Slides
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UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2025 1 UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2025
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UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2025 2 AGENDA OPERATIONAL REVIEW Frans Olivier FINANCIAL REVIEW Dries Ferreira GROUP OUTLOOK Frans Olivier Q&A Frans Olivier / Dries Ferreira
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UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2025 3 OPERATIONAL REVIEW Frans Olivier Chief executive officer
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UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2025 4 KEY TAKEAWAYS FROM THE 1H26 RESULTS Operating environment • Trading conditions remained challenging, influenced by domestic and global factors, subdued consumer demand Highlights • Good improvement in results, largely due to: ▪ Improved performance by PG Bison, with increased panel production and sales volumes, supported by the full utilisation of the new MDF line; 1H25 impacted by increased operational costs during ramp -up phase ▪ Feltex benefited from increased domestic vehicle assembly volumes; 1H25 impacted by a model changeover ▪ Lower net finance costs due to R752 million reduction in net debt and lower interest rates • Improvement in results underpinned by operational focus and disciplined execution in the group • Progress with addressing underperforming operations • Traction with the execution of our strategic objectives Lowlights • Safripol results materially lower; continued cyclical low in the polymers sector • Optix performance below expectations
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UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2025 Revenue* * Divisional contribution to group results, before intersegmental eliminations DIVISIONAL CONTRIBUTION 1H26 1H25 0% 10% 20% 30% 40% 50% Optix Sleep Group Feltex Unitrans Safripol PG Bison Operating profit 1H26 1H25 -10% 0% 10% 20% 30% 40% 50% Optix Sleep Group Feltex Unitrans Safripol PG Bison (10%) 5 24% (1H25: 20%) 28% (1H25: 33%) 30% (1H25: 32%) 9% (1H25: 7%) 7% (1H25: 6%) 2% (1H25: 2%) 43% (1H25: 36%) 13% (1H25: 24%) 26% (1H25: 28%) 12% (1H25: 4%) 9% (1H25: 10%) (3%) (1H25: (2%))
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UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2025 6 • Panel sales volumes increased by 20%, resulting in higher revenue: ▪ Plants and upgrading presses operated at capacity ▪ Sales volumes to primary and deep-sea export markets grew by 14% and 43%, respectively ▪ Deep-sea exports 16% (1H25: 12%) of sales volumes, mostly raw board ▪ Value-add sales volumes increased by 10% • Increased sales volumes supported by demand-creation and customer-enablement activities, as well as development of new export markets • Operating profit up 32% due to increased sales volumes and operational efficiencies • 1H25 performance affected by the ramp-up process of the new MDF line • Market share growth and improved margins a priority for the division: ▪ Additional upgrading press planned for 2H27 ▪ Sales mix to migrate towards mostly primary markets over time Sales momentum accelerating following the ramp-up of the new MDF line Operating profit R545 million 32% Operating margin 15.2% from 13.6% Revenue R3 591 million 18% PG BISON
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UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2025 7 • Subdued demand and pricing attributable to low economic growth and global overcapacity in the sector • Sales volumes 7% lower, resulting in revenue declining by 18%, mostly due to: ▪ 15% reduction in PET sales volumes; demand also affected by increased low-value imports, mainly from China, five-week commercial shutdown ▪ Domestic and export sales volumes lower by 5% and 10%, respectively ▪ Exports 13% of sales volumes (1H25: 13%) • Operating profit reduced by 40% owing to the lower sales volumes, prices and raw material margins • PP margins notably weaker, margins for all three polymers low compared with history • Industry expectations are for the global polymers sector to remain in a cyclical low until the early 2030s ▪ Continue to focus on operational efficiencies, raw material procurement, cost savings, and higher-margin polymers ▪ Another commercial shutdown for PET plant in 2H26 due to elevated inventory Operating profit R169 million 40% Operating margin 4.0% from 5.4% Revenue R4 277 million 18% SAFRIPOL Cyclical low in polymers sector continues to weigh on performance
