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Edited Transcript of 669.HK earnings conference call or presentation 15-Aug-19 10:59am GMT

Half Year 2019 Techtronic Industries Co Ltd Earnings Call

Tsuen Wan Aug 17, 2019 (Thomson StreetEvents) -- Edited Transcript of Techtronic Industries Co Ltd earnings conference call or presentation Thursday, August 15, 2019 at 10:59:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Chi Chung Chan

Techtronic Industries Company Limited - Group CFO & Executive Director

* Horst Julius Pudwill

Techtronic Industries Company Limited - Founder & Executive Chairman

* Joseph Galli

Techtronic Industries Company Limited - CEO & Executive Director

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Presentation

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Horst Julius Pudwill, Techtronic Industries Company Limited - Founder & Executive Chairman [1]

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Good morning, ladies and gentlemen. I would like to thank all of you to attend our first half TTI Group announcement. And really very happy and delighted to see all of you. And it's always easier to invite people if the results are good.

The Group had another strong first half, delivering record revenue, profit and gross margin. Actually, our gross margin has increased for the 11th consecutive first half period, and our new product development machine is as strong as ever. And Joe will go in a little while to present to you our short-term and long-term strategy, how we further can surprise you with good news in the future.

Can I pass, Joe -- I would like to pass the floor over now to our Group CEO, Mr. Joe Galli; and our Group Financial Officer, CFO, Mr. Frank Chan, who will share with you the results, and we will go into some more details a little bit later.

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Joseph Galli, Techtronic Industries Company Limited - CEO & Executive Director [2]

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Thanks, Mr. Chairman. Let's start with Frank, who will cover our outstanding financial highlights. Frank?

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Chi Chung Chan, Techtronic Industries Company Limited - Group CFO & Executive Director [3]

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Yes. Thanks, Joe, and thanks, Mr. Chairman.

So as Chairman said, another set of results for the first half of 2019. Our sales delivered an organic growth of 8.7% to over USD 3.7 billion, a 10th consecutive period increase. Excluding the currency impact during the period, like euro and Aussie dollars, our revenue actually increased by 10.7% in local currency. This stellar performance mainly driven by our very focused and dedicated commitment to the development of innovative cordless technology, delivering strong categories and geographic expansion and market share gains.

Milwaukee continue to drive the sales growth momentum, delivering another over 22.2% increase globally and by RYOBI ONE+ cordless systems and the revolutionary range of cordless Outdoor Products. Floor Care and Appliances revenue was lower as projected as we continue to transition out of legacy corded products and markets. However, our carpet cleaning products and solutions and the newly launched ONE PWR cordless systems has been very well received by the market.

Gross margin increased for the 11th consecutive year to 37.6%, another 50 basis point margin expansion as compared to previous period. The increase was mainly driven by the new high-margin products, mix improvements, productivity gains and very effective supply chain management. During the period, we also implemented and executed very swift and effective actions and tackled challenging headwinds, including tariffs.

EBIT increased by 11.9% to USD 314 million with a 20 basis point margin improvement. We will continue with this proven strategy to further invest in strategic SG&A to maintain sales growth momentum and further margin improvements while leveraging nonstrategic SG&A spend.

Net profit increased by also 11.9% to USD 285 million with margin also improved by 20 basis points as compared to the same period last year. Earnings per share increased by 12.4% to USD 0.1561 per share.

The Board declared an interim dividend of HKD 0.45 per share, representing an increase of 18.4% over last period and a payout ratio of 37.2% as compared to 35.2% same period last year.

We like this chart. It has always been our target that EBIT and net profit improvements must outperform sales growth. Over the 10th period under review, we have managed to deliver this target with sales CAGR of over 10% while our EBIT delivered a CAGR of over 16% and net profit of 22%.

Power Equipment division now account for close to 90%, 89.1% of the Group's total revenue, delivered a 12.1% sales growth or a strong 14.3% in local currency. They increased mainly by the outstanding performance of Milwaukee globally, together with RYOBI ONE+ systems and Outdoor's incredible success in cordless lawn mowers and the exciting new brushless 40-volt platform.

Our strategy has always been not only to capture additional market share but also to expand into new categories, creating new markets, leveraging on our innovations and technology. This strategy's been very successful, executed over the past years, and we will continue to invest to fuel the growth momentum.

Excluding the translation effect, our Power division delivered a 20.2% growth in Europe and 15.3% growth in Australia, respectively. EBIT margin of this division remain comparable to that of last year as we continue to invest in strategic initiatives to capture future revenue growth and margin expansion opportunities.

