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Roy Michael Twite: Good morning, everybody, and welcome to IMI's 2025 Interim Results Presentation. I am joined here as usual, but sadly for the last time by Dan Shook. I'd also like to extend a very warm welcome to Luke Grant, who many of you already know and is joining the presentation for the very first time. This slide covers the key messages in the presentation. and the first thing to say is that it was another good performance in the first half. We delivered 2% organic sales growth and 5% organic adjusted operating profit growth. Adjusted operating margins were up another 30 basis points and we delivered an outstanding GBP 64 million of orders through our innovative Growth Hub. And I would like to express a personal thank you to everyone across IMI for their hard work and dedication during the first half to deliver this performance amid the market uncertainty and to recover so quickly from the cyber incident reflects a tremendous effort from all of our people. I'm also pleased to report that the GBP 200 million share buyback announced in February, is now complete and that we are once again raising the interim dividend by 10%, reflecting the continued confidence that we have in the business. With the completion of the buyback, we have now returned over GBP 1 billion to shareholders since the start of 2019. The strategic review of transport is progressing. Our sector team is developing a detailed plan to accelerate improved financial returns, and we continue to assess all strategic options. There is strong momentum in IMI heading into the second half, underpinned by a record order book in Process Automation, continued strong demand in Climate and improving trends and catch-up shipments in Industrial Automation as well as supportive order books in both Transport and life Sciences & Fluid Control. I'm therefore pleased to reconfirm our guidance for 2025. We are on track to deliver our 4th consecutive year of mid-single-digit organic revenue growth, and we continue to expect that full year adjusted basic earnings per share will be between 129p and 136p. With that, I'm going to hand over to Dan to talk through the first half results in more detail.
Dan Shook: Thanks, Roy, and good morning, everyone. I'm pleased to be able to take you through our first half results today, one more time. Here we go. As Roy mentioned, another good performance in the first half. Revenue increased by 2% organically. Adjusted operating profit was up 5% and our adjusted operating margin increased another 30 basis points. Adjusted basic EPS was 3% higher than the prior period as adverse currency and tax rate movements were offset by the reduction in outstanding shares. Operating cash conversion was very strong, and we are pleased to be increasing our proposed interim dividend by another 10%. So firstly, some more detail around our revenue and profit performance. We delivered 2% organic revenue growth, but due largely to a weaker U.S. dollar, our statutory revenue was slightly lower. Adjusted operating profit increased to GBP 198 million, organic profits increased by 5%, which was again offset by FX. Looking at the income statement. As mentioned, we saw good growth in revenue and operating profit in the year. The net interest charge was broadly in line with last year at GBP 8.6 million, despite the share buyback and the adjusted tax rate increased from around 24% to roughly 25%, in line with our guidance for the full year. Now as I'm sure you are aware, IMI was subject to a very serious cyber attack in the first quarter, thanks to the incredible efforts of our people supported by industry experts, we were able to limit the impact to temporary operational disruption. The second quarter organic revenue growth of 6% reflects the catch-up on sales that we expect to complete in H2. As expected, we have recognized a one-off exceptional charge of $25.4 million in the first half. That covers IT system recovery, risk management, upgraded IT infrastructure and advisory costs. Now looking at the performance of the platform and sectors, which was very much in line with our expectations. Starting with Automation. Automation delivered good growth with revenue up 3% organically and margins in line with the prior period at 18.4%. Process Automation had an excellent first half, delivering strong order intake as shown at the bottom of the slide. Adjusting for the one-off multi-boat marine order last year, orders were up 7% organically with particular strength in Power and Nuclear. We made further progress in the high-margin aftermarket where organic orders were 10% higher than last year. Organic revenue was 8% higher than the prior period, and the order book was up another 5%. Industrial Automation organic revenue was 4% lower than the same period in the prior year, reflecting the one-off impact from the cyber incident and softer industrial activity in Europe and the Americas. The business is rebuilding momentum. It was flat organically in Q2 and will benefit in the second half from further catch-up of shipments impacted by the cyber incident. And turning to Life Technology. As expected, organic revenue was 1% lower than the prior year. However, margins improved by 80 basis points to 17.8%, supported by the final benefits from our footprint optimization initiatives. Climate Control delivered another strong performance in the first half as we saw continued demand for our products that reduce energy consumption in buildings, including the benefit from our growing portfolio of smart-connected products. Organic revenue was 5% higher than the prior year period. Life Science & Fluid Control organic revenue was 5% lower than the prior period. Now the Life Science sales were only slightly down in the first half with good order intake with a book-to-bill in H1 was 1.1x. The Fluid Control sales were more impacted by the cyber incident, but it is recovering well and also has a strong order book heading into the second half. Transport revenue was down 9% organically in the first half. This was in line with expectations given the 13% organic growth delivered in the first half of 2024. So continuing to cash flow. Our adjusted operating cash flow was 21% higher than the prior period, supported by the strong profit performance and good working capital management. Inventory levels rose in the first half, but this is due to our normal seasonality plus investment to support the Process Automation order book growth. The inventory position reduced by GBP 21 million versus the same point last year despite the Process Automation order book increasing by over GBP 45 million. We are actively managing the position to ensure we reduce stocks in the second half while maintaining customer service levels. Free cash flow was lower than the prior period, largely due to the one-off exceptional costs associated with the cyber incident and a GBP 26 million loan we have made to our U.K. pension scheme to support the final wind-up process. The loan is providing flexibility to the scheme as it manages its remaining illiquid investments, we expect it to be partially repaid in the second half. Now when I joined IMI in 2015, our U.K. scheme had roughly GBP 1.3 billion in liabilities. So to now be in the final wind-up stage is really great, and it reflects a tremendous effort from our team over the last 10 years. Our net debt has increased from GBP 548 million at the beginning of the year to GBP 738 million at the half year. This principally reflects the successful execution of our GBP 200 million share buyback and the GBP 54 million dividend payment. Net debt to trailing 12-month EBITDA was 1.4x, which continues to give us the capacity to invest in both organic and inorganic growth opportunities. So with that, let me hand over to Luke, who will be covering the outlook today. Thanks, everyone.