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UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2025 8 • Revenue 8% lower mainly due to the passenger operations: ▪ Loss of material contract and subsequent closure of Mozambique operations ▪ Disposal of commuter contract in FY25 • Operating profit increased by 3%: ▪ Stronger performances from agriculture, food, and petrochemical operations; higher volumes and/or cost control/savings and/or operational improvements ▪ Good momentum with the turnaround of petrochemical operations, included disposal of its Eswatini operations ▪ Mining operations result weaker, linked to an underperforming contract • Focused on improved performance, with R700 million medium -term operating profit target unchanged: ▪ Exit of low-return activities and contracts ongoing ▪ Fleet modernisation, where required ▪ Operational excellence and cost savings ▪ Organic growth at required returns Operating profit R332 million 3% Operating margin 7.3% from 6.5% Revenue R4 558 million 8% UNITRANS Meaningful progress with turnaround
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UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2025 9 • Revenue higher due to increased sales volumes in both OEM and aftermarket operations: ▪ Domestic new vehicle assembly volumes up by 12%; 1H25 included temporary production constraints at two major OEMs, one due to a model changeover ▪ LCV and SUV sales 18% and 25% higher, respectively • Operating profit meaningfully higher due to increased sales volumes, non-recurrence of costs related to the model changeover in 1H25 and good cost control • Some headwinds in the industry but encouragingly investment continues; two new models planned in 2026/27. Management focus areas: ▪ Pursuing localisation opportunities as well as cost savings ▪ Engagement with government in relation to policies to stimulate growth and sustainability Operating profit R146 million > 100% Operating margin 10.3% from 3.6% Revenue R1 421 million 23% FELTEX Strong recovery in performance as 1H25 constraints eased
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UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2025 10 • Absence of two-pot retirement withdrawals and growth in online gambling affected consumer demand • Revenue 5% higher largely due to: ▪ Inclusion of Botswana operations ▪ Improved sales mix ▪ Bedding unit sales stable; market share maintained or gained with key customers • Operating profit up by 4% due to: ▪ Improved performance from raw material operations (turnaround in foam) ▪ Bedding operations profitability lower due to increased marketing and distribution costs • Successful launch of entry-level and premium products; division now offers comprehensive bedding range to support growth • Acquisition of Botswana bedding manufacturer to support growth in Botswana and Zambian regions Operating profit R115 million 4% Operating margin 10.8% from 11.0% Revenue R1 061 million 5% SLEEP GROUP Positive momentum continues, with initiatives to support growth in a subdued market
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UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2025 11 • Revenue declined by 11%: ▪ Hardware sales declined by 27% ▪ Subscriptions grew by 25%, supporting annuity revenue • Operating loss increased due to higher costs associated with largely the investment in executive capacity, sales pipeline conversion not yet sufficient • Result remains below expectations: ▪ Intensifying sales efforts ▪ Expanding international sales pipeline ▪ Restructuring to right-size following investments in technology ▪ Focused on improving performance Operating loss R43 million (> 100%) Operating margin (16.5%) from (6.1%) Revenue R261 million 11% OPTIX Slow sales pipeline conversion continued to weigh on performance
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UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2025 12 FINANCIAL REVIEW Dries Ferreira Chief financial officer
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UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2025 13 SALIENT FEATURES OF THE 1H26 RESULTS Revenue R14.9 billion 3% EBITDA R2.0 billion 5% Operating profit before capital items R1.3 billion 10% Operating margin 8.5% 100 bps Headline earnings per share 22.7 cents 32% Net working capital R4.4 billion 6% Net interest-bearing debt R8.5 billion 8% Cash flow from operations R899 million 39% Expansion capital expenditure R202 million 36% Earnings per share 20.8 cents 28% Free cash outflow before dividends paid of R219 million ROCE* 8.5% 40 bps * Rolling 12 months
