2025 earnings call transcript

RS Group plc – Full-year results 2025

Wednesday, 21st May 2025

RS Group plc – Full-year results 2025 Wednesday, 21st May 2025

RS Group plc – Full-year results 2025

Simon Pryce

Chief Executive Officer, RS Group plc

Welcome

Good morning, everybody, and welcome to the RS full year results presentation for the 12- month period ended 31st March 2025. Thank you for joining us here today. Thank you for joining us online. And thank you all for your continuing interest in the RS group. I am pleased to report that 12 months in to our quite ambitious multiyear plan to enhance and improve RS, we are making really good underlying progress in all areas of our business and will highlight that as we go through the course of the presentation today. Although the unwinding of post pandemic trading benefits and the challenging macro environment continues to impact our financials and to slightly mask the sustainable and underlying improvements that are going on and are in train across the group.

However, by focusing on the things that we can influence and executing well to our plan. We are now in much more control of our own destiny as we continue to position ourselves effectively for the acceleration as markets recover and we returned to more sustained growth and so on to the presentation itself. I am going to share some detail on what we have done this year. Kate will then take us through how this has been reflected in our numbers and our regional performance. And then I will wrap up by sharing what we are focusing on going into

2026. And our presentation should take around 35 minutes, but we will leave plenty of time for questions at the end, and we will aim to get you all away by 10:00.

Health & Safety

Now, as you know, at RS, we like to start all meetings with a health and safety and a values moment. And so, first, I would like to point out the fire exits to those that are here in the room back corner. There are no planned fire alarms. So please, if you hear one, leave in an orderly fashion and follow the instructions of the fire marshals who will be wearing high vis vests. But at RS, safety is not just about physical well-being, it is about mental well-being, too. And that is why, to mark World Mental Health Awareness Month, nearly 200 of us at RS around the world joined our Lifeworks Employee Resource Group initiative, Move for Mental

Health.

The object is simple but powerful. We are going to walk to raise awareness of mental health in the workplace. And of course, moving also is good for our own physical and mental well- being. We started with an ambition to walk collectively a kilometre in May for every colleague statistically likely to be impacted by mental health during their working lives. We passed that goal of 4350km by week two. And so, we have extended it, and I fully expect the 200 of us to walk over 10,000km this month, each kilometre a message of awareness and support. And this is an example of what RS is all about. It is our values in action. It is one team doing the right thing by coming together to raise awareness and make every day better for ourselves and for each other.

2025 Performance

So into the presentation itself, fiscal year 2025 was a year of significant underlying progress at RS where, thanks to the continuing efforts of our great people, we delivered a pretty

2

RS Group plc – Full-year results 2025 Wednesday, 21st May 2025 resilient and in-line performance. We are executing against our plan effectively with clear prioritization, improved accountability, enhanced agility, and as a result, much improved delivery. We are performing, as we should, delivering more predictable outcomes even in difficult markets and continuing to take market share. We are managing the things that we can control better taking action early, delivering restructuring and integration benefits ahead of plan, improving efficiency and managing costs appropriately. And we are beginning to see the benefits in our underlying operating metrics of our continued strategic investments, and all of which gives us great confidence in our ability to drive stronger growth and operating leverage, which in turn will generate significant value for all of our stakeholders over time.

And we have done all this and made all this progress, despite the difficult market backdrop that we have operated in.

Better Execution

Now expanding on each of these themes in turn, as this slide suggests, we are executing more extensively because of the extensive changes that we have made here over the last over the last two years, we have now got a strong, diverse and stable leadership team with enhanced capabilities and a breadth of experience. And most importantly, a common set of aligned objectives. The second block as set out in our Capital Markets Day in September, we have got a clear and focused strategy and an integrated and multi-year action plan to deliver it with much more systemic, systematic and rigorous resource and people prioritization.

We have implemented changes to our operating model and ways of working to create clearer accountability and to support better execution. And we are more process focused, and that is highlighting opportunities to harmonize, automate, and improve delivery through more rigorous program and change management. And importantly, we are actively monitoring progress with much more effective management oversight, all of which is driving clear prioritization, that enhanced accountability that I referred to and much better visibility, agility and ultimately delivery. This year, we performed much more as we should. As the chart on the left-hand side here shows, it is one we have published before. It plots our like for like revenue growth, the red line against the RS weighted market PMI, which are the grey bars.

