Half-year Financial Report

BUSINESS REVIEW

We made further strategic and operational progress in the first half of the year, against an uncertain market backdrop. Like-for-like revenue for the Group was broadly flat, continuing the trend from the final quarter of the previous financial year, with the Group in marginal growth in Q2. Trading in EMEA continued to be impacted by soft PMI and industrial production data, while performance in Americas and Asia Pacific was more resilient. At a Group level, our supplier data indicates that we are outperforming the market and gaining market share in most of our product categories.

We continue to invest in strategic initiatives to accelerate growth, improve efficiency and drive better operating leverage over time. In the absence of market recovery, the benefits of these initiatives are yet to be reflected in our financial performance. However, we are already beginning to see them driving improvement in some of our key underlying operational metrics, providing resilience for the Group, and our growth accelerators are delivering. We achieved an additional £9 million of restructuring and integration benefits in H1 2025/26, taking the cumulative total since April 2023 to £47 million, well ahead of our initial expectations.

Our performance underpins our confidence both in our strategy and in delivering on our medium-term financial targets to generate stronger returns and long-term sustainable value, particularly once markets demonstrate more sustained recovery.

First half financial performance as expected

We delivered financial performance in line with our expectations in the first half of 2025/26. Like-for-like revenue reduced by 1% compared to the same period last year, with growth in Americas and Asia Pacific offset by a decline in EMEA against a continuing backdrop of soft markets. Group like-for-like revenue in the second quarter was up 1%, continuing the underlying trend of stabilisation we saw in the first quarter and the fourth quarter of last year. First quarter like-for-like revenue was down 2%, which was adversely impacted by our significant projects to upgrade our digital commerce platform in Americas and the closure of a Distrelec distribution centre in EMEA.

Average order value increased by 3% to £257, although we saw reductions in average order frequency and in the number of customers in our Key customer segment, with the weak economic environment impacting demand. In line with our strategy to grow share of customer wallet, we delivered 4% like-for-like revenue growth from our Corporate customer segment. Higher uptake of our eProcurement solution from these larger customers was a major factor in 7% like-for-like revenue growth in service solutions. We also continue to drive revenue growth in our own-brand RS PRO products, up 4% like-for-like. At a product category level, the more resilient product categories of Facilities & Maintenance and Mechanical & Fluid Power continue to outperform in EMEA, with Americas delivering improved Automation & Control (A&C) and Electrification revenues. Demand for Semis & Passives remained weak across the Group.

Gross margin was 43.1%, up 0.4 percentage points on last year, as we start to see some benefits from inflation and active price management. Adjusted operating costs were broadly flat, with restructuring savings and focused cost management helping offset the impact of cost inflation and continued strategic investment to improve the business. Adjusted operating profit of £122 million was 8% lower than the same period last year, or 7% lower on a like-for-like basis. The adjusted operating profit margin was 0.5 percentage points lower at 8.7%, largely reflecting the planned increase in spend on our strategic investments.

Continued good working capital management resulted in adjusted operating cash flow conversion of 107%, well in excess of our greater than 80% target. Net debt fell by £31 million over the first six months of the year to £333 million, and our balance sheet remains strong, with net debt to adjusted EBITDA reducing to 1.0x.

Strategic and operational investment delivering  

We continue to progress with our multi-year strategic growth and operational improvement plan to strengthen our differentiated proposition and accelerate growth, improve efficiency and drive better operating leverage over time. These organic investments are already driving improvement in some of our key underlying operational metrics, providing resilience and delivery in our growth accelerators.

People

Create an inclusive and engaging environment where everyone is proud and excited to come to work, perform at their best, thrive and grow.

We continue to strengthen our senior leadership team through a mix of external hires, internal promotions and increased investment in training and mobility. We are also enhancing our people management capability, including through the introduction of our Leadership Advantage Programme to around 100 senior leaders across the globe. We have enhanced our programme management capabilities and discipline, rolling out an 'RS Way of Change and Program Management' to improve prioritisation, address interdependencies and drive better execution combined with time allocation tracking systems for informed decision making.

Maintaining and improving employee engagement at all levels remains a key priority. Our recent employee engagement survey again demonstrated high levels of engagement, with a one point increase in the engagement score to 73 despite the challenging markets and the level of change taking place across the Group. We have also recognised the contribution of our employees below senior leadership level through the introduction of anall-employee share scheme and in July made an award of shares to all eligible employees with the aim of driving further engagement and shared ownership.

