #7: I see. Got you. Thank you.

Sky Hong: I see. Got you. Thank you.

Sky Han: I see. Got you. Thank you.

Speaker #3: Thank you. We will now take our next question from the line of Eric Lau from Citi Group. Please go ahead.

Operator: Thank you. We will now take our next question from the line of Eric Lau from Citigroup. Please go ahead.

Speaker #7: Thank you. Congratulations for the management for the excellent result. May I have just two questions regarding the margin and cost. We see the you know tight you know I've done a good job for the gross margin breakdown.

Eric Lau: Thank you. Congratulations for the management for the excellent result. May I have just two questions regarding the margin and cost. We see the, Ty, have done a good job for the gross margin breakdown, actually by almost 258 basis points. However, we find out the distribution cost also increased significantly, around 190 basis points, by almost 2 percentage points on the sales. I'm not sure, the gross margin expansion at a large degree and then distribution cost increased also at a large degree. I'm not sure any change of the accounting policy for booking margin and also the distribution cost or actually impact by the tariff.

Speaker #7: Actually by almost 258 basis points. However we spun out the distribution cost also increased significantly around 190 basis points by almost 2% point on the sales.

Speaker #7: So I'm I'm not sure you know the gross margin expansion at a large degree and then you know distribution cost increase also at a large degree.

Speaker #7: I'm not sure any change of the accounting policy for booking margin and also the distribution cost or actually impact by the tariff.

Speaker #1: Yeah. Eric I guess the I guess the question is is that the the you know the in our EBIT margin walk we really pointed to the the annualization of the tariff mitigation efforts that's net right.

Ty Sabolsky: Yeah. Eric, I guess the question is that in our EBIT margin walk, we really pointed to the annualization of the tariff mitigation efforts. That's net, right, of what we're seeing. It's not just the one side of it, but it's actually a net impact there from that.

Ty Staviski: Yeah. Eric, I guess the question is that in our EBIT margin walk, we really pointed to the annualization of the tariff mitigation efforts. That's net, right, of what we're seeing. It's not just the one side of it, but it's actually a net impact there from that.

Speaker #1: Of what we're seeing. So, it's not just the one side of it, but there's actually a net impact there from that.

Eric Lau: No, I mean, why the distribution cost increased significantly by almost 190 basis points.

Speaker #7: No. I mean why the distribution cost increase significantly by almost 190 basis points.

Speaker #1: Yeah. So so.

Ty Sabolsky: Yeah. The selling cost is in the distribution.

Ty Staviski: Yeah. The selling cost is in the distribution.

Speaker #7: Oh I mean.

Speaker #1: Yeah. The the selling cost is is in the distribution.

Speaker #7: Right. But actually distribution cost increase 17% right versus the sales only sales growth only you know missing a digit. Why why is that?

Eric Lau: Right. Actually, distribution cost increased 17%, right? Versus the sales growth only mid-single digit. Why is that?

Ty Sabolsky: Yeah. I think from the standpoint, Eric, one of the things you need to think about is the Milwaukee business is mixing to a higher right number from that aspect. As we take a look, even though the selling distribution cost is up, it's all about the field resources that we're investing in that it's the product development, the NPD cost that we have. It's a significant amount of that. As we mix more towards the Milwaukee business, which has higher SG&A costs, you see that from that perspective.

Ty Staviski: Yeah. I think from the standpoint, Eric, one of the things you need to think about is the Milwaukee business is mixing to a higher right number from that aspect. As we take a look, even though the selling distribution cost is up, it's all about the field resources that we're investing in that it's the product development, the NPD cost that we have. It's a significant amount of that. As we mix more towards the Milwaukee business, which has higher SG&A costs, you see that from that perspective.

Speaker #1: I think the Milwaukee—I mean, I think from that standpoint, Eric, one of the things you need to think about is the Milwaukee business is mixing to a higher right number from that aspect.

Speaker #1: So as we take a look you know even though the the selling distribution cost is is up you know it's all about you know the field resources that we're investing in in that it's the you know the product development the NPD cost that we have it's a it's a significant amount of that.

