Kingspan Group Stock

Good evening, everybody. It's Dave O'Brien here, Head of Investor Relations. Thanks for joining us at a reasonably short notice. I'm joined today by Gene Murtagh, CEO; and Geoff Doherty, CFO. In a moment, Gene is going to take you through the slides reasonably quickly, and then we'll hand over to Q&A. All told, don't really expect to go on much longer than 15 minutes or so. When we move to questions, if you could limit yourselves to 2 person we get through that quickly. And with that, I'll hand you over to Gene.

Great. Thank you, Dave, and welcome, everybody. If we could move to Slide #2 here. So in essence, today, we've agreed to acquire a business called BMC Manufacturing, which is an Ireland-based business for the time being, but supplying worldwide in a very fast-growing sector of the data centers. It's a business that's been built over many years by Brendan and his team. And in more recent years, it's focused very significantly on the data center opportunity and well in excess of 95% of revenues derived from that sector now.

The business has been acquired for an initial consideration of EUR 850 million, which is made up of EUR 600 million in cash and EUR 250 million of new Kingspan shares, which will be issued. The primary product that the business produces and the one where we can get most significant global leverage is a product called PDCs, power distribution cabinets. And I'll show you later on just exactly where that's positioned in our space and how it's such a very natural next addition for the Advances business within Kingspan.

The deal itself from a financial perspective is obviously attractive. In reality, by the time we get this done, it's going to be into the fourth quarter. So we will -- all going well, we expect some contribution this year, but clearly, the lion's share of it into '27 and beyond. So the first full year multiple looks like around 5x EV to EBITDA, and that's based on both a significant backlog and a very compelling pipeline of opportunity that Brendan and his team have been focused on even in the absence of Kingspan so far. So the deal is significantly EPS accretive from the get-go. Geoff will take you through that shortly. And year 1 return on capital will be well in excess of 20%.

Just on Slide 3 then, some of the numbers here I've already talked about. But in terms of our playbook and how we operate, naturally, BMC has been extremely successful in its own independent ROCE. We intend to clearly add some horsepower to that whole effort worldwide. And part of that comes from our relationships with the key hypers and colos around the world and also our ability to expand our manufacturing presence at some pace, which we've already demonstrated in the Advances business and beyond in the wider Kingspan group. So a lot of the opportunity facing the business is not surprisingly in North America. Right now, the business is manufacturing in a number of premises in Dublin, in Ireland and about to move into an even more significant facility close by outside Dublin. And still the lion's share of the manufactured product out of these facilities will be heading abroad and obviously, most significantly to the U.S.

We've recently commissioned a facility within the Advances business in Glasgow, Kentucky in the U.S. And there is a facility essentially right next door to this that we would be intending to convert to a BMC manufacturing facility as fast as we possibly can. But in reality, that will take us through most of 2027 to actually get that up and running and then obviously producing product out of it in '28 as we expand the product range and the customer base in North America. There's also an earn-out aspect to the deal as well, EUR 50 million, which would take the total consideration up to EUR 900 million, and that's based on the achievement of an average EBITDA over the next 3 years of EUR 250 million.

So from a debt perspective, immediately, 1.9x is where it leaves us, obviously, comfortable from the limits that we set ourselves. And assuming we do nothing else and drive the thing for cash during 2027, that takes us to just over 1x at the end of 2027. So everything looking healthy from that side.

On Slide 4 and 5, these are kind of key to just, if you like, address people's understanding of where this fits with us. Like we've been developing up through the white space into what we would call light gray at this stage. And the PDC product itself really does take us kind of into that borderline territory. And on Slide 5, people always ask us, what is it that we do or provide through Advances and into data centers. And that's it in a nutshell on Slide 5, where you see we literally began at the floor level through tail access floors in the U.S. and Hewitson in the U.K. to the structural ceilings and now obviously, everything in between. So it's a modular hack unit that's got air management integrated, liquid cooling integrated, cable management, et cetera. And where you can see there just on the bottom left of the graph is where you see the PDC itself, which is literally bolted onto the hack and obviously, a very natural next step for us as a business.

From a share of wallet perspective, which is like there are 3 areas that we find highly attractive in the general advances space. One is it's clearly a hugely growing sector data in its own right, data, AI, technology, et cetera. Our market share is still tiny if you take a world view of the opportunity. That's an area where we're growing. And then in terms of share of wallet, that's been a critical area of focus for us that when we've got the audience with the customer, we essentially try and sell to them as much as possible. And from a share of wallet perspective per meg, it's been growing very rapidly over the last few years. We're up at around $500,000 per meg of opportunity from our current offering. And literally, this product doubles that to about EUR 1 million, assuming naturally, we can execute and make that work.

Then on Slide 6, the strategic rationale here I think, is very straightforward. We have a very solid track record of execution right across our businesses, but clearly in this sector as well. In terms of technology readiness, this is fully aligned to next-generation data center power specs and requirements and also the move to 800 volt, if anything, actually becomes an even bigger opportunity for the BMC business and its product set. And a very interesting dimension to all of this, which isn't something either Kingspan or Advnsys has been exposed to in the past is the obsolescence opportunity. So in practice, these products will work for approx 20 years. But in reality, things move on, computation requirement moves up, energy density moves up, et cetera, et cetera. And in practice, probably the obsolescence period for these products is in or around 5 years, which opens up obviously a critical and very attractive replacement opportunity over time. Again, extremely interesting for Kingspan.

And then just finally, on Slide 8, I'll just take you to what it means for the overall group. We've clearly been growing at a significant pace for, well, a very long time now. Assuming our plans for this business in 2027 happen, which we'd be highly confident they will, it should take group EBITDA to around EUR 1.78 billion and group trading profit to about EUR 1.47 billion. And I'd stress this is obviously very significant organic growth of the BMC business itself in '27, growing EBITDA from approx EUR 90 million to EUR 180 million or potentially even more. And that's all organic growth in advance of the horsepower we will put behind this in '28, '29 and beyond. And it's worth pointing out here, just even if you look at the recent 5 or 6 years, in 2020, our EBITDA as a group was just about EUR 600 million. So assuming we achieve this target next year, in that relatively short 6 or 7 years, Kingspan Group's EBITDA and EBITDA will have both grown by 300%. And that's it in a nutshell. Now we'd be delighted to take your questions.

[Operator Instructions] Our first question comes from Shane Carberry from Goodbody.

I'll just stick to one in the interest of time. Could I just dig a little bit further into kind of the geographic expansion of this business? Obviously, Gene, you mentioned there in the presentation about the new facility in Kentucky. How should we think about the expansion here? Will it be existing data facilities that you'll be expanding and bringing the BMC product in? Will it be BMC site specifically? And how does that work in terms of the product that BMC are already shipping from their current facilities? Just how I should think about all that would be really helpful.

Yes. Thanks, Shane. So we will be -- the facilities will be bespoke to the assembly of PDCs under the BMC brand. Increasingly, we're going to launch a [indiscernible] power brand around the world as well. I think our preference would be to have these close or alongside the existing Advances facilities around the world. It doesn't necessarily have to be. Like it can be a product sale or it can be a package sale. So it's flexible on that front. But obviously, the opportunity worldwide is huge. The business is already serving some demand in Asia. So as that grows and obviously, as the North American opportunity grows, I think we'll just be expanding physical facilities, PDC dedicated close by the Advances premises as well.

Our next question comes from Flor O'Donoghue from Davy.

Just a couple for me. Firstly, just wondering whether BMC is there a kind of a customer cohort they don't currently deal with that Advances does kind of -- are they missing some hyperscalers, some of the bigger colocators, et cetera? And is that something you'll be able to put them in front of now under Kingspan ownership?

Yes is the answer to that, Flor. Naturally, BMC have relationships with customers we do as you'd expect. But I think, obviously, our global presence and really our kind of 25-year experience in the data center segment already means we understandably would have a lot more relationships. And therein lies the beauty of it all that it's BMC's capability, its technology and our scalability is where this all really comes together.

Okay. Great. Second one, just more on the finance side, the kind of target of doubling EBITDA next year. Just to understand that, is that going to be based on a kind of a doubling in revenues as well? Or will it be kind of helped by margin instead or just to think about what we should be doing in terms of '27?

Yes, Geoff will take that for you there, Flor.

Yes. In very broad terms, Flor, you can model a little over EUR 600 million of 2027 sales and EUR 170 million of trading profit. So still very strong trading margins into 2027.

Our next question comes from Alexander Craeymeersch from Kepler.

Yes. So I mean, clearly, you're more moving into power management away from thermal and air management here. I'm just wondering whether this is also the direction you want to go in the future and you want to continue to go into space doing acquisitions? And then the second question I have is really on the multiple. I mean, obviously, a multiple of around 5 to 6x 2027 estimates. Can you like square this why the seller sort of accepted this? Is this because there were capacity issues or something like that? And then maybe if I can squeeze a third one in there. Is there a lockup on the shares that are issued?

Okay. So we take that in reverse. There is a lockup of 2 years post close on the shares. So that might kind of answer your middle question, and that's about as far as I go on that. And then the other piece, I guess we're certainly not moving away from thermal. In fact, we're at the very, very early stages of growth and expansion on the thermal side. So we're really after maximizing the full solution that we can offer rather than moving in any particular direction. So we see it as an enhancement of our offering to our customer base rather than a move in any direction. And yes, you can take it that we will continue to bolt on and expand technologies onto our offering for as long as our customers demand that from us. And we're in a strong position to be able to take this wider portfolio of solutions to the hypers and colos and others. So it's an evolving piece, very exciting, and I'd say many more steps to come as well.

Can I press a bit on the multiple here because...

We'll talk offline, Alex. We got to get everybody on for a question. We'll talk offline.

Our next question comes from Julian Radlinger from UBS.