Luke Robert Grant: Thanks, Dan. As Roy mentioned, with the completion of our GBP 200 million share buyback, I'm very pleased to report that we have now returned over GBP 1 billion to shareholders since the start of 2019. This has been supported by significant improvements in our free cash flow. And you can see on the slide that we see a clear pathway to delivering further improvements. We expect to deliver GBP 1 billion of free cash flow over the next 3 years, supported by further growth and the normalization of working capital. We have an extremely disciplined approach to deploying this capital, prioritizing investments in our people, processes and operations that accelerate organic growth. We will also pursue bolt-on acquisitions that enhance our position in attractive, long-term growth markets and that deliver results in- line with our strict financial criteria. Finally, we will continue to deliver returns to shareholders. We are committed to maintaining a progressive dividend, and we will look to return capital to shareholders should leverage fall sustainably below a 1 to 2x net debt-to-EBITDA target range. At the end of the first half, net debt to EBITDA was 1.4x towards the midpoint of that range. We are on track to deliver our 4th consecutive year of mid-single-digit organic growth in 2025. We continue to expect that full year adjusted basic EPS will be between 129p and 136p. Our guidance assumes that the full year adjusted operating margin will be around 20% and that our interest charge will be slightly higher than our previous guidance. The tax rate is still expected to increase to around 25%, and we expect that the weighted average number of shares will reduce to 249 million at the year-end. Exchange rates have been volatile in recent weeks. But as things stand, we see a 1.5% headwind to profits in the full year. We'll be keeping a close eye on how this develops in the second half. With that, I'm going to hand over to Roy who will talk you through the strategy update.
Roy Michael Twite: IMI is a global leader in fluid and motion control with a compelling value proposition. Our solutions typically represent a small part of the total system cost, but have a significant positive impact on end customer outcomes. This drives growth, customer loyalty and strong pricing power. We are well placed to support our customers in the attractive aftermarket. Our business is aligned to 3 long-term structural growth trends, automation, energy efficiency and health care demand. These powerful drivers support the delivery of sustainable, profitable growth, and all of this is underpinned by our One IMI operating model. The One IMI operating model is a proven platform for value creation and sustainable growth designed to deliver our financial framework. By applying a consistent approach rooted in commercial excellence, market-led innovation and continuous improvement, we are creating significant value for shareholders. Commercial excellence remains at the heart of our growth strategy. We are focused on creating ever more value for our customers through premium service, technical support and disciplined sales execution. We have significantly improved customer satisfaction scores, and we leverage these relationships to co-create high-value-add solutions. All of this is supported by significant investments that we have made in our people, in our processes and our operations, including in Data and Digital, which I'll touch on later in this presentation. A unique market-led approach to innovation is creating real value, grounded in deep customer insight and executed through our entrepreneurial Growth Hub model, we develop solutions that address industry-wide problems. We leverage our strong customer relationships to gain a deep understanding of our customers' needs before moving at pace to validate solutions and full market potential. Through this process, we minimize upfront investment before rapidly bringing validated solutions to market once our customers' endorsement has been fully secured. We delivered GBP 64 million of Growth Hub orders in the first half with a strong pipeline of opportunities across IMI. And as Luke mentioned, we also pursue attractive bolt-on acquisitions. Since 2019, IMI has been strengthened by 6 complementary acquisitions, while our fully burdened return on invested capital has increased to 13.4%, significantly higher than our 12% underpin and our weighted average cost of capital. Finally, with our full multiyear restructuring program now complete, our focus is on continuous improvement. Whilst IMI now operates from a leaner, stronger platform, we will continue to identify programs to improve efficiency, reduce complexity and better serve our customers. Restructuring costs associated with our current business are now being taken into underlying operating profit. I also wanted to spend some time sharing a few examples of how we are executing our One IMI operating model across the business. Firstly, our investments in data and digital are accelerating high-margin aftermarket growth. Through the hard work from our Process Automation team, we have built a full database of over 200,000 valves in our installed base. Using this database, we are able to identify key aftermarket opportunities and prioritize our sales efforts. We estimate that this has had at least a GBP 70 million positive impact from this initiative alone on our order intake over the last 2 years, with more to come. Secondly, the excellent progress we have made expanding our range of connected products, smart-connected products make up