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Horst Julius Pudwill: Good morning, everybody. I'm happy to see the attendance to welcome you to our TTI first half 2025 result announcement. It was really a fantastic record first half ever. So was a record rainstorm from ever yesterday. So we established 2 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 MILWAUKEE, our Group President, Mr. Tim Albrecht. 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, the sales outperformed the market and was really a record first half, and we delivered double-digit growth in profit and free cash flow. Frank Chan will elaborate a little bit later and detail what our positions are. And I think if you didn't read the release, it will be a very pleasant surprise to you. And what I can do, I can congratulate you to holding TTI shares. Thank you very much. And Stephan, would you say some words, our Vice Chairman?
Stephan Horst Pudwill: Thank you, Chairman. As the Chairman said, 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 are 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.
Chi Chung Chan: Thank you, Mr. Chairman, and Stephan. As Chairman and Stephan 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 USD 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 noncore 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 USD 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 sourcing 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 our gross margin increase, together with an 18 basis point decrease in SG&A. Net profit increased by 14.2% to USD 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 USD 0.34 per share. The Board declared an interim dividend of HKD 1.25 per share, an increase of 15.7% over last year, representing a payout ratio of 46.9% as compared to 46.3% in 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 nonstrategic 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've 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've further strengthened our balance sheet together with the $1.6 billion free cash flows generated in 2024, our net finance cost was only 0.35% of sales, a reduction of 14.5% versus last year. Effective tax rate was at 7.8%, 15% 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 maintained at the current level of effective tax rate is very sustainable near term. Our balance sheet remained very strong with shareholders' equity increased by 6.4% or $403 million to USD 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%, an improvement of 190 basis points when compared to first half 2024. Inventory days decreased by 1 day to 103 days, while we increased our finished goods inventories by 6 days in preparation for the ever-changing tariff situation, we reduced our raw material and work in progress by 7 days, reflecting the effectiveness of our material planning and efficiencies of our supply chain management. Trade receivables 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 order 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 6 months of 2025, we've continued to deliver positive free cash flows of USD 468 million. Despite the full tariff impact in the second half of 2025, we project that we will continue to deliver positive free cash flow for the full year. We were in a net cash position first half of 2025 as compared to a gearing of 9.2% same period last year. The improvement mainly from the increase in profit, our very disciplined working capital management and CapEx spend, together with the free cash flows generated from operations. Even under this very uncertain macroeconomic and government 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 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 debt. Fixed rate debt 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 Richman.
Steven Philip Richman: Thank you, Frank. So at TTI, our foundation, what leads to our success every day are our bookends of success, are people, the people of TTI and our culture, that combination allows us to deliver the outstanding results you just heard about today. This foundation has been built over years with recruiting, retaining and investing in the best people, not only in our industry, but the best people in any of the competitive industries that we see every single day. Our people are not just our salespeople and our job site solutions team that call on the users and our regions throughout the globe, which are absolutely outstanding and our commercial teams that drive that success. It's our factory workers. It is our leaders of our facilities throughout the globe. It is our supply chain leaders that challenge each other every single day, to say what is best, what is great and how do we raise the bar. It is our developers and our engineers and our product development teams who look at what those problems are from the user, from the consumer and the pro and say, how are we going to disrupt entire markets and industries. Our teams of people want to grow. They want to learn. They want to advance every single day, and that's the difference of TTI. Now you combine that with the evolution that we have made over the years to one team. And why is one team important? One team is important to you because it brings out the best in people. It challenges people to say, what does great look like. We have James Wamsley and Nate Easter, who run our operations globally with Patrick. And they challenge each other to say, between the brands, between the regions, between the product categories, how do we improve. How do we get better? What does great look like from automation, from quality. These are the types of things this one team mentality drives every single day. And we do the same with our commercial leaders where they talk about what is great in Australia versus EMEA versus the U.S. versus Canada versus Latin America and our supply chain teams throughout the globe. All of this in one team delivers outstanding results, and we clearly believe raises the bar so those results will continue to improve year after year after year. Now what makes all this happen? Clearly, it's culture and people, but it's experience, it's wisdom, it's the viewpoint if you have leaders, the key leaders throughout the company that have been together for over 17 years, where they can have candid dialogue, communication, talk about what we're doing wrong, not only what we're doing right and how we're going to take that to the next level in a significant way. That is our leadership. It is Alex over in Europe running the commercial teams. It is Darryl Hendricks running the commercial side of the U.S. Craig Baxter in Canada, Greg Borland in the Australian market and more and more of these leaders that have been together. You combine that with Nate and Patrick and James on the operations side who have been together and challenge each other, and you understand our key leadership is best-in-class. And then on the business front, you'll hear from Drew in a few minutes and his counterpart on the RYOBI side, Bobby Shaw. And then on the MILWAUKEE side, you have Scott Griswold, Tim Albrecht will be up in a few minutes and Shane all challenging each other for how do we improve. And then you combine that with our CFO leadership with Tai and the rest of the CFO leaders, and we are best in class. Now it's not just the senior leaders in the company. That's the message we want to provide. The bench strength that TTI has built is second to none. It's the senior VPs, the Vice Presidents, who've been here for 10-plus years, who know each other, who challenge each other. It's the people that joined 5 years ago that have helped build the business or the people that have just graduated MIT or Carnegie Mellon or the best universities throughout the globe. They are all part of what has led to the success of TTI and part of our culture and part of our people, and we clearly believe we are just getting started. Now how does that relate to results? Well, the foundation is this people and culture, no question about it. We could never deliver the results. Horst was saying this last night to me. He's saying "as good as strategy is, as good as the brands are, without having the right people in the right positions and grooming those people and growing those people, there is no way we'd be able to have the success we have year after year after year." Sales is top of that. Our DNA is a growth company, driven from disruptive innovation, new product development in every one of our brands, and that will continue. How we disrupt is very different, though? People look at us and say, "You're a tool company." Well, we are not a tool company. We disrupt markets, we disrupt businesses and we disrupt all of those because we are a technology solutions company that delivers something that our professional end users need to be able to