Customers 

Focus on higher value customers through harnessing data, effective strategic engagement, and optimising cost to serve.

A key driver of our strategy is to grow our number, and share of wallet, of higher potential value customers. This will be achieved through data driven insights and targeted omnichannel engagement that delivers a tailored value proposition and personalised experience with an optimised cost to serve. This is enabled through the creation of consistent and connected customer data, engagement and management platforms coordinated across all channels.

In H1 2025/26 we completed the design and build of our customer data master platform, bringing together all our customer data to create consistent and unique insights into our customers and their potential, globally. We have developed granular, potential-based, segmentation models, and cleansed, uploaded and matched 90% of our customer data across EMEA and Asia Pacific. In H2 2025/26, we will be using this insight to develop prioritised customer targeting, based on potential, to effectively deploy our sales and marketing efforts for activation in 2026/27, initially in our EMEA region.

We have also developed our customer data platform to allow us to build opportunity-based personalised experiences - online and offline - to better attract and nurture a larger share of customer wallet. We are now beginning to integrate our master data with our customer data platform to enable real time activation of customers. Ultimately, we will be able to do this across all channels, using other engagement platforms such as our Customer Relationship Management (CRM) system and upgraded digital commerce engine. In parallel, we will be using agile working techniques and our cleansed and unique data to design, experiment with and launch tailored and more effective 'always-on' omnichannel marketing campaigns.

We completed the rollout of our global CRM tool in 2024/25. This is foundational to allow us to focus on higher value customers and we have now recorded over 340,000 customer interactions. This has already enabled our sales teams to identify more than 50,000 new sales opportunities and, leveraging the richer insight into our customers, drive increased win rates and deal sizes, and 4% like-for-like revenue growth from our Corporate customer segment in H1 2025/26. These insights will be significantly enhanced, driving greater opportunity and further improved conversion rates once we complete the integration of our CRM tool with our customer data platform and ultimately with our upgraded digital commerce engine as it rolls out over time.

Product and suppliers

Deliver a seamless, mutually value creative supplier experience with appropriate and data driven breadth, depth and range curation.

Our upgraded Product Management Solution, launched last year, removed system constraints when introducing new products. This allows faster and more targeted management of our curated product range, while the new localisation and product information capabilities created will allow us to improve product content further for customers. Average monthly new product introductions tripled to more than 30,000 in H1 2025/26, with a 30% increase in monthly sales of new products. It also allows us to improve our inventory management with one third of over 300,000 new products launched in the past twelve months stocked and two thirds unstocked.

There is increasing recognition by suppliers of the value to them of omnichannel distributors and we continue to expand and strengthen our top supplier relationships, through a programme of increased collaboration at Group, regional and local levels. This has given us access to broader ranges of products and enhanced technical product expertise to support our customers.

We continue to invest in margin optimisation capability, and in H1 2025/26 we invested further in more dynamic and data-based pricing capability using availability and price elasticity. This has been successfully trialled in North America and we plan to standardise and systemise this in H2 2025/26 before rolling it out more widely across the Group next year. Our enhanced pricing capability has also been integral in allowing us to navigate global trade uncertainty effectively, including the impact of tariffs. It allowed us to manage 3x the historic volume of price changes in H1 2025/26, ensuring that our pricing better reflects the current cost of products, and that gross margin is optimised to give us greater flexibility in support of both suppliers and customers.

Solutions

Deliver valued, scalable solutions to build greater strategic engagement and drive product pull-through.

We continue to scale our digital procurement solutions, with eProcurement like-for-like revenue growth of 9% reflecting our focus on deepening relationships with our higher value customers. Performance was particularly strong in Americas, with the launch of our re-engineered eProcurement solution helping drive like-for-like revenue growth of 22%. We are also upgrading our Purchasing Manager solution in support of our Key customer segment, with introduction planned for 2026/27.