roughly 25% of Climate Control sales now and there is a strong growing demand for the precision, the insight and the convenience that these connected solutions offer. In March 2025, we launched a new electronic thermostatic radiator valve, that leverages Heatmiser's technology and can be controlled via an app. This is an incredibly exciting new opportunity and presents us with a significant opportunity to scale across our European markets and in over 200,000 homes in the Heatmiser ecosystem. Finally, we are focused on driving excellent customer service and productivity through continuous improvement. In Industrial Automation, we win in highly customized applications, with fast response to customers is absolutely crucial. And there is lots of great work across the sector, and our Rockford facility is an excellent example. The team have built a digital twin of the site to facilitate layout simulations and optimizations in real-time, drastically reducing lead time to customers and improving flow. Our people and culture are the foundation of the One IMI operating model, and we have put a lot of effort into building a culture of ownership, culture of accountability and customer focus. And this has played a key role in IMI's transformation over the last 6 years. And as you can see on the screen, it's supported by a significant increase in productivity. We are focused on embedding a performance-driven mindset and have made significant investments in our people to help them grow, develop and continue creating significant value for customers. We are committed to targeted development at every level and have launched a range of new training programs in the first half. We also ensure that our top talent regularly moves across the group enabling us to leverage best practice and develop the next generation of leaders. Congratulations to Tarak, on his appointment to the most senior position with Industrial Automation. Another key driver of significant productivity gains is our absolutely relentless focus on continuous improvement. A great example of this is in our Brno facility in Czech Republic, where they identified over 600 improvement initiatives in the first half of this year alone, as they continue to reduce complexity and improve customer service every single day. All of this is supported by employee engagement, and I'm very glad to report that 79% of all our employees would recommend IMI as a Great Place to Work in our recent survey. As you've seen on the previous slides, IMI has been fundamentally transformed over the last 6 years. We are executing the growth strategy, and we are on track to deliver our financial framework. As a reminder, we want to deliver 5% organic growth, operating margins of 20% plus, cash conversion above 90% and maintain our fully burdened return on invested capital above 12% as we continue to create significant value by deploying our capital, both organically and into targeted bolt-on acquisitions. It is clear that our growth strategy continues to deliver great results. And as you can see on this slide, we have built a track record of compounding profitable growth. Adjusted EPS has grown at 11% CAGR since 2019, and we expect further progress in 2025. So to summarize then, the key takeaways from today are, first, that our growth strategy continues to deliver results, and I'm proud of our achievements during the first half. Organic revenue grew by 2%, adjusted operating margin was up another 30 basis points, and our organic adjusted operating profit grew by 5%. Second, that there is great momentum within our business, as we head into the second half, and we are on track to deliver our 4th consecutive year of mid-single-digit organic revenue growth. Third, and finally, as Luke said, we are reconfirming our EPS guidance range. We continue to expect that this year's full year adjusted EPS will be between 129p and 136p. Okay. I'm going to stop talking there and turn over to the moderator for the Q&A, please.
Operator: [Operator Instructions] Our first question comes from Andrew Douglas from Jefferies.
Andrew Douglas: Welcome, Luke. I've got 3 questions, standard 3 questions. But beforehand, I just want to say on behalf of the analysts, who've worked with you over the last 10 years, Dan, thank you for everything that you've done for us. You've been absolutely a genuine pleasure to work with. So I think on behalf of everyone, I just want to wish you well for whatever comes next for both of you and the family, so thank you. Over to questions, can we just talk about Process Automation, please? You flagged the order book was going to be under a little bit of downward pressure on the OE side due to Marine. I think that's all well understood. Can you talk about what you see over the next kind of 12, 18 months? I think hydrogen was a reasonably tough comp for you in the second half of last year. Can I just make sure that we're confident of Process Automation continuing to grow as a division next year? And just how well that's underpinned by the order book? Secondly is on the slightly more cyclical bits. You've talked about order books improving in IA, in Fluid Control & Life Sciences, can I just quadruple check that, that is over and above recovery post the cybersecurity incident? Just make sure I understand that. And then last but no means least, is on the share buyback. Share buyback is finished. You're going to be around about 1x by year-end. Was there a debate about whether we should just do another GBP 200 million now because you've got plenty of firepower? Or do you have a strong M&A pipeline?
