Hunting PLC

Good morning, everybody. I appreciate you taking the time to be here today as we talk about our results for 2025. And I want to thank everybody also online that will be tuning in to listen and watch this. The timing today is very, very interesting. And I thought before I got into the presentation, I'd just make a few comments and updates on what's going on. We have people in Saudi Arabia. We have people in Dubai where they're all safe right now. We've been checking on them on a regular basis. I think that trying to predict what's going to happen with that situation in the next couple weeks is kind of a crazy guess right now. Nobody knows. We don't know. But it is one that definitely has the world focused on energy. And I think if there's one takeaway as we start this out for, you know, hunting's, you know, what we did in 25 and what the future holds for us, I think it highlights again the importance of energy security and the fact that when you look at our clients' reserve life as far as people like Shell saying six years in a row their reserve life has declined, I think it only points to a long-term bright outlook for the oilfield service industry and for hunting in particular. So as we start this presentation, I always want to reach out and thank the team at Hunting. There's a tremendous amount of talent within our organization and a great team that delivers these results. And I'm just very privileged to work with this group of people every day. So I want to thank them first and foremost for all of their support and what they do. Operational highlights, 2025 was a great year for us. I don't think you're going to see a whole lot of changes from what we kind of preannounced back in January. We had a lot of highlights for the year, a lot of hard work done, and a lot of good execution took place. The two acquisitions we were able to add into the group with flexible engineering solutions and also the organic oil recovery positioned us well to continue to diversify our client base and to be more global in all that we need to do from a revenue point of view. We executed a good bit of the KOC orders. Those are done. Fortunately, I don't have any boats full of pipe waiting to get through the Strait of Hormuz right now, so that's part of the good story that that's done. We opened up a new facility in Dubai. It was kind of the cornerstone for the move out of Europe where we had to close two facilities in the Netherlands, further restructuring obviously going on in our European business. We're excited about the opportunities to be closer to the customer and have a better cost basis in Dubai. We were able to finally dispose of our interest in rival downhole, so we're now totally out of the downhole drilling tool side of the business. Wish our ex-employees and joint venture partners great success in that, but it was a good way to generate cash to be put to other acquisitions that made more sense for us for the long term. We continue to focus, as I mentioned, on our efficiencies. We've announced today an additional $15 million cost savings plan. There's a lot of moving pieces to that, everything from more efficiency on the shop floor to organizational changes, shared service issues that we're going to address, and that will play out over the next 12 to 18 months or so. Capital allocation has been a different story for us in the last year or so with the share buybacks. We've announced a couple of them. Obviously, we are about done with the $60 million first two tranches, and we've announced today our intention is to do another $40 million to be completed by March of 28th. I don't want anybody reading into this, and I've talked to some people earlier, we still intend to be very acquisitive and focusing on M&A, so I don't want anybody to take a signal that, oh, we can't find anything to do with our money. We just feel that with our outlook for profitability and the cash generation that we have the potential to do, we want to make sure we're giving returns back to our shareholders. financial highlights the key one was the abaddon number of 135.7 the rest of the things oil price wise and that that you all know share buyback that i already talked about sales order book down from last year but it's really a more normalized level and i always like to highlight that really doesn't include much at all for titan because of the short cycle nature of the titan business we anticipate that sales order book number accelerating substantially through and into Q2. The scorecard for our 2030 strategy, a lot of boxes ticked. I think of all of them, we talked about the cash flow generation. The two, I think, maybe most important to me and a highlight was the fact that we continue to move our EBITDA margins higher. We're still striving to get to that 15% number. Hopefully, maybe that will happen this year. But, I mean, our plans are that we've got the products. And we've got the geographic reach to continue to grow and go after high-margin business. Cash generation was a real big deal for us in the past year. I'd like to highlight that we generated the $63 million in cash, but that's after also doing all the acquisitions, increasing the dividend, and doing the share buyback. So the company, to me, financially, we're in a very, very healthy place and a good place to be in order to fund our growth going forward. This chart here just shows you some of the stats on where we're at with our EBITDA growth for the year. OCTG, to me, is probably industry-leading EBITDA margins for what we do in that area of the business. Very strong performance, some of the strongest margins in the company's history in OCTG, thanks to the effort of our teams in North America and in Southeast Asia. Subsea