Floor Care and Appliances division account for now only 10% or 11% of the Group's revenue, down 12% in local currency to USD 406 million. The revenue declined mainly due to I explained before, the transition out of legacy corded products and markets. This enabled the division to stay focused in the new cordless ONE PWR system together with carpet washing products and solutions, both with high-growth opportunities and also margin accretive.

EBIT for this division slightly lower than that of last year. However, with the new portfolio being launched in the second half of the year and the margin accretive carpet washing products, we expect revenue and margin will improve going forward.

From a geographic perspective, all regions delivered satisfactory revenue growth despite challenging translation effect. North America remained to be our major market, accounting for 76.3% of the Group's revenue; followed by Europe, 16%; and Rest of the World, mainly Australia and New Zealand and South Korea, 7.7%. In local currency terms, Europe grew 14.2% while Rest of the World grew 12.8%, respectively.

Consistent with our strategy, we have continued to invest in strategic SG&A for growth and margin improvements. SG&A as a percentage to sales in first half 2019 was at 29.3% as compared to 29% in 2018. We increased strategic SG&A spend by 40 basis points while we've been able to lever down our nonstrategic SG&A by 10 basis points. Joe will give you more details later. R&D spend remained the same as that of last year at 2.9%.

Net finance costs increased by only USD 2 million on a sales increase of close to USD 300 million and at a higher interest rate environment during the period under review. With our very diligent financial management, we will continue to deliver very efficient and effective finance costs.

Effective tax rate was at 7.1% as compared to 7.4% last period. We remain confident that the current high single-digit effective tax rate is very sustainable through our very effective and yet prudent tax plans leveraging on our global operations.

Our balance sheet remains very strong and healthy. We have shareholders' equity now at USD 3.18 billion as compared to USD 2.9 billion in first half 2018.

As at June 30, 2019, our gearing was at 13.1% as compared to 1.8% last year. They increased mainly due to the additional infrastructure CapEx spend during the period together with the strategic inventory build to maintain our strong sales growth momentum and to mitigate any tariffs impact. We consider the CapEx investment essential for the long-term growth of our company and business. There will still be infrastructure spend in the next 12 to 18 months' time. However, we are confident that the gearing will further improve going forward. Excluding the additional inventory build and the infrastructure CapEx spend, gearing was -- actually was at around 5.3%. And the inventory build was a onetime thing, and the infrastructure spend after 12 to 18 months' time may come down.

Working capital as a percentage to sales was at 18.4% as compared to 17% same period last year. The increase was mainly due to the additional inventory build, which is strategic to our growth and to mitigate our tariffs impact as explained. There's no significant changes in both accounts receivables and payable days. We will, for sure, leverage our financial strength, volume and visibility to get the best terms from our suppliers while maintaining a very prudent and tight credit control over our receivables. Working capital as a percentage of sales will continue to be below our target level of 20% going forward.

CapEx for the period was at USD 211 million, of which about 50% of it was in the infrastructure CapEx spend.

We continue to execute our prudent, risk-free financial plans and structure to maximize our finance cost efficiencies, resulting in both a higher level of cash and debt. The increase in net debt of USD 417 million mainly due to the financing of the infrastructure CapEx and the high level of inventory as previously explained. Currently, 61% of our debts are long term, a 20% increase to match our long-term CapEx investments, 80% in floating rate, capitalizing the current low interest rate environment. Debt portfolio and structure will continue -- constantly be reviewed to maximize our operation and balance sheet efficiencies to support our long-term continuous growth ahead of us.

With that said, I'll pass the floor to Joe.

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Joseph Galli, Techtronic Industries Company Limited - CEO & Executive Director [4]

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Thank you, Frank. We -- we're thrilled with our first half performance. Our sales actually, in local currency, were up over 10% in the first half in the face of significant headwinds in an environment where competitors are making one excuse after another about poor sales performance, and our team delivered up 10%. Our profit, as Frank said, was up 12% in the first half. And our financial performance is consistent with our guidance. We intend to grow sales high, strong single digit. We intend to grow our level of gross margin improvement and EBIT at a faster rate than sales. So you can clearly see leverage. And we continue to invest aggressively in the right kind of SG&A. I'm going to -- Frank, the clicker is stuck. I can't advance it from this.