In RS Integrated Supply (RSIS), we continued to improve efficiency, simplify the business model and focus our offer on attractive industry vertical sectors. In H1 2025/26 we delivered 6% like-for-like revenue growth and improved operating profit. We also continued to invest in our innovative and data-led proprietary technology solution for full sourced Maintenance, Repair and Operations (MRO) procurement. This included the incorporation of a mobile application, tariff functionality, automated sourcing capability and multi-site inventory visibility within the tailored marketplace function. RSIS also continues to collaborate more closely with the rest of the Group to better support RSIS customers' MRO spend, while ensuring the independence that is important for other RSIS suppliers.

Experience

Strengthen and tailor our customer experience to provide a digitally-enabled, seamless omnichannel service relevant for our customers' needs.

We completed the rollout of our AI-enabled web search capabilities in 2024/25, which continues to deliver enhanced "findability" across our ranges. This resulted in an increase in the 'Add to Cart' rate from visits containing a search from 18.0% to 18.4%. During the first half, we also launched a new Basket & Checkout experience, with the basket to order conversion rate up from 39% to 41% post-implementation.

We launched the initial version of our upgraded Adobe-based digital commerce engine to support enhanced web search experience and more granular data capture in Mexico at the end of 2024/25. In H1 2025/26, we continued the phased development and enhancement of this digital commerce capability, launching it in the US. We continue to tune the website and customer experience journey, and web orders are close to where they were before launch as we put in place fixes to resolve some interface issues which impacted web sales in Q1 in particular. We are now seeing much improved core web metrics on the new platform, with website load times a third quicker than the old system. Learnings from the US upgrade have been adopted, and we plan to introduce the new platform in our first EMEA market in 2026/27.

Continued development of our Enterprise Data Platform through 2024/25 has enabled us to run AI and machine learning over our data more easily and it analysed over 100,000 customer interactions in the first half, helping us to identify and implement areas of improvement to the customer journey.

We released our deliver-to-promise solution in 2024/25, which provides more accurate and reliable delivery information to our customers. This launch initially resulted in some cancellations and returns due to real lead time visibility. However, with the release of the customer facing module, and as we upgrade with further features and capabilities such as live availability, this is resulting in an improved customer experience, with cancellations and returns now at or below historical levels.

Operational excellence

Deliver efficient physical, digital and process infrastructure, improved operating leverage and marginaldrop-through.

In the first half, we made good progress against all three aspects of our operational excellence pillar:

Leveraging our physical infrastructure

We continue to invest in our distribution network to ensure we are ready for growth, having added capacity to our distribution centre at Beauvais in France and broken ground on upgraded facilities in Italy and Ireland. Meanwhile, the upgrade of our UK automated warehouse management system continues, with the final phase planned for 2026/27.

Migration of Distrelec's distribution centre in the Netherlands to our Bad Hersfeld facility in Germany was completed at the end of June. This will save us more than €10 million from reduced annual costs and deliver increased operational gearing through the use of existing infrastructure.

Optimising our technology estate

We are simplifying our technology estate and having removed around 40 applications in 2024/25 we have decommissioned c. 100 more in H1 2025/26. This includes, as part of the Distrelec integration, the decommissioning of redundant search and discovery tools across the Group, simplifying our processes and removing unnecessary licence costs. Our active management of applications is creating space for the shift into a morelicence-based "software as a service" technology model.

As part of the upgrade programme we are undertaking across our technology estate, we are optimising and increasing the capacity of our test environment. This will create additional bandwidth for experimentation and pre-release testing of our applications with more detail and current data. Preparation for the upgrade of our Enterprise Resource Planning (ERP) systems is on track and we are now moving into the design and build phase.

Harmonising and improving our processes

Middle and back-office transformation began in 2024/25 and has continued through the first half. We have now completed the preparation phase and detailed process reviews towards our goal to standardise non-differentiating Group-wide processes.

We also continue to optimise product flow through our distribution network, and in H1 2025/26 we reduced the number of times a product was handled more than once from 52% to 40%, resulting in a lower cost to serve.

Advancing sustainability for a better world

ESG remains a strategic priority and a core strength for RS, increasingly influencing customer sourcing decisions and supplier partnerships. Our commitment to ESG is deeply embedded in our company values of 'doing the right thing' and 'making every day better', supporting our long-term success and resilience. We are platinum EcoVadis and CDP A-list rated and our ESG leadership stands out as a differentiator with our customers, suppliers and people.