Speaker #1: And as we shift more towards the Milwaukee business, which has higher SG&A costs, you see that from that perspective. So I see.

Eric Lau: I see. Will the company book the tariff refund into P&L during the H2, if any, or just the cash flow statement?

Speaker #7: I see. So we the company book the tariff refund into P&L during the second half if any or just the cash flow statement?

Speaker #1: We have you know in this you know second half of the of the year we will determine how we handle the tariff rebates if and when we get any.

Ty Sabolsky: In the H2 of the year, we will determine how we handle the tariff rebates, if and when we get any. Just to reiterate, the H1, these results did not include any tariff rebate pickup.

Ty Staviski: In the H2 of the year, we will determine how we handle the tariff rebates, if and when we get any. Just to reiterate, the H1, these results did not include any tariff rebate pickup.

Speaker #1: But just to reiterate the first half these results did not include any tariff rebate pickup.

Speaker #7: Right. If my last question is if excluding the tariff refund in the second half so under certain normal circumstance you know second half profit usually higher than the first half right.

Eric Lau: Right. My last question is, excluding the tariff refund in the H2, under a normal circumstance, H2 profit usually higher than the H1, right? Do you see no exception for 2026, right?

Speaker #7: So do you see you know no exception for these for 2026 right?

Speaker #1: No.

Ty Sabolsky: No.

Ty Staviski: No.

Speaker #7: Okay, got it. So sorry—one more follow-up question. What do you think about the gross margin and EBIT margin, you know, sequential improvement in the second half versus the first half?

Eric Lau: Okay. Got it. Sorry, one more follow-up question. What do you think about the gross margin and EBIT margin sequential improvement in H2 versus H1? Do you think how much they could Ty.

Speaker #7: Do you think you know how much they.

Speaker #1: Yeah. Eric you you you you know that we have a a a track record of looking at cost out and and mitigating off our commodity increases and that's kind of our mentality.

Ty Sabolsky: Yeah, Eric, you know that we have a track record of looking at cost outs and mitigating off our commodity increases. That's kind of our mentality. We hope to maintain a gross margin in the levels that we're currently seeing in H1.

Ty Staviski: Yeah, Eric, you know that we have a track record of looking at cost outs and mitigating off our commodity increases. That's kind of our mentality. We hope to maintain a gross margin in the levels that we're currently seeing in H1.

Speaker #1: And you know we hope to maintain you know a gross margin in the levels that we're currently seeing in the first half.

Speaker #7: And and as Ross Ross reiterated our mix of products are heavy in gross margin on the Milwaukee brand that are feeding mega job sites data centers and those types of of end users throughout the globe.

Steven Richman: As Ross reiterated, our mix of products are heavy in gross margin on the Milwaukee brand, that are feeding mega job sites, data centers, and those types of end users throughout the globe, which will continue to mix in a positive way.

Steve Richman: As Ross reiterated, our mix of products are heavy in gross margin on the Milwaukee brand, that are feeding mega job sites, data centers, and those types of end users throughout the globe, which will continue to mix in a positive way.

Speaker #7: Which will continue to mix in a in a positive way. Right. Okay. Thank you. Thank you management.

Eric Lau: Right. Okay. Thank you. Thank you, management.

Speaker #3: Thank you. We will now take next question from John Choi from Daiwa. Please ask your question John.

Operator: Thank you. We will now take next question from John Choi from Daiwa. Please ask your question, John.

Speaker #8: Thanks for taking my question and congratulations on the strong results. Just a quick follow up on you know I think Eric's question and I think Ty you answered.

John Choi: Thanks for taking my question. Congratulations on strong results. Just a quick follow-up on, I think Eric's question, and I think, Ty, you answered. You mentioned that the entire rebate or refunds were not included in H1, and you guys have not determined how to book it in H2. I'm just wondering if that's the case, should we be expecting this if there's potential refunds, could be viewed as an incremental gross margin offset or it could be booked as more of a one-off? Apart from that, GP margins, this trend should be similar for that? I have another second question.

Speaker #8: So you mentioned that the tariff rebate or refunds were not included in first half and you guys have not determined how to you know book it in the second half.

