Welcome to the Verisure Group second quarter results 2026 presentation. Today, I am joined by CEO Austin Lally and CFO Colin Smith. For the first part of the conference call, all participants will be in listen-only mode. If you wish to participate in the questions and answers session after the prepared remarks, then please dial into the telephone conference and press pound key five on your telephone keypad to enter the queue. Please note that you will not be able to ask questions if you have joined on the audiocast link. Now I will hand the conference over to the speakers. Please go ahead. Well, thank you, operator. Good morning, everyone. Welcome to our second-quarter earnings call. First, just a reminder that you can find today's presentation, earnings release, and interim report on our investor relations website together with updated long-term trending schedules setting out our operating and financial performance. This morning, Austin will begin with opening remarks and second-quarter performance highlights. I will walk through financial performance in more detail. With that, Austin, over to you. Well, thank you, Colin. Good morning, everyone. Thank you for joining us on our second quarter 2026 results presentation. Q2 was another strong quarter of delivery. Our results reflect the strength of our model, recurring revenue growth, expanding margins, and improving cash generation. We grew our customer portfolio, focused on quality new customer intake, grew margins, generated meaningful positive free cash flow, and reduced leverage to within our year-end target range. Today, we're declaring our first-ever dividend, entering a phase of progressive shareholder returns. With that, let's turn to slide two. I would summarize the second quarter by talking about two themes. First, we are reporting profitable financial growth and significant positive free cash flow. Annualized recurring revenue reached EUR 3,620 million, up 11.9% year-over-year at constant currency, including around 2 percentage points from Mexico. Adjusted EBIT was EUR 269 million, up 13.9%, boosted by a record monthly EBITDA per customer of EUR 35.7. We delivered our third consecutive positive free cash flow quarter at EUR 56 million. That's a year-on-year improvement of EUR 97 million. We've declared our first interim dividend as a public company of EUR 0.10 per share within our pre-IPO guided range. Second, we executed well against our strategic priorities. Our rebrand in Spain is progressing to plan and on budget. We're very pleased with the positive response. I'll provide more detail on this later in the presentation. We also completed a technology-led bolt-on acquisition in France. The company is Kivala. They have developed and brought to market a smart, innovative digital technology that controls access to apartment buildings. Think about a modern app-based intercom system. We also expect this to open new opportunities to increase apartment penetration within those buildings, complementing our current proposition. I'll share more on that later. Importantly, our AI program is progressing well with savings already landing and much more to come. Finally, we won two prestigious Red Dot Design Awards for ZeroVision and for GuardVision cameras in the quarter. We achieved the highest MSCI ESG rating of AAA, alongside recognition as an ESG leader by Morningstar Sustainalytics. We were also pleased to be named on the Financial Times Europe's Best Employer list for the second consecutive year. Turning to slide three and our second quarter dashboard, you see consistent broad-based delivery across every metric. Our portfolio is now around 6.4 million customers. That's up 9.4% year-over-year, reinforcing our position as the largest professionally monitored home security company globally. New installations were 209,000, up 0.6% year-over-year, reflecting our focus on quality intake with no compromises. As in Q1, we saw a more uncertain consumer backdrop in Latin America, particularly in Argentina. Total revenue increased 9.3% in Q2. This growth was supported by portfolio growth of 9.4% and ARPU growth of 2.4%. Annualized recurring revenue reached EUR 3.62 billion, up 11.9% year-over-year. Adjusted EBIT was EUR 269 million, up 13.9%, with the margin expanding 107 basis points year-over-year to 26.3%, increasing margins as our portfolio continues to grow. Turning to slide four. Here we set out the continued compounding of our portfolio alongside stable low attrition. On the left, our customer portfolio grew by over half a million customers year-over-year, or 9.4%. Highly consistent, valuable growth quarter after quarter. On the right, our Q2 annualized attrition was very stable, remaining low at 7.5%. We're very pleased with the performance here. With an uncertain consumer backdrop through Q2, the resilience and stability of our portfolio were evident again. Continuous improvements across the group offset an approximately 7 basis point headwind from the Mexican acquisition. These remain industry-leading attrition levels, especially at our level of ARPU, reflecting the high-quality intake, the portfolio resilience, and the high customer engagement that define our model. With that, let me hand over to Colin. Thanks, Austin. Let's come to slide six. As always, I'll talk to growth rates in constant currency where applicable. Annualized recurring revenue was EUR 3.62 billion, up 11.9% year-over-year. Total revenue was EUR 1.024 billion, up 9.3% year-over-year, supported by strong portfolio and ARPU growth. Adjusted EBITDA was EUR 468 million, up 9.1% year-over-year. As a reminder, our quarterly EBITDA includes a EUR 10 million investment from our Spain rebrand program, as previously guided. Adjusted EBIT was EUR 269 million, up 13.9% year-over-year, with margin