business going in the right direction. It was a business where we had some good results in the year. Some of those segments of business like our coupling business at our Stafford location are really just accelerating now as it's a follow-up to the Subsea Tree Awards and then how we receive the orders for those components going forward. Advanced manufacturing, it was really a two-part story for the year. Some good results in Dearborn, great traction on the non-oiling gas side. The electronics business has lagged, and I'll talk a little bit about that in more detail later. And then one of the happiest parts of the story for hunting in 2025 has really been the improvement on the Titan business. So the number isn't at our 15% range, but when I look at our results there compared to our peers, especially over the last half year plus, we've definitely done better from an earnings and margin point of view, and I think that that will continue. The acquisition update, flexible engineered solutions, our integration plans have all come together well. There's been no hiccups, no hurdles. We didn't find anything unfortunate, so everything we thought we had is there. Opportunities are very large. Part of the big second quarter upside we're anticipating has to do with Brazil and Guyana. The picture you see there is one of the Guyana FPSOs with the DBSCs attached to them. It's one of those developments with Exxon where titanium stress joints were not going to be used. But as I talked about when we made this acquisition, we wanted to be able to play on every FPSO opportunity out there as we see that a growing market. And this is a case where the DBSCs are being purchased and used to help that installation on that FPSO. Organic oil recovery, we're getting a lot of good traction on that right now. A lot of people have seen the announcement from our client Buccaneer for their East Texas operation that they had. Considering the hundreds of thousands of conventional wells in North America, That, to us, was a really great sales point with what they talked about, the water cut being reduced and the production doubling. We anticipate that as a good start for our North American business. And if you all remember, before we made the acquisition, we did not have the rights in the Western Hemisphere. So we're excited about that. We've got trials going on right now in Brazil. And one big one we've got in Angola with a major oil company down there. So I think there's really good upside with OOR. The OCTG business talks there about some of our progress there. TechLock, Travis Kelly, who leads that business for us in Houston, and his team have done a great job. We continue to gain market share on that. And it kind of aligns with our story we have with Titan right now in North America. As clients have more challenging wells, and I think the last number that I heard was 40% of all shell wells in the U.S. right now are three miles long or longer. And in the case of some of our clients even doing these U-shaped wells, failure is just not an option when you're two miles from the wellhead or further. So, the Tek-Lok product line is trusted for its performance and its integrity downhole, and that has driven a lot of that growth there. Plus, again, it's also the fact that we highlight our virtual meal concept. So, whether it's in North America, whether it's in the Middle East, whether it's in West Africa, we're not tied to one steel supply, which gives our clients a lot of flexibility. The accessory business was very strong last year, driven by a lot of work in South America and a bit of a resurgence on re-completions and workovers in the Gulf of America. We see the upside there being very, very bright. We've also picked up more of the sub-C work, not for our own product line, but doing work for people like FMC and One Sub-C, which has helped that business out as well. Our joint venture in India is performing as planned, delivering good contribution of earnings. The outlook continues to be bright. The shop is busy. India, if anything, and talk about energy security, they're the ones that need to build up their own domestic source of hydrocarbons, hydrocarbon production, and we're well placed in that operation there to see that grow. And then there's just a note about KOC there. Right now, just everybody's asked me 100 times, KOC tenders have been delayed. And so right now our anticipation is that those will go out in the next week or so, but that could change tomorrow. But if that happens, the award dates would probably not be until April. Fortunately for our plan this year, we don't have much in the guidance planned for KOC because even if we had the orders today, you have to make this deal. It's six months to do that. You have to thread it, the shipping and the like. So that was not planned on being a big part of this year's business. Non-oil and gas, there you see it broken down by different product segments. Again, Dearborn has really been the star on the non-oil and gas side. When space, nuclear, power gen, we're seeing there's some new jet engine business that we're doing first articles on and working on now. We're not going to tell you the client yet. But I see a big upside to that. And as I've mentioned earlier, it's been kind of a reinvention of the capacities at that facility in Maine, where it was very focused on oil and gas product lines. Now the focus is on non-oil and gas, primarily, again, aerospace and defense. And we want to make sure we have the kit and the tools in place to capture that business. Electronics, a bit of a different story, mainly because while we've worked hard to diversify the product client base there, we're still very, very reliant on oil and gas. We have had an uptick in