do their job and the consumer needs and helps them do their job better as well. That disruption is part of our DNA. And last but clearly not least, all of this together adds to outstanding financial results year after year after year. Let's talk about those results. You heard from Frank and Stephan and Horst about 2025 the back half. Yes, it was an outstanding back half in isolation. But the most important thing to each one of you is what does this mean next year and the year after and the year after that. And that is this 17-year track record of growing sales of delivering more and more EBIT, of delivering net profit that has continued to increase. That is our DNA. That formula over the last 17 years shows that not only is sustainable but it's expected for us to continue year after year. Our financial focus areas, clearly, sales growth, that disruption, we are a new product development machine. Our core users on the professional side expect that we deliver more productivity and safety to them every single year. On the consumer side, as Drew will talk about, that consumer expects the next generation of technology and more products to help them inside the home or outside the home every single day. EBIT accretion, there is no question. Our objective begins with when we will deliver 10% plus EBIT and then grow from there. That's our objective at TTI. And free cash flow, you heard the great results for the half over $450 million and a track record year after year again. Now let's talk about the first half sales performance. You look at these numbers, you compare them to our hundreds of competitors in every single field and our major competitors in the tool business, and there's only one thing you can say, that we dominated in the first half of 2025. No question about it. That domination was clearly led by MILWAUKEE, where our core is that professional end user. And that professional end user being able to solve their problems every single day, leveraging that technology and the solutions that we provide them to be able to keep their uptime, manage their manpower, which is a constraint throughout the globe today, and that's why MILWAUKEE continues to flourish with a new product development that Tim is going to take you through led by technology. On the consumer front, outstanding results from RYOBI, the consumer brand of choice, the #1 consumer brand throughout the globe, the #1 cordless brand throughout the globe and why? We have a foundation that we have built year in, year out since Horst started the company on this basis that we have technology, we have what the consumer wants, and we have a value that is appreciated every single day by that consumer. In the other areas of our business, we understand we need to drive profitability. And that's our mantra. And we will work on that year in, year out to be able to improve that top line, but also the bottom line. How do we get there? How do we position ourselves for success, not only today but into the future. Been a lot of questions from a lot of people based on the environment that we're in today, are you ready? Are you prepared? Are you flexible? Are you agile? How does your DNA really adapt to each and every one of those areas? Here is a great example. 2015, our manufacturing development base was very focused. And we realized back then that we needed to change. We needed to adapt. We need to have the flexibility and the agility to be able to deal with any macroeconomic situation that was going to occur. Move production, change facilities, have the best people and continue to use that as we grow. That led to what we have today, which is the most dominant, the best, the most flexible manufacturing operations approach of not only anybody in our industry, but the envy of consumer and professional technology companies today. Next, it's about innovation. We are an innovation machine. Yes, I'm going to bring you back to last year in the past and for those that we have met with, this all started with a viewpoint of disruptive innovation. Clayton Christensen, the Harvard Prof talked about the Innovator's Dilemma and the Innovator's Solution. What is that? That is the understanding that if you're not paranoid, which we are throughout TTI. If you are not paranoid, you will be disrupted. And all of us, all the senior leaders, all the managers, all the people that have joined TTI are all scared to that, that we're going to be disrupted. So what are we doing about it? We have the DNA to understand -- to clearly understand that to disrupt is essential. We don't want to become the next blockbuster. We don't want to become the next Nokia. And how we're going to accomplish that objective is really based on disruptive innovation. And this disruptive innovation is led by technology. Now if you think about technology solutions, how do we enable a vast amount of technology solutions to be able to deliver that disruptive innovation. Tim is going to talk about it on the MILWAUKEE side. Drew is going to talk about it on the RYOBI side, and that's essential for our future success. This disruptive innovation allows us to partner on the technology side with the best of the best. When you talk about Texas Instruments, you talk about Infineon or you're talking about STMicro. These are technology leaders in chip design. They help us drive AI and ML in a way that allows us to disrupt the market and provide solutions to our professional end users as well as our consumers. For us, in many of these ways, it starts with system architecture. Our teams have looked at those systems and said, "Yes, we understand MILWAUKEE and RYOBI, have platforms that are backward and forward compatible, unlike anybody else in the industry. But what this allows us to do with this disruption is not only do what we have today, but it allows us to design products that will outperform anything else in the industry and still keep those platforms. The same for our users on the consumer side or on the professional side. But it doesn't stop there. You're going to hear Tim and Drew talk about how we bring new products to market. And when we bring those new products to market, our #1 asset is speed. We have the ability to bring them faster than anybody else in the world. We leverage technology in the front end to be able to do that, leveraging ML and AI, the next generation of circular saw blades, our matrix product that was brought to market, leveraging all that technology and all of our tools. That is a competitive advantage for us and has been since Horst founded this company. This leads to success as we drive more new product development than anybody in the industry. But it doesn't stop there. How do we automate in the factory and the facilities? How does Nate and James and Patrick challenge each of their teams and the quality organizations to say, how do we win on the factory floor? How do we move more product faster? How do we take a perspective that says we have to be best cost? Not lowest, cheapest product, but best cost overall. And that's what this allows us to do. And you combine that with a supply chain that is better than anybody else in the world, which allows us to deliver 98% service level to the best distribution partners throughout the globe. The facilities throughout the globe, leveraging disruption and doing it in a way that no one else does with technology partners and solutions on the consumer side and the pro side is a clear competitive advantage. Now let me switch over to our 2 brands before I turn it over to Tim on MILWAUKEE, and Drew on the RYOBI side. This isn't new for anybody here. We have built the MILWAUKEE business year after year throughout the globe by saying that we must earn the right to be the user's brand of choice. If the user does not believe that we're going to deliver productivity and safety solutions, leveraging that technology because we are a technology company, then we lose. And that's why that is so important for us every single day. You combine that with the best distribution partners throughout the globe. That allows us to disrupt the industry, dominate not only in 2025, but going forward and develop new markets in every region of the globe. How do we think about our business? 