Power Probe (LSE:PWR) — Investor Presentation

0:00 Good afternoon, and welcome to the POWER PROBE PLC investor presentation. In fact, this recorded meeting, investors will be in listen only mode. Questions are encouraged and could be submitted at any time via the Q and A tab situated in the right hand corner of your screen. Just simply type in your question and press send. The company may not be in a position to answer every question received during the meeting itself. However, the company can review all questions submitted to them, publish responses where it's appropriate to do so. Before we begin, we'd like to submit the following poll. I'd now like to hand you over to Chairman Garcia, CEO. Good afternoon, sir. Good afternoon. Thank you very much, Paul. Good afternoon, everyone, and welcome to POWER PRO, a thirty plus years, company brand technology that became essential for the professional mechanic based, in the amazing world of the automotive electrical diagnosis. I don't know if you guys are familiar with the automotive electrical diagnosis, but I'm pretty sure that you, your family, your friends experienced in some moment one light in the, the dashboard or a complete Christmas tree, and you are not even able to grind your car, and it's a very challenging situation, not only for you, even for the mechanics in the first moment that they are facing that situation.

1:09 We are developing a technology, a product range that is able to help them simplify an automotive diagnosis and is being recognized like the Hoover of the automotive electrical diagnosis. Let me explain a little bit more about what POWER PROBE does after introducing our shelves. I'm Cema Garcia, the group CEO of POWER PROBE with twenty plus years as a testing and measuring man working for different companies in different areas, Europe, US, and Asia. I established my own company in 2012, and I, co founded the NGL Group in 2019, becoming a POWER PROBE, managing director in 2018. And after the demerger in December 2024, full time CEO of POWER PROBE. I'm based in Charlotte, North Carolina and traveling globally to oversee the strategy and operations.

2:06 With me, Fabio Medina and Tom Marsh, that they are helping on between three of us developing this amazing project. Going back over. Thank you, Cemma. Good morning, good afternoon. Fabio Medina here, POWER PROBE CFO, Joined the business in August 2025. Bringing to the business fifteen years over fifteen years of experience leading finance teams for both private and public companies, primarily in the manufacturing industry. Sit here and live in Charlotte, North Carolina, been here for over fifteen years as well. That's where we have our main distribution site and where we're planning our new expansion growth as far as manufacturing. I'll hand it over to Tom Marsh. Thanks, Fabio. Tom Marsh, Group Corporate Development, based here in The UK.

2:55 My background is in corporate finance and investment banking. I retain responsibility for corporate development, IR, and overseeing The UK and European operations. Cool. Thank you very much, Tom, Fabio. And with us, another 35 colleagues in three different countries that they are helping us to develop this amazing project. POWER PROBE was established in 1992 in Orange County, California, starting with a single hand power circuit probe, a category definer technology that provide to the professional mechanics, the unique tool that allow us to with one hand identify the problem in the electrical system and apply power and ground saving a lot of time in the automotive electrical analysis. That simple philosophy in those, product category that was new in the market and fully patented, just provide, you know, the most efficient way to identify problems in the electrical system. Getting the, the problem found it in the quickest way possible, fixing more cars during the day, making more money at the end of the day. This is the simple philosophy that POWER PROBE has nowadays in more than 120 innovative products.

4:13 POWER PROBE is developing the $31,000,000 revenue in 2024 with 84% of the revenue in private brand, POWER PROBE brand. Having as well private brands for 16% with other brands, well known companies like Snap on and other mobiles. With a high margin of 45% gross margin delivering and 27 EBITDA, POWER PROBE is already a very profitable business ready to scale going forward. Let me explain now why we believe that this is a great opportunity to invest going forward. First, POWER PROBE is a very well known brand that is based in a market that is growing and growing consistently.

4:59 The main structural tailwinds helping this market to grow is that we have more cars, aged cars and more complicated car in the market. What is bringing new challenges to the mechanics that they are growing as well to fulfill the needs to do the repair and maintenance and as well for the car manufacturers that they are in need of new tools to do the maintenance and the service of their own cars. Taking account this, POWER PROBE is very well known brand, very well positioned and highly recognized and already a go to brand for the professional mechanics. Backed by more than 80 patents with a strong IP and a trade dress POWER PRO on its own identity. That's why we believe with our position in the market, the new product introduction with more than 10 new products planned for 2025 going forward, we have a very strong position to keep developing a business that is already successful with a very good margin and a strong cash conversion.

6:02 Our distribution model based in mobiles and traditional distribution, distributing our own brand backed by our IP is giving us as well very strong barrier to enter for the competition. Our competition is far away from POWER PROBE in terms of innovation and in terms of distribution, which is giving us as well the chance to kill improving the market leading by innovation and leading by distribution strategy. We are ready to scale business. To scale business, developing and accelerating the new product introduction, investing in a full R and D department here in The U. S, capturing the feedback from all the different mobiles and professional mechanics, speeding up the process, introducing new market and capturing with the new production plan that will be complemented the existing supply chain with a dual source.