So could I just get a little bit more help, please, with the accretion math. So first of all, did I just hear that correctly, EUR 170 million trading profit next year on EUR 180 million EBITDA. So that doesn't seem like there's a big difference. Maybe you can help out with D&A. And then will there be any PPA? And just maybe an idea of sort of the interest costs would be great to get a sense for the overall EPS accretion, if possible.

Yes, absolutely. I'm happy to take that, Julian. So going down the income statement, yes, approximately EUR 180 million of EBITDA. Depreciation is approximately EUR 10 million. So that bridges to the EUR 170 million of trading profit. The interest cost directionally will be about EUR 30 million on a full year basis. We intend to issue a public bond to fund this. The effective tax rate will be broadly at the existing group average, which is 16.5%. And the amortization in terms of the intangible of the order of EUR 50 million there or thereabouts, the noncash amortization charge. If you run all of that through the numbers, it's approximately EUR 0.38 of earnings on a full year basis, if you do the math on that.

That's including the small dilution from the new shares?

That's net of the small dilution and also the noncash amortization charge is within that.

Okay. Super. And then my other question was just on the -- so on the 2027 outlook, which you're suggesting is very much locked in basically, right, in terms of order book. Is it order book? Or is it a pipeline? Is there much -- is there a lot of wiggle room there? Could it be a lot better? Could it be a little bit worse? I mean how sure are we about that number?

I'd be inclined to take the one we gave you. It's -- and it is a blend. It's not entirely locked in, nothing ever is. But you can take it that there's a very strong backlog and then a pipeline that's almost as good as, but just POs haven't been issued. So we have a lot of confidence around the delivery of that number for next year. And like I said, this is before we really get our shoulder behind the wheel and take this thing more global.

Our next question comes from Ephrem Ravi from Citigroup.

So 2 quick questions. Firstly, apologies for going back to the funding. On the conference call on Friday, you mentioned you are not planning any equity, but obviously, there is some equity component to it. And given the attractive multiple, I take it that it is because the sellers wanted to participate in the upside. And would that be a correct sort of interpretation of that aspect? And secondly, in terms of the obsolescence point, which you mentioned earlier, it was very interesting. So what percentage of your data center business today is refurbishment/sort of replacement? And what could you see it sort of in 3 years' time?

Okay. So actually, to date, very little, like the sector is so young itself and the buildings are so recent and so modern, a very tiny part of our business would be remodeling so far. We see that clearly has been a much more attractive opportunity longer term. And then just on the dilution piece, I'll take that because I made the point myself. That was clearly meant in the context of any significant share issuance or dilution, which once again, I can tell you, is absolutely not in the offing. And bear in mind, we still have a share buyback program, which we may or may not use to repurchase the stock. So like in all, we're talking here about a little over 1% dilution. So that wasn't really what we were trying to capture on the comments last Friday.

Our next question comes from Isaac Ocio from On Field Investment Research.

Could you maybe give a geographical sales split of your EUR 600 million revenue expected in '27? And maybe if so you deleverage by '27, do you see similar acquisition opportunities by the end of the decade in that space? And if so, would it be more in the white space or in the gray space?

Yes. So in terms of the revenue split, it feels like around 50% could be U.S. and then a very large chunk in Europe and a smaller chunk in Asia. That's kind of what it feels like. And on your second point, yes, I think in our very normal way, applying the same style and strategy to growing the business and expanding it. Yes, we'll delever and we'll go again both in this and indeed across the building envelope businesses.

Our next question comes from Pujarini Ghosh from Bernstein.

So if we talk about the EBITDA margin expectations from this, so this year, your kind of the expectation is EUR 90 million of a revenue base of EUR 280 million. And next year, you said EUR 180 million of a low EUR 600 million revenue base. So the margin seems to be slightly weaker. And are you not baking in any synergy potential as you combine the 2 groups? So I think that is my question.

Well, sorry, Geoff will deal with just the other end of that in a minute. But in terms of synergy potential, like I kind of regard a doubling of the business in year 1 as pretty strong performance. And like I said, more to come in the future. So that's organic growth next year. And on the other piece there, Geoff?

Yes. I mean the margins remain strong into 2027. I mean, again, they're bordering on high 20s into 30% in terms of trading margins. So we're not planning for margin dilution here. We're actually planning for the opposite.

Our next question comes from Ben Rada Martin from Goldman Sachs.

I have 2, please. My first was just around the product mix of BMC. It sounds like PDCs is obviously the growth area. But when you think about the 3 products that you mentioned today, PDCs, switchboards and switchgears, how big are each of those within the scope of the business? And then just a second one on CapEx and I guess, the Kentucky expansion plan for BMC. Does this change any of the CapEx outlook for the business? And could you kind of talk to the capital intensity of the BMC business as well?

Yes, the PDCs is approximately 90% and even growing as a portion of the product sales. So going back, it would have been more in the low-voltage switchgear end, but much less so at the present time. And the opportunity clearly is around the PDC and the advancing PDC product itself.

And Geoff, on CapEx?

And just on CapEx, the guidance we gave on the earnings call on Friday was next year's CapEx of EUR 360 million. Post this transaction, the guidance is approximately EUR 390 million in total, including BMC in 2027.

We currently have no further questions waiting in the queue. I'd now like to pass back to Gene for any closing remarks.

That's great. Thank you very much all for joining us at such short notice. Anyway, it's a tremendously exciting opportunity for us and for the BMC team, and we look forward to getting it over the line and making it happen. Obviously, we're all available if you need to contact us individually hereafter. So thank you, and goodbye.

Thanks, everyone.

Good morning, and welcome to today's Kingspan Half Year Results 2026 Conference Call.

My name is Seb, and I'll be the operator for your call today.

[Operator Instructions]

I will now hand the floor over to Gene Murtagh, CEO, to begin the call. Please go ahead.

Thank you, and good morning, everybody. Welcome to the half year results 2026 here at Kingspan. We get straight into it on Slide #3, which is titled H1 in Summary. Really quite a strong first half, bearing in mind the first quarter was difficult worldwide and in our sector naturally. But for the first half, I think a very pleasing outcome with revenue just under EUR 4.9 billion, which is 8% ahead of prior year. Our EBITDA was up 9% at EUR 626 million and our trading profit our pure trading profit number, up 10% at EUR 487 million, all of which is, I think, reasonably positive in the environment that we're in.

Importantly, by business segment, pre-currency, the envelope business was up 4% at a revenue level and advances, which is heavily focused on the data side, was up 36% pre currency at a revenue level. So both extremely encouraging, and we get into the order books in both businesses as we go through the presentation. We're holding back on our share buyback program just to preserve dry powder for some opportunities that are out there right now. And the outlook for the second half of the year is even better again. We're upping our guidance to EUR 1.125 billion trading profit for the year as a whole, which would imply second half trading profit growth of around 25%. So momentum is increasing, and we expect that to obviously continue into 2027 as well.

So that's it in summary. And I'll just hand it over to Geoff for some detail on this.

Thanks, Gene. And I'm speaking to the financial highlights on Page 6. So going to the top group revenue, up 8% half year on half year, and I'll come to the constitution of that in a second. EBITDA up 9%, trading profit up 10%. But I would highlight that the -- this year's reported number of EUR 487.2 million is net of EUR 4.5 million of Advances IPO exploration costs. So actually stripping that out, and adjusting for currency, the underlying trading profit was up 13% half year-on-half year. Earnings per share up 5%. As you recall, the interest number in the first half of '25 was flattered by a one-off credit we would expect, based on the guidance that we've given for the full year on trading profit of EUR 1,125 million that our earnings per share growth on a full year basis will be close to mid-teens for the full year.

Our interim dividend of EUR 0.271, up 3%, a strong free cash flow performance in the first half, EUR 144 million, and I'll come to the components of that shortly. A decent trading margin performance of 10%, up 20 basis points. The margin performance continues to evolve positively. We expect in the second half to be knocking on the door of 12% in the second half. So our full year margin guidance for the year ought to be in the region of 11% on a full year basis.

From a debt and leverage perspective, the balance sheet remains in good shape. Net debt-to-EBITDA standing at little over 1.5x.

Turning to Page 7, just the bridges of revenue and profit. Firstly, to deal with revenue. Currency clipped EUR 61 million or about 1.5% of sales half year on half year. Acquisitions contributed EUR 125 million or about 3% and underlying sales grew by 6% or EUR 278 million, all combining to give us the EUR 4.86 billion for the first half. From a profit perspective, currency shaved a little under 2% of the half year number, EUR 8.4 million. M&A contributed EUR 14 million, which is net of that EUR 4.5 million that I referred to earlier. And underlying profit grew by EUR 38.7 million in the first half, all combining to give the EUR 487 million for the first half.

Turning to Page 8, just on our sales by geography. I think a couple of particular highlights on this would be that the Americas business grew by 1/5 in total, half year over half year, up 21% constant currency. And our Rest of World business grew by over 1/4 half year-on-half year. And the rest of the business grew nicely in the first half as well, and you've got the components of the various territories there on the slide.

Turning to free cash on Page 9. Obviously, the strongest component of free cash flow performance is EBITDA, which was ahead in the half year. On working capital, we typically build working capital in the first half. Our trading balance sheet is larger in June than it is at year-end. Our working capital to sales ratio actually improved in the first half of '26. The working capital sales ratio is 12.3% in June '26 compared to 13.1% in June '25. So a positive performance there. CapEx, a little under EUR 156 million. Our CapEx guidance for the full year is EUR 360 million and a similar number going into 2027. And the only other number I'd highlight on the page is our tax outflow, EUR 47 million, slightly lower than the income statement charge that will normalize with the income statement charge as we move through the year.

Reconciling that to the overall net debt position on Page 10. The only other items of note on that beyond free cash flow are a modest acquisition spend in the period of a little under EUR 74 million and our dividend payments of EUR 52.6 million.