the medical side. We have captured a couple new clients on the defense side, but it still is more focused towards oil and gas. And with rig counts down, especially in North America, the CapEx purchases that our big OEM customers would make has just been lagging. We announced also today 5 million cost savings plan. That has many, many moving pieces to it. It's sensitive when it talks about people and things like that, so I'm not going to have a lot of detail about that to pass on to you today. But I think the key message is it's an ongoing process. I highlight up there that in the past year, for example, we generated some meaningful cost savings from our lean manufacturing focus. We've been doing that for 17 years now. I started that program a long time ago, and my favorite line is that I remember as a salesman sitting in a drilling engineer's office and saying, I never had any one of them ever tell me they drilled a well fast enough and they were done. That's the same with our manufacturing operations. It can always be better and we get bright minds in there. We start looking at things like AI and the likes. We're going to continue to focus on making sure we do things quicker, faster, and better. Balance sheet efficiency. Good numbers there. Bruce and the team have done a super job there. Inventory turns are much better than they have been over the last couple years. Free cash flow, nice generation. And, well, especially today, share price is up. So way to go, team. I mean, I'd like to see that reaction today. Dividends, as we said, continue to grow as well. And let's see. Precision engineering. Talking about product lines right now. Again, a little bit more detail. OCTG I talked a bit about. We see, again, strong market opportunities throughout North America due to the complexity of what's going on there. We have not seen much of a recount response yet on natural gas. We think that could be a very nice driver in the second half of the year. But right now, the business is performing very well, and there's the statistics for that. Sub-C, I guess I talked about that a bit earlier. The key is really the awards that we anticipate receiving in Q2. So that's an area where the tender activity right now is very, very high. Our total... Our total inquiry base right now is over a billion dollars. A big part of that is on the subsea side, both with the FES, the NPRO product line, as well as the titanium stress joint business. We're seeing more decommissioning opportunities in the North Sea that's going to benefit the NPRO product line. But all in all, I think things are all going in the right direction. It's a substantial business we have now with our ability to bundle a lot of these products to people. I think it's going to make our ability to enhance sales even greater. We have a new office opening up in Kuala Lumpur this year to have more exposure in the Asian market. So all speed, full speed ahead for our subsea business. And then the Titan business, which again, Adam Dice and the team have done an amazing job. I was just out at Pampa about a week and a half ago with the team out there. We've made great improvements on efficiencies. I saw some new laser equipment out there that we're using for gun manufacturing performing extremely well. But the key is it's coming down to a point where I would say that two years ago it was a lot of three bids and a buy by clients in the North American marketplace. We're seeing – I'll say the pricing pressures are still there, but to a lesser extent. Because clients are realizing they just can't have failures down the hole with these shell wells becoming longer and longer and the fact that you need dependability and you need dependability in supply. And that's where our distribution centers are a nice part of what our sales offering is to our client base. But I'm very happy at the turnaround improvement in earnings that we've seen at Titan. International activity remains strong, and we think the international business will continue to grow. And I'm a big believer that the most common sedimentary rocks in the world are shale, and they're all over the place. Again, with energy security being an important factor, we're already seeing talks about places like Algeria and Libya and Turkey and Australia as potential growing markets for unconventionals. We want to and will be a big part of that whenever it happens. Again, advanced manufacturing, I've already talked a good bit about that. Order books there. I'm not going to go through all the numbers right now. Interestingly, the nuclear business, which if you went 20 years ago back, that was a big part of the Dearborn business, is now starting to come back. And again, we're a company that is known with our reputation as being a high provider of products. Small business now that has great upside, and we continue to work the power gen and the aerospace and the potential business as well. On electronics, it's, again, trying to get that diversification. But sooner or later, with these wells, with the drilling intensity going on, there needs to be a capex cycle that will increase purchase of drilling tools, such as MWD equipment and the like. And when that happens, it will benefit our electronics business as well. And then just some other manufacturing, talks about some of the few areas. The key is we're moving OOR into the subsea business with the number starting in January. We had a good year with our trenchless business, and we also talk about what we've done in Dubai, which part of that manufacturing is based on our well-testing equipment that we manufacture, which now we're closer to the client and closer to where the applications are going to be. And with that, I'm turning it over to Bruce.