6:56 The made in USA, POWER PROBE PWR PROBE that is highly recognized in the market. That's why we believe that this is a great opportunity to invest going forward. Let me explain a little bit more about these points one after one. In terms of the market, as you can see in the slide number six, the market is growing due to different drivers, but mainly all of them well known for all of us. We have more cars, in in the market, but the car park is aged, going close to thirteen years in average for the car with this requiring more reverse and maintenance due to the car park age. Take in account as well the complexification that we have in the cars. Just give me just let me give you guys one example. In 2,005, we had, you know, around two kilometers of wiring in a for Mustangs 2005, same for Mustang car 2025, we're able to find cars with up to five kilometers of wires. And if it's a EV version or luxury version up to seven kilometers of wire. In terms of fuse fuse boxes, we moved from 50 fuses max in 2005 for more than 200 fuses, meaning different circuits in the car that can bring problems.

8:15 That complexification is bringing a need of new tools to help mechanics to perform. And this is where POWER PROBE is perfectly positioned to capture this growth. Let's check this in terms of the total, growth in the Slide number seven. As you can see, no matter if we're checking the global market of The U. S. Market, the growth is consistent in around 6%, 7% CAGR. And the thing that is extremely interesting is when you break down in the up left graph, you see all the different product categories, technologies, and you can see in all of them how the growth is consistent in all of them and how the dot line, if you zoom in, the dot line is showing what POWER PROBE has in terms of technology, how POWER PROBE is perfectly positioned in a well diversified broader range in most of the categories.

9:12 Meaning, a market that is growing with a brand that is highly recognized at the top of mind, well positioned in most of the technologies. In the upper right side of this slide, I would like to give you guys some color about the two main segments of this market. At this moment, POWER PROBE with 91% of the total revenue base in The U. S. Is having pretty much all the revenue in the segment of aftermarket sales. Aftermarket sales are the independent mechanics that they are in the auto repair shops providing maintenance and repair services to all different kind of branded users. But we recently opened another one that represents 30% of the total market that is the OEM market.

9:59 The OEM market is based in car manufacturer or car dealerships. We recently opened agreements and afterwards I'm to explain some of them. So meaning we're already ready to unlock in a growing business that we have in the aftermarket segment, a new segment that represents 30% of the total market. So market that is growing and a new market that we already unlocked going forward. Let's have a look in the next slide, you know, about the market position of POWER PROBE. The reason, the reason because I explained that POWER PROBE is a go to brand for the professional mechanics is based back in the days due to our technologies that were a category defining. The power circuit probes, a category that took their name from our company represents, 64% of the total market with 91% of market share of the aftermarket.

10:59 So now getting into the OEM market, we have 36% potential growth going forward in existing market where we are based. But in the rest of the product range that we were diversifying, as I explained before with different product categories like cable tracer or the complex multi mirrors field that is very, generalist field. We are having a growing market share, having a dominant position in the open short circuit finder in the cable tracer or in the multimeter with a specific functionality. Once again, in the center graph, in you zoom in, you're going to see what is the dot line showing where POWER PROBE is having technology, unique technology providing the same philosophy, simplifying automotive diagnosis, especially developed for professional mechanics for simplifying their job in a daily business.

11:54 Let me explain in the next slide, how POWER PROBE became an essential tool for for mechanics. POWER PROBE was pioneering the first of kind tool for mechanics with a single hand tool back in the days. Nowadays, with all the different categories, we are able to provide the most efficient tool, especially designed for professional mechanics. We are filling a gap that is existed in the market between the digital diagnosis, scan tool, and reading readers that basically are computers that they are reading codes in the car and the general purpose electrical field tools like multimeters, clamp meters that the electrician, HVAC installers, etcetera, can be used in the building sector.

12:45 Mechanics due to the complexification of the technology in the car requires their own technology performing a specific, you know, functionality for them. And this is where POWER PROBE is filling the gap between the complicated scan tools and the general purpose, electric kind of building sector tools. POWER PROBE is giving the right tool in the right moment to perform the right diagnostics. Avoiding misdiagnosis, replacing parts that are not needed by car by by the users or the cars that are being repaired and avoiding revisit with the same problem. And this is, you know, recognized by the market with more than 4.7 star rating in different social media. I would like, giving you the chance to check by yourself on different awards and recognition for the industry.

13:37 Distribution like Snap on, Stanley Black and Decker, Mac Tools, Matco, etcetera, or with huge reputation, agents like PTEN with innovation, our people choice, tool award, etcetera. In the right hand, I would like to give you some info about the new technologies that we are, developing and they are fully backed by IP driving growth with new product introduction. Besides the power circuit tester or the cable tracers that they explained before with the same philosophy, we are able to offer parasitic brain tools and specialized automotive multimeters. Let me give you some color about why cable tracer that they are well developed in the building sector are being unique for the mechanics.

14:30 Cable tracer are not only tracing a cable, our cable tracer and our technology is able to provide a tool to the mechanics that they are saving all the time to disassemble car parts to get access directly to the wire. We are able to inject a sign on it the wiring system using the fuse box, and they are able to check and find where they have an open short circuit without this assemble, yes, wirelessly pricing the cable along the car. What is saving a lot of time and avoiding some parts that could be broken in the process. A great time saver with the same philosophy before. Parasitic drain is exactly the same, but this providing, you know, a new tool helping mechanics and car manufacturer to face a new challenge after the COVID era.

15:19 Due to the complexification of the cars, nowadays we have much more technology in every single car. Our cars are not going completely to sleep anymore. They are awaiting to interact with us, especially if we are having our keys close to the car. The car is draining battery with some of the functions. Sometimes it's an issue related with the design, an issue related with the software, or could be as easy, you know, the way that the owner of the car use it, you know, leaving the car, the key inside the car. Our new product range is able to identify the car is having a parasitic brain and identify over all 200 different circuit exactly which circuit is the one that is having the problem, saving a lot of time and avoiding misdiagnosis.