Our Better World product range continues to grow as a sustainability and commercial differentiator, now spanning over 33,000 products and 140+ suppliers. Backed by our industry-standard claims-based framework, the range helps customers operate more sustainably and strengthens supplier partnerships. We are expanding the framework to recognise more products that combine together to form Better World solutions that will deliver more product choice and sustainability benefits for our customers - such as reduced resource use, CO₂ emissions and waste, and cost savings. We are also developing carbon reporting for our higher-value customers, designed to drive further value and deepen our relationships by supporting their sustainability goals more effectively.

We continue to drive efficiencies across our own operations to reduce cost and carbon and offer our customers a more sustainable distribution service. Our regionalised supply chain and distribution network enables us to shorten delivery distances, resulting in lower transportation costs and reduced emissions. As of H1 2025/26, we have reduced our emissions intensity from product transportation by 35% from our 2019/20 baseline, 95% of our packaging is recyclable, 85% of our waste is recycled and 92% of our electricity is from renewable sources.

We have eight non-financial KPIs to help measure progress against our strategy and the commitments of our 2030 ESG action plan - For a Better World. To provide greater transparency on our performance in the period, a summary of our progress is included below with further details available in the ESG section on our website: www.rsgroup.com/sustainability.

Non-financial KPIs

Full year outlook unchanged

PMIs are higher in nearly all our markets than they were six months ago, although they are generally still in contraction territory and markets remain uncertain. We continue to take market share and are benefiting from active management of the things we can control, remaining agile in our execution, pricing, and cost and cash management to react effectively to prevailing market conditions, while continuing to invest in improving the business to drive sustainable long-term value creation. Our 2025/26 full year outlook remains unchanged since the time of our AGM on 17 July 2025.

We currently expect full year gross margin to be slightly above 43%, compared to 42.8% in 2024/25, as we see some benefit of inflation and pricing optimisation. For operating costs, the guidance we provided at the time of the Preliminary Results in May 2025 remains unchanged, and we will continue to actively manage our cost base in response to the market environment. We expect organic investment at the lower half of the £35-£45 million range (compared to £31 million in 2024/25) and cost inflation of around 3% compared to 2024/25. Restructuring and integration costs are still expected to be in the range of £10-£15 million (compared to £17 million in 2024/25) and depreciation and employee incentives will be second half weighted. Total restructuring and integration savings are expected to be in excess of £15 million.

Capital expenditure is forecast to be around £50 million. We plan to deliver a progressive dividend for the full year, in line with our dividend policy, with improved profit and cash flow over time expected to result in an increase in dividend cover.

Confidence in long-term value creation

Our performance in the first half and the strong underlying progress we are making confirms to us that RS Group is:

· Uniquely well-positioned in fragmented markets which, while uncertain at the moment, have attractive through-cycle growth characteristics.

· Driving market share gains through a differentiated technical and digital product and service solutions offer.

· Investing to improve efficiency and operating leverage of global infrastructure to drive significant margin expansion.

· Pursuing disciplined acquisition opportunities to accelerate growth, subject to our key criteria of strategic fit, value accretion and successful integration.

· Targeting the creation of significant and sustainable value for stakeholders.

This progress underpins our confidence in delivering on our medium-term financial targets of revenue growth of twice our market, mid-teen adjusted operating margin, cash conversion of over 80% and a sustainable return on capital of more than 20%.

REGIONAL PERFORMANCE

EMEA

1. Like-for-like adjusted for currency; revenue also adjusted for trading days. See Note 15.

2. See Note 2 for reconciliation to Group operating profit.

3. See Note 2 for disaggregation of revenue analysis and reconciliations to regional revenue.

In EMEA, we have a broad product and service solutions proposition and significant opportunity to grow market share, with the focus on larger Corporate and Key customers. We remain focused on driving efficiencies, to benefit from improved operational leverage.

Revenue decreased by 2% and was down by the same on a like-for-like basis, with a slightly stronger euro during the period offset by the impact of fewer trading days. This was partially attributed to some anticipated customer revenue attrition in Distrelec, which crystalised when we closed the distribution centre in the Netherlands, as well as an order backlog when we closed the distribution centre which has now recovered. Overall, the Distrelec integration is proceeding well, and integration benefits are still expected to materially exceed the original business case, more than offsetting the impact of the anticipated customer attrition.