Speaker #8: So I'm just wondering if if that's the case you know should we be expecting this you know if there's potential refund could be viewed as incremental gross margin upside or it could be booked as a more of a one you know GP margins the trend should this trend should be similar for that.

Speaker #8: And then I have another second question.

Speaker #1: Yeah. I think I think what we were mentioning before in Eric's question as we take a look at the business as usual ex the any tariff refunds we are continuing to model our gross margins in line with what we're expecting to see in the front half and and the reason being of what Steve just said too with the mix towards the higher Milwaukee margin products.

Ty Sabolsky: I think what we were mentioning before in Eric's question, as we take a look at the business as usual, X any tariff refunds, we are continuing to model our gross margins in line with what we're expecting to see in the H1. The reason being of what Steve just said too, with the mix towards the higher Milwaukee margin products as we see the growth in the H2. When it comes to the I can also queue up to Frank here. As we take a look at the H2 and as we look at any potential refunds, rebate refunds, we will have to determine how we're going to properly account for that in accordance with accounting standards and how we view it. From that standpoint. It could be treated either as a one-off or net of impacts from that side.

Ty Staviski: I think what we were mentioning before in Eric's question, as we take a look at the business as usual, X any tariff refunds, we are continuing to model our gross margins in line with what we're expecting to see in the H1. The reason being of what Steve just said too, with the mix towards the higher Milwaukee margin products as we see the growth in the H2. When it comes to the I can also queue up to Frank here. As we take a look at the H2 and as we look at any potential refunds, rebate refunds, we will have to determine how we're going to properly account for that in accordance with accounting standards and how we view it. From that standpoint. It could be treated either as a one-off or net of impacts from that side.

Speaker #1: As we see the growth in the back half. When it comes to the you know and and I can also queue up to Frank here but as we take a look at the second half and as we look at any potential refunds rebate refunds you know we will have to determine how we're going to properly account for that in accordance with accounting standards and how we view it.

Speaker #1: From that standpoint. So it could be treated either as one off or you know net of you know impacts to the to that from that side.

Speaker #1: So yeah they they they current yeah this is Frank. The current direction is is more to to to call it the one one off item.

Frank Chi Chung Chan: This is Frank. The current direction is more to call it a one-off item. Otherwise, there will be another EBIT margin walk next year, taking out this tariff refunds. The current thinking, also we need to agree with the auditors. The current thinking is that this is a one-off, non-recurring item.

Frank Chan: This is Frank. The current direction is more to call it a one-off item. Otherwise, there will be another EBIT margin walk next year, taking out this tariff refunds. The current thinking, also we need to agree with the auditors. The current thinking is that this is a one-off, non-recurring item.

Speaker #1: And otherwise you know there will be another EBIT margin walk next year. You know taking out this tariff refunds. So the current thinking you know also we need to we need to agree with the auditors the current thinking is that this is a one off non recurring item.

Speaker #7: And unlike other companies that are out there in in the environment we're clearly not showing EBIT as we have said in the first half from any tariff refunds that we haven't seen.

Ty Sabolsky: Unlike other companies that are out there in the environment, we're clearly not showing EBIT, as we have said in H1, from any tariff refunds that we haven't seen, that clearly will not be our practice in H2 as well.

Steve Richman: Unlike other companies that are out there in the environment, we're clearly not showing EBIT, as we have said in H1, from any tariff refunds that we haven't seen, that clearly will not be our practice in H2 as well.

Speaker #7: And and that clearly will not be our practice in the second half as well.

Speaker #8: Great, that's very clear. Just to quickly shift gears to Ryobi—I think, you know, in the first half, you guys grew 1.7% in local currency.

John Choi: Great. That's very clear. Just to quickly shifting gears to Ryobi. I think, H1, you guys grew 1.7% in local currency. You also mentioned mid-single digit growth in power tools offset by softer outdoor business. What gives you guys the confidence that Ryobi can come back to mid to high single growth? Is it the H1 is obviously one-off because of weather? Are you seeing kind of a pickup on the consumer demand side? Any color on this will be very helpful. Thank you.