16:08 A technology that is fully patented as well uncovered by a unique, you know, trade dress with the red color. Same with the automotive multimeters that they are able to provide in that format for the mechanics that prefer to use in two hands and test leads to perform, including for the electrical vehicles with complex standards. Let's have a look in the next slide how we are able to protect our unique technology. Taking into account that, we are considered the Hoover of the out of multi diagnosis, and we are investing in more than 10 new product year after year, it's very important how we protect our technology. We have more than 80 patents, including for IP protection claims successfully litigated, which means that we are not only able to protect it, are able to polish and protect, our IP.

17:06 We are a multi layered technology strategy that we are covering not only one product, are covering a technology in different products with different formats, which is giving us the chance to use different patterns in the same product being very strong in the case that we need to claim IP in frame it. Besides that, we own our own identity. We have the pen type shape and the red color fully protected in the same way that any other brand, you know, could have for instance, Coke or any other brand like that you can that can imagine. But this as well a very good barrier to enter, especially for the imitation that they're coming from the Far East. This has given us a very powerful IP mode and a very strong barrier to enter in our market.

18:01 If you check-in the next slide, our new product introduction pipeline, you'll realize that the innovation is in our DNA. Since the very beginning, we start developing from that pioneering single hand circuit testing till nowadays, a complete different product range that is able to provide the right tool at the right moment to to to to the mechanics. For instance, in 2024, we launched eight new products to the market. In 2025, six new products to the market. And in 2026, we have 15 new products ready to be launched to the market. That is giving us numbers as a company that is really, you know, growing, driving innovation and new product introduction.

18:50 Let me just explain a little bit some of the technologies that are unique and how these technologies help our PROBE not only to grow, even to keep, you know, being considered the Hoover of the automotive electrical diagnosis. Besides the PP draw technology around the parasitic brain, we have technology specifically developed for the EV vehicles and hybrid vehicles. The electrical vehicles and the car manufacturers develop one, specific protocol called ECE dash r 100. That is a protocol for a safety connection and disconnection of the battery and the wiring related with the high voltage system. We developed a single and the unique technology in a single hand tool that is able to perform specifically that functionality fulfilling the needs of the car manufacturers.

19:42 Fully patented, this is, you know, a game changer in the mechanics in the daily use considering a time saving and the safety procedure. Another technology that will be unique launch in 2026 is the POWER PROBE technology. Nowadays, due to the complexification of the cars, the electrical wiring is being affected by different aspect like corrosion or some part of the part of the strings that could be, you know, broken. And this giving us, let me say, readings in terms of continuity or even voltage. They get into account that we have more and more kilometers of wiring in a car. The the wires are becoming thinner and thinner to be able to keep, you know, the cost of production in the car and the space in the harnesses.

20:35 That weakness in the wires are providing malfunction that they're extremely difficult to find for the mechanics. For instance, with the LED technology in the lighting system or the new laser technology in the light system in the car, you start having a bad wiring with the strings that are broken. You can find continuity in a wire, you can find that there is, you know, 12 volts in that wire, but it's not performing good with blinking LEDs or LEDs that they are not brightening in the same level than the rest. This is because of the quality and the health of the wire. We developed a unique technology that is able to provide no matter the efficient of power it could prop on a multi meter format, a technology to test if the wiring even looking good, testing good and continuity is giving a problem. What is saving a lot of time, revisits to the car and avoiding the problem to replace parts of the car unnecessary saving a lot of money in warranties for the car manufacturers and dealership. This is a unique technology fully patented that we'll be launching in 2026, giving you some example about how important is our new product introduction.

21:49 Let's see how this is helping us to protect our technology in on our market position in the next slide. At this moment, I'm pretty sure that you realize that we are specialized automotive diagnostic manufacturer and will be extremely difficult for any, other company to have a catalog that is really matching with our catalog. This is that that is, you know, what is giving us a very, you know, protected position in the market. Two main examples that these limitations that we have or the generalist brands. The limitations are pretty much coming from Asia are, you know, imitation that in some of the cases they are trying to copy the same technology that we have. The feedback from the market is in two different ways, terms of the mechanics, professional mechanics, giving a feedback that the tools are not performing accurately, not working good, or they are not lasting in a heavy duty environment like a shop.

22:52 Coming from the different distribution, partners, they are completely, you know, against these brands because mostly are distribute by, you know, very cheap, you know, market places like Tmall, Alibaba, AliExpress, etcetera, being sold directly to the end users. What is generating a strong barrier to enter in our distribution model. The generalist brands are very well known, And they are developing technology that they're in the highest standard working good for mechanics. And the feedback that we're work that we're having for them, especially for brands like Fluke or Bosch is that that technology and product is a very good product. But it's a general use product developed for another kind of technology like, you know, electrical installers, industrial MRO departments, or HVAC installer with a lot of functionality that is not really needed by the mechanics and with some other functionality that is missed.

23:57 In this category, for instance, our multimeters are providing a specific functionality at the same time we are giving them a multimeter that is ready to work in a heavy duty environment, waterproof, bulletproof, unable to perform a specific functionality like battery testing, cranking testing, inline testing, bolted truck testing, parasitic drain testing, etcetera. What is giving a huge advantage compared you know, with all the general brands that they are for different markets. In terms of the general brands that are specifically related with, the automotive electrical diagnostics like Snap on or Bosch, They have a great product, but, you know, they're they need to cover all the different, product mix like, you know, car car lifts, compressors, grange tool, toolboxes, etcetera, all the different all the different technologies.

