Q2 2026 Videndum PLC Earnings Call

August 5, 2026

Speaker #1: Hello, and welcome to the addendum half-year results 2026. I'll now hand it over to Chairman Stephen Harris to begin. Please go ahead.

Operator: Hello, welcome to the Videndum H1 Results 2026. I'll now hand it over to Chairman Stephen Harris to begin. Please go ahead.

Operator: Hello, and welcome to the Videndum H1 Results 2026. I'll now hand it over to Chairman Stephen Harris to begin. Please go ahead.

Speaker #2: Thank you. Good morning, ladies and gentlemen. Welcome to the call. I'm Stephen Harris, and I have with me today Brian Morgan, our Chief Financial Officer.

Stephen Harris: Thank you. Good morning, ladies and gentlemen. Welcome to the call. I'm Stephen Harris, I have with me today Brian Morgan, our chief financial officer. We move to slide two, you can see the agenda that we've got this morning. A very short agenda. I'll be doing a quick overview, just talk about significant events that impacted us in this H1. Brian will take you through a financial review, I'll come back for the strategy and operational priorities piece, then into the outlook. Without any further ado, let's move on to slide three, please. Just a quick overview. It's more than fair to say that our H1 for us has been very difficult. Well, a lot disappointing for us, as I'm sure it is for the shareholders.

Speaker #2: If we move to slide 2, you can see the agenda that we've got this morning. It's a very short agenda. I'll be doing a quick overview, just talking about significant events that have impacted us in this first half.

Speaker #2: And then, Brian, I'll take you through a financial review, and then I'll come back for the strategy and operational priorities piece, and then into the outlook.

Speaker #2: So without any further ado, let's move on to slide 3, please. So just a quick overview. I mean, it's more than fair to say that a half-one for us has been very difficult, a bit of a—well, a lot—disappointing for us, as I'm sure it is for the shareholders.

Speaker #2: The like-for-like revenues, in fact, if you adjust for discontinued brands and constant currency, are just about flat with the prior year. So there's underlying growth in there, but there's also some downward swings, and we'll talk about that in a minute.

Stephen Harris: The like-for-like revenues, in fact, if you adjust for discontinued brands at constant currency, is just about flat with prior year. There's underlying growth in there's also some downward swings, we'll talk about that in a minute. We got an increase in EBITDA to GBP 3 million, GBP 2.3 million of adjusted operating cash flow, despite the fact we had an operating loss. Net debt has decreased by GBP 103 million. We're sitting at GBP 39.3 million. That includes the leases, of course. Brian will unpick that as to how that comes about, what's involved in that. We just move on to the next slide, please. The significant events, I would like to call this key achievements, but unfortunately you wouldn't want some of these achievements. We had our flagship new tripod from Manfrotto that we launched.

Speaker #2: We saw an increase in EBITDA to £3 million, and £2.3 million of adjusted operating cash flow, despite the fact that we had an operating loss.

Speaker #2: Net debt has decreased by £103 million, so we're sitting at £39.3 million. And that includes the leases, of course, and Brian, we'll unpick that as to how that comes about and what's involved in that.

Speaker #2: So, if we just move on to the next slide, please. So, the significant events—I mean, I would like to call this 'key achievements,' but unfortunately, you wouldn't want some of these achievements—so we had our flagship new tripod from Manfrotto that we launched.

Speaker #2: Unfortunately, this didn’t go that well because, for the first time ever, this tripod was being produced on an automated line, and when it’s running, it clicks about very quickly.

Stephen Harris: Unfortunately, it didn't go that well because for the first time ever, this tripod was being produced on an automated line. When it's running, it clicks about very quickly. Unfortunately, there were quite a lot of teething troubles with the line, we were not able to produce. The manufacturer came in, fixed the faults, which were design faults, we got it back running in the end. It meant we missed quite a lot of business in the H1 that we had expected, upwards of GBP 6 million in sales that didn't come through. A lot of it will have gone into the H2, but we have no idea how much of that demand we actually lost because people were looking for product. If they said, "Well, I'll hold on until it becomes available," that's great.

Speaker #2: Unfortunately, there were quite a lot of teething troubles with the line, and we were not able to produce. And so the manufacturer came in, fixed the faults—which were design faults—but got it back running in the end.

Speaker #2: But it meant we missed quite a lot of business in the first half that we had expected. I put a £6 million in sales that didn’t come through, and a lot of it will have gone into the second half, but we have no idea how much of that demand we actually lost because people were looking for product.