Roy Michael Twite: Well thanks Andy. Yes, I totally agree on your comments on Dan. It's been fantastic working with Dan. But Luke, we're in safe hands. So welcome to Luke's first presentation. I'll take the first 2, and then I suggest, Luke, you talk about the share buybacks. Yes. So Process Automation, Andy, in short, the order book is up 5% despite the multiyear marine contract that we called out over the last few calls. So we're pleased with the situation that's in. As you know, 60% of that division is aftermarket and the gross margins in aftermarket are 2.5x what they are in new construction. So the good news was that aftermarket orders up another 10% in the first half. Jackie, Robbie and the team just driving the whole upgrade valve strategy which we go in, we swap out either our old valves or increasingly the competition's valves that aren't working for the customer that are providing reliability issues or noise or vibration issues, and that strategy continues to pay dividends. So yes, we think we're going to finish the year with the order book higher again, and that would lead us naturally into growth again for next year, Andy. So we feel very good about where Process Automation is. The second question was on the sort of short-cycle businesses, IA. Yes, I mean, the good news is, yes, we've got a higher order book, which is partly catch-up on IA because of the effects of the cyber incident. There's no doubt about that. But we're also seeing in the order run rate a pick up to what I would call growth now, Andy. So it was slightly ahead. We're now seeing growth sort of consistent with our outlook for the second half, which is around 3%, 4% growth for the second half in IA. So we are encouraged by that. We'll see whether it's a sustained recovery. As you know, there's still lots of moving parts in the global economy. There's still lots of settling down to do there with things like the tariffs and stuff, but the encouraging thing is we're making progress. And on the IA team, honestly, I haven't seen IA in better shape for as long as I can remember. What Jackie has done with that sector of our business, as I said on the presentation, we brought Tarak now who's been with IMI something like 10 years. He's very successful in Process Automation. He moved across into IA well over a year ago. Now he's done very well there. And now he's going to be set to head. I'm really pleased with that. Again, a bit like Luke, we've moved people through, develop them, and now where we are with the strategy and the team, we're in a good position, Andy. Similar thing on -- particularly on the fluid control part of Life Science & Fluid Control, but we've got a good order backlog, partly because of the effects of the cyber instance. So part of it is catch-up. On the Life Science side, though, Andy, customer order schedules are definitely showing growth for the second half. And I think we'll deliver growth in that segment in the second half. Again, on the Life Sciences side, I'm not calling a sustained recovery. Again, we all look at the news, right? There's been enough profit warnings over the last few weeks in that sector. Obviously, we've got the issue with the U.S. funding and stuff. So I'm definitely not calling a sustained recovery. But at least in the second half, we think we're going to show growth and customers are talking about new product launches, and we are winning future platforms. So again, the team there, Kevin is doing a really good job. I think we're really focused in the right areas. And I think over a period of time, we'll see that return to growth as the aging population, all of those dynamics and the propensity to spend more money on health. But certainly, second half, we see growth. Luke, do you want to cover share buyback?
Luke Robert Grant: Yes, of course, yes Andy, I think as you said, the leverage at the half year was 1.4x net debt to EBITDA. And I think we expect delever to about 1.1x come the year-end, and that would be sort of our normal rate of delevering. It's roughly about 0.5x a year. I think we just completed our last tranche of GBP 200 million just this week and we are going to continue to look at share buybacks as we get sustainably below the 1x range. So that will probably happen sometime in the next 12 months. The other thing I would always say is that capital allocation, we take very seriously. We look at the M&A pipelines, they continue to be strong. We continue to review opportunities. So we'll always look at it through that lens as well.
Operator: Our next question comes from Christian Hinderaker from Goldman Sachs.
Christian Hinderaker: I'll, of course, echo Andy's sentiments and thanks to Dan, and welcome to Luke. If I can come back to the run rate growth comment in IA, 3% to 4%. I just want to clarify if that was in quarter or after the end of June? I guess, interested as well within IA to understand relative growth dynamics across Europe and the Americas. I'll start there.
Roy Michael Twite: Yes, brilliant question. Christian, sorry, I should have said, we use our standard 60-day moving average order income rate. And it's that 60-day moving average because over the years, we found that's been the best sort of smooth average predictor of what's happening at least in the next quarter or so. The order book is about 3 months in IA, as you know. So it's not a Process Automation full 12 months, but is a pretty good indicator. And in terms of Europe, U.S., both have returned to growth, actually, Christian, which is good news. It's not just one area, taking it all. It's actually growth across both of the major regions. So yes, that's encouraging.
Christian Hinderaker: Thank you, Roy. Maybe it's a bit early, but you touched on the strategic review in Transport, I guess, curious as to when we might receive sort of full context there. And then also in terms of the growth expectations for that segment as we enter the half that are built into your guidance?
Roy Michael Twite: Yes. So I'll start with that. So Transport, second half will be down, I would say nowhere near as down as the first half. Remember, we grew at 13% in the first half of last year. As all the OEMs caught up, managed to get the components that they needed post-COVID. So the first half was against a very difficult comparator. Second half, well, if we look at it consecutively, we see that first and second half sales will be about the same as the way we see it, Christian. In terms of the review, the review is progressing well, as I said. The internal team, we've done a couple of reviews with them, and they're building their plan. We've got a very, very strong internal team now. And they are absolutely committed to improving the financial returns. I've absolutely no doubt about that. As I've said before, we brought in some real heavyweights from passenger car and they really know exactly what they're doing. And that means increasing the amount of value engineering we're doing, really making sure that our new products are accretive to margins, and then frankly, exiting some poorer business. And so that really is the sort of 3-point game plan. They're doing the detailed -- all the detailed plans behind that and we continue to look at external options. As I said on the last call, to Christian, I don't expect this to be quick thing. We're going to optimize for value, not for speed, and I see this very much in the same way as we did the 20% to 30% of what was critical back then, which has, as you know, been an incredibly effective driver of shareholder value for IMI. Does that answer your question Okay?
Christian Hinderaker: Maybe just a quick final one then on the tariff situation. Can you just clarify, have you put through price increases as part of your actions? And if so, in what form?