17 years ago, this started with 3 traits, 3 verticals that we call mechanical, electrical and plumbing end users. And our dream was, if we could earn the right where those users believe that our brand was the brand of choice, then we would have the opportunity to be able to win in the marketplace. That dream has become a reality. Users throughout the globe, we generate the opportunity to be able to win with those users, dominate with those users every single day. That advantage is essential for us today and into the future. That domination is the difference of TTI and of MILWAUKEE versus everybody else. Now how do we keep it going? It's not simple to keep it going. You have to continue to earn the right with each and every one of those verticals. How do we grow those businesses. And that's with the teams. On the commercial side, the JSS side, our job side solutions is JSS who call on the users, from the CEOs and the Presidents to the foreman, to the worker. They call on them and they understand how important they are and they understand that for us to grow -- we have to grow with the existing users, the existing verticals, the existing businesses, take more share in each one of those verticals that we talked about and expand the market. Next, there's the opportunity to grow existing markets. If we think about markets that we're just entering now, that we're just began, David Butts is in the back of the room. We talk about our Japanese market. We're in the first inning of Japan, leveraging technology to become that solution provider towards the professional end user in the Japanese market. Same opportunity in Latin America, clearly, an opportunity in EMEA, but also more growth with the current verticals and our current businesses in the Americas and Australia. Last but clearly not least, is the vision of why we believe that total addressable market, that TAM that we just showed that Tim is going to talk about, we'll continue to grow. We're going to add more and more verticals on the MILWAUKEE business. We have a track record of success of adding verticals and then owning the vertical, earning the right to be the partner with those users. And we're doing the same thing with new businesses. Think about this. 17 years ago, we had tools. We had circular saws. We didn't have lighting. We didn't have hydraulics. We didn't have Made in America hand tools. We barely had any power tool accessories. We did not have gear. We did not have safety. All these are new businesses with new opportunities in the existing markets as well as new markets. And that's why we are so confident for growth for MILWAUKEE from '26 and beyond. Now let me talk about RYOBI. RYOBI, that #1 consumer brand, just like MILWAUKEE is the #1 professional brand in the globe and both being the #1 cordless brands in their space. RYOBI's addressable market, $80 billion plus. Drew is going to talk about how we take advantage of those markets, how we grow each and every one of those markets. Yes, it's delivering innovation. It's leveraging technology, and we'll continue to do that day in, day out to be able to win. But it starts with that foundation on the cordless front, that backward and forward compatibility where that consumer understands that bought the brand 20 years ago that they can still buy a new product today, and that new product will still work on that old battery platform. We have the opportunity to expand geographically, and Drew is going to discuss that in a few minutes. And geographical expansion means what, for the first time into Latin America, for the first time into Asia, more into EMEA, more share in the Canadian market with our partners, opportunities from a geographical expansion. And then just like MILWAUKEE, the initiative to add more businesses. For those users who bought a drill or bought a blower, get them to buy the rest of the array of great RYOBI product. And they add more new users because some users enter the platform and enter the system with a drill, others with a blower, others with a lawnmower, some with a cleaning product. And all of those wrap up to significant opportunities for RYOBI and for TTI. So how do we tie this together? Bookends of success, people and culture, delivering these outstanding results in the front half of 2025, but a track record that is second to none. Now I want to turn it over to Drew, and Drew is going to take you through RYOBI where we are, but where we're going and why there's so much opportunity in the future.
Drew Patrick: Thank you, Steve. Mr. Chairman, Stephan and Frank, thank you for the opportunity to be here today. I am unbelievably excited to talk to you about the tremendous momentum that RYOBI has as a brand around the world. RYOBI is the #1 brand of consumer power tools and outdoor products in the world. The combination of our innovative world-class products along with the unbelievable partnerships we have with our retail partners have enabled this current leadership position. But as Steve said, I believe that the true secret to our success is our people. Our people are innovative in every aspect of the word. Our people are industry leading in every part of our business. Our people fuel the competitive mindset and the innovative culture that drives our business today. Next year, RYOBI ONE+ will celebrate 30 years of forward and backwards compatibility. That means that the hammer drill that you purchased in 1996 will work with the battery, with the RYOBI ONE+ battery that you purchased last week. And not only will it work, it will work better than the day that you bought it. With over 400 cordless solutions in today's cordless portfolio, RYOBI has the solutions to make our users' lives better, easier and more convenience. We have 3 core platforms in our portfolios. The first platform is our RYOBI ONE+ platform. Our RYOBI ONE+ platform is our largest platform, and it's our fastest-growing platform. Our RYOBI 40-volt platform is our most powerful platform. RYOBI 40-volt has the power to replace petrol-powered products in lawn and garden applications. And our newest platform is our USB Lithium platform. Our USB Lithium platform combines the perfect size and performance to accomplish most light-duty DIY tasks. RYOBI cordless has over a 15% CAGR since 2016 -- 15% CAGR since 2016. RYOBI ONE+ has grown to be over 300 tools that are compatible on that platform. And RYOBI 40-volt has over 85 tools, all compatible on that platform. The current and future growth of RYOBI is fueled by our cordless platforms. As Steve stated, we have a 3-pillar approach towards our sales growth in RYOBI. The first pillar is to leverage and entrench our existing users. This can come in 2 forms. This can come with our existing user base or by adding new users into our platforms. The second is to expand geographically. RYOBI is extremely strong in the markets that we currently trade in. However, there's a tremendous opportunity for us to continue to grow into new markets around the world. And the third growth pillar is to add new businesses and new users to our arsenal. We're going to discuss each in more detail now. So from our customer strategy, we categorize our customers into 2 buckets. The first is our existing users. Our goal here is to drive them deeper into our categories. We know that most of our users have multiple RYOBI tools and multiple RYOBI batteries in their toolboxes. With the goal of driving them deeper into our categories, we must continue to innovate and bring new products to market. A lot of users will start with a product like a drill or a blower. They have an outstanding initial experience, and they come back and purchase more tools and more batteries, further entrenching themselves into our systems. That initial impression that the user has with the first time that they pull the trigger on one of our products, gives them the ability and the confidence to continue to invest in our systems. But we also know that we have to add new users into our systems all the time. There's multiple ways you can enter our categories. Yes, like I said, drills and blowers are very common ways to enter our categories. However, we have multiple avenues to bring people in. Let's look at the first tier. In our cleaning category. Our cleaning category, like a product on the screen right now, the stick vac is incredibly popular and an incredibly fast-growing category for us. That stick vac around the globe right now is taking market share in the cleaning category. We have task-oriented products like circ saws and chainsaws, which are incredibly popular for bringing new users into our systems. And our lifestyle recreation categories are growing like crazy. Products like a battery-powered cordless fan or a portable power station are all unique and fantastic opportunities to bring more and more users into our system. Another way we're bringing people into our systems, though, is through cordless conversion. And when we talk about cordless conversion, we talk about converting people from traditional power sources to battery-powered sources. For instance, in the lawn and garden world, most applications are accomplished through petropowered products. In the power tool world, corded systems and pneumatic systems are still very popular, giving us a tremendous opportunity to bring more and more people into our systems. And there's a lot of hand tools out there, too, all are prime for the opportunity to convert cordless. When we