Full Year 2026 Volution Group PLC Preliminary Earnings Call

October 8, 2026

Speaker #1: Randy, I think it's my 25th, and Andy's 15th, and we haven't got where out. Just to be clear, that doesn't— it's just longevity, not where out.

Speaker #1: So we're really pleased to be here this morning, and we'll take you through the story in a very similar format that we've done previously.

Speaker #1: So overview: I've got the relatively easy bit where I'll talk about the overview and what's been happening, hand over to Andy for a little bit more detail on the financial review.

Speaker #1: I'll come back on the business review, and then summary and outlook. And we've got something a little bit different just at the end of the presentation, so I'll keep you sort of guessing.

Speaker #1: For that. But look, it was another really good year for us. A strong earnings growth, margin expansion, and strategic progress. We're absolutely delighted with the performance that we had in FY26.

Speaker #1: Revenue operating profit EPS and cash generation all up greater than 15%. From our perspective, you look at our long-term targets, it doesn't really get much better than that in terms of our long-term targets.

Speaker #1: To be above 15% on those metrics. And continuing our long-term compounding growth performance. Organic growth 2.8%, just slightly below the bottom end of our 3 to 5% range.

Speaker #1: But demonstrating the benefits of our diverse geographic end market exposure. And we'll cover that in a little bit more detail. Operating margin progression 90 basis points, now 23.2%.

Speaker #1: Good progress in the second half of the year. Leveraging our scale, our expertise in procurement, engineering, and product range. And our second largest acquisition to date, AC Industries, in Australia.

Speaker #1: That was in February, so that was in the financial year 26. And then right at the beginning of the financial year, first working day, actually second working day of FY27, GetAir in Germany, a company that we've quoted for many years.

Speaker #1: Delighted to now have that inside our group. But look, continuing to deliver strong returns and compounding growth. A little bit about our clear growth focus.

Speaker #1: And we talk about organic growth. We believe we've got an agile, decentralized approach, very close intimate focus on local markets. And organic growth of 2.8% on a constant currency basis in the year.

Speaker #1: Value-adding acquisitions. I talked about AC Industries very excited about that proposition and how it performed in the year, delivering an 11% inorganic revenue growth.

Speaker #1: And that was only for half the year. We only had that opportunity inside from the beginning of February, so at the second half of the year.

Speaker #1: And operational excellence. I think of this as about running the business well, so product cost leadership through sourcing, engineering, and manufacturing, incremental efficiencies around process and operations, and our people underpinning that significantly strong margin performance at 23.2% in the year.

Speaker #1: Investing in our compounding growth story. Why do we believe we're a compounding growth story? I'll come back to the chart at the bottom. But what's underpinning this?

Speaker #1: We're in growing markets supported by long-term structural tailwinds, and we could make you maybe cover that off a little bit more detail. But if you look at AC Industries acquired more recently, this is ventilation mining systems in copper and gold mining.

Speaker #1: I think the copper price very recently hit its all-time highest price ever. We see with the energy transition that's a very strong place to be.

Speaker #1: Increasing diversified geographic and end market exposure. That's really important for us. If I look at my early years in Volution, joined in 2008, it was a UK-centric residential play.

Speaker #1: If you look at where we are today, we're providing ventilation systems in mines in Australia. We've had our first data center order for ventilation and cooling for Australian data centers.

Speaker #1: We've got a huge wide breadth of end markets products and different applications. We're pure play. We focus on ventilation and air. I've said this throughout.

Speaker #1: I've had it over the time. We're not looking at anything else. We want to be providing healthy air, sustainably. It's about air quality. It's about leveraging scale.

Speaker #1: Intimacy and expertise and scale benefits in a specific area that we believe we can be very good at. Continues to be a capital light model.

Speaker #1: Strong margins, highly cash generative. I've talked to you about the metrics. All being well over 15% in the year. And disciplined capital allocation at M&A capability.

Speaker #1: We did 2 deals since the last time we sat in front of you. There's other deals that we haven't done, and that's really to do with discipline and not doing deals just for the sake of it.

Speaker #1: So if you look at the adjusted earnings per share over time, 15.4% growth in the year. That's absolutely at the high end of our expectations.

Speaker #1: We have a long-term target to be over 10%, but we've compounded now over 10 years at 11.7%. And that goes back further. We have a debate about how far back do we go.

Speaker #1: But if you look at 14 when we listed through to now, or indeed if you go back prior, as a private company, that compounding theme has been consistent throughout.

Speaker #1: We talk about our 3 Ps, although there's 4 here, but we talk about 3 Ps: product, planet, and people. Delivering our purpose around healthy air, sustainably.

Speaker #1: And just a little bit about what's happening. So these are metrics that we put out. So on revenue from low carbon products, it looks as if it's come down over the last couple of years, but that's partly to do with the composition of the group and FanTech, which is our largest acquisition that we made in December 2024.

Speaker #1: So on a like-for-like basis, actually our low carbon revenue has been increasing, but we actually acquired some propositions that have a lower proportion of low carbon revenue, and that's why we're only at 72.1% of our revenue from low carbon products.

Speaker #1: Particularly pleased about carbon intensity. This is in line with our long-term SBTI targets and we had a reduction in the amount of CO2 per million pounds of revenue down to 10.5.

Speaker #1: So that's a very strong improvement in sustainability and carbon reduction in the year. When we move to people, we've actually updated our internal values around customer excellence, calibration, continuous improvement, and ownership.

Speaker #1: But a disappointing number here. I'm not particularly happy about the fact that our accident frequency rate increased in the year, and we've been redoubling our efforts internally.

Speaker #1: With a view of improving that, we had a downward trend through to 25, and then regrettably we've stepped up to 0.29 frequency rate in 2026.

Speaker #1: So more that we can do there and absolutely on that journey. And then finally, recycled plastics in our products. And this is really important.

Speaker #1: You'll remember that recycled plastics for us are a huge hedge to the higher costs of virgin plastics. Quite a few organizations coming out more recently over the last 6 to 9 months talking about material cost inflation relative to virgin plastics.

Speaker #1: We try to insulate ourselves here by having a recycled content. Although it dropped to 81.3%, in absolute terms, the amount of recycled plastic that we were using has increased, but we are actually molding more in our facilities.

Speaker #1: And the ratio dropped back to 81.3%. It's still an outstanding achievement. 80% of what we process in our facilities is from a recycled source.

Speaker #1: But can go higher. We're still committed to increasing that over time. And as you can see there, the 10-year increase is quite phenomenal. And of course, it's lower diminishing returns as we move forward, but still more that we can do in the future.

Speaker #1: So as I say, I had the easy bit. I think this is a really compelling set of results. I'm going to hand over to Andy now, take you through the financial review in a little bit more detail.

Speaker #1: And then I'll come back afterwards and just go through the 3 geographic areas in a little bit more detail.

Speaker #2: Good morning, all. Thank you, Ronnie. I don't think this is the hard bit, though, if that was the easy bit. So really positive set of numbers, which I'm going to spend a few minutes walking you through.

Speaker #2: So starting with this slide. Two words that Ronnie's used a few times in the introductory section were compounding and growth. And look, I make no apologies for using them again now.

Speaker #2: That's what we're aiming to deliver. And this is showing track record over the last 5 years. So obviously, the 4 on the left there, revenue, operating profit, earnings per share, and cash flow.

Speaker #1: Ability and carbon reduction in the year. When we move to people, we've actually updated our internal values around customer excellence, calibration, collaboration, continuous improvement, and ownership.

Ronnie George: Ability and carbon reduction in the year. When we move to people, we have actually updated our internal values around customer excellence, collaboration, continuous improvement, and ownership. But a disappointing number here. I am not particularly happy about the fact that our accident frequency rate increased in the year, and we have been redoubling our efforts internally with a view of improving that. We had a downward trend through to 2025, and then regrettably, we stepped up to 0.29 frequency rate in 2026. So more that we can do there, and absolutely on that journey. Then finally, recycled plastics in our products. This is really important. You will remember that recycled plastics for us are a huge hedge to the higher costs of virgin plastics. Quite a few organizations coming out more recently over the last six to nine months talking about material cost inflation relative to virgin plastics.

Speaker #2: And over the 5 years, shown on this chart here, really, really strong double-digit growth in all 4 of those. And then if you like, the 2 on the right-hand side, so the operating margin performance and the return on invested capital.

Speaker #1: But it's a disappointing number here. I'm not particularly happy about the fact that our accident frequency rate increased in the year, and we've been redoubling our efforts internally with a view to improving that.

Speaker #2: So delivering that growth, but preserving or actually, in the case of margin, continuing to improve on those key sort of quality of earnings and quality of returns metrics.

Speaker #1: We had a downward trend through to 2025, and then, regrettably, we've stepped up to a 0.29 frequency rate in 2026. So, there's more that we can do there, and we're absolutely on that journey.

Speaker #2: So I think a really powerful slide, which demonstrates in-year performance, which we'll talk more about now, but also I say that sort of consistency and compounding of the growth performance.

Speaker #1: And then finally, recycled plastics in our products. And this is really important. You'll remember that recycled plastics for us are a huge hedge against the higher costs of virgin plastics.

Speaker #2: So looking in a little bit more detail at year-over-year 2026 versus 2025, we'll go through the breakdown and the analysis of the revenue, the operating profit, the cash, et cetera, in later slides.

Speaker #1: Quite a few organizations have come out more recently, over the last six to nine months, talking about material cost inflation relative to virgin plastics. We try to insulate ourselves here by having recycled content, although it dropped to 81.3%.

Ronnie George: We try to insulate ourselves here by having a recycled content. Although it dropped to 81.3%, in absolute terms, the amount of recycled plastic that we were using has increased. But we are actually molding more in our facilities, and the ratio dropped back to 81.3%. It is still an outstanding achievement. 80% of what we process in our facilities is from a recycled source, but can go higher. We are still committed to increasing that over time. As you can see there, the 10-year increase is quite phenomenal. Of course, it is law of diminishing returns as we move forward, but still more that we can do in the future. As I say, I had the easy bit. I think it is a really compelling set of results.

Speaker #2: So I won't dwell on that too much here. Couple of pieces to pick out. So look, leverage, this shows you where we were on the 31st of July, so 1.5 times leverage.

Speaker #1: In absolute terms, the amount of recycled plastic that we were using has increased, but we are actually molding more in our facilities, and the ratio dropped back to 81.3%.

Speaker #2: And I think probably important to context that in the last 2 years, we've done our 2 biggest acquisitions ever. We've invested over 200 million pounds in those 2 acquisitions.

Speaker #1: It's still an outstanding achievement. Eighty percent of what we process in our facilities is from a recycled source. But it can go higher. We're still committed to increasing that over time.

Speaker #2: And yet we still closed the year with a leverage at 1.5 times on an old money ex-leases basis. Full transparency, of course, this is pre the get-there transaction.

Speaker #1: As you can see there, the 10-year increase is quite phenomenal. Of course, there are lower, diminishing returns as we move forward, but there is still more that we can do in the future.

Speaker #2: Immediately post that, we'd have been more like 1.8 times. But as you know, and as again, we'll sort of show later, that constant and consistent cash generation profile of the business means that we do still feel there's plenty of headroom and capacity on the M&A side of things.

Speaker #1: So, as I say, I had the easy bit. I think this is a really compelling set of results. I'm going to hand over to Andy now, who will take you through the financial review in a little bit more detail, and then I'll come back afterwards and go through the three geographic areas in a little bit more detail.

Ronnie George: I am going to hand over to Andy now, take you through the financial review in a little bit more detail, and then I will come back afterwards and just go through the three geographic areas in a little bit more detail.

Speaker #2: Finance costs fourth bullet point down there were higher in the year, and that is a function of that investment in acquisitions. And then dividend, we're not a dividend stock, but I think really important to show that we can continue to have this sort of slightly dividend increasing fractionally ahead of earnings year by year, whilst continuing to, as I say, deploy our capital to acquisitions.

Speaker #2: Good morning, all. Thank you, Ronnie. I don't think this is the hard bit, though, if that was the easy bit. So, a really positive set of numbers, which I'm going to spend a few minutes walking you through.

Andy O'Brien: Morning, all. Thank you, Ronnie. I do not think this is the hard bit, though, if that was the easy bit. Really positive set of numbers, which I am going to spend a few minutes walking you through. Starting with this slide, and the two words that Ronnie has used a few times in the introductory section were compounding and growth. Look, I make no apologies for using them again now. That is what we are aiming to deliver. This is showing chart, track record over the last five years. So obviously the four on the left there, revenue, operating profit, earnings per share, and cash flow. Over the five years shown on this chart here, really strong double-digit growth in all four of those. Then if you like, the two on the right-hand side, so the operating margin performance and the return on invested capital.

Speaker #2: So, starting with this slide—and two words that Ronnie's used a few times in the introductory section were "compounding" and "growth." And look, I make no apologies for using them again now.

Speaker #2: So revenue breakdown. So clearly, on the left-hand side, how does our organic growth break down across the 3 regions? And look, if you were to glance back at the composition of that growth over the last 2 years, you'll see a very different picture.

Speaker #2: That's what we're aiming to deliver. This slide shows our track record over the last five years. Obviously, the four metrics on the left—revenue, operating profit, earnings per share, and cash flow—are highlighted.

Speaker #2: And over the five years shown on this chart here, we've seen really strong double-digit growth in all four of those. And then, if you like, the two on the right-hand side: the operating margin performance and the return on invested capital.

Speaker #2: So you'd have seen perhaps UK in the lead, and the others slightly behind. And this year, look, Ronnie will talk much more about the dynamics of the individual markets later.

Speaker #2: But you see a bit of a rotation. And look, would we love all of our regions to be growing phenomenally? Of course we would.

Speaker #2: So, delivering that growth, but preserving—or actually, in the case of margin, continuing to improve—on those key quality of earnings and quality of returns metrics.

Andy O'Brien: Delivering that growth, but preserving or actually in the case of margin, continuing to improve on those key quality of earnings and quality of returns metrics. I think a really powerful slide, which demonstrates in-year performance, which we will talk more about now, but also, I would say that sort of consistency and compounding of the growth performance. Looking in a little bit more detail at year-over-year 2026 versus 2025. We will go through the breakdown and the analysis of the revenue, the operating profit, the cash, et cetera, in later slides. I will not dwell on that too much here. Couple of pieces to pick out. Look, leverage, this shows you where we were on 31 July, so 1.5x leverage. I think probably important to context that in the last two years, we have done our two biggest acquisitions ever.

Speaker #2: But I think what you really do see here and I think the last few years really do demonstrate this is the benefit of that diverse portfolio both geographically, but also end market and application-wise.

Speaker #2: So I think a really powerful slide which demonstrates in-year performance, which we'll talk more about now, but also, I say, that sort of consistency and compounding of the growth performance.

Speaker #2: In terms of the breakdown of that organic growth between price and volume, it's roughly equal. So 2.8% organic growth, pretty evenly distributed between say price contribution and then volume.

Speaker #2: So, looking in a little bit more detail at year-over-year—2026 versus 2025—we'll go through the breakdown and the analysis of the revenue, the operating profit, the cash, et cetera, in later slides.

Speaker #2: For once, actually, foreign exchange was helpful. I think that probably is the first in my 7 years that it's been in our favor. And then the inorganic contribution there is the first 6 months of AC Industries which we'll have again a further 6-month contribution in 2027.

Speaker #2: So I won't dwell on that too much here. A couple of pieces to pick out. So, look, leverage—this shows you where we were on the 31st of July: 1.5 times leverage.

Speaker #2: And I think it's probably important to add some context: in the last two years, we've completed our two biggest acquisitions ever. We've invested over £200 million in those two acquisitions.

Speaker #2: But also the 4 months of Fantech through to December 2025. Operating profit. Again, look, we talked about this in the highlights earlier. The further nudging up well, I suppose 90 basis points is a bit more than a nudge.

Andy O'Brien: We have invested over GBP 200 million in those two acquisitions, and yet we still closed the year with a leverage at 1.5x on an ex-leases basis. Full transparency, of course, this is pre the getAir transaction. Immediately post that, we would have been more like 1.8x. As you know, and as again, we will show later, that constant and consistent cash generation profile of the business means that we do still feel there is plenty of headroom and capacity on the M&A side of things. Finance costs, fourth bullet point down there, were higher in the year, and that is a function of that investment in acquisitions.

Speaker #2: And yet we still closed the year with leverage at 1.5 times, on an old money ex-leases basis. Full transparency, of course, this is pre-Get Air transaction; immediately post that, we'd have been more like 1.8 times.

Speaker #2: But the further improvement of the group operating margin to say that 23.2% level. So 2.8% constant currency revenue growth coming through at 6.3% constant currency profit growth, if you want to think about it that way.

Speaker #2: But as you know, and as, again, we'll sort of show later, that constant and consistent cash generation profile of the business means that we do still feel there's plenty of headroom and capacity on the M&A side of things.

Speaker #2: Bottom left section of the chart, there is really just a try and give this a bit of complexion and detail on a region by region basis.

Speaker #2: Finance costs—fourth bullet point down—were higher in the year, and that is a function of that investment in acquisitions. And then dividend: we're not a dividend stock, but I think it's really important to show that we can continue to have this sort of slightly increasing dividend, fractionally ahead of earnings year by year, whilst continuing to, as I say, deploy our capital to acquisitions.

Speaker #2: First and really, really important message is all 3 regions expanded their margins on an organic basis. The UK, I think that 230 basis points improvement on the back of a business where revenue was flat.

Andy O'Brien: Dividend, we are not a dividend stock, but I think really important to show that we can continue to have this sort of slightly dividend increasing fractionally ahead of earnings year by year whilst continuing to, as I say, deploy our capital to acquisitions. Revenue breakdown. Clearly on the left-hand side, how does our organic growth break down across the three regions? Look, if you were to glance back at the composition of that growth over the last two years, you will see a very different picture. You would have seen perhaps UK in the lead and the other slightly behind. This year, Ronnie will talk much more about the dynamics of the individual markets later. You see a bit of a rotation and, look, would we love all of our regions to be growing phenomenally? Of course, we would.

Speaker #2: So I think that is absolutely testament to the delivery that Ronnie talked about earlier in terms of product cost initiatives, efficiencies, whether that's in the factories or the back office.

Speaker #2: So, revenue breakdown. Clearly, on the left-hand side, how does our organic growth break down across the three regions? And look, if you were to glance back at the composition of that growth over the last two years, you'll see a very different picture.

Speaker #2: And it's also continuing to push up the premiumization, if you like, of the product range that we're selling. Continental Europe, pretty consistent year over year.

Speaker #2: There's obviously quite a spread and diversity of activities that we have in continental Europe. But good to see that that margin nudging up slightly.

Speaker #2: So you'd have seen, perhaps, the UK in the lead and the others slightly behind. And this year—look, Ronnie will talk much more about the dynamics of the individual markets later.

Speaker #2: And then in Australasia, we've given you this year and last year, but we've also in the slightly lighter shaded blue there, given you 2026 on an organic basis.

Speaker #2: But you see a bit of a rotation. And look, would we love all of our regions to be growing phenomenally? Of course we would.

Speaker #2: But I think what you really do see here, and I think the last few years really do demonstrate this, is the benefit of that diverse portfolio, both geographically but also end-market and application-wise.

Andy O'Brien: I think what you really do see here, and I think the last few years really do demonstrate this, is the benefit of that diverse portfolio, both geographically but also end market and application wise. In terms of the breakdown of that organic growth between price and volume, it is roughly equal. So 2.8% organic growth, pretty evenly distributed between, say, price contribution and then volume. For once, actually, foreign exchange was helpful. I think that probably is the first in my seven years that it has been in our favor. The inorganic contribution there is the first six months of ACI, which will have, again, a further six-month contribution in 2027, but also the four months of Fantech through to December 2025. Operating profit. Again, look, we talked about this in the highlights earlier, the further nudging up.

Speaker #2: So effectively, that is essentially excluding the 6 months of AC Industries. AC Industries did come in at a premium to our group margin, which is unusual.

Speaker #2: When we're at 23.2%, but this was a premium. But even if you take that out, so look, that moved us that benefited us by about 60 basis points in the year.

Speaker #2: In terms of the breakdown of that organic growth between price and volume, it's roughly equal. So, 2.8% organic growth, pretty evenly distributed between price contribution and then volume.

Speaker #2: But there's still about 100 basis points of underlying margin improvement there, which is great to see. And look, the biggest element of that, we've talked over the last couple of years about how when Fantech came into the group, it had a good margin, a strong margin, but it wasn't quite at our group levels.

Speaker #2: For once, actually, foreign exchange was helpful. I think that probably is the first time in my seven years that it's been in our favor. And then the inorganic contribution there is the first six months of AC Industries, which we'll have again with a further six-month contribution in 2027.

Speaker #2: And I think this amongst other things is early evidence and proof points of us doing what we said we would, which is to sort of move that margin in an upward direction.

Speaker #2: But also the four months of Fantech through to December 2025. Operating profit — so again, look, we talked about this in the highlights earlier. The further nudging up, well, I suppose 90 basis points is a bit more than a nudge, but the further improvement of the group operating margin to, say, that 23.2% level.