On Page 11, some highlights on our balance sheet. Balance sheet remains in strong shape, net debt-to-EBITDA at 1.56x. An undrawn component of EUR 700 million of our green revolving credit facility, which is committed to May 2028. And with total outstanding private placement notes of EUR 1.4 billion and public bonds of EUR 750 million. The weighted average maturity of all of our debt facilities is 3.7 years. And with total available liquidity of EUR 1.3 billion. And what I would say is that the group remains strongly committed to its investment-grade rating, which means maintaining leverage sub 2x. And with that, I will hand back to Gene.

Great, Geoff. So we just -- we'll take you to Slide 25, which is outlook. And then head on to the Q&A. So obviously, the general geopolitical environment remains, I guess, unpredictable, but that's something we've got used to dealing with for some time now. But even considering that, we do expect the second half to deliver strong performance, both on the Building Envelope business and in the Advances business and pretty much across the world, obviously, with some markets, some businesses doing better than others. But in total, we expect the business to solidly break through EUR 10 billion in revenue for the year as a whole. And as we said, to reach a trading profit of in and around EUR 1.125 billion, way up from prior year, 18% if we achieve that number. And again, importantly, we expect that momentum to carry through into next year and kind of feels like about EUR 1.3 billion as an organic rate of growth or to be achievable at a trading profit level for 2027.

And that's well backed by pipeline and customer engagement on projects. And that's really in a nutshell. So we're happy now to take your questions.

Our first question is from Shane Carberry with Goodbody.

Well done, Gene, Geoff, on a stellar set of results. First one for me is just in terms of the panel order intake growth, pretty exceptional stuff that kind of 13%. And Gene, you kind of gave us that really helpful slide back at the full year, I was talking about the consistent outperformance of about 3% versus the market. It probably feels like this is going to be an even bigger outperformance. So could we dig a little bit deeper into exactly what you're seeing in terms of the kind of panel growth would be really helpful. And then just on Advances, like obviously, we kind of commenced the year thinking about an outturn for '26 at an EBITDA level of EUR 300 million. And you talked about doubling that. Obviously, it feels like you're running significantly ahead of that for 2026.

So how should we think about sort of the medium-term targets, certainly feels like you're going to hit that EUR 600 million maybe sooner than we would have anticipated.

Okay. Shane, thank you. Yes, the order intake was pretty pleasing for the first half of insulated panels, 13% ahead by volume, globally. And you can take the order book is kind of up at a similar level. That delivered a strong performance for the first half, and we -- we expect that to continue kind of with this sort of momentum into the second half as well. We're -- actually, we've seen quite an encouraging performance in some parts of Europe. Iberia, France, Germany, we would kind of pull out as having been strong performers for us. They've been reasonably depressed for quite some time. So good momentum there in -- particularly in penetration growth and some new product introduction.

North America has continued to be strong for us. And indeed, so has Latin America where the business has expanded way beyond Brazil into many surrounding countries. And even recently into Argentina. So like that expansion is going very encouragingly. And we would see that whole market as really very early stage in terms of the adoption of this method of construction. So we continue to focus on that.

So yes, I'd have to say that has been by and large, a kind of a global growth trend that we've been driving and experiencing. And then from the Advances side, we had indicated an EBITDA in 2026 of around EUR 300 million. Yes, that's going to be significantly up on that. It could be EUR 400-ish million. If you recall, at the time when we pulled back from the IPO the very reason we gave, which some people didn't seem to catch at the time, was that momentum was just increasing way beyond our expectation, even in the near term.

So that's evident in coming through now and we'd be very confident that we break through that EUR 600 million guide that we had given. I think it was for 2030, we're in advance of that. At an organic level. Clearly, that's not including any acquisitions, which, of course, we would expect to do.

So that's the general shape of those 2 questions.

Next question is from Florence O'Donoghue from Davy.

Thank you. I have 2 questions as well. First, I might ask is just on advances. Just wondering about the order book in terms of how long that now stretches out. And just in terms of the kind of evolution of the business in terms of the nature of the orders, the type. Is there any kind of changes there? Or what are you seeing?

And then the second one, just on the reference to the dry powder. Just interested to hear your thoughts on that in terms of what it might actually mean in terms of the balance sheet capacity, et cetera, and what we might need to keep an eye out for in the coming while. Those 2, please.

Yes. So on the advances side, like raised floor, this has been -- like it's around -- the environment we're operating is growing significantly. Like there's no need for us to kind of focus on that. That's clear. Our market share growth is hurtling along at a product-by-product level. And then our share of wallet is expanding as we add different technologies to the offering. And that's something that we're going to continue to focus very heavily on. So like the shape of this business is entirely different than it was even 3 or 4 years ago, where we've gone from floors to ceilings to modular racks into air management and significantly now into liquid cooling in the data centers.

And that itself hasn't really kicked off yet and we would expect in the second half and particularly into 2027 and beyond that, that will really gain momentum. And this is all before we get into the next stage, which is more the electrical side insofar as it's bolted on to the rack itself, which is precisely what we're doing. And that should pull the share of wallet up significantly again.

So we're really just evolving the whole product offering, gaining share and gaining share of wallet. The dry powder comment is you can take it, as Geoff said, like our focus is on ensuring that our investment grade is maintained. So we've heard speculation that we're going to be up to all sorts. You can take it, we're not going to be up to all sorts. We will look at chunky deals naturally, but nothing that kind of stretching us beyond 2x, and we want to be very clear about that.

But that still leaves us with encouraging opportunity that we hope to continue to move on, as you normally expect us to.

The next question is from Elodie Rall with JPMorgan.

So just following up on your M&A ambitions. Could you maybe elaborate a little bit about Indeed, where you'd go, what your financial firepower would be that 2x leverage that you've mentioned, is that a hard cap? Or would you be able to go a little bit above it? Would you use equity eventually for a deal? So it -- so if you can give us a bit more color about how big what we could expect there? That would be helpful.

And second, on margins, I mean, 11% margin for '26. That's versus broadly 10% for the last few years. And historically, so are we now in a different dynamic? And should we expect more margin progression from here?

Okay. Elodie. So just on the first point, just to reiterate, again, we have no intention of doing anything that involves equity anytime soon. We obviously would never dismiss that as a possibility long term, but nothing remotely imminent on that front. If you think about us pushing it to 2x with an intention to rapidly delever as we always have done, that implies we have headroom of approximately EUR 1 billion at the present time. And that's about the height of it. And we have lots of opportunities that would fill that scope.

Just to pick up on your point around margin, Elodie. You'll have seen in the first half some progression on margin by 20 basis points at a group level. We expect the momentum in margin in the second half to pick up to close to -- at a group level, close to 12% in the second half. So we ought to be at or around 11% for the full year. As we progress the business into next year and consistent with the EUR 1.3 billion of trading profit that Gene referenced earlier, we continue to see ongoing incremental improvement on that front as well as we move through the years.

The next question is from Julian Radlinger from UBS.

So 2 questions from me, please. First of all, can you give us a sense for the organic growth you're expecting in the second half for Envelope? And maybe how that fits between price and cost, roughly? I know you don't like to talk about that, but I think what -- with the conflict going on and the input cost inflation currently. I think a lot of investors would be interested to understand that a bit better.

And then secondly, on commercial roofing, I didn't see too much in the release, maybe I missed it. Can you remind us of your -- of the sales targets there, how that's -- how the ramp there is going? I think that should be happening now, right? What are your expectations for sales and EBITDA contribution either into '27 or in 2027?

So I'll just deal with the first bit there, if I can, Julian. The commercial roofing rollout in the U.S. is going totally according to plan. We would expect revenue next year to be hopefully pushing up around $200 million with a positive contribution as well. We're already manufacturing and delivering product from our facility in Oklahoma, which is a fairly stunning plant and will be the location where CMD is later in the year.

Commissioning in Cumberland in Maryland at the present time. And the hot on the heels of all that would be a facility for polyiso board in Utah. That we're working on right now. So that's kind of what's on our immediate horizon.

As I say, developing well, commercial engagement is very positive with the customer base. And we'd be at least as confident as we ever were about how we will succeed in driving that business forward in the U.S. And of course, in Europe, the business is performing exceptionally well too. And the business, as you know, right now that's in excess of EUR 800 million in Europe, and we're satisfied with the performance of that as well.

Yes. Just to deal with the sales performance in Envelopes, I mean, firstly, it's worth highlighting that both divisions have contributed to the earnings upgrade that we've referenced this morning, both this year and our early guidance next year. But if you look at the trajectory of sales, and I'm just going to do a pre-currency to avoid any to avoid that, in the first quarter, our Building Envelope sales were minus 2%. For the first half, they were up 4% pre-currency. That implies a pickup in momentum in the second quarter. We're not going to be drawn on the specifics of pricing and volumes, given the category breadth that we have, the breadth of end markets that we're in, all of the factors around that.

But suffice to say, we would expect the top line growth in envelopes to be better than 4% in the second half of the year. But more importantly than that, the EUR 1.125 billion profit guidance is where we remain centrally focused. The margin recovery speaks for itself in terms of the margin performance in Envelopes in the first half. And indeed, we expect the margin performance in envelopes to be north of 11% in the second half. So that will be borne out through a combination of volume and pricing in different markets and different products.

The next question is from Alexander Craeymeersch from Kepler Cheuvreux.

Yes, 2 questions on my side. So question would be on inflation. If you could say a word on what you expect for the second half in terms of chemical inflation and steel inflation in terms of the cost. And if you also expect that some demand of your clients got put forward to Q2, considering they were anticipating some price increases in the third quarter. So that would be 1 part.

And then, yes, the other one is on advances. I mean clearly, it's gaining steam here. So a couple of months ago, you mentioned that you would postpone the IPO. I think it's -- I mean the markets sort of read into that, that this is canceled. But the question that I really have is now whether we still need to take into account the potential IPO of these advances or whether this is completely behind us, but I would anticipate a positive read considering this strong momentum.