talk about our growth strategy, the second pillar of our growth strategy is to expand geographically. Geographic expansion for us. We spent the last 30 years establishing fantastic partnerships with the strongest retailers in the globe. In North America, our relationship and our exclusive partnership with the Home Depot is one of our strongest. And in Australia and New Zealand, we have an exclusive partnership with Bunnings. Those exclusive partnerships give us the opportunity -- those exclusive partnerships benefit both RYOBI and the Home Depot and Bunnings. They give us the opportunity to do more long-term strategic planning. That give us the opportunity to do more long-term product planning. We can be very transparent with future technologies that are going to fuel our industries. In Western Europe, we have outstanding relationships with the region's most strategic retailers. Retailers like Leroy Merlin, Castorama and B&Q to name a few, have been great partners over the year. But as Steve said, we have an incredible opportunity to drive deeper into Western Europe, to continue to strengthen our brand and to take market share. Soon, we'll be expanding into Asia and looking at opportunities in Latin America, too. The first markets and the first opportunities that we'll look at are the markets that are heaviest in DIY. Markets like Taiwan and Vietnam are prime for conversion for RYOBI and for us to quickly take market share. The third pillar in our growth strategy is to add new businesses and new users. As Steve stated before, we break our users into verticals. These 6 core verticals on the RYOBI side of the business cover everybody from a light-duty DIYer to a heavy-duty lawn and garden application. They cover everybody from a tailgater all the way through an auto enthusiast, but we're not limited to these 6 core verticals. Really to understand, though, how the 6 core verticals break down into our $80 billion global opportunity and how we grow upon that, we have to get more granular. And when we talk about getting more granular, we take our verticals and we break them into sub verticals. Each one of these subverticals reveals opportunities for the RYOBI brand to continue to grow. Let's take, for instance, the cleaning vertical. The cleaning vertical, if we just looked at indoor and outdoor cleaning, we would miss the opportunity to provide products for recreational cleaning. We have many users that have boats and RVs that have needs for cleaning products, and we'll continue to add products like that into our arsenal. Another great example here is in our lifestyle and recreation category. In the lifestyle and recreation category, be very easy for us to just produce products like fans and radios like our competition does, but we would then miss the opportunity to provide portable power sources to customers that need them in the times of storm relief or when they're on the go or on a job site. The real opportunity for us here, though, is to incorporate RYOBI advantages into these vertical and sub verticals. And when I talk about the RYOBI advantages, we talk about compatibility a lot in our battery systems. This mentality of no users left behind. As we've stated before, 30 years of backwards and forwards compatibility for RYOBI ONE+. Our 40-volt system next year will be 15 years of backwards and forwards compatibility for our 40-volt system. This compatibility gives our users the confidence to continue to invest in our systems knowing that we will never obsolete their products. The second RYOBI advantage that we have is a significant advantage when it comes to power and performance. Our next-generation brushless motors in association with our industry-leading lithium-ion batteries, combined with our advanced electronics platforms enable RYOBI to achieve power that no one else in the industry can. This additional power can then be cross-referenced back into our verticals. So products like [ chore ] products that previously could not be achieved by using traditional battery means can now be achieved. Rotary tillers, core aerators, are all possible now with our increased performance products. And the final pillar here is our investment in artificial intelligence and machine learning. In artificial intelligence and machine learning, they have incorporated themselves into every aspect of our business. From optimizing supply chains to accelerating advanced development projects and accelerating the way that we bring our products to market, artificial intelligence and machine learning are there in every aspect. The image that you see on the screen here is the next-generation 40-volt Whisper Series blower. This blower was brought to market because of artificial intelligence and machine learning and the ability to use AI to optimize the fan designs by reducing turbulence inside of the unit. We found out very quickly that when you can reduce air turbulence, there's multiple benefits to doing that. First and foremost, your product performs at a much higher level. Second, your fan runs much more efficiently, thus extending the run time of your product. And third, your product is significantly quieter. So this is really the trifecta, and it's the perfect example on why we would use artificial intelligence to bring our products to market faster. So as we address our total addressable market, we look at $80 billion today. But when you add in the RYOBI growth strategies that we've just covered, adding new and existing users, expanding our geographies, as well as adding new businesses and verticals, we can easily increase that total addressable market from $80 billion today to over $120 billion. RYOBI cordless has endless opportunities to grow. Our goal is very simple. Our goal is to partner with our end users in every aspect of their lives. We want to make sure that when one of our end users is in the home, in the yard or on the go. They're thinking about how RYOBI can make their lives better. When we do this, RYOBI has endless possibilities to grow. I thank you for your time. I'd like to introduce Tim Albrecht. He's the Group President for MILWAUKEE Tool.
Tim Albrecht: All right. Hey, I want to talk about people and culture first. And Steve did a great job setting the tone about what makes TTI different. MILWAUKEE is a great example of leveraging the best people in the industry. Over the last 5 years, MILWAUKEE Tool has hired over 9,500 people across the globe. That is an amazing amount of people that we've added to the industry. What's really cool, though, and just happened this summer at our corporate headquarters in MILWAUKEE, Wisconsin is we had over 20,000 students apply for a summer internship at our headquarters. And that includes some of the schools that Steve talked about, MIT, Carnegie Mellon, the best universities across the country. We have the opportunity at MILWAUKEE to select the best and brightest students across the country and across the globe to continue our growth. At the same time, when you look at the top 150 senior leaders across MILWAUKEE Tool across the entire globe, the average tenure of our Vice President and higher positions at MILWAUKEE is over 16 years. Steve talked about the retention of our people. Steve talked about the training and development. We are clearly seeing that at MILWAUKEE across the world. And why is that important? You've got a very tenured leadership group that's helping drive the culture down into the organization and motivate and train that new crop of those 9,500 people that have joined the organization, a very powerful tool for MILWAUKEE. Now the question that I'd love to get that we get every time we sit is how is MILWAUKEE going to keep growing. How is it possible that year after year for the last 17 years that we continue to grow. Steve hit on these 3 pillars. The strategy is in place. I'm going to talk about how are we going to continue to grow and cultivate the relationship with our current verticals, our partners, the users. How are we going to grow the businesses that we've developed within MILWAUKEE Tool. When we look globally, how are we going to drive deeper into every region of the world that we have a sales team. We are well positioned right now, and we can get more business out of every single region of the world that we play in. And then finally, most excitingly, what's next? We get the question all the time. What are the next verticals that MILWAUKEE is going to go get into? And I've got a sneak peek for you. I can't tell you the product so the business is quite yet, but it all ties together. At the core of this is what Steve touched on in the beginning. And when the Chairman acquired MILWAUKEE Tool, before that, we were a very inward-looking company. We did not seek to understand, we were not innovating. We were slowly dying until Horst bought MILWAUKEE, and we