Speaker #2: If they said, "Well, I'll hold on until it becomes available," that's great. If they just said, "Well, I'll buy something else," then we've lost the opportunity.

Stephen Harris: If they just said, "Well, I'll buy something else," well, then we lost the opportunity. We'll see that in the H2, but we know a proportion of it has been deferred into our H2. The Middle East conflict didn't do us any favors either. We actually have quite a sizable business in the Middle East in the broadcast industry, where we'd won contracts to outfit some of the large studios there. Quite a few GBP million. Clearly, with all the conflict going on, we couldn't get the equipment out there. We couldn't get our troops out there to commission it. That got pushed into the H2. On top of that, of course, the increased freight costs and logistic costs caused mayhem with various people, particularly in North America.

Speaker #2: So we'll see that in the second half. But we know a proportion of it has been deferred into that half too. The Middle East conflict didn't do us any favors either, and we actually have quite a sizable business in the Middle East in the broadcast industry.

Speaker #2: Where we’d won contracts to outfit some of the large studios there—quite a few million. Clearly, with all the conflict going on, we couldn’t get the equipment out there.

Speaker #2: We couldn't get our troops out there to commission it, so that got pushed into the second half. And then, on top of that, of course, the increased freight costs and logistics costs caused mayhem with various people, particularly in North America.

Speaker #2: So we had a number of channels that told us directly that they weren't buying because until their shipping costs came down and they'd been assured, of course, by the politicians that this was a temporary blip, they thought that because they pay the freight, and they thought they could get better freight rates if they held off a bit.

Stephen Harris: We had a number of channels that told us directly that they weren't buying because until their shipping costs came down, and they'd been assured, of course, by the politicians that this was a temporary blip. They thought that because they pay the freight, and they thought they could get better freight rates if they held off a bit, and they started just running down the small amount of inventory they had. They ran out at the end of June, and they have started buying again. Clearly, if the conflict keeps going and the costs don't come down, it will see it. It goes up and down. It confuses people, frankly, as I'm sure you're all aware. That was another thing that caused a deferral into the H2, but not a loss of business in that.

Speaker #2: And they started just running down the small amount of inventory they had. Now, they ran out at the end of June, and so they have started buying again.

Speaker #2: But clearly, if the conflict keeps going and the costs don't come down, it will see. It goes up and down. It confuses people, frankly, as I'm sure you're aware.

Speaker #2: But that was another thing that caused a deferral into the second half. But there wasn't a lot of business in that. We did complete the £85 million equity raise.

Stephen Harris: We did complete the GBP 85 million equity raise on 30 March, which was a good thing. Got out from underneath the ridiculous debt situation we have, and combine that with GBP 39 million of debt equitization and write-off. Our balance sheet's in pretty good shape. We strengthened our go-to-market execution and geographic reach. We've been putting on sales channels, particularly in Asia, at quite a rate. We're very much underrepresented in Asia and have been for quite a few years, and we're piling that on now. We've got a good operation in Asia that's been built up, and it's very nice to see it happening. From small beginnings, we expect to get quite a lot of growth there. We've still keep going with the cost-saving initiatives.

Speaker #2: On the 30th of March, which was a good thing, we got out from underneath the ridiculous debt situation we had. And combine that with £39 million of debt equitization and write-off.

Speaker #2: And so our balance sheet's in pretty good shape. We strengthened our go-to-market execution and geographic reach. We've been putting on sales channels, particularly in Asia.

Speaker #2: They're quite a rate. We're very much underrepresented in Asia, and have been for quite a few years. We're piling that on now, and we've got a good operation in Asia that's being built up.

Speaker #2: It's very nice to see it happening from small beginnings. We expect to get quite a lot of growth there. We're still keeping on with cost-saving initiatives.

Speaker #2: We achieved about $3.5 million additional last year in the first half. And we expect to deliver the full-year savings of $8 million this year.

Stephen Harris: We achieved about GBP three and a half million additional to last year in the H1, and we expect to deliver the full-year savings of GBP 8 million this year. We don't see any problems with doing that. In fact, we are considering some further cost reductions, which we will announce once we're sure what we're doing on that. We've managed to get the inventory reduced by GBP 10 million. We've had far too much inventory, and that's been a target of ours, is to get the inventory down, and that's working quite well. We continue to accelerate the rate of innovation. We've got 26 new product lines scheduled for release this year. It's important to note, they're not just cosmetic, so you can't just paint a tripod camo green and call it a new product.