24:53 That's why it's for them, it's very difficult to specialize in one specific technology. In this case, for instance, Snap on is having a very good tool, top tier high end tool. And this is the only one that they have for instance, the, POWER SERVEL PROBS when we have more than 10 different tools to perform in the same way that this tool. At the same time, we are the manufacturer for private brand for this tool for Snap on. So this is in reality not being a competition. This is a partnership that is giving us the chance to improve the relationship and have stronger connection with Snap on going forward. And if you see in the next slide, the way that we are able to drive our technology to the market, you realize that our distribution network and the strategy is helping us to establish a barrier to enter as well.

25:49 With 84% of our product POWER PROBE PWRON, a brand that is a low brand, highly recognized by the market, is we are being distributed by the main channels, traditional channels and specialized professional channels that are the preferred one by the professional mechanics and master technician. Mobile tool distributors and specialized wholesalers with 34% each of them. And we are covering the rest of the channel, including the retail chain stores as well with the e commerce channels. Just giving you some info, the preferred channels for the mechanics are this one. We are able to distribute our product with a MAP pricing policy, but this giving us the chance to protect with the ecom and any other resellers in Internet, the selling price to Direct Mechanics, protecting the margin and giving us the chance to have a high margin and a high profit going forward protecting our channel, giving us a very strong protection going forward. We have a replacement cycle of two to three years in all of our different products.

27:00 And we are covering with this all the different territories, including, you know, The US and recently in new areas like UK, Mexico, Canada, etcetera. Let's have a look in one specific, you know, channel that is, quite unique. We're selling POWER PROBE branded product as one of the unique brands, an independent brands through all the different mobiles in The US. With more than 7,000 booths on the ground, Mac Tools, Cornwall, Snap on, or Macotools, they are able to visit in a weekly basis mechanics through all the different tracks and franchises offering tools directly to the mechanic, explaining, training with the new technologies and providing services like financing services, after sales services, warranty reverse, etcetera.

28:01 This is more than a delivery truck. This is a mechanic driving a truck with exclusive route, visiting mechanic in a weekly basis, offering tools and advising how to improve their daily job to the mechanics with their tool. And POWER PROBE is included in all of them. This is the way that we are able to hear as well from the market receiving all the feedback about the new challenge, the new needs that the mechanics are having. With more than 700 bullets in the ground, we are able to get extremely good feedback about the new challenges and the new tools, what is feeding our new product introduction pipeline and innovation. Let me now hand over to Fabio that will give you guys some visibility about how we are doing in terms of our financials.

28:52 Yes. Thank you, Cemma. So POWER PROBE has truly been a growth story. The company has grown through organic volume, through the MAP pricing policy that Cemma had mentioned, and through product innovation. As you can see in our consolidated income statement in this slide, from '22 to '24, we've grown our top line 24%. We've increased our gross profit margin to 4% to 4.5% in 2024, while still managing to keep our underlying EBITDA margin at 26.5%. You can see on the bridge in the bottom left of this slide, we've grown an EBITDA 31% CAGR, while in first half of twenty twenty five year over year, we've grown our top line 36.4% while still managing to keep our underlying EBITDA margin 26%.

29:42 Now talking about product innovation and product introduction in the market, you can see on the bottom right of that slide, the innovation that keeps adding fuel growth to our top line. So in 2024, the overall new product introduction for total product mix was 16%. Meanwhile, the first half of twenty twenty five, that new product introduction percentage of sales is 39%. You can actually correlate the top line sales growth with the profitability on the bottom right of that chart, where you see the first half of twenty twenty five in the gray shaded area. The gross margin of those products were 42%, and the new product introduction in the first half of twenty twenty five, that gross margin of those products makes was 52% for new products coming into the market. Next slide, please, Slide 16.

30:31 So in this slide, you can see you can easily see the mix of the new product introduction adding few to the top line. So as you look at the top left chart, you see on the dark red shaded area, our legacy core superprobe products growing consistently and steady from 2017 to the first half of twenty twenty five. Meanwhile, the orange shaded area, you can see the significant steep growth starting 2023 up to the annualized 2025. And you can see in the bottom left of this slide, the first half of twenty twenty three, the new product introduction was only equivalent to about 5% of period sales. Meanwhile, 39% of period sales in the first half of twenty twenty five, as I mentioned in the price slide.

31:17 You can actually see the new products in the market that have been offered. And in the bottom right of this slide, you have the PP draw and PP fuse products actually carry above 5060% margin. And in the in the the three products on the right side of the of this slide, you see those are equivalent to about 29 of the overall product sales miss product sales mix in 2025. Next slide, please. And go ahead and over to Thank you very much, Fabio. Well, this is pretty much, you know, a clear example about how we are growing our company based in new product introduction. But I would like to give you as well some color about the expansion that we have in new markets.

32:02 We are based in a market that we are clearly leading, developing new technology backed by a strong IP. And with the new investment in our R and D center based here in Charlotte, with all the feedback that we're collecting from the different mobiles as we explained before, we are able to accelerate the time to market with a new product introduction, which will bring speed in terms of growing and giving us an extra layer of protection in terms of driving this market based on innovation. In terms of the new markets, we have two main drivers here. One is related with the new, territories. We start, operations recently in UK with a new facility based in on Newton close to Birmingham that is giving us to start expanding our successful model into the European market.