Okay. So in terms of cost inflation in the second half, that's obviously a moving piece. View on that kind of ebb and flow depending on the week and what's going on geopolitically. But broadly speaking, I'd say we would feel that -- broadly speaking, we feel that we have already taken on the cost inflation by and large that we would expect to through particularly the second quarter. There may be some humps and bumps as we go through H2. Chemicals and steel may move in different directions and for entirely different reasons. I think if anything, steel could push on a little, I wouldn't expect it to be huge, but possibly a little.

And on our chemical input side, I think it's reasonable to expect it to remain broadly stable, although that will jump around depending on the obvious stuff. So from a selling price perspective, I'd also say that we've -- we've done a good job in terms of cost recovery. That's evident in terms of the maintenance of margins in the businesses. And again, I would say that we'd expect that to be broadly stable in the second half. And in terms of what impact that's had in terms of H1 forward buying, like that's always -- honestly, that's very difficult for even us to assess.

The majority of Kingspan's business, as you know, is made to order. The only bit that is not is around Insulation Board, which can go into stock as standard items. And that's a relatively small part of the overall group. The bigger part by far in terms of insulated panels is all bespoke and it's impossible to actually buy forward. So we have an order bank, like we said, that's extremely healthy for the second half. And that's for delivery through to the second half.

I think it's not unreasonable to think that there's been some element of forward buying, but it's not something we think has been a very significant feature of the business. You can take it the -- on the advances side, the IPO discussion is over. It's very much a central part of Kingspan as, by the way, it would have been even in the event of IPO. If you recall, we were going to retain 75% of it in any event. So there's 1 Kingspan, it's all together. It's all very tight, and we're blasting forward.

Next question is from Ben Rada Martin from Goldman Sachs.

Gene and Geoff, I had 2, please. My first was around some of the 2027 comments that you made, Gene. I think you spoke to [ $1.3 billion ] in trading profit. I'd be interested in terms of your optimism, which segments do you think you're mainly constructive on in terms of seeing greater visibility on 2027? Is it mainly the Advances piece? Or I guess are there parts of IB outside of maybe U.S. roofing that you're also constructive on into 2027?

And then second would just be on the advances performance in the first half I'd be interested if you could kind of break down the contribution between new facilities that you've got coming online and also existing facilities as well.

Okay. I think you got about 400 questions in there. We'll try and break them down. In terms of the 2027 confidence, I think that it's very difficult for us to predict with total accuracy like where we're going to go in terms of envelope, insulation, et cetera, et cetera. But you can take it, it's not a particularly buoyant time. For our end markets right now worldwide. We're making progress. We're seeing recovery in the EU despite that, as we talked about a little earlier. Our forward project engagement in North America, where we've a significant longer-term pipeline visibility is actually still encouraging. Naturally, an awful lot of that is tech oriented, but that's a positive thing.

We have new product introductions, particularly around flat roofing and insulated panels, a product called OneDek in one of our brands in the U.S. that's getting significant traction, which means -- which means bodes well for the panels business, but also it's a very interesting dynamic in our emerging flat roof presence. That's extremely encouraging. As I said, LatAm at a volume level is doing extremely well. And even having said that, penetration of our products in LatAm is still at a very low level by comparison to any other part of the world.

So like all of that would give us confidence, if you like, heading into 2027. And on the advances side, there's naturally a very long lead time. I think it was asked earlier on, it's -- we would have an order bank of around 1 year, we would even have some order engagement beyond that. But broadly speaking, you can take it, we have an order bank of around 1 year there, which gives us strong visibility.

Next question is from Ephrem Ravi from Citi.

So you mentioned the EUR 600 million in advances could be achieved before. Again, could you from your perspective, give us a sense as to when that would be on your base case, you gave us very helpfully EUR 1.3 billion organic kind of expectation for operating profit next year. So I guess, advances in terms of how quickly the target could be that could also be from that similar market consumption as well.

And secondly, in terms of the CapEx, obviously, you've accelerated growth significantly. Should we see a significant step-up in CapEx related to that? Does the Utah plant also come under the $1 billion investment that you've already done, just clarifying that point.

Yes. So the Utah facility absolutely comes as part of that. So that $1 billion was organic and acquisition. It's well underway. And yes, the Utah plant is included in that. And from the EUR 600 million EBITDA target, if you like, we put out there for advances. Look, it's difficult to be precise on that, but it will be -- that will happen long before 2030.

And Ravi, just in terms of CapEx, this year's full year CapEx guidance, approximately EUR 360 million and a similar CapEx investment in 2027.

The next question is from Isaac Ocio from On Field Investment Research.

So first on M&A. So is it fair to assume a key interest area of interest is residential roofing and your data center operations that would be adjacent to advances. And then when you look at your M&A pipeline, could you maybe explain a bit more about your decision framework when you approe or pass on opportunities? And do you have clear valuation limits? Is it in terms of EV-to-EBITDA or other multiples? Or do you have minimum threshold in terms of returns? And finally, could you maybe accept a temporary dilution in returns on capital if the long-term strategic fit and EPS accretion were compelling?

So in terms of M&A focus, it's right across the piece. Like we've got a large portfolio of product opportunity. We've got a very broad geography. Residential roofing wouldn't feature very highly, certainly not in the near term. And yes, you'd be right in thinking that fleshing out our advances portfolio and building what we keep saying is our share of wallet opportunity is really important to us. Like we've got -- we've got an audience with some of the really critical decision-makers and hyperscalers around the world and the more we can include in that conversation, the better. And that's a critical area of focus.

And then obviously, right across the business, we see opportunity in panels and boards and insulations of all different types. So yes, it's -- it's quite broad, but residential roofing would not feature highly at the present time.

And just on returns on capital. As a management team, we are absolutely focused on returns on capital and rebuilding that over time and naturally the sharpest way to do that is through margin and performance, and you've seen these numbers that actually we're on with that. As we think about allocating capital as we go forward, I mean, the type -- the proportionality of M&A capital relative to our existing capital base is not going to materially alter the returns profile of the group.

Anything we're contemplating, we would have an aspiration to incrementally add to return on the capital over time.

The next question is from Pujarini Ghosh from Bernstein.

So if we talk about -- going back to the margin discussion, -- so we are expecting around 12% EBITDA margin in H2. Could you maybe talk about the different levers which are driving this margin expansion? Is it coming from price cost or the product mix might be geared to higher margins now? And looking at the medium term, how sustainable do you think these margins would be? So that's my question for today.

Okay. Well, firstly, the 12% that I indicated earlier in the second half, that's the trading margin. And typically, our trading margin is higher in the second half than in the first half, bearing in mind the trading cycle in a typical year. That would leave us at 11% and as we indicated earlier, as we ramp up further through 2027 and beyond, we fully expect to be able to incrementally add to margin each year in a developmental way, not a sea change in any 1 year but to continually incrementally add to margin, whether that's through our new products, whether it's through the growth that we have in various segments, there's a whole strand of levers that we deploy to develop margin over time.

The market often gets fixated on price and price recovery. That rarely makes the difference between a good or bad year in Kingspan. If we've got inflation, we've recovered. And we've got any amount of examples over our history that demonstrate that. The margin expansion over time will be grounded in innovation, new product, developing our business, developing our end markets, developing new territories and all of that as a combination ought to be meaningful for margin over time.

Next question is from Chase Coughlan with Kempen.

I just have to -- perhaps I missed it, but starting with Advances, could you provide the split between data and non data in the first half of '26 and just on a sales level? And I think the initial sort of target for the medium term was to have that data portion grow to above 50%. Is that -- does that seem conservative now? Where do you think that will sort of realistically end up in a few years?

And my second question, just a quick one on the boards strategy in Europe. I believe you are repurposing some capacity there to more attractive products and end markets. Could you provide just a brief update on that strategy?

Yes. The exact advances split between data and on data we haven't provided, but it's you can take it that the shift in that split towards data is increasing rapidly. And -- in fact, we'd be very confident that, that split will exceed 50% in the not-too-distant future. That will be our strong sense. And then the second question -- sorry, repurposing board capacity, yes, indeed. So we're doing -- we're obviously increasing our polyiso opportunity around roofing in North America. One of the plants that has been taken down in Europe will be put into the U.S. And one of the facilities will also be put into Brazil. As we start to just break into that opportunity in conversion from other traditional types of insulation in Brazil longer term.

They are 2 likely repurposing projects that are underway at the moment.

Our next question is from Allison Sun with Bank of America.

Congratulations on the very good results. I only have 1 question on the U.K. market. I think you mentioned that this market is more subdued in the revenue year-over-year, but the order intake was solid. Can you give us more color on like which end market you see is a bit weaker? And what gives you confidence that you think the second half will be stronger.

Yes, I mean, I think it's always hard to call a particular trend in the U.K. It was encouraging to see a pickup in intake. I think we're gearing up for a solid second half in the U.K. I don't think we'd call out any 1 sector over the other. But the residential sector, which is the smaller part of our business in the U.K., remains pretty quiet as it does in other markets as well. But there's no standout, I think, categories in the U.K. that we would call out. But we do expect it to be a little bit better in the second half than in the first half when it was particularly quiet in the early part of the year.

Thank you, we have no further questions on the line at this time. So I'll hand back to Gene for any closing remarks.

Thank you very much. We obviously look forward to engaging with most of you individually as we go through the next day and next week. And you're also all very welcome to our CMD, which takes place in Oklahoma later in the year. We'd encourage you to get out there. It always makes a big difference to see stuff rather than just hear about it. And we've lots to talk about there right across our business worldwide, but clearly in particular about our continued push into the Americas.

So thank you all, and we'll be in touch.

This concludes today's call. Thanks, everyone, very much for joining, and have a wonderful rest of your day.