Speaker #2: We don't see any problems with doing that. In fact, we are considering some further cost reductions, which we will announce once we're sure what we're doing on that.

Speaker #2: We've managed to get the inventory reduced by $10 million. We've had far too much inventory, and that's been a target of ours—to get the inventory down.

Speaker #2: And that's working quite well, and we continue to accelerate the rate of innovation. So, we've got 26 new product lines scheduled for release this year.

Speaker #2: It's important to note they're not just cosmetic. So you can't just paint a tripod camo green and call it a new product. These are actually proper new products.

Stephen Harris: These are actually proper new products, and they tend to attract quite a lot of extra business. We should see that continuing to ramp in terms of the business on the back of these product lines. Of course, we need to get the production lines working properly, which I think we now have. I think it's important to go back to the first point there, to point out that we have now got rid of the problems on the Manfrotto one production line that are causing us all the problems. We should see that doing well in H2. Moving on to the next slide. We've got a quick bridge across the revenue here, which I'll talk you through. Starting on the left-hand side of the chart, we did discontinue a few brands.

Speaker #2: And they tend to attract quite a lot of extra business, so we should see that continuing to ramp up in terms of the business on the back of these product lines.

Speaker #2: Of course, we need to get the production lines working properly, which I think we now have. And I think it's important to go back to the first point there to point out that we have now gotten rid of the problems on the Manfrotto One production line.

Speaker #2: That are causing us all the problems, so we should see that doing well in the second half. Moving on to the next slide, we've got a quick bridge across the revenue here, which I'll talk you through.

Speaker #2: So, starting on the left-hand side of the chart, we did discontinue a few brands. The major ones that we discontinued were Joby and National Geographic.

Stephen Harris: The major ones that we discontinued were JOBY and National Geographic in 2025. You can see GBP 4.3 million of volume that we didn't get. On a like-for-like basis, basically, GBP 111.1 million. Then we got the Olympics and World Cup, gave us an extra GBP 5.5 million. There's still some more to come from that in H2. We had some volume loss on some product areas, GBP 5.3 million. I think it's quite important to just talk through that one a little bit. There are some product lines which are going backwards. They're not a surprise. I think one of the more notable ones is our photographic paper business. Now, as a sector, that sector is pretty much in terminal decline. It's being taken over by technology. You don't have to have a whole host of different paper colors as backdrops for photographers these days.

Speaker #2: In 2025, you can see the 4.3 million of volume that we didn't get. So, on a like-for-like basis, it's basically 111.1. And then we have the Olympics and World Cup.

Speaker #2: Gave us an extra $5.5 million. There's still some more to come from that in the second half, but we had some volume loss in some product areas.

Speaker #2: 5.3. I think it's quite important to just talk through that one a little bit. So, there are some product lines which are going backwards.

Speaker #2: And they're not a surprise. I think one of the more notable ones is our photographic paper business. Now, as a sector, that sector is pretty much in terminal decline.

Speaker #2: It's being taken over by technology. You don't have to have a whole host of different paper colors as backdrops for photographers these days. As long as they've got a plain background—typically white, gray, black, or green.

Stephen Harris: As long as they've got plain background, typically white, gray, black, or green, they can post-process in the color. Sometimes you can even do it in the camera. The need for all these different paper backdrops is disappearing quite rapidly, and we've seen quite a downturn in that business. It will just continue going down, I think, is my guess. We also saw some downturn in lighting and in some areas of the old bags that we had. We're expecting the bag side to come back in H2. Generally, we had some smaller brand movements downwards, which is, if you balance that, then with the fact that the rest of the business is all pointing north, which is a very good sign. Demand in terms of the supports, we can see the sell-out from the distribution channels is going up.

Speaker #2: They can post-process in the color. Sometimes you can even do it in the camera. So, the need for all these different paper backdrops is disappearing quite rapidly.

Speaker #2: And we've seen quite a downturn in that business, and it will just continue going down, I think—that's my guess. We also saw some downturn in lighting.

Speaker #2: And in some areas, with the old bags that we had, we're expecting the bag side to come back in the second half. But generally, we had some smaller brand movements downwards.

Speaker #2: Which is, if you balance that then with the fact that the rest of the business is all pointing north, which is a very good sign.