Performance also reflects ongoing economic weakness across the region, with PMIs typically below 50 in all our main EMEA markets, representing a contraction in business activity. However, we saw an increase in like-for-like revenue from the corporate customer segment, in line with our strategy to focus on higher lifetime value customers. In addition, the data we gather from suppliers indicates that we continue to increase market share overall in EMEA, leaving us well placed when markets return to growth.

Across the region, our more resilient product categories of Facilities & Maintenance and Mechanical & Fluid Power delivered like-for-like growth. Demand for Semis & Passives, which makes up around 4% of EMEA revenue, remained weak.

UK and Ireland, which accounts for 38% of the region's revenue, saw a 1% decline in like-for-like revenue. We delivered growth in Ireland however UK PMIs were consistently below 50 over the period as business confidence remained weak.

France, which accounts for 20% of the region's revenue, once again delivered revenue growth, with like-for-like revenue up 7% despite a weak and uncertain economic backdrop. We continue to see the benefit of targeting our product and sales offer to serve more resilient industry verticals, particularly those connected to process manufacturing such as food and beverage, while we also continue to outperform the market in less resilient sectors.

DACH (Germany, Austria and Switzerland), which accounts for 14% of the region's revenue, saw a 9% like-for-like revenue reduction, partially due to the impact of the Distrelec distribution centre closure. Consistent with most of the rest of the region, PMIs in Germany were below 50 over the period, with production volumes remaining weak in the manufacturing sector and the automotive industry.

RS Integrated Supply EMEA like-for-like revenue was up 8%, as we continue to leverage data and technology to optimise customers' MRO processes, driving measurable value and reinforcing our position as a trusted partner.

Digital revenue was flat on a like-for-like basis. Web revenue was down, reflecting reduced activity from more transactional customers. However our focus on deepening our relationship with larger higher value customer segments resulted in increased use of our eProcurement and Purchasing Manager platforms. This was also reflected in like-for-like service solutions revenue growth of 7%. RS PRO like-for-like revenue was up 4% and now makes up 21% of total EMEA revenue.

EMEA's like-for-like gross margin was slightly higher than last year as we began to see some pricing benefit following a period of minimal sales price inflation. Operating costs were up by less than inflation, as restructuring benefits and an ongoing focus on cost management offset ongoing strategic investments. As a result, operating profit was down 9% to £86 million, and the operating profit margin was 10.0%.

EMEA's rolling 12-month NPS was 47.3, down from 49.9 in H1 2024/25. This reflects a decline in monthly net promoter scores over 2024/25 as we implemented our new product tracking system which temporarily impacted order fulfilment scheduling. Monthly NPS scores have been improving in recent months and we expect this to flow through to the rolling 12-month NPS over the second half of the year.

Americas

1. Like-for-like adjusted for currency; revenue also adjusted for trading days. See Note 15.

2. See Note 2 for reconciliation to Group operating profit.

3. See Note 2 for disaggregation of revenue analysis and reconciliations to region's revenue.

4. H1 2024/25 restated to reflect the correct application of the Group inventory provisioning policy in the US. See Note 16 for further details.

In Americas, we have a strong technical Automation & Control and Electrification focus, with expanding presence and solutions expertise. We see the opportunity to broaden our customer base and offer, through greater digital andown-brand RS PRO share.

Our business in Americas serves a higher proportion of builders of industrial assets, including discrete manufacturers, than the rest of the Group. This results in greater sensitivity to capital investment expenditure and project-related revenue, and Americas is therefore particularly exposed to manufacturing output.

Americas revenue decreased by 5%, with like-for-like revenue up 1% after excluding the impact of a weaker US dollar and fewer trading days during the period. In Q1, we delivered a significant project to upgrade our digital platform in the US. Excluding a temporary impact on revenue of this operational improvement, we estimate that like-for-like revenue would have been up around 5% in H1 2025/26. Web performance has been improving on the new digital platform, with the focus in H2 on optimising it to accelerate growth. At a product category level, sales of A&C and Electrification products (c. 70% of the region's revenue) were in line with the broader Americas performance.

Like-for-like revenue in the US and Canada (73% of the region's revenue) was up 2%, with growth accelerating in Q2 with improving PMIs and economic conditions. This followed a small decline in Q1, which included the majority of the temporary impact on revenue following the digital platform upgrade. This was partially offset by an increase in offline revenue driven by a focused effort on higher value customers, select vertical markets, strategic suppliers and targeted product expansion.