Speaker #8: But you also mentioned missing a digit growth in power tools, offset by a softer outdoor business. What gives you guys the confidence that Ryobi can come back to mid- to high-single-digit growth?

Speaker #8: Is it the first half weakness obviously one off because of the weather? And are you seeing kind of a pick up on the consumer demand side?

Speaker #8: And you know any color on this will be very helpful. Thank you.

Speaker #7: You know I think the perspective from many people has led to understating the value of the Ryobi brand which is the number one consumer brand throughout the globe.

Ty Sabolsky: I think the perspective from many people has led to understating the value of the Ryobi brand, which is the number one consumer brand throughout the globe. What we want to make clear is that the pipeline of new products, the viewpoint of the backward and forward compatibility, the fact that we're launching more and more products like pool cleaners and lifestyle products and core power tools inside that area, products for camping, everything inside the house and outside the house. The results in H1, we believe bode well for those same type of results with the best distribution partners throughout the globe, with the Ryobi brand in H2 of the year.

Steve Richman: I think the perspective from many people has led to understating the value of the Ryobi brand, which is the number one consumer brand throughout the globe. What we want to make clear is that the pipeline of new products, the viewpoint of the backward and forward compatibility, the fact that we're launching more and more products like pool cleaners and lifestyle products and core power tools inside that area, products for camping, everything inside the house and outside the house. The results in H1, we believe bode well for those same type of results with the best distribution partners throughout the globe, with the Ryobi brand in H2 of the year.

Speaker #7: And what we want to make clear is that the pipeline of new products the viewpoint of the backward and forward compatibility the fact that we're launching more and more products like like pool cleaners and lifestyle products and core power tools inside that area products for camping everything inside the house and outside the house and the results in the first half we believe bode well for those same type of results.

Speaker #7: With the best distribution partners throughout the globe with the Ryobi brand in the second half of the year.

Operator: Question, John?

Speaker #3: Question John.

Speaker #8: No. That's good. Thank you.

John Choi: No, that's good. Thank you.

Speaker #3: Thank you very much. I'll take a next question from the line of Terrence Chang from Macquarie Capital Securities. Please go ahead Terrence.

Operator: Thank you very much. I'll take the next question from the line of Terence Chang from Macquarie Capital Securities. Please go ahead, Terence.

Speaker #5: Thank you. Hi. Good morning management. Can you hear me okay?

Terence Chang: Thank you. Hi. Good morning, management. Can you hear me okay?

Speaker #1: Yes. Yes.

Ty Sabolsky: Yes.

Ty Staviski: Yes.

Frank Chi Chung Chan: Yes.

Frank Chan: Yes.

Speaker #5: Yes. So first of all, congratulations on the strong, strong set of results, and thank you for taking my question. My question is actually on the tariff rates that the company is seeing in the second half.

Terence Chang: Yeah. First of all, congratulations on the strong set of results, and thank you for taking my question. My question is actually on the tariff rates that the company is seeing in H2. I just want to kind of get a feel from the management on how are you guys going to mitigate the tariffs in H2. Obviously, I think, in the announcement you guys also mentioned about stepping up in further fine-tuning your manufacturing footprint in the Americas and also in Vietnam over the next 12 to 18 months. Can you guys just share with us, in terms of kind of CapEx spend on this and how it will benefit you on the tariff mitigation standpoint? Thank you.

Speaker #5: I just want to kind of get a feel from the management on how are you guys going to mitigate the the tariffs in second half and obviously I think in the announcement you guys also mentioned about setting up in further fine tuning your manufacturing footprint in the Americas and also in Vietnam over the next 12 to 18 months.

Speaker #5: So can you guys just share with us in terms of kind of CapEx spend on on this and how it will benefit you on the tariff mitigation standpoint.

Speaker #5: Thank you.

Speaker #1: Yeah. Terrence thanks for the question. So I I I think the as we take a look at it's a continuation of the mitigation efforts that we've put in place.