Speaker #2: So demand, in terms of the supports, we can see the sell-out from the distribution channels is going up. In our Cine business, it’s actually going up quite nicely.

Stephen Harris: In our cine business, it's actually going up quite nicely. The broadcast business, excluding the Middle East, is starting to look okay. Overall, I think the volume should be picking up now and going well for us. We had a bit of foreign exchange loss there, GBP 1.4 million, which brings us to the GBP 109.8 million. Moving on to the next slide. It allows me to hand over to Brian.

Speaker #2: And the broadcast business, excluding the Middle East, is starting to look okay. So overall, I think the volume should be picking up now and going well for us.

Speaker #2: We had a bit of foreign exchange loss there, $1.4 million. Which brings us to the $109.8 million. Moving on to the next slide, it'll ask me to hand over to Brian.

Speaker #3: Thank you, Steven. Moving on to slide 7, please. As you will be aware, we completed the refinancing at the end of March. We put the group on a more solid financial footing.

Brian Morgan: Thank you, Stephen. Moving on to slide seven, please. As you will be aware, we completed the refinancing at the end of March, which put the group in a more solid financial footing and brought to a conclusion an intense, prolonged period where the focus of management was on securing the financial survival of the business. The refinancing consisted of raising GBP 85 million of equity, GBP 21.9 million of debt was equitized by one of the lenders, and GBP 16.9 million was written off by the lenders. This reduced net debt overall by GBP 110 million. During the course of the refinancing, the group paid GBP 26 million of fees, including GBP 17 million alone in 2026. Immediately after the refinancing concluded, we repaid tranche B of the term loan, which was GBP 13.5 million, using some of the proceeds of the capital raise.

Speaker #3: I brought to a conclusion an intense, prolonged period where the focus of management was on securing the financial survival of the business. The refinancing consisted of raising £85 million of equity, £21.9 million of debt was equitized by one of the lenders, and £16.9 million was written off by the lenders.

Speaker #3: This reduced net debt overall by £110 million. During the course of the refinancing, the group paid £26 million of fees, including £17 million alone in 2026.

Speaker #3: Immediately after the refinancing concluded, we repaid the tranche fee of the term loan, which was $13.5 million, using some of the proceeds of the capital raise.

Speaker #3: This reduced the number of lenders down to one, and allows us to have more control over day-to-day treasury activities, in line with companies not in a distressed debt situation.

Brian Morgan: This reduced the number of lenders down to one and allows us to have more control over day-to-day treasury activities in line with companies not in a distressed debt situation. The debt facilities now consist of a GBP 31.5 million three-year term loan and a GBP 15 million three-year RCF facility. The only covenants on both these facilities until March 2028 is for the group to have a minimum liquidity of GBP 5 million. Moving on to slide eight, please. Revenue at GBP 109.9 million is lower than prior year, as Stephen explained in his bridge earlier on. Gross margin at 36% is higher than last year, as we benefited from savings from procurement initiatives and restructuring projects started last year. Operating expenses are also lower than the prior year as the savings from restructuring projects more than offset salary and other inflation.

Speaker #3: The debt facilities now consist of a £31.5 million three-year term loan and a £15 million three-year RTF facility. The only covenant on both these facilities until March 2028 is for the group to have a minimum liquidity of £5 million.

Speaker #3: Moving on to slide 8, please. Revenue at $109.9 million is lower than the prior year, as Steven explained in his bridge earlier on. Gross margin at 36% is higher than last year, as we benefited from some procurement initiatives and restructuring projects started last year.

Speaker #3: Operating expenses are also lower than the prior year, as the savings from restructuring projects more than offset salary and other inflation. Depreciation and amortization are lower than last year, as we impaired assets in December 2025.

Brian Morgan: Depreciation and amortization is lower than last year as we impaired assets in December 2025. Finally, on this slide, the net finance expense is higher than last year due to the amortization of financing fees and the write-off of the financing fees in relation to the repaid term loan tranche B. Going forward, we expect the charge to be significantly lower at around GBP 3 million per half year. Next slide, please. This EBITDA bridge shows the impact of the cost savings more than offsetting inflation, which included around 4% in wages and salaries in the H1 of the year, as well as the fact that we benefited from GBP 0.7 million exchange gains in the prior year, which did not repeat in the current year. On to slide 10. We use adjusted measures to explain performance and the items which impact operating profit are shown on this slide.

Speaker #3: And finally, on this slide, the net finance expense is higher than last year due to the amortization of financing fees and the write-off of the financing fees in relation to the repaid term loan tranche fee.