became a new product machine. And at the core of that is what Steve and the executive team did back in 2007 and 2008, and said, we need to stop thinking about internal, and we need to focus on the user, the people that care about MILWAUKEE Tool. And for us, it was a point of reflection. The plumber, the mechanical user, the electrician, that's who really cared about MILWAUKEE. And in the beginning, we focused on that user. And we got away from being a corded power tool company, and we became a technology company. A company that was focused on developing solutions for our users to make them more productive and safer every day on the job site. Everyone in this room has heard the reports about how difficult it is to get labor in the construction trades. Our mission is to make the existing labor pool for our partners more productive and safer on a day in and day out basis. That creates an immense amount of partnership and trust between our core verticals and MILWAUKEE tool. At the same time, Steve mentioned this, years ago, we started integrating this saying that has become part of our culture, which is a one-team mentality. And what does that mean? Whether you're in marketing or product or quality or on our product service side of the business or customer experience, we are focused on this mission to serve our end user. And we do it as one team. We pull in the same direction at MILWAUKEE as a global team. And I will tell you that is a big differentiator from a lot of people in our industry. When you look at our core users, we focus on 10 verticals, and this is very clear. I'm not going to read them all to you guys. You guys can read off the screen behind me. But when you roll these up, it is $160 billion worth of total addressable market with these 10 users. To help explain this, why is this so big? I want to share with you guys a very specific example. Everyone in this room has read about the volume of business that data centers are driving globally. The race for AI. Automation, which we talked about with some folks last night. When you look at cloud computing, data centers are driving an immense amount of volume of business across the world. In fact, one of our closest partners on the electrical side just published a paper saying by the end of 2025 in the U.S. alone, data centers will be at $390 billion market. If you talk to our core users, they will all tell you that one of the biggest growth drivers they have right now is data centers. In fact, this same electrical partner that we talk to has estimated that by the year 2034, data centers will be a $1 trillion market in the United States alone. These are the largest companies in the world. Meta, Apple, Google, Microsoft, that are fueling this growth, which means billions of dollars of opportunity back to MILWAUKEE Tool. And why is that? Look at the verticals behind me and think about a few examples. The general contractor, that's who is employed by Apple, by Google, by Meta, they are running these projects. We are focused on general contracting. Electrical vertical, they're doing the work inside of the data centers to make them operate. Our partners in power utility, helping get the energy to the facility to actually run it. And then the energy side, it has to come from somewhere. All verticals within our focus. You all know that data centers run extremely hot. They create an immense amount of heat. We have a partnership strategically with the mechanical side of the business and HVAC that cools those data centers and allows them to operate. This $1 trillion opportunity in the United States alone accounts for half, 5 of the core verticals that we focus on are making that industry work. That's just one example. When you think about the businesses, that fuel this. We have to sell something, obviously, at the end of the day to make that $160 billion of addressable market. Steve mentioned this earlier, but long gone are the days where we were a MILWAUKEE Electric tool, a power tool company or a power tool and accessory company. Those days are gone. We are a technology company, focused on multiple different ways to grow, and we split our company up now into 17 unique businesses. And this is important for a couple of reasons. This $160 billion of TAM is driven by these 17 different businesses with unique and specialized teams focused on each one of them. We have subject matter experts in every one of these businesses. Teams that are pushing the envelope every single day to innovate, to push the team, their other team members to invent products that don't even exist today. We have extremely functional teams within these groups that are driving innovation daily. The other thing, the other benefit of splitting our business up into multiple businesses is every time we get into a new business, we are creating a new set of competitors, which means we are naturally increasing our total addressable market. It's one of the reasons we see endless opportunity in MILWAUKEE Tool to continue with this disciplined approach of focusing on the user and growing businesses that develop products that answer solutions to make them more productive and safer on a day-to-day basis. I want to use one other product as an example, and hit on 2 verticals that I didn't mention in my data center example. When you look at this product, a 1-inch dehandle high-torque impact rent with one key. This M18 product was developed for the transportation maintenance vertical, a massive vertical. The users love this product. It was great for taking large tires off of equipment for working on heavy machinery, and it helped us really get entrenched early with that transportation maintenance user. We have a growing segment. One of the newest verticals that we focus on globally is mining. The mining vertical saw this solution and took that product and made it their own. What happened in that instance was we had took an existing business that was met for one vertical and now we've crossed over into another vertical, which unlocks opportunities for us to invent new products for mining. At the same time, from a system standpoint, we now have 18 products in a new vertical. They're buying our lighting, they're buying our fastening products. They're buying our pack out storage system. They're using our BOLT safety system, the stickiness of our systems across MILWAUKEE permeates with examples like this. Another powerful way in which the focus on the user helps grow our TAM every single year. I want to shift gears a little bit and now talk about that middle column, the growing the global. We have over 1,600 job site solutions people in the field. These men and women that Steve had mentioned, are in every region of the world that we have a sales team that one team approach. We have a sales team, we have a job site solutions team. And I make that distinction because our job site solutions team is not technically your typical sales team. What they're doing is talking about the solutions with the user. Steve mentioned, they're on the job site with the men and women doing the job, showing them how to be safer, conducting safety seminars. But also, Steve, myself, Shane Moll, Scott, Bill Hughes, Darryl Hendricks, we're with the CEOs of these companies, along with our jobsite solutions team. That top-down bottom-up approach has built an immense amount of trust between the verticals that we serve in MILWAUKEE tool. They know that we are there to help them drive to what they care about, productivity and safety. The other piece of global growth is leveraging partnerships with our distributors. And MILWAUKEE Tool is very selective about who we allow to sell our tools. Now clearly, anchored in North America, as Drew pointed out, Canada, United States, Mexico, we have an extremely strong partnership with the Home Depot. The Home Depot has helped MILWAUKEE grow in multiple different ways, and you can look in areas like the electrical aisle. You can look at the growth of pack out storage of our PPE. M12 cordless is absolutely growing like crazy at Home Depot, MAT, outdoor power, power tool accessories. Home Depot is a strategic partner in every one of those categories for us. We also have a distribution base across North America that's very strong on the industrial side, hardware side, plumbing, electrical, even automotive now selling MILWAUKEE tools. When you look at areas like Asia, Europe, Australia, South America, the distribution base is much more industrial, like really similar to way the MILWAUKEE started in the U.S. about 100 years ago. That channel is still the predominant way that we're growing. Now no matter where we're at in the world, we operate with a simple philosophy. We need to be the brand that distribution counts on. And what does that mean? That means that, that job site solutions team back to our JSS team, is drawing