expanding 107 basis points to 26.3%. This marks our 15th consecutive quarter of double-digit adjusted EBIT growth, reflecting a long-track record of predictable compounding growth. Looking at the first half of 2026, adjusted EBIT was EUR 546 million, up 16.6% year-over-year. H1 margin was 26.7%, up 157 basis points. Earnings per share in the quarter increased to EUR 0.14, up from EUR 0.08, reflecting profit growth combined with a step-down in interest costs following a refinancing program. Finally, a quarter two highlight. Free cash flow was positive EUR 56 million, and I'll unpack cash flow in more detail later. Let's turn to slide seven. ARPU was EUR 48.20 in Q2, up 2.4% year-over-year. This growth reflects the quality and engagement of our portfolio. A strong response to the January price increase, continued low discounting, and increased upsell propensity. We maintain no frontbook-backbook dynamic within our base, with new customers joining Verisure in line with portfolio ARPU. This supports both lower attrition and consistent ARPU delivery. Recurring monthly costs were EUR 12.49, up 1.2% year-over-year. As previously noted, this includes an impact from the Mexico acquisition that we expect will reduce over time. Excluding Mexico, RMC was 0.4% lower year-over-year, reflecting continued progress on sustainable cost transformation against a backdrop of higher cost inflation. Bringing this together, EBITDA per customer reached EUR 35.71. Portfolio services adjusted EBIT margin increased to 74.1%, up 30 basis points, increasing contribution per customer alongside a growing portfolio. Turning now to slide eight on customer acquisition. Q2 new installations were 219,000, up 0.6% year-over-year. We remain disciplined in the quarter, focusing on high-quality customer intake with no compromise on credit scoring or discount levels. With an average customer lifetime around 15 years, maintaining acquisition quality is an imperative to drive long-term value creation. We continue to diversify our routes to market. In Spain, our new MasOrange partnership launched in April and already showing promising signs, offering partnership access to over 30 million customers. In Italy, our Unipol partnership continues to evolve well, and in France, our BPCE alliance has now scaled nationally. Cost per acquisition was EUR 1,644, up 9.8% year-over-year. This includes EUR 10 million of incremental Spain rebrand media investment, equivalent to approximately EUR 46 on CPA. Excluding rebrand, CPA was up 6.7% year-over-year, consistent with previous quarters. The increase reflects media inflation and lower absorption of certain fixed sales-related costs. We chose to continue to invest in media, given the long-term benefits to brand equity and future growth. Our acquisition multiple was 3.8 x or 3.7 x excluding rebrand, well within our target corridor. New customer cohorts generate an unlevered IRR of around 20% over 15 years, highly attractive value-creating returns. Moving now to cash flow on slide nine. We generated EUR 56 million of positive free cash in Q2, which represented our third consecutive positive cash flow quarter. Stepping through the bridge. From adjusted EBIT of EUR 269 million on the left of the chart, we add back D&A and customer acquisition EBITDA. We then remove technology and portfolio CapEx investments. In Q2, we delivered an improved working capital movement with an outflow of EUR 8 million. This reflects further progress on our working capital improvement program. That takes us to adjusted operating cash flow before customer acquisition of EUR 557 million. From there, we invested EUR 195 million in attrition replacement, and EUR 164 million was deployed to organic portfolio growth, increasing our portfolio by 100,000 customers quarter-on-quarter. Adjusted operating cash flow reached EUR 197 million, more than doubling year-over-year. Below the line, finance costs were EUR 80 million, which was slightly down year-over-year. This included EUR 13 million of non-recurring costs related to a refinancing program comprising a call premia and associated transaction fees. Following the completion of the refinancing program in July, we expect cash finance costs to step down in Q3 and again in Q4. Last, I wanted to highlight the note on the right of the chart. By adding back organic portfolio growth investment, our pre-growth cash generation in Q2 was EUR 220 million, up 84% year-over-year. This highlights the underlying cash generative strength of the financial model. Let's now turn to slide 10. Staying on cash flow, here we summarize progress as we move through our cash inflection point, ahead of expectations on every dimension. Our balance sheet has strengthened significantly alongside improving cash generation. First, on weighted average cost of debt, we reached approximately 4.25% on a pro forma basis within our year-end target range of 4%-4.5%, despite the higher rate environment. Second, our refinancing progress puts us well on track to deliver at the upper end of the EUR 200 million-EUR 220 million interest savings versus 2024, as we guided at the time of the IPO. Third, leverage is already within our year-end guidance range of 2.5x-2.75x, closing Q2 at 2.7x. Fourth, portfolio reinvestment rate has reduced to 57.3% in Q2 from 58.5% a year ago. This is an important metric for us as our portfolio grows in profitability and cash generation, a progressively smaller proportion of portfolio cash flow is reinvested into new customer acquisition. Last, CapEx intensity is reduced to 23.9% of sales from 25.8% a year ago, as we capitalize a lower proportion of customer acquisition costs, charging more of these costs immediately to the income statement. Taken together, it's clear that our cash inflection is now well established, with