Speaker #2: Moving on to cash, yeah, so really, really strong cash generation performance again. This year, so our cash conversion target of 90%. We delivered 107% this year.

Andy O'Brien: Well, I suppose 90 basis points is a bit more than a nudge, but the further improvement of the group operating margin to, say, that 23.2% level. So 2.8% constant currency revenue growth coming through at 6.3% constant currency profit growth, if you want to think about it that way. The bottom left section of the chart there is really just to try and give this a bit of complexion and detail on a region-by-region basis. First, and really, really important message is all three regions expanded their margins on an organic basis. The UK, I think that 230 basis points improvement on the back of a business where revenue was flat.

Speaker #2: Good, good working capital control. Capex probably actually a million or 2 lighter than we expected it to be. So we would normally think of spending somewhere in the sort of 9, 10, 11 million pound range.

Speaker #2: So, 2.8% constant currency revenue growth, coming through at 6.3% constant currency profit growth, if you want to think about it that way. The bottom left section of the chart is really just to try and give this a bit of complexion and detail on a region-by-region basis.

Speaker #2: And that's probably just a function of the timing of our facility investment in ERI and North Macedonia. There's a bit more of that to come in 2027.

Speaker #2: But look, still, we're going to continue spending of that magnitude on a capex side of things. And then over on the right-hand side, of course, the big bar there is the 105 million spend in the year on acquisitions.

Speaker #2: First and really, really important message is all three regions expanded their margins on an organic basis. The UK, I think that 230 basis points improvement on the back of a business where revenue was flat.

Speaker #2: So that is 75 million roughly speaking on AC Industries and then 30 million being the deferred element of the Fantech consideration. Because when we brought that in 2024, there was an obligation to pay the remaining 60 million Aussie dollars 12 months later.

Speaker #2: So, I think that is absolutely testament to the delivery that Ronnie talked about earlier in terms of product cost initiatives and efficiencies, whether that's in the factories or the back office.

Andy O'Brien: I think that is absolutely testament to the delivery that Ronnie talked about earlier in terms of product cost initiatives, efficiencies, whether that is in the factories or the back office, and it is also continuing to push up the premiumization, if you like, of the product range that we are selling. Continental Europe, pretty consistent year over year. There is obviously quite a spread and diversity of activities that we have in Continental Europe, but good to see that margin nudging up slightly. Then in Australasia, we have given you this year and last year, but we have also, in the slightly lighter shaded blue there, given you 2026 on an organic basis. So effectively, that is essentially excluding the six months of ACI. ACI did come in at a premium to our group margin, which is unusual when we are at 23.2%, but this was a premium.

Speaker #2: And it's also continuing to push up the premiumization, if you like, of the product range that we're selling. Continental Europe—pretty consistent, year over year.

Speaker #2: But as I say, the upshot of all of that is we've had one of our most exciting years on an M&A investment perspective, but we still end the year in a very, very healthy balance sheet position.

Speaker #2: There's obviously quite a spread and diversity of activities that we have in continental Europe, but it's good to see that margin nudging up slightly.

Speaker #2: Returns on invested capital, super. Important metric for us. And I suppose the bullets on the right probably capture the key takeaways I'd give you on this slide here.

Speaker #2: And then, in Australasia, we've given you this year and last year, but we've also, in the slightly lighter shaded blue there, given you 2026 on an organic basis.

Speaker #2: So overall, the ROIC improved by 20 basis points. Now, we've always said if we've got a return up in the sort of 25% and above level, if we're buying businesses at 8, 9, 10 times trailing earnings, they will or should be diluted, actually.

Speaker #2: So, effectively, that is essentially excluding the six months of AC Industries. AC Industries did come in at a premium to our group margin, which is unusual when we're at 23.2%, but this was a premium.

Speaker #2: I think the fact that AC Industries was only a 40 basis points impact in the year partly because it's half the year, but actually part of it is testament to the very low multiple that we paid for buying what is a high-quality asset there.

Speaker #2: But even if you take that out—so look, that moved us, that benefited us by about 60 basis points in the year. But there's still about 100 basis points of underlying margin improvement there, which is great to see.

Andy O'Brien: Even if you take that out, that benefited us by about 60 basis points in the year, but there is still about 100 basis points of underlying margin improvement there, which is great to see. The biggest element of that, we have talked over the last couple of years about how when Fantech came into the group, it had a good margin, a strong margin, but it was not quite at our group levels. I think this, amongst other things, is early evidence and proof points of us doing what we said we would, which is to sort of move that margin in an upwards direction. Moving on to cash. Really, really strong cash generation performance again this year. Our cash conversion target of 90%, we delivered 107% this year. Good working capital control.

Speaker #2: And look, the biggest element of that—we've talked over the last couple of years about how when Fantech came into the group, it had a good margin, a strong margin, but it wasn't quite at our group levels.

Speaker #2: So 40 basis points dilution because of AC Industries. 20 basis points improvement on Fantech itself. And I think that is, again, coming back to that margin, improvement during the course of the year.

Speaker #2: And I think this, amongst other things, is early evidence and proof points of us doing what we said we would, which is to sort of move that margin in an upward direction.

Speaker #2: And then 40 basis points of other organic improvement outside of that. So look, we're really, really important metric to us. And I think we're very pleased to still be north of 25% after the busy couple of years that we've had M&A-wise.

Speaker #2: Moving on to cash—so, really, really strong cash generation performance again this year. Our cash conversion target is 90%, and we delivered 107% this year.

Speaker #2: And I think there's probably not too much to say here because this really does just sort of wrap up what we've already covered. But this is where we were in FY26 against those key financial metrics that we sort of pride so heavily.

Speaker #2: Good, good working capital control. Capex is probably actually a million or two lighter than we expected it to be. So we would normally think of spending somewhere in the sort of £9, £10, £11 million range.

Andy O'Brien: CapEx probably actually GBP 1 or 2 million lighter than we expected it to be. So we would normally think of spending somewhere in the sort of GBP 9, 10, 11 million range, and that is probably just a function of the timing of our facility investment in ERI in North Macedonia. There is a bit more of that to come in 2027. Still, we are going to continue spending of that magnitude on a CapEx side of things. Then over on the right-hand side, of course, the big bar there is the GBP 105 million spend in the year on acquisitions. So that is GBP 75 million, roughly speaking, on ACI, and then GBP 30 million being the deferred element of Fantech consideration, because when we bought that in 2024, there was an obligation to pay the remaining AUD 60 million 12 months later.

Speaker #2: All of them at or above target with the slight exception of organic growth, but again, we'll talk more about that shortly. But 2.8%, very close to our sort of 3% to 5% target.

Speaker #2: And that's probably just a function of the timing of our facility investment in ERI and North Macedonia. There's a bit more of that to come in 2027, but look, still, we're going to continue spending of that magnitude on the CapEx side of things.

Speaker #2: And all the others sort of looking very nicely ahead. So with that, I'll hand over to Ronnie. Thanks.

Speaker #2: And then, over on the right-hand side, of course, the big bar there is the £105 million spend in the year on acquisitions. So that is £75 million, roughly speaking, on AC Industries, and then £30 million being the deferred element of the Fantech consideration. Because when we bought that in 2024, there was an obligation to pay the remaining $60 million AUD twelve months later.

Speaker #1: Thanks, Andy. A little bit more detail about the business. And I was listening to Andy taking you through the financial results. And they are quite frankly pretty outstanding results.

Speaker #1: I've been doing this for a long time, not just involution, but in the industrial world. And when I look at the sort of repeatability and consistency of our results over time, I thought why do we have that level of confidence?

Speaker #2: But, as I say, the upshot of all of that is we've had one of our most exciting years from an M&A investment perspective, but we still end the year with a very, very healthy balance sheet.

Andy O'Brien: But as I say, the upshot of all of that is we have had one of our most exciting years on an M&A investment perspective, but we still end the year in a very, very healthy balance sheet position. Returns on invested capital, super important metric for us. I suppose the bullets on the right probably capture the key takeaways I give you on this slide here. So overall, the ROIC improved by 20 basis points. Now, we have always said, if we have got a return up in the sort of 25% and above level, if we are buying businesses at 8, 9, 10 times trailing earnings, they will or should be dilutive.

Speaker #1: And we'll talk about some of the market difficulties in a moment. It's not easy. And then I was thinking to myself, how many of the last 10 years have been easy?

Speaker #2: Position. Returns on invested capital—super important metric for us. And I suppose the bullets on the right probably capture the key takeaways I give you on this slide here.

Speaker #1: Market being really quite punchy and supporting us and providing that additional strength. And I guess the point I'm trying to make there is that it's the way in which we run our business, the choices we make about the markets that we want to be in, the decisions we make and I was pleased to have some of the team along today, Martin, put your hand up there.

Speaker #2: So, overall, the ROIC improved by 20 basis points. Now, we've always said, if we've got a return up in the sort of 25% and above level, if we're buying businesses at 8, 9, 10 times trailing earnings, they will—or should be—diluted, actually.

Speaker #1: But Martin's the group technical director and Lee's put up with me for 19 years now, 18 years as the business development director. But look, we're really confident about the outlook for our business.

Andy O'Brien: Actually, I think the fact that AC Industries was only a 40 basis points impact in the year, partly because it is half a year, but actually part of it is testament to the very low multiple that we paid for buying what is a high-quality asset there. So 40 basis points dilution because of AC Industries, 20 basis points improvement on Fantech itself, and I think that is, again, coming back to that margin improvement during the course of the year. Then 40 basis points of other organic improvement outside of that. So look, really, really important metric to us, and I think we are very pleased to still be north of 25% after the busy couple of years that we have had M&A-wise. I think there is probably not too much to say here because this really does just sort of wrap up what we have already covered.

Speaker #2: I think the fact that AC Industries was only a 40 basis points impact in the year is partly because it's half the year, but actually part of it is testament to the very low multiple that we paid for buying what is a high-quality asset there.

Speaker #1: Almost irrespective of the market. And even if the market is to be quite difficult in certain areas, it's about that agility and the choices that we make and the way in which we run our business.

Speaker #2: So, 40 basis points dilution because of AC Industries, 20 basis points improvement on Fantech itself, and I think that is, again, coming back to that margin improvement during the course of the year.

Speaker #1: And one of the things that was really important to us was increasing geographic diversity. When I joined Volution in 2008, it was two UK ventilation brands.

Speaker #2: And then 40 basis points of other organic improvement outside of that. So, look, it's a really, really important metric to us, and I think we're very pleased to still be north of 25% after the busy couple of years that we've had, M&A-wise.

Speaker #1: I had the great opportunity to become the chief executive at the beginning of 2012. And it was very much a buy and build story.

Speaker #1: And we've done 31 acquisitions in the last 15 years. And we've chosen these markets. We've chosen to be in continental Europe. We've chosen to be in Australasia.

Speaker #2: And I think there's probably not too much to say here, because this really does just sort of wrap up what we've already covered. But this is where we were in FY26 against those key financial metrics that we sort of pride so heavily.

Speaker #1: First acquisition in New Zealand in 2018, I remember the feedback was, what have they done? Why are you going to New Zealand? The revenue pro fora in Australia now is actually bigger.

Andy O'Brien: But this is where we were in FY26 against those key financial metrics that we sort of pride so heavily. All of them at or above target, with the slight exception of organic growth. But, again, we will talk more about that shortly, but 2.8%, very close to our sort of 3% to 5% target. All the others sort of looking very nicely ahead. With that, I will hand over to Ronnie.

Speaker #2: All of them at or above target, with the slight exception of organic growth. But, again, we'll talk more about that shortly. The 2.8% is very close to our sort of 3 to 5%.

Speaker #1: In Australasian region is bigger than the UK. And these are great markets. We go to the Australasian region and we talk to our team.

Speaker #1: And they say, competition's really tough here. And I sort of smile about it, Lee spent a couple of years living in New Zealand. Competition is different in New Zealand than it is in the UK.

Speaker #2: And all the others are sort of looking very nicely ahead. So with that, I'll hand over to Ronnie.

Speaker #1: We have a market leadership position. We're very respectful. And mindful of that position. But I think we've created a huge geographic and in-market diversity that gives us a high degree of confidence that the results that we've provided on a training basis can be repeated into the future.

Speaker #1: Thanks, Andy. A little bit more detail about the business, and I was listening to Andy take you through the financial results—and they are, quite frankly, pretty outstanding results.

Ronnie George: Thanks, Andy. A little bit more detail about the business, and I was listening to Andy taking you through the financial results, and they are, quite frankly, pretty outstanding results. I have been doing this for a long time, not just in Volution, but in the industrial world. When I look at the sort of repeatability and consistency of our results over time, I thought, why do we have that level of confidence? We will talk about some of the market difficulties in a moment. It is not easy. Then I was thinking to myself, how many of the last 10 years have been easy? The market being really quite punchy and supporting us and providing that additional strength.

Speaker #1: And so a little bit more detail on the performance in the year. UK revenue was flat. It was up in the first half. It was down in the second half of the year.

Speaker #1: I've been doing this for a long time, not just at Volution but in the industrial world. And when I look at the sort of repeatability and consistency of our results over time, I thought, why do we have that level of confidence?

Speaker #1: If I was to stand up now and tell you the UK market's quite difficult, you'd be really surprised to hear me say that. But look, we're adjusting the way in which we run our UK business.

Speaker #1: And we'll talk about some of the market difficulties in a moment. It's not easy. And then I was thinking to myself, how many of the last 10 years have been easy?

Speaker #1: The operating profit margin expansion in the year was huge. It was substantial. And we think we're not setting a new target, but we think that there's still more that we could do.

Speaker #1: The market has been really quite punchy and supportive, providing that additional strength. I guess the point I'm trying to make is that it's the way in which we run our business—the choices we make about the markets we want to be in, and the decisions we make.

Ronnie George: I guess the point I am trying to make there is that it is the way in which we run our business, the choices we make about the markets that we want to be in, the decisions we make. I was pleased to have some of the team along today. Martin, put your hand up there, but Martin is the Group Technical Director, and Lee has put up with me for 19 years now, 18 years as the Business Development Director. Look, we are really confident about the outlook for our business, almost irrespective of the market. Even if the market is to be quite difficult in certain areas, it is about that agility and the choices that we make and the way in which we run our business. One of the things that was really important to us was increasing geographic diversity.

Speaker #1: I said to the team more recently, we had a perfect year. Everything went exactly as it should do. We didn't make any mistakes. And we had every initiative delivered.

Speaker #1: And I was pleased to have some of the team along today. Martin, put your hand up there. Martin's the Group Technical Director, and Lee has put up with me for 19 years now—18 years as the Business Development Director.

Speaker #1: Of course not. So there's still more that we could do. And what's happening in the market, residential RMI, public housing is still quite strong.

Speaker #1: But look, we're really confident about the outlook for our business, almost irrespective of the market. And even if the market is quite difficult in certain areas, it's about that agility and the choices that we make, and the way in which we run our business.

Speaker #1: But if I was to tell you that residential new build was more challenging, you wouldn't be surprised to hear that. Look at what the house builders are telling us.

Speaker #1: But nevertheless, in the year, we delivered a really compelling result. Notwithstanding the fact that the revenue didn't grow. And we're positioning our UK business for the long term.

Speaker #1: And one of the things that was really important to us was increasing geographic diversity. When I joined Volution in 2008, it was two UK ventilation brands.

Speaker #1: I actually believe in the UK market for the long term. I think we will eventually start to build more houses. The impact of building regulations is driving a more low carbon product portfolio.

Ronnie George: When I joined Volution in 2008, it was two UK ventilation brands. I had the great opportunity to become the Chief Executive at the beginning of 2012, and it was very much a buy and build story, and we have done 31 acquisitions in the last 15 years. We have chosen these markets. We have chosen to be in Continental Europe, we have chosen to be in Australasia. First acquisition in New Zealand in 2018. I remember the feedback was, "What have they done? Why are you going to New Zealand?" The revenue pro forma in Australia now is actually bigger, in Australasian region, is bigger than the UK. These are great markets. We go to the Australasian region and we talk to our team, and they say, "Competition is really tough here." I sort of smile about it. Lee spent a couple of years living in New Zealand.

Speaker #1: I had the great opportunity to become the Chief Executive at the beginning of 2012, and it was very much a buy-and-build story.

Speaker #1: And we absolutely, in the residential space, lead on residential ventilation products. And I think there's so much more that we could do there. So that's Andy talked about premiumization.

Speaker #1: And we've completed 31 acquisitions in the last 15 years. We've chosen these markets; we've chosen to be in continental Europe, and we've chosen to be in Australasia.

Speaker #1: But it's about products that are helping our customers deal with their low carbon challenges. And we're very good at that. On the commercial side, disappointing.

Speaker #1: The first acquisition in New Zealand in 2018—I remember the feedback was, "What have they done? Why are you going to New Zealand?" The revenue pro forma in Australia now is actually bigger.

Speaker #1: We talk about this internally. It's an opportunity. We should be doing a lot more. We think we can do more. And we're continuing to invest in that space.

Speaker #1: The Australasian region is bigger than the UK, and these are great markets. We go to the Australasian region and we talk to our team, and they say competition is really tough here.

Speaker #1: But a disappointing decline in our commercial revenue in the year but we can do better. During the year, we took on a new facility.

Speaker #1: And I sort of smile about it. Lee spent a couple of years living in New Zealand. Competition is different in New Zealand than it is in the UK.

Speaker #1: We've made some expansion changes at our Dudley facility. We have a very considerable capacity headroom. We're just not utilizing it yet. But we intend to over time.

Ronnie George: Competition is different in New Zealand than it is in the UK. We have a market leadership position. We are very respectful and mindful of that position, but I think we have created a huge geographic and end market diversity that gives us a high degree of confidence that the results that we have provided on a trading basis can be repeated into the future. So a little bit more detail on the performance in the year. UK revenue was flat, was up in H1. It was down in H2 of the year. If I was to stand up now and tell you the UK market is quite difficult, you would be really surprised to hear me say that. But look, we are adjusting the way in which we run our UK business. The operating profit margin expansion in the year was huge. It was substantial.

Speaker #1: We have a market leadership position. We're very respectful and mindful of that position. But I think we've created a huge geographic and in-market diversity.

Speaker #1: Strong growth in export. The Irish market is still, from a new build perspective, probably the complete opposite to what we might talk about in the UK at the moment.

Speaker #1: It gives us a high degree of confidence that the results we've provided on a training basis can be repeated in the future. And so, a little bit more detail on the performance in the year.

Speaker #1: But the Irish market is still very strong from a new build perspective. And very much focused on low carbon products, including what we call mechanical ventilation with heat recovery.

Speaker #1: UK revenue was flat. It was up in the first half, and it was down in the second half of the year. If I was to stand up now and tell you the UK market's quite difficult, you'd be really surprised to hear me say that.

Speaker #1: And then finally, OEM. I think the really important part about OEM is that we are now using a very material quantity of our own produced motors in our products.

Speaker #1: But look, we're adjusting the way in which we run our UK business. The operating profit margin expansion in the year was huge—it was substantial.

Speaker #1: And that's, again, another initiative that helps expand our operating profit margin. So 28.3% operating profit margin, higher in the second half of the year, than in the first half, despite the fact the revenue declined in the second half.

Speaker #1: And we think we're not setting a new target, but we think that there's still more that we could do. I said to the team more recently, we had a perfect year.

Ronnie George: We think we are not setting a new target, but we think that there is still more that we could do. I said to the team more recently, we had a perfect year. Everything went exactly as it should do. We did not make any mistakes, and we had every initiative delivered. Of course not. So there is still more that we could do, and what is happening in the market, residential RMI, public housing is still quite strong. But if I was to tell you that residential new build was more challenging, you would not be surprised to hear that. Look at what the house builders are telling us. Nevertheless, in the year, we delivered a really compelling result, notwithstanding the fact that the revenue did not grow. We are positioning our UK business for the long term. I actually believe in the UK market for the long term.

Speaker #1: So good trajectory on margin. As Andy said, there's been years that we've here. And sort of apologized for more anemic organic growth in continental Europe.

Speaker #1: Everything went exactly as it should have. We didn't make any mistakes, and we had every initiative delivered. Of course not. So there's still more that we could do.

Speaker #1: And what's happening in the market: residential RMI, public housing is still quite strong. But if I was to tell you that residential new build was more challenging, you wouldn't be surprised to hear that.

Speaker #1: 5.9% constant currency. We had some currency tailwinds there, both in Europe and in Australasia. But 5.9% is above our long-term 3% to 5% range.

Speaker #1: Look at what the house builders are telling us. Nevertheless, in the year, we delivered a really compelling result, notwithstanding the fact that the revenue didn't grow.

Speaker #1: Operating profit margin 24.3. Small expansion. Nordics perform well. We've got a strong position in the Nordic market, particularly on the residential side. We're continuing to invest in our central systems and commercial proposition.

Speaker #1: And we're positioning our UK business for the long term. I actually believe in the UK market for the long term. I think we will eventually start to build more houses.