So this gross margin performance is extraordinary. You will not see a company in our space that can consistently grind out and deliver 50 basis point improvements in gross margin half after half, year after year. In fact -- Frank, this one also is stuck. 11, can you imagine, 11 years of gross margin improvement at that kind of -- with that kind of trend? This is historically considered to be an impossibility. This does not happen. And once again, we delivered a 50 bp -- basis -- a 50 bp gross margin improvement, and we are confident, over the next 5 years, we will continue to drive gross margin at a rate of about 50 basis points a year. 50 is an easy number to remember. And I think investors should recognize that this is not a episodic development. This is a permanent trend. And as Frank said, our volume growth drives productivity. Our gross margin improvement is driven by accretive new products, new products with accretive gross margins. We have a very, very disciplined management of our mix in the company, and you can clearly see that in gross margin.

As Frank said, our SG&A investment continues to be highly focused and highly disciplined. We are actually very rigorous about reducing nonstrategic SG&A, administrative overhead. And at the same time, we continue to invest aggressively in areas that we deem strategic. So research and development to drive new products is an investment area. Product management and product development is an investment area. End user conversion globally in our Milwaukee business is a major area of investment. Our sales coverage program continues to expand. We continue to expand geographically in a very targeted way, and you can see that in our sales growth. And LDP means Leadership Development Program. That's our campus recruiting effort. And this year, we will hire globally about 1,000 graduates from college campuses around the world. Can you imagine, we're adding 1,000 high potential individuals that join our company. And that infusion of talent is a very powerful force in driving our results this year and on into the future.

As Frank said, our working capital management is very disciplined at TTI. We continue to stay under 20%, which is world-class. We added inventory in the first half to help us mitigate the effect of the tariffs. The tariffs, by the way, were most painful in the Floor Care area, where we had a 25% tariff environment. But we did a good job of building inventory up in advance of tariffs and mitigating, and you can see that in our gross margin and our EBIT. At the same time, our receivables management is a function of being very disciplined about not selling to high-risk customers and not selling in markets that have high risk. One of the things that we are not getting credit for is what we don't do. For example, we didn't rush into Turkey like our competitors. We didn't overinvest in Russia. We didn't overinvest in Brazil and Argentina and Venezuela. Our competitors have all been in these markets, and their receivables performance will show that. And I'm really proud of our team for having the kind of discipline to not chase short-term sales when there's risk of collection. Frank, we don't have bad debt risk because we don't sign up customers or countries in the first place that reflect that kind of risk. And you can see that here on working capital.

Of course, the flagship business at TTI is Milwaukee. As you can see on this wall, we have amazing range of Milwaukee products and so many new products that I won't be able to cover. I will just touch on some of the new products today. But we were up 22% in Milwaukee in an environment, again, with significant headwinds, 22%. And what I was most excited about is Europe. Europe was up actually 25% in the first half. And we actually had our largest competitor actually announce recently that they were incredibly pleased with their European business growing 5%. They were pleased with 5%. We're up 25%. So I think that, that would tell you that we are in a position of leadership. We are capturing record share. We are developing new markets. And I can assure you that this is -- these kind of numbers are what we expect over the next 5 years here at TTI with Milwaukee.

Our FUEL business, FUEL is our highest priced, high-end, most sophisticated range of cordless, brushless motor products in Milwaukee. And so while Milwaukee was up 22% overall, I think it's particularly encouraging to see that the highest gross margin high-end range of Milwaukee actually outgrew the average and was up 24%, and that's going to continue, David, as well.

One of the things that is unique about TTI is we focus on very specific end user groups we call verticals. There's -- I'm going to touch on 6 verticals today just to give you a sense of how we attack the market. We don't look at the market in a broad brush. We look very specifically at groups of end users that have specific requirements that are different than other groups of end users. So for example, carpentry and remodeling. This is commercial, residential construction activity. We have an incredibly broad line and a growing line of products that serve this market. We're adding here, in the second half, a series of really, really cool innovative products.

For example, this is a rear handle cordless circ saw. So this is a ubiquitous product on job sites in the West Coast of the U.S. And for the first time ever, we have an 18 -- there's an 18-volt cordless product that replaces corded. We have a 12-inch miter saw. This is a beast and is a required product on residential and commercial job sites. And for the first time ever, we have a single 18-volt battery that drives this high-performance, very precise miter saw. This is the world's most accurate, most precise cordless compact router. This is -- this product is perhaps the most important product we're launching in the second half. This is finally a framing nailer, we call them a framer, that will replace the traditional pneumatic or the gas-powered units on the market today. This is incredibly fast and accurate. It doesn't jam. And it will -- this will literally revolutionize the way people put together houses in markets like Australia, U.S., Canada, Scandinavia. This is a game-changing product in the framing arena. We also have our first-ever cordless concrete cut-off saw. This is a 9-inch cordless concrete cutter replacing hydraulic or petrol on these job sites. This is a really cool, super quiet impact driver. It makes half the noise of a typical impact driver, half the noise. It's got terrific torque. And it changes the game for somebody who uses these products all day. You don't now have to have the earmuffs because the product is very quiet. Here is a brand-new installation tool with replaceable heads that changes the way that the end user will install various materials on the job site. And we can go on and on, on carpentry and remodeling.