EUR 95 million of positive free cash flow generated in the first half of 2026. Lastly, in June, Fitch assigned Verisure its first investment-grade rating at BBB- with a stable outlook, further strengthening our financial flexibility. Moving now to slide 11. Our deleveraging progress continues at pace. As noted, last 12 months net leverage stepped down to 2.7x at the end of Q2, representing a further 0.1 of a turn improvement in the quarter, with total net debt reducing to EUR 4.9 billion. We reduced our total net debt by EUR 72 million in Q2 and by EUR 110 million in the first half of the year. We reaffirm our medium-term leverage target of around 2.5x, with a clear pathway to additional shareholder returns over time. As we've noted in the earnings release, we're pleased with progress on refinancing. In April, we refinanced a EUR 570 million Term Loan A upsize, with proceeds used to fully redeem a legacy pre-IPO bond carrying a 7.125% coupon. In late June, we priced a new EUR 1 billion senior secured note at a 4.125% coupon, using those proceeds to fully repay our 5.25% senior notes. Following these refinancings, together with margin step downs on our RCF, Term Loan A, and Term Loan B, our weighted average cost of debt has reduced to approximately 4.25%. We now have no debt maturities due until May 2030, but we will remain opportunistic in assessing further options within the debt structure. As noted, we expect to deliver interest savings at the top end of the EUR 200 million-EUR 220 million savings range versus 2024. Before I pass back to Austin, let's now turn to slide 12. Today, we reconfirm our 2026 outlook. We continue to expect ARR growth of around 10%, excluding Mexico. Adjusted EBIT margin above 26%, reflecting further margin progression while absorbing the Spain rebrand investment, and free cash flow positive for the full year. An important milestone today, our declared interim dividend is EUR 0.10 per share based on a 35% payout ratio on H1 2026 adjusted net income. This will see us return EUR 103 million to shareholders, marking the beginning of a new phase of progressive shareholder returns. We also reaffirm our medium-term guidance, around 10% annualized recurring revenue growth, revenue growth up to 100 basis points below ARR growth, and progressive adjusted EBIT margin development to 30% long term. Q2 was a quarter of measured execution and again demonstrated the adaptability and the resilience of our financial model. With that, Austin, back to you. Well, thank you, Colin. Behind the Q2 numbers is a business model designed to compound value year after year. Over the next slides, I'll cover our disciplined portfolio model, investments for growth, our AI-enhanced service, and our plans for progressive shareholder returns. This slide sets out the essence of our model in four words: disciplined, compounding, portfolio growth. Strategic execution rests on three pillars. First, high-quality customer intake with no compromise on credit scoring or entry pricing. Second, highly attractive unit economics, each new customer generating around a 20% unlevered IRR over a 15-year lifetime. Third, robust growth, margin expansion, and cash flow delivered quarter after quarter. Q2 underscores this on all three fronts. EBITDA per customer reached the highest level ever. Per customer profitability continues to grow. Portfolio services adjusted EBITDA margin increased to 74.1%, That represents the valuable recurring monthly contribution generated per customer. Attrition at 7.5% remains among the lowest across global consumer subscription businesses. This is a business that has grown consistently through multiple cycles, and the opportunity ahead remains compelling with category penetration still at only around 4% across our footprint. Turning to slide 15, let me provide a brief update on the Spain rebrand. We launched the Verisure brand in Spain in April, building on the Portugal launch in late 2025. Three months in, we see strong early proof points. We already have over 70% awareness for the Verisure brand, and over 70% of digital marketing leads are now coming through the Verisure brand, both meaningfully ahead of our initial expectations. Beyond commercial channels, the rebrand is also strengthening our employer brand, with traffic to our careers website from Spain more than doubling since April. Marketing investment in the rebrand remains on track with prior guidance and is fully included in our 2026 adjusted EBIT margin outlook of above 26%. The early response reinforces our confidence in the value of a unified Verisure brand across our European footprint. Let's turn to slide 16. Here we highlight three initiatives that reinforce our position for the future around growth, supply chain strategy, and cost. First, on growth, as I indicated earlier, we completed the acquisition of a company called Kivala in France. Kivala provides a secure digital intercom solution for residential shared access buildings. Kivala extends the Verisure protection ecosystem. We protect customers on city streets with our Guardian service, at the building entrance with Kivala, at the front door with our very popular LockGuard product, and inside the home through our AI-enabled alarm and camera platform. Standalone, Kivala is an attractive business with a profitable recurring revenue model and accretive unit economics. It also, though, creates an opportunity to increase our ability to address apartments within Kivala-protected buildings. This was an opportunistic technology-led acquisition with a modest committed investment of around EUR 6 million in 2026. Second, supply chain. We opened our new assembly facility in Brazil in the Manaus Free Trade Zone. Our supply chain strategy is focused on regionalization, shortening supply