Ronnie George: I think we will eventually start to build more houses. The impact of building regulations is driving a more low-carbon product portfolio, and we absolutely, in the residential space, lead on residential ventilation products, and I think there is so much more that we could do there. Andy talked about premiumization, but it is about products that are helping our customers deal with their low-carbon challenges, and we are very good at that. On the commercial side, disappointing. We talk about this internally. It is an opportunity. We should be doing a lot more. We think we can do more, and we are continuing to invest in that space. But a disappointing decline in our commercial revenue in the year, but we can do better. During the year, we took on a new facility. We have made some expansion changes at our Dudley facility. We have a very considerable capacity headroom.

Speaker #1: And I think that's quite exciting about what we can do in future. Our climarad activities in the Netherlands around decentralized heat recovery. There's a really important theme here.

Speaker #1: The impact of building regulations is driving a more low-carbon product portfolio. And we absolutely, in the residential space, lead on residential ventilation products.

Speaker #1: Decentralized heat recovery, from my perspective, I don't think I've got enough years left in Volution to see it fully vest. But decentralized heat recovery ventilation is the only way to deal with the existing stock of buildings in Europe.

Speaker #1: And I think there's so much more that we could do there. So, as Andy talked about, premiumization is about products that are helping our customers deal with their low-carbon challenges.

Speaker #1: It's the only way to properly ventilate an existing building when you make it airtight. And we now own climarad in the Netherlands. Get air in Germany.

Speaker #1: And we're very good at that. On the commercial side, disappointing. We talk about this internally—it's an opportunity. We should be doing a lot more.

Ronnie George: We talk about this internally. It is an opportunity. We should be doing a lot more. We think we can do more, and we are continuing to invest in that space. But a disappointing decline in our commercial revenue in the year, but we can do better. During the year, we took on a new facility. We have made some expansion changes at our Dudley facility. We have a very considerable capacity headroom.

Speaker #1: We think we can do more, and we're continuing to invest in that space. But there was a disappointing decline in our commercial revenue in the year, and we can do better.

Speaker #1: Inventor in Germany. I vent in Slovenia, and Croatia. We have a fantastic product portfolio. And we're very excited about this. And we also own one of the largest producers of aluminium heat exchangers, energy recovery industries based in North Macedonia, where we've made quite a bit of investment over the last couple of years.

Speaker #1: During the year, we took on a new facility. We've made some expansion changes at our Dudley facility. We have very considerable capacity headroom.

Speaker #1: We're just not utilizing it yet, but we intend to over time. Strong growth in export. The Irish market is still, from a new-build perspective, probably the complete opposite to what we might talk about in the UK at the moment.

Ronnie George: We are just not utilizing it yet, but we intend to over time. Strong growth in export. The Irish market is still, from a new build perspective, probably the complete opposite to what we might talk about in the UK at the moment, but the Irish market is still very strong from a new build perspective and very much focused on low-carbon products, including what we call mechanical ventilation with heat recovery. Finally, OEM. I think the really important part about OEM is that we are now using a very material quantity of our own produced motors in our products, and that is again, another initiative that helps expand our operating profit margin. So 28.3% operating profit margin, higher in the H2 of the year than in the H1, despite the fact that revenue declined in the H2. So good trajectory on margin.

Speaker #1: Really great support from the board in terms of the investment for a new facility. And the product range and the production capability. And growing very nicely.

Speaker #1: So this heat recovery theme is very important to us. We talk about Belgium and France remaining challenging. And it was interesting because I had a comment back, I think, already this morning about, oh, we're a little bit worried about France.

Speaker #1: But the Irish market is still very strong from a new-build perspective, and very much focused on low-carbon products, including what we call mechanical ventilation with heat recovery.

Speaker #1: And then finally, OEM. I think the really important part about OEM is that we are now using a very material quantity of our own produced motors in our products.

Speaker #1: It's de minimis for us. Whether France performs well or not this year will not change our results. But over time, there's a market in France where we believe we can have a much bigger market share.

Speaker #1: And that's, again, another initiative that helps expand our operating profit margin. So, 28.3% operating profit margin—higher in the second half of the year than in the first half—despite the fact that revenue declined in the second half.

Speaker #1: So this is only upside opportunity over time. We're talking about a small delta on its financial performance in the year. But it's more about the opportunity cost.

Speaker #1: It's about what we hope to do in France in the future. And we believe we're a challenger there. And we can do much better.

Speaker #1: So, good trajectory on margin. As Andy said, there have been years that we've stood up here and sort of apologized for more anemic organic growth in continental Europe.

Ronnie George: As Andy said, there has been years that we have stood up here and sort of apologized for more anemic organic growth in Continental Europe. 5.9% constant currency. We had some currency tailwinds there, both in Europe and in Australasia. But 5.9% is above our long-term 3% to 5% range. Operating profit margin 24.3%, small expansion. Nordics performed well. We have got a strong position in the Nordic market, particularly on the residential side. We are continuing to invest in our central systems and commercial proposition, and I think that is quite exciting about what we can do in future. Our ClimaRad activities in the Netherlands around decentralized heat recovery. There is a really important theme here.

Speaker #1: So sometimes talking about these challenges, they get overemphasized. It really is insignificant from a group perspective today. But how do we make it significant in the future?

Speaker #1: 5.9% constant currency. We had some currency tailwinds there, both in Europe and in Australasia. But 5.9% is above our long-term 3% to 5% range.

Speaker #1: And as I say, probably the only way is up from our perspective, in France, as much as that might feel counterintuitive. Our revenue is circa 10 million out of a total revenue in central Europe, of 150 million.

Speaker #1: Operating profit margin 24.3, small expansion. Nordics perform well. We've got a strong position in the Nordic market, particularly on the residential side. We're continuing to invest in our central systems and commercial proposition.

Speaker #1: You can get a sense of that. And we've improved the operating profit margin. We've improved the quality of the business. And we've made some really good investments.

Speaker #1: Martin, his team, brought together a new mechanical extract ventilation product about six, seven months ago now. And that's starting to get really good traction.

Speaker #1: And I think that's quite exciting about what we can do in the future. Our Climarad activities in the Netherlands around decentralized heat recovery—there's a really important theme here.

Speaker #1: So we're excited about Europe. And we think that Europe maybe, on a slightly further ahead of the curve in terms of new build recovery, than where we might be in the UK at the moment.

Speaker #1: Decentralized heat recovery—from my perspective, I don't think I've got enough years left in Volution to see it fully vest. But decentralized heat recovery ventilation is the only way to deal with the existing stock of buildings in Europe.

Ronnie George: Decentralized heat recovery, from my perspective, I do not think I have got enough years left in Volution to see it fully vest, but decentralized heat recovery ventilation is the only way to deal with the existing stock of buildings in Europe. It is the only way to properly ventilate an existing building when you make it airtight. We now own ClimaRad in the Netherlands, getAir in Germany, inVENTer in Germany, I-Vent in Slovenia and Croatia. We have a fantastic product portfolio, and we are very excited about this. We also own one of the largest producers of aluminum heat exchangers, Energy Recovery Industries based in North Macedonia, where we have made quite a bit of investment over the last couple of years. Really great support from the board in terms of the investment for a new facility and the product range and the production capability, and growing very nicely.

Speaker #1: Finally, Australasia. 48.7% revenue growth. You understand why that was the, obviously, the tailwind from the acquisitions. Organic revenue growth at 3.3%. And adjusted operating profit margin at 22.2%.

Speaker #1: It's the only way to properly ventilate an existing building when you make it airtight. And we now own Climarad in the Netherlands, GetAir in Germany, and Inventor in Germany.

Speaker #1: So we are consistently making north of 20% operating profit margin in all three geographic areas. We have a strong market position in Australasia with the acquisition of Fantech.

Speaker #1: I went in Slovenia and Croatia. We have a fantastic product portfolio, and we're very excited about this. We also own one of the largest producers of aluminium heat exchangers, Energy Recovery Industries, based in North Macedonia, where we've made quite a bit of investment over the last couple of years.

Speaker #1: We're now busy with trying to bring this together and create a sort of scale benefit opportunity similar I might add to what we've been doing in the UK over the last 10 plus years.

Speaker #1: Really great support from the board in terms of the investment for a new facility, and the product range and the production capability are growing very nicely.

Speaker #1: So if you think about the trajectory for the UK business over the last 10 years, from a margin perspective, that's the blueprint. We had the team together a few weeks ago in Germany.

Speaker #1: So this heat recovery theme is very important to us. We talk about Belgium and France remaining challenging. And it was interesting because I had a comment back—I think already this morning—about, "Oh, we're a little bit worried about France."

Ronnie George: This heat recovery theme is very important to us. We talk about Belgium and France remaining challenging, and it was interesting because I had a comment back, I think, already this morning about, "Oh, we're a little bit worried about France." It's de minimis for us. Whether France performs well or not this year will not change our results. But over time, there's a market in France where we believe we can have a much bigger market share. This is only upside opportunity over time. We're talking about a small delta on its financial performance in the year, but it's more about the opportunity cost. It's about what we hope to do in France in the future. We believe we're a challenger there, and we can do much better. Sometimes talking about these challenges, they get over-emphasized.

Speaker #1: And we actually had the UK finance lead come and tell us about the back office transformation that we've delivered in the UK over the last seven or eight years, as a model a playbook that we have at our disposal to drive our Australasian margin over time.

Speaker #1: A couple of real big highlights in Australasia at the moment. AC Industries. I've gone on record saying I think it's probably going to be, at this moment in time, one of our best returning acquisitions yet.

Speaker #1: So this is only upside opportunity over time. We're talking about a small delta on its financial performance in the year, but it's more about the opportunity cost.

Speaker #1: It's done phenomenally well since we've acquired it. It's in copper and gold mining. Not just in Australia, but more globally. We're looking at further international expansion there and how we can supply more into the other continents.

Speaker #1: It's about what we hope to do in France in the future, and we believe we're a challenger there, and we can do much better.

Speaker #1: Sometimes, when discussing these challenges, they tend to be overemphasized. From a group perspective today, they are really insignificant. But how do we ensure they become significant in the future?

Speaker #1: And we've got a really good story. This is a product that performs. Helps mines reduce their cost. Think about the cost of a mine.

Ronnie George: It really is insignificant from a group perspective today, but how do we make it significant in the future? As I say, probably the only way is up from our perspective in France, as much as that might feel counterintuitive. Our revenue is circa EUR 10 million out of a total revenue in Central Europe of EUR 150 million. You can get a sense of that. We've improved the operating profit margin, we've improved the quality of the business, and we've made some really good investments. Martin and his team brought together a new mechanical extract ventilation product about six, seven months ago now, and that's starting to get really good traction. We're excited about Europe, and we think that Europe may be on a slight further ahead of the curve in terms of new build recovery than where we might be in the UK at the moment.

Speaker #1: They're running ventilation. Those ventilation products are often run off of generators. Those generators are running off of diesel and other fuels. I don't know if you've noticed what's happened to the price of diesel over the last six months.

Speaker #1: And as I say, probably the only way is up from our perspective in France, as much as that might feel counterintuitive. Our revenue is circa €10 million out of a total revenue in Central Europe of €150 million.

Speaker #1: But energy reduction by having a super efficient ducting system in a mine is a very significant advantage for us. And this is going well.

Speaker #1: You can get a sense of that. And we've improved the operating profit margin. We've improved the quality of the business. And we've made some really good investments.

Speaker #1: And we expect it to continue to go well. We're out in Sydney in about three weeks' time. Look forward to being with the team again.

Speaker #1: Martin and his team brought together a new mechanical extract ventilation product about six or seven months ago now, and that's starting to get really good traction.

Speaker #1: And we don't want to sort of set the hairs running here. But it is an opportunity. And it will underpin our organic growth this year.

Speaker #1: So we're excited about Europe, and we think that Europe may be slightly further ahead of the curve in terms of new build recovery than where we might be in the UK at the moment.

Speaker #1: And we decided it'd be remiss not to talk about the fact that we've had quite a substantial order of about 12 million dollars first order that we're supplying now for ventilation and cooling fans that go into data centers.

Speaker #1: Finally, Australasia: 48.7% revenue growth. You understand why—that was obviously the tailwind from the acquisitions. Organic revenue growth at 3.3%, and adjusted operating profit margin at 22.2%.

Ronnie George: Finally, Australasia, 48.7% revenue growth. You understand why that was, obviously, the tailwind from the acquisitions. Organic revenue growth at 3.3%, and adjusted operating profit margin of 22.2%. We are consistently making north of 20% operating profit margin in all three geographic areas. We have a strong market position in Australasia with the acquisition of Fantech. We're now busy with trying to bring this together and create a sort of scale benefit opportunity. Similar, I might add, to what we've been doing in the UK over the last 10 plus years. If you think about the trajectory for the UK business over the last 10 years from a margin perspective, that's the blueprint.

Speaker #1: And look, our Fantech proposition in Australia is the leader. It is the brand that you can trust. It is a company that can deliver.

Speaker #1: And when you're looking at large infrastructure projects like this, that's why we think we can do quite well in this space. So we're happy about that.

Speaker #1: So, we are consistently making north of 20% operating profit margin in all three geographic areas. We have a strong market position in Australasia with the acquisition of Fantech.

Speaker #1: And that's probably a good segue into the outlook and why. And why we feel, despite the fact that the UK market is probably at best described as soggy, why we still feel that the prospects for the group are really quite strong for the rest of this financial year.

Speaker #1: We're now busy with trying to bring this together and create a sort of scale benefit opportunity, similar, I might add, to what we've been doing in the UK over the last ten-plus years.

Speaker #1: I won't repeat this. It was on the first slide. But I will just spend a little bit of time talking about the. Outlook. And what we're saying here is the year has started well.

Speaker #1: So, if you think about the trajectory for the UK business over the last ten years, from a margin perspective, that's the blueprint. We had the team together a few weeks ago in Germany.

Ronnie George: We had the team together a few weeks ago in Germany, and we actually had the UK finance lead come and tell us about the back office transformation that we've delivered in the UK over the last seven or eight years as a model, a playbook that we have at our disposal to drive our Australasian margin over time. A couple of real big highlights in Australasia at the moment. AC Industries, I've gone on record saying I think it's probably going to be, at this moment in time, one of our best returning acquisitions yet. It's done phenomenally well since we've acquired it. It's in copper and gold mining. It's not just in Australia, but more globally. We're looking at further international expansion there and how we can supply more into the other continents, and we've got a really good story.

Speaker #1: The group is delivering organic growth alongside a positive revenue contribution from AC. It's not organic yet, but it is growing within itself. So if we look at the comps pre our ownership, it's growing strongly.

Speaker #1: And we actually had the UK finance lead come and tell us about the back-office transformation that we've delivered in the UK over the last seven or eight years, as a model, a playbook that we have at our disposal to drive our Australasian margin over time.

Speaker #1: And that's really helpful. We completed the acquisition of GetAir in Germany. That integration is underway now. We had another review on the 200-day plan with the team last night.

Speaker #1: A couple of real big highlights in Australasia at the moment. AC Industries—I've gone on record saying I think it's probably going to be, at this moment in time, one of our best-returning acquisitions yet.

Speaker #1: Very pleased about GetAir and the proposition that we've got. In Germany. And the fact that we've got the widest product portfolio and some really good innovation.

Speaker #1: It's done phenomenally well since we've acquired it. It's in copper and gold mining—not just in Australia, but more globally. We're looking at further international expansion there and how we can supply more into the other continents.

Speaker #1: They were very smart. Have been very smart around innovation and Martin will be leading that opportunity and how we can sort of cross-sell, cross-percolate those that technology into other areas of the group.

Speaker #1: And we've got a really good story. This is a product that performs; it helps mines reduce their costs. Think about the cost of a mine.

Ronnie George: This is a product that performs, helps mines reduce their cost. Think about the cost of a mine. They are running ventilation. Those ventilation products are often run off of generators. Those generators are running off of diesel and other fuels. I do not know if you have noticed what has happened to the price of diesel over the last 6 months, but energy reduction by having a super efficient ducting system in a mine is a very significant advantage for us. This is going well, and we expect it to continue to go well. We are out in Sydney in about 3 weeks time and look forward to being with the team again.

Speaker #1: We've talked about the UK. And no doubt there'll be some questions on it. The UK is challenging. But it's fully baked into our view.

Speaker #1: They're running ventilation. Those ventilation products are often run off generators. Those generators are running off diesel and other fuels. I don't know if you've noticed what's happened to the price of diesel over the last six months.

Speaker #1: We're baking in that the UK will be challenging. And we'll take whatever mitigating steps to deal with that. But there are still lots of opportunities for us to gain share, to innovate and bring new products to market.

Speaker #1: But energy reduction by having a super-efficient ducting system in a mine is a very significant advantage for us, and this is going well.

Speaker #1: And the way the building regulations are driving this, it's helpful. So we are still reasonably positive about what we can do in the UK, despite a more benign, less positive outlook.

Speaker #1: And we expect it to continue to go well. We're out in Sydney in about three weeks' time. Look forward to being with the team again.

Speaker #1: And we see really good opportunities to build on this momentum the recent orders for data centers, the strong ACI revenue stream, and we have a really strong product portfolio and platform.

Speaker #1: And we don't want to set the hares running here, but it is an opportunity, and it will underpin our organic growth this year.

Ronnie George: We do not want to set the hares running here, but it is an opportunity, and it will underpin our organic growth this year. We decided it would be remiss not to talk about the fact that we have had quite a substantial order of about $12 million, first order that we are supplying now for ventilation and cooling fans that go into data centers. Our Fantech proposition in Australia is the leader. It is the brand that you can trust. It is a company that can deliver. When you are looking at large infrastructure projects like this, that is why we think we can do quite well in this space.

Speaker #1: And we decided it would be remiss not to talk about the fact that we've had quite a substantial first order, about $12 million, that we're supplying now for ventilation and cooling fans that go into data centers.

Speaker #1: So the output there is that as the board, we're confident there's delivering another year of good progress. And delivering sustainable growth for our for all of our stakeholders.

Speaker #1: And look, our Fantech proposition in Australia is the leader. It is the brand that you can trust. It is a company that can deliver.

Speaker #1: And when you're looking at large infrastructure projects like this, that's why we think we can do quite well in this space. So we're happy about that.

Speaker #1: And what does that mean? I just ask you to have a look at the track record. Look at what we've been delivering over the last 12 years.

Ronnie George: We are happy about that, and that is probably a good segue into the outlook and why we feel, despite the fact that the UK market is probably at best described as soggy, why we still feel that the prospects for the group are really quite strong for the rest of this financial year. I will not repeat this, it was on the first slide, but I will just spend a little bit of time talking about the outlook. What we are saying here is the year has started well. The group is delivering organic growth alongside a positive revenue contribution from ACI. It is not organic yet, but it is growing within itself. If we look at the comps pre our ownership, it is growing strongly, and that is really helpful. We completed the acquisition of getAir in Germany. That integration is underway now.

Speaker #1: And we're standing up today saying, we don't think there's any material difference in our outlook to what we've delivered in the past. So before we go to Q&A, one of the challenges that we have is looking around the room.

Speaker #1: And that's probably a good segue into the outlook, and why we feel, despite the fact that the UK market is probably, at best, described as soggy, that we still feel the prospects for the group are really quite strong for the rest of this financial year.

Speaker #1: Some of you have been to our reading facility where we make about 3 million small plastic ventilation devices each year, 45 injection molding machines, and then come away from it thinking, they make small plastic fans.

Speaker #1: I won't repeat this—it was on the first slide. But I will just spend a little bit of time talking about the outlook. What we're saying here is the year has started well.

Speaker #1: That's what Volusion do. And you're right. We do. And then we'd like to take you to our facility in Dudley in the West Midlands over the next couple of months and show you where we make ventilation, heat recovery systems.

Speaker #1: The group is delivering organic growth alongside a positive revenue contribution from AC. It's not organic yet, but it is growing within itself. So, if we look at the comps pre-our ownership, it's growing strongly.

Speaker #1: But 65% of what we do in our group isn't in the UK. And you haven't seen all of the UK. And that's a challenge for us.

Speaker #1: And that's really helpful. We completed the acquisition of GetAir in Germany. That integration is underway now. We had another review on the 200-day plan with the team last night.

Speaker #1: I guess if it was an all-expenses-paid trip to visit our factory in Melbourne, we'd probably get takers. But we need to protect our margins.

Ronnie George: We had another review on the 200-day plan with the team last night. Very pleased about getAir and the proposition that we have got in Germany and the fact that we have got the widest product portfolio and some really good innovation. They were very smart, have been very smart around innovation, and Martin will be leading that opportunity and how we can cross-sell, cross-pollinate that technology into other areas of the group. We have talked about the UK, and no doubt there will be some questions on it. The UK is challenging, but it is fully baked into our view. We are baking in that the UK will be challenging, and we will take whatever mitigating steps to deal with that. There are still lots of opportunities for us to gain share, to innovate and bring new products to market, and the way the building regulations are driving this is helpful.

Speaker #1: I'm very pleased about GetAir and the proposition that we've got in Germany, as well as the fact that we've got the widest product portfolio and some really good innovation.

Speaker #1: So we decided that the best route to maybe give you a bit of an insight about our group is to just show you a little corporate video that we've prepared.

Speaker #1: They were very smart, have been very smart around innovation, and Martin will be leading that opportunity and how we can sort of cross-sell, cross-percolate that technology into other areas of the group.

Speaker #2: Air. Every day it affects our health. Comfort and productivity. Most of the time, we don't even notice it. We can take it for granted.