Economic and political conditions were more uncertain in Mexico, including persisting concerns over tariffs and their impact on the wider Mexican economy. This resulted in several of our larger customers deferring capital expenditure and like-for-like revenue in Latin America (20% of the region's revenue) decreased by 5%. 

RS Integrated Supply Americas delivered 4% like-for-like revenue growth, as we continue to enhance operational efficiency and harness data and technology to deepen customer relationships and expand our client base.

Revenue from digital decreased by 13% on a like-for-like basis. Web revenue was materially down, reflecting the temporary impact of the digital platform upgrade in the US. Service solutions like-for-like revenue grew 7% driven by a significant increase in the use of eProcurement solutions by larger Key customers in line with our strategy. RS PRO like-for-like revenue increased again, by 14%, as we continue to seek to capture more of our customers spend in the US and Canada and continue to introduce RS PRO in a targeted way to our customers in Latin America.

Americas gross margin improved slightly, driven by disciplined price execution and the passing on of supplier and tariff-related cost increases to customers in the US and Canada. This was partially offset by lower gross margin in Mexico due to reduced customer capital spend and volatile US dollar/Peso exchange rates which negatively impacted the result in H1 2025/26, after having had a positive effect in H1 2024/25. Operating costs included the impact of inflation and ongoing strategic investments, with these cost increases offset by the benefits of currency movements in reported operating costs. Americas operating profit of £35 million was 15% lower than last year, and down 9% on a like-for-like basis. Like-for-like profit was up slightly in the US and Canada, but was down in Mexico, reflecting the reduced revenue and gross margin. The resulting Americas operating margin was 8.2%.

Americas rolling twelve-month NPS remained relatively high at 58.5, although lower than the 65.9 from H1 2024/25 reflecting the launch of the digital platform in Q1. The monthly NPS has been recovering over recent months, although the impact of the lower NPS will remain in the reported rolling NPS for the next 12 months.

Asia Pacific

1. Like-for-like adjusted for currency; revenue also adjusted for trading days. See Note 15.

2. See Note 2 for reconciliation to Group operating profit. Regional operating profit has been restated in the prior period as shown in Note 2.

3. See Note 2 for disaggregation of revenue analysis and reconciliations to region's revenue.

4. H1 2024/25 restated following a review of service solutions categorisation, see Note 2.

We offer a unique pan-Asia Pacific proposition for customers and have the opportunity to grow scale through increasing sales of products and services to customers looking to aggregate their maintenance purchasing.

Asia Pacific revenue was flat year-on-year and up 4% on a like-for-like basis after excluding the impact of currency moves and fewer trading days during the period. This reflects broadly stable economic conditions, with PMIs remaining marginally above 50 in most of our markets during the first half of the year.

Australia and New Zealand, which contributed 37% of the region's revenue, delivered 8% like-for-like revenue growth. This reflects improved economic indicators, with PMIs above 50 in Australia for the whole period, and also includes benefits from the acquisition of Trident in April 2024. The acquisition is performing ahead of expectations.

Southeast Asia, which accounts for 32% of the region's revenue, delivered 4% like-for-like revenue growth against a backdrop of improving business confidence across its markets. Encouragingly, in line with our regional strategy we saw strong growth in higher value corporate customers and increased take up of RS PRO products and our eProcurement solutions.

Greater China, representing 21% of the region's revenue, saw a 3% fall in like-for-like revenue. Within this, China and Taiwan delivered growth, but performance in Hong Kong was very weak. This reflects significantly lower spend from a few large state-owned customers linked to government budgetary constraints. Japan and Korea, with 10% of the region's revenue, delivered 2% like-for-like revenue growth, with particularly strong RS PRO growth.

Digital like-for-like revenue was up 3% year-on-year, driven by greater take up of our eProcurement solution by larger corporate customers, with growth in all sub-regions apart from Greater China. RS PRO like-for-like revenue was up 6%, with growth accelerating in Q2 as we continue to enhance our go-to-market strategy, including targeted product marketing campaigns and focused product range catalogues.