Thanks, Jim. Morning, everyone. I'm delighted to present a strong set of results this morning. Jim's covered a number of these key points, but just to wrap up on the numbers, they're fairly similar to what we presented back in January. Okay, good set of solid numbers despite that challenging market conditions as well. We've got EBITDA up 7% to 13%, and that's the focus on the higher margin product lines, like a sub-C, like a OCPG. The restructure of EMEA is coming through as well. We'll get the full benefit coming through 27 of those savings. Titan Recovery is helping those margins, going from 0% up to 7% for Titan, so that's feeding through to that recovery as well. We want to get that to 15%, and that's the key target. All in gas, I still want to do a measure of diversification. in terms of moving into businesses that are not only gas, but can still hit the right margins. So that's up 10%. You can see that growth. EPS up 9%. We're not seeing the full benefit of the share buyback yet coming through EPS. We'll see that more in 27. It's good to see that's up 9% to 34.1 cents. Jim talked about order book. It's normalized in the sense that KOC is no longer in there. It's at 358. Quarter 2 is going to be a big quarter for us. We've got a big tender pipeline of north of 1 billion. So a lot of that is coming through sub-C, OCTG, the new FES acquisition has got a really strong tender pipeline. So we're looking for a big conversion in quarter 2 into orders, and we'll see that order book increase by the end of quarter 2. Return on capital up to 10% in double figures. We're almost at 11%. I mean, that's a key target for us. We want to get that to 15%. That's probably 18 months, 24 months away from that. But again, it's focusing on that higher return businesses and diluting the capital employed on the balance sheet where we can as well. Exiting product lines that are not getting there. Dividend growth alongside the share buyback. We want to get that dividend back to increase that to shareholders as well. We've got 13% per annum. from 2025 onwards to the end of the decade. Part of the reason we can do that is our working capital efficiency. We're seeing that now, back in 2020, that was over 70%. Working capital and sales, we're now at 33%. So that's given us more cash to play with, and that's going back to shareholders in the form of buybacks and dividends as well. And we also took the opportunity to extend the RCF, the 20 million RCF, by 12 months out to 2029. Gives us that good option for further optionality there as well. One of the key features and really promising performance has been OCG in 25 and 24. And that is over 46% of our sales is OCG. And that's really from three pillars. It's coming from our development of our virtual mill. And that allows us to bid for the huge tenders we're seeing in the Middle East and elsewhere. We're seeing some really good performances in U.S. lands and tech law with the longer laterals. We're also getting good performance coming from India as well. And some good packages coming through from completion accessories. It's a real success story on OCDG. And it's that pivot into that offshore international business that's allowed us to do that. In terms of our P&L, just picking off some of the key highlights there. There's our turnover, which is flat year on year. It's just over a billion. Good to see that our gross profit, EBITDA and operating profit margins have improved by a point each. Again, reflecting that push to take costs out to focus on the higher margin businesses as well. We've got our proper after tax of 58, gives our EPS of 34.1 and we've got that total dividend declared of 13 cents for the year, again showing that increase. A little bit more detail about product lines and operating segments, you see in terms of The external metric of 15%, OCDG, sub C, well over the 15% good to see. Perforating systems is a recovery story. That was at 0% last year, now up to 6%. We think we can get that up to double digits for the end of 26 as those cost efficiencies come through, international business picking up as well. Advanced manufacturing, that's some electronics division has been softer with less capex coming through. It's been at 90%. Again, there's restructuring going on there to address the electronics division. Other manufacturing, that's basically zero. That's been caught up in the real storm of all the restructuring, the well intervention, the well testing business in EMEA. So all that equipment has been getting moved from Aberdeen down into Dubai. We've had closure of four facilities. So we're seeing a much better improvement coming through in 26. If you look at the segments, you've got Titan there coming down the way of the verticals at 6% margin. North America, very good performance at 19%. Subsea at 17%. And May has been the big struggle. That's at everything. A weak market, all the restructuring going on, all the disruption coming through there as well. We will get the benefit of that full year of $11 million cost savings coming through 2026. And that will see an improvement going through there. Balance sheet is strong. We've got net assets of $900 million. Not much movement there in terms of our depreciation and capex more or less catching each other out. A bit more in terms of $80 million onto the Goodwill and other intangibles. That's the FES and OR acquisitions going on there. And still, despite, we talked about all the returns to shareholders. I'm going to talk about that in a little bit more detail. We're still sitting with cash of $63 million as well. A little bit of the working capital revenue, a key metric for us as well, keeping that below the 35% mark. That is key for us when we look at cash flow, and that helps us to keep that cash balance on the balance sheet. In terms of working capital improvements, you can see from 2020, that's when we were at 75% of working capital set to revenue. We've now got that down to 33%. If you look at inventory balance for the year, a lot of good work being done there. We've reduced that inventory balance by 65 million over the year. Good to see there. We've been smart in terms of, you know, we did exit since 2020 a number of our higher capital businesses like OCDG in Aberdeen, also OCDG in Canada as well. smart use of working capital instruments to finance our KOC orders. That's helped with the discount letter of credits and advance payments to the mills as well. So that has allowed us at least a lot more cash and that's allowed us to make the shareholder returns. And again, this shows where that cash is coming from and how we've used that over the last period. We've got that at the end of In 2024, we had 104 million of cash on the balance sheet. We added 135 million of EBITDA for the year. We controlled our inflow from working capital. That gave us, we go through the year to 201 million of cash. This is where we've used it. 73 million in net disposals. 33 million of share buyback. That equates to about 7.2 million of shares we've bought back. dividend payments of $19 million, and treasury shares for the employment share scheme of $18 million. And we're still left with $63 million on the balance sheet. So that's a really pleasing position to be in. In terms of order book, there's a little bit more color around 358. That is 20% lower than we were at the end of December 24. That does reflect the fact we've completed through KOC. We do see that being replenished. through subsea, through OCG awards, hopefully some OR awards coming through there as well. And we'll have a figure approaching where the 500 million we get to quarter three. But that tender pipeline is strong. It's over a billion. It's good to see that coming through. That does tie into what we're seeing, especially in the subsea space, and the big awards coming out for OCG as well. So in terms of guidance, I think in terms of the phasing for the year, we're definitely looking at a back-end loaded year in terms of the big awards coming through quarter two, and then that recognition being more into the second half of 26. And that's how we modeled and budgeted the year. So that's consistent with that. Obviously a lot of uncertainty out there just now, but there's nothing that we're going to change at the moment. This stays totally the same as what we announced back in January. EBITDA growth of between 145 and 155. That EBITDA margin improving between the 13 and 14%. In fact, effective tax rate, depending on deferred tax assets, jurisdictions, should be between 25% and 28%. CapEx is a little bit higher than what we saw this year. We're around the 30 million mark for 25. I think that's gone up to 40, 50. We're doing a little bit more automation work, some robotics, replacement of CapEx, a bit more capacity into our Chinese facility as well to allow us to thread for the KOC lights. I'm still confident we can achieve that 50% free cash flow conversion as well. Okay, and with that, Jim, I'll hand back to you.