Speaker #2: But the quality of the air around us is fundamental to our well-being. At Volusion, our purpose is to deliver healthy air. Sustainably. Across a broad range of buildings and applications.

Speaker #1: We've talked about the UK, and no doubt there'll be some questions on it. The UK is challenging, but it's fully baked into our view.

Speaker #1: We're baking in that the UK will be challenging, and we'll take whatever mitigating steps are necessary to deal with that. But there are still lots of opportunities for us to gain share, to innovate, and to bring new products to market.

Ronnie George: We are baking in that the UK will be challenging, and we will take whatever mitigating steps to deal with that. There are still lots of opportunities for us to gain share, to innovate and bring new products to market, and the way the building regulations are driving this is helpful.

Speaker #2: We could tell you all about our technology and experience. But we'd rather tell you about our impact. Our smallest and simplest products create cleaner bathrooms, kitchens, and homes.

Speaker #1: And the way the building regulations are driving this, it's helpful. So we are still reasonably positive about what we can do in the UK, despite a more benign, less positive outlook.

Ronnie George: We are still reasonably positive about what we can do in the UK, despite a more benign, less positive outlook. We see really good opportunities to build on this momentum. The recent orders for data centers, the strong ACI revenue stream, and we have a really strong product portfolio and platform. The output there is that, as the board, we are confident we are delivering another year of good progress and delivering sustainable growth for all of our stakeholders. What does that mean? I would just ask you to have a look at the track record. Look at what we have been delivering over the last 12 years, and we are standing up today saying we do not think there is any material difference in our outlook to what we have delivered in the past.

Speaker #2: Improving comfort and health for everyone. And smarter buildings where fresh air is continuously supplied and valuable heat recovered. Which saves energy and costs and reduces CO2.

Speaker #1: And we see really good opportunities to build on this momentum. The recent orders for data centers, the strong ACI revenue stream, and we have a really strong product portfolio and platform.

Speaker #2: We create healthier spaces for schools, retail, hotels, and hospitals. Empowering people to learn, work, and thrive. As the demands of the world and our customers grow, so do we.

Speaker #1: So the output there is that, as the board, we're confident it's delivering another year of good progress and sustainable growth for all of our stakeholders.

Speaker #2: Evolving and improving our technology. Manufacturing and capabilities to meet every new challenge. Drawing on our engineering expertise, we deliver healthy air, even in the harshest environments.

Speaker #1: And what does that mean? I just ask you to have a look at the track record. Look at what we've been delivering over the last 12 years.

Speaker #1: And we're standing up today, saying we don't think there's any material difference in our outlook compared to what we've delivered in the past. So, before we go to Q&A, one of the challenges that we have is looking around the room.

Speaker #2: So people can operate safely, and perform at their best. We are more than 2,000 dedicated employees across 17 countries. Combining deep local understanding with the scale and operational excellence of a global group.

Ronnie George: Before we go to Q&A, one of the challenges that we have, just looking around the room, some of you have been to our Reading facility where we make about 3 million small plastic ventilation devices each year, 45 injection molding machines, and then come away from it thinking, "They make small plastic fans. That is what Volution do." You are right, we do. We would like to take you to our facility in Dudley in the West Midlands over the next couple of months and show you where we make ventilation heat recovery systems. But 65% of what we do in our group is not in the UK, and you have not seen all of the UK. That is a challenge for us. I guess if it was an all-expenses-paid trip to visit our factory in Melbourne, we would probably get takers. But we need to protect our margins.

Speaker #1: Some of you have been to our wedding facility, where we make about 3 million small plastic ventilation devices each year, with 45 injection molding machines, and then come away from it thinking they make small plastic fans.

Speaker #2: We bring together innovation, sustainability, and technology to create smarter solutions. Through different products. And different brands. But always united by one purpose. To provide healthy air.

Speaker #1: That's what Volution does, and you're right, we do. And then we'd like to take you to our facility in Dudley in the West Midlands over the next couple of months and show you where we make ventilation heat recovery systems.

Speaker #1: But 65% of what we do in our group isn't in the UK. And you haven't seen all of the UK, and that's a challenge for us.

Speaker #2: Sustainably.

Speaker #1: I guess if it were an all-expenses-paid trip to visit our factory in Melbourne, we'd probably get takers. But we need to protect our margins.

Speaker #1: Now, round of applause. So that's 35 minutes in. And over to the floor really now for any Q&A. I think we'll start in the room first.

Speaker #1: So, we decided that the best route to maybe give you a bit of an insight about our group is to just show you a little corporate video that we've prepared.

Ronnie George: We decided that the best route to maybe give you a bit of an insight about our group is to just show you a little corporate video that we have prepared.

Speaker #1: And then we can go online, virtually, afterwards. So Rob, I'm going to stand up. That's you for now.

Speaker #2: Air. Every day, it affects our health, comfort, and productivity. Most of the time, we don't even notice it. We can take it for granted.

[Company Representative] (Volution): Air. Every day it affects our health, comfort, and productivity. Most of the time, we do not even notice it. We can take it for granted, but the quality of the air around us is fundamental to our well-being. At Volution, our purpose is to deliver healthy air, sustainably, across a broad range of buildings and applications. We could tell you all about our technology and experience, but we would rather tell you about our impact. Our smallest and simplest products create cleaner bathrooms, kitchens, and homes, improving comfort and health for everyone. Smarter buildings where fresh air is continuously supplied and valuable heat recovered, which saves energy and costs and reduces CO2. We create healthier spaces for schools, retail, hotels, and hospitals, empowering people to learn, work, and thrive.

[Video Narrator]: Air. Every day it affects our health, comfort, and productivity. Most of the time, we do not even notice it. We can take it for granted, but the quality of the air around us is fundamental to our well-being. At Volution, our purpose is to deliver healthy air, sustainably, across a broad range of buildings and applications. We could tell you all about our technology and experience, but we would rather tell you about our impact. Our smallest and simplest products create cleaner bathrooms, kitchens, and homes, improving comfort and health for everyone. Smarter buildings where fresh air is continuously supplied and valuable heat recovered, which saves energy and costs and reduces CO2. We create healthier spaces for schools, retail, hotels, and hospitals, empowering people to learn, work, and thrive.

Speaker #3: Thanks. Hi. It's Rob Chantry Berenberg. Thanks for the presentation, guys. I'm three questions from me. So firstly, breadth of product range is clearly key.

Speaker #2: But the quality of the air around us is fundamental to our well-being. At Volution, our purpose is to deliver healthy air, sustainably, across a broad range of buildings and applications.

Speaker #3: Could you just comment on what percentage of the business you'd ideally like to have from specialist industrial in five years' time versus residential? Have you had something in mind?

Speaker #3: Secondly, cost inflation. I guess you've not really touched on it that much. You seem to deal with it very well. What was the pricing strategy in the year to cover any costs?

Speaker #2: We could tell you all about our technology and experience, but we’d rather tell you about our impact. Our smallest and simplest products create cleaner bathrooms, kitchens, and homes.

Speaker #3: And how did that differ from the approach taken by your competitors? And then thirdly, post the AC industry's deal. I think you've spoken well about it.

Speaker #2: Improving comfort and health for everyone, and smarter buildings where fresh air is continuously supplied and valuable heat recovered. This saves energy and costs, and reduces CO2.

Speaker #3: Has that given more optionality in the acquisition pipeline? Has more interesting things like that come into the pipeline post that deal? And people see you're a relevant player in that area?

Speaker #3: Thanks.

Speaker #1: Andy do. If you do cost first, I'll do one and three together. So I mean, cost so we gave you the amount of price contribution to revenue growth this year.

Speaker #2: We create healthier spaces for schools, retail, hotels, and hospitals—empowering people to learn, work, and thrive. As the demands of the world and our customers grow, so do we.

Speaker #1: Rob, roughly 1 and 1/2%, 1.4%. And I think in the past, we've talked about it being there or thereabouts. 1% in most normal years, with the exception of those couple of years where supply chains went a little bit bonkers.

[Company Representative] (Volution): As the demands of the world and our customers grow, so do we, evolving and improving our technology, manufacturing, and capabilities to meet every new challenge. Drawing on our engineering expertise, we deliver healthy air even in the harshest environments so people can operate safely and perform at their best. We are more than 2,000 dedicated employees across 17 countries, combining deep local understanding with the scale and operational excellence of a global group. We bring together innovation, sustainability, and technology to create smarter solutions through different products and different brands, but always united by one purpose: to provide healthy air, sustainably.

[Video Narrator]: As the demands of the world and our customers grow, so do we, evolving and improving our technology, manufacturing, and capabilities to meet every new challenge. Drawing on our engineering expertise, we deliver healthy air even in the harshest environments so people can operate safely and perform at their best. We are more than 2,000 dedicated employees across 17 countries, combining deep local understanding with the scale and operational excellence of a global group. We bring together innovation, sustainability, and technology to create smarter solutions through different products and different brands, but always united by one purpose: to provide healthy air, sustainably.

Speaker #2: Evolving and improving our technology, manufacturing, and capabilities to meet every new challenge. Drawing on our engineering expertise, we deliver healthy air, even in the harshest environments.

Speaker #1: So actually, what does that tell you? It probably means that we've done largely the same approach that we've adopted before, which is to be forward-looking, to be proactive, to have good what we always try to do, of course, is to have good forward visibility of what's coming down the track so that we can then respond and react sensitively.

Speaker #2: So people can operate safely and perform at their best. We are more than 2,000 dedicated employees across 17 countries, combining deep local understanding with the scale and operational excellence of a global group.

Speaker #1: What do I mean by that? Having the right amount of safety stocks and inventory in the facilities, having forward order placement with our key suppliers that gives us maybe as much as 9, 12 months of reasonably good certainty about where those costs are at.

Speaker #2: We bring together innovation, sustainability, and technology to create smarter solutions—through different products and different brands, but always united by one purpose: to provide healthy air.

Speaker #1: So that if things do change, they don't change on day one. And we've got time to adjust and adapt in terms of our pricing.

Speaker #1: So look, I don't know how other people approach it. But we sort of we don't have a global mantra of saying X percent across the board because the circumstances and the requirements are different market to market.

Speaker #2: Sustainably.

Speaker #1: But I think the test case is being really close to our margin performance, looking at the data all the time, and going, have we done the right thing?

Speaker #1: Now, a round of applause. So that's 35 minutes in. And over to the floor, really, now for any Q&A. I think we'll start in the room first.

Ronnie George: No round of applause. That is 35 minutes in. Over to the floor now for any Q&A. I think we will start in the room first, and then we can go online virtually afterwards. Rob, I am going to stand up actually for now.

Speaker #1: And if we need to adjust, we adjust. So I don't think there's been any change to it in terms of approach or strategy.

Speaker #1: And then we can go online virtually afterwards. So, Rob, I'm going to stand up. That's you for now.

Speaker #3: I do question.

Speaker #1: One and three together because I think they're quite nicely related. I think it's fair to say that a lot of our M&A is opportunistic.

Speaker #3: Thanks. Hi, it's Rob Chandrik Berenberg. Thanks for the presentation, guys. Three questions from me. Firstly, Brett, the product range is clearly key.

Rob Chantry: Thanks. Hi, it is Rob Chantrey at Berenberg. Thanks for the presentation, guys. Three questions from me. Firstly, breadth of product range is clearly key. Could you just comment on what percentage of the business you would ideally like to have from specialist industrial in five years' time versus residential, if you have something in mind? Secondly, cost inflation, I guess you have not really touched on it that much. You seem to have dealt with it very well. What was the pricing strategy in the year to cover any costs, and how did that differ from the approach taken by your competitors? Then thirdly, post the ACI deal, I think you have spoken well about it. Has that given more optionality in the acquisition pipeline? Have more interesting things like that come into the pipeline post that deal, and people see you as a relevant player in that area? Thanks.

Speaker #1: And opportunistic, not in the sense of do we want to acquire these opportunities. It's just timing. It's a conversation we have at the board on a regular basis.

Speaker #3: Could you just comment on what percentage of the business you'd ideally like to have from specialist industrial in five years' time versus residential? Have you had something in mind?

Speaker #1: It would be so much easier if we could build a timeline over the next five years. And actually, put in the dates at which we'd acquire these opportunities.

Speaker #3: Secondly, cost inflation—I guess you've not really touched on it that much. You seem to deal with it very well. What was the pricing strategy in the year to cover any costs?

Speaker #1: And you've only got to look at the last couple of them that we did. Get air. I said at the beginning was an opportunity that we actually got close-ish in '23.

Rob Chantry: What was the pricing strategy in the year to cover any costs, and how did that differ from the approach taken by your competitors? Then thirdly, post the ACI deal, I think you have spoken well about it. Has that given more optionality in the acquisition pipeline? Have more interesting things like that come into the pipeline post that deal, and people see you as a relevant player in that area? Thanks.

Speaker #3: And how did that differ from the approach taken by your competitors? And then, thirdly, post the AC industry's deal—I think you've spoken well about it.

Speaker #1: And then it didn't happen. And then and of course, there is competition. There is competition for these assets. Although I would say that I think we're not paying the highest price necessarily for the asset.

Speaker #3: Has that given more optionality in the acquisition pipeline? Have more interesting things like that come into the pipeline post that deal? And do people see you're a relevant player in that area?

Speaker #1: There are other factors at play why I think with AC, it was about continuing the growth trend in an environment where they felt they could be supported.

Speaker #3: Thanks.

Speaker #1: And you do. If you do cost first, I'll do one and three together. So look, I mean, cost—so we gave you the amount of price contribution to revenue growth this year, Rob: roughly 1.5%, 1.4%.

Ronnie George: Andy, do costs first. I will do one and three together.

Speaker #1: And have the opportunity to keep going. So it's very difficult to say, this is where we'll be. But we do like the diversity. We have entered some new markets with an air quality theme that we like.

Andy O'Brien: Costs, so we gave you the amount of price contribution to revenue growth this year, Rob, roughly 1.5%, 1.4%. I think in the past we have talked about it being there or thereabouts, 1% in most normal years, with the exception of those couple of years where supply chains went a little bit bonkers. What does that tell you? It probably means that we have done largely the same approach that we have adopted before, which is to be forward-looking, to be proactive. What we always try to do, of course, is to have good forward visibility of what is coming down the track so that we can then respond and react sensibly. What do I mean by that?

Speaker #1: And I think in the past, we've talked about it being there or thereabouts—1% in most normal years, with the exception of those couple of years where supply chains went a little bit bonkers.

Speaker #1: And we do think that that opens up much more optionality in the future. So in actual fact, one of the questions that we often have is, can you of course, if you're going to continue to compound at 10% plus growth rate, M&A is an absolutely integral part of that story.

Speaker #1: So actually, what does that tell you? It probably means that we've largely taken the same approach that we've adopted before, which is to be forward-looking, to be proactive, to have good—what we always try to do, of course—is to have good forward visibility of what's coming down the track so that we can then respond and react sensitively.

Speaker #1: I'm not concerned about whether or not we can continue to consummate deals at a similar rate proportionate to our size, in the future. I think having a by definition, the residential ventilation markets globally are smaller.

Speaker #1: What do I mean by that? Having the right amount of safety stocks and inventory in the facilities; having forward order placement with our key suppliers that gives us maybe as much as 9 to 12 months of reasonably good certainty about where those costs are at, so that if things do change, they don't change on day one.

Andy O'Brien: Having the right amount of safety stocks and inventory in the facilities, having forward order placement with our key suppliers that gives us maybe as much as 9, 12 months of reasonably good certainty about where those costs are at, so that if things do change, they do not change on day one, and we have got time to adjust and adapt, in terms of our pricing. Look, I do not know how other people approach it, but we do not have a global mantra of saying X percent across the board because the circumstances and the requirements are different market to market. I think the test case is being really close to our margin performance, looking at the data all the time and going, "Have we done the right thing?" If we need to adjust, we adjust.

Speaker #1: Than the commercial industrial markets. So that opens up more opportunity. And indeed, with AC industries, what we're seeing is, if you think about sort of secular growth trends, we often talk about energy efficiency and carbon emissions.

Speaker #1: And we've got time to adjust and adapt in terms of our pricing. So, look, I don't know how other people approach it, but we sort of—we don't have a global mantra of saying 'X percent across the board,' because the circumstances and the requirements are different market to market.

Speaker #1: But there's also a really important issue about health and about filtration the reason why ventilation in mines is really important is it's a really onerous environment.

Speaker #1: But I think the test case is being really close to our margin performance, looking at the data all the time and going, have we done the right thing?

Speaker #1: We're still putting charges at the mine phase and blowing them and having to have refresh and recharge rates to get back in the mine.

Speaker #1: And if we need to adjust, we adjust. So I don't think there's been any change to it in terms of approach or strategy. One and three together because I think they're quite nicely related.

Andy O'Brien: I do not think there has been any change to it in terms of approach or strategy.

Speaker #1: We recently we had the board visit in May. And we went to a fire station in Melbourne where we are providing and rolling out now ventilation system for the fire stations.

Andy O'Brien: I do not think there has been any change to it in terms of approach or strategy.

Ronnie George: I will do question 1 and 3 together because I think they are quite nicely related. I think it is fair to say that a lot of our M&A is opportunistic, and opportunistic not in the sense of Do we want to acquire these opportunities? It is just timing. It is a conversation we have at the board on a regular basis. It would be so much easier if we could build a timeline over the next 5 years and actually put in the dates at which we would acquire these opportunities. You have only got to look at the last couple of them that we did get here. I said at the beginning was an opportunity that we actually got close-ish in 2023, and then it did not happen. Of course, there is competition. There is competition for these assets.

Speaker #1: I think it's fair to say that a lot of our M&A is opportunistic. And opportunistic, not in the sense of, do we want to acquire these opportunities.

Speaker #1: Because a diesel particulate and so forth. So there's lots of different secular growth trends that we'd like to tap into. So there is a degree of opportunity if you like.

Speaker #1: It's just timing. It's a conversation we have at the Board on a regular basis. It would be so much easier if we could build a timeline over the next five years and actually put in the dates at which we'd acquire these.

Speaker #1: Or opportunistic behavior. But I suspect over time, because there are more opportunities in the residential industrial market, it's likely that we move in that direction just simply because there'll be more opportunities to deploy capital.

Speaker #1: Opportunities. And you've only got to look at the last couple of them that we did. Get Air, I said at the beginning, was an opportunity that we actually got close-ish in '23.

Speaker #1: And then it didn't happen. And then, of course, there is competition. There is competition for these assets. Although, I would say that I think we're not necessarily paying the highest price for the asset.

Speaker #1: You look at the residential ventilation space. It gets harder for us in the UK now. I think it would be hard to do a big deal in the UK.

Ronnie George: Although I would say that I think we're not paying the highest price necessarily for the asset. There are other factors at play why. I think with ACI, it was about continuing the growth trend in an environment where they felt they could be supported and have the opportunity to keep going. It is very difficult to say this is where we will be, but we do like the diversity. We have entered some new markets with an air quality theme that we like, and we do think that that opens up much more optionality in the future. In actual fact, one of the questions that we often have is can you, of course, if you are going to continue to compound at 10% plus growth rate, M&A is an absolutely integral part of that story.

Speaker #1: I'm not necessarily saying that we couldn't do bolt-ons, just because of our share. But there's still plenty of places in Europe where we're underweight.

Speaker #1: There are other factors at play. Why I think, with AC, it was about continuing the growth trend in an environment where they felt they could be supported.

Speaker #1: And we think that we can add value. OK.

Speaker #1: And have the opportunity to keep going. So it's very difficult to say this is where we'll be. But we do like the diversity. We have entered some new markets with an air quality theme that we like.

Speaker #4: Hi, guys. It's Jamie Murray from Bank of America. So you flagged I mean, great results firstly. But you did flag challenges in the UK new build residential market.

Speaker #4: It would just be good to hear your thoughts about what do you think could be done to get that market back up and running.

Speaker #1: And we do think that opens up much more optionality in the future. In fact, one of the questions that we often have is, can you?

Speaker #4: And if you have any thoughts about the YFH, your first home initiative,

Speaker #1: Of course, if you're going to continue to compound at a 10%+ growth rate, M&A is an absolutely integral part of that story. I'm not concerned about whether or not we can continue to consummate transactions at a rate proportionate to our size.

Speaker #1: We need to extend the meeting to it.

Speaker #4: And if there's anything else in the budget that we should look out for that could benefit you guys.

Ronnie George: I am not concerned about whether or not we can continue to consummate deals at a similar rate, proportionate to our size in the future. I think having, by definition, the residential ventilation markets globally are smaller than the commercial industrial markets, so that opens up more opportunity. Indeed, with ACI, what we are seeing is if you think about secular growth trends, we often talk about energy efficiency and carbon emissions, but there is also a really important issue about health and about filtration. The reason why ventilation in mines is really important is it is a really onerous environment. We are still putting charges at the mine face and blowing them and having to have refresh and recharge rates to get back in the mine.

Speaker #1: Look, what are we seeing? If you look at the market dynamics, are we at the low point? Probably. Maybe that low point we've gone past.

Speaker #1: In the future, I think, by definition, the residential ventilation markets globally are smaller than the commercial and industrial markets. So that opens up more opportunity.