33:01 The European market, The UK and European market is the second largest market in the Western world for automotive electrical diagnostics. And UK is the perfect landing area for POWER PROBE going forward in that territory. The main reason for that is because UK is having same distribution, pretty much the same distribution network that The US has. For instance, some of the players like Snap on US, you can find Snap on US, Snap on UK, Mac Tools US, Mac Tools UK, ISN as a double duty, the wholesaler distributor in The UK in US and same in in in UK. What is giving us the chance to expand our business model and start capturing the distribution network that we are having successfully in The U. S. Very well known brand as well in Europe, ready to keep growing in a market where the mechanics are facing exactly the same challenges that The U. S. Want, ready to go. The other market that we are growing is the one that they explained before, that this in total 30% of the total market in The U. S.

34:11 And a little bit higher in the European market, around 40% of the total market. That is the OEM market for car manufacturer and car dealerships. We recently in 2025 a lot four of the different car manufacturers for Toyota, Hyundai and Honda and POWER PROBE as a POWER PROBE branded product is listed in their programs. What we will be bringing in 2026, new revenue that will be putting on top of the existing growing business model that we have before. Those two new territories and new OEM market will bring a new driver of growth complementing the new product introduction that we have in the existing market.

34:57 Besides that, some of the verticals that will be helping us going forward, after the investment in the new factory in The U. S, giving us the chance to have the dual source with a made in USA performed part of our product here in The U. S. Is unlocking the military and the government segment, able to get into the public tender and beats for the different opportunities. Besides other models like we have the marine or verticals like the car rental or the education, where POWER PRO is perfectly positioned and provided the most efficient tool to perform diagnosis and getting the cars back to the car park to be rented or training new mechanics in the way to perform the automotive electrical diagnosis in the easiest way possible.

35:44 Let me explain now why we believe that we are ready in the new phase of growth. POWER PROBE is a very well known brand, positioned in a market that is already growing and is a is a successful, business model, a successful company. But this is not about, you know, refinancing or it's not about, you know, reallocating. This is about scaling a business, scaling the strategy that we have in our business that is already working great. What we're trying to invest is in a new supply chain that we will complement the existing supply chain, providing the speed in the new product introduction, giving us more and faster products into the market protected by a strong IP mode and giving us the challenge to shorten the supply chain in one of our main market that is The U. S. One. At the same time that we're able to keep control in the supply chain, avoiding disruption, controlling our cost and making sure that we are able to fulfill the demands in the market.

36:52 Besides that, we'll be capturing the main in USA for a brand that is already a low brand in the market, what is giving us as well an extra layer of protection and barrier to enter. That will give a stability and reduce the volatility that we have in our margins, giving us the consistency that we have at this very moment going forward aside of any other geopolitical situation that could have in the Western world. That is giving us the chance to coexist and maximize to supply chains, bringing the best of each of them, giving us the way to scale a business that is successful working great. Let me give the chance to Fabio to give you guys more color about how and why we'll be doing this. Right. Thank you, Cemma.

37:40 So the current structure, we source the products from Taiwan, and you can see in this slide the bridge of our current lending costs. So the current structure or current lending cost is up to the tariff cost line on the left side of chart of this slide. And as you can see us extending the supply chain, creating that dual sourcing in Charlotte, North Carolina and The United States, we believe that there's huge opportunities for POWER PROBE going forward. So as you can see, the bridge of the production cost goes up overall cost, primarily due to direct labor from Taiwan to The United States. However, even with that cost going up approximately, we believe 50%, there is still buffer for any learning curves that we have in the manufacturing process in The U. S. Side. So because we're excluding, in that case, any tariff cost in transportation margin. So we still believe there's pricing opportunity and cost opportunity for us to be more profitable in sourcing or making that product in The United States. So the plan again is to expand capacity, dual source with 10 different product lines, which are equivalent to about 40 different SKUs, which, by the way, the 40 different SKUs comprise of about 75% or 70% of overall revenue of 2024.

39:02 So it can really gives us can really give us a lot more flexibility and velocity to our working capital while shortening the overall life of the work the working process and finished goods in our warehousing. So we believe we'll have a lot more velocity, introduction of products in the market and will give us more velocity on the cash flow. Back to you, Shalman. Now in the Slide 21, you can see how this production technology works in our existing products in the factories that we have. As Fabio said before, we have at this very moment more than 98% of our production made in Taiwan, our supply chain in Beijing, Taiwan. And we have a very good quality product range with a lower than 1% after sales after sales claims.

39:59 So going forward, what we are planning is to open a new supply chain that will be complementing the existing one in Taiwan, giving us the chance to reallocate production for the SKUs that Fabio mentioned before in The U. S, giving us that made in USA and giving us as well the chance to, accelerate the new product introduction. Very easy explain. We are not in the the chipset market. We are pretty much in the electronic assembly market. Our technology based in plastic injection, very easy, a fully automated plastic injection on surface mount technology SMT that disassembly electronic components automatically fully automated as well in the SMT lines and putting together in the image that you have in the center, doing a calibration on quality control before packaging.