the pull-through of orders. We need to create that demand with our distribution to continue to add value, and they do that by converting the users in the field. We also need to make sure that we are supporting our distributors with the strong product service team. And our product service team continues to evolve and get better and better to serve not only our distributors but our users in the field that rely on them. At the same time, creating an environment in which we are adding margin and adding value to our distribution base. Last category I want to talk about is the future. Now I'm going to talk about AI just for a few minutes and how it applies to MILWAUKEE Tool. But I love this line. Shane Moll, Group President of our Power Tool industry talks about, and it is extremely relevant. When you think about every major innovation that has happened in the tool world in the last 20 years, it has come out of MILWAUKEE Tool. The partnerships that Steve talked about with TI, with STMicro, with Infineon, have played out in multiple different ways, from Horst acquiring MILWAUKEE with the invention of lithium-ion for a power tool as the start to what the teams have done with brushless motor, high-powered brushless motor. To connected systems across our power tools, MILWAUKEE was at the forefront of every one of those technologies. Today, we see an opportunity to take AI to the next level, and we use it in 3 main ways. We use AI to unlock breakthrough technology in 3 main ways. And I'm going to focus on the categories on the top here. Corey Dickert sat down, and we went through some points on this, and he explained it really well for me. He runs our digital side of our business and explain that the first way that we're really differentiated ourselves is by looking at how do we get faster with new product development. And we do that by leveraging AI to do things like industrial design. How can we use our industrial designers and our design researchers to ideate within artificial intelligence to create a mockup of a tool and a job site to build empathy with what that user might be going through. We have 6 R&D labs across Southeast Wisconsin that are dedicated to research and development and AI and ML. We have a world- class facility in the Menomonee Falls that we are working on machine learning and AI that you will see put out some of the most innovative tools in the world. And we do it at lightning speed because of leveraging AI. Secondly, we are able to create more productive tools. And you can see that in battery technology that MILWAUKEE continues to push the envelope on. You see it in motors. You see it in electronics. You see it in our software with the partners that Steve and I just mentioned. One key is a fantastic example of bringing all that together. Our one key platform leverages group sharing of a network effect, along with a unique machine learning algorithm to help our end users find a lost tool to control the output of that tool, creating an immense amount of productivity and savings long term for that user when they get into our One key system. The last major way that we leverage AI is with safety. Back to what we've talked about, creating a safer job site. If you look at our FUEL Gen 4 drill driver, the M18 product with AUTOSTOP, this tool has been invented based on machine learning, leveraging AI so that if it binds up what a user is drilling instead of breaking someone's risk or twisting their risk, it will shut itself off as a safety feature. A major advantage to any contractor that cares about safety on a job site. We leverage the same technology in rotary hammers and grinders, even circular saws. When you look at our PPE platform, we are leveraging AI to make the safest head protection, for example, with helmets in our new type 2 full brim hard hat. We are leveraging AI to change the world when it comes to how our users operate on a daily basis. So the new verticals. This is the last piece. What are the next verticals? This question comes up all the time. I love that you guys have the 10 verticals. What's next? You see a lot of cameras coming up, sneak peak. These are the verticals that we are focused on next. Some of them are in the test, learn and scale mode. Some of them are up next. We will be working on them. But think back to that example I gave you about transportation maintenance leading to mining. We are seeing the same thing bleed into these additional verticals. And we see a ton of opportunity because those products that are grayed out that I can't quite disclose yet need to be invented to feed the same success model that we've had to serve this vertical group that is coming online right now. We have the plan. We have a strategy that is proven. We have the R&D. We've invested in our future. We have the partners globally to help sell through this product, but it is our people, and it is our culture. They will execute the plan to go from $160 billion in TAM to $200 billion in addressable market in the short period of time ahead of us. Thank you.
Steven Philip Richman: Okay. Thank you, everybody. We're going to open it up for our Q&A from anybody.
Jacqueline Du: I'm Jacqueline Du from Goldman Sachs. I have 2 major questions. The first one is on your top line growth trajectory. What I understand is you currently -- you are proactively managing some of the SKUs, especially produced in China. And therefore, the growth rate might be moderating a little bit heading to second half, just want to clarify, is it more for MILWAUKEE or the same pace for MILWAUKEE and RYOBI? And my understanding is this is a short-term adjustment and next year after this adjustment, it might be back to our more normal mid- to high single-digit growth. Just want to clarify is that understanding correct or not? That's the first question.
Steven Philip Richman: Let me answer the first question and then we'll go on to number 2. First question regarding 2026 and beyond. We are extremely confident based on what you heard from Drew and from Tim and the teams overall that our path in 2026 and beyond regarding top line growth in MILWAUKEE double-digit and RYOBI single-digit growth, and the path to more and more profitability is setting that stage in 2026 and beyond. In terms of today, we are sitting with a series of unknowns with a lot of lack of clarity. As you're well aware, there's been some changes in tariffs in the past couple of days, understanding what those tariff codes mean and what -- and how that relates to our brands is going to be important for us. And our teams are analyzing all those different data right now to figure out where we're going for the rest of the year. But be rest assured, then our focus is the same it's always been, is we're going to deliver the Pro and be the pro brand of choice throughout the globe with MILWAUKEE. We're going to be the brand of choice for the consumer, and we are going to outperform the other parts of the industry and those hundreds of competitors that we deal with every single day in the back half of '25.
Jacqueline Du: I think Tim and Drew explained the long-term TAM opportunity really well. So I totally understand and we are excited. The second question is actually accordingly on margin profile, how should we think about the second half. Just curious, what are the tariff rates you assumed for the different regions, Vietnam, China, Mexico and what are your pricing strategies accordingly? And should the situation deviate from your assumption? What are the other copping measures?
Steven Philip Richman: The ability for us to have clarity is absolutely essential. As you're well aware, as everyone's well aware right now, the clarity changes every single week. We just had some new information come out regarding, for instance, Vietnam tariffs and potential other parts of the world. Our teams throughout the U.S. are not only analyzing but putting those scenarios together regarding what that is going to mean. And then our operations teams are going forward and saying, how do we react to that? What path with the agility that we have are we going to take? So we're in the mode of the multiple scenarios right now and waiting for the detail behind whatever those tariffs codes are to understand more fully and then putting those plans together. So we don't have a concrete perspective at this moment. Just a perspective that we'll continue to drive and outperform the rest of the industry day in, day out like we have and set ourselves up for a robust 2026.
Xiao Feng: Xiao Feng from CLSA. Just a quick question on European side. It seems like we have a pretty good result out of Europe. So could you share more color on that? What are the drivers behind it? What are the things we're doing right? And what are the improvements we are targeting for the next few years regarding our European business?