Ty Sabolsky: Yeah. Terence, thanks for the question. I think as we take a look at, it's a continuation of the mitigation efforts that we've put in place. I think when we take a look back 18 months, and when this kind of all started, we did a lot of work to optimize our production and get it into what we believe would be the lowest tariff jurisdictions from a production standpoint from that. Since then, obviously, we were running at the set tariff rates that we had in H1. Knowing that the tariff rates have increased a little bit in H2, some from the 10% to the 12.5%, we've now modeled that into our financials for H2 of the year as we're taking a look at it.

Ty Staviski: Yeah. Terence, thanks for the question. I think as we take a look at, it's a continuation of the mitigation efforts that we've put in place. I think when we take a look back 18 months, and when this kind of all started, we did a lot of work to optimize our production and get it into what we believe would be the lowest tariff jurisdictions from a production standpoint from that. Since then, obviously, we were running at the set tariff rates that we had in H1. Knowing that the tariff rates have increased a little bit in H2, some from the 10% to the 12.5%, we've now modeled that into our financials for H2 of the year as we're taking a look at it.

Speaker #1: So I think when we take a look back 18 months and when you know this kind of all started you know we did a lot of work to optimize our production and get it into what we believe would be the you know lowest tariff jurisdictions from a from a production standpoint from that.

Speaker #1: Since then obviously we were running at the you know the the set tariff rates that we had in the first half and you know knowing that the tariff rates have you know increased a little bit in the back half from you know some from the 10 to the 12 and a half percent.

Speaker #1: You know, we've now modeled that into our financials for the back half of the year. As we're taking a look at it and still considering all of that, we still believe we're capable of delivering what we believe is the gross margin that we talked about in the last couple of questions.

Ty Sabolsky: Still considering all of that, we still believe we're capable of delivering what we believe is the gross margin that we talked about in the last couple of questions. From the capital spend that we're looking to do over the next couple of years that the team mentioned in the presentation, it's further not so much about readjusting the global footprint as it is for handling the growth that we're experiencing in the business.

Ty Staviski: Still considering all of that, we still believe we're capable of delivering what we believe is the gross margin that we talked about in the last couple of questions. From the capital spend that we're looking to do over the next couple of years that the team mentioned in the presentation, it's further not so much about readjusting the global footprint as it is for handling the growth that we're experiencing in the business.

Speaker #1: From the capital spend that we're looking to to do over the next couple of years you know that that the team mentioned in the presentation you know it it further not so much about readjusting the global footprint as it is for handling the growth that we're experiencing in the business.

Speaker #1: And I think the beauty that our operations team did when we built the factories that we have in both Vietnam and Mexico is we built them with the assumption that they would be able to be expanded at a lower cost capital cost in the future because we had already built the infrastructure whether it be the the pad for the the flooring for the building in the first phase or whether it was acquiring the land and building out in that.

Ty Sabolsky: I think the beauty that our operations team did when we built the factories that we have in both Vietnam and Mexico, is we built them with the assumption that they would be able to be expanded at a lower capital cost in the future, because we had already built the infrastructure, whether it be the pad for the flooring for the building in the first phase, or whether it was acquiring the land and building out in that. As we knew we needed to continue to expand, we knew that it was easy to do on the existing sites that we already had using some of the pre-work that we had already done in the prior years and the prior capital expenses that we had already spent.

Ty Staviski: I think the beauty that our operations team did when we built the factories that we have in both Vietnam and Mexico, is we built them with the assumption that they would be able to be expanded at a lower capital cost in the future, because we had already built the infrastructure, whether it be the pad for the flooring for the building in the first phase, or whether it was acquiring the land and building out in that. As we knew we needed to continue to expand, we knew that it was easy to do on the existing sites that we already had using some of the pre-work that we had already done in the prior years and the prior capital expenses that we had already spent.

Speaker #1: So as we knew we needed to continue to expand we knew that it was easy to do on the existing sites that we already had using some of the pre-work that we had already done in the prior years in the prior capital expenses that we had already spent.

Speaker #1: So we anticipate that we're not going to see a big uptick in CapEx not like we we've seen in the past where we were you know going into Mexico or going into Vietnam initially we're talking about expanding the facilities that we currently have at a much lower capital expense rate.