Thanks. Anyhow, we're laying out here where we're at 25, 26 targets. Those are some of the areas that we're focused on. I'll get into some more detail here in a little bit. But highlights, again, we always consider ourselves a technology company, so we continue to focus on developing new products. whether it's in premium connections, subsea applications, well intervention, Titan, it's pretty much non-stop. It goes part into the lean philosophy we've had on operations, and it has to do with making sure that we're relevant in the market for the days ahead. OCTG, Bruce and I have already talked a good bit about that. We're well-placed for that cycle that we're in right now. We see it as being one that's going to continue to grow, especially in international markets year over year. I've talked already a little bit about non-oily gas and the subsea bundling that we have, our opportunities there. Just a topic on new technology, subsea, I'll point you to the one on the bottom, the STACFAM. You've heard us talk about our FAM application before that fits and works with the subsea tree to allow a variable operations performed on a standard subsea tree. The STACFAM, the whole goal of it is really to accelerate tieback opportunities in brownfield sites. So if you look at even places like the UK where nobody apparently wants to drill anymore, you've still got areas where you can tie back to infrastructure that's there. And this is an opportunity with this new product line to perhaps grow business there, as well as a lot of more mature areas like the Gulf of America, for example. OCTG, the Wedgelock product line, we continue to look at new applications, but it's also new diameters of pipe, new grades of material, things like that that we're constantly testing at our testing facility in Houston, as well as using some third-party facilities in Texas. The well intervention business is one where we've tried to get smarter tools, some smart tools. Our Optitec tubing cutter is almost CNC in precision as far as what it can do in cutting product for cutting tubing downhole. Optitec data stem, again, it's a smart tool for more advanced downhole measurements on slickline applications. And then the Optitec valves are really more of a lean manufacturing effort to try to make things more lightweight to reduce the floor space at the well site. And that's what that is right there. Perforating systems, again, our ballistic release tools, our gyro tools, those are things that we actually rent. Some of the new developments we've put in there is for our benefit from a cost point of view for refurbishment and the like, but they also have the technology that customers are asking for today. Titan growth, I mentioned earlier. You see the numbers there that we've shown the growth and anticipated growth. But there's a lot more of a market potential out there than even the Saudi Arabia and Argentina. I mean, I'm excited about the opportunities in Australia. You've seen people like Liberty make moves into Australia. They have a huge resource down there for unconventionals. Mexico, unconventionals. Algeria and Libya, big unconventional markets. And the thing with the opportunities, even in the U.S., we talk international here, but domestically, today, the average well in big parts of the Permian is actually producing about 20% less oil per foot of completion than what it was doing three years ago. So as these sweet spots get used up, the Tier 1 acreage becomes less and less abundant. part of the portfolio, the operators are going to have to just drill more. They're going to have to drill longer wells, drill more to hold production at levels that are going to maintain their profitability and tighten and our premium connection business will be a key part of that deliverable part. OCTG, there's lots of nice colored parts there of where we do business at. It's an international business. We have the technology and the virtual meal concept that allows us to compete on an even playing field with our much, much bigger competitors out there. but customers trust hunting, trust the value we bring to the table, and the dependability that we have with our broad suite of connections and our excellent manufacturing capabilities in places like Houma, Louisiana, Houston, Texas, and in Singapore to provide the completion accessories to put all this stuff together for an operator down the hall. Non-oil and gas, we've identified more areas. I talked a bit earlier about nuclear. I've talked about some new things going on on the jet engine side, some customers other than Pratt & Whitney that we're talking to right now. The PowerGen to me is a big, big growth story. We're actually getting overflow work from our big PowerGen customer that we're actually putting also in one of our facilities in Houston now. We see that as growing as data centers become more demanding on where they're going to get their electricity from. A lot of it's going to have to be from natural gas fire generation that will supply, hopefully, components for the turbine shafts, as well as that's going to be a driver for the Titan and the premium connection business. And then with the addition of FES, we now do have more opportunities in the offshore wind market, as the FES team has a long track record of supplying connectors for some of that. And while it's probably not a huge growth area in the U.S. right now, there's still a lot of progress being made in European markets for offshore floating wind and the like. Subsea bundling, just a slide here. I look back to 2018 when we had one subsea business. Now we've got a multiple grouping of product lines that gives us the ability to have huge geographic reach. But the key is to go into the customer and be more relevant. And the more things you can put in front of them as far as we can do this, the more opportunities you're going to have from a tender basis and I think a success basis to also win business. So we're excited about what we've done so far. I mean, if you look at, for example, our titanium stress joint business was zero when we bought this. It was one of those cases where we knew we were onto something when we bought it. If you looked at the numbers that time, it's like, why did you do this? Well, it became the anchor of what has built this subsea business. So it's a great, there's great opportunities for us and having people like ExxonMobil being a star client of ours is a good housekeeping seal of approval, like we would say in the States for the things that we do in the subsea marketplace. So in summary. We had a very, very good year. We're going to continue to focus on our capital allocation plans, which are going to benefit shareholders. We're maintaining our guidance. Again, I started the whole meeting off talking about where I see this business going. And I like to say, you know, we're not here – I'm not focused on what's going on in the next three months. I'm looking at where we're going to be in the next three years, five years. Where's the growth of the business? That's why we're doing the things that we are, why we're investing in our people, we're investing in the CapEx, we're adding new product lines. Because I truly believe as... you look at the again reserve life of our clients i mean other than saudi aramco most of them are down down down every year and the world is not going to use less hydrocarbons over the next decade it's going to be more natural gas people are worried about oil prices i think the recent events in the middle east they're forgetting about gutters shutting down their lng trains and not being able to ship lng and that's going to be affecting markets globally, but it also brings that energy security picture back in Claymore. And I just think that we're a company that's essential to the world prospering as far as a contributor to the oilfield service industry. So with that, that's kind of where we're at. I hope you've enjoyed the presentation and had a lot of detail. I'm excited about the year ahead, and I'm excited that I get to work with a great bunch of people that make it happen. So we'll open it up to questions. Okay. No, I'm just kidding. Go ahead.