Steven Philip Richman: Tim, you want to talk about Europe and MILWAUKEE?
Tim Albrecht: Yes, Steve and I and Shane were fortunate enough to go to Europe a few weeks ago. Some multiple different areas and it ties back to really the segments of work that I was talking about. We've got a team out there that's focused, extremely focused on things like power utility, energy, that's clearly driving the area. We also see opportunities in mining in certain areas. So the team in Europe has done a fantastic job, infrastructure everywhere we went, the infrastructure across Europe is driving a lot of opportunity. Data centers, the story I told that related to the U.S., the same can be said across Europe. So the team there is set up very similar to the team in the U.S. Job site solutions team, accompanying the conversion in the field. The sales team working with our partner distributors to close that loop. So there's a lot to be proud of. The team in Europe has done an amazing job. Alex Duarte and his team continue to convert users similar to what we have done in the U.S., they've taken that approach and taking it to a next level and adopted it for how it works best for them in Europe, but it's those trades dimension that are really driving for them.
Tak Hung Lau: Eric from Citi. Congratulations again for the record high result. May I just have one question regarding your EBIT margin target 10%. I think it's the first time to stay this target over the result announcement because in the old days, under Joe leadership, always verbally guided this 10% EBIT margin. But now this time is stay in the annual report. So may I know you know how keen you guys to deliver this EBIT margin expansion like you are going to give us the guidance. So EBIT margin expansion, say, 30, 50 basis points rather than just gross margin expansion every year. How can you are or any change of your KPI to take to -- for the management team to take into the EBIT margin expansion. So how can you -- and then how much is the upside? Because even though you delivered 10% EBIT margin, I know it's difficult, but compared to SWK tools, they're talking about low teens EBIT margin, say, great start to hand you guys, talking about mid-teen to high-teen EBIT margin, even higher at this level. So my point is, how much upside for this EBIT margin target in the coming 5 years?
Steven Philip Richman: Let me answer it this way, and that is that, number one, we have one team throughout all the senior leadership at TTI that is focused on delivering as a core objective to begin 10% EBIT. No question about that. We all have that in sight. The detail behind the financial planning to be able to get there is part of our strategy, part of our review process, part of our metrics to be able to deliver that. At the same time, we're a growth company, and we know we have to grow as well as continue to drive EBIT margin improvement over time. So our objective is clear: deliver 10% first. And when we get there, then set that next target for future years going forward. Our teams are confident that over time, this will occur, and we have a robust approach to ensure that we are moving in that direction.
C. Fang: This is Helen from HSBC. And I have 2 things that I want to discuss with the gentlemen. Number one, in the near term, I understand that we are going to slow down a little bit in the second half due to the tariff and also the capacity relocation. Can we have a rough idea what is going to be the impact for our capital expenditure in the second half? That's my first question. And the second question is, well, TTI has demonstrated very strong growth in the past 2 decades, mainly because our dedication, the people and the culture and also since we have widened the penetration rate of the power tools, I think. What is going to be our growth rate in the next decade? What kind of estimate it is going to be? Is it still MILWAUKEE leading RYOBI leading the others? And I mean, we have been hearing about all the different strategies, either expanding geographically or we are going to do more diversification of our SKUs. What is going to be the key alpha here? Can we share a little bit more color?
Chi Chung Chan: Thank you, I'll take the first one, which is the more easier one. So yes, when it comes to CapEx, I think this year's full year's CapEx will be very comparable to that of last year. And the CapEx spend will be more on improving the productivity, qualities and the like and not necessarily on capacity.
Steven Philip Richman: So you heard from Tim and Drew and realistically the rest of the senior teams that we have a TAM today that is -- that total addressable market for the Pro side, which is significant and a TAM, that total addressable market for the consumer side. We view both of those as opportunity to continue to expand. So to answer your question, are we confident? Yes. More businesses, more geography, the potential TAMs with more verticals across the board. Our confidence level in '26 and beyond for double-digit MILWAUKEE growth and single-digit RYOBI growth is there. And we have the track record to show that we have done it by owning the user on the Pro side and owning the consumer on the DIY side.
Tim Albrecht: Speaking from MILWAUKEE, one of the reasons we are so bullish when you talk to our partners in each one of the verticals, their backlog of work, meaning how much work do they have lined up in some cases is in the factor of years. Years' worth of work that they have to get accomplished. That's why we are so bullish on the MILWAUKEE side of the business because we see how busy those 10 core verticals are with work right in front of us. And although this year we're going to get through it, we fully expect to get back to double-digit growth on the MILWAUKEE side because of the strength of the positioning of our partners in the field.
Unidentified Analyst: Thanks so much for flying all the way from the U.S. making efforts. Steven, you had showcased, I think the strong interest in taking care of the shareholders in Hong Kong, really appreciate that. And also the holding, particularly flying into Hong Kong during the black rainy season. So hope you're flying in yesterday, all right? So I think the question I have is a little bit more color with regard to how MILWAUKEE, RYOBI will be growing, particularly going to the next few years beyond 2026. I saw the guidance for 2026 being reiterated. But I'm more curious because we are at a juncture where I think going into the next few years under Trump 2.0, I believe there will be a lot of investment projects, which are waiting to be unleash, particularly given I think the anticipation of lower interest rates. The high interest rates as well as high inflation rate has definitely impacted our growth rates over the past few years. But we have been really amazing in terms of delivering 10% to 20% type of growth for MILWAUKEE, how will that reactivate? Particularly listen to what you're presenting today, you are telling us the TAM for these 2 product categories going to be a lot bigger compared to what we've been told over the past few years.
Steven Philip Richman: Yes. Let's start with the TAM. And the understanding, as you heard from Drew and Tim that we're not -- we don't have one business under MILWAUKEE. We have a series of different businesses that provide this unbelievable TAM with the verticals that we are in today. Same on the RYOBI side. That's why we are so confident about the opportunity because our ability to be able to attack each one of those verticals, there's a lot of growth opportunity, not only throughout the world from geographical expansion, but in the current markets that we are in. And that gives us that confidence and the track record regarding where we were in the past and where we're going forward. You combine that with the amount of construction on the MILWAUKEE side that we see coming throughout the world. You talk about European expansion in infrastructure and defense and multiple other areas. You talk about the continued expansion in the U.S., Latin America, Australia, the mining expansion throughout the globe. And then you think about the consumer side and the numbers that we are delivering by adding businesses and our backward and forward compatibility of the platform, while interest rates are extremely high, which means on the consumer side, when a consumer buys a new home, they need to buy new garden equipment. They need to buy a new mower. They need to buy new tools for their house. We are delivering the kind of results without even the housing market on the consumer side happening because we have such an entrenched ecosystem on our battery platforms for both. So we are extremely bullish in '26 and beyond for both the MILWAUKEE brand as well as the RYOBI brand.