The next area is what we call MEP, mechanical, electrical and plumbing. This is the core of Milwaukee. This is an area that we continue to dominate globally. And we will amplify that domination here with the products we're launching here in the second half. For example, this is an incredible cordless sewer. It's not a pleasant thought, but if you have an issue in a commercial building, a hotel, et cetera, like this hotel, if you have an issue with the plumbing, this will clear up to 200 feet. It will clear the pipes and get you back to normal in the bathrooms. This is the first-ever cordless fish tape. We call it the Angler. So what this device does is you pull the trigger and it will literally pull the wire through conduit. So if you're an electrician, you can now install the wiring in a commercial setting without the tedious and carpal tunnel-oriented process that people used in the past. Here is a first-ever cordless cable stripper. And here is a crimper for crimping aluminum or copper wires in commercial electrician environment. This product is really, really exciting. This is the first-ever cordless torque wrench. You can set the torque with this device on your iPhone or on board. And you very precisely -- even if you're not a skilled end user, you now can appear to be skilled because you can't make a mistake. Once you set the torque, you pull the trigger and you will screw the threaded mechanical fastener at exactly the right torque, not too much where you strip it and not too little where it doesn't have a good attachment, so another breakthrough product in our cordless family.

Okay. Another vertical is, and I'm really excited about this space, this is the power utility. So around the world today, people worry about the macroeconomic environment. And let me assure you, whatever the macroeconomic environment does over the next 5 years, the world's power utility arena will get massive investment. You name the country, and I can tell you that this is an area where there's significant infrastructure investment required. And we're seeing that spending happen like crazy. And so we have a unique series of products for the power utility repairman. For example, this is the first-ever -- this is a 10,000 psi hydraulic pump powered by a lithium battery. It's an incredible breakthrough for an application. It's very common with the power utility user.

Okay. This is one of our favorites. This is a utility light. So if you're a power utility repairman, if you look up here to your right, you'll see the light this fires up. And then you can see that this light, it can be oriented remotely 200 feet away. So you install this light and you can figure out which power line is down, where the damage is, et cetera. And this is fired by a lithium battery. It's cordless. You can control it with your iPhone or the remote control device. And this really changes the way a power utility -- if you think if you're a utility repairman and it's nighttime and it's raining, you just put the light in and you can figure out where you have to go do your work.

So -- and here we have -- this is called a hot stick light. This device is called a hot stick light because, of course, power utility people deal with a lot of electricity. So you hang this up, it's cordless, you turn this light on, and you can see exactly what repairs are needed in the area where there's a lot of juice flowing through these lines.

Okay. So next vertical is what we call transportation, whether you are a repairman for cars, trucks, bulldozers, boats, planes, trains, David, and anything, any device that moves, we call it transportation. And we have a -- an onslaught of new product to serve this marketplace, and this is new for us. For example, we have a long anvil impact wrench which is for installing wheels on these various transportation vehicles. We have -- this is a real breakthrough. These are extended reach ratchets. So if you're a mechanic and you're trying to remove or install bolts of any kind, the extended nose on this thing allows you to get to places where, historically, you have to use a manual ratchet. So this is a game changer for the automotive mechanic. Here is another breakthrough product. This is a cordless die grinder. It's super powerful. It's 12-volt. It's very compact. And any mechanic working around engines of any kind will find this product to be a must-have as they do their jobs.

One of the areas that is brand-new for TTI is mechanics hand tools. We are attacking the $6 billion global market for wrenches and sockets and ratchets, et cetera, torque wrenches, with our line of mechanics hand tools. We have designed a unique range here. These are high gross margin, super high-performing mechanics hand tools, and it takes us into a space we've never been in before. This is all brand-new market for us. And the reaction so far has been incredible. We are raising one of these mechanics hand tool products after another to market to meet the demand that we've seen so far.