40:53 This is not a rocket science production. It's a very well known technology, in the Western world, and we are ready to open the new supply chain. We did this before. In my professional career with more than twenty years, you know, working in testing and measuring, I reallocate production from the Western to the Eastern and the Eastern to the Western Wall at least four times before. Our experience doing that is that if you are doing a phase movement from the existing one into the new one, and especially if you are not transferring, if you are not reallocating, if you are duplicating the supply chain, you have no risk in terms of reopen gradually production complementing the previous one. And that is what we are giving just the chance to join us in this project going forward.

41:46 Yes. Thank you, Cemma. So for the CapEx project and dual sourcing this supply chain here in United States, we're planning on a $7,600,000 CapEx expenditure. As Cemma mentioned, we're phasing that expenditure to make sure our learning curves are on target and that we avoid bottlenecks throughout the production process. So we'll start the overall expenditure in Q2 twenty twenty six, feeding the facility to any infrastructural needs and installations that we need, for example, electrical. And with target goal of commissioning the assembly lines first and making sure that group is trained ahead of time, with the primary goal of putting the first made in USA product by Q4 twenty twenty six. After we have the established learning curves through the assembly lines, we'll then commission the SMT lines and then the injection molding in Q1 twenty twenty seven. So by Q2 twenty twenty seven is to have the goal of making the whole product here in the Charlotte facility in United States, which by the way, you can see on the bottom on the right side of this slide, the blueprint of the two suites that we're currently on. The left side of that blueprint is where we currently inventory our items or finished goods. And then Suite 400 on the right side is where we're planning on putting through all the assembly lines, SMT and injection molding. You can see the layout of those lines on the bottom right of this

43:17 slide as well. By the way, we just renewed our lease. Our lease goes until 2034 here in the Charlotte facility. And throughout this project, we expect a five year payback period being very conservative. Back to you, Chamot. Okay. So we got financial summary next. Right. So more of an expanded look here in our financial summary. I know we looked at in prior slides on the consolidated side. So growth showing overall gross profit margin improvement overall. As I mentioned before, we grew the top line at 24%, managed our EBITDA margin 26.5% and consistently keeping that EBITDA margin in the first half of twenty twenty five.

44:06 Next slide, please. Cash flow. So this business has been highly cash generative since 2024. As you can see, we ended the year at the cash at the end of the period, 2,100,000. Just a quick highlight, the first half of twenty twenty five, the end year cash was 42. But however, we do have a credit line that's spread extensive with the Bank of America of $8,000,000. We we do not pay for any nonutilization of the line of credit. So as you can see, that net proceeds and repayment of the of the of the line of credit was $2,700,000. We did pay a dividend in the beginning of the year of 4,000,000. And as of the month of October, November, we were at about $2,600,000 in cash on hand, including the expenditure with at the time with the IPO, 1,700,000.

45:09 So highly cash generative. And as we put through the manufacturing in Charlotte, we believe that the velocity of cash generation is going to improve consistently going forward. The next slide, we have a the balance sheet look. So I'd like to highlight here just the working capital metrics have improved significantly year over year and now throughout the first half of twenty twenty five. So day sales outstanding at the end of twenty twenty four was 58.4. Now the the first half of twenty twenty five is 63.1, so pretty much in line, especially after we increased the sales so significantly. The days inventory outstanding have improved significantly, so we should we used to inventory those those goods for a lot longer period of time, we've been improving so much throughout our supply chain and through our different distribution models that that's improving significantly.

46:03 And then the days payable outstanding, the numbers have decreased significantly from prior years, but that's due to being part of a group, the MGL group Since then, since December 2024, POWER PROBE went through the demerger process. So now we have a a three month payment term, ninety day payment term. So that's a normalization of that working capital moving forward as we source those products from Taiwan. Thank you very much, Fabio. Well, at this point, I'm pretty sure that you guys realize that POWER PROBE is a very well known brand, well positioned in a market that is growing, growing consistently due to the structural tailwinds that we have with a very strong IP mode on protecting their own identity with a trade dress. Considering the strong new product introduction with 15 new product plan to be launched in 2026, covering all the different markets as well, including the OEM car manufacturers and new territories like The UK and European market with a very potential growth going forward.

47:17 It's having a model that is protected by strong pricing power in terms of the distribution strategy in the main distribution channel with the MAP pricing protecting the channel, a brand that is highly recognized and a go to brand for the mechanics. A business that is already successful in our financial with a great cash conversion and that is ready to scale. That's why we believe that investing in this project will be able to unlock and power up with a strategy, a growing phase in assisting a successful business model for POWER PRO. And we would like to invite you guys to join us in this new phase of growth. And we believe that we'll be able to deliver in the coming years a significant growth profitability and cross conversion to give you guys back your confidence in our project.

48:13 Thank you very much for your time. And now I'm going to hand over to Paul. Thank you very much indeed for your presentation. Ladies and gentlemen, do please continue to submit your questions just using that q and a tab situated on the top right hand corner of your screen. Just while the company take a few moments to review those questions submitted today, I'd like to remind you the recording of the presentation along with a copy of the slides and the published q and a can be accessed via your dashboard. As you can see, we've had a number of questions through today, and thank you to all the investors for submitting those. Perhaps let me start with the first one we've got here from Valeriano. We've got a couple of questions. The first one, perhaps I can direct that to you, Gemma, is why list on AIM? Well, this is, you know, a question that is quite quite common.