Gross margin improved by 1.1 percentage points on a like-for-like basis, benefiting from favourable pricing and lower inventory provisions. Regional operating costs increased by 4% on a like-for-like basis, due to the impacts of inflation and investment in growth initiatives. As a result, operating profit increased by 10%, and 42% on a like-for-like basis, with a resulting operating margin of 3.1%.

Asia Pacific's rolling 12 months NPS score decreased by 7.4 points to 14.7, which reflects the historic impact of the implementation of our new product tracking system which had a temporary impact on order fulfilment. Performance levels are now returning to normal, and we are engaging with our customers to mitigate any outstanding issues.

GROUP FINANCIAL PERFORMANCE

1. See Note 15 for definitions and reconciliations of all alternative performance measures, including like-for-like change and adjusted measures.

2. See Note 2 for disaggregation of revenue analysis and reconciliations.

3. H1 2024/25 restated to reflect the correct application of the Group inventory provisioning policy in the US. See Note 16 for further details.

Revenue

Group revenue of £1,403 million was down 3% compared to H1 2024/25. After adjusting for adverse exchange rate movements, largely related to a weakening of the US dollar compared to last year, and fewer trading days in H1 2025/26, like-for-like revenue was down 1%. Growth of 1% in Q2 followed a 2% decline in Q1, which included the majority of a reduction in revenue associated with the implementation of two significant projects, namely upgrading our digital platform in Americas and consolidating a Distrelec distribution centre in EMEA.

Detail on regional revenue, gross margin and operating profit is provided in the Regional Performance section above.

Digital revenue, accounting for 60% of Group revenue, reduced 2% on a like-for-like basis. Within this, digital solutions such as eProcurement, which are predominantly used by our larger customers, grew by 9% like-for-like. Web revenue, which tends to reflect smaller, more transactional purchases, decreased by 7% like-for-like, although the underlying reduction was smaller when taking into account the impact on web revenue of Americas digital platform upgrade. This decline reflects a continuation of the trend we have seen over the past 18 months, as we look to move larger customers onto our eProcurement platform to deepen the relationship, while also observing a market-wide reduction in web search activity and remaining mindful of the cost to acquire lower order value web customers.

Service solutions revenue, accounting for 27% of Group revenue, increased by 7% like-for-like, reflecting the increased use of eProcurement solutions and a continuation of strong performance in inventory solutions and design, technical and custom order services. RS Integrated Supply delivered 6% like-for-like revenue growth reflecting a strategic positioning to focus on higher value customers, new contract wins and higher customer retention rates in both EMEA and Americas.

RS PRO, which is our main own-brand product range and accounts for 14% of Group revenue, grew by 4% like-for-like, as we saw the benefit of extending our product breadth and an end-to-end sales and marketing focus in all our regions. Our competitively priced offer continues to gain traction as a quality but non-competing value alternative to third-party branded ranges as we demonstrate our quality assurance qualifications and design and test facilities.

Consistent with trends seen over the past couple of years, revenue performance by product category demonstrates the difference between categories that are more industrial and tend to be less volatile (Facilities & Maintenance, Mechanical & Fluid Power, PPE & Site Safety, Other) and those correlated to the electronics market (such as Automation & Control and Electrification) and the more electronics-specific categories, Semi & Passives and Cables & Connectors.

Gross margin

Group gross margin increased 0.4 percentage points to 43.1%, or 0.3 percentage points on a like-for-like basis. This is a continuation of the positive trend we saw in the second half of 2024/25, as we actively managed and optimised our pricing. We continue to focus on gross margin optimisation through direct procurement initiatives, commercial discipline and expanding our own-brand ranges.

Operating costs

Operating costs were down 3% to £483 million and as a percentage of revenue was flat at 34.4%. This includes certain items that we exclude from adjusted operating cost and adjusted profit measures, to improve the comparability of information between reporting periods and between businesses with similar assets that were internally generated. These items relate to acquisition-related costs (a one-off gain of £10.5 million in the current period relating to an acquisition-related legal settlement compared to £nil in the prior period) and the amortisation and impairment of acquired intangibles (£9.9 million in the current period compared to £13.5 million in the prior period).

See Note 15 for more detail on definitions and reconciliations of adjusted measures.