Revenue Growth

It shows that the post-pandemic, mainly electronics trading benefit that we saw from the second half of our financial year in 2021, had broadly unwound by the first half of 2024. And it also shows that PMI data throughout this period has been below 50 and certainly has been in decline since Q2 2023. And despite this, our revenue performance this year returned to its more close correlation with PMI and has even started to outperform in the second and third in the third and fourth quarter of this year, despite actually PMI softening a little. And this reflects some of our strategic initiatives beginning to deliver. And whilst it is difficult to measure market growth and share in the high service distribution space, the proxies that we use, which tell us we are continuing to gain share such as supplier support, supplier reported, channel relative and absolute growth and web enquiries all indicate that we are performing better than the market.

And now, and most importantly, we are performing predictably. And part of this is because in

2025, we were much more effective at managing the things that we control. As you will hear from Kate shortly, our growth accelerators continued to outperform the broader group. We

3

RS Group plc – Full-year results 2025 Wednesday, 21st May 2025 are managing our variable and fixed costs better, exceeding our expectations on restructuring benefits and taking additional in-year action to reflect a more difficult than anticipated trading environment, and are actually our headcount reduced by over 4% during the year. And although we increased strategic investment to £31 million this year, we did actually defer and reprioritize nearly £9 million of strategic investment to later years. And Kate will expand on both these things in her section.

Growth Acceleration

We accelerated delivery of integration benefits, commencing the early exit of our distribution centre in the Netherlands, originally operated by Distrelec, and this will generate significant additional cost savings in future years. And we are driving greater efficiency through reducing complexity, removing duplication, and this will continue as we improve collaboration and begin to harmonize our processes. And finally, and importantly, much more focused balance sheet management has led to over £200 million of free cash flow this year, strong cash conversion, and as a result, leverage remains towards the bottom end of our target range.

And all of this demonstrates that we are able to exercise greater agility in our execution, investment and cost management.

And on this chart, we are just showing you where the focus of our £31 million of organic OPEX this year, and our £35 million of related CapEx has been spent, sent has been spent and the light red is the capital expenditure and the darker red is the OPEX. And in customers, we have got cleansed and much more granular data and have rolled out improved tools to enhance our customer understanding in products and suppliers. We have launched major systems improvements to accelerate new product introduction in solutions. We have re-platformed and upgraded our principal digital procurement solution, and we have enhanced our service offerings in customer experience. We have developed an upgraded digital platform for roll out across the group, and launched an extensive systems upgrade that will ultimately allow real time delivery tracking.

And in operational excellence, we continue to integrate this into RS at an accelerated pace, whilst better leveraging automation and our global shared business services capability ability to optimize our operating costs. And all of this highlights the significant strategic and operational progress that we have made this year. And with that, I am going to hand over to

Kate, who is going to share with you how this has all been reflected in our numbers.

Kate Ringrose

Chief Financial Officer, RS Group plc

Strategic Direction

Thank you, Simon. Good morning, everyone. I have seen significant improvement in RS and a greater understanding of our strategic direction, analysing our commercial KPIs better and what levers we need to pull to optimise our performance, and how to respond to external factors. We have navigated the difficult market well, executing better and staying focused on what we can control. Building the foundations to take the opportunity to benefit from greater operating leverage as market conditions improve. So let's move on to what is behind the numbers. This slide summarizes the results for the 12 months to 31st March 2025. Year on year revenue decreased by 1%, and that is 2% on a like for like basis. Having adjusted for

4

RS Group plc – Full-year results 2025 Wednesday, 21st May 2025 acquisitions, trading days and FX. Trading was slightly stronger in the second half in Americas and Asia Pacific as PMIs improved and we traded against weaker comparators.

2025 Results

Our adjusted profit before tax reflects the market backdrop and our actions taken on normalized costs, which have all set inflation, as well as the increase in organic investment.

Adjusted operating cash flow conversion has been very strong at over 110% as we released working capital in the year through improved working capital management. Our ROTE decline reflects an 80-basis point impact from last year's acquisitions, with the remainder due to lower profit, partially offset by reduced capital employment. And our full year dividend increases by 2% to 22.4 pence per share, consistent with the progressive dividend policy. Our digital like for like performance of -2% largely reflects the market decline. And as Simon mentioned, we can see material declines in online footfall for some of the key words we are bidding for, albeit our conversion rates are improving following our search tool investment.