49:02 And thank you very much, Valeriano, to to bring this question up. The main reason for this is our main market is in The US. So logically, you know, NASDAQ and The US stock market could be, you know, the first market to check. With the company size and the deal structure that we have at this very moment, Nasdaq is not giving us the chance to to lease the company. They don't have an aim or emerging market. And, you know, we were trying to develop this base in new product introduction and investment. So private equity was not, either, you know, another route to keep growing this business. After checking outside The US, being, you know, or understanding that the Nasdaq is not an option, we check the different, stock market including in Asia, like Hong Kong, Taiwan, or in Europe, like the different Euronext market or the London Stock Exchange.

50:03 After being all the pro and con and considering that our main business in the Western, we found the London Stock Exchange the best market for us in terms of the technology, other companies in US being listed there and the way to develop in a global market that is able to give us visibility and give us, you know, the the the all the different things that we were looking for in the market. Considering that the rest of the markets can provide a different way for different technologies, this part, we choose London Stock Exchange and aim like the proper market to go through with the perfect size, with the perfect match for the deal size and the company size that POWER PROBE has.

50:49 In terms of the second question that this, the, mobile tool distributors, we have agreements with all the different mobile tool distributors that are distribution agreement that is based as well in a sometimes in a rebate program that is giving us the chance to have visibility in the annual goals. With all this, we are having the MAP pricing policy implemented with the, different resellers, authorized resellers online, that we are limited and we are defining in The U. S. What, are the different price or minimum advertised price into the market. That is giving us with the MSRP and 15% off as a maximum discount or being said in different way, minimum price in the market all the way with the discount structure that we have in the policy for their mobiles to have the margin that they need to provide to the different franchises to split and develop the business. Just bear in mind that the mobiles, they are investing time, they are investing money in gas, visiting mechanics. So that's why they need to have higher margin to share between the headquarter or the mobiles and the different franchises.

52:11 And this is how we are enforcing the MAP pricing policy and we are supporting the distribution ship agreements that POWER PRO has with all the mobiles. For the private brand, for all the mobiles that we have for them, we have specific agreements for private branded product like the Snap on tools or Matco tools that we have with them that is establishing the terms of condition that we have between both of us. Tim, thank you, Lee, for that. Another question we've got here, which is two parts. The first part reads, how much future growth do you expect to come from new product launches? And the second part reads, beyond The U. S. And The U. K, which international markets offer the biggest and largest medium term growth? I can take the first part of that question. So we're targeting internally a 10% growth.

53:04 As we go through the next three years, the overall growth we expect to be a CAGR of, of 20% on the top line. However, the new product launches between the OEM, and the new product introduction, should be about 10% of that 20% growth in a CAGR basis. And then I'll send it back to Tim on the second part of that question. Yes. Well, it's actually a great question, Will. Our business plan on strategic planning is giving us for the short and mid run growth plan based in the new territories that I explained before, mainly in UK and the European one and in the new markets that are car manufacturers and dealerships.

53:53 The reason for that is because, in UK and the European market, we are receiving a lot of requests and demand from the system, mechanics trying to get access to our technologies. Nowadays, they are not barrier considering social media and all the different platforms. They are realizing that we have technology and they would like to get that technology in the daily use for their toolboxes. So this is in mid run, one of the key drivers of growth in terms of territory. And in terms of market, we are, receiving a strong demand for all the car manufacturers due to the new challenges that they are having to provide, you know, more and more tools and technologies. In the electrical vehicles, hybrid vehicles, but even in the existing one due to the complexification.

54:43 The last one that we received is quite unique. It's a tool to check the the phone wireless charger that they have in the cars. They are having a great challenge nowadays with the warranties to perform, you know, a testing in that part. For instance, that's the one. In the long run, we have started researching and developing some strategy around some Asian markets, especially around Japan and the Japan market. But this is as well connected with the mid run technology. Fantastic. Thank you very much indeed. Another question here from Valeriana. Why doesn't POWER PROBE see a growth opportunity in the growing robotics trend? One could expect a huge industrial robotics part to be installed in the next ten years.

55:30 Wouldn't technicians maintaining these machines benefit from the use of power probe devices as well? Well, I think, Valeriano, that in this case, we are talking about two different technologies. Robotics and the way that they are implementing their robotics in production line. I totally agree that this the automation is a trend, a trend that is, you know, will be providing efficiencies going forward, especially with the new competition with the Asian car manufacturers. But our space or our field of operation is more related with the servicing program of the car manufacturers more than the production plan itself.

56:16 So our tools for car manufacturers and dealerships are developed for them, for their cars, but to be used mainly in the car dealerships and mainly for providing the right service following their standard operating procedures. So for the robotics, I don't think that in the, at least in the mid long run, they will be able to perform or replace the professional mechanics due to the complexity of finding, you know, the the fault or the problem. Anyway, being said that, we have a in R and D, we have projects that are powered up by AI and we'll be, you know, able to implement this going forward. It's not exactly robotics, but we'll unlock a new edge of technology.

57:05 Fantastic. Thank you, Chairman. Perhaps one for you here, Fabio, really. Where do see the greatest operational leverage and how sustainable are the margins? I guess you can split that between both of you, but over to you guys. Yeah. So as we go through the the manufacturing process here in in Charlotte, as I mentioned, right, the the assembly lines are are key to make sure that we have the expected efficiencies that we can actually beat our current current cost structuring source in the product. So we'll ensure that the the assembly lines are commissioned and we're running the correct we have the knowledge in house to run the correct, you know, speed rates and etcetera as far as production goes. Now the margins, we believe to be sustainable and actually improving the next three years.

