Luceco plc

Good morning everyone and welcome to Luceco's interim result presentation. My name is Thorsten Müller and I was recently appointed as CEO of the company joining at the start of September. I've previously worked at Helma where I led one of the divisions within the safety sector. Before that I served in senior leadership roles at ABB, Osram and Bosch. Let's turn to the agenda for today. Will is later going to take you through the details of the first half that the team has delivered. I'll then share with you my first impressions and initial priorities, as well as the outlook for the result of the year, followed by any questions you may have. Let me take the opportunity to express how excited I am to be joining such a high quality business. The Lusico team has continued to deliver strong results during the first half, building on the momentum achieved in 2025. Starting with the headline numbers, H1 was a strong first half, with performance accelerating across the group. Revenue was up 13.4% to 142.6 million, driven by energy transition, where revenue more than doubled. This also means that the energy transition contribution to the half-year revenue increased from 2 million back in 2022 to 18 million in 2026. Debt growth is converting into profit, with adjusted operating profit up 14.5% to 15.8 million sterling, resulting in a return on capital invested improvement by 50 basis points to 20.5%. Leverage remains comfortable at 1.5x bank EBITDA, allowing headroom for future M&A in line with our capital allocation policy. Reflecting the performance and our confidence in the outlook, we have increased the interim dividend by 16.7%. With that, I will pass to Will to take you through the performance during the period.

Thank you, Torsten. Good morning, everybody. I'll take you through the first half performance starting with the financial review before moving on to the business review and the growth opportunities that support our medium-term outlook. Revenue for the first half, as Torsten mentioned, was £142.6 million, an increase of 13.4% on the prior year. Growth accelerated through the period, with like-for-like growth of 12.9% in the first quarter and 14.9% in the second quarter. Energy transition activity was the principal driver, with revenue up 119.5%. While the remainder of the core business grew by 6.5%, all three operating segments, all four sales channels and each geography delivered growth. Adjusted gross profit increased to £59.8 million and adjusted gross margin was 41.9%, broadly in line with the prior year despite increases in key material costs. We continue to benefit from strong manufacturing productivity and close cost control, while maintaining a disciplined approach to pricing. We are working with our customers to pass through higher commodity costs. Adjusted operating costs increased by approximately £5 million to £44 million. The increase reflects targeted investments in EV infrastructure, marketing and technical capability, together with wage and salary increases. We are also simplifying the operating footprint following recent M&A. including the consolidation of D-Line Warehousing and Associated Labour into the wider group during the first half. Adjusted operating profit increased by 14.5% to £15.8 million and adjusted operating margin improved by 10 basis points to 11.1%. Adjusted net finance expense was broadly stable at £2.9 million, resulting in adjusted profit before tax of £12.9 million, an increase of 19.4%. The effective tax rate was higher than in the prior period when we benefited from the utilisation of previously unrecognised tax losses. We expect the full year adjusted effective tax rate to remain below the UK corporation tax rate of 25%. Adjusted earnings per share increased by 13.6% to 6.7p. Reflecting the group's strong first half performance and momentum for the full year, the Board will pay an interim dividend of 2.1p per share, an increase of 16.7%. This slide provides more detail on the composition of the 13.4% revenue growth in the first half. Currency was a 0.6 million or 0.5% headwind, giving constant currency revenue of £143.2 million and underlying like for like growth of 13.9%. wiring accessories revenue increased by 3.8 million contributing 3% to group light for light growth a robust performance aided by CMD it's pleasing to report that CMD enters H2 with a healthy order book integration synergies are flowing through and aided by Luceco's competitive manufacturing and product sourcing the excellent CMD sales team are winning key tenders Portable power was the standout contributor, adding £12.8 million driven by energy transition activity. The strength of our established wholesaler relationships are helping us bring our expanding energy transition range to a broader contractor base. LED lighting added £0.9 million which included a strong first half performance from DW Windsor. We have seen some recovery in our overseas operations. As you would expect, our business based in Dubai has had a challenging six months from an operational standpoint. The team there did a great job over this period and still delivered growth in the first half. However, we do note that events in the region could delay significant investment projects in the second half. Moving to adjusted operating profit, the group delivered an increase of £2 million or 14.5% to £15.8 million. Portable power contributed an additional £2.3 million and was the principal driver of group profit growth. The benefit from substantially higher energy transition volumes more than offset the additional investment in infrastructure marketing and capability required to support this opportunity. wiring accessories reduced by 0.4 million although we saw strong top line revenue growth profitability was temporarily affected by the timing of material cost increases we expect this effect to reverse over the forthcoming quarters as pricing actions take effect LED lighting added £100,000 and was broadly stable. Taken together, the bridge demonstrates that strong revenue growth was converted into a slightly improved group operating margin while we continued to invest for future growth. As normal in our business, we expect our operational leverage to improve