Shane Moll: We anticipate that we're not going to see a big uptick in CapEx, not like we've seen in the past where we were going into Mexico or going into Vietnam. Initially, we're talking about expanding the facilities that we currently have at a much lower capital expense rate.

Ty Staviski: We anticipate that we're not going to see a big uptick in CapEx, not like we've seen in the past where we were going into Mexico or going into Vietnam. Initially, we're talking about expanding the facilities that we currently have at a much lower capital expense rate.

Speaker #5: Thank you. And the second question is actually on the finance cost. So obviously first half you already seeing kind of reduction in the financing cost and with the strong free cash flow that you guys are generating and the net cash balance should we expect you guys to further pay down debt hence even lower financing expense into the second half of the year.

Terence Chang: Thank you. The second question is actually on the finance cost. Obviously, H1, you're already seeing kind of reduction in the financing cost. With the strong free cash flow that you guys are generating and the net cash balance, should we expect you guys to further pay down debt, hence even lower financing expense into the H2 of the year?

Speaker #1: Oh that that definitely so Terrence. Yeah we will we will definitely leverage on the on our strong balance sheet and on our on our cash flow generating capabilities you know to to drive our net finance cost further further down.

Frank Chi Chung Chan: Oh, definitely so, Dennis. Yeah, we will definitely leverage on our strong balance sheet and on our cash flow generating capabilities to drive our net finance costs further down. That's definitely in our plan and in our H2 projections.

Frank Chan: Oh, definitely so, Dennis. Yeah, we will definitely leverage on our strong balance sheet and on our cash flow generating capabilities to drive our net finance costs further down. That's definitely in our plan and in our H2 projections.

Speaker #1: That's that's definitely in in our plan and in our second half projections.

Speaker #5: Thank you. And and a final question in in terms of the effective tax rate any kind of changes or kind of things that we need to be aware or we we are basically still able to kind of keep the relatively low tax rate.

Terence Chang: Thank you. A final question. In terms of the effective tax rate, any kind of changes or kind of things that we need to be aware of? We are basically still able to keep the relatively low tax rate? Thank you. That's all for my question.

Speaker #5: Thank you.

Speaker #1: Yeah I think from our effective tax rate was at 8% and as as I mentioned you know we are pretty comfortable you know with our current tax plans and structures that there's high single digit type of effective tax rates is is very sustainable.

Frank Chi Chung Chan: Yeah. At income, our effective tax rate was at 8%, as I mentioned, we are pretty comfortable with our current tax plans and structures that this high single-digit type of effective tax rate is very sustainable.

Frank Chan: Yeah. At income, our effective tax rate was at 8%, as I mentioned, we are pretty comfortable with our current tax plans and structures that this high single-digit type of effective tax rate is very sustainable.

Speaker #5: Thank you management. All the best.

Terence Chang: Thank you, management. Over to you.

Speaker #3: Thank you. We will now take our next question from Helen Fong from HSBC. Please ask your question, Helen.

Operator: Thank you. We will now take our next question from Helen Fang from HSBC. Please ask your question, Helen.

Speaker #6: Sure. Thank you for taking my question and congratulations on the great results. And what I have a more strategic question because I noticed that during this earning we have changed the reportable segments from power equipment and floor care and cleaning to professional and consumers.

Helen Fang: Sure. Thank you for taking my question, congratulations on the great results. Well, I have a more strategic question because I noticed that during this earning, we have changed the reportable segments from power equipment and floor care and cleaning to professional and consumers. I was just wondering, is there any strategic underlying message to that change? For example, you're going to focus more on Milwaukee and Ryobi and maybe less resources towards the floor care, et cetera. Can you share some color? Much appreciated.

Speaker #6: I was just wondering is there any strategic underlying message to that change? For example you're going to focus more on Milwaukee and Royalty and maybe less resources towards the floor care etc.

Speaker #6: Can you share some color much appreciated.