chains, and bringing production closer to our end markets. This will also benefit working capital and unitary hardware costs over time. Third, on cost. Our Fit for Growth transformation program is delivering excellent benefits. The program is broad-based, and areas in scope include lowering material costs, digital-first, organizational design, and AI-enabled sales and marketing efficiency. We look forward to sharing examples of new initiatives regularly over the coming months. Taken together, these initiatives support both growth and margin expansion, demonstrating that at scale, we continue to identify structural improvements that reinforce the model. On the next slide, an important point on how we deliver our service. We are a human-delivered, AI-enhanced business. An AI lets our highly trained human experts act fast on what really matters. To bring this to life, in Q2, our systems processed approximately 24 million alarm triggers across our customer base. 9 million cases were verified by our highly trained security advisors. AI plays a key role here, supporting filtering, identifying high-risk events, and routing those events to the most experienced teams within our 17 alarm receiving centers. This allows us to filter out 99.5% of false positives. Of the 24 million alarm triggers, we provided expert intervention in 104,000 incidents that required on-site assistance. These are the key moments of truth when Verisure intervenes to protect a family, a home, or a business. Our intervention is what the customer pays for. It illustrates how we're operating at scale. Cutting-edge AI, engineered by our in-house technology teams, deployed at scale, enabling our human experts to be more effective and more focused when it matters. AI doesn't replace our human service. It makes it consistently better. It's a genuine competitive advantage, especially given the size of our portfolio, the vertical integration in our technology stack, and therefore the size and the quality of the dataset that we use. We see this continuing to enhance the service that we provide to our customers. Now with that, let me move to the key takeaways. First, a strong Q2 performance, robust growth, margin expansion, and positive free cash flow. The business model continues to deliver as expected. Second, progressive shareholder returns. Following the declaration of our first interim dividend today, we see clear scope for additional shareholder returns beyond 2026 as free cash flow continues to accelerate. We're coming through the 2G/3G upgrade program, the Spain rebrand, and continued reduction in the portfolio reinvestment rate. Once leverage settles at our medium-term target of 2.5 x, we see a clear pathway to return further capital. Third, we reaffirm our 2026 guidance. ARR growth around 10%, adjusted EBIT margin above 26%, and free cash flow positive. Verisure is defined by disciplined, choiceful growth, and consistent execution. In Q2, we executed well, demonstrating the flexibility of our business model. We're delivering quality growth, margin expansion, cash generation, and shareholder returns, and that's the inflection point we have been guiding towards. With that, I'll hand back to the operator, and Colin and I look forward to your questions. Thank you. As a reminder, if you wish to participate in the question-and-answer session, please dial into the telephone conference and press pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. We please ask all analysts to limit their questions to two per person. We will take a short pause as we wait for the first question. As a reminder, it is pound key five to join the queue. Thank you. The next question comes from Annelies Vermeulen from Morgan Stanley. Please go ahead. Morning, Austin. Morning, Colin. Two questions, please. Could we talk a little bit about the macro environment? New installations perhaps a little slower this quarter, but ARPU and retention, very robust. Perhaps could you talk about the regional differences you're seeing within that? Secondly, just on the free cash flow, which was better than expected, could you unpack the moving parts within that where you delivered better performance? Given the usual seasonality around working capital, et cetera, would you expect Q3 and Q4 free cash flow to continue to build on the Q2 levels? Thank you. Well, Annelies, good morning. Nice to talk to you. Maybe I'll take the first question, right on installations and the macro picture around. We certainly see, I think we're all looking at the same reports, a more choppy consumer backdrop. It's, I would say, a bit worse in Latin America than Europe. Even in the European economies, there's uncertainty and we know when we go through cycles like this, that it creates some headwind right on new installations. Customers delaying decisions on big-ticket items until the situation becomes clearer. I think against that backdrop, I was actually very pleased with the absolute volumes that we delivered in the quarter. It was 219,000 new installations. It's our third highest ever. I guess the important point is when that feeds into the portfolio, the book's up 9.4% year-over-year. I think, that level of portfolio growth on a business of our scale against a difficult economy, we were really pleased about. I will say as well that even if you look across the footprint, there are still places where we actually deliver standout growth. I was very pleased, for example, I look at the U.K., I look at Italy, I look at Spain, that's important for the future. I'm glad that you mentioned the attrition performance, the retention on the portfolio. That's the thing in the quarter probably I'm most pleased with. Attrition was stable at 7.5% despite a more difficult macro. That portfolio is just rock solid, high