Hello, and welcome, everyone, to the Kingspan Preliminary Results 2025. My name is Becky, and I will be the operator today. [Operator Instructions] I will now hand over to your host, Gene Murtagh, CEO, to begin. Please go ahead.

Excellent. Good morning. Thank you, and welcome, everybody. I'm joined here by Geoff and Dave to take you through our 2025 results. If you could please just go to Slide 3 in the results deck titled 25 in summary. And just in brief, we saw revenue growth to EUR 9.2 billion, which was pre-currency growth of 9%. On the EBITDA, we were just over EUR 1.2 billion, which similarly was 9% up. And trading profit was just over EUR 955 million. And again, like-for-like growth or pre-currency growth of 8% which brought our EPS to EUR 3.70.

And once again, on our continued emission reductions program right across the group, we've seen since 2020, a Scope 1 and 2 internal reductions of 70, 7-0 percent which is pretty extraordinary, and that continues to advance along the lines that we've discussed previously. Backing up those results clearly and exiting the year, the insulated panel order bank as part of the envelope was ahead 8%. And actually, the intake in the same product group is ahead 8% for the first 6 weeks of this year. And in the Advances business unit, the revenue was up 12% in the year, which obviously accelerated through the second half.

The backlog at the end of the year was ahead 24% in that whole product group. And the order intake in the Advances product set is double prior year in the first 6 weeks, and we expect that growth rate to actually accelerate from this point forward. So all in all, it was a strong year given the circumstances. We entered this year with, I would say, very encouraging backlogs and activity right across the business. And notwithstanding the weather hampered start to the year, which won't surprise anybody, we do expect to see significant growth in 2026.

So just for some more color on all that, I'd hand you over to Geoff now.

Thank you, Gene. I'm on Page 6, the financial highlights. Firstly, group revenue at EUR 9.2 billion, up 7% or 9% at constant exchange rates. The principal FX move year-on-year was U.S. dollar to euro. To be specific on that, the average translation rate from euro to U.S. dollar was 1.08 in 2024 versus 1.13 in 2025 in terms of our average translation rate.

Group EBITDA, EUR 1.22 billion, up 7%. Trading profit, EUR 955 million, up 5% or 8% at constant exchange rates. Earnings per share at EUR 3.70. Our total dividend for the year, EUR 0.555, a payout ratio of 15%, which is our policy guide. Strong free cash flow of EUR 429 million, and I'll come to the components of that shortly. Trading margin at a headline down 10 basis points to 10.4%. But actually underlying pre-acquisition, we were actually ahead by 20 basis points to 10.7% year-on-year.

Net debt, we ended the year at EUR 1.88 billion. And in terms of leverage, net debt-to-EBITDA of 1.65x. Turning to Page 7, just bridging revenue and trading profit year-on-year. Our 2024 revenues of EUR 8.6 billion. Clearly, the significant component of sales growth during the year was the EUR 707 million contributed by acquisitions year-over-year. And then we had the FX move of 2% or so, clipping sales by EUR 138 million. From a profit perspective, 2024 was EUR 906.7 million. Currency shaved EUR 21.4 million of that.

It's worth highlighting that of that EUR 21.4 million, EUR 19.6 million of that occurred in the second half of the year because that's really when the pronounced exchange rate move actually happened. Acquisitions contributed EUR 49.5 million in the year, initially dilutive, but will kick on from here in terms of trading margin and underlying profitability up by EUR 20 million.

The geographic profile of sales set out on Page 8, pretty consistent year-on-year. The Americas at 22% of the business. Rest of World, 8%. And Europe, all told across all territories, 70% of the business in both '24 and '25.

Turning to free cash flow on Page 9. Naturally, the strongest component of free cash is the EBITDA of EUR 1.22 billion. Working capital, an outflow of EUR 151 million. Our working capital to sales ratio was 11.9%, which on a 5-year view, is an efficient performance. It happened to be up by 50 basis points on the very low level of December '24. And about half that move reflects the timing of acquisitions versus year-end. CapEx, EUR 325 million. And we're guiding EUR 350 million for this current year. The other significant cash flow item, tax of EUR 132.8 million, in line with our income statement charge with an effective tax rate of 16% in 2025 and our guidance for 2026 is an effective tax rate of 16.5%.

So all of that combined to give us free cash flow of EUR 429 million. From a capital perspective, that's set out on Page 10 in terms of the reconciliation of opening and closing net debt. We reduced debt by the free cash. We deployed EUR 258 million in acquisitions and incurred EUR 168 million in deferred consideration. We also acquired 2.2 million shares during the year for a consideration of EUR 148.6 million. That's an average share price of EUR 67.58.

Dividends paid of EUR 99.5 million during the year. So net debt ended the year at EUR 1.88 billion. A feature of the business for a long period of time has been the strength of our balance sheet, some commentary around that on Page 11. The group has significant liquidity. The principal strands of that are our undrawn EUR 800 million green revolving credit facility, which is fully committed to May 2028. We have cash balances on hand of approximately EUR 600 million. Our total gross debt is about EUR 2.2 billion or so between private placement and public bank. And the weighted average maturity of all of our drawn debt is a little over 4 years, and we have no significant maturities in the current financial year.

So with that, I will hand back to Gene.

Thank you, Geoff. So just to look at the structural growth drivers of the business. Once again, a lot of you will be familiar with this. But just in summary, if we can go to Slide 14, which is titled multifaceted growth drivers for the insulated envelope. And again, we'll go through this in some more detail with Dave shortly, but the 3 primary strands here are growth and penetration, which continues even in European markets, not to mention North America, APAC and South America with very significant runway for us there into the long term.

The continued geographic rollout of the business continues. Again, I would stress, even in Europe and all of the other regions that we've just mentioned. And the product portfolio within the envelope is expanding way beyond what it was 5, 10 years ago. Obviously, huge growth in the QuadCore business, but expansion into other technologies like wood fiber and the acoustic insulation sector, stonewool, not to mention, obviously, the roofing expansion, which is going on worldwide and most significantly in North America, where we have very large ambitions for our business there.

And I'd say similarly on Slide 20, which is the growth drivers for Advances. And this clearly is quite extraordinary and won't come as a surprise to anybody. But the sector itself we're operating is demonstrating very strong double-digit growth in itself, which naturally we're in the middle of. The business is growing share as we go along as well. So just market share growth as we expand our product portfolio is a significant driver for us.

And then the share of wallet is just way beyond what it was even 5 years ago, where per megawatt we had exposure of about $100,000 per meg, and that is now 5x that and growing. As we've expanded the product portfolio, got into water cooling and now obviously into air handling, that continues to grow. And that spread of business and share of wallet, we expect to continue to expand significantly into the future.

Thanks, Gene. If I could take you all to Slide 16 now, please. I think just as we enter a period where the macro backdrop looks like it's a little more stable than it's been for some time, it's probably worth reflecting on the markets that we faced over the last 5 to 6 years. And what the slide is showing you is look at a very challenged backdrop, particularly across Europe compared to 2019 on a volume basis, which if you look at the total footprint of the Kingspan markets, it looks like volumes in our addressable market down between 4% and 5% globally when we compare that to 2019.

And over the same period, organically, insulated panel volumes have grown by nearly 14%. So it's been a very consistent 3% outperformance, which will become more evident as markets stabilize, with the conversion to more energy-efficient products has never been stronger.

If I can bring you on then to Slide 23. Look, you've seen our global expansion map before and really in taking advantage of all of the opportunities that Gene has outlined across the data business, the roofing opportunity that we have started in Europe and are embarking upon in North America, alongside the structural growth of the vast array of our products. You can see the investments we are making across the globe now and over the next 2 to 3 years to unlock all of that potential.

So we look to have projects in the pipeline that will require investment of about EUR 1.2 billion, which is nothing out of the ordinary in terms of capital allocation, but has the potential to unlock about EUR 2 billion of revenue over the fullness of time, which, again, if you flip on to Slide 24, will underpin that consistent long-term growth story that you've been familiar with Kingspan.

With that, I'll hand it over to Gene.

Thank you, Dave. So just on Slide 25, which is the outlook and how we're feeling about the near-term future. We've -- as we said earlier, we've entered the year with very strong backlogs right across the business. They have continued to grow significantly through the first 6 weeks, although clearly, dispatches and deliveries have been hampered somewhat by weather, but we expect that to recover pretty swiftly through March, April and beyond that. And really just when we step back, the business clearly has grown consistently over the last forever.

We reached our target for 2025. We expect growth of in or around 10% in earnings for the current year. And we would expect that rate of growth to accelerate beyond that into 2027 and '28. Difficult to be specific about that, but we're certainly seeing a pipe of longer-term activity and engagement that would give us a high degree of confidence to deliver what we've just expressed there now.

So with that, we would be delighted to take your questions.

[Operator Instructions] Our first question comes from Shane Carberry from Goodbody.

The first one, maybe just to follow up on that last point you were making, Gene, about the kind of level of growth over the kind of medium term or out to the end of the decade. Can you just give us a little bit more color on exactly what you mean in terms of that trading profit growth exceeding what we've seen over the last couple of years would be helpful. And then the second is just thinking about the product evolution from a data perspective and how you kind of keep a pace with all the change that's happening in the industry. And are you still confident in terms of achieving a kind of EUR 600 million EBITDA number kind of over the next 4 to 5 years?

Okay. So on the first point, so we really have multi-stranded growth across the business. And it's actually very, very exciting, very encouraging. But if you look at our envelope for a start, like we've clearly got the evidence through the backlog and order intake in the insulated panel product strand. And obviously, our entry into roofing, which has been both acquired and now increasingly organic, predominantly in North America, which just hasn't kicked in at all, and that's something for second half of this year and into 2027 and beyond. And that's going to be significant.