Unidentified Analyst: Can I ask the second question? Given we have Tim and Drew on the stage, I would like to take the opportunity to ask what is the difference between RYOBI Pro versus some of the MILWAUKEE products? I didn't increasingly, maybe there is some over that.
Steven Philip Richman: You mean RYOBI HP and MILWAUKEE?
Unidentified Analyst: Well, so I don't know whether my question is appropriate because I'm seeing from what you're presenting. RYOBI is definitely expanding the product category. Some of the key focus is more regarding, I think, bigger sized professional use like -- we label as RYOBI Pro. I just wonder whether there's any overlap with the existing MILWAUKEE products?
Drew Patrick: So the way I understand the question is what is the difference between the RYOBI Pro products versus MILWAUKEE products. And I think what Tim and I have laid out over the course of our presentations is that understanding of really the end user application. So although it's very easy to classify both types of products within the same category, there's really truly differences between the end users and the way that they need those products and they use them over time. So for RYOBI Pro, they may have a very different application need than a MILWAUKEE than a MILWAUKEE user would have. And we take those mentalities into our development processes. And it could be anything from the durability of the product to the longevity of the product. It could be the power of the product, the ergonomics of the product. As we get to know our users better and better, we're able to custom design those solutions to really tailor fit the end user needs. So I believe that the RYOBI Pro is a very different customer than the MILWAUKEE Pro is. And RYOBI Pro, we often refer to them as value pros. They have a different cost tolerance than, for instance, the MILWAUKEE Pro would have. So although it's very simple to classify them in the same bucket, they are really 2 very different users.
Tim Albrecht: Yes. I think Drew and Bobby on the RYOBI side have done a great job working with -- as part of TTI, we're one team. But the group up in MILWAUKEE that works on product, that's all we do is Pro. That's 100% of our focus is the Pro end user. So when you look at the MILWAUKEE product, the specs, the expectations, the performance, the longevity of a product is tailored to that professional that makes their living with that tool every single day. And the demands of that product are typically much more aggressive. Good question.
Terence Chang: Terence from Macquarie. So I got two questions. First is the ongoing supply chain relocation. Is it still a function on how the overall landed cost will be by the end of the year? Obviously, your peers have talked about getting out of China sourcing by the end of next year, which is a bit probably too late. So I just want to get a bit of color on how do you see the production sourcing towards the end of 2025. And the second question is on the financing costs, whether we see more opportunity to deleverage by the end of the year?
Steven Philip Richman: Frank, do you want to hit that first?
Chi Chung Chan: Sorry, can you repeat?
Terence Chang: The further downside for the finance costs by deleveraging by the end of the year.
Chi Chung Chan: I would say there's a good chance that given that we have $1.6 billion in cash by June 30, and we are in a net cash position right now. But having said that, we still need the banks to help us to do the trade transactions. So what we can do is to -- bad news to our bankers here, is try to drive the spread further lower to help to reduce the net finance cost. It doesn't mean that we will not be having any interest cost by end of the year, but definitely, we are looking forward to further reducing it.
Steven Philip Richman: Globalization, a global manufacturing in our strategy, as we talked about from '15 to today, our strategy has been real clear. Give us the flexibility and the agility to deliver products throughout the globe. As part of that our strategy has been best cost. So we will continue to move our production and adapt our production and our manufacturing strategy regarding where that best cost is for the specific markets that we are in at any given point in time. Your question about China. We have a great manufacturing team in China. We're not leaving the MILWAUKEE production in China for the rest of the world. We are going to and in the process of moving for the U.S. that production to multiple other locations throughout the globe. And that will be continuing through the end of the year. Actually, if we could just take one more from John Choi and then we'll wrap it up.
Hyungwook Choi: John from Daiwa here. I noticed that this time your rest of the world was a little bit underperforming the other regions, particularly U.S. and Europe. Is there any specific reason behind that? And to follow up, I think, Steve, you mentioned probably for the first time in recent years that you guys will be kind of going into new emerging markets like Vietnam, Latin America. Is there any reason behind the thought of change there? And also, what will be your strategy when you go into these newer countries that are relatively underdeveloped?
Steven Philip Richman: Our growth in rest of the world, if you look at Latin America, if you look at Asia, that has been extremely strong. The ANZ market and the outdoor business because of seasonality in the front half, and some of those same issues on the MILWAUKEE side and ANZ has been a more challenging year versus normal years, where that market has always been double-digit growth. But the new markets we have entered, like Asia, like different parts of the European sector, and clearly, in Latin America are outperforming even our overall growth at this point in time. In terms of new markets and the emerging markets, we've always had an approach that said we are not going to go into new markets until we are ready. And then we are going to take a test and replicate approach. So for Latin America, we made a decision to go into certain markets, try those countries first, adapt the approach to those countries, then replicate that approach as we go from country to country to country. We are seeing extreme success there and are bullish on that opportunity. Same piece that David Butts has done in the Asian market, where we've expanded into those markets, and now we're ready to go after one of the largest markets in the globe, which is Japan, which we have not participated in at all. We're not trying to go after the whole country. We're not trying to go after every user segment. We're starting with a select group of users building that foundation out and then scaling from there. So our approach is never a big bang until we are 100% confident. It is test and replicate, refine and then go in a big way, and we believe that approach is the most prudent approach for top line and bottom line success for the business.
Tim Albrecht: I think when you look at Latin America, one of the big groups for us to grow down there is mining and power utility, 2 trades that really care about, productivity and safety. So that is a reason for us to take our existing portfolio and sell there versus other places. And it's been a very successful plan.
Steven Philip Richman: Thank you for all the support. Let me turn it over to Horst for some final words.
Horst Julius Pudwill: All I can say, we are very confident that we will manage to second half and 2026 and beyond. Apart from we invested in AI what we don't know, we invested over the last, not because of the tariffs in the last few months. We invested over the last 5 years, over $5 million, $6 million in manufacturing facilities. We are very positioned with Europe manufacturing. We have manufacturing in the U.S., 3 or 4 factories. We have manufacturing in Mexico. We have manufacturing in Vietnam, and we have manufacturing in China. And for each of the location, we have markets where we can sell. So I'm very confident. And I think our team has done a great job till now. And none of our competitors has numbers like we have. And all I can say, please be assured we'll not disappoint you. Thank you for attending.