quality, engaged, sticky. There's a little bit of headwind on that attrition number for Mexico, I think 7 or 8 basis points. If you actually excluded Mexico, attrition was actually down in the quarter. I think that maybe also moving to the question around ARPU development too. The way I look at it, we delivered a strong volume intake. We managed to continue to price. I think that was very pleasing. We held the portfolio rock solid, I think the combination of those three things we were pleased about. As I've said in previous calls as well, we could have sold more alarms in the quarter if we'd been prepared to compromise on the quality of the intake, and we don't. We focused on very high quality standards in that quarter because chasing some easy volume today is just tomorrow's attrition. It doesn't make sense. That's one of the reasons we don't guide on installs. We guide on ARR is a bit more than installs. It's about the portfolio size, it's about the attrition, it's about the ARPU that you can develop. One of the reasons that we don't guide on install volumes is that I don't want to create inside the company pressure for people to chase customers that we're going to regret bringing in. Well, why don't I pick up on cash, Annelies? Listen, thanks for the question. I think, look, cash was a real highlight of our Q2 delivery. I was very happy with the quality of the cash delivery in the quarter. It was our third successive quarter of cash generation. As a reminder on the numbers, we delivered EUR 56 million of positive free cash. That's actually EUR 120 million over the last nine months, so it shows the consistency of that delivery over time. Let me unpack the Q2 delivery in a little bit more detail. Firstly, look, we had two cash headwinds in the quarter that are worth talking about, both of which are non-recurring. First, the payment of an IPO bonus to all staff, which was EUR 18 million. That was paid in April. Second was refinancing cost mentioned in my remarks earlier on, which was a EUR 13 million cash out. They came against us in Q2. Second, though, we were pleased with better working capital. You mentioned that, and I know that we've talked about this a lot together over the course of the past 12 months in the context of us moving through our cash inflection point. Q2 working capital was a cash outflow of EUR 8 million, making a working capital outflow of EUR 56 million in the first half, and that broadly equates to around 2.5% of sales. The outflow is lower than in Q2 2025, but I would treat 2025 very much as the outlier here. To share a little bit of color on what we're doing on working capital, firstly, on inventory, we built up stock a little higher pre-summer than we had planned. We're carrying around EUR 330 million of inventory, which is around seven months of supply. Stocking up a little bit higher was a deliberate choice for us, and that was due to the global memory demand and price pressures that we're seeing. Over the medium term, we do see opportunity to sustainably step down inventory, particularly given that our assembly line is now open and operational in Brazil. Second, we worked across all markets to ensure that we're optimized across payables and receivables. Areas such as recovering withholding taxes promptly, further good progress on getting cash in the door more quickly. We also kicked off a rebrand in the quarter in Spain, as I talked about earlier on, and that had the impact of increasing our trade payables balance. Therefore, I think I'd see cash delivery in the quarter as very well-balanced and, as I said earlier, of high quality. In terms of guidance, as you know, we don't give cash guidance for the rest of the year. I do think that this is a positive point of progress on our journey on cash flow. We see it as a way point in terms of those accelerating shareholder returns that I talked about earlier on. Caveat here is that cash, as we know, will always be a bit choppier quarter on quarter than the P&L delivery. We certainly see this as a good base for the rest of the year, i.e., the H1 number. Just before I close, I also just wanted to note that on cash flow, both of our discontinuous strategic programs, 2G, 3G sunset, and the rebrand are at peak investment levels, they will flip to become a cash tailwind in the medium term. Of course, cash, we've talked about it so much since the IPO. It's the ultimate proof point that the model is working. As I say, we see ourselves at the very beginning of a really attractive journey on cash. Thanks. Great. Thank you very much for the detail. The next question comes from Joachim Gunell from DNB Carnegie. Please go ahead. Thank you, good morning. Just a follow-up on the discussions on new installations. I know that you don't guide, can you just provide some commentary here on what we see going on with regards to the fires in southern Europe, basically in light of your large presence in this region, and if that can become anything greater headwind to new installations in Q3? I think, maybe I'll take this. I think for us, the absolute first primary consideration is the safety of our employees and our customers. That's where we've been focused. We're supporting our employees who've been affected, particularly by the outbreaks to the west of Madrid. We did have a number of employees affected there who are being given paid leave, and our teams are continuing to assess their needs and provide support on a case-by-case basis so that we get their families set up right and sort of moving on. I think moments like this, your DNA is tested in terms of your care for your people and your care for your employees. If I look at Western France, sort of around Bordeaux, those fires and also what we saw in Var, down in the south of France, we don't have major operations