The majority of the digital revenue decline is in web sales, and that is to medium and smaller customers.

Services solutions revenue grew by 6% like for like as we have had success in targeting high value corporate customers who are increasingly using our digital procurement solutions, which grew by 4%. We have restructured our business model for RS integrated supply, improving the commercial offer, and we are pleased with the progress that the team is making with new profitable contract wins, improved contract management and a doubling of the order book. I am also pleased with the performance of our own brand, RS Pro, which grew

2% due to range development and end to end sales and marketing focus. RS Pro now accounts for 14% of group revenue. Before I leave this page, you will also have noticed our full year 2023 and 2024 inventory provisions have been restated for an adjustment in the US to reflect the correct application of the group inventory provisioning policy. This is further detailed in note 12 of the RNS, but there is no effect on our full year 2025 numbers.

Revenue

All right, let's turn to revenue. Group revenue was broadly flat with like for like revenue declined 2%, largely due to lower volumes with minimal price inflation. There was a full year benefit from last year's acquisitions, Distrelec, Trident and a forex impact from a stronger dollar. Average order value declined slightly, whilst average order frequency increased marginally, and in our three product categories, facilities and maintenance and other industrial categories grew 3%. Automation, control, electrification and testing measurement fell 2%, and these two categories cover around 80% of our group revenue. Our weakest category is in semis and passes cables and connectors, which declined 8%, reflecting weak end markets.

We have been active in managing our cost base, and as you have heard from Simon earlier, we exceeded our expectations on restructuring and integration benefits and this in part offset inflation and normalization of incentives. We took additional short term cost action, recognizing a difficult trading environment. I have updated the cost bridge that I have shown you in previous sessions, so that you can follow the change in OPEX over the year so that we can all align on a good starting point. I have rebased 2023, 2024 OPEX to exclude the £13 million cost to achieve last year's benefits, which, as a reminder, we show above the line that

5

RS Group plc – Full-year results 2025 Wednesday, 21st May 2025 gives us a baseline starting point of £9.39 million. As we step through the chart from left to right, we include the full year impact of acquisitions, small single digit increase in inflation, and normalization of employee incentives. We have increased our organic investment by £7 million to £31 million, which is £9 million below our original expectations. And that is because we optimized our pace and our sequencing of our investment spend appropriately. This leads to a cost base of £9.94 million before management cost savings.

Integration & Restructuring

We executed the integration and restructuring plans to generate another £29 million of ongoing cost savings by removing labour and facility duplication. This cost £17 million, which is a payback well below 12 months. We have also delivered over £38 million of cost savings over sorry. We have now delivered over £38 million of cost savings over two years, which is above our £30 million target. And this leaves us with an ongoing cost base before in year one-offs of £965 million. During the year, we identified a further £13 million of one-off savings, including the early termination of a lease agreement in the first half general belt tightening and spending and delaying vacancies. The £17 million, which I referred to above of restructuring and integration costs, which we incurred in year, were again recorded above the line. So our operating costs, including one off costs and benefits, finished the year at £9.69 million. R.

So let's bring this all together. Our adjusted operating profit margin reduced by 100 basis points to 9.4%. The most significant movement in that being inflation in the cost base. Given there is little revenue and COGS inflation during the year in gross profit. Let's move on to our region, starting with EMEA. Total revenue declined by 1%, including an extra quarter contribution from Distrelec. Like for like revenue declined 3% with weak industrial production output and ongoing economic weakness across the region and within the region, we saw

France outperform, helped by more resilient industry verticals. The UK suffered from weaker demand since November, and Germany be impacted by a higher exposure to manufacturing and automotive industries.

Americas

In Americas, our total revenue fell 3%, which is largely a result of the weak dollar during the year with like for like revenue. Flat economic weakness in the US and Canada through most of the year impacted business confidence, as evidenced by the weaker PMI data. Although this showed some signs of improvement in the fourth quarter, our operations in Mexico performed well as we expanded our product and service offer against a strong economic backdrop. Like for like gross margin was down just 0.1 percentage point, and the 4% decline in like for like operating profit reflects the revenue decline and increased organic investment, including within Mexico, which was partially offset by operating cost discipline.