Roy Michael Twite: Yes, Christian. So again, I mean, Jackie and all of the teams have done an incredible job with this really because as you know, it's been a moving picture to say the least in the first half. They have managed to mitigate a lot of the effects of tariffs through things like exemptions, which is incredibly intensive in terms of documentation, but I've done that, we've rerouted some supply chains as well. We've got our global footprint. We brought that into play. What remained, Christian, was about GBP 4 million of impact that we couldn't avoid and we have passed that through in the form of surcharges, mainly to customers, and customers have understood why we had to do that. So that's the sort of extent of it in the first half. Again, it's a moving picture, but at the moment, our base case is in the second half, the effect will be just over twice that, just over twice the GBP 4 million. And again, we're in a good place to mitigate that effect as well.
Operator: Our next question is from Lush Mahendrarajah from JPMorgan.
Lushanthan Mahendrarajah: I just want to echo the views before, welcome, Luke and Dan, best of luck on the next step, been great innings at IMI. I've really enjoyed getting to know you and working with you and look forward to staying in touch. I've got three questions, I think, if that's okay. The first is just on tariffs and obviously help us sort of quantifying the impact, I mean is that lean into any specific business in particular? And I guess, have you seen anything in there, whether it's sort of prebuys ahead of tariffs? Or just given your cost base versus some of your peers, have you seen any sort of shifts in market share on the fringes, just interested in that, so that's the first question. Second question is just on Process Automation again and sort of orders and sort of helpful color earlier, but I guess could you just give us a bit more sort of detail on some of the sort of moving parts in the market wise? I know you called out sort of power and nuclear in particular, but just interesting sort of what you're seeing elsewhere, maybe oil and gas, et cetera, as well? And then the third question is just on Life Sciences. I know you sort of touched on the sort of the orders there. But as you said, there's been sort of mixed reporting so far from some of the big guys. And I guess, where is your -- why do you think your order has been so good in the first half and I guess, keeping that confidence into the second half?
Roy Michael Twite: Yes. Thanks, Lush. Yes, so tariffs first. So tariffs, as I said, GBP 4 million impact in the first half, completely offset through the actions that we took. The big impact for us in Industrial Automation and in Transport, Lush, they're really the 2 big ones. And the single biggest impact at the moment is Mexico. So our flows from Mexico into the U.S. Some of that has been offset through exemptions, but it's still the biggest impact once we've got all the exemptions we can get. In terms of process -- in terms of market share, you said as well on top. Yes, very interesting. So we are obviously taking any opportunity that we can to take market share from these changes in tariffs. And what's been interesting is Jackie told me last week that we've actually won some business in Asia from the reciprocal tariffs on the back of that. So yes, around the edges, I think because we've got a global footprint and some of our smaller competitors obviously haven't, there will be opportunities, and we're alert to them. So I'm really pleased with that. Process Automation orders, where we see real strength this year is Nuclear, both on the new construction side and in the aftermarket, but interesting that we're winning some big new construction orders now in the U.K., actually, Lush, LNG. LNG, as I said on the last call, second quarter orders were really strong. And actually, we see LNG obviously continuing through the second half and into the full year. And then conventional power, we're seeing a real surge in conventional power. I think you probably know, Lush, that the order books of some of our customers are now at record levels on conventional power, particularly combined cycle gas. So yes, actually, that's been real lift. It shouldn't be a surprise, I suppose, because typically, we see an order a couple of years, 1.5 years, a couple of years after final investment decision on a lot of these things. And if you think about it, data centers, AI, EV, what's driving this. We talked about it a few years ago, that this was going to drive a resurgence. But definitely, our customers have record order books now, and that bodes well both the new construction and obviously for aftermarket that we'll generate in the longer term. And then the last one was about Life Sciences. You're right. I mean very mixed reporting. We have got some particular platforms that are recovering nicely. And if I think about sort of the one that's moving the most, it's where our customer has been able to do the test in the doctor surgery rather than in the laboratory and this particular equipment can test for, I think it's over 200 different pathogens and literally give you a result within less than an hour. It's that sort of things, Lush. And it really is recovering well into the second half, so that's the -- if that helps at all, that's the single biggest thing. But I would say generally across the patch, the destocking, at least with our customers, is less, and therefore, we're starting to see a bit of a pickup. Remember, Life Sciences is only 7% of our business, and I'm not calling a sustained recovery. I certainly think, Lush, it's is going to continue to be bumpy, right, particularly with you look at some of the U.S. reductions in investment and so on, but at least for the second half, we're seeing a nice order book and good order patterns, let's put it that way.
Operator: Our next question comes from Jonathan Hurn from Barclays.
Jonathan Hurn: Just a few questions for me, please. A couple of them sort of clarifying things that have been touched earlier. But firstly, just coming back to process, just looking out to that to '26. Obviously, you talk about the order book, but that's sort of the growth of that business in '26. If you look at the order book, obviously, it's plus 5% at the first half, is that the kind of level of growth we should expect for Process in 2026? And also just, Roy, if you could just give us how much book to ship you need to do in H2 to meet the forecast by '25? That was the first question. Second question was just coming back to the IA, obviously, you're seeing sort of 3% to 4% growth coming through in the second half of that business. Just to understand how much of that 3% to 4% is actually that order book catch-up or delivery catch-up because of the stuff that was delayed in the first half? Is that sort of half of that 3% to 4? And then the third question was just on -- sorry, it was on hydraulic or climate. If we look at that, obviously, great performance in the first half, plus 5%. If we look into the second half, that comp actually gets a lot tougher for that business in H2. Do you still think you can do 5% growth in H2? And if so, what's sort of really driving that performance there?