Speaker #3: Going forward, we expect the charge to be significantly lower, at around £3 million per half year. Next slide, please. This EBITDA bridge shows the impact of the cost savings more than offsetting inflation, which included around 4% in wages and salaries in the first half of the year.

Speaker #3: As well as the fact that we benefited from £0.7 million of exchange gains in the prior year, which did not repeat in the current year.

Speaker #3: And to slide 10: we use adjusted measures to explain performance. These items, and the items which impact operating profit, are shown on this slide.

Speaker #3: These adjustments are for items which, because of their nature, do not reflect the underlying performance of the business. The largest item this year is the benefit from the debt write-off taken of £16.9 million.

Brian Morgan: These adjustments are for items which, because of the nature, do not reflect the underlying performance of the business. The largest item this year is the benefit from the debt write-off taken of GBP 16.9 million. We had no impairment of assets in the H1 of 2026, compared with GBP 0.9 million in the prior year. The amortization of acquired intangibles has decreased year on year as a result of the impairment taken in December 2025, when most of the acquired intangible assets were written off. Restructuring in 2026 relates to projects undertaken to strengthen the commercial team and is lower than the cost taken in 2025, when we had a number of significant projects taking place to move production from the UK to Italy and Costa Rica. We will look at the cash impact on the next slide.

Speaker #3: We had no impairment of assets in the first half of 2026, compared with £0.9 million in the prior year. The amortization of acquired intangibles has decreased year on year as a result of the impairment taken in December 2025, when most of the acquired intangible assets were written off.

Speaker #3: Restructuring in 2026 relates to projects undertaken to strengthen the commercial scene and is lower than the cost taken in 2025, when we had a number of significant projects taking place to move production from the UK to Italy and Costa Rica.

Speaker #3: We will look at the cash impact on the next slide. In May 2026, we transferred the liabilities, and sorry, can you go back one, please?

Brian Morgan: In May 2026, we transferred the liabilities. I am sorry, can you go back one, please? In May 2026, we transferred the liabilities and assets of the Videndum UK defined benefit pension scheme to Clara-Pensions Group Limited. This secured the pension arrangements of the members of the scheme whilst removing any future funding calls on Videndum and the associated administered costs of running the scheme. The accounting valuation of the scheme was an asset based on actuarial assumptions and was written off along with the cost of the transfer when the scheme was transferred, resulting in a GBP 3.3 million accounting loss. Next slide, please. The group generated positive operating cash flow in H1 of the year, compared to an outflow in the same period in the prior year.

Speaker #3: Sorry. In May 2026, we transferred the liabilities and assets of the Addendum UK defined benefit pension scheme to Claro Pension Group Limited. This secured the pension arrangements of the members of the scheme, whilst removing any future funding calls on the Addendum and the associated administrative costs of running the scheme.

Speaker #3: The accounting valuation of the scheme was an asset, based on actuarial assumptions, and was written off along with the cost of the transfer when the scheme was transferred.

Speaker #3: Resulting in a £3.3 million accounting loss. Next slide, please. The group generated positive operating cash flow in the first six months of the year, compared to an outflow in the same period in the prior year.

Speaker #3: The inflow and trade working capital was higher than last year, as the business continues to focus on reducing customer terms. We expect further inflows in the second half as we continue to focus on inventory optimization.

Brian Morgan: The inflow in trade working capital was higher than last year as the business continues to focus on reducing inventory and managing supplier and customer terms. We expect further inflows in H2 as we continue to focus on inventory optimization. We have also provided some select financial guidance on H2 cash flows, which can be found on page 20 in the appendix to this presentation. Given the refinancing happened in the middle of the half, we have presented the cash flow opposite to separate the refinancing and other non-recurring items to better reflect the ongoing business. This assumes that the refinancing had happened at the beginning of last year using the current borrowing levels and interest rates. On this basis, the business would pay circa GBP 2 million per half year rather than the higher amounts of interest which were paid up to March 2026.

Speaker #3: We've also provided some select financial guidance on H2 cash flows, which can be found on page 20 in the appendix of this presentation.

Speaker #3: Given the refinancing happened in the middle of the half, we have presented the cash flow opposite to separate the refinancing and other non-recurring items, to better reflect the ongoing business.