Asia Pacific

Moving on to Asia Pacific. Total revenue grew 2% with like for like flat. We saw improving momentum during the year with like for like growth in the second half reflecting signs of market recovery, especially in Southeast Asia. We have been developing our industrial offer, focusing on high lifetime value customers and expanding our service solutions offer, helped by the acquisitions of Domnick Hunter and Trident. And we are pleased with the success that we are having with RS Pro in the region. Operating profit increased by £1 million with

6

RS Group plc – Full-year results 2025 Wednesday, 21st May 2025 evidence of improved operating leverage emerging. I am pleased to report strong free cash flow with an operating cash flow conversion of over 110%. The lower EBITDA was partly offset by an improvement in working capital with better working capital management, especially in receivables. Capital expenditure remains stable at 1.2 times depreciation and supports our organic investment and strategy. Notably, physical and system infrastructure.

Net debt decreased to £364 million, resulting in a gearing ratio of 1.1 times, which gives us good headroom to consider. Inorganic opportunities and our cash generation, balance sheet and debt facility headroom provide plenty of capacity for continued strategic investment, and our clear capital allocation policy hasn't changed. First, we prioritize organic investment to support organic growth, especially in strengthening our physical system and process infrastructure. And this will increase next year and continue at around about 35 to £45 million as previously signalled.

Acquisitions

Second, acquisitions in this globally fragmented market can accelerate our strategy, especially small bolt-ons. We remain value and capacity disciplined in our approach, assessing and building a pipeline of acquisitions which, if executed, are targeted to cover a cost of capital within three years. And third, we believe in sharing cash generated with shareholders through a progressive dividend policy. And where we do not have sufficient value creation opportunities in organic and inorganic investments, we will return excess capital to shareholders. Our full year dividend in 2024, 2025 grew by 2%. We expect future increases to continue to be in the low single digits until dividend cover is rebuilt. We targeted return on capital employed of over 20%, and leverage an efficient balance sheet within a range of one to two times net debt adjusted EBITDA, depending on prevailing market conditions and acquisition opportunities.

2026

Finally, to give you some help on factors to consider when you are thinking about full year

2026, we believe that the work we are doing to improve the operating performance of RS puts us in a strong position to drive greater operating leverage when the markets return to growth. We are planning for gross margin to be broadly flat, with pricing discipline maintained, whilst recognizing gross margin can be impacted short term by a variety of factors, including forex and inflation. We plan to increase our spend on organic investment next year to within the lower end of the guided range of 35 to £45 million per annum, and we anticipate similar cost inflation to that seen in full year 2025 of 3%, including higher labour costs and additional UK national insurance costs.

We announced a further £30 million cost savings program, which is now complete, and a further 150 basis points of margin improvement through cost savings over the medium term.

I approximate that to be around about £45 million of cost, and we are making inroads into that target and will continue to do so in full year 2026. We expect during this coming year that further cost efficiencies, combined with cost synergies delivered from integrating

Distrelec, will deliver at least a further £15 million of cost benefit. The associated cost to deliver these benefits will be in the region of 10 to £15 million. Higher depreciation from our capital investment spend and further normalization of our employee incentives will be about 5 to £10 million of increase.

7

RS Group plc – Full-year results 2025 Wednesday, 21st May 2025

We are proactively managing costs and have demonstrated our ability to flex expenditure as required. Remember, as shown on our cost bridge slide on slide 11, that our underlying cost base for 2024, 2025 was £965 million. Stripping out one-off cost benefits and expenditure, we will continue to target cash conversion to exceed 80%. There is no change to our capital expenditure guidance at around £50 million. And we continue to support the physical and system infrastructure investment with our CapEx, including progress on the 2030 ESG Action

Plan guidance points, which include trading days and forex unchanged tax rate, and a summary of the operating cost actions is included on slide 34 of your pack.

Tariffs

And with the final word on tariffs, we are not currently experiencing any visible direct impact from tariffs. And we are closely monitoring this evolving situation. We are fully engaged with our suppliers on their response and to support our customers in meeting their needs, and we would expect to pass on any price increases as suppliers adjust. And we have the system capability to manage those changes given our global reach, broad product offer, wider supplier base and supply chain management expertise, we have the opportunity to offer alternative products, manage supply disruption and minimise our direct and indirect exposure to tariffs where necessary, whilst mindful of the impact of tariffs that it may have more broadly on PMIs and the macro environment. I would like to now hand you back to Simon.