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UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2025 14 0 500 1 000 1 500 2 000 2 500 1H25 PG Bison Safripol Unitrans Feltex Sleep Group Optix Intersegmental eliminations 1H26 15 355 14 872 (Rm) GROUP REVENUE 551 264 (936) 50 (33) (399) 20 Decreased by 3% compared with prior period Revenue growth supported by: ▪ Increased production and sales volumes at PG Bison ▪ Improved domestic new vehicle assembly volumes benefiting Feltex Revenue declined mainly from: ▪ Safripol impacted by lower sales prices and volumes ▪ Unitrans' passenger operations affected by the loss of a material contract (1H26) and the disposal of commuter contract (FY25)
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UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2025 15 0 350 700 1 050 1H25 PG Bison Safripol Unitrans Feltex Sleep Group Optix 1H26 1 153 1 264 GROUP OPERATING PROFIT (Rm) 132 104(113) 4 9 (25) Increased by 10% compared with prior period Operating profit increase mainly due to: ▪ Increased production and sales volumes for PG Bison ▪ Higher domestic new vehicle assembly volumes in Feltex Unitrans and Sleep Group delivered improved performances Lower results from: ▪ Safripol as a result of the cyclical low in the global polymers sector (overcapacity), impacting selling prices and margin ▪ Optix due to increased costs and slow sales pipeline conversion
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UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2025 16 1H26 Rm 1H25 Rm Variance % Revenue 14 872 15 355 (3) EBITDA 1 986 1 897 5 Depreciation and amortisation (722) (744) (3) Operating profit 1 264 1 153 10 Capital items (50) (33) Net finance costs (433) (517) (16) Associate and joint venture companies 25 24 Taxation (226) (163) Minorities (59) (59) Profit attributable to owners of the parent 521 405 29 Add back: capital items net of taxation 47 23 Headline earnings 568 428 33 Weighted average number of ordinary shares (m) 2 502 2 495 Headline earnings per share (cents) 22.7 17.2 32 Operating profit improved by 10%, mostly due to PG Bison and Feltex Decrease in net finance costs owing to the reduction in net interest-bearing debt and lower interest rates Effective tax rate 28% (1H25: 26%) FINANCIAL ANALYSIS Income statement
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UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2025 17 FINANCIAL ANALYSIS Balance sheet 31 Dec 25 Rm 31 Dec 24 Rm 30 Jun 25 Rm Property, plant and equipment and investment property 15 082 16 128 15 653 Right-of-use assets 340 332 318 Intangible assets 1 476 1 776 1 491 Goodwill 525 656 510 Biological assets 1 239 1 604 1 610 Net working capital 4 410 4 159 3 267 Assets held for sale 653 – – Other assets 438 477 423 Assets 24 163 25 132 23 272 Total equity 13 151 13 213 12 704 Net interest-bearing liabilities 8 515 9 267 8 106 Liabilities held for sale 28 – – Other liabilities 2 469 2 652 2 462 Equity and liabilities 24 163 25 132 23 272 Net asset value per share (cents) 513 518 498 Net working capital increased by R251 million compared to 1H25 PG Bison southern Cape operations classified as held-for- sale (assets R653 million, of which R342 million relates to biological asset) Net interest-bearing debt declined by R752 million compared with 1H25, but is R409 million higher than FY25 due to seasonality in working capital Targeting a reduction in net debt of R500 million in FY26, with a further reduction planned for FY27
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UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2025 18 Increase of R251 million (6%) from 31 December 2024 Net inventory increased by R146 million: ▪ PG Bison increase as expected compared with 1H25 as new MDF plant was still in ramp-up process ▪ Offset by Safripol due to lower HDPE and PP finished goods, elevated PET finished goods offset by lower PTA inventory Net receivables decreased by R429 million: ▪ In line with decreased revenue, mainly in Safripol and Unitrans ▪ Offset by increase in PG Bison due to increased revenue R534 million decrease in payables: ▪ Lower Q2 PTA imports for PET production, in preparation for commercial shutdown in February 2026 FINANCIAL ANALYSIS Net working capital (Rm) -50 150 350 550 750 950 1H25 Inventory Receivables Payables 1H26 4 159 (429) 534 4 410 146 31 Dec 2531 Dec 24