Speaker #3: This assumes that the refinancing had happened at the beginning of last year. Using the current borrowing levels and interest rates, on this basis, the business would pay circa £2 million per half year, rather than the higher amounts of interest which were paid up to March 2026.

Speaker #3: Taxes are being excluded from this analysis, as there was a large refund in the prior year, and we are currently utilizing historical tax losses to offset tax payments.

Brian Morgan: Tax has been excluded from this analysis as there was a large refund in the prior year, we are currently utilizing historical tax losses to offset tax payments. The cash outflow from restructuring has come down as the major projects are starting to conclude, and this differs in the P&L charge as we accrue for charges for restructuring ahead of when the payments are being made. The cash flows, while still negative, are improving compared to the prior year as a result of improved EBITDA and working capital. Finally, to slide 12. This shows the evolution of our net debt over the last three reporting periods and the impact that the refinancing has had.

Speaker #3: The cash outflow from restructuring has come down, as major projects are starting to conclude. This differs from the P&L charge, as we accrue charges for restructuring ahead of when the payments are made.

Speaker #3: The cash flows, while still negative, are improving compared to the prior year, as a result of improved EBITDA and working capital.

Speaker #3: And finally, to slide 12. This shows the evolution of our net debt over the last three reporting periods, and the impact the refinancing has had.

Speaker #3: The level of cash the group holds has been stable over the last three reporting periods, and liquidity of £25 million at the end of June 2026 has headroom over and above the covenant of £5 million.

Brian Morgan: The level of cash the group holds has been stable at the last three reporting periods, and liquidity at GBP 25 million at the end of June 2026 has headroom over and above the covenant of GBP 5 million. With that, I will hand you back to Stephen.

Speaker #3: With that, I'll hand you back to Steven. Thank you very much, Brian. So, if we could go on to slide 14, I believe it is.

Stephen Harris: Thank you very much, Brian. If we could go on to slide 14, I believe it is. Thank you. Just a quick go through the strategic and operational priorities. These are unchanged from the last time I spoke. It's quite consistent. Now, they may come a change as we move forward. We'll talk about in a second. We have decided to keep a focus on the professional content creation markets, and we have exited the retail markets, the consumer markets, through the sale of JOBY and discontinuation of some of the other products. We're actually back to our wheelhouse, if you like. This is where this company started and has been very successful, and that's what we're focusing on now. We have accelerated the innovation in core categories.

Speaker #3: Thank you. So, just a quick go-through of the strategic and operational priorities. These are unchanged from the last time I spoke, so it’s quite consistent.

Speaker #3: Now, there may come a change as we move forward. We'll talk about that in a second. So basically, we have decided to give a focus to the professional content creation markets, and we have exited the retail markets—the consumer markets.

Speaker #3: Through the sale of Joby and the discontinuation of some of the other products, we're actually back to our wheelhouse, if you like. This is where this company started and has been very successful, and that's what we're focusing on now.

Speaker #3: We have accelerated the innovation in core categories. It's quite important because innovation came here, and now we've reinstigated it. The important point that's not stated on the slide, but which is very important, is that we have stopped doing the R&D work for the non-core categories.

Stephen Harris: It's quite important because innovation came to a halt at one point here, and now we reinstigated it. The important point that's unsaid on the slide, but which is very important, is we have stopped doing the R&D work for the non-core categories, which we were wasting a lot of money in just for declining sales. We're certainly strengthening our go-to-market execution and geographic reach, which I mentioned before. Particular focus on Asia for us there. We've got a focus on product cost. The important point, I think product cost reduction, in terms of hitting the P&L, is not great yet. One of the problems with that is that whilst we are renegotiating some contracts and waiting for other contracts to come to the end so that we can get the cost down, there is an inventory effect here. It takes time.

Speaker #3: Which we were wasting a lot of money on, just for declining sales. We're certainly strengthening our go-to-market execution and geographic reach, which I mentioned before.

Speaker #3: There's a particular focus on Asia for us there. And we've got a focus on product cost—important point, I think. Product cost reduction, in terms of hitting the P&L, is not great yet.

Speaker #3: And one of the problems with that is that, whilst we are renegotiating some contracts and waiting for other contracts to come to the end so that we can get the costs down, there is an inventory effect here.

Speaker #3: So it takes time. For example, in Feltra, in Italy, which is our largest production facility, it's a 12-month average cost inventory system. So it takes 12 months for the full savings to get through the inventory there before we start benefiting on the bottom line.