Roy Michael Twite: Jonathan, as usual, we'll get through a lot of questions. If you asked 3 really good ones. So I really appreciate that. On the Process Automation order book, I mean, we're not going to forecast next year yet Jonathan. Give us a chance to try. It was up 5% at the half year despite that big marine order, which is multi-year, aftermarket growing at 10%. We do think the order book will be higher at the end of this year. I mean, let's see how much higher, but good momentum in that business. As I said, particularly on conventional power. Conventional power is about 25% of Process Automation, 5% is new construction and 20% is aftermarket, right? So that's nice that, that sort of reasonably big part has got some nice momentum behind it. You've got LNG going really well as well. Jonathan, so that's good, and then Nuclear, as I said, seems to be picking up. So let's see. But right now, as I said, we think we'll finish the year with a better order book, then we came into it, and that would mean that we'd grow it again next year. Book-to-ship, yes, we've got GBP 15 million more book to ship this year than at this point last year. So on book-to-ship, we feel good, right? Because book to ship, obviously, we've got most of the new construction orders because they tend to be a 12-month later. This is aftermarket. And as you can see, the momentum in aftermarket is great. So we feel fine about where book-to-ship is. IA, so of the sort of 3% to 4% growth. Let's say, very, very roughly, Jonathan, about 1/4 of it -- 1/4 to 1/3 of it is backlog catch-up and then the rest is order momentum. So give you a rough idea of the breakdown of that. And then in terms of Climate -- yes, I mean, Climate, wow, again, fantastic performance first half, Stefano and the team doing a cracking job. And what's really growing there is the 25% of that business that's connected products, is really providing momentum. The TA-Smart valve, we've talked about it a lot, that's really taken off now. So yes, that's what we see. Jonathan, I would say certainly within our guidance is about similar levels of growth as the first half. As you know, the heating season, how strong that is, can determine a bit of that growth. So we can't predict it exactly, but we would expect all things equal that because our products generate an energy saving. And I think you've seen some of the peers that have had difficult results, right? But because we're very focused on energy saving while providing a very comfortable indoor climate, making sure that we know that because we've got market-leading brands, market-leading shares, we do feel pretty good. That business continues to grow and generate excellent returns, Jonathan. So yes, that's why we feel, even though it's used at a more difficult compare to second half, when we look at all of the component parts within there, we feel comfortable with that level of growth. Does that answer your question?
Jonathan Hurn: Yes, absolutely. That's great. Thanks very much, Roy. Likewise, I'd just like to say or express the same sort of gratitude to Dan for this time over the last 10 years. Thanks very much, and good luck for the future.
Operator: Our next question comes from Kulwinder Rajpal from AlphaValue.
Kulwinder Rajpal: So just wanted to understand the extent of the data center business within your group, I would presume most of it falls under Climate Control and probably a small part of it. But just wanted to understand how has that business been growing? And are there any other divisions that could eventually cater to this segment?
Roy Michael Twite: Yes, Kulwinder. So within Climate, I think last year, the orders, I want to say, were sort of GBP 6 million, GBP 7 million, specifically around data centers. In the first half, we've done about the same number of orders, amount of orders in Climate on data center. So I think we did about GBP 6 million in the first half. So we're probably double what we did last year. The interesting thing on Climate actually, Kulwinder, is that we typically get orders sort of 3 or 4 years after the data center is announced that it's going to be built. So that's very encouraging, obviously, because that means that as all these data centers come through, we would expect that number to increase nicely. At the moment, Kulwinder, though by far the bigger effect is the effect it's having on Process Automation, right? Because energy demand, as I said earlier in the call, right, roughly 25% of Process Automation is conventional power. And we are seeing that our customers, particularly in combined cycle gas power stations, their order books are just at record levels. They could not make combined cycle gas power stations, as fast as they need to, right so that is obviously providing a nice pull- through for us, the power that's data using that secondary effect.
Kulwinder Rajpal: Right. And then is there any aspiration to maybe grow the data center piece a little bit more through investments in Growth Hub or through innovation?
Roy Michael Twite: Yes. I mean, absolutely. So within Climate, there's a focused team that's actually pulling on people outside of Climate that are using absolutely Growth Hub teams, Growth Hub techniques to grow that business absolutely, Kulwinder. So yes, we see it as a very strong area for years to come. And yes, absolutely.
Kulwinder Rajpal: And lastly, I just wanted to go back to Slide 17, where we see the aftermarket metrics. So is the aspiration there to go from bottom right to top right? Is that reading correct?
Luke Robert Grant: The aftermarket potential versus the aftermarket performance?