Speaker #1: There's so many different factors here. We had what was it? Oh, I've forgotten the name. Planning over Gateway 2. Thank you, Lee. Gateway 2.

Speaker #1: And indeed, with AC industries, what we're seeing is, if you think about sort of secular growth trends, we often talk about energy efficiency and carbon emissions, but there's also a really important issue about health and about filtration. The reason why ventilation in mines is really important is it's a really onerous environment.

Speaker #1: I knew there was a reason for Lee. Being here today. No. Gateway 2. So Gateway 2 was a big issue because of planning in high rise.

Speaker #1: And that was a big issue for us because of central systems. You typically wouldn't build an apartment now without MEV or even MBHR. So we think that from our perspective, Gateway 2 is starting to release some opportunities.

Speaker #1: We're still putting charges at the mine face and blowing them, and having to have refresh and recharge rates to get back in the mine.

Speaker #1: And that will be helpful. So we may have gone through the worst pain point with respect to high rise. Then from our perspective, if you look at the volumes and debate where they are, there are certain aspects of our market that aren't so acutely impacted by how many houses we build.

Speaker #1: We recently had the board visit in May, and we went to a fire station in Melbourne where we are providing and rolling out a new ventilation system for the fire stations.

Ronnie George: We recently had the board visit in May, and we went to a fire station in Melbourne where we are providing and rolling out now a ventilation system for the fire stations because of diesel particulate and so forth. So there are lots of different secular growth trends that we would like to tap into. So there is a degree of opportunity, if you like, or opportunistic behavior. But I suspect over time, because there are more opportunities in the residential and industrial market, it is likely that we move in that direction just simply because there will be more opportunities to deploy capital. You look at the residential ventilation space, it gets harder for us in the UK now. I think it would be hard to do a big deal in the UK. I am not necessarily saying that we could not do bolt-ons just because of our share.

Speaker #1: Because of diesel particulates and so forth, there are lots of different secular growth trends that we'd like to tap into. So there is a degree of opportunity, if you like.

Speaker #1: Student accommodation is still very robust. We do well there. We lead. I think retirement homes is a little bit more difficult. And that's back to the equity release issue.

Speaker #1: Typically, back in time, it was if you've got a good, strong new build market, people are equity releasing. They're moving up. You've moved towards retirement.

Speaker #1: Or opportunistic behavior. But I suspect over time, because there are more opportunities in the residential industrial market, it's likely that we move in that direction, simply because there'll be more opportunities to deploy capital.

Speaker #1: You release your equity. And you go and buy a retirement home. And that's been more challenging. But I think, again, been challenging for the last 18 months to two years.

Speaker #1: Does it get any worse over the next 6 to 12 months? I'm not sure. So I think our sort of working assumption on residential new build for us is it's not going to get any worse.

Speaker #1: You look at the residential ventilation space. It gets harder for us in the UK now. I think it would be hard to do a big deal in the UK—not necessarily saying that we couldn't do bolt-ons—just because of our share.

Speaker #1: I do think and I want to be mindful of not giving too much of an advantage to anyone else. But I do think there's some share gains that we can make.

Speaker #1: But there are still plenty of places in Europe where we're underweight, and we think that we can add value. OK.

Ronnie George: But there are still plenty of places in Europe where we are underweight and we think that we can add value.

Speaker #1: And underway, I do think our technology and some of the innovation that we brought to market around low carbon products will be really helpful.

Speaker #3: Hi guys, it's Jamie Murray from Bank of America. Firstly, congratulations on the great results. You did flag challenges in the UK new build residential market.

Jamie Murray: Hi, guys. It is Jamie Murray from Bank of America. You flagged, I mean, great results, firstly, but you did flag challenges in the UK new build residential market. It would just be good to hear your thoughts about what do you think could be done to get that market back up and running, and if you have any thoughts about the YFH, Your First Home initiative.

Speaker #1: And carving out share gains. And for us, of course, what we always say to people is, don't blame the market. The market will be what it will be.

Speaker #1: We can't make house builders build more houses. That's something we can't do. But we can help them choose more of our ventilation solutions. There's quite a lot around overheating in the summer.

Speaker #3: It would be good to hear your thoughts about what you think could be done to get that market back up and running.

Speaker #3: And if you have any thoughts about the YFH, your First Home initiative,

Speaker #1: We need to extend the meeting to it.

Ronnie George: We need to extend the meeting, don't we, to-

Speaker #1: I think that would have firmly focused that in people's minds. We're not an air conditioning business. But we provide comfort cooling. We provide products that deal with part of the building regs.

Speaker #3: And if there's anything else in the budget that we should look out for, that could benefit you guys.

Jamie Murray: If there is anything else in the budget that we should look out for that could benefit you guys.

Speaker #1: Oh. Look, what are we seeing? If you look at the market dynamics, are we at the low point? Probably. Maybe that low point—we've gone past.

Ronnie George: Look, what are we seeing? If you look at the market dynamics, are we at the low point? Probably. Maybe that low point we have gone past. There are so many different factors here. We had, or what was it? Oh, I forgot the name. Planning over Gateway Two. Thank you, Lee. Gateway Two. I knew there was a reason for Lee being here today. No, Gateway Two. So Gateway Two was a big issue because of planning in high rise, and that was a big issue for us because of central systems. You typically would not build an apartment now without MEV or even MVHR. So we think that from our perspective, Gateway Two is starting to release some opportunities, and that will be helpful. So we may have gone through the worst pain point with respect to high rise.

Speaker #1: And I think you'll see an increasing focus on that for very obvious reasons. We've had two very hot summers now. Is this the new environment that we're living in?

Speaker #1: There are so many different factors here. We had—what was it? Oh, I forgot the name. Planning over Gateway 2. Thank you, Lee. Gateway 2.

Speaker #1: We're part of the solution. So look, as part of the sort of wider what do we think on the UK, we told you where the first couple of months are.

Speaker #1: We don't think the UK, for us, gets any worse. And we're growing organically as a group. And we're still in go forward mode. But I think it will be challenging.

Speaker #1: I knew there was a reason for Lee being here today. Gateway 2 was a big issue because of planning in high rise.

Speaker #1: And I don't see I'm not forecasting in the next three or four months it gets material better. I suspect post budget, there might be just the fact that we've had the budget.

Speaker #1: And that was a big issue for us because of central systems. You typically wouldn't build an apartment now without MEV or even MVHR. So, we think that, from our perspective, Gateway 2 is starting to release some opportunities.

Speaker #1: And the uncertainty goes away in itself will probably be helpful. And the other one that we're not sure of at the moment is just how much of an impact there was on RMI demand over the last three or four months because of the heat.

Speaker #1: And that will be helpful. So, we may have gone through the worst pain point with respect to high rise. Then, from our perspective, if you look at the volumes and debate where they are, there are certain aspects of our market that aren't so acutely impacted by how many houses we build.

Ronnie George: Then from our perspective, if you look at the volumes and debate where they are, there are certain aspects of our market that aren't so acutely impacted by how many houses we build. Student accommodation is still very robust. We do well there. We lead. I think retirement homes is a little bit more difficult, and that's back to the equity release issue. Typically back in time, it was if you've got a good, strong new build market, people are equity releasing. They're moving up. You move towards retirement, you release your equity, and you go and buy a retirement home. That's been more challenging. But I think, again, been challenging for the last 18 months to 2 years. Does it get any worse over the next 6 to 12 months? I'm not sure.

Speaker #1: I don't know if you've been in your loft space in the middle of summer. But it's pretty hot and pretty difficult to work in.

Speaker #1: And you hear from contractors that there's work that they would come back to later. And I came in this morning a little bit chillier we're moving into autumn and winter.

Speaker #1: Student accommodation is still very robust; we do well there. We lead. I think retirement homes are a little bit more difficult, and that's back to the equity release issue.

Speaker #1: So I think that summer and so forth wouldn't have been helpful. But look, just to finish on our UK business, big improvement in operating profit margin last year.

Speaker #1: Typically, back in time, it was: if you've got a good, strong new build market, people are equity releasing, they're moving up, you've moved towards retirement.

Speaker #1: Good trajectory coming out of the year into this year. Probably a little bit more benign around inflation impacts and risks. So we don't see an immediate risk around pricing or margin or a need to necessarily increase prices as we sit today.

Speaker #1: You release your equity, and you go and buy a retirement home. That has been more challenging, but I think, again, it's been challenging for the last 18 months to two years.

Speaker #1: Does it get any worse over the next 6 to 12 months? I'm not sure. So, I think our sort of working assumption on residential new build for us is it's not going to get any worse.

Ronnie George: I think our working assumption on residential new build for us is it's not going to get any worse. I do think, and I want to be mindful of not giving too much of an advantage to anyone else, but I do think there are some share gains that we can make and underway. I do think our technology and some of the innovation that we brought to market around low carbon products will be really helpful and carving out share gains. For us, of course, what we always say to people is don't blame the market. The market will be what it will be. We can't make house builders build more houses. That's something we can't do, but we can help them choose more of our ventilation solutions. There's quite a lot around overheating in the summer.

Speaker #1: Pretty much where we are is baked into our thinking.

Speaker #1: I do think, and I want to be mindful of not giving too much of an advantage to anyone else. But I do think there are some share gains that we can make.

Speaker #2: Thank you. Clyde Lewis at Peelham. I think I've got four apologies, Ronnie.

Speaker #1: Four.

Speaker #2: Andy, probably the first one. The inflation, the one and a half percent, 1.4% that you were talking about, is there much difference regionally? In that number?

Speaker #1: And underway, I do think our technology and some of the innovation that we've brought to market around low-carbon products will be really helpful.

Speaker #1: And carving out share gains. And for us, of course, what we always say to people is: don't blame the market. The market will be what it will be.

Speaker #1: List the four, Clyde.

Speaker #2: OK. Following on on the UK question, I'd be interested to hear a little bit about where do you think the public sector is around the RMI drive?

Speaker #1: We can't make house builders build more houses — that's something we can't do. But we can help them choose more of our ventilation solutions. There's quite a lot around overheating in the summer.

Speaker #2: And obviously, all of that humidity and damp issues. The UK commercial, what are you going to do to actually sort of start growing that business again?

Speaker #1: I think that would have firmly focused that in people's minds. We're not an air conditioning business, but we provide comfort cooling. We provide products that deal with part of the building regs.

Ronnie George: I think that would have firmly focused that in people's minds. We're not an air conditioning business, but we provide comfort cooling. We provide products that deal with Part O of the building regs, and I think you'll see an increasing focus on that for very obvious reasons. We've had 2 very hot summers now. Is this the new environment that we're living in? We're part of the solution. Look, as part of the wider what do we think on the UK, we told you where the first couple of months are. We don't think the UK, for us, gets any worse, and we're growing organically as a group, and we're still in go-forward mode, but I think it will be challenging. I'm not forecasting in the next 3 or 4 months it gets materially better.

Speaker #1: And I think you'll see an increasing focus on that for very obvious reasons. We've had two very hot summers now. Is this the new environment that we're living in?

Speaker #2: Obviously, it's partly the market. But obviously, sort of where are the opportunities for you, I suppose? And I've got to ask, obviously, on the data center stuff, you've dangled it out there.

Speaker #1: We're part of the solution. So, look, as part of the sort of wider 'what do we think' on the UK, we told you we're the first couple of months are.

Speaker #2: Are there products that you're making in odds that you can actually start to ship into the UK or the European markets and maybe try and enter that this side of the globe?

Speaker #1: We don't think the UK for us gets any worse, and we're growing organically as a group. We're still in go-forward mode, but I think it will be challenging.

Speaker #1: OK. Well, I will take the first one. Then Ronnie will take the others. So look, I think in terms of the number region to region, it is different.

Speaker #1: And I don't see—I'm not forecasting in the next three or four months—it gets materially better. I suspect post-budget, there might be just the fact that we've had the budget, and the uncertainty goes away in itself, which will probably be helpful.

Speaker #1: And why is it different? It's different because the cost impacts have been different. Because the margin profile of the products that they're selling are different.

Ronnie George: I suspect post-budget, there might be just the fact that we've had the budget, and the uncertainty goes away in itself will probably be helpful. The other one that we're not sure of at the moment is just how much of an impact there was on RMI demand over the last 3 or 4 months because of the heat. I don't know if you've been in your loft space in the middle of summer, but it's pretty hot and pretty difficult to work in. You hear from contractors that there's work that they would come back to later. I came in this morning a little bit chillier. We're moving into autumn and winter. I think that summer and so forth wouldn't have been helpful. But look, just to finish on our UK business, big improvement in operating profit margin last year.

Speaker #1: And there's some competitor behaviors that are different. So I'll give you an example. ERI, selling aluminium heat cells, that is a competitive market. And of course, there's a sensitivity to the aluminium price and input cost that goes in there.

Speaker #1: And sure, at the moment it is just how much of an impact there was on RMI demand over the last three or four months because of the heat.

Speaker #1: I don't know if you've been in your loft space in the middle of summer, but it's pretty hot and pretty difficult to work in.

Speaker #1: We've suffered a little bit of margin deterioration over the last year or so. But that is everything that will come back. But there's only so much we think we can do because there's a very, very clear market price.

Speaker #1: And you hear from contractors that there's work that they would come back to later. And I came in this morning, a little bit chillier.

Speaker #1: We're moving into autumn and winter, so I think that summer and so forth wouldn't have been helpful. But look, just to finish on our UK business: big improvement in operating profit margin last year.

Speaker #1: And there's competition. It's not that there's not competition elsewhere. Because of course, there is. But look, I mean, I think the overall I suppose for us, the asset test is still in the margin.

Speaker #1: If each region has nudged its margin up and of course, we haven't given you inside each of the European countries. But generally speaking, that's been the dynamic as well there that people have done the right things to largely hold or maintain margins.

Speaker #1: Good trajectory coming out of the year into this year. Probably a little bit more benign around inflation impacts and risks. So we don't see an immediate risk around pricing or margin, or a need to necessarily increase prices as we sit today.

Ronnie George: Good trajectory coming out of the year into this year. Probably a little bit more benign around inflation impacts and risks. We do not see an immediate risk around pricing or margin or a need to necessarily increase prices as we sit today. Pretty much where we are is baked into our thinking.

Speaker #1: So as long as that's the case, Clyde, we're comfortable and we're happy. Even if it means that percent the right percent in country A is different from the correct percent in country B.

Speaker #1: Pretty much where we are is baked into our thinking.

Speaker #2: I'm just trying to get some numbers for you, Clyde. OK. So public housing, strong public RMI. I think public housing is still 5 million homes quality is still very low.

Speaker #2: Thank you. Clyde Lewis at Peelham. I think I've got four. Apologies, Ronald. Andy, probably the first one—the inflation, the 1.5 percent, 1.4 percent that you were talking about, is there much difference regionally?

Clyde Lewis: Thank you. Clyde Lewis at Peel Hunt. I think I have four. Apologies, Ronald.

Ronnie George: Four.

Clyde Lewis: Andy, probably the first one, the inflation, the 1.5%, 1.4% that you were talking about, is there much difference regionally in that number?

Speaker #2: In that number?

Speaker #3: List four, Clyde.

Ronnie George: List four, Clyde, and then we will.

Speaker #2: I think we've said this as a multi-year issue. We did very well. I would say we've got some outstanding products. A product called Revive, I think iteratively, we developed it again over the last 18 months, made the footprint a little bit smaller.

Clyde Lewis: Okay. Following on on the UK question, it would be interesting to hear a little bit about where you think the public sector is around the RMI drive and obviously all of that humidity and damp issues. The UK commercial, what are you going to do to actually start growing that business again? Obviously, it is partly the market, but obviously where are the opportunities for you, I suppose? I have got to ask, obviously on the data center stuff.

Speaker #2: OK. Following on from the UK question, it would be interesting to hear a little bit about where you think the public sector is around the RMI drive?

Speaker #2: And obviously, all of that humidity and damp issues—the UK commercial—what are you going to do to actually sort of start growing that business again?

Speaker #2: We've got some smarter connections now. We coupled up with a company called Switchy to provide data capture for the housing association. So I'm still really positive about social housing outlook.

Speaker #2: Funding's there. This is a social issue. And it absolutely needs to be dealt with. So one of our maybe stronger revenue streams and the outlook still really I think quite positive.

Ronnie George: Oh, yes.

Clyde Lewis: You have dangled it out there. Are there products that you are making in Aus that you can actually start to ship into the UK or the European markets and maybe try and enter that this side of the globe?

Speaker #2: If you look at UK commercial, I was just trying to look at construction products association. I was just trying to get my head around what happened there.

Speaker #2: Are there products that you're making in odds that you can actually start to ship into the UK or the European markets, and maybe try and enter this side of the globe?

Speaker #2: So it's sort of had new build down RMI down sorry, 10 and 8. So I'm not arguing that 9.6 down is the market. But market was very weak.

Speaker #1: OK, well, I will take the first one.

Andy O'Brien: Well, I am going to take the first and then Ronnie will take the other. Actually, I think in terms of the number region to region, it is different. Why is it different? It is different because the cost impacts have been different, because the margin profile of the products that they are selling are different, and there are some competitive behaviors that are different. I will give you an example. ERI selling aluminum heat cells, that is a competitive market. Of course, there is a sensitivity to the aluminum price and input cost that goes in there. We have suffered a little bit of margin deterioration over the last year or so, but that is, we think that will come back. There is only so much we think we can do because there is a very clear market price and there is competition. It is not that there is not competition elsewhere, because of course there is.

Speaker #3: Then Ronny will take yours. So, look, I think in terms of the numbers, region to region, it is different. And why is it different?

Speaker #3: It's different because the cost impacts have been different, the margin profile of the products they're selling is different, and some competitor behaviors are different.

Speaker #2: And there's almost some humility here. We stand up. And we're really positive about our business. But it would be remiss not to say this is an area where we think we should be doing better.

Speaker #3: So I'll give you an example: ERI, selling aluminum heat cells—that is a competitive market. And of course, there's a sensitivity to the aluminum price and the input costs that go in there.

Speaker #2: And we've discussed it internally. And we've positioned ourselves to do it. And I think it's one of those that once we build momentum in the space, it will run.

Andy O'Brien: Of course, there is a sensitivity to the aluminum price and input cost that goes in there. We have suffered a little bit of margin deterioration over the last year or so, but that is, we think that will come back. There is only so much we think we can do because there is a very clear market price and there is competition. It is not that there is not competition elsewhere, because of course there is.

Speaker #3: We've suffered a little bit of margin deterioration over the last year or so, but that is everything that will come back. But there's only so much we think we can do, because there's a very, very clear market price.

Speaker #2: So when we get the model right and look, we've got some formidable competitors. I mean, January bought Monodraft last year. And they've owned it for about 12 months.

Speaker #2: And quite frankly, that's an area of the market that we should do better. So let's see how they integrate that opportunity over time. And let's see how we can do better against opportunities like that.

Speaker #3: And there's competition. It's not that there's no competition elsewhere, because of course there is. But look, I mean, I think overall, I suppose for us, the acid test is still in the margin.

Ronnie George: But look, I think the overall, I suppose for us, the acid test is still in the margin. If each region has nudged its margin up, and of course, we haven't given you inside each of the European countries, but generally speaking, that's been the dynamic as well there, that people have done the right things to largely hold or maintain margins. As long as that's the case, Clyde, we're comfortable and we're happy, even if it means that the right percent in country A is different from the correct percent in country B. Just trying to get some numbers for you, Clyde. Okay. So public housing. Strong public RMI. I think public housing is still 5 million homes. Quality is still very low. I think we've said this is a multi-year issue. We did very well. I would say we've got some outstanding products, a product called Revive.

Andy O'Brien: But look, I think the overall, I suppose for us, the acid test is still in the margin. If each region has nudged its margin up, and of course, we haven't given you inside each of the European countries, but generally speaking, that's been the dynamic as well there, that people have done the right things to largely hold or maintain margins. As long as that's the case, Clyde, we're comfortable and we're happy, even if it means that the right percent in country A is different from the correct percent in country B.

Speaker #3: Each region has nudged its margin up, and of course, we haven't given you details inside each of the European countries. But generally speaking, that's been the dynamic there as well—people have done the right things to largely hold or maintain margins.

Speaker #2: So this is one that should become a growth engine for us. And just imagine we could get that growing well at a time when maybe residential new build and the UK market at large was doing a little bit better.

Speaker #2: So yeah, so full disclosure there. This is one that we talk about a lot internally. And we'd certainly like to do better. If you talk about data centers more generally, the solution we have in Australia, I think look, I'm not a data center expert.

Speaker #3: So as long as that's the case, Clyde, we're comfortable and we're happy, even if it means that the right percent in country A is different from the correct percent in country B.

Speaker #1: I'm just trying to get some numbers for you, Clyde. Okay, so public housing, strong public RMI. I think public housing is still 5 million homes, quality is still very low.

Ronnie George: Just trying to get some numbers for you, Clyde. Okay. So public housing. Strong public RMI. I think public housing is still 5 million homes. Quality is still very low. I think we've said this is a multi-year issue. We did very well. I would say we've got some outstanding products, a product called Revive.

Speaker #2: But there's lots of different solutions. Liquid cooling, air cooling. We have a very relatively simple solution in terms of it's like a big fan coil.