Stephen Harris: For example, in Feltre, in Italy, which is our largest production facility, it's a 12-month average cost inventory system, it takes 12 months for the full savings to get through the inventory there before we start benefiting on the bottom line. We are focusing on SKU rationalization. There is a lot of that to do. This company got into the habit of introducing products in the past and never discontinuing anything, and that's something that we are doing now, and we're simplifying the portfolio as well. We have a relentless focus on operational efficiency. If we move to the next slide, please. I'm very, very pleased to announce the appointment of our new Group Chief Executive, Jan Peter Tewes. He has a private equity background primarily, and he's got very good international experience.

Speaker #3: We are focusing on SKU rationalization; there is a lot of that to do. This company got into the habit of introducing products in the past and never discontinuing anything.

Speaker #3: And that's something that we are doing now. We're simplifying the portfolio as well, and we have a relentless focus on operational efficiency. So, if we move to the next slide, please.

Speaker #3: So, I'm very, very pleased to announce the appointment of our new Group Chief Executive, Jan Pieter Tuijs. He basically has a private equity background primarily, and he's got very good international experience.

Speaker #3: He's based in Brussels, as it happens, which is closer to the city than my house is in the UK. But there you go. Yeah.

Stephen Harris: He's based in Brussels as it happens, which is closer to the city than my house is in the UK. There you go. I don't live that far away. It's a time issue. He's got extensive leadership experience. He was a previous chief executive, and his strong points are in channel management, which is a must for us, in sales and brand management, and driving operational improvement. We believe he's ideally suited for what we need in this company at this point, because what we need is to improve that sales execution, then channel management execution, and brand management. Really looking forward to him starting. Starts on 17 August. I'm going back to non-executive chairman, and I'll be working to onboard Jan Peter and helping him as much as he needs me. Next slide, please. Moving to the summary and outlook.

Speaker #3: And I don't live that far away, so time isn't an issue. But he's got extensive leadership experience. He was a previous chief executive. His strong points are in channel management—which is a must for us—as well as sales, brand management, and driving operational improvement.

Speaker #3: So we believe he’s ideally suited for what we need in this company at this point, because what we need is to improve that sales execution, channel management execution, and brand management.

Speaker #3: I'm really looking forward to him starting. He starts on the 17th of August. I'm going back to non-executive chairman, and I'll be working to onboard Jan Pieter and helping him as much as he needs me.

Speaker #3: Next slide, please. So, moving to the summary and outlook. Let's go to the next slide. These are, out of those significant events, the items that we think are the key achievements.

Stephen Harris: Let's go to the next slide. These are out of those significant events, the items that we think are the key achievements. This is just a repeat of those items that were at the beginning of the presentation. If we move on to the outlook, please, the next slide. This is it. I'm not going to go through it line by line. It's printed up there and in the release. I think the only thing I would call out about this is that we see the H1 this year as being a bit of an abomination and a one-off. We don't expect to see this kind of performance again. We'll be improving through the H2. The key point, I think, is looking to the medium term.

Speaker #3: This is just a repeat of those items that were at the beginning of the presentation. And if we move on, then, to the outlook, please.

Speaker #3: The next slide—this is it. I'm not going to go through it line by line; it's printed up there and in the release. I think the only thing I would call out about this is that we see the first half of this year as being a bit of an abomination and a one-off.

Speaker #3: We don't expect to see this kind of performance again. We'll be improving through the second half, but the key point, I think, is looking to the medium term.

Speaker #3: We see no reason to change our target of $350 million in sales, and mid-teens EBITDA margins that will follow as a result of that.

Stephen Harris: We see no reason to change our target of GBP 350 million in sales and mid-teen EBITDA margins that will follow as a result of that. With that, we'll bring this presentation to a close. We're not going to do questions and answers today. We are having a roadshow in the 1st week of September. We'll be coming around to see shareholders that want to see us. If you'd like to have a Teams presentation or a call, please contact us and we'll fit you in as we can. Thank you very much, everybody, and I look forward to seeing you soon.

Speaker #3: So with that, we'll bring this presentation to a close. We're not going to do questions and answers today, but we are having a roadshow in the first week of September.

Speaker #3: We'll be coming around to see shareholders who want to see us. If you'd like to have a Teams presentation or a call, please contact us, and we'll fit you in as we can.

Speaker #3: Thank you very much, everybody. I look forward to seeing you soon.

Operator: This concludes today's conference call. Thank you all for joining. You may now disconnect.

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