in the second half as a result of seasonal growth in our order book. turning to cash flow. Adjusted free cash flow was an outflow of £2.1 million in the first half compared with an inflow of £10.3 million in the prior period. You might recall that 2025 benefited from unusual timing of working capital movements between December 24 and January 25. This makes 25 a tough comparative when reviewing 26. adjusted EBITDA increased £2.1 million to £20.4 million. Working capital was a £10.1 million headwind. We have consciously invested in the first half as we built stock to support expected second half trading. We increased capital expenditure by £1.1 million to £4.9 million in line with our capital allocation policy. Interest paid was unchanged at £2.9 million and tax paid was £2.9 million, compared with a £0.4 million receipt in the prior period. We expect the usual stronger second half cash generation, though lower than 2025 due to timing of accounts receivable collections. Finishing on the numbers, this slide brings together our cash flow track record, working capital metrics and leverage. The group generated approximately £52 million of adjusted free cash flow over the last three completed financial years. The phasing has varied but cash generation has consistently been weighted towards the second half. Average inventory days increased to 145 from 136, and inventory rose to 71.2 million, reflecting higher volumes, the stock build to support second half trading, and increasing mix of higher value energy transition products. Data days improved to 76 from 78, demonstrating continued discipline in receivables management. Bank net debt was £69.6 million at the half year, compared with £68 million a year earlier. Bank leverage improved to 1.5 times EBITDA from 1.6 times and remains in the middle of our target range of 1 to 2 times. The group had £44.4 million of undrawn facilities and the facility matures in May 2029. We remained comfortably within our banking requirements, providing capacity to invest organically and pursue selective bolt-on acquisitions in line with our capital allocation policy. Now I can talk about some of the long-term structural growth markets in which we are participating. On the left, electricity is expected to account for a materially greater share of consumer energy demand over time as transport and heating electrify. The big ticket items include EV chargers, heat pumps, solar panels and batteries. However, these installations also require associated electrical infrastructure. products such as enclosures, isolators, metering and circuit protection increase the electrical product content of a renewables ready home by an estimated 200 to 300 pounds compared with a traditional home. On the right, the UK EV charger market is forecast to grow at a sustained double digit rate. forecasts predict a compound annual growth rate in charger installations of 13 percent to 2030 and continued growth beyond this time with the potential to be another three times larger new electric vehicle sales regained momentum in the first half supporting the long-term requirement for residential and commercial charging infrastructure crucially Luceco can participate in both parts of this opportunity, directly through sync energy charging products and through the broader range of electrical accessories required to enable the transition. Demand flexibility provides an additional recurring revenue opportunity from the installed base of connected chargers. As more transport and heating are electrified, peak electricity demand will rise significantly unless consumption can be shifted to different times. An EV battery can hold several days' worth of the electricity used by a typical home, which illustrates both the load created by widespread charging and the value of managing when the charging takes place. Managed EV charging including vehicle to grid capability is therefore expected to be an important source of flexibility for the electricity system. The regulatory framework for distributed assets is now in place following changes to the balancing and settlement code in November 24 and November 25. We moved to an in-house charger management platform in the fourth quarter of 2024 and achieved COP 11 metering certification in the first quarter of 2026 with the certification applicable to the installed base. More than 30,000 chargers are currently active in demand flexibility. changes to the regulated mechanism have been phased in during q3 growth in the active base more than offset changes in the mechanics This remains an evolving regulatory market so the value per charger may change over time. Nevertheless, demand flexibility is strategically attractive because it adds a recurring revenue stream to the initial hardware sale with the opportunity growing as we expand the installed base and the functionality of the platform. Bringing the financial and business review to a close, this slide shows the progress made since 2022 and the profile implied by the market consensus for 2026 before today. Revenue increased from £206.3 million in 2022 to £271.4 million in 2025, while adjusted operating profit increased from £22 million to £33.8 million. Over that period, adjusted operating margin improved from 10.7% to 12.5%. The consensus figures shown for 2026 before this morning's announcement are approximately £310 million of revenue, £41 million of adjusted operating profit and a 13% adjusted operating margin. Including self-funded acquisitions, This represents a four-year revenue compound annual growth rate of 10.8% and a 230 basis point improvement in adjusted operating margin since 2022. The progression reflects the combination of continued growth in the core business, the increasing contribution from energy transition and discipline management to the cost base. Further operational consolidation and efficiency opportunities provide additional support to the margin over time. Our objective is to sustain this combination of growth and improving returns while retaining the balance sheet capacity to invest in the most compelling organic and inorganic opportunities. With that, I will hand you back to Torsten for his first impressions of the group and his initial priorities.