So thank you. Alex Smith from Barenburg. So good to touch on the subsea business, potentially exciting year for growth. You mentioned Q2, potentially some big tenders. Any kind of color you can give on where those tenders are, location? And then just on the bundling, do you have like a dedicated sales team that are now going to go in and start selling that bundled product? And is that the kind of key driver for growth for that pipeline? And lastly, just on M&A, still a big part of the business kind of strategy, subsidy in particular, what does the competitive market look like? Okay, I'll try to remember to answer all this.

So on the sales side, yes, we have dedicated teams working on that. We've integrated the sales process. At FBS, they really... It was owned by two gentlemen. It was a reputation that they sold the product on. Really not a very sales-focused organization. They didn't have to be. And so now with the bundling, like I mentioned, we've relocated a man from Houston to KL to be working with our Singapore team because a lot of the shipbuilding, FPSO construction is done in Asia. So it's good to be there integrating with those offices for opportunities. So, yes, we are doing that bundling. The first question was, again, repeat that one. Oh, where it's at. All the places you would expect. There's a heavy load of tenders in Brazil right now, but it's in the Gulf of America. It's in West Africa. It's in Suriname. It's in Guyana. It's all those places that are wet that you would think about. And then as far as... The last question was M&A. So M&A is one that you can never predict. I like to say our heart was broken a couple times over the last couple years because one thing that hunting does well is go into due diligence. very strongly so we don't want to you know we want to make sure we know what we know and in cases in the past we had two specific where once we started getting into due diligence we had to drop pencils and say time out because of certain things we found out so we will always be very prudent on how we approach that it also has to fit our strategy we don't want to get into things that are not tangential to what we do as a company For example, I'm not going to go and buy a company that makes windows and doors tomorrow, right, or something like that. I mean, it's going to have to fit technology and what we want to do. The market out there right now, I don't think it's really any different than it's been a year or two ago. I think that, you know, will this make a pause in opportunities? Perhaps. But we are screening things on a steady basis, and it's just finding, you know, it's kind of like getting married. You've got to find the right partner and make sure the union is going to work. And we're focused on growing our business through M&A and haven't let up on that.