And as I say, clearly not evident just yet. We've got another dimension which is happening, and I think it's going to be significant and here to stay for some time, which is inflation. So there are all kinds of trade barriers coming up left, right and center. The result of that is that our big inputs like steel and chemicals are going to be subject to significant inflation in the current year, it's happening, and we see it happening consistently quarter-by-quarter into the future. And as odd as that sounds, that actually is a very positive dynamic for the group once you get past the lag phase. And that's going to be, I think, more and more materially evident as we go through even 2026.

And then beyond that, which affects both Advances and the Envelope business is just this truly seismic transition that's going on in the tech sector and in particular, around the move towards AI. Like as a group, we are positioned right at the core of all that, and that's both internal and external. And just when you just piece all that together, and you consider the level of tangible engagement we've got with our client base, which is now much more long term because of the nature of these projects. The pipeline we're looking at is actually just really extraordinary.

On the product evolution piece, we've obviously been able to keep at or above the pace of that moving from what was just a simple access floor, which was giving us exposure today to going back 20, 25 years, in fact, like now the product portfolio is just not comparable to that, and it continues to expand. So in terms of us being able to keep the pace of that, all I can say is the evidence of the past is that we have been able to do that.

We're able to pivot and move with whatever the technology and the solutions have been going all along. And I'd be extremely confident that we continue to be at the forefront of that with our clients. And confidence around the EUR 600 million EBITDA, yes, we'd be at least as confident on delivering that as when we kind of mentioned it 3 or 4 months ago. And that's obviously whatever kind of 4- or 5-year target. But the trajectory towards that is very, very evident.

Our next question comes from Cedar Ekblom from Morgan Stanley.

I've got 2 questions. One quite simple one. On your free cash flow, you had quite a big swing in working capital in 2025. I wonder if you could just give us a little bit of commentary around the working capital investment there. Is that simply associated with new plants? Or is there something else that we need to think about there? And then how we think about that sort of working capital development into 2026.

And then secondly, on your roofing portfolio, can you talk a little bit about your decision to invest beyond these 2 initial assets? I believe that recently, the commentary was around making a third investment in residential roofing. It would be good to just hear how you're thinking about that cadence. And then beyond maybe the next 2 years or so, can you talk to us about what your ambition is in the U.S. roofing space? You're a new entrant. There's a lot of concern around disruption to pricing, et cetera. And I'd just like to hear how you would like your business to be positioned towards the end of the decade?

Cedar, just to take the free cash flow question first. Over time, a highly efficient measure for us is a working capital to sales ratio less than 12%, and that's been the measure of efficiency over time. At the end of 2024, it was 11.4%, which was particularly low and particularly efficient for a number of reasons. It was 50 basis points higher at the end of December 2025 to 11.9%.

That's our assumption as we go into 2026 in terms of average working capital levels. It can be -- it can vary for a whole number of reasons to within 50 or 60 basis points, but 11.9% is what we see the profile of the business. The -- specifically, about half the move during 2025 was associated with the timing of acquisitions and the working capital move between the date of acquisition to year-end. So that will naturally normalize as we move through 2026.

And then Cedar, on the roofing side, we've got the first 2, as you mentioned, Oklahoma and Maryland, they're happening as planned. On the commercial roofing side, we will be moving to a third facility as well in the not-too-distant future, more than likely in Utah. So that's going to give us really an ability to service the market pretty much nationally. And as you mentioned there, our intended entry into the resi side, that's kind of always been on our radar. It won't surprise you to know that we've been looking at acquisition opportunities on that side as well. It's a huge market.

There are tens and tens of facilities around the country and us entering with one will hardly even be noticed. But obviously, we've got to step into it at some point. That clearly, just by the nature of the size of the project is more long term, probably more like a 3-year project. And as you know, that side of the roofing market is pretty challenged at the present time, but that's just a moment in time. So we just see it as part of the wider roofing portfolio longer term. How will be received or what our success rate will be, that's all TBC, but we haven't failed yet.

In terms of disruption, market pricing, it's not something I'd be particularly concerned about. It's a huge market. It's a growing market on the commercial side. We would expect that certainly in the earlier years that our capacity additions will be readily absorbed by the general pace of growth in the market. And our previously stated ambition of getting to a 15% share of the addressable side, bearing in mind, we don't want any presence in the EPDM market or the bitumen market. That remains our ambition, and we have every confidence of succeeding in getting there.

Our next question comes from the Florence O'Donoghue from Davy.

I have a couple of questions. I might just ask on Advances. First of all, just in terms of the order book, how much visibility that gives you when you talk about it being the intake levels doubling and just generally, the conversion of an order book, is there a long time lag, just the kind of dynamics of how that works. And then the second one I might ask is just -- you mentioned in the document about the boards business in Europe in terms of capacity management and actions you've been taking. Just a little bit more color on that would be very much appreciated.

Yes. So just on the Advances backlog floor, it's approximately 9 months, but it's actually becoming even longer. So it's getting larger and longer. And then we would have very solid engagement of work right through '27 and even into '28. Now that's obviously not -- they're not purchase orders. And so not entirely bankable. But on the basis of the type of engagement we've had with these end clients going back, we'd have a fair degree of comfort in that work coming through.

And none of that will come as a surprise when you look at the general scale of investment into AI. It's only a tiny little bit around the edge that we're after. And in terms of the board capacity, we have been -- it's obviously not a huge part of the group any longer. It's become overpopulated, to be frank, particularly in Europe, largely granted by Brussels, which is completely daft, but that's the situation we've got. So it's become unattractive in many markets. We have invested in the -- probably the finest plant in the world in Winterswijk in the Netherlands, huge capacity.

And what we're on course to do is to really kind of gear up on that facility and get out of lesser performing more niche manufacturing plants around. So Finland, we've exited. Sweden, we're in the process of. We have a facility in France that we're not starting up, and we're likely to take out of commission another facility somewhere in the middle of Europe. And like I say, really just gear up on one core plant in the Netherlands and just make that work hard.

But importantly, we're going to be repurposing this capacity. It's not going in the bin or going to be growing cobwebs. So at least 2 of those lines I've just mentioned are going to be -- one of them is brand new in Rian in France that like I said, we're just -- it's not wise to start it up. It's going to be going into the roofing sphere in the U.S. and one other of the European facilities is likely to be Utah destined as well. So we just see a better future for those assets in that market, and that's kind of what we're about doing.

Our next question comes from Arnaud Lehmann from Bank of America.

A couple of questions on my side. Firstly, on Advances, obviously, you decided not to IPO the business. Can you confirm that this is now a closed idea and that you're going to keep 100% of Advances and obviously keep the full consolidation of this high-growth business? And secondly, just a follow-up on U.S. roofing, as you know, there's been a decent amount of consolidation and M&A activity in the distribution side of it. Is that an opportunity for you in terms of the new owners of these assets are maybe more open-minded to take on your products? Or does that create new challenges.

Great. So Arnaud, yes, the Advances IPO idea is put to bed, that's it. We're retaining 100% and moving on. That is that. It was a fantastic exercise, very interesting for us as well. But that's where we've ended up. In terms of the U.S. roofing, yes, there's an awful lot of moving parts on the distribution side, which to be honest, it's neither positive nor negative for us because we're starting from 0.

So it's opportunity one way or the other is the way I would characterize that. Bearing in mind, by the way, that we're obviously through our Insulated Panel business a direct-to-market model. So our relationships are with specifiers, delivering direct to site and invoicing contractors is our primary presence in North America. So we're going to be multi-stranded in terms of how we approach the market, which we're already doing. So distribution, we see as a route as opposed to the route. And it will take us a while to find our feet, but we have a blank page and we're looking forward to it.

Our next question comes from Elodie Rall from JPMorgan.

My first question is actually going back on Q4. If you could get us maybe a bit more color on the organic growth for both businesses, price volume, that would be helpful. And my second question is going back on U.S. roofing on '26 guidance, what do you have with regard to that part of your business? And how should we model start-up costs as the plants are ramping up, please?

Thanks, Elodie. I'll take those questions. Firstly, as it relates to Q4, I mean, as we've said before, we're -- our business ought to be judged over a 12-month period, you get ebbs and flows through various months and quarters. We guided in November that we would do approximately EUR 950 million of trading profit, and we came in at EUR 955 million. I think it would be fair to say as well that our intake in Q4 was strong, both within Envelopes and Advances such that we ended the year on the panels dimension to envelopes with the backlog 8% ahead. So that did build through Q4.

And as we've highlighted previously, the intake in advances was strong as well, both in Q4 and beyond that. As regards to the components of the growth into this year and the 1050, since we gave the guidance of 1050 in November, the FX headwind has become steeper. Weather has been more acute in the early part of the year. Notwithstanding both of the factors, we're still -- we still have a lot of conviction around the 1050 given the momentum in the business. Specifically within that, there's about EUR 30 million of scope in terms of the run rate annually of acquisitions we've already made. So they're the constituents of that.

Our next question comes from Yassine Touahri from On Field Investment Research.

I think the main question I would have is that what kind of sequence of organic growth do you see throughout 2026. I think the organic growth was very slow in 2025 in H1 and H2. I understand that the first quarter will be a little bit slow as well. Do you see an acceleration for the rest of the year? And it would be great if you could give us a little bit of more color on the element of the growth in trading profit. What is scope, what is organic, what is FX.

Yes. Just to deal with the last part of your question first, the scope is about 20 -- sorry, EUR 13 million in terms of acquisitions that we've already made and annualizing that through 2026. FX at current spot rates, so we can only assume what's out there at the moment is broadly a EUR 17 million or EUR 18 million headwind for '26 versus '25. Much of that is in the first half because the euro-dollar rate really moved in a pronounced way from the second quarter.

So much of that is the first half. As we've highlighted, Q1 is likely to be soft enough for the early part due to weather. But we -- given the backlogs that we have, we see momentum picking up considerably from March onward. And it's always difficult for us to kind of trend things from quarter-to-quarter. But over the course of the year, we're absolutely poised for decent growth.