Adjusted operating costs (which excludes the amortisation and impairment of acquired intangibles andacquisition-related items detailed above) were flat at £483 million and as a percentage of revenue increased by 1.0 percentage points to 34.5%. Restructuring and integration benefits of £9 million, ongoing strong cost management, foreign currency exchange movements and a £3 million profit on disposal related to the disposal of our sales activities in Finland, Estonia, Lithuania and Latvia offset the impacts of inflation and £5 million additional spend on our ongoing programme of organic investment.

Operating profit and margin

Operating profit of £122 million was up 3% compared to the prior period. Adjusted operating profit (which excludes acquisition-related costs and amortisation and impairment of acquired intangibles) was also £122 million, 8% lower than last year, and down 7% on a like-for-like-basis (which excludes the impact of currency movements). This reflects the regional movements described in the Regional Performance section, partially offset by the £3 million reduction in central costs due to the profit on disposal. Operating profit conversion (operating profit as a percentage of gross profit) was 0.9 percentage points higher at 20.2% and adjusted operating profit conversion was 1.4 percentage points lower at 20.1%. Operating profit margin of 8.7% was 0.4 percentage points higher than last year and adjusted operating profit margin of 8.7% was 0.5 percentage points lower, largely reflecting the additional organic investment we are making to improve the business.

Net finance costs

Net finance costs fell to £10 million (H1 2024/25: £15 million), reflecting a lower average level of net debt over the period and lower market interest rates. At 30 September 2025, 30% of the Group's gross borrowings excluding lease liabilities (H1 2024/25: 23%; 2024/25: 34%) was at fixed rates, with surplus cash deposited at variable rates.

Profit before tax

Reflecting all the above, profit before tax increased 7% to £112 million. Adjusted profit before tax reduced 6% to £112 million, or 4% lower on a like-for-like basis.

Taxation

The Group's income tax expense was £29 million (H1 2024/25: £27 million). The adjusted income tax charge, which excludes the impact of tax on items excluded from adjusted profit before tax, was also £29 million (H1 2024/25: £31 million). This resulted in an effective tax rate of 26.0% on adjusted profit before tax (H1 2024/25: 26.0%) which reflects the current mix of profits in different tax jurisdictions.

Earnings and earnings per share

Profit for the year attributable to owners of the Company was £83 million (H1 2024/25: £77 million). The weighted average number of shares over the period was 468.6 million (H1 2024/25: 471.6 million) resulting in basic earnings per share of 17.7p (H1 2024/25: 16.4p). Adjusting for items excluded from adjusted profit and associated income tax effects, adjusted basic earnings per share was 5% lower at 17.6p, or 3% lower on a like-for-like basis.

Cash flow

1. See Note 15 for definitions and reconciliations of all alternative performance measures.

2. H1 2024/25 restated to reflect the correct application of the Group inventory provisioning policy in the US. See Note 16 for further details.

EBITDA (earnings before interest, tax, depreciation and amortisation) of £162 million was broadly stable, reflecting the movements in operating profit as described above and a similar depreciation and amortisation charge.

Actively managing our working capital position and optimising cash conversion remains a key area of focus. Working capital reduced in line with revenue and total working capital as a percentage of revenue was broadly stable at 24%.

Within this, trade and other receivables decreased by £11 million over the first half to £678 million. The collection of receivables has the greatest impact on our short-term liquidity, and we continue to limit our exposure through tight credit policies and proactive monitoring of collections.

Inventories of £600 million were £18 million lower when compared with our 31 March 2025 position. Within this asset value, inventory provisions were up slightly, reflecting an increase in non-moving stock, with an overall provision rate of 13.4% (2024/25: 12.6%). With the reduction in inventories broadly in line with the reduction in our cost of sales, inventory turn remained stable at 2.7 times. We will continue to seek to manage our inventory levels to take account of changing demand dynamics and supply chain behaviour, while anticipating our customers' expectations. We will continue to invest in the right inventory to ensure that we remain well-positioned to maintain service levels and deliver strong growth as the markets recover.

Trade and other payables decreased by £20 million over the first half to £591 million. The overall reduction reflects the reduced cost of sales. We aim to pay our suppliers to terms and continue to work with some of our larger suppliers to get more favourable terms where possible.

Reflecting these movements, cash generated from operations was £166 million (H1 2024/25: £163 million). This resulted in adjusted operating cash flow conversion of 107% (H1 2024/25: 104%), compared to our target of over