Roy Michael Twite: Yes. I think the -- so the aspiration with aftermarket Kulwinder, as I said, we have matched our own assets, and we continue to improve our ability to help customers identify earlier and earlier whether they're going to have a problem with one of our installed valves, and that's 200,000 valves, right? The other opportunity is, obviously, the 300,000 installed severe service valves from our competition. And we grew that, upgrade valves were up 17% in the first half, 17% -- another 17%, right? And competitor upgrade valves were up another 12% on volumes, right? So it's really that strategy, that Jackie, Robbie and the teams are driving that means that we see a lot of runway for the years to come in the aftermarket within in Process Automation. So yes, our ambition is just -- it's a highly technical sale. As you know, we've got valve doctors. They're the most advanced applications engineers in the industry. When they come out of universities with an advanced degree. It typically takes them another 7 years to qualify as a valve doctor, and that's gaining lots and lots of application knowledge. Most of these process plants and power plants are different. They're all unique. So it requires a lot of engineering knowledge to go in and then actually do an upgrade valve cell. But that's our ambition to keep growing that very, very profitable space to obviously carry on generating huge amounts of cash out of that, which is now let's face it, IMI's biggest profit pool, aftermarket Process Automation.
Operator: Our next question comes from Mark Davies Jones from Stifel.
Mark Davies Jones: And of course, I joined in the virtual round of applause for Dan. It's difficult to do when we're not in the room, but yes, share those sentiments. Couple of slightly more niche questions, if I may. The latest bit of Trump tariff nonsense overnight, they seem to be slamming something extreme on Switzerland. I remember from COVID days, there were some specialist miniature valves produced out of Switzerland. I know it's just breaking news, but I don't know if there is material manufacturing still there, and that's anything you could comment on. But more broadly on tariffs, we are beginning to hear some companies suggesting there is more resistance to simply passing through cost, are you beginning to see any signs of that? And is that a concern through the back end of the year?
Roy Michael Twite: Thanks, Mark. I'll start with passing through cost actually. So passing through cost we obviously do everything else first, Mark, right? We try and get exemptions, we try and reroute supply chains. But in the end, certain things, I think, I said on the last call, Mark, right, manufacturing costs outside the U.S. in some of our factories are so competitive that they can be even after tariffs, literally half what we can make it for in the U.S., right? So you get to the point where -- and I have to say, in our case, yes, of course, customers question it, of course. I mean, but when you go through the logic and in the end, you're typically talking about a mid-single-digit increase for a lot of people on a product or a component or system that is normally, in our case, a very, very small part of the overall cost of their system, but obviously a vital part of the cost of their overall system and the way it performs for their customers. So I think in the end, we have to do our absolute best. But as I said in the first half, we completely offset the GBP 4 million that we couldn't do anything about. And then on Switzerland, well, yes, that is breaking news, isn't it? Yes, we will..
Mark Davies Jones: It's unfair, I know.
Roy Michael Twite: I just try, I'll try and frame it for you Mark. So those are, again, tiny valves where the tolerance is, I mean, we are one of only, I would say, 2 or 3 companies globally, as you saw in COVID, that can make these valves. I can tell you a story about that because during COVID, obviously, some other people thought they could make those valves, even some of the most advanced manufacturing companies in the world thought they could make them, but they obviously couldn't, right? Because you're literally dealing with micron level tolerances. So literally, 150th of a human hair and stack tolerances, typically 6 to 10 tolerances that go inside a proportional valve that has tens of thousands of settings to go inside of a ventilator that will keep you alive when you're in a coma. I mean the technology is quite frankly, amazing. So yes -- and again, this is going to be a bit of a guess, to be honest with you, Mark. We might have GBP 5 million to GBP 10 million of that sort of product that would flow out of Switzerland into the U.S. So we will obviously look at it, if that becomes an enduring thing. We have got -- we did build extra capacity, obviously, during COVID to obviously, may need to save lives. So we will have options as usual, and we will be agile around it. If that becomes an enduring thing, but in the scheme of things, I don't think it's going to be a massive thing for us.
Mark Davies Jones: And if I can ask a slightly odd question. Was there anything positive to come out of the cyber attack in terms of what you've learned from that process and where your systems are now?
Roy Michael Twite: Wow, that's a really good question because at the time, it felt not positive, Mark. But you know what, the recovery, the 6% growth in Q2 from our teams, and I was out visiting 3 of our German sites in the last couple of weeks. And the response was, frankly, absolutely fantastic. So we have this sort of saying around one big team. The amount of teams that pulled together, Mark, so our French sales team, I made the leader of the French sales team, he was there in Germany with us. And. The whole French sales team, 20 of them moved in to manually put orders in with the German, just to give you one example of what happened globally. And so that feeling of spirit -- team spirit to overcome adversity like COVID or like the inflation that we had with the sort of cost of living crisis in order, those things just bring us together and ultimately makes you stronger, right? If you survive it, you become stronger. Of course, we are investing in the second half in more IT security and more IT infrastructure. There is no doubt about that. We've done a fundamental external review. And there's lots of things but let Luke just touch on 2 or 3 of them, but there's lots of things that we're going to do because, ultimately, I read the other day, Mark, there's about 1 billion phishing e-mails a year now. The average number of people clicking on them still is about 5%. We're actually at 3% now. So we're training, training, training obviously. But if you click on that phishing e-mail, it's obviously a risk, right? That's what -- that's the main way people tend to get into your systems. And then it's what you do to make yourself, the place where the attack is the hardest door to knock on, right? Because that they're obviously improving every day, and it's a race. But Luke, do you want to just touch on the sort of things we're doing?