I have three, I think. So first of all, North American Division has had a very good second half of last year as far as I can see, perhaps a bit more insight into why that was the case and your expectations for 26, expecting year on year improvement in North America?

yeah i think if you look i think it's been as long as i've been in this job i think every year things have always been back in loaded at least through q3 what we saw this year and it matches the dialogue you've probably heard from halliburton and people like that we did not have the budget exhaustion issues and we did not have too many weather issues as far as the holiday issues post-mid-November. So that was a big positive for Titan, for our connection business. We could get orders out for threading. Rigs were still running and putting piping around. So I think it was just the fact that it was a pretty good year from a number of factors, whether it's weather, budgets, and the like. I think that, again, the year four, we're expecting better things and continued growth in North America in 26 through a number of different product lines.

Thank you. That leads into the second question. Guidance for FY26 EVDA margin is 13 to 14%. Can I test your confidence in that figure given that OCTG looks like it's going to have a weaker year this year?

Yeah, I don't know. Well, it will maybe from a top-line number, but it has nothing to do with pricing. It's not a margin perspective there. So margins, if anything, I think will enhance because we're seeing more premium applications even on the shale plays. We're anticipating an improvement in the Gulf of America. And if you look at the margin profile for OCTG, that's really the best margin products are the offshore stuff, right, not the land. But with the benefit that we did have a very successful golf lease that the Trump administration put through, that won't really probably pay into holes in the ground until 27. But that foundation is there, we think, driving it forward. So, yeah, it's going to be an area we're not cutting prices. We see areas where we can improve our margins. Part of that's in the $15 million of cost savings. Part of it's in the lean-in issues that we've had. But the market's pretty steady as far as pricing goes. Not a lot of pressures.

So I'm hearing very confident in group 13% to 14% of the EBITDA.

Yes, I am. And I think overall for the group, one of the big drivers is going to be the sub-C business. We've had a lag in our Stafford business the last year or two, as I mentioned. You saw Subsea Tree Awards took a big fall in 25. They're coming back now. We're starting to get those orders in. As I mentioned, the backlog at our Stafford business is double what it was this time a year ago. So those are all, again, it hits efficiencies, hits throughput in the facilities. I think Titan is going to, again, overperform based on even where we're at today, and that's going to be a plus for the company's overall margin as well.

Okay, thank you. That leads neatly into the third question, subsidy related. FES, if I saw the notes correctly, the contribution in the year was about 10 million revenue and a small loss, I think. Pre-acquisition, the revenue run rate of that business was nearer to 40 million.

um i think so that probably requires a bit more yeah i mean i think it's again it's a lumpy business it's where we could reduce uh revenue recognition in 25 you know getting them all into our proper accounting systems and the like but the business off the opportunities are still there i mean that's where a big chunk of the pipeline that we see in 26 is sitting at fes And so I think it will never be a straight line in that business just because of the project nature of it. But we haven't changed our optimism or our thoughts on that business one bit.

Could you quantify the FPS contribution to the order book at the year end? Do you have that number?

Do you know what it was, Bruce, off the top of your head?

I don't have that. It's a big chunk of the pipeline.

Thank you.

Hi, Alex Brooks at Canaccord. I'm actually going to ask some sort of return on capital and balance sheet related questions, if you don't mind. Yep, it's Bruce. So firstly, of the 15 million new cost savings program announced today, does that include some balance sheet work as well?

There could be part of that, yeah, around facilities, et cetera. So there could be an element of that coming off balance sheet, yeah.

At year end, obviously you had a significant reduction in payables, even though it was overall good work capital performance. Is that kind of roughly where you're normalised at? Was there anything exceptional in that year end?

That was the reversal of the KOC. So that was the big, we used the bank acceptance bonds to defer payment to the Chinese mills. So once that was paid off, that is a more... It's a more normalised position, yeah. But it will flow with the big orders as they come through and the timing orders down the line, Alex.

And in terms of pushing return on capital up towards 15%, if we just take the guidance, you'll achieve a little bit more this year than you did last year. But is there scope for capital employed improvement as well as...

Well, we're always looking at that. Similar to what we did back in the four or five years ago with some of the low return product lines, facilities, OCG in Aberdeen, OCG in Canada. That would benefit less capital. That came off the balance sheet, improved the operating profit as well. So all I can say is we're always looking at some of the product lines that aren't hit the mark. They're always under constant review, what we can do there on both sides, capital employed and getting that operating profit up as well.

