Techtronic Indus Ltd Adr

to welcome you to our TTI first half 2025 results announcement. It was really a fantastic record first half ever. So was a record rainstorm ever yesterday. So we established two records and I think our record will please you more than the rainstorm. I would like to introduce you our group CEO, Mr. Steve Richman, which you have met before, and our presenter for today's individual companies, which we have, Miborki, our group president, Mr. Tim Arbrecht. Tim, you're there, right? Thank you. And our divisional president, Drew Patrick of our Ryobi auto power equipment. As I said, we had a solid first half of 2025 with sales outperforming the market and was really a record first half. And we delivered double-digit growth and profit and free cash flow. Frank Chan will elaborate a little bit later. in detail what our position are. And I think if you didn't read the release, it will be a very pleasant surprise for you. And all I can do, I can congratulate you to holding TTI shares. Thank you very much. And Stefan, would you say some words? Our Vice Chairman.

Thank you, Chairman. As the Chairman said, you know, we delivered another strong first half. which showcases the strength, resilience, and dedication of the remarkable team that we have in place. The financial performance has been nothing short of outstanding with record revenue, improved margins, and robust free cash flow. So these achievements are a testament to the strategic focus, operational excellence, and relentless commitment to delivering values to our customers and to the shareholders of the company. But it's not just about the numbers. We strengthened our market position, expanded our customer base, deepened our partnerships, all while staying true to our core values of integrity and innovation. Our ability to adapt to changing market dynamics and deliver consistently has set us apart as an industry leader. These results are not an accident. They're a result of our collective vision, hard work, and our determination to be the best. Looking ahead, I can say with confidence that we couldn't be better positioned, fueled by a clear strategy and a team that is arguably the best in the industry. We're uniquely equipped to navigate the complexity of today's geopolitical environment, including any challenges that may lie ahead of us. Our diversified supply chain, strategic partnerships, and proactive risk management ensure that we remain agile and resilient. Thank you for all your support and your belief in this great company. We will keep pushing the boundaries of what's possible, and we look forward to 2026 and beyond. I'd now like to pass the floor over to Frank Chan, who will elaborate on the financials of the first half.

Thank you, Mr. Chairman and Stephen. As Chairman and Stephen highlighted, we have an exceptional team executing our highly focused and consistent strategy. We have delivered strong first-half numbers in this very challenging business environment. Our revenue increased by 7.1% or 7.5% in local currencies to US$7.83 billion. Our flagship Milwaukee business extended its dominant leadership position and delivered an 11.9% sales growth globally. Ryobi, with power tools growing low double digit and outdoor growing mid single digit, delivered tremendous performance by growing 8.7% in local currencies. Our remaining non-core business decreased as we continue to rationalize our product lines to improve operating profits of this part of the business. Gross profit increased by 8% to US$3.16 billion, with margins further improved by 34 basis points to 40.3%. Our focus on profitability of consumer brands, positive mix of high-margin Milwaukee business, productivity and operational efficiencies Improvements across all our global manufacturing operations together with our very effective sorting networks are all contributing factors to the margin improvements. Our EBIT increased by 13.3% to $709 million, with margin increased by 49 basis points to 9.1%. The improvement was a result of a gross margin increase together with an 18 basis points decrease in SG&A. Net profit increased by 14.2% to US$628 million, with margin at 8%, a 50 basis point increase as compared to first half 2024. Earnings per share increased by 14.1% to 34 US cents per share. The Board declared an interim dividend of 125 Hong Kong cents per share. an increase of 15.7% over the last year, representing a payout ratio of 46.9% as compared to 46.3% first half 2024. We've continued to invest in research and development, new products, technology, and commercialization, but also been very dedicated to leveraging down our non-strategic expenses. SG&A as a percentage to sales was at 31.3%, an 18 basis point reduction as compared to 31.5% last year. We increased our R&D spend to 4.6% of sales, 50 basis points higher than that of last year, and our selling expenses also increased by 8.5%. However, we have been able to reduce our admin expenses to 9.5% of sales as compared to 10.4% last year, an improvement of 90 basis points. As we further strengthen our balance sheet together with the $1.6 billion free cash flow generated in 2024, our net finance cost was only 0.35% of sales, a reduction of 14.5% versus last year. Effective tax rates was at 7.8%, 50% higher than last year's same period, but comparable to full year 2024. We have continued to take a proactive and yet prudent approach to plan our tax strategy and maintain that the current level of effective tax rates is very sustainable near term. Our balance sheet remained very strong, with shareholders' equity increased by 6.4% of $403 million to US$6.7 billion. Net current assets increased by 10.5% to $3.1 billion. With our extremely healthy balance sheet, we are well positioned to continue to invest and grow our business, capture more market shares, and be able to navigate changes in this very challenging environment. To improve working capital efficiencies has always been our primary focus. For first half of 2025, working capital as a percentage to sales was at 16.8% and the improvement of 190 basis points when compared to first half 2024. Inventory days decreased by one day to 103 days. While we increased our finished goods inventories by six days in preparation for the ever-changing tariff situations, we reduced our raw material and work in progress by seven days. reflecting the effectiveness of our material planning and efficiencies of our supply chain management. Trade resale days was at 60 days, same as that of last year, while we increased our payable days from 96 days to 103 days, leveraging on our volume, water visibility and financial strength for the best trade terms with our suppliers. CapEx spend was at 96 million, 4.1% lower than first half of 2024. The spend mainly focused on new products, productivity, quality, automation, and manufacturing network rebalancing across the globe. Free cash flow generation is most critical in this current business environment. In the first six months of 2025, we've continued to deliver positive free cash flows of $468 million. Despite the full tariff impact in the second half of 2025, We project that we will continue to deliver positive free cash flows for the full year. We are in a net cash position first off of 2025 as compared to a gearing of 9.2% same period last year. The improvements, mainly from the increase in profits, are very disciplined working capital management and capex spend, together with the free cash flows generated from operations. Even under this very uncertain macroeconomic environment, we still project that we will be at net cash by end of the year. In the first half of 2025, we have increased our cash balance by $381 million and at the same period reduced our total borrowings by $320 million. The reduction was mainly on the more expensive floating rate short-term working capital debts. Fixed rate debts now account for 61% of our total debt portfolio. We will continue to optimize our debt structure with the most effective cost to support our growth going forward. And now I would like to pass the floor to our CEO, Mr. Steve Fishman.