57:54 One, because of the operational efficiency we're bringing to the site. Secondly, as Chairman mentioned, the MAP pricing policy gives us great strength in the market and a very heavy barrier to enter. So especially with all the IP we have in The U. S. And around the world. So we do believe that margin to consistently and note, year by year improving slightly and be very sustainable. Well, next question we've got here is, what is the largest risk factor moving the manufacturing to The US? Well, first of all, Mason, I think that we are not moving manufacturing to The U. S. What we are doing is opening a dual source, keeping the existing one that is based in Taiwan, our production.

58:45 And at this moment, the country of origin for our product range is made in Taiwan. And what we are opening is additionally a new manufacturing or supply chain that will bring the same product or part of those product with made in U. S. As well. What is giving us the chance to maximize the advantage for both of the country of origins having the best of both country of origin. And I would say that in terms of technology, we don't believe that there's any risk considering, you know, the experience that we had before and how standardized is the technology. What we experienced with this movement is the potential, cost of opportunity that we have going forward, because our experience when we are opening, especially in The U. S. And made in U.

59:32 S. Will generate a lot of expectation from older manufacturers, including mobiles that they have their own private brand as well, trying to join us to to get, you know, their own product as well, like the Snap on or Macro branded product we've made in US. And sometimes could, you know, be, you know, a bottleneck trying to capture all that. So more than a risk could be, you know, a challenge how to maximize and align all the different opportunities that we have going forward with that dual service, adding the new supply chain in The US. Yeah. And then I'll add a little more to that, Chairman. I was probably a little brief on this slide that I explained that. So with the use of proceeds, we also have $3,000,000 reserved for additional inventory bringing on-site.

1:00:19 What that means is we're going to continue to service our customers as we bring or add production here in United States, add the capacity here. So the insourcing of those products from Taiwan will not stop, it will continue. So our customer will not struggle with any supply chain disruption from our side. So that's been well planned for. Fantastic. And the last question we've gotten through so far from Tom. Thank you, Tom. How large is the opportunity in The UK and Europe? And how do you expect revenue to scale over the next three years? Do you wanna take that? Sorry. We had a technical difficulty here. Can you guys hear us? Yes. We can hear you, Fabienne. No problem until we can hear you. Okay.

1:01:08 Just to repeat that question, if that's okay, from Tom. Thank you. How large is the opportunity in The UK and Europe? And how do you expect revenue to scale over the next three years? So for 2026, sorry, Trevor, for 2026, that growth should be about 4% of the overall growth of the company. So there there is a clear strategy. I think, Cemma can take you through a little more between The UK and overall, EMEA as well. Yeah. It's a actually, it's a phase growth. UK is the is the first stage of the implementation already in place in or near term, Birmingham. The first, let's say, rollout even without the facilities over there was fantastic, was great. Yes. It was to hit around 1,000,000 US dollar revenue.

1:01:58 Now with the operations in 2026, we are planning to to to do three times of what we did in the previous year, going up to 3,000,000 US dollar. Compared with the existing ones, it's still a very small one, but we need to understand that this is the the first year of the fully operational structure that we have over there. We have a lot of demand. We are getting, you know, a lot of traction as well for the for the car manufacturers there. Let me just answer this question giving you visibility about, you know, the market size. In terms of the market size, considering that the technology that POWER PRO has is exactly the same that will be, you know, used by the mechanics in the European. I could say that the market size of the European market, the total European market could be considered around 80% of The US market itself. So it's a very big market. And in terms of the segments in that market, the car manufacturers and dealership is a little bit higher than The U. S. One, going up to 40%, 45%, which takes a little bit longer. So meaning, we believe that in the mid run POWER PROBE will be able to replicate in the same percentage that I mentioned before in around 80% the successful model that we have in The U. S, generating the same business model that we have in The US and implement it with some of the difference that the European market bring to the table. That could be, you know, different languages, potentially different, certificates that will be implemented.

1:03:27 But you know, with all the technology in place, based in UK, going forward in the European territory, we believe that that will give us an extra protection as well for that European market. Fantastic. Look, thank you indeed for answering those questions you can for investors. And of course, any further questions come through, you'll be able to review all those and publish responses. We're prepared to do so on the Investor Me company platform. Just before redirecting investors to provide you with their feedback, which is particularly important to you and the team, Chairman, if I could just ask you for a few closing comments, please. Yes. Thank you very much, Paul. Yes. I think that what we are doing and what we did in December was the right thing to grow our business that this already, you know, successful.

1:04:14 We believe that, the opportunity going forward is really huge. It's massive considering the technology and the market opportunity, growing market with technology that is, complex suffocating, and generating new demands. And we are perfectly positioned and ready to do. We are experienced. We are based in a market that is already recognized in our know how and our technology. We are considered essential for them, and we believe that we are ready to scale the business. Thank you very much for your time, and, we will love to to have you guys joining us in this amazing project for POWER PROBE. Fantastic. Thanks indeed for updating investors today. Could I please ask investors not to close this session?

1:05:02 You know, we automatically redirect to provide your feedback order the team can better understand your views and expectations. This may take a few moments to complete, and I'll be greatly valued by the company. Above the management team of POWER PROBE PLC, we'd like to thank you for attending today's presentation. That concludes today's session, and good