Thank you, Will. Thank you, Will. As you'll be aware, I started in post three weeks ago, but I thought it would be beneficial for you to run through my first impressions and the priorities for the next few weeks. As well outlined, Lucico has built significant momentum over the last few years and has delivered consistent compounding growth during that time. The business benefits from its strong foundation generating sustainable commercial advantages. This is based on four pillars. An innovative portfolio of products, services and brands across all its segments. Well-established routes to market with a profound understanding of our customers and their needs. A highly agile, vertically integrated supply chain that allows us to respond to market conditions at pace, bringing new products to customers at a remarkable speed. And finally, a strong team with entrepreneurial and customer-centric mindset. These four pillars drive an attractive financial profile. Our market position in established categories provide a sustainable and predictable base of revenue and cash flow. This allows us to address and invest into any attractive structural growth opportunities offered by the energy transition. This is evident in the work the team has done in EV charging, a segment that has its origin in the highly accretive targeted acquisition of Sync EV four years ago. Since then, we organically grew the segment through focused and agile product development, which has unlocked recurring revenue streams that provide additional upside, albeit in an evolving regulatory environment. Product innovation has been core to Lusico's growth strategy for many years. This slide highlights the breadth of the 2026 pipeline across our core categories, supported by product development teams in both the UK and China. With energy transition, the pipeline now includes high-power DC charging as well as vehicle-to-grid capable and a smart portable EV charger. DC charging broadens our proposition beyond our established AC residential offering, while vehicle to grid capability reflects the expected future direction of the market, allowing the vehicle battery to support household energy use as well as transport. In wiring accessories and portable power, launches include three-phase and HVAC circuit protection, grid light modular as well as luxury switches, 65-watt integrated USB charging, and home office power products. These developments extend the range into further attractive professional and consumer applications and create additional opportunities through our established customer relationships and routes to market. Dynamis Stadium Lighting and Hinge Trunking are different products that demonstrate the same approach. Applying our product development and sourcing capabilities to adjacent categories where our brands and channel access can support growth. This momentum underpinned by Luceco's business model, market position and financial profile provide a strong platform for us to build on in the coming months and years. I will present my thoughts more fully in March at our full year results. In the meantime, my three priorities over the coming months are going to be focus and stringent capital allocation, ensuring that Lusico is focused on the most compelling opportunities for future growth across all our markets, products and channels. Process excellence, by defining and implementing best-in-class processes and technology to serve our customers and partners in an efficient and accommodating manner, making sure that these systems reflect the group scale and future growth prospects. And structure, ensuring that Luceco is a team-led organization, having a decentralized and lean operating model and a strong talent base in place that allows seamless scaling to facilitate our future growth ambitions. So, let me turn to the outlook for the full year. The Group continues to experience strong demand across key product categories, channels and territories, with revenue in our core business growing 6.5% in the first half of the year. Demand flexibility is delivering a recurring revenue stream. Our success in delivering growth of EV charger sales will also improve our demand flexibility revenue. We therefore expect that our adjusted operating profit will be ahead of market expectations.