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UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2025 19 1H26 Rm 1H25 Rm EBITDA 1 986 1 897 Net revaluation of biological assets 29 (18) Other non-cash adjustments 38 42 Cash generated from trading 2 053 1 921 Working capital changes (1 154) (1 272) Inventory (373) (228) Receivables (27) (189) Payables (754) (855) Cash generated from operations 899 649 Dividends received 7 15 Net finance costs paid (441) (521) Taxation paid (166) (191) Cash flow from operating activities 299 (48) Cash conversion ratio* 45% 34% * Conversion of EBITDA to cash generated from operations Cash generated from operations up R250 million (39%) due to: ▪ R89 million (5%) increase in EBITDA ▪ R118 million less cash absorbed in working capital Net finance costs paid decreased by R80 million (15%) Cash conversion to normalise towards year end to achieve our internal target of greater than 90% FINANCIAL ANALYSIS Cash flow
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UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2025 20 1H26 Rm 1H25 Rm Cash flow from operating activities 299 (48) Investing activities (518) (747) Expansion capex* (202) (314) Replacement capex^ (469) (440) Net disposal/(acquisition) of subsidiaries 141 – Other investing activities 12 7 Free cash flow before dividends paid (219) (795) Dividends paid to minorities (76) (61) Financing activities (833) 560 Movement in cash and cash equivalents (1 128) (296) * Net of government grants received ^ Net of proceeds from disposal, insurance proceeds and government grants received Prudent capital allocation resulted in reduced expansion capital expenditure (down by R112 million) Net cash inflow of R171 million on the disposal of Unitrans’ petrochemical operations in Eswatini (1 December 2025), of which R46 million is due in March 2026 Sleep Group acquired a bedding manufacturer in Botswana, for R30 million (1 August 2025) Free cash outflow before dividends paid improved by R576 million FINANCIAL ANALYSIS Cash flow (continued)
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UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2025 21 452 481 499 632 312 Manufacturing capital expenditure * Excluding capitalised borrowing costs, including government grants received ^ Estimated PG Bison MDF line of R2 051 million Pre-FY25: R1 923 million FY25: R96 million 1H26: R22 million 2H26: R10 million^ Completed in June 2024 Material and strategic items* PG Bison MFB press of R240 million 1H26: R6 million 2H26: R26 million^ FY27: R208 million^ Planned completion in 2H27 (Mkhondo) FINANCIAL ANALYSIS Investment to drive growth and efficiency benefits Expansion capital expenditure Replacement capital expenditure (net of proceeds on disposal) Depreciation and amortisation (excluding right-of-use assets) FY22 FY23 FY24 FY25 from continuing operations (Rm) 1H26 1 103 1 532 1 843 553 162 508 475 342 255 88 595 1 057 1 501 298 74 0 200 400 600 800 1 000 1 200 1 400 1 600 1 800 2 000
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UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2025 22 806 692 400 804 463 532 269 258 202 128 -400 -200 0 200 400 600 800 1 000 1 200 1 400 846 889 810 751 355 Non-manufacturing capital expenditure* Items to highlight Unitrans Proceeds of R81 million (1H25: R58 million) Expansion of R98 million (1H25: R92 million) Total R480 million (1H25: R448 million) Replacement of R463 million (1H25: R414 million) Optix Expansion of rental assets R30 million (1H25: R36 million) ▪ Redeployment of assets and disposal of underutilised assets to improve capital efficiency completed ▪ Continued focus on disposal or closure of underperforming operations FINANCIAL ANALYSIS Investment to drive growth and efficiency benefits (continued) (Rm) FY22 FY23 FY24 FY25 1H26 (400) (200) * Includes Unitrans and Optix Expansion capital expenditure Replacement capital expenditure Proceeds on disposal Depreciation and amortisation (excluding right-of-use assets) from continuing operations 1 338 961 658 1 006 591 (247) (296) (319) (138) (82)
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UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2025 23 Funding structure Net debt: EBITDA internal limit < 2.5 times EBITDA: interest cover internal limit > 4.5 times TREASURY ACTIVITY Debt serviceability ratios 1H26 1H25 Banks and financial institutions – 43% Listed notes – 43% Lease liabilities – 4% Unutilised facilities – 10% Banks and financial institutions – 52% Listed notes – 44% Lease liabilities – 4% Unutilised facilities – 0% Bank covenant FY26 31 Dec 25 30 Jun 25 31 Dec 24 Gross interest-bearing debt (Rm) 10 169 10 196 10 485 Net interest-bearing debt (Rm) 8 515 8 106 9 267 Equity excluding non-controlling interest (Rm) 12 857 12 443 12 952 Gearing (net debt: equity) 66% 65% 72% Net debt: EBITDA (times) < 3.0 2.4 2.4 2.6 EBITDA: interest cover (times) > 3.5 3.9 3.5 3.6