And then just finally, because I'm looking at the slide in front of me, I've got nearly $200 million of dividends and over a similar period a little bit more than $100 million of share buyback if it stays at the same rate. Is that something which you think is a reasonable split of return to shareholders, somewhere in the sort of half and half? 40, 60 range?

Yeah, I think it's a good balance. It's something for everyone from that side in terms of buybacks. That's something I think is working. We're still confident in terms of, I still believe we're undervalued even though we're above net asset value. I think there's still value to be had in there. And yeah, that constant return, that 30% increase in sharehold, the dividends as well. So I think it's a good balanced return and that's probably where we're going to be at over the rest of the decade, yeah.

Thank you. And then I've got one final question, which is one of the things that really shines out to me from the presentation is how much of the business is new. So is it possible to quantify, because the chemical industry does this as they kind of talk about, you know, X percent of revenue is products introduced in the last five years. Do you think you'd have a number for that?

I'm not standing right here now, but we can get that for you. I mean, it is true. I mean, I was thinking this morning coming into here, you know, we're now working on, what, year 152 of hunting? And it's been in a company that has constantly evolved to the times, right? And I think what we've done in the last five years even has been that evolution, becoming more of a subsea company, adding things, and taking on some risk. I mean, OOR, there were times when Bruce and I were like, is this going to work? We know it is. And that's why we spent the money to get control of it. But it's looking at the, again, it's like the old Wayne Gretzky thing, right? State to where the puck's going, not where it's at today. And that's what we're trying to do when we look at our business today. And, yeah, I'm very, very pleased with how the team has put – I mean, there was no tech lock a few years ago. There was a small subsidy business. No OR. We were stuck with pipe all over the place that was really bad return on capital employed. So I think we've evolved like hunting's tradition has shown that they do. Thank you very much.

Hey Mick. Hi, it's Mick from Barclays. A couple of questions if I may. Can I just go back to that tender pipeline you talked for a big Q2? You said it's sub-C and OCTG. Obviously sub-C, your positions are pretty strong in OCTG with some big 800-pound gorillas in the world. So could you just split that between sub-C and OCTG just so we get an idea of confidence on that? On what the split is?

Yeah. I mean, right now, I would say the split is over 100 million on just the Dearborn side on future business going forward. And then the bulk of it is split. I would say there's a couple hundred million that we know of that I can remember off the top of my head in the subsea side. and then the bulk of it is OCTG. So we're seeing some OCTG tenders in places like Turkmenistan. We're seeing more in Indonesia. It's actually a growing market right now. We had some nice business already at the start of this year in that market. So it's all over the place, Nick. But, I mean, those are the three areas where the main drivers are. Okay. And then? I mean, the FES pipeline alone is a nine-figure pipeline.

Okay. And then can I be greedy? Obviously, you've highlighted a lot of new places you've gone to. Right. If I look at the OCTG world, one of the big players did a big pullout in its results on geothermal, saying that's the next big thing. And you were the first to talk about that in your capital markets a few years ago. Right. So what you're seeing of that. And every major bank, I'm sure, at the moment has got some junior wanting to become the space analyst, given IPOs coming down the route. Right. Obviously, you've got exposure there. So can you talk about what you're seeing in that?

So in the geothermal side, most of what we've seen activity-wise has actually been in the international market. So it's been Philippines was a good market for us and Indonesia. We haven't seen a lot in the U.S. because the geothermal, you know, typically where we played was things like titanium tubulars or very high chrome areas. If it's a commodity L80 grade material going into some of this geothermal stuff, I think Valorex done some of that business, captured some of that, but it just hasn't been an area for growth for us in North America. On the aerospace side, we're really excited about that. It's almost part of following up on the last question. We've almost had to reinvent Dearborn because it was so focused equipment-wise and asset-wise on the oil field side of the business. It's a business that started years ago in defense and aviation, then went in the oil field, and now it's going back to more aerospace. So we're excited about the rocket business. Actually, Blue Origin is a bigger customer for us than is SpaceX, while we do business with both. But we see some really good things happening there. One of the other small parts of our story is our investment in Cumberland, the 3D printing company. That company is in the black now. They're seeing growth. One of their big customers, I say we because we own a third of the company, one of their big customers is Firefly, which is another space company. I think they put a product on the moon. So we see growth in a couple areas on that that I think is going to benefit us in the years ahead. thank you is there anything online any questions from online so the webcast questions have been answered in this q a so i'll pass back to you for some closing remarks okay well i just want to thank you all for your time and for being here and your support again i want to thank you know all of our i want to thank our customers out there all of our employees for what they do our investors for being with us for the ride Again, I've talked about we don't want renters. I mean, we really want investors that see our vision and what we're trying to do for the long term to drive value into this company. So on for a good 26. Thanks again. I think we're done.