Our next question comes from Pujarini Ghosh from Bernstein.

So going back to the roofing in the U.S. So could you talk about the progress on the build-out of the plants? And you just highlighted that potentially the contribution to the P&L in 2026 is not that material, but then how should we expect that to progress in 2027? And also regarding your approach to commercial roofing going greenfield and then potentially considering M&A for residential roofing that you just talked about. What is the difference that you see in the market, which informs the difference in the way you're considering entering the market in these 2 sides of roofing. And my second question is a little bit broader. Could you talk about your exposure to OpenAI and any potential opportunities or headwinds you see in the medium to long term?

Pujarini, thanks for the questions. Just on Roofing first, to be clear, we're leading out with an organic investment. We've said we're keeping our options open with regard to potential M&A. But at the moment, the investments in Oklahoma and Maryland are organic investments. Similarly, on commercial, when we move towards the West Coast, that will be organic as well. And as we appraise and go after the shingles market, that's again an organic investment. None of that precludes M&A, but we are leading out organic for the time being.

Yes. And as regards to the broader question of exposure to OpenAI, I guess, AI, never mind OpenAI, just AI itself. It's -- like what's going on is -- there's no other word for it, except extraordinary. And yes, our exposure to it is extremely significant. And honestly, like we've had -- we've seen exciting times in the past and growth in Kingspan, obviously, over the years. But in terms of what we're looking at for the next number of years, like who can see way beyond. We're kind of looking at activity levels just way beyond growth levels that we've ever experienced in the past. So our exposure to it is, yes, very significant.

And the Roofing profit contribution in 2027, if you have any indication?

I mean, we should see sales activity from the end of this year in Roofing and will ramp up through 2027. Trading margins in Roofing will still be single digits in 2027, but building out to group average rates into '28 and beyond, and that's assumed in our forward guidance. At this stage, we would expect sales in the U.S. in Roofing to be somewhere in the region of $150 million to $200 million in 2027 and building out to $300 million to '28.

Our next question comes from Julian Radlinger from UBS.

Two from me. So first of all, the stronger or the very strong order intake in advances year-to-date, that's obviously similar to what we've seen from many other data center exposed players. I suppose why might that not lead to upside to the EBITDA guide for Advances for EUR 300 million that you gave a few months ago. Is that because you're basically sold out for 2026 already and that order intake translates more into 2027? Or what are the moving parts here?

And then second question on inflation. So you called this out explicitly. Is that more steel or MDI that you're seeing just because I'm looking at MDI prices, they were actually -- I think they're actually down year-to-date in the U.S. So is it more about steel here?

Okay, Julian. So yes, just on the Advances EBITDA, so like that's progressed. If you say -- if you go '24, '25, '26 and it's largely organic, it's kind of EUR 180 million, EUR 230 million, EUR 300 million. So that's obviously pretty lively. So I guess in all of that, we were indicating that it was going to grow significantly, and I think that's kind of -- that qualifies as significant. But we're not going to hold the business back. And the EUR 300 million number for this year would be a minimum, actually, to be honest. So let's see how that progresses.

And then in terms of the other point was inflation. So steel by far and away, like it's multiples of size and impact versus chemicals, not just MDI. So we do see it has been predominantly steel. It's largely as a result of protective measures all over the place, and it's starting to kind of jump ahead now. MDI, whatever MDI is doing in the U.S. just spot, I wouldn't be particularly -- like for a start, our consumption in the U.S. would be tiny by comparison to Europe. So -- and in Europe, it's definitely trending upwards. And if it's not, I'll just have to speak to the procurement guys because that's the message I've got.

Our next question comes from Chase Coughlan from Van Lanschot Kempen.

Just 2 quick ones. Firstly, could you provide a bit more color around your pricing strategy for this year? I mean you just discussed raw material changes, but also in the context of potentially wage inflation, what sort of pricing measures you're taking throughout the course of '26.

And then the second question going to Advances. Obviously, there was sort of somewhat of a rebrand over the last few months. I think it's likely to cause some more traction commercially. I'm just curious on what you're hearing from competitors, especially given the more modular solutions you're offering? I think Vertiv was quite bullish on this in their last results. So I'm just curious on what you're hearing there and how you're seeing that rebrand play out with customers.

Yes. So in terms of pricing, like our approach successfully at all times has been just to pass through. So whatever cost inflation we're seeing we have all always succeeded in getting it through to market. That's over decades. So we don't expect that to really be any different. From a wage inflation perspective, that's not a particular kind of dial mover for us. The materials would be much more significant and much more public and obvious in terms of our ability to actually pass it through as well. So that's kind of our approach to that.

In terms of the positivity that Vertiv have been propagating, we clearly would agree with that. We see it. We're growing into it. We're coming from opposite ends of the spectrum, if you like. We're literally coming from the floor up through the white space into gray. I'd say predominantly, Vertiv is at the higher tech end, very deep in gray and to some extent, kind of moving south into the white. So I think yes, there's certainly enough for all. But I think, yes, we'll be looking -- our Advances business will be increasingly looking more like it, I'd say, more so than the other way around.

Our next question comes from Priyal Woolf from Jefferies.

The first one, I guess, is just a clarification just on the U.S. residential roofing. I appreciate you talked about this being something that you're looking at more in the longer term. But in your usual slide on global expansion, you've talked about a plant in Georgia in 2028. So I just wanted to check, is that locked in? Or is that sort of still TBC?

And then the second question is just in terms of capital allocation. You've reiterated that you're looking at the EUR 650 million share buyback in tandem with other growth opportunities. Should we interpret that as you potentially don't fully reach that EUR 650 million level if you see bigger or more interesting organic and M&A opportunities. Or you think you'll get there regardless and it's more just about the timing, which is the uncertainty.

Okay, Priyal. So just on the first point, that remains our ambition and our plan. Like that clearly can flex. It's not going to come forward, but it could push out. And that will depend largely around timing of machinery, plant construction, all that kind of stuff as well as market conditions. We clearly want to -- at whatever point we enter that site, we want conditions to be as favorable as possible. And naturally, right now, it's about as bad as it's been in recent years. So thankfully, it's not right now that we're entering because they're all under an awful lot of pressure, as you know. But 3 years from now or whatever, that's some time out. And on the buyback...

Just on the buyback and capital allocation, generally, as we've said previously, we, at all times, compare opportunities that are external to Kingspan versus buying ourselves in terms of the relative valuation of both. We're fortunate that we have a healthy pipeline of development opportunities within the business, both organic and inorganic. And we'll continue to get that balance right and assessment right as we move through the year. We've done about 23% of the announced program, and we'll just see how that evolves through 2026. .

Our next question comes from Harry Goad from Berenberg.

Just a question on the Panels business, please. Can you give us a rough idea of what the annual increase in new capacity is? I appreciate you probably can't be too exact year-to-year, but in terms of the percentage number on average over the years, just to think about the sort of steady increase in contribution from that division.

I guess it's difficult to give a global answer to that in terms of capacity is pretty regional and localized. We're addressing different markets in different parts of the world. Naturally, we've seen very strong intake in a lot of the regions that we've entered over the last decade, in particular, like Latin America, APAC, all of those, we've put down a lot of capacity in recent years, but we're now seeing the fruits of that come through intake and orders. So as I say, it varies very significantly from one region to another and capacity is regional.

Rather than think about it as one lump sum, Harry, if you go back to that Slide 16, just think about the average construction cycle and the investments that we're making, that feeds the 3% outperformance very consistently.

We currently have no further questions. This concludes today's call. Thank you all for joining. You may now disconnect your lines.

Great. Thanks. Fantastic. Thank you all for joining, and we'll be in touch over the coming days.

Good morning, everyone. It's David O'Brien here, Head of Investor Relations. And thank you all for dialing in on reasonably short notice.

This morning, we're joined by Gene Murtagh, Group CEO; and Geoff Doherty, Group CFO. In a moment, I'll hand you over to Gene for an overview of this morning's announcement, and then we'll host some Q&A.

But before I do, just to note, this morning's statement has outlined what is a potential process that we're exploring. And while very exciting, there are obvious limitations on the amount of detail we can give this morning, so bear with us.

Also, I'll make the point, it's been 6 weeks since we released our interim results, and we're about 6 weeks from our Q3 trading update. So we will not be providing any comments on current trading. All told, we would expect to keep you a maximum of 30 minutes.

And with that, I'll hand over to Gene.

Excellent, Dave. Thank you very much, and welcome, everybody, to this morning's call. Thank you for joining. We'll get straight into it. You've got a presentation and no doubt you've all flicked through.

But just as a background to that, we've been operating in the data center market for over 20 years now in some form or another. And clearly, that's been growing a lot in recent years.

And a couple of months ago, we created two new segments within the group, one of which was Advanced Building Systems, which going forward will be known as Advnsys without the A in the middle. And the reason for this, as we explained at the time, is that we see these businesses coalescing progressively and rapidly, and we want to capitalize much more meaningfully on the tech sector opportunity in particular.

If you just step back from that, the -- about 40% of Advnsys' current earnings are derived from critical bespoke infrastructure into the tech sector and particularly into data. And we see that portion of this business growing to around 75% within a 3- or 4-year period. And clearly, we expect that 75% to be of a much larger absolute number also at that point.

Particularly, we've been strong in the white space to date in data, but we are rapidly getting into the gray space, which brings some more complexity, but an awful lot more opportunity and value for Kingspan as well into the future. The opportunity is really enormous, and it's been erupting before our eyes at a pace that's way beyond what we expected even actually a couple of months ago.

And just overnight, you'll have seen, just as it happens, the announcement from NVIDIA and OpenAI, which is just another of these gigantic announcements of $100 billion investment, particularly into the data market. And that's the type of thing we're really dealing with and referencing with regard to this particular announcement.