Simon Pryce

Chief Executive Officer, RS Group plc

Strategic Action Plan

Thanks, Kate. And now, in this last section, I just like to share with you a bit more detail on the significant progress that we are making against our strategic action plan, where we are focusing on going into 2026 and where we are in our broader strategic and operational improvement journey. So this is a slide some of you will recognize from our Capital Markets

Day in September. And it is our pictorial plan on a page. It is how we intend to become first choice for customers, first choice for suppliers, and how we will accelerate sustainable value creation for all of our stakeholders. So what have we done and what are we planning to do?

At the core of our wheel, core to everything we do is people. And for people, for us, it is all about further aligning and developing our people and leadership capability and capacity.

Our people actions in 2025 led to greater focus and empowerment, more accountability and responsibility. And we did see a small drop in our October engagement survey. Although perhaps it remains at high levels, and it is perhaps not surprising given the difficult market environment in which we have been working and the level of change going on at RS. But pleasingly, our most recent survey, which is just coming to a close now, is showing significant improvement in engagement in all areas. So in 2026, we will be focusing on equipping our leaders with greater agility and flexibility to better manage and lead continuous change and moving to a more skills-based organisation, particularly in key functional areas like finance, product and supply chain and people as we continue to build a greater organizational agility, efficiency and competence to support our strategic opportunity.

8

RS Group plc – Full-year results 2025 Wednesday, 21st May 2025

Customers

In customers, it is all about prioritizing the most valuable ones whilst continuing to serve all who buy a broad mix of industrial MRO products in small volumes, but doing so in more effective cost to serve. In 2025, we aggregated and cleansed our customer data and enhanced our data capture mechanisms and put in place the tools to enable us to develop much more targeted sales approaches and to clarify those costs to serve. We defined and put in place standardized and forward-looking operational metrics to monitor our progress. And as we move into 2026, we will start to use this data and advanced segmentation capability to provide much more tailored and effective sales, service and marketing efforts to our customer base.

Digital Front End

We will also be using our improved digital flexibility to optimize our digital front end in markets where there are significant cultural variations, such as China. And all of this allows us to better prioritize the right customers with the right products and the right services efficiently and at an effective cost to serve, all enabled through the use of proprietary data and enhanced data platforms. In products and supplies, it is about strengthening our technical product offer through value sharing partnerships with strong suppliers and by developing more curation for our customers. In 2025, we made material changes to our systems to allow increased local sourcing and stocking, and introduced a new product management capability to materially accelerate both our capacity for new product introduction and our speed of adoption whilst migrating sourcing to improve sustainability and stability of our supply chain. And this is particularly true in RS Pro.

2026 Focus

And moving into 2026, our focus is on optimizing our product management systems to accelerate the availability of relevant technical data and improve our customer experience, building out further our RS Pro range and upgrading our pricing capability and processes to make us more effective value-based prices. And all of this is creating greater flexibility and allow a better sharing of the value we create for both suppliers and customers. We are continuing to focus our solutions and service offer during the year, we re-platformed our e- procurement offer in Americas and Asia Pacific, enhancing content and order processing with new software planning tools.

Now, as you heard from Katie earlier, under new management, we have also refocused the

RS integrated supply business to drive standardization and automation, which will lead to greater cost efficiencies and better scalability. And as we enter 2026, we will continue to develop our digital product solutions, our technical solutions, and to leverage closer relationships between our integrated supply business and the broader RS as we pursue greater scalability and enhance value through our solutions and our services. And we continue to strengthen and tailor our customer journey for a seamless omnichannel customer experience in 2025. As you heard from Kate, we have introduced a major artificial intelligence enabled enhanced search capability across the group, and commenced the development of a major upgrade to our digital commerce platforms, with release one actually launched in

Americas just after the year end.

9

RS Group plc – Full-year results 2025 Wednesday, 21st May 2025

Systems Upgrade

We have also launched an extensive systems upgrade in EMEA and APAC that will, whilst causing some initial disruption, ultimately allow us to deliver real time delivery tracking to our customers. Going into 2026, we will be further enhancing our digital commerce platform and begin rolling it out in Europe, and will also launch the real time tracking functionality to customers that we have done all the base work to enable and start to better tailor our customer experience using, again, our extensive proprietary data. That is all enhanced by artificial intelligence and machine learning enabled platforms. And of course, we are improving our physical, digital and process infrastructure to make it more efficient, more agile, and more scalable to better support our strategic direction of travel and ultimately to improve our operating leverage.