Okay. Shifting gears, we have some -- people ask this all the time, where are we going to see the growth in the future? And I just want to emphasize that we have a number of start-up businesses that we've created from scratch inside the company that have vast potential. For example, lighting. All kinds of lithium-powered cordless lighting is -- if you look at this collectively, we think this could be a $1 billion business for TTI as time goes on. And the traction we see in our lighting program is extremely encouraging and only getting better.

Another example is something we call PACKOUT. So one of the things that's happened in the power tool market over the last decade because of cordless is the end user is buying more and more different tools. So if you look in the typical fleet of tools that an end user has, it used to be end user would have 6, 7, 8 tools. And today, people have 25, 30, 35 tools. That's very common. So the question is, where do you put all those tools? And the answer is PACKOUT. So -- and people store their tools in their workshop, but more importantly, they need a way, a mobile way, of storing tools. So if you think of PACKOUT, this is a system -- just like for your luggage in the airport, this is a system where the user can wheel their tools, their fleet of tools to the job site where they work. And they can organize it in all these different containers in this interlocking system called PACKOUT. And the -- this program is selling 5x the forecast. We think this will be a $1 billion business for the company. And the easier we make it for people to store their tools, the more tools they'll end up buying afterwards. So this sort of is a catalyst for what we call the tool accumulator. We want people to accumulate as many tools as possible. This encourages them to do that.

Okay. So in hand tools, we -- 10 years ago, we weren't in the hand tool business. Now we're a major factor. We've become a global leader in tape measures. And I'm very excited that we have now reached a point where we have a -- a key determinant of tape measure effectiveness is something called standout. So you basically pull the tape out, and the longer it stands out without bending, the user views it as the more effective that tape is. And we have -- the market leader today has a 12-foot standout. And we just came up with a 14-foot standout on a tape. Can you imagine 14 feet? So we will have the best-performing line of tape measures in the world. We're rolling this out in the second half. And this is a major hand tool category that we're focused on.

Okay. Let's shift gears and talk about the DIY market for a moment. We -- if you look in the back, you see that the RYOBI DIY range of cordless power tools and other labor-saving devices, this is the broadest line in the world. We are the -- RYOBI's the #1 brand in the world for DIY tools. And RYOBI is the #1 brand in the world for cordless DIY tools. And we continue to expand the -- what we call the ONE+ platform with one innovative new product after another. So for example, we're launching a whole line of hobby tools that are all powered by the same battery. We have a line of plumbing tools. So this is an example of taking technology that we create in Milwaukee and then we let it cascade down into our DIY line. The products aren't as robust as Milwaukee but perfect for the DIY-er. And we are doing a lot of this cascading of technology so that we can build the RYOBI ONE+ System into a broader and broader platform.

Something that sold extremely well this summer because of the heat was our new air cannon. So we have a fan -- actually, we call these things air movement products. And this air cannon is powered by a battery. So you don't plug it in. And it's an incredibly effective way of staying cool or drying. If there's a flood or if there's any water damage, this is a terrific way to help expedite the process of drying up the issue.

Okay. So outdoor is one of the company's highlights. We've mentioned in the past, and if you look at our outdoor program here on your left, we were up over 15% in the first half in outdoor. And this is an environment where there were droughts, there was a cold spell in the U.S., and yet, we still were able to deal with these headwinds and grow over 15%. Why? Because we are the global leader in transforming outdoor power equipment from petrol-based products and AC-based products to lithium battery-powered products. Our lawn mower range is the -- our lawn mower line of battery-powered mowers is the broadest in the world, is selling like crazy. We think that our mower business, long term, is a $1 billion opportunity for the company from nothing 3 years ago. And the sales in the first half are very, very encouraging. And more broadly, this is now our family of lithium-powered, battery-powered outdoor equipment. So historically, all these devices, all these things were powered by petrol or, in some cases, AC, and now it's all battery-powered. So there's no fumes. There's no spark plugs to tune. There's no trips to the petrol station. There's no heat. There's no cord to pull. And people are adopting this lithium cordless technology at an incredible rate. In fact, the adoption rate here is going faster than what we planned, and that's great news for our future because we are the clear global leader here in this space. And we're launching one new cordless outdoor product after another, for example, a snow blower. So instead of a petrol snow blower, we have a lithium battery-powered. And believe me, if you live in Canada or Norway, this is a product that you're going to want to buy to clear the driveway.