Steven Richman: There's clearly no change to our strategic direction. Our strategic direction is, and we have been talking about it for some time now, that we have two extremely valuable brands. Those brands are Milwaukee, the number one professional brand throughout the globe, driving safety and productivity, and Ryobi, the brand of choice for consumers inside the home, in the garage, lifestyle, and inside the yard. They are clearly a focus. At the same time, what we have said is that in the cleaning segment with our Vax and Hoover brands, it's a matter of us restructuring how we think about it, really revitalizing the brands from the product development areas and every single aspect. As we do that, and you've seen the numbers go down.

Steve Richman: There's clearly no change to our strategic direction. Our strategic direction is, and we have been talking about it for some time now, that we have two extremely valuable brands. Those brands are Milwaukee, the number one professional brand throughout the globe, driving safety and productivity, and Ryobi, the brand of choice for consumers inside the home, in the garage, lifestyle, and inside the yard. They are clearly a focus. At the same time, what we have said is that in the cleaning segment with our Vax and Hoover brands, it's a matter of us restructuring how we think about it, really revitalizing the brands from the product development areas and every single aspect. As we do that, and you've seen the numbers go down.

Speaker #1: There there's there's clearly no change to our strategic direction. And our strategic direction is and we have been talking about it for some time now that we have two extremely valuable brands and those brands are Milwaukee the number one professional brand throughout the globe driving safety and productivity and Ryobi the brand of choice for consumers inside the home in the garage lifestyle and inside the yard.

Speaker #1: And they are clearly a focus. At the same time what we have said is that in the cleaning segment with our VAX and Hoover brands it's a matter of us restructuring how we think about it really revitalizing the brands from the product development areas and every single aspect and as we do that and we have you have seen the numbers go will be how do we put put more new product development in those products do more demand creation and figure out what the next step of that revitalization will be in 2027 and beyond.

Steven Richman: The next phase of that will be how do we put more new product development in those products, do more demand creation, and figure out what the next step of that revitalization will be in 2027 and beyond.

Steve Richman: The next phase of that will be how do we put more new product development in those products, do more demand creation, and figure out what the next step of that revitalization will be in 2027 and beyond.

Helen Fang: Understood. Thank you. Well, I think AIDC, we've talked a lot about it. I think it's representing almost 16% of the Milwaukee sales as of the reported quarter. I was just wondering, is it a cyclical or structural high growth driver that's in your view? If it is a structural one, what gives you the confidence in its durability beyond, say, 2026 or even 2027? Any color you can share with us here? Thank you.

Speaker #6: Understood. Thank you. Well I think AIDC we've talked a lot about it. I think it's representing almost like 16% of the Milwaukee sales as of the reported quarter.

Speaker #6: I was just wondering is it a cyclical or structural high growth driver that in your view and if it is a structural one what gives you the confidence in its durability beyond say 2026 or even 2027.

Speaker #6: Any color you can share with us here. Thank you.

Speaker #1: All right. Thank you for the question. We definitely view this as a structural growth driver behind our business. We're very close to the trades that are performing the work in the in the owners that are investing in this work.

Shane Moll: Hi, thank you for the question. We definitely view this as a structural growth driver behind our business. We're very close to the trades that are performing the work and the owners that are investing in this work. We're confident that this is a strong growth driver for the Milwaukee business into the foreseeable future.

Speaker #1: So we're confident that this is a strong growth driver for the Milwaukee business into the foreseeable future.

Operator: Great, thank you. Once again, if you wish to ask a question, please press star one one on your telephone keypad to ask a question. Our next question comes from the line of Frank Fan from Nomura. Please ask your question, Frank.

Speaker #3: Great. Thank you. Once again if you wish to ask your question please press star 11 on your telephone keypad to ask a question. Our next question comes from the line of Frank Fan from Nomura.

Speaker #3: Please ask your question Frank.

Speaker #7: Thanks for taking my question. And congratulations on the strong result. I would like to ask one question. At the level of the customers actually buying the products not the end not the end market demand so the question is when you look at the first half growth coming from the non-home people channel are you seeing the same users buying more products and buying different products or are you seeing new users coming to the base?

Frank Fan: Thanks for taking my question, and congratulations on the strong results. I would like to ask one question. At the level of the customers actually buying the products, not the end market demand. The question is, when you look at the H1 growth coming from the Home Depot channel, are you seeing the same users buying more products and buying different products, or are you seeing new users coming to the base? Thank you.