centered there. The number of employees impacted is smaller, but we do continue to support them. We actually had three sales branches in the affected area that we had to evacuate. We'll return to activity there when the situation normalizes. But obviously just first priority is we don't make any compromises on the safety of our staff and our customers. Around that initial evacuation area around Bordeaux, I think we had about 7,000 customers in our portfolio. We're obviously in touch with all of them to make sure that we can help. I think when you add it all up, I don't see that adding up to being a material topic around installations. Okay? But it's clearly from a humanitarian perspective, it's a strong concern for us. Understood. On the rebrand that is progressing according to plan, both in Portugal and Spain, you commented on that the investments here are tracking in line and is embedded into the guidance. But just for, say, Q3 and the seasonal pattern on margin progression is, call it a step up in Spain investments on the rebrand side, something that could pose a threat to the seasonal margin expansion into Q3 versus Q2? I think we guided before that the investment in Q3 would be similar to Q2. Yeah, that's right. Joachim, it's Colin. We talked last time around about a EUR 25 million media investment over the course of the year. As we've talked today, EUR 10 million of that was made in the second quarter. I expect Q3 to be similar to Q2, with potentially a slightly lower level of investment in the fourth quarter. I think stepping back, importantly, in terms of EBIT, as we said on the call earlier, we're pleased with where we're at both year to date and in the quarter. Margins are at 26.7%. The rebrand at those levels was fully included in the outlook that we shared for the year. Before anyone asks if we're re-guiding on EBIT, I think the answer to that one very much is not yet. I think I would like to come back at the Q3s and share more specific updates on how the year-end 2026 outlook i s fairing. Commenting just a little bit more on the rebrand. I'm delighted with the quality of the execution in Spain. Just really proud of the Spanish team. It's been a full-court press across the whole organization, marketing, sales, operations, talent. Although I'm not guiding to upside, it's going faster than we anticipated, faster than we expected. Some people thought about these rebrands as being a risk or a cost, and I always viewed it as an investment. I really look forward to having unification and control of our brand right across Europe. Lovely. Thank you both, and have a great summer. You too, Joachim. Thank you. See you in Stockholm. The next question comes from Suhasini Varanasi from Goldman Sachs. Please go ahead. Hi. Good morning. Thank you for taking my questions. Given the healthy free cash flow generation, feels like leverage could actually drop quite quickly by the end of the year. In which case, if leverage does drop quickly, could we expect additional capital returns at the full year results next year? Appreciate it's a bit too early, just wanted to get the question there. The second question is on the Manaus assembly line, which was opened. Just wanted to get a bit more color here, please. Are you trying to be a bit more vertically integrated here by getting into manufacturing? Are your capital requirements changing, or is it just trying to diversify the supplier base and having contracts with somebody else? Thank you. Suhasini, let me pick up Manaus first off, from a supply side. I think the benefits here, it's really all about our strategy of shortening supply chains. We assemble the majority of our hardware, I think we've said before, in Eastern Europe. What we're doing here is we're working with Flex. They're one of our two strategic manufacturing and assembly partners, to basically open up in the Manaus free trade zone in Brazil. That will basically mean that we shorten the supply chain and will be one of the elements that help us reduce the inventory levels that I was talking about earlier on. It's going to give us working capital benefits. It also will deliver unitary cost benefits in terms of the hardware cost into Latin America, because we avoid some import duties by manufacturing that hardware locally. I think all in all, it's a really nice business case, this one. I think it really delivers with it multiple benefits. Helping us diversify manufacturing and assembly plants is always a good thing. Thanks for your question on cash. Similar to the answer I gave to Annelies earlier on, we're not going to give definitive guidance on cash flow for the full year, but as I said earlier, we're in good shape, and I think the first half should be looked on as a good base for what's coming. In terms of where that takes us in year-end leverage, I think you're right. I expect us to make some further progress, but that will be something that we will review and discuss at the right moment in time. I think standing back from it, the bigger position is, as you've called it, we see the ordinary dividend as being well-covered already. I think the pathway and the opportunity for additional returns is fairly close at hand. Thank you. Thank you very much. The next question comes from Virginia Montorsi from BofA. Please go ahead. Good morning. Thank you for taking my question. I just had two quick ones. One is about your ARR guidance, because I think it's one of the most debated topics right now with the investor community. How are you thinking about the kind of moving pieces of new installations and cancellations to get to that 10%? Because I think lots of conversations we're having is, if we look at where you're tracking right now on the new installation growth and the current cancellations, 10% into next year or