Luke Robert Grant: Yes. I think maybe just to add, there's probably 3 things I call out. I think Roy touched upon one, which was just all the work we're doing on phishing and the efforts around training in the business. I think the second one is the IT security team itself. We're more than doubling in size and most of those people are joining in the coming weeks. And then the last one is just investing in more tools. So we'll have more multilayer tools than we've ever had before and really just going for the top end tools at every single stage of our IT security set up.
Roy Michael Twite: Yes. So lots of stuff, Mark, that we've learned. Luke is now a fantastic IT security expert already, and we're still learning. This is only going to get more difficult. AI is going to make this more difficult. But yes, it's a race, and we want to try and stay ahead in the race. Yes.
Operator: Our next question comes from Richard Paige from Deutsche Numis.
Richard Paul Paige: And obviously, echoing again for Dan, if it's getting boring, fantastic legacy to have left behind. But before you put your feet up in Dubai, my leaving present to you is a question on the pension. Obviously, a great legacy to reduce those liabilities to GBP 1.3 billion. But can you just explain what's going on in terms of that loan in what future cash costs and obviously the ultimate buyout that scheme, please? And then just a second one, Process Automation, just some clarity. I noticed it's a small thing, but on the sales-as-a-Service, it's dropped from GBP 40 million to GBP 25 million. I assume that relates to process inflation, just explain those moving parts as well, please.
Dan Shook: Richard, thanks for the parting gift here. Pensions, yes, yes. No, really, really great journey. And as you'd expect, when we had GBP 1.3 billion, we had a number of asset classes, including some of these longer-dated private equity investments. Most of that we've been able to turn into cash. There's just this final tail. And as we're going through the buy-in and the buyout, we don't want to leave money on the table by trying to accelerate the liquidation of those. And given the balance sheet we've got, it was just an easy decision. We'll put some capital into the trust. That will give them the time over the next 12-plus months to wind the whole thing down. We'll likely get some of that cash back already in the second half of this year, and then we'll watch how it all winds down. But yes, very pleased. I told, Adrian, who is in charge of it, get it done. Otherwise, I'm showing up at the AGM and asking tough questions of Luke, next May.
Roy Michael Twite: So as pensions, field service, basically is reverted to the mean, Richard. So field service, we won a big contract. It was in Texas last year -- in the half year last year, and we reverted pretty much back to our normal sort of run rate of field service. Field service is important because some customers require us to do more work around things like start-up of the plant and things like that. It's also important because we get insight on valves that could cause problems, right? But it tends to sort of revert to the mean, Richard, whereas it's the upgrade valve part of Process Automation and then the very good margin parts business on the back of that, that's obviously where the growth strategy is.
Operator: Our next question is from Harry Philips from Peel Hunt.
Harry Philips: I think I'm going to use my standing as the oldest lag on the circuit to maybe just conclude with a few thoughts on Dan. Just really, what an amazing 10 years, this very quiet unassuming person who turned up all that time ago. Yes, quite an amazing innings. But I know people are busy. So just very simply down, your contribution to where IMI is today is absolutely enormous. Very hard to overstate your impact, and you've set an enormously high bar for Luke, which I'm sure he's going to appreciate greatly. Legacy is a much overused word, but I think it is extremely appropriate here. And I think I can say on behalf of us all on the call and elsewhere, that you help, support, guidance, wisdom have been huge and much appreciated over that period. And also, you made it fun, which is particularly important. May you be -- may you enjoy your family life, may be long and joyful, slap on a sun cream, improve the golf, giants might even have a winning season. But very simply, Dan, we're going to miss you hugely and very good luck for the future.
Dan Shook: Wow, Okay. That's not fair, Harry -- are we ready to finish up or any more questions Harry? Is that it? Well, all right. Thank you, Harry. Okay. Firstly, I got to even it up from February. Happy birthday Katy, my daughter. She's got her birthday coming up in a couple of weeks. If I didn't do that, it could have been a very tough family event going forward. Sentiment right back to everybody on the call, you all the analysts have been -- have made it fun back the investors, everybody, you've supported me. I've learned a tremendous amount, and you've challenged along the way, which has helped us deliver this great company to the position it is today. I know their employees and on the call and the listen later, it's been just such a privilege to be a part of this great organization. And it's -- again, it's been fun to learn about these incredible products like these incredibly small valves that come out of Switzerland, just brilliant. And yes, the exact -- my friends right here, Roy, you've been an incredible boss. You've been an incredible colleague, and you know that you've been a great friend as well. It's just been tremendous. Yes, Luke, bar is high, but you all know Luke almost as well as I, you're going to smash it out of the park, and yes, I won't say goodbye. Not sure what we'll do, definitely maybe a little bit more golf. Thank you, Harry. I don't think the giants are going to be doing any good anytime soon. But eventually, but I won't say goodbye, I'll just say until the next time. It's just been an absolute privilege. And for those of you who know, I'm going to take a selfie right now to commemorate. So yes, many thanks. We'll see you all soon.
Roy Michael Twite: Well, thanks, everybody on the call, but my main thanks to Dan and well done for holding it together. Well said, Harry. totally. We've had, as you can imagine, a couple of big leaving dues for Dan, including a Dan fest because that is the outpouring of love from this organization for you, Dan. And it really has been a brilliant 10 years, and you've been an amazing partner. And yes, we're going to miss you. Thanks, everybody, and I'm sure we'll all catch up soon. Thank you.