We have a global footprint already that indeed you'll know about, but we're in the process of entering India, Vietnam, Brazil in this business segment.

And I'd say, critically, we're moving ahead with a gigantic assembly site in Kentucky, U.S.A., which will produce hot aisle containment solutions, liquid cooling solutions and also air handling units, which is a sector that we've entered recently through the acquisition of Sandometal in Portugal and also to some extent, Q-nis in Ireland.

We see the AHU segment and the CDU areas being areas that will present very significant growth opportunity for Advnsys and indeed for Kingspan well into the future.

So this site in the U.S. is also on top of the already commissioned world-scale facilities in Virginia and more recently in Arkansas, all of which are filling up rapidly. And as we've referenced before, we're obviously building at a very significant pace, and that's to keep up with this burgeoning demand from all of our clients.

So in essence, we feel that the time is now to shine a greater light on this business and on this opportunity, both as a potential stand-alone public organization and through Kingspan as its long-term parent.

If you look at the crude numbers, and it's on Slide 7, I think, the past year -- the past 10-year EBITDA CAGR for the business has been around 21%. And we expect the 2026 EBITDA of the business to be in the region of EUR 300 million.

And we're also acutely cognizant of the fact that relevant sector peers, and these are not building sector peers, they're tech end peers, that are supplying the data center market, are trading at and above 20x EBITDA. And hence, clearly, the reason and the time for focusing on this potential IPO.

The aim is to fully explore going public in Amsterdam. Two global investment banks have already been appointed to jointly lead the process. And if successful, we expect to retain a shareholding of around 75% and continue, obviously, to consolidate Advnsys into Kingspan Group as an overall.

So that essentially captures in summary, the background and reasoning behind this, and we'd be delighted to take all of your questions.

[Operator Instructions] Our first question today comes from Shane Carberry from Goodbody.

Just two from me. I guess just with the figures that you've just given there, Gene, we're thinking about a business that could then be worth over EUR 6 billion, I suppose. With that in mind, could you give us a little bit more of a flavor, one, in terms of a bit of a reminder in terms of the complementary nature of kind of Data Solutions in the Light, Air + Water business?

And then two, when I think about future product evolution in this business generally, how should I be thinking about things going forward and other product categories you could potentially get into?

Okay, Shane, thank you for that. So in terms of the compatibility and the growing, let's say, the coalescence of the businesses, that's around a couple of areas. Obviously, as part of what was the Light, Air + Water, air is an area that's been obviously focusing on ventilation for some time.

So a very significant portion of that business is already in parts of ventilation. And both this and what was the Data Solutions business have effectively, as it happened, just ended up essentially chasing the same market to a large degree, some of which is for the data center opportunity and some of which, very important, is for non-data.

Because obviously, we need a business that services markets for the very long term that's not necessarily tech linked. So they've been growing progressively into the same area, number one.

I'd say secondly and very importantly, around 20% of what was the Light, Air business is actually in service. So annual maintenance of all types of systems. So that's in excess of EUR 200 million of business, mainly around Europe. So this is a very particular skill set that we see as playing a very important role in the maintenance of data center solutions as well into the future.

And as I've just said, that's a skill set that lies within that business, not what was previously our Data Solutions business. And it's an area which is high margin and critically important for the longer term. So they're kind of the two main areas where we see the businesses joining forces most prominently.

And then in terms of product evolution, we've -- like we've gone from -- and there's a slide on it, number David will point it out to you now. So we entered the data market via the access floors. Then it was direction layered through the floors. Then it was into the hack area, which was stick built to start with, then modularly built.

Now we're integrating water cooling through manifolds into the hack. So we're doing that retrospectively in existing data centers. We're also doing it in new data centers as a complete unit. And we see that -- for a start, we see that as being an area that we're pretty embryonic in and the opportunity is enormous.

And then, as I mentioned, the air handling space is one that we've more recently entered, and there, very significant opportunity, both retrospective and in terms of new build. Like I say, very early days. And to be honest, Shane, just between even those ones I've just mentioned at the latter end, the opportunity to capitalize on that globally is gigantic.

Our next question comes from Ephrem Ravi from Citigroup.

I appreciate it's early days, but again, to -- while doing the IPO, are you looking to raise new money to accelerate the growth in this business? Secondly, on the Kentucky plant, my understanding was that, that was more to do with roofing? Or is it kind of being transferred into Advnsys?

And then also on the future outlook in terms of the data centers, is there transferability of these product categories to other applications other than just data centers?

Yes, absolutely. So -- well, for a start, from a capital raise perspective, let's see how this all goes and what the potential valuation is. But the intention for now is to flow 25% of it, and that money clearly comes into Kingspan Group.

Like very broadly speaking, if that was successful, both Kingspan as the parent and Advnsys would end up essentially with zero debt and obviously, huge runway for both the businesses to take it from there. So at a crude level, that's kind of our thinking.

In terms of the Kentucky site, that was never for roofing [Audio Gap] Oklahoma [Audio Gap] on top of Virginia, more recently, Arkansas and then this site, and that's very specifically around the whole Advnsys opportunity and not to be mixed up with roofing.

And then the final question was transferability, absolutely very important. That's -- if you look at the data business and the light and air business, one essentially has been servicing what we call regular markets and the other has been very specifically the tech sector.

And we see a number of the solutions here as having application in the world outside of data as well. And we believe long term, that's actually critical for balancing the business as well.

Our next question comes from Flor O'Donoghue from Davy.

Just I think one for me really. Just wondering on the CapEx requirements for Advnsys in terms of maybe the kind of the more bigger projects that may be kind of further down the line and also just the kind of recurring level of CapEx that's needed to run the business.

Yes. All right. So we've been -- we've set very demanding hurdles and returns for all of our organic CapEx in the data side of the business. We've been getting and expect to get returns in literally a 2- to 3-year period. And that we expect to be the case into the future for all of the investments that are underway at present. So I don't see anything that's going to change that.

But beyond that, clearly, like Kingspan itself, there's a very significant development pipeline, specifically into the Advnsys opportunity as well. And that clearly is much more of a capital consumer than the organic CapEx. But again, if we end up with a clean slate in both the parent and in Advnsys, I think our ability to develop at a rapid pace will be significantly enhanced.

Our next question comes from Alexander Craeymeersch from Kepler Cheuvreux.

Alexander from Kepler. Just a small question. I was just wondering about -- certainly, there are going to be some intercompany sales. I was just wondering how will you ensure that how these transactions will kind of happen at arm's length.

Can you repeat that, Alexander?

Well, I assume that there's going to be some intercompany transactions. So I'm just wondering if you -- how will you ensure that this transaction will happen at arm's length?

Alexander, there won't be actually intercompany. So just like right now, the Advnsys businesses don't intertrade to any significant degree. I mean small millions between that and other parts of Kingspan, we wouldn't see that being any different.

Our next question comes from [indiscernible] from JPMorgan.

I think you mentioned helping the debt profile of both companies through the equity raise. Is this kind of in anticipation of any large-scale acquisitions for Kingspan Group or just more of you seeing good opportunities going forward?

Yes. I think it's actually only a byproduct rather than a reason to be honest. But as we've signaled before, there's always a bigger pipeline of opportunity than we have the ability to execute on. And that's more from financials than from a physical perspective. So that's not any different necessarily, but naturally, it will put us in a much stronger position for execution on all fronts.

[Operator Instructions] Our next question comes from Pujarini Ghosh from Bernstein.

So one question on the listing. So basically, why did you decide to list in Amsterdam? And do you have any expectations of the timing of the potential listing?

And the second question is on the medium-term outlook for Advnsys. So in the past 10 years, you've grown at 16% and EBITDA has grown at 20%. So what are your expectations going out to 2028 or 2030 in terms of top line growth and margin expansion?

Just on the first one, I would say that we would expect that growth rate to continue at least at that pace.

And just on the listing choice, at this early stage, we've done an assessment of the various alternatives that would be available to Advnsys, including the U.S. And our strong preference is Amsterdam based on that. It's a highly liquid market.

There's over 300 companies trading on the exchange. It has IFRS from an accounting perspective, which makes it a very straightforward process. There's no stamp duty in that market as well, which makes it an easier environment for investors from a transaction perspective.

So for all those reasons, it would be a very natural home for Advnsys. From a timing perspective, we're looking at Q1 2026, which is another benefit of Amsterdam as well as a listing location that will accommodate an earlier timetable than perhaps other markets.

Our next question comes from Glynis Johnson from Jefferies.

Two, if I may, and forgive me, they might be quite basic. I wonder if you can just talk us through the geographical breakdown of the business that you're listing, just how much is U.S., Europe and so on.

And then if you can just talk about expected corporate costs. Obviously, there's cost of listing, how should we think about that for business you're listing, but also in terms of the business that will remain because I assume there will be some duplication that's required? So yes, if you can help us with that, please.

Yes, absolutely. So in broad terms, around 45% of the current Advnsys business is in the U.S. the rest being Europe and rest of world, which is particularly Southeast Asia, Australia at the moment.

And it's probably reasonable to expect that 45% U.S. to actually increase significantly because it's there that we see the gigantic wave of investment. Obviously, it's happening elsewhere, but in the U.S., it's really other level. So we probably see that going well beyond the 50% over the next 3 to 5 years.

As regards to corporate costs, I mean, we would expect Advnsys to have limited incremental corporate costs, bearing in mind all of the operating and administrative infrastructure is already within those businesses. So it ought to be limited in quantum.

Thank you very much. So -- and over a short notice, I really appreciate you all joining, and I'm sure we'll have opportunity to catch up with you at a later point. But bear in mind, really, this is the beginning of the process, and we need probably the next 4 months or so to fully explore and see it through. Thank you.

Thanks, everybody.

Thank you, everyone.