so looks a little bit harder to achieve. Is there anything we're missing out? Obviously, you've explained the priority of the quality of the cohort, but what are your kind of moving pieces in terms of being comfortable with that guidance? Last question on my side, is there anything you can comment on exit rates on the new installations for Q2 or anything on July trading? Thank you very much. I think in terms of how Q3 has started, obviously it's kind of similar to what I would say in Q2. I don't think that there's been a significant improvement in the landscape or a worsening. I think you're right on the ARR point, which is look, over the medium and long term, obviously our model benefits from growing installation volumes. It's not something that's a one quarter or a two quarter effect. Right? Obviously a better macro would help us. In the medium term, we're not counting on that because we're not in control of that. We'll take it when it comes. I think the first thing I would say on ARR, of course, in the short and medium term, it's fundamentally driven by having a big portfolio up 9.4% and the ability to price and very happy with attrition being stable in this environment. We obviously have an objective to try and bring attrition down over time. Right? That is certainly not something that I would accept that 7.5% is sort of the new normal for attrition. Maybe in a difficult economy it comes down a bit more slowly, but we're still working very much on that. If I go to ARPU, because eventually ARR is ARPU times portfolio, we've never had a stronger innovation program ahead. The whole point about innovation in Verisure is to create the market, is to take the lion's share of the growth. We've been on a journey over decades of basically resetting and step changing the ARPU levels in this industry, and we've done it behind innovation. I think the innovation that's ahead is going to continue to give us pricing power, and that's going to contribute to that ARR delivery over time. I'd echo that. I think installations are always going to be subject to ebb and flow quarter-on-quarter. I think the one thing that's not subject to ebb and flow is our focus on quality. There's absolutely no compromise there, and that would never happen. It's all about the health of the portfolio. We've also announced today, Virginia, that EBITDA per customer, so the average contribution made each month by our 6.4 million customers is at the highest level of EUR 35.71. That really is the engine of both profitability and cash flow growth in the business. Thanks. Thank you very much. Very helpful. The next question comes from Andy Grobler from BNPP. Please go ahead. Hi. Good morning. Just a couple from me as well, if I may. CPA was up again in the quarter, even stripping out the rebranding cost. Can you just talk through, A, the drivers of that, and B, your expectations into the second half of the year? Do you think media costs are going to continue to rise? Are there any other factors we should take into account? Secondly, just a niche one. Within the cash flow statement, there are a few moving parts around factoring. Can you just talk through what's changed there and whether there is any impact on working capital? I don't think there is, but just wanted to check. Thank you very much. Andy, it's Colin here. Let me pick those both up. I think let's go second one first because I think it's a simpler, shorter explanation. I think factoring importantly is not included in the EUR 56 million free cash flow delivery. As you say, that doesn't come through working capital. We treat that as a financial liability, and it sits on the balance sheet. If you think about the reduction in net debt, which was EUR 72 million, and the free cash flow generated per our definition, the difference between those two numbers is the movement in that factoring balance. This is primarily in partnership with a long-standing partner in Spain, as we've mentioned before. You always see a little bit of up and down in terms of that factoring balance based on the amount of factoring that is provided for each new installation. We're broadly level with where we were last year, but I hope that answers the factoring one and clears that one up. Let me go to CPA. Thank you for the question. Firstly, I just wanted to remind everyone that CPA is only really one half of what we focus on in terms of the returns that we get from customers. We work on the acquisition multiple, which captures CPA as well as the unit economics of customers that are newly acquired. The acquisition multiple was broadly stable in Q2 at 3.7x. That's in line with 10-year averages. We're very happy with the returns that we receive here. Let's look at CPA in Q2. We were up 9.8% in the quarter, as you say. Let me unpack that. I'm going to talk about four things. Firstly, as we've talked, the media rebrand investment was EUR 10 million. That equates to three percentage points of year-on-year growth. That takes us down to 6.7% growth rate. That's in line with the last three quarters, as you say. Key drivers of the growth I'd point to would be as follows. Lower upfront. As expected, and as discussed previously, that's driven by country, but mainly the apartment mix of new installations. That led to around a 2 percentage point increase in CPA. We did see some persistent increase in media costs, primarily driven by digital. That increased CPA by around 1 percentage point. It's kind of slowed down a bit, but it's still there. Lastly, the point I made earlier on lower operating leverage from install volumes that were slightly lower quarter-on-quarter and versus what we had planned to complete, which cost us around 3 percentage points of growth on CPA. As I noted, this relates to the under absorption of fixed in-quarter