One of the things that has been amazing to us is the success of our battery-powered riding lawn mowers. So the petrol mower companies are not so happy about this, but we are selling a lot of battery-powered riding mowers. This is actually a zero turn model. So it's a very sophisticated, advanced riding mower. And the sales success of these has just given us even more confidence about the future of battery-powered versus petrol outdoor equipment.

And it's interesting. We have a large competitor that actually just invested in a petrol mower company. Can you imagine? They are now investing in a petrol mower company. That would be -- it would be like Apple buying a pay phone company while they're launching iPhone. And we just look at this and we love it because we're focused on the iPhone and not the pay phone like our competitive set. Right, David?

Floor Care actually had a very good first half. Yes, the revenue was down. And you have to remember, the Floor Care got hit the hardest, Stephan, with the tariff environment in the U.S. So -- but if you just separate the noise of tariff and the short-term discontinuance that we're going through of low-margin Floor Care, the fact is our carpet washing range, which is a critical part of Floor Care, has been completely re-engineered. And we are seeing fabulous success on our compact carpet washer and our full-size unit, plus in detergent.

We also are now rolling out, finally, our ONE PWR system of cordless floor care and cleaning products. This -- we shipped just a little bit in the first half. So in the second half, we will end up setting major retailers with this program. And it will have a nice impact on our growth in 2020. And the reaction from the end user on our ONE PWR cordless floor care products has been outstanding.

One of the highlights is a product we call JET. So this is a hard surface cleaner that cleans, it vacuums, and it works on all sorts of different floor surfaces. And people love the fact that there's no cord. Cordless matters a lot here. Another successful launch has been our spot cleaner. Again, cordless spot cleaner for quick cleanups, and there's a lot of things that need to be cleaned up on carpets, as you know. So this is a great way to do it without a cord.

So in summary, we launch more new products every quarter than all of our competitors launch -- all of our competitors combined will launch for the whole year. And our products are not warmed-over package changes or brand changes. These -- our new products are designed from scratch, innovative breakthrough products, mostly cordless, along with some hand tools and storage products, as we mentioned. And I think that flow of new products should give our investment community confidence that our ability to grow the top line at an improving gross margin is looking pretty good.

So anyhow. Why don't we, Mr. Chairman, open up for questions at this point? Frank?

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Questions and Answers

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Chi Chung Chan, Techtronic Industries Company Limited - Group CFO & Executive Director [1]

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Nothing.

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Joseph Galli, Techtronic Industries Company Limited - CEO & Executive Director [2]

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Okay. Thank you. Okay. Mr. Chairman, I turn it over to you to wrap it up.

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Horst Julius Pudwill, Techtronic Industries Company Limited - Founder & Executive Chairman [3]

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Joe, you have done a fantastic job, even answering your question with a CapEx on the 40% that we invested in new warehouse on a piece of land we negotiated with the South Carolina government, about 400 acres, and the warehouse, innovation center with Milwaukee and improving our manufacturing facilities in the U.S. That will not happen every year, I know, but was a good question. Thank you very much.

As we continue investing in our core business, I feel strongly that the exceptional Group performance delivered in the first half will continue. Our global, worldwide manufacturing footprint and supply chain, along with the highly effective management team has helped us to offset the headwind. What are the headwinds? As Joe says, tariffs, which are presently in place, we don't worry too much. It's all right.

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Joseph Galli, Techtronic Industries Company Limited - CEO & Executive Director [4]

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We manage it.

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Horst Julius Pudwill, Techtronic Industries Company Limited - Founder & Executive Chairman [5]

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We manage it. We're extremely well positioned to continue our momentum into the second half and beyond. We will remain passionately committed on executing our goals. But I would like to thank our team and you, Joe.

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Joseph Galli, Techtronic Industries Company Limited - CEO & Executive Director [6]

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Thank you, Horst.

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Horst Julius Pudwill, Techtronic Industries Company Limited - Founder & Executive Chairman [7]

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And everybody for our passionate effort we're putting in. And the end, we all will benefit, you and me and all of us. Thank you very much for attending and hope to see you with even better news in...

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Joseph Galli, Techtronic Industries Company Limited - CEO & Executive Director [8]

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Exactly. In 6 months.

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Horst Julius Pudwill, Techtronic Industries Company Limited - Founder & Executive Chairman [9]

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6 months from now. That's right.

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Joseph Galli, Techtronic Industries Company Limited - CEO & Executive Director [10]

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That's exactly right.

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Horst Julius Pudwill, Techtronic Industries Company Limited - Founder & Executive Chairman [11]

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Thank you very much for attending.