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UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2025 24 R3 billion revolving credit facility (‘RCF’) • R2 billion in three-year (due 7 December 2026) and R1 billion in five-year (due 7 December 2028) tenures concluded in FY24 • The maturity date of this R2 billion three-year tranche was extended by two years to 7 December 2028 during the reporting period • Covenant ratchet on interest cover ›› FY24: > 3.0 times ›› FY25: > 3.25 times ›› FY26: > 3.5 times • Net debt to EBITDA cover < 3.0 times Corporate bonds settled at maturity • KAP026 – Listed: R340 million • KAP028 – Listed: R600 million Global Credit Rating confirmed KAP’s rating as A+(za) but revised the outlook from stable to negative (November 2025) TREASURY ACTIVITY Significant debt funding activities for the period
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UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2025 25 -4 000 -3 000 -2 000 -1 000 0 1 000 2 000 3 000 4 000 Dec 25 Jun 26 Jun 27 Jun 28 Jun 29 Jun 30 Jun 31 and thereafter (2 077) (1 804) (1 999) (625) (1 387) (2 631) (2 204) (815) 1 714 (1 051) (2 000) (3 000) (4 000) (1 000) 905 TREASURY ACTIVITY Net interest-bearing debt maturity profile at 31 December 2025 (Rm) Debt maturity profile allows for planned reduction of net debt in FY26 and FY27 Available facilities – uncommitted Available facilities – committed Cash and cash equivalents, net of overdrafts Debt repayments Vehicle and asset finance Lease liabilities 1 000 (2 291) (92) 3 619
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UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2025 26 GROUP OUTLOOK Frans Olivier Chief executive officer
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UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2025 27 GROUP OUTLOOK • We remain focused on the following three objectives to support higher returns and earnings growth, with good progress made during 1H26: ▪ Value-realisation from our recent investments (c. R2.7 billion major capital projects), MDF line the largest ▪ Addressing areas of underperformance, Unitrans being the most material ▪ Reducing net debt in FY26 and FY27 – supported by cash flow contribution from major capital projects, expected improvement in Unitrans’ performance and prudent capital allocation • Alignment between strategy, executive capacity and capability, and incentives to support the delivery of the above objectives • Revenue growth, cost savings and control, and margin enhancement pursued by all divisions • 2H26 performance to soften relative to 1H26; expected normal seasonality, and timing of maintenance shutdowns in PG Bison • Stronger rand relative to the US dollar presents near-term pressure for Safripol
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UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2025 Q&A
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UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2025 APPENDIX
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UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2025 30 13 649 15 265 15 028 15 355 14 872 14 330 14 363 14 034 14 260 FY22 FY23 FY24 FY25 1H26 (Rm) 27 979 29 628 29 062 29 615 1H 2H * From continuing operations Group revenue, operating profit and HEPS 1 552 1 515 1 252 1 153 1 264 1 384 1 008 998 784 FY22* FY23 FY24 FY25 1H26 Operating profit 2 936 2 523 2 250 1 937 FY22* FY23 FY24 FY25 1H26 (Rm) (Cents) Headline earnings per share 37.2 33.8 21.8 17.2 22.7 37.2 13.5 23.5 6.9 74.4 47.3 45.3 24.1 Revenue FINANCIAL ANALYSIS
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UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2025 31 Feltex 1H22 1H23 1H24 1H25 1H26 Sleep Group 3.6% 9.9% 1H22 1H23 1H24 1H25 1H26 Safripol 3.8% 12.7% PG Bison 1H22 1H23 1H24 1H25 1H26 Unitrans 6.5% 9.4% 0.7% 5.4% 10.6% 7.1% 5.2% 6.2% FINANCIAL ANALYSIS Group margin analysis* Group 1H22 1H23 1H24 1H25 1H26 7.5% 8.3% 9.9% 11.4% 8.5% 4.0% 7.3% 10.3% * From continuing operations ^ Restated ^ ^ 1H22 1H23 1H24 1H25 1H26 18.4% 19.9% 13.6% 20.4% 15.2% 1H22 1H23 1H24 1H25 1H26 10.2% 10.2% 3.8% 11.0% 10.8% Optix 1H20 1H21 1H22 1H23 1H24 1H25 1H22 1H23 1H24 1H25 1H26 3.5% – (6.1%) 21.4% (16.5%)
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UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2025 32 Net operating asset contribution 0% 5% 10% 15% 20% 25% 30% 35% 40% Optix Sleep Group Feltex Unitrans Safripol PG Bison Return on capital employed* -20% -10% 0% 10% 20% 30% 40% Optix Sleep Group Feltex Unitrans Safripol PG Bison Group (10%) 1H26 1H25 1H26 1H25 FINANCIAL ANALYSIS ROCE performance per division 37% (1H25: 37%) 22% (1H25: 22%) 26% (1H25: 26%) 6% (1H25: 6%) 7% (1H25: 6%) 2% (1H25: 3%) 9.3% (1H25: 9.6%) 7.4% (1H25: 8.4%) 7.3% (1H25: 9.1%) 18.5% (1H25: 11.8%) 10.6% (1H25: 8.7%) (10.7%) (1H25: (2.3%)) (20%) 8.5% (1H25: 8.9%) * Rolling 12 months