costs. Remember that CPA is a fully loaded metric. It's a unit cost, and more than 50% of CPA is fixed effectively in the quarter. The examples of those costs would include sales salaries, vehicles, the branch network, and overheads. If we think about forwards, as you know, we don't guide on CPA, but we have previously talked about the EUR 25 million of rebrand media. We stand by that and reconfirm that today. We've also noted many times that we expect the upfront to continue to reduce similarly to how it has done over the course of the past 12 months ago. Given that we're a people business primarily, inflation will impact CPA going forward. Although I don't want to give full kind of specific guidance, I think generally speaking, I'm broadly okay with where CPA sell side consensus is for 2026. Taking all that together, it's important to note that clearly we work as a business to maximize or drive CPA efficiency. The cost program that Austin talked about earlier targets support cost and cost of material. We're also driving increased conversion and productivity in the field, which lower CPA, as well as working on alliance partnerships, which deliver a slightly lower than average cost per acquisition. I know that was a bit of a long answer, but I wanted just to make sure that we provided some extra color on CPA in Q2 and how that's come through. Great. Thank you very much. The next question comes from Erik Lindholm- Röjestål from SEB. Please go ahead. Good morning, Austin, Colin. Thanks for taking my questions. Two questions, if I may. Memory price inflation, you touched on the topic in networking capital, for example, but it continues to be quite extreme. I guess you have some exposure in both your central unit and your detectors. I understand that there are, of course, many moving parts here, but is it possible to give a best estimate how you are thinking about memory price inflation impact on perhaps both EBITDA and the CapEx into next year? Thanks. Let me pick that one up then, I will go quickly because I am conscious of time. It is tough supply conditions globally, of course, right? We are not seeing a material cost exposure at this stage and no risk to guidance, which we have reconfirmed today. If we talk about memory specifically, we spend a total of around EUR 400 million a year on hardware. Currently, we see around EUR 10 million-EUR 15 million annualized impact from increasing memory costs. That, as you say, is primarily in our central units and detectors, and that is based on current elevated chip pricing. Now, where that cost goes, it goes to our CPA, it is capitalized and equates to maybe EUR 10 million-EUR 15 million. Because we have got seven months' worth of stock on hand, I expect that more to be a 2027 impact than 2026. Just to kind of go around a couple of other topics. Freight and logistics is not material, a couple of million from elevated pricing. Thirdly, the fuel that runs our car fleet. We spend around EUR 30 million a year on fuel. We are looking at a risk this year of between EUR 5 million and EUR 10 million, but importantly, that is fully absorbed and included in our reconfirmation of guidance. Working hard on all of these items. Whenever we see a cost up that is unexpected, we do a full court press, and the business will look for opportunities to mitigate and offset. I would just add maybe one quick comment on this, too, which is, look, we make EUR 36 in profit per customer per month. We got a 15-year customer lifetime. Even a little bit of elevation on memory cost over the lifetime value of a customer, it is well worth taking. Obviously, that is one of the reasons why we take the entry pricing up, right? That we can get the money back quicker. The bigger topic actually in these situations, it is not the elevated pricing, it is being able to make sure we secure supply. That is it. When we had the supply chain shocks, for example, coming out of COVID, one of the things I was really proud of our procurement team, we never missed a single customer order because of supply chain disruption. Thanks. That is very clear. Just one follow-up, if I may. On the sort of under absorption topic here in CPA, that was the biggest driver of CPA in the quarter. Are you sort of doing anything to address these costs, or do you think that it will improve as macro gets better and leads to higher installation volumes? Thanks. I mean, I talked about the Fit for Growth cost program, looking at areas like support cost. I also mentioned the fact that we're always looking to optimize sales channels and always looking to drive the productivity coming out of the field. I think generally speaking, I said earlier that we weren't kind of pulling back on marketing and media because a lot of the media investment that we make is in return for future growth as we build brand equity. We're certainly not going to be trying to squeeze CPA into a targeted number for the quarter. We're going to do the right thing for the medium and long term. Great. Thanks. Thanks, Erik. Thank you for your questions. I will now hand over to CEO Austin Lally for closing remarks. Well, thank you all for joining us today and for your continued interest in Verisure. Colin and I are delighted to get your questions. Just to maybe close by saying Q2 is another good example of the disciplined execution and the long-term value creation at the heart of the business. Disciplined, choiceful growth, expanding margins, and a structural improvement in cash generation. Today, as you noted, we declared our first-ever dividend. We're now at the inflection point; the beginning of a different progressive shareholder returns profile. Colin and I, we look forward to meeting many of you in the coming weeks for further discussion. I want to wish you all a good summer