Frankie Fan: Thanks for taking my question, and congratulations on the strong results. I would like to ask one question. At the level of the customers actually buying the products, not the end market demand. The question is, when you look at the H1 growth coming from the Home Depot channel, are you seeing the same users buying more products and buying different products, or are you seeing new users coming to the base? Thank you.

Speaker #7: Thank you.

Steven Richman: With Home Depot and our other distribution partners, we have a blend Milwaukee enthusiasts and loyalists and Ryobi loyalists, and both of them continue to buy in our forward and backward compatible cordless systems and platforms and our other systems and platforms such as PACKOUT on storage on the Milwaukee side, BOLT Helmets from the PPE side, as well as other product categories because of the loyalty to the brand and the fact that we deliver productivity and safety on Milwaukee and on Ryobi, we deliver what that consumer needs every single day. At the same time, we target new users. Those are new consumer users who are first in the market for do-it-yourself or for landscaping or for leisure or for any single aspect of the business.

Steve Richman: With Home Depot and our other distribution partners, we have a blend Milwaukee enthusiasts and loyalists and Ryobi loyalists, and both of them continue to buy in our forward and backward compatible cordless systems and platforms and our other systems and platforms such as PACKOUT on storage on the Milwaukee side, BOLT Helmets from the PPE side, as well as other product categories because of the loyalty to the brand and the fact that we deliver productivity and safety on Milwaukee and on Ryobi, we deliver what that consumer needs every single day. At the same time, we target new users. Those are new consumer users who are first in the market for do-it-yourself or for landscaping or for leisure or for any single aspect of the business.

Speaker #1: With Home Depot and our other distribution partners we have a blend of Milwaukee enthusiasts and loyalists and Ryobi loyalists and both of them continue to buy in our forward and backward compatible cordless systems and platforms.

Speaker #1: And our other systems and platforms such as Packout on storage on the Milwaukee side Bold helmets from the PPE side as well as other product categories because of the loyalty to the brand and the fact that we deliver productivity and safety on Milwaukee and on Ryobi we deliver what that consumer needs every single day.

Speaker #1: At the same time we target new users and those are new consumer users who are who are first in the market for do-it-yourself or for landscaping or for leisure or for any single aspect of the business and we do that from a digital first approach to the business through all different vehicles to be able to accomplish that throughout the globe.

Steven Richman: We do that from a digital first approach to the business through all different vehicles to be able to accomplish that throughout the globe. On the Milwaukee side, we do that through converting those new users on the job sites throughout the globe to our platforms where they want better performing products that deliver productivity and safety for them based on where the world is today. This is from Home Depot to our industrial channels, to Bunnings in Australia, to direct-to-consumer in the European sector on the Ryobi side. All aspects of our business do both.

Steve Richman: We do that from a digital first approach to the business through all different vehicles to be able to accomplish that throughout the globe. On the Milwaukee side, we do that through converting those new users on the job sites throughout the globe to our platforms where they want better performing products that deliver productivity and safety for them based on where the world is today. This is from Home Depot to our industrial channels, to Bunnings in Australia, to direct-to-consumer in the European sector on the Ryobi side. All aspects of our business do both.

Speaker #1: And on the Milwaukee side we do that through converting those new users on the job sites throughout the globe to our platforms where they want better performing products that deliver productivity and safety for them based on where the world is today.

Speaker #1: And this is from Home Depot to our industrial channels to Bunnings in Australia to direct-to-consumer in the in the European sector on the on the Ryobi side.

Speaker #1: So, all aspects of our business do both.

Frank Fan: Understood. Thank you.

Frankie Fan: Understood. Thank you.

Speaker #7: Understood. Thank you.

Operator: That is the end of the question and answer session. Thank you for your participation. This concludes today's interim results announcement analyst and investor webcast. You may now disconnect.

Speaker #3: That is the end of the question and answer session. Thank you for your participation this concludes today's interim results announcement analyst and investor webcast.

Speaker #3: You may now disconnect.

Steven Richman: That was

Steve Richman: That was

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