In 2025, we made really good progress in a number of areas. In addition to commencing the closure of the Distrelec central distribution centre, we have also expanded our capacity and capability in our DCs in both France and in the US, and we have begun the simplification and upgrading of our technology stack, retiring over 40 applications during the year. And we have now commenced our middle and back-office transformation planning. In 2026, our focus will be on continuing the exit from Distrelec CDC and upgrading our warehouse management systems in the UK and continuing to selectively invest and automate our distribution infrastructure in Europe. We will also commence the final phase of the integration and start decommissioning the district technology stack.

And on the process side, global end to end process owners will be defining harmonized processes for application across the group and will begin driving standardization where it makes sense. And we are well into the next phase of operational improvement work at RS, which will further increase efficiency, reduce cost, and ultimately support accelerated growth and much improved operating leverage. So bringing this all back together, we are 12 months in to our ambitious multi-year plan to enhance and improve this group. And we continue to invest despite the tough markets that we have seen this year.

Improvement Plan

This chart reflects the progress we are making and the increased confidence we have in the plan as we execute it. The chart on the left-hand side of the page is a repeat of what you saw, which allocates the OPEX and the CapEx that we will be spending over the next four years to the areas in which we will be driving improvement. And remember, Kate referred to that 35 to £45 million of elevated OPEX or so that will incur. And this will drive at least a further £45 million of efficiencies and cost reductions. And then the chart on the right-hand side is a directionally correct representation of how these costs and these benefits are expected to come through over the next four years.

And as you can see from the chart, we are beginning to build real momentum going into next year. We will, of course, continue to be agile in our cost management, as we have demonstrated this year, but with benefits already beginning to come through in our operational performance, we do have increased confidence that these investments will drive accelerated and long-term value creation. And as we enter 2026, markets remain challenging, with Americas and Asia Pacific probably more resilient than EMEA, and particularly in the UK,

10

RS Group plc – Full-year results 2025 Wednesday, 21st May 2025 as you will have noted from the PMIs. However, we remain confident that once PMIs recover, structural industry trends will return our markets to growth.

And therefore, whilst we will flex effectively, as we have demonstrated this year, we will continue to execute our improvement plan to drive and improve the quality of RS and to position us best for accelerated growth. To realize the significant value opportunity that exists here, from being uniquely placed in fragmented markets and well-positioned for when they return to growth, which they will, through driving market share gains through a differentiated and increasingly differentiated technical and digital product and service solutions offer, through improving and continuing to improve the efficiency of our global infrastructure, to enhance that operating leverage and enhancing it all with disciplined acquisitions that accelerate growth and value creation. And as we do that, we will increasingly become sustainably first choice and drive sustainable value creation for all of our stakeholders.

Conclusion

And to conclude, I am extremely proud and hugely grateful of the efforts of our great people who continue to embrace the changes that we are making and are working extremely hard to deliver them. This stuff is not easy, and it can be frustrating, particularly when difficult markets mean that you cannot immediately see the benefits of all your hard work in the headline financials. But thanks to the efforts of the team, we are making real and significant underlying strategic and operational process progress. And this is giving us increased confidence, increased confidence in our ability to deliver on those medium-term objectives that we have set out for you in the past, growing at twice the market, with mid-teens adjusted operating margins, generating over 80% cash flow conversion, and delivering returns on capital well in excess of 20%.

That brings us to the end of the formal presentation. I am going to open up the meeting to questions. We will take questions in the room first, if that is okay. There are a couple of people with mics. If you can raise your hand, state your name and the institution that you represent, we will take questions and we will also then take any questions submitted online.

So give me two seconds to go and sit down, then stick your hand up and thank you.

Q&A

David Brockton (Deutsche Numis): Good morning. It is David Brockton from Deutsche

Numis. Can I ask two questions in relation to tariffs, please? thanks for setting out the minimal direct imports that you fill the business has into the US. I guess that was somewhat contrary to my prior view of. I thought it was minimal from China. I am just wondering if you could just give us a rough split of the proportion of products that are sourced from Europe and the UK, as well as China into the US if you are able to. Or any sort of directional indication there. And then secondly, in relation to tariffs, it is very encouraging that the businesses have seen improved performance through Q3 and Q4. And I think you noted that it was ahead of PMIs due to the sort of strategic initiatives that are coming through. Have you ruled out any pull forward of orders ahead of tariffs in that in those numbers? And just wondering what you are seeing on a ground level there. Thanks.