Speaker #2: So it's a chilling device where you blow air over the chilling device. Big cassettes, very repetitive but big volume. We've had our first order.

Speaker #1: I think we've said this is a multi-year issue. We did very well. I would say we've got some outstanding products. A product called Revive, I think iteratively, we developed it again over the last 18 months and made the footprint a little bit smaller.

Speaker #2: And we're in sort of a confidential discussion around future projects. And I'm not going to give you the numbers that they talk about for the next five years because I think we could get carried away with ourselves.

Ronnie George: I think iteratively, we developed it again over the last 18 months, made the footprint a little bit smaller. We've got some smarter connections now. We coupled up with a company called Switchee to provide data capture for the housing association. So I'm still really positive about social housing outlook. Funding's there. This is a social issue, and it absolutely needs to be dealt with. So, one of our maybe stronger revenue streams, and the outlook's still really, I think, quite positive. If you look at UK commercial, I was just trying to look at Construction Products Association. I was just trying to get my head around what happened there. So it sort of had new build down 8, RMI down, sorry, 10 and 8. So I'm not arguing that 9.6 down is the market, but the market was very weak. There's almost some humility here.

Speaker #1: We've got some smarter connections now. We coupled up with a company called Switchy to provide data capture for the housing association. So I'm still really positive about the social housing outlook.

Speaker #2: But we're focusing on it. And it's slightly lower margin in terms of how we bring it to market. Can we transfer that technology to other areas of Europe?

Speaker #2: We did a little bit of data center business through a third party in the Nordics last year. It's just helpful. It is just really helpful.

Speaker #1: Funding's there. This is a social issue, and it absolutely needs to be dealt with. One of our stronger revenue streams—and the outlook is still, really, I think, quite positive.

Speaker #2: And you're always worried about this because if we have a couple of three or four good years around data centers, it's what comes beyond it.

Speaker #1: If you look at UK commercial, I was just trying to look at Construction Products Association. I was just trying to get my head around what happened there.

Speaker #2: And we're absolutely not trying to pivot pollution towards being exclusively focused on that area of the market. It's additive. It's helpful. But we're not hanging our hat on this is where we go in the future.

Speaker #1: So, it sort of had new build down, RMI down—sorry, 10 and 8. So, I'm not arguing that 9.6 down is the market, but the market was very weak.

Speaker #2: And some have. There are some names out there at the moment. You'll know who they are. We'd like that wider proposition. How do we if we're still here in five or 10 years' time standing up, presenting to the results, say we've just continued our 12% compounding CAGR of earnings.

Speaker #1: And there's almost some humility here. We stand up, and we're really positive about our business. But it would be remiss not to say that this is an area where we think we should be doing better.

Ronnie George: We stand up and we're really positive about our business, but it would be remiss not to say this is an area where we think we should be doing better. We've discussed it internally, and we've positioned ourselves to do it. I think it's one of those that once we build momentum in the space, it will run. So when we get the model right, and look, we've got some formidable competitors. Ingenio bought Monodraught last year, and they've owned it for about 12 months. Quite frankly, that's an area of the market that we should do better. So, let's see how they integrate that opportunity over time, and let's see how we can do better against opportunities like that. So this is one that should become a growth engine for us.

Speaker #1: And we've discussed it internally, and we've positioned ourselves to do it. I think it's one of those that, once we build momentum in the space, it will run.

Speaker #2: And so we need lots of things that are growing well rather than necessarily betting the ranch on one opportunity. Hope that helps. And you were here at the first results presentation.

Speaker #1: So when we get the model right and look, we've got some formidable competitors, and Ingeniate bought Monodraught last year, and they've owned it for about 12 months.

Speaker #2: So you've listened to all 25 of them probably. But anyway.

Speaker #1: And, quite frankly, that's an area of the market where we should do better. So, let's see how they integrate that opportunity over time, and let's see how we can do better against opportunities like that.

Speaker #3: Hi. Richard Hill from Jefferies. I've got two if I can. The first one, just looking at AC industries, could you give us a bit more on how you're going to internationalize that opportunity and kind of what you put in place so far?

Speaker #1: So, this is one that should become a growth engine for us. Just imagine if we could get that growing well at a time when, maybe, residential new build and the UK market at large were doing a little bit better.

Speaker #3: And then just a second part to that one, strong first six months, how does that look when you consider the contingent consideration a couple of years down the line?

Ronnie George: Just imagine we could get that growing well at a time when maybe residential new build and the UK market at large was doing a little bit better. So yeah, so full disclosure there. This is one that we talk about a lot internally, and we'd certainly like to do better. If you talk about data centers more generally, the solution we have in Australia, I think that. I'm not a data center expert, but there's lots of different solutions, liquid cooling, air cooling. We have a very relatively simple solution in terms of, it's like a big fan coil. So it's a chilling device where you blow air over the chilling device, big cassettes, very repetitive, but big volume. We've had our first order, and we're in a confidential discussion around future projects.

Speaker #1: So yeah, full disclosure there—this is one that we talk about a lot internally, and we'd certainly like to do better. If you talk about data centers more generally, the solution we have in Australia—I think, look, I'm not a data center expert.

Speaker #1: It's in the back of the it's in the back. Valued.

Speaker #4: I mean, it's at the current so the contingent consideration is in two tranches. There's a first smaller piece, which is measured in 2027. And then the larger piece that's about 9 million Aussie dollars.

Speaker #4: And then the larger piece, 20 million dollars, is 2029. Just to context it, to earn 100% of both of them, they would have to get to 330 million dollars of EBITDA Australian dollars in 2029.

Speaker #1: But there are lots of different solutions: liquid cooling, air cooling. We have a relatively simple solution in terms of—it's like a big fan coil.

Speaker #1: So it's a chilling device, where you blow air over the chilling device. Big cassettes, very repetitive, but big volume. We've had our first order.

Speaker #4: When we bought the business, it was 17. So that's the growth that we sort of targeted into it. So our current when you sort of noodle through the notes to the accounts, we've effectively assumed that we're going to hit the 2027 one because that's reasonably foreseeable.

Speaker #1: And we're in sort of a confidential discussion around future projects. I'm not going to give you the numbers that they talk about for the next five years, because I think we could get carried away with ourselves.

Ronnie George: I am not going to give you the numbers that they talk about for the next 5 years, because I think we could get carried away with ourselves. We are focusing on it. It is slightly lower margin, in terms of how we bring it to market. Can we transfer that technology to other areas of Europe? We did a little bit of data center business through a third party in the Nordics last year. It is just helpful. It is just really helpful and you always worry about this because if we have a couple of 3 or 4 good years around data centers, it is what comes beyond it. We are absolutely not trying to pivot Volution towards being exclusively focused on that area of the market. It is additive, it is helpful, but we are not hanging our hat on, this is where we go in the future. Some have.

Speaker #1: But we're focusing on it, and it's a slightly lower margin in terms of how we bring it to market. Can we transfer that technology to other areas of Europe?

Speaker #4: And at the moment, we've got a reasonably high proportion of the 2029 one that we're assuming is going to be hit as well. So we think that it's we'd love it to be maxed because that's the best checks we write because it tells you what the business has done.

Speaker #1: We did a little bit of data center business through a third party in the Nordics last year. It's just helpful. It is just really helpful.

Speaker #4: But yeah, we're assuming it's going to do well. And that shows the growth.

Ronnie George: It is just really helpful and you always worry about this because if we have a couple of 3 or 4 good years around data centers, it is what comes beyond it. We are absolutely not trying to pivot Volution towards being exclusively focused on that area of the market. It is additive, it is helpful, but we are not hanging our hat on, this is where we go in the future. Some have.

Speaker #1: And you're always worried about this because if we have a couple of three or four good years around data centers, it's what comes beyond it.

Speaker #1: If it gets there, it'll be six times trailing is the purchase price. So cracking deal and back to sort of capital discipline. That's where we want to deploy our capital.

Speaker #1: And we're absolutely not trying to pivot Volution towards being exclusively focused on that area of the market. It's additive, it's helpful, but we're not hanging our hat on this as where we go in the future.

Speaker #1: So the international growth piece is really interesting because when we were acquiring it, it was already underway. And we did a considerable piece of due diligence commercial.

Speaker #1: And some have. There are some names out there at the moment—you'll know who they are. We'd like that wider proposition. How do we, if we're still here in five or ten years' time, standing up and presenting the results, say we've just continued our 12% compounding CAGR of earnings?

Speaker #1: But we don't normally do with M&A. So when we bought Getir in Germany, we did no commercial due diligence. We're now the leading proposition for decentralized heat recovery in Germany.

Ronnie George: There are some names out there at the moment, you will know who they are. We would like that wider proposition. How do we, if we are still here in 10 or 15 years standing up presenting to the results, say we have just continued our 12% compounding CAGR of earnings. We need lots of things that are growing well rather than necessarily betting the ranch on one opportunity. Hope that helps. You were here at the first results presentation, so you have listened to all 25 of them probably. Anyway.

Speaker #1: Why do we need to do due diligence on a market we know? But we didn't know the mining customer base we didn't understand the lifetime of mines and everything else.

Speaker #1: And so we need lots of things that are growing well, rather than necessarily betting the ranch on one opportunity. Hope that helps. And you were here at the first results presentation.

Speaker #1: And we put quite a bit of color in previous presentations on AC. But it's already growing in those different areas. I think the bigger issue for us that we need to address is the sort of key man or key team risk.

Speaker #1: So you listened to all 25 of them, probably. But anyway.

Speaker #2: Hi, Richard Hill from Jefferies. I've got two, if I can. The first one, just looking at AC Industries—could you give us a bit more on how you're going to internationalize that opportunity and kind of what you've put in place so far?

Richard Hill: Hi, Richard Hill from Jefferies. I have got 2, if I can. The first one, just looking at AC Industries. Could you give us a bit more on how you are going to internationalize that opportunity and

Speaker #1: The earn-out's great because we think that gives us a degree of security. But what we have to do is to build the resource and the team behind them.

Speaker #1: And that's frankly why Andy and Lee and I are going out and supporting Anthony, the local regional managing director. It was us that sat in front of the ex-owners and convinced them that it should come inside Vollution.

Ronnie George: Yeah

Andy O'Brien: what you have put in place so far? Then just a second part to that one. Strong first 6 months. How does that look when you consider the contingent consideration a couple years down the line?

Richard Hill: what you have put in place so far? Then just a second part to that one. Strong first 6 months. How does that look when you consider the contingent consideration a couple years down the line?

Speaker #2: And then just a second part to that one: strong first six months. How does that look when you consider the contingent consideration a couple of years down the line?

Speaker #1: But now we want to encourage them to actually put a bit more resource in and build a stronger wider team. That, I think, is the bigger challenge for us, less so do I think that they're going to grow internationally.

Speaker #1: It's in the back of the—it's in the back. Valued.

Ronnie George: It is in the back of the. It is in the back. Valued.

Speaker #3: I mean, it's to do with the current contingent considerations in two tranches. There's a first smaller piece, which is measured in 2027, and then the larger piece, that's about $9 million Australian dollars.

Andy O'Brien: Yeah, it is at the current. The contingent consideration is in 2 tranches. There is a first smaller piece, which is measured in 2027, and then the larger. So that is about AUD 9 million. And then the larger piece, AUD 20 million, is 2029. Just to context it, to earn 100% of both of them, they would have to get to AUD 330 million of EBITDA in 2029. When we bought the business, it was 17. So that is the growth that we targeted into it. So our current, when you noodle through the notes to the accounts, we have effectively assumed that we are going to hit the 2027 one because that is reasonably foreseeable. And at the moment, we have got a reasonably high proportion of the 2029 one that we are assuming is going to be hit as well.

Speaker #1: They already are. And we haven't given you any color here in terms of exactly how it's going on the prior year. But it's above our range.

Speaker #3: And then the larger piece, $20 million, is 2029. Just to context it, to earn 100% of both of them, they would have to get to $330 million of EBITDA, Australian dollars, in 2029.

Speaker #1: And of course, we look forward to showing you that. And the second half of the year, as it starts to become organic.

Speaker #3: Thanks. And just to kind of the second one, you've kind of mentioned it there. Decentralized heat recovery, continental Europe. You called out that you had a strong fourth quarter.

Speaker #3: When we bought the business, it was 17. So that's the growth that we sort of targeted into it. So our current—when you sort of noodle through the notes to the accounts, we've effectively assumed that we're going to hit the 2027 one, because that's reasonably foreseeable.

Speaker #3: Could you just kind of break that down into how much was internal actions in your half market and then obviously with Getir as well?

Speaker #3: And at the moment, we've got a reasonably high proportion of the 2029 one that we're assuming is going to be hit as well. So we think that it's—we'd love it to be maxed, because that's the best checks we write, because it tells you what the business has done.

Speaker #3: Where do you see that going?

Speaker #1: Yeah. Interesting question how to sort of split what we brought to it and what looking cleaner ad. We had a really strong revenue growth in the Netherlands.

Andy O'Brien: So we think that it is. We would love it to be maxed because that is the best check to be right because it tells you what the business has done. But yeah, we are assuming it is going to do well and that shows the growth.

Speaker #3: But yeah, we're assuming it's going to do well, and that shows the growth.

Speaker #1: And I think it's absolutely about the proposition and the sales process. And we often talk about sales process in our group. And we're big on sharing best practice around innovation and around procurement and so forth.

Speaker #1: If it gets there, it'll be six times trailing in terms of purchase price. So, a cracking deal and back to sort of capital discipline—that's where we want to deploy our capital.

Ronnie George: If it gets there, it will be 6x trading as it is the purchase price. So, cracking deal and back to capital discipline. That is where we want to deploy our capital. So look, the international growth piece is really interesting because when we were acquiring it was already underway. And we did a considerable piece of due diligence commercial that we do not normally do with M&A. So when we bought getAir in Germany, we did no commercial due diligence. We are now the leading proposition for decentralised heat recovery in Germany. Why do we need to do due diligence on a market we know? But we did not know the mining customer base. We did not understand the lifetime of mines and everything else. And we put quite a bit of color in previous presentations on ACI, but it is already growing in those different areas.

Speaker #1: So, look, the international growth piece is really interesting because when we were acquiring it, it was already underway. And we did a considerable piece of commercial due diligence.

Speaker #1: But I think there's probably more to do around selling best practice. Cleaner ad have got a really well-executed machine. It's a project business. I think the way that they use CRM and they track these things is really good.

Speaker #1: But we don't normally do that with M&A. So when we bought Getir in Germany, we did no commercial due diligence. We're now the leading proposition for decentralized heat recovery in Germany.

Speaker #1: So I'm confident that we're growing significantly ahead of market in the Netherlands. In Germany, Inventor, we've alluded to. We actually changed the leadership about six or seven months ago.

Speaker #1: Why do we need to do due diligence on a market we know? But we didn't know the mining customer base; we didn't understand the lifetime of mines and everything else.

Speaker #1: We've moved to I haven't really talked about it at length today. But if you do get a chance in the prelims, quite a lot around our regional focus and how we've got four regional leaders now.

Speaker #1: And we put quite a bit of color in previous presentations on AC, but it's already growing in those different areas. I think the bigger issue for us that we need to address is the sort of key man or key team risk.

Speaker #1: And I think we've just got a stronger team in Germany and Inventor. And Getir coming in will be part of that team. Martin's already working on a more consolidated approach to innovation.

Ronnie George: I think the bigger issue for us that we need to address is the key man or key team risk. The earn-out is great because we think that gives us a degree of security. But what we have to do is to build the resource and the team behind them. That is frankly why Andy, Lee, and I are going out and supporting Anthony, the local Regional Managing Director. It was us that sat in front of the ex-owners and convinced them that they should come inside Volution. But now we want to encourage them to actually put a bit more resource in and build a stronger, wider team. That I think is the bigger challenge for us. Less so do I think that they are going to grow internationally, they already are.

Speaker #1: The earn-out's great because we think that gives us a degree of security. But what we have to do is build the resource and the team behind them.

Speaker #1: You see, for us and I'm not this isn't being critical of others on M&A and how they integrate. But we have a really fundamental view on acquisitions and how they come into the group.

Speaker #1: And that's, frankly, why Andean Lee and I are going out and supporting Anthony, the local regional managing director. It was us who sat in front of the ex-owners and convinced them that it should come inside Volution.

Speaker #1: And that is what I don't want is 31 deals and 31 managing directors all doing their own thing. Because for me, that is just a portfolio of operating companies.

Speaker #1: But now we want to encourage them to actually put a bit more resource in and build a stronger, wider team. That, I think, is the bigger challenge for us—less so do I think that they're going to grow internationally.

Speaker #1: What we actually want is some scale benefits and some joined-up thinking. So Getir is an OEM proposition in Germany. There's lots of heating companies in Germany.

Speaker #1: That are decarbonizing, moving to heat pumps. And as part of their proposition, they go and see customers and say, hi, you want a heat pump and you also need some decentralized heat recovery.

Speaker #1: They already are. And we haven't given you any color here in terms of exactly how it's going compared to the prior year, but it's above our range.

Ronnie George: We have not given you any color here in terms of exactly how it is growing on the prior year, but it is above our range. Of course, we look forward to showing you that in the H2 of the year as it starts to become organic.

Speaker #1: And, of course, we look forward to showing you that in the second half of the year, as it starts to become organic.

Speaker #1: So we've chosen to be in that market through Getir. What that means is that there's a leg of the market that we can't be in with our own brands.

Speaker #2: Thanks. And just to touch on the second one, you kind of mentioned it there: decentralized heat recovery in continental Europe. You called out that you had a strong fourth quarter.

Richard Hill: Thanks. Just the second one, you mentioned it there, decentralized heat recovery, Continental Europe. You called out that you had a strong Q4. Could you just break that down into how much was internal actions on your half market?

Speaker #1: But we can be with the OEMs. Now, you might say, but what if the OEM does it themselves? You look at these large heating groups in Germany.

Speaker #2: Could you just break that down into how much was internal actions in your half-market, and then obviously with Getir as well?

Speaker #1: They're not interested in developing a few million euros of revenue of heat recovery with the widest product and best portfolio in the market. So it's a really good, honest partnership.

Richard Hill: Okay.

Ronnie George: Okay.

Richard Hill: Then obviously with getAir as well, where do you see that going?

Speaker #2: Where do you see that going?

Speaker #1: We can go to them and say, we want to be your partner in that space. It's complementary to the project business that we have elsewhere under our other brands.

Speaker #1: Yeah, interesting question—how to sort of split what we brought to it and what Looking Cleaner added. We had really strong revenue growth in the Netherlands.

Ronnie George: Yeah. Interesting question. How to split what we brought to it and what. Looking at ClimaRad, we had a really strong revenue growth in the Netherlands, and I think it is absolutely about the proposition and the sales process. We often talk about sales process in our group. We are big on sharing best practice around innovation, around procurement, and so forth. I think it is probably more to do around selling best practice. ClimaRad has got a really well-executed machine. It is a project business. I think the way that they use CRM and they track these things is really good. So I am confident that we are growing significantly ahead of market in the Netherlands.

Speaker #1: And we're really excited about it. So it's a great acquisition. The integration is underway. It's only a couple of months in. And I think it'd be really exciting for us, notwithstanding the fact Inventor's actually started to perform when we alluded to it very well over the last four or five months.

Speaker #1: And I think it's absolutely about the proposition and the sales process. We often talk about sales process in our group, and we're big on sharing best practices around innovation and procurement, and so forth.

Speaker #1: But I think there's probably more to do around selling best practice. Cleaner Ad have got a really well-executed machine. It's a project business. I think the way that they use CRM and they track these things is really good.

Speaker #1: Oh, come back. Oh, sorry.

Speaker #3: Thanks. Morning. Ben Verra, RBC. Two, please. First on the target. So margin and returns, both comfortably ahead, I suppose. How do you think about those shaping out over the next few years?

Speaker #1: So I'm confident that we're growing significantly ahead of the market in the Netherlands. In Germany, Inventor, we've alluded to. We actually changed the leadership about six or seven months ago.

Ronnie George: In Germany, inVENTer, we have alluded to, we actually changed the leadership about 6 or 7 months ago. We have moved to, I have not really talked about it at length today, but if you do get a chance in the prelims, quite a lot around our regional focus and how we have got four regional leaders now. I think we have just got a stronger team in Germany in inVENTer, and getAir coming in will be part of that team. Martin is already working on a more consolidated approach to innovation. You see, for us, and this is not being critical of others on M&A and how they integrate, but we have a really fundamental view on acquisitions and how they come into the group. That is, what I do not want is 31 deals and 31 managing directors all doing their own thing. For me, that is just a portfolio of operating companies.

Speaker #3: Sounds like you've got a bit more to do on margin. Next one on leverage. Where do you see that shaking out to at the end of the year?

Speaker #1: We've moved to—I haven't really talked about it at length today—but if you do get a chance in the prelims, there's quite a lot around our regional focus and how we've got four regional leaders now.

Speaker #3: And how should we think about headroom for M&A from here?

Speaker #2: Yeah. Well, look, I'll take both of those events. So we've had the targets question quite a few times. And are you going to change them?

Speaker #1: And I think we've just got a stronger team in Germany in Inventor, and Getir coming in will be part of that team. Martin's already working on a more consolidated approach to innovation.

Speaker #2: Look, I think the returns on invested capital, as you saw there, it was 27, 28 percent three or four years ago. It's now sort of 25 and a half.

Ronnie George: Martin is already working on a more consolidated approach to innovation. You see, for us, and this is not being critical of others on M&A and how they integrate, but we have a really fundamental view on acquisitions and how they come into the group. That is, what I do not want is 31 deals and 31 managing directors all doing their own thing. For me, that is just a portfolio of operating companies.

Speaker #1: You see, for us—and I'm not, this isn't being critical of others on M&A and how they integrate—but we have a really fundamental view on acquisitions and how they come into the group.

Speaker #2: But in those last three years, we've been very, very acquisitive. And we want to carry on being so. So actually, if we can keep up same or very close to pace of M&A and retain those margins there or thereabouts in the low 20s, we're delighted with that.

Speaker #1: And that is what I don't want: 31 deals and 31 managing directors all doing their own thing. Because for me, that is just a portfolio of operating companies.

Speaker #2: So our target of 20 percent and above, I think, is absolutely valid there. It wouldn't be valid if we stopped acquiring. But then the whole business model changes.

Speaker #1: What we actually want is some scale benefits and some joined-up thinking. So Getir is an OEM proposition in Germany. There are a lot of heating companies in Germany.

Ronnie George: What we actually want is some scale benefits and some joined-up thinking. So getAir is an OEM proposition in Germany. There are lots of heating companies in Germany that are decarbonizing, moving to heat pumps. As part of their proposition, they go and see customers and say, "Hi, you want a heat pump, and you also need some decentralised heat recovery." So we have chosen to be in that market through getAir. What that means is that there is a leg of the market that we cannot be in with our own brands, but we can be with the OEMs. Now, you might say, but what if the OEM does it themselves? You look at these large heating groups in Germany, they are not interested in developing a few million euros of revenue of heat recovery with the widest product and best portfolio in the market. So it is a really good, honest partnership.

Speaker #2: So on the premise of acquisition, we think that target is right. Look, the margin target is something that we do keep getting sort of asked about because our stated target remains 20 percent and above.

Speaker #1: ...that are decarbonizing, moving to heat pumps. And as part of their proposition, they go and see customers and say, "Hi, you want a heat pump, and you also need some decentralized heat recovery."

Speaker #2: And as we showed all three regions are above that. And we're continuing to sort of eke out the organic opportunity. So again, boring answer, but it's the one I've given before.

Speaker #1: So we've chosen to be in that market through Getir. What that means is that there's a segment of the market that we can't be in with our own brands.

Speaker #2: This is not us saying it's going to come down to 20 percent. It's also not any lack of ambition or saying we've run out of ideas.

Speaker #1: But we can be with the OEMs. Now, you might say, but what if the OEM does it themselves? You look at these large heating groups in Germany.

Ronnie George: Now, you might say, but what if the OEM does it themselves? You look at these large heating groups in Germany, they are not interested in developing a few million euros of revenue of heat recovery with the widest product and best portfolio in the market. So it is a really good, honest partnership.

Speaker #2: But I think we just believe that there would be no benefit from restating a new target fund. I mean, you guys might model something slightly differently.

Speaker #1: They're not interested in developing a few million euros of revenue from heat recovery with the widest product range and best portfolio in the market. So it's a really good, honest partnership.

Speaker #2: But you can do that anyway based on what you think is going to happen. But internally, I guess what I'm really talking about, I think we've got it in the right spot right now in terms of margin awareness, margin attention, that people know to focus on all the small things.

Speaker #1: We can go to them and say, "We want to be your partner in that space. It's complementary to the project business that we have elsewhere under our other brands."

Ronnie George: We can go to them and say, "We want to be your partner in that space." It is complementary to the project business that we have elsewhere under our other brands. We are really excited about it. So it is a great acquisition. The integration is underway. It is only a couple of months in. I think it will be really exciting for us, notwithstanding the fact inVENTer has actually started to perform, and we alluded to it very well over the last 4 or 5 months. Oh, it has come back. Oh, sorry.

Speaker #2: But they also know that it's about a long-term play and doing the right things for the long term. And the danger if you said, I don't know, 23, 24, 25 percent target, you might drive in some sort of short-term cost-saving behavior, which isn't right for the long term.

Speaker #1: And we're really excited about it, so it's a great acquisition. The integration is underway; it's only a couple of months in, and I think it'll be really exciting for us, notwithstanding the fact that Inventor has actually started to perform—as we alluded to—very well over the last four or five months.

Speaker #2: So that's still our judgment. But it's not but absolutely, it's not about feeling it's going to drop down or taking foot off the gas in terms of the opportunities.

Speaker #1: Oh, come back. Oh, sorry.

Speaker #2: Thanks. Morning. Ben Vera, RBC. Two questions, please. First, on the target—so margin and returns, both comfortably ahead, I suppose. How do you think about those shaping out over the next few years?

Richard Hill: Thanks.

Ben Vera: Morning, Ben Vera, RBC. Two, please. First on the target, so margin and returns, both comfortably ahead, I suppose. How do you think about those shaping out over the next few years? Sounds like you've got a bit more to do on margin. Next one on leverage. Where do you see that shaking out to at the end of the year, and how should we think about headroom for M&A from here?

[Analyst] (RBC): Morning, Ben Vera, RBC. Two, please. First on the target, so margin and returns, both comfortably ahead, I suppose. How do you think about those shaping out over the next few years? Sounds like you've got a bit more to do on margin. Next one on leverage. Where do you see that shaking out to at the end of the year, and how should we think about headroom for M&A from here?

Speaker #1: Oh, leverage. I'm sorry. Yes, yes.

Speaker #2: So we showed you where we were right now. And of course, the movement in the year just gone. Was in the context of spending 105 million pound on M&A.

Speaker #2: Sounds like you've got a bit more to do on margin. Next one, on leverage: where do you see that shaking out at the end of the year?

Speaker #2: So look, what we say is, crudely, if we had a year with zero M&A, and we don't want to have one, but if we did, we would deliver about half a turn per year.

Speaker #2: And how should we think about headroom for M&A from here?

Speaker #3: Yeah, well, look, I'll take both of those events. So, we've had the targets question quite a few times. And are you going to change them?

Andy O'Brien: Well look, I'll take both of those, Ben. We've had the targets question quite a few times, and are you going to change them? Look, I think the returns on invested capital, as you saw there, it was 27%, 28% three or four years ago. It's now 25.5%. But in those last three years, we've been very, very acquisitive, and we want to carry on being so. So actually, if we can keep up same or very close to pace of M&A and retain those margins there or thereabouts in the low 20s, we're delighted with that. So our target of 20% and above, I think is absolutely valid there. It wouldn't be valid if we stopped acquiring, but then the whole business model changes. So, on the premise of acquisition, we think that target is right.

Speaker #2: So the cash generation is very, very consistent, very reliable. And that is what fuels the opportunity. So look, we've always said we're happy. If we did deals that took us up to two times, 2.1 times on acquisition for good cash generative businesses that bring it down the other side, we're happy to do that.

Speaker #3: Look, I think the returns on invested capital, as you saw there, were 27–28 percent three or four years ago. It's now sort of 25.5 percent.

Speaker #3: But in those last three years, we've been very, very acquisitive, and we want to carry on being so. So actually, if we can keep up the same, or very close to the pace of M&A, and retain those margins there or thereabouts in the low 20s, we're delighted with that.

Speaker #2: So Getir, we took us to 1.8. If we did nothing else this year, we probably end the year at 1.3, 1.4. So that gives you more than half a turn to play with still.

Speaker #3: So our target of 20 percent and above, I think, is absolutely valid there. It wouldn't be valid if we stopped acquiring, but then the whole business model changes.

Speaker #1: And then Toby, a question or four.

Speaker #3: So, on the premise of acquisition, we think that target is right. Look, the margin target is something that we do keep getting sort of asked about.

Speaker #3: Thanks very much. A couple of supplementaries on the UK, please, for the slightly longer-term perspective. But apologies if there's any repetition here. So in a five-year perspective, all the growth in the UK has come from residential, which I think is interesting.

Andy O'Brien: Look, the margin target is something that we do keep getting asked about because our stated target remains 20% and above. As we showed, all three regions are above that, and we're continuing to eke out the organic opportunity. So, again, boring answer, but it's one I've given before. This is not us saying it's going to come down to 20%. It's also not any lack of ambition or saying we've run out of ideas. But I think we just believe that there would be no benefit from restating a new target. Fine, you guys might model something slightly differently, but you can do that anyway based on what you think is going to happen. But internally is, I guess, what I'm really talking about.

Speaker #3: Because our stated target remains 20 percent and above, and as we showed, all three regions are above that. We're continuing to sort of eke out the organic opportunity.

Speaker #3: In itself, exports up a bit. Commercial and torrents I found are down. Just interested to know on that basis, where you think the market position is in the UK now compared to five years ago?

Speaker #3: So again, boring answer, but it's the one I've given before. This is not us saying it's going to come down to 20 percent. It's also not any lack of ambition or saying we've run out of ideas.

Speaker #3: But I think we just believe that there would be no benefit from restating a new target fund. I mean, you guys might model something slightly differently.

Speaker #3: Because that's an unusually big residential increase over that time period. That was the first question.

Speaker #3: But you can do that anyway, based on what you think is going to happen. But internally, I guess what I'm really talking about—I think we've got it in the right spot right now, in terms of margin awareness, margin attention—that people know to focus on all the small things.

Andy O'Brien: I think we've got it in the right spot right now in terms of margin awareness, margin attention, that people know to focus on all the small things, but they also know that it's about a long-term play and doing the right things for the long term. The danger, if you said, I don't know, 23%, 24%, 25% target, you might drive in some sort of short-term cost-saving behavior, which isn't right for the long term. So that's still our judgment, but absolutely it's not about feeling it's going to drop down or taking foot off the gas in terms of the opportunities.

Speaker #1: Yeah. OK. Do you want to ask all of them just in case? Because I might.

Speaker #3: Yeah. Sure. I guess the supplementary to that bit is, what do you think the mix looks like in five years' time? You've sort of spoken about the commercial a little bit.

Speaker #3: But they also know that it's about a long-term play and doing the right things for the long term. And the danger is, if you set, I don't know, a 23, 24, 25 percent target, you might drive some sort of short-term cost-saving behavior, which isn't right for the long term.

Speaker #3: Also in the UK, gross margin increase but that was amplified by what looks to be a reduction in opex over the year. Just wondering if there's anything structural in there that we should be aware of.

Speaker #3: So that's still our judgment. But it's not—absolutely—it's not about feeling it's going to drop down or taking our foot off the gas in terms of the opportunities.

Speaker #3: And final question, in concern for Europe, just wondering there's a small gross margin increase there as well, just wondering if there's any sort of reinvestment further down the P&L in the opex line that stopped that dropping all the way through.

Ronnie George: One more.

Speaker #1: Oh, leverage. I'm sorry. Yes, yes.

Andy O'Brien: Oh, leverage. I am sorry. Yes, yes. We showed you where we were right now, and of course, the movement in the year just gone, was in the context of spending GBP 105 million on M&A. What we say is, crudely, if we had a year with zero M&A, and we do not want to have one, but if we did, we would de-lever about half a turn per year. The cash generation is very, very consistent, very reliable, and that is what fuels the opportunity. Look, we have always said, if we did deals that took us up to 2 times, 2.1 times on acquisition for good cash generative businesses that bring it down the other side, we are happy to do that. getAir took us to 1.8. If we did nothing else this year, we would probably end the year at 1.3, 1.4.

Speaker #3: So, we showed you where we were right now. And of course, the movement in the year just gone was in the context of spending £105 million on M&A.

Speaker #1: OK. I've got it. I'm glad I asked for them all at once because I can bring them together. So UK, there's a couple of things that have happened in the UK that have meant the residential has grown significantly.

Speaker #3: So, look, what we say is, crudely, if we had a year with zero M&A—and we don't want to have one—but if we did, we would deliver about half a turn per year.

Speaker #3: So the cash generation is very, very consistent, very reliable. And that is what fuels the opportunity. So look, we've always said we're happy if we did deals that took us up to two times, 2.1 times on acquisition for good cash-generative businesses that bring it down the other side, we're happy to do that.

Speaker #1: And I think regulations is a huge part in that. So Lee chairs the beam of ventilation committee. I won't ask him to come up and talk to you about it.

Speaker #1: But we could tell you we know what's happening in this space. We've innovated in advance of where the regulations move to. There's a sort of a an expectation about where we're going to go in future.

Speaker #3: So, Getir took us to 1.8. If we did nothing else this year, we'd probably end the year at 1.3 or 1.4. So, that gives you more than half a turn to play with, still.

Speaker #1: And it's our job through Lee and the wider team to make sure we understand it. And then to innovate ahead of it. So one of our fastest growing products in the UK in the new build space, we developed in 2022.

Andy O'Brien: That gives you more than half a turn to play with still.

Speaker #1: And then, Toby, a question or four.

Ronnie George: Toby has a question or four.

Speaker #1: And we were talking about it the other day. And we were talking about the volumes that we sold in the first couple of months.

Speaker #2: Thanks very much. A couple of supplementary questions on the UK, please, for a slightly longer-term perspective. Apologies if there's any repetition here. So, looking at a five-year perspective, all the growth in the UK has come from residential, which I think is interesting.

[Analyst]: Thanks very much. A couple of supplementaries on the UK, please, with a slightly longer-term perspective, but apologies if there is any repetition here. In a five-year perspective, all the growth in the UK has come from residential, which I think is interesting in itself. Exports up a bit. Commercial and Torin-Sifan are down. Just interested to know on that basis where you think the market position is in the UK now compared to

Speaker #1: And we went, is that it? And now it's very significant. And the reason is we got there first. We had that first move advantage.

Speaker #1: But it was actually a very, very good solution, specific fan power, noise, and cost. We're absolutely paranoid about cost. I say it with Martin in the room again.

Speaker #2: In itself, exports are up a bit. Commercial and Torin Sifan are down. Just interested to know, on that basis, where you think the market position is in the UK now compared to five years ago?

Speaker #1: He knows it anyway. But we're absolutely paranoid about cost because this is a competitive market. There are other people out there. There are very good competitors in this residential space.

Speaker #1: So if we're going to have a bigger share as we grow, we've got to be able to bring not only a compelling solution to our customers, but one that they're prepared to pay for.

[Analyst]: five years ago, because that is an unusually big residential increase over that time period. That was the first question?

Speaker #2: Because that's an unusually big residential increase over that time period. That's the first question.

Speaker #1: And there's others that I think do elements of that. But you've got to do both of it. So I think we're predominantly, from an organic perspective, going to be this sort of split.

Speaker #1: Yeah, OK. Do you want to ask all of them just in case? Because I might. Yeah.

Andy O'Brien: Yeah. Okay. Do you want to ask all of them, just in case? Because I might

Speaker #2: Yeah, sure. I guess the supplementary to that bit is: what do you think the mix looks like in five years’ time? You’ve sort of spoken about the commercial a little bit.

[Analyst]: Yeah, sure.

[Analyst]: Yeah.

Andy O'Brien: Yeah.

Speaker #1: I do think there's some commercial add-ons that we could do. And we started to think about them a little bit more. But we won't rush.

[Analyst]: I guess the supplementary to that bit is, what do you think the mix looks like in 5 years' time? You've spoken about the commercial a little bit. Also in the UK, gross margin increase, but that was amplified by what looks to be a reduction in OpEx over the year. Just wondering if there's anything structural in there that we should be aware of. In Continental Europe, just wondering, there's a small gross margin increase there as well. Just wondering if there's any sort of reinvestment further down the P&L and the OpEx line that stopped that dropping all the way through. Okay, I've got it. I'm glad that I asked for them all at once because I can bring them together.

Speaker #1: And all I would say is, although we're talking about the complexion of the business, OEM and commercial being maybe broadly similar, the level of profitability that we deliver from those revenue streams is significantly higher.

Speaker #2: Also, in the UK, gross margin increased, but that was amplified by what looks to be a reduction in OPEX over the year. Just wondering if there's anything structural in there that we should be aware of.

Speaker #1: The operating profit in the year was circa 50 million. And if you go back, when we listed the group, was circa 20, including some overseas activities.

Speaker #2: And final question: in terms of Europe, I'm just wondering—there's a small gross margin increase there as well. Just wondering if there's any sort of reinvestment further down the P&L in the OPEX line that stopped that dropping all the way through?

Speaker #1: But it was mainly UK. It's been a very, very exciting journey. Gross margin, I think it's operational excellence and efficiency. We had a good year in the UK in 2005.

Speaker #1: My sense was that we weren't as efficient as we should have been. And we doubled down on those efficiencies in 2006, although we also took on an additional building that we paid for and expanded the operating profit margins.

Speaker #1: OK, I've got it. I'm glad I asked for them all at once, because I can bring them together. So, UK—there are a couple of things that have happened in the UK that have meant the residential has grown significantly.

Ronnie George: Okay, I've got it. I'm glad that I asked for them all at once because I can bring them together.

Ronnie George: So UK, there's a couple of things that happened in the UK that have meant the residential has grown significantly, and I think regulations is a huge part in that. Lee chairs the BEAMA Ventilation Committee. I won't ask him to come up and talk to you about it, but we could tell you, we know what's happening in this space. We've innovated in advance of where the regulations move to. There's an expectation about where we're going to go in future, and it's our job, through Lee and the wider team, to make sure we understand it and then to innovate ahead of it. So one of our fastest-growing products in the UK, in the new build space, we developed in 2022.

Speaker #1: The new facility at Dudley that we had a full year of lease costs in 2006 that we didn't have in 2005. And then just more generally about investment.

Speaker #1: And I think regulations are a huge part of that. So, Lee chairs the BEAMA ventilation committee. I won't ask him to come up and talk to you about it.

Speaker #1: Our biggest investment that we make is primarily in products. In tooling and in R&D and in products. It is a relatively capex light model.

Speaker #1: But we can tell you we know what's happening in this space. We've innovated in advance of where the regulations move to. There's sort of an expectation about where we're going to go in future.

Speaker #1: We don't have an ambition to necessarily own our facilities. So quite a few of our facilities are leased. And that's fine. That gives us some flexibility for the long term.

Speaker #1: And it's our job, through Lee and the wider team, to make sure we understand it, and then to innovate ahead of it. So, one of our fastest-growing products in the UK in the new build space, we developed in 2022.

Speaker #1: So the business is actually investing quite a bit. And I alluded to some of the things that are underway at the moment. We bought the facility in North Macedonia because we couldn't lease it.

Speaker #1: And we were talking about it the other day, and we were discussing the volumes that we sold in the first couple of months.

Ronnie George: We were talking about it the other day, and we were talking about the volumes that we sold in the first couple of months, and we went, "Is that it?" Now it's very significant. The reason is we got there first. We had that first-mover advantage, but it was actually a very good solution. Specific fan power, noise, and cost. We're absolutely paranoid about cost. I say it with Martin in the room, and he knows it anyway, but we're absolutely paranoid about cost because this is a competitive market. There are other people out there. There are very good competitors in this residential space. If we're going to have a bigger share as we grow, we've got to be able to bring not only a compelling solution to our customers, but one that they're prepared to pay for.

Speaker #1: We're spending a lot of money on expanding it at the moment. And quite frankly, our ambition for Erie Energy Recovery Industries over the next five years is to double the revenue.

Speaker #1: And we went—is that it? And now it's very significant. The reason is we got there first. We had that first-move advantage.

Speaker #1: But it was actually a very, very good solution—specific fan power, noise, and cost. We're absolutely paranoid about cost. I say it with Martin in the room again.

Speaker #1: Now, that's not a new target that we're necessarily going to guide to. But that's the ambition that we're working to internally and is driving the sort of investment decision.

Speaker #1: He knows it anyway. But we're absolutely paranoid about cost, because this is a competitive market. There are other people out there; there are very good competitors in this residential space.

Speaker #1: And it's back to Andy's point on margin. We don't set margin targets for the sake of margin targets. What we do is we look at what's the art of the possible.

Speaker #1: So, if we're going to have a bigger share as we grow, we've got to be able to bring not only a compelling solution to our customers, but one that they're prepared to pay for.

Speaker #1: And it's also when it comes to pricing. I talk about our pricing being value-based. What is the value of the proposition that we bring to the customer?

Ronnie George: There's others that I think do elements of that, but you've got to do both of it. I think we're predominantly, from an organic perspective, going to be this sort of split. I do think there's some commercial add-ons that we could do, and we started to think about them a little bit more, but we won't rush. All I would say is, although we're talking about the complexion of the business, OEM and commercial being maybe broadly similar, the level of profitability that we deliver from those revenue streams is significantly higher. The operating profit in the year was circa GBP 50 million, and if you go back, when we listed the group was circa GBP 20 million, including some overseas activities, but it was mainly UK. It's been a very exciting journey. Gross margin, I think it's operational excellence and efficiency.

Speaker #1: And there are others that I think do elements of that. But you've got to do both of it. So I think we're predominantly, from an organic perspective, going to be this sort of split.

Speaker #1: And how much are they prepared to pay for it? That's really important. And that's probably slightly different for our industry because it quite often ends up being cost plus and so forth.

Speaker #1: And for me, it's about if we do a really good job innovating, we have great service. And the customer is prepared to pay X.

Speaker #1: I do think there are some commercial add-ons that we could do, and we've started to think about them a little bit more. But we won't rush.

Speaker #1: And all I would say is, although we're talking about the complexion of the business—OEM and commercial being maybe broadly similar—the level of profitability that we deliver from those revenue streams is significantly higher.

Speaker #1: That's what they'll pay. And if you look in the UK, as I say, lots of formidable competitors. But we're able to eke out share gains.

Speaker #1: And that's not because we charge necessarily more than anyone else. But we create more value when we do it. We're just coming yeah, OK.

Speaker #1: The operating profit in the year was circa £50 million. And if you go back, when we listed the group, it was circa £20 million, including some overseas activities.

Speaker #1: Do we have any online at all? Just. A couple. OK. We're OK to carry on. Please go for it.

Speaker #1: But it was mainly UK. It's been a very, very exciting journey. Gross margin—I think it's operational excellence and efficiency. We had a good year in the UK in 2005.

Speaker #3: Yeah. Good morning. It's Rajesh Patki from Barclays. I've got just one remaining. You've talked about diversification away from the UK into Europe and Australia, over a number of years.

Ronnie George: We had a good year in the UK in 2025. My sense was that we weren't as efficient as we should have been, and we doubled down on those efficiencies in 2026. Although, we also took on additional building that we paid for and expanded the operating profit margins. The new facility at Dudley that we had a full year of lease costs in 2026 that we didn't have in 2025. Then just more generally about investment. Our biggest investment that we make is primarily in products, in tooling, and in R&D and in products. It is a relatively CapEx-light model. We don't have an ambition to necessarily own our facilities, so quite a few of our facilities are leased, and that's fine. That gives us some flexibility for the long term. The business is actually investing quite a bit.

Speaker #1: My sense was that we weren't as efficient as we should have been, and we doubled down on those efficiencies in '26. Although, we also took on an additional building that we paid for and expanded the operating profit margins.

Speaker #3: Can you talk about incremental thoughts on potentially expanding into the US? Or are you content with the opportunities in the existing regions for now?

Speaker #1: We've got a new facility at Dudley that we had a full year of lease costs in '26 that we didn't have in '25. And then, just more generally about investment, our biggest investment that we make is primarily in products.

Speaker #3: Also, if you've taken a look at any targets, what do you see as the key constraints in the US? From M&A perspective. Thank you.

Speaker #1: I mean, I'll answer this. More sort of holistically, I think, Rajesh. So we think diversification is really important. And it's about expanding access to the markets.

Speaker #1: In tooling, in R&D, and in products, it is a relatively capex-light model. We don't have an ambition to necessarily own our facilities.

Speaker #1: It's not just doing it for the sake of it. It's because if we just stayed as a UK-only business, there was a limit to obviously where we could sell into and how far we could grow.

Speaker #1: So quite a few of our facilities are leased, and that's fine. That gives us some flexibility for the long term. So the business is actually investing quite a bit.

Speaker #1: So it's all about the market access, the growth opportunities. Our judgment still is that at the moment, the three markets, Ronnie talked about making choices earlier.

Speaker #1: And I alluded to some of the things that are underway at the moment. We bought the facility in North Macedonia because we couldn't lease it.

Ronnie George: I alluded to some of the things that are underway at the moment. We bought the facility in North Macedonia because we couldn't lease it. We're spending a lot of money on expanding it at the moment. Quite frankly, our ambition for ERI, Energy Recovery Industries, over the next 5 years is to double the revenue. That's not a new target that we're necessarily going to guide to, but that's the ambition that we're working to internally and is driving the sort of investment decision. It's back to Andy's point on margin. We don't set margin targets for the sake of margin targets. What we do is we look at what's the art of the possible. It's also when it comes to pricing, I talk about our pricing being value-based.

Speaker #1: The markets we've chosen were deliberate and are deliberate because we think there's a product overlap and product sharing opportunity. There's an organizational sort of efficiency opportunities.

Speaker #1: We're spending a lot of money on expanding it at the moment. And, quite frankly, our ambition for Erie Energy Recovery Industries over the next five years is to double the revenue.

Speaker #1: Now, that's not a new target that we're necessarily going to guide to. But that's the ambition that we're working to internally, and it's driving the sort of investment decisions.

Speaker #1: So we think that these are still good choices. And we think there's a lot more we can do in all three, but particularly probably in continental Europe from a market share perspective.

Speaker #1: But selective in the other two. And look, when it comes to the US, or other markets, we also have quite openly said we are opportunistic.

Speaker #1: And it's back to Andy's point on margin. We don't set margin targets for the sake of margin targets. What we do is we look at what's the art of the possible.

Speaker #1: And it's also important when it comes to pricing. I talk about our pricing being value-based — what is the value of the proposition that we bring to the customer?

Speaker #1: So we're not going to say no, never. And we must do X. Or we're not going to do Y. Our judgment, though, is that almost certainly at the moment, we'd have to pay more.

Ronnie George: What is the value of the proposition that we bring to the customer, and how much are they prepared to pay for it? That's really important, and that's probably slightly different for our industry because it quite often ends up being cost plus and so forth. For me, it's about if we do a really good job innovating, we have great service and the customer's prepared to pay X, that's what they'll pay. If you look in the UK, as I say, lots of formidable competitors, but we're able to eke out share gains. That's not because we charge necessarily more than anyone else, but we create more value when we do it. We're just coming. Yeah, okay. Do we have any online at all? Just.

Speaker #1: And how much are they prepared to pay for it? That's really important. And that's probably slightly different for our industry, because it quite often ends up being cost plus and so forth.

Speaker #1: We'd have to buy bigger. The sharing of the synergies and benefits are less certain. And so back to that importance of returns. At the moment, our judgment is it probably wouldn't offer the same return outcome as the existing markets would.

Speaker #1: And for me, it's about if we do a really good job innovating, we have great service, and the customer is prepared to pay X.

Speaker #1: That's what they'll pay. And if you look in the UK, as I say, lots of formidable competitors, but we're able to eke out share gains.

Speaker #1: But we'll keep learning, keep observing, and be opportunistic in case something ever did pop up. But there's not a we must be there or we must be there it's all about that returns piece.

Speaker #1: And that's not because we charge, necessarily, more than anyone else, but we create more value when we do it. We're just coming—yeah, OK.

Speaker #3: It's a great question because I don't want to be controversial. But ratings if you look at some of the US HVAC plays that may or may not be delivering a similar trajectory of performance as us, and ratings versus where we are, that's probably a debate in itself.

Speaker #1: Do we have any online at all? Just.

Speaker #3: Got a couple.

[Company Representative] (Volution): We've got a couple online.

Speaker #1: A couple. OK, we're OK to carry on. Please go for it.

Ronnie George: A couple. Okay. We are okay to carry on. Please go for it.

Speaker #3: Good morning, Rajesh Patki from Barclays. I've got just one remaining question. You've talked about diversification away from the UK into Europe and Australia over a number of years.

Rajesh Patki: Good morning. It is Rajesh Patki from Barclays. I have just one remaining. You have talked about diversification away from the UK into Europe and Australia over a number of years. Can you talk about incremental thoughts on potentially expanding into the US, or are you content with the opportunities in the existing regions for now? Also, if you have taken a look at any targets, what do you see as the key constraints in the US from an M&A perspective? Thank you.

Speaker #3: As Andy says, for us, it's at the synergies and the route to delivering. If you take AC industries, it's a step out from buildings into mining ventilation.

Speaker #3: Can you talk about incremental thoughts on potentially expanding into the US? Or are you content with the opportunities in the existing regions for now?

Speaker #3: I don't think we'd have done that deal in Australia if we weren't in Australia. Because we want to bring some competence around it, some governance and management, some security.

Speaker #3: Also, if you’ve taken a look at any targets, what do you see as the key constraints in the US from an M&A perspective? Thank you.

Speaker #3: And the thing is, although the US is a big market, it's not driving energy efficiency in the same way as maybe we see in Europe.

Speaker #1: Amina, I'll answer this. More sort of holistically, I think, Rajesh. So, we think diversification is really important, and it's about expanding access to the markets.

Andy O'Brien: I will answer this more holistically, I think, Rajesh. We think diversification is really important, and it is about expanding access to the markets. It is not just doing it for the sake of it. It is because if we just stayed as a UK-only business, there was a limit to obviously where we could sell into and how far we could grow. It is all about the market access, the growth opportunities. Our judgment still is that at the moment, the three markets, Ronnie talked about making choices earlier, the markets we have chosen were deliberate and are deliberate because we think there is a product overlap and product sharing opportunity. There are organizational efficiency opportunities.

Speaker #3: But look, as I say, evolution's got a huge runway of opportunity many years into the future. And at some stage, we might be standing up here saying we've done deal number 53, not 31.

Speaker #1: It's not just doing it for the sake of it. It's because, if we just stayed as a UK-only business, there was a limit to, obviously, where we could sell into and how far we could grow.

Speaker #3: And we're running out of opportunities in our chosen markets. And there's a step out. But I think it's about returns. And if you look at AC and the returns that will make there, I'm confident on Get Air as well.

Speaker #1: So it's all about the market access, the growth opportunities. Our judgment still is that, at the moment, the three markets—Ronnie talked about making choices earlier—the markets we've chosen were deliberate and are deliberate, because we think there's a product overlap and product sharing opportunity.

Speaker #3: They're stellar. And there's a risk of dilution, I think.

Speaker #1: No more in the room. Just see if we've got any-.

Speaker #2: Just a couple online from David Farrell, Jefferies. You've touched on the growth, international growth on AC industries. But can you expand on what international infrastructure you might need to drive the growth?

Speaker #1: There's an organizational sort of efficiency opportunities. So we think that these are still good choices. And we think there's a lot more we can do in all three, but particularly probably in continental Europe from a market share perspective.

Andy O'Brien: We think that these are still good choices and we think there is a lot more we can do in all three, but particularly probably in Continental Europe from a market share perspective, but selective in the other two. When it comes to the US or other markets, we also have quite openly said we are opportunistic, so we are not going to say, "No, never," and we must do X or we are not going to do Y. Our judgment, though, is that almost certainly at the moment, we would have to pay more, we would have to buy bigger, the sharing of the synergies and benefits are less certain, and so back to that importance of returns. At the moment, our judgment is it probably would not offer the same return outcome as the existing markets would.

Speaker #2: And second question from David. How do you see the interplay between ventilation and cooling solutions?

Speaker #1: But selective in the other two. And, look, when it comes to the US or other markets, we have also quite openly said we are opportunistic.

Speaker #1: OK. I can do both those quickly. So if you look at AC industries and the proposition, the nice thing about the solution is because it's a HDPE, high-density polyethylene textile solution, it's actually flat-pack.

Speaker #1: So we're not going to say, "No, never," and we must do X, or we're not going to do Y. Our judgment, though, is that almost certainly, at the moment, we'd have to pay more.

Speaker #1: It expands in the mine when it's under pressure. It charges at 4,000 pascals. But we can actually manufacture and ship anywhere and already doing that.

Speaker #1: We'd have to buy bigger. The sharing of the synergies and benefits is less certain. And so, back to that importance of returns: at the moment, our judgment is it probably wouldn't offer the same return outcome as the existing markets would.

Speaker #1: So I think the sort of infrastructure would be, if we grew significantly ahead of our expectations, there'd be a factory capacity challenge there. And then it might be appropriate to manufacture these products closer to the market.

Speaker #1: But we'll keep learning, keep observing, and be opportunistic in case something ever does pop up. But there's not a 'we must be there' or 'we must be there'; it's all about that returns piece.

Andy O'Brien: But we will keep learning, keep observing, and be opportunistic in case something ever did pop up. There is not a, we must be there or we must be there. It is all about that returns piece.

Speaker #1: But look, our logistics costs are probably only about 5% to 6% of revenue. And the advantage of scaling up our existing Sydney factory, which is exactly what we're doing right now, works.

Ronnie George: It is a great question because I do not want to be controversial, but ratings, if you look at some of the US HVAC plays that may or may not be delivering a similar trajectory of performance as us and ratings versus where we are, that is probably a debate in itself. As Andy says, for us, it is at the synergies and the route to delivering. If you take AC Industries, it is a step out from buildings into mining ventilation. I do not think we would have done that deal in Australia if we were not in Australia because we want to bring some competence around it, some governance, some management, some security. The thing is, although the US is a big market, it is not driving energy efficiency in the same way as maybe we see in Europe.

Speaker #2: It's a great question because I don't want to be controversial. But ratings, if you look at some of the U.S. HVAC plays that may or may not be delivering a similar trajectory of performance as us, and ratings versus where we are, that's probably a debate.

Speaker #1: The rest of the infrastructure is more about selling expertise closer to the customer. So I think we'd like some more selling expertise in those local markets.

Speaker #1: Rather than having to fly all over the world. So I think they're relatively light touch. If we did do a new factory, it would be a fantastic outcome because of the growth.

Speaker #2: And itself, as Andy says, for us, it's about the synergies and the route to delivering. If you take AC Industries, it's a step out from buildings into mining ventilation.

Speaker #1: And then the other question was on and I've forgotten.

Speaker #2: I don't think we would have done that deal in Australia if we weren't in Australia, because we want to bring some competence around it—some governance and management, some security.

Speaker #2: Just on interplay between ventilation and cooling.

Speaker #1: Yes. And cooling. Yes. OK. It's a really good it's a good question because air conditioning is the only way to properly cool a hot property in the middle of summer when it's 35 degrees outside.

Speaker #2: And the thing is, although the US is a big market, it's not driving energy efficiency in the same way as maybe we see in Europe.

Speaker #2: But look, as I say, Volution's got a huge runway of opportunity many years into the future. And at some stage, we might be standing up here saying we've done deal number 53, not 31.

Ronnie George: But look, as I say, Volution has got a huge runway of opportunity many years into the future, and at some stage, we might be standing up here saying, we have done deal number 53, not 31, and we are running out of opportunities in our chosen markets, and there is a step out. But I think it is about returns. If you look at ACI and the returns that we will make there, I am confident on getAir as well, they are stellar, and there is a risk of dilution, I think. No more in the room. Let us just see if we have got any.

Speaker #1: You'll never get to the sort of cooling that we can provide. But it's expensive. I was talking to somebody the other day. He said, oh, I ran my air conditioning all night.

Speaker #1: And I said, have you calculated how much it costs? So it's 12 pound a night, 360 pound a month. And they fell off their chair.

Speaker #2: And we're running out of opportunities in our chosen markets, and there's a step out. But I think it's about returns. And if you look at AC and the returns that we'll make there, I'm confident on Get Air as well.

Speaker #1: It's expensive. These are products that consume a lot of energy. They're expensive to install. And so what we're seeing is sort of ambient type cooling or free cooling.

Speaker #2: They're stellar, and there's a risk of dilution, I think.

Speaker #1: No more in the room. Just see if we've got any—

Speaker #1: And we see that. And we already happens in schools in the UK, there's something called natural and hybrid ventilation. And what happens in the summer, we have some quite sophisticated controls strategies that bring in all the cool air from outside overnight.

[Company Representative] (Volution): Just a couple online from David Harrell, Jefferies. You have touched on the international growth on AC Industries, but can you expand on what international infrastructure you might need to drive the growth? Second question from David, how do you see the interplay between ventilation and cooling solutions?

Speaker #3: Just a couple online from David Farrell, Jefferies. You've touched on the growth—international growth on AC industries—but can you expand on what international infrastructure you might need to drive that growth?

Speaker #1: You bring the temperature of the classroom down to 17, 18 degrees in the morning. And then you're less likely to overheat through the day.

Speaker #3: And second question from David: How do you see the interplay between ventilation and cooling solutions?

Speaker #1: So ventilation and cooling are absolutely entwined. And I think that's a greater opportunity for us. And maybe we don't talk about it enough. But we have a lot of solutions at the moment, that provide ambient cooling, summer bypassing mechanical ventilation, heat recovery units, part O.

Speaker #1: OK, I can do both those quickly. So, if you look at AC Industries and the proposition, the nice thing about the solution is because it's an HDPE—high-density polyethylene—textile solution, it's actually flat-pack.

Ronnie George: Okay. I can do both of those quickly. If you look at AC Industries and the proposition, the nice thing about the solution is because it is a HDPE, high-density polyethylene textile solution, it is actually flat pack. It expands in the mine when it is under pressure. It charges at 4,000 pascals, but we can actually manufacture and ship anywhere and we are already doing that. I think the infrastructure would be if we grew significantly ahead of our expectations, there would be a factory capacity challenge there, and then it might be appropriate to manufacture these products closer to the market. Our logistics costs are probably only about 5% to 6% of revenue, and the advantage of scaling up our existing Sydney factory, which is exactly what we are doing right now, works. The rest of the infrastructure is more about selling expertise closer to the customer.

Speaker #1: We have cool box products in the UK that we sell to developers. So yeah. So the overheating risk is a tailwind opportunity for us in ventilation.

Speaker #1: It expands in the mine when it's under pressure. It charges at 4,000 Pascals. But we can actually manufacture and ship anywhere, and we are already doing that.

Speaker #1: So I think the sort of infrastructure would be, if we grew significantly ahead of our expectations, there’d be a factory capacity challenge there. And then it might be appropriate to manufacture these products closer to the market.

Speaker #1: OK. So sorry. We went over. But great questions. And just to finish, we're really excited about our results. And equally optimistic as ever about the outlook.

Speaker #1: The rest of the infrastructure is more about selling expertise closer to the customer. So, I think we'd like some more selling expertise in those local markets.

Ronnie George: I think we would like some more selling expertise in those local markets rather than having to fly all over the world. I think they are relatively light touch. If we did need a new factory, it would be a fantastic outcome because of the growth. The other question was on, and I have forgotten.

Speaker #1: Rather than having to fly all over the world, I think they're relatively light touch. If we did the new factory, it would be a fantastic outcome because of the growth.

Speaker #1: And then the other question was on, and I've forgotten, I think.

Speaker #3: Just on the interplay between ventilation and cooling.

[Company Representative] (Volution): Just on interplay between ventilation and cooling.

Ronnie George: Yes, and cooling. It is a good question because air conditioning is the only way to properly cool a hot property in the middle of summer when it is 35 degrees Celsius outside. You will never get to the sort of cooling that we can provide, but it is expensive. I was talking to somebody the other day, said, "Oh, I ran my air conditioning all night." I said, "Have you calculated how much it costs?" I said, "It is GBP 12 a night, GBP 360 a month," and they fell off their chair. It is expensive. These are products that consume a lot of energy. They are expensive to install. What we are seeing is ambient type cooling or free cooling, and we see that. It already happens.

Speaker #1: Yes, and cooling. Yes, OK. It's a really good question because air conditioning is the only way to properly cool a hot property in the middle of summer when it's 35 degrees outside.

Speaker #1: You'll never get to the sort of cooling that we can provide, but it's expensive. I was talking to somebody the other day. He said, "Oh, I ran my air conditioning all night."

Speaker #1: And I said, "Have you calculated how much it costs?" So, it's £12 a night, £360 a month. And they fell off their chair.

Speaker #1: It's expensive. These are products that consume a lot of energy. They're expensive to install. And so, what we're seeing is sort of ambient-type cooling, or free cooling.

Speaker #1: And we see that. And it already happens in schools in the UK; there's something called natural and hybrid ventilation. And what happens in the summer is we have some quite sophisticated control strategies that bring in all the cool air from outside overnight.

Ronnie George: In schools in the UK, there is something called natural hybrid ventilation. What happens in the summer, we have some quite sophisticated control strategies that bring in all the cool air from outside overnight. You bring the temperature of the classroom down to 17, 18 degrees in the morning, then you are less likely to overheat through the day. Ventilation and cooling are absolutely entwined, and I think that is a greater opportunity for us, and maybe we do not talk about it enough. We have a lot of solutions at the moment that provide ambient cooling, summer bypassing, mechanical ventilation, heat recovery units. Part O, we have cool box products in the UK that we sell to developers. The overheating risk is a tailwind opportunity for us in ventilation. Sorry, we went over, but great questions.

Speaker #1: You bring the temperature of the classroom down to 17 or 18 degrees in the morning, and then you're less likely to overheat through the day.

Speaker #1: So ventilation and cooling are absolutely entwined, and I think that's a greater opportunity for us. Maybe we don't talk about it enough, but we have a lot of solutions at the moment that provide ambient cooling, summer bypass in mechanical ventilation and heat recovery units.

Speaker #1: Part O, we have Cool Box products in the UK that we sell to developers. So, yeah. The overheating risk is a tailwind opportunity for us in ventilation.

Speaker #1: OK, we're so sorry we went over. But great questions! And just to finish, we're really excited about our results, and equally optimistic as ever about the outlook.

Ronnie George: Just to finish, we are really excited about our results and equally optimistic as ever about the outlook. Thanks to all of you for giving up your time this morning to come and see us. Really appreciate it. Thank you.

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Full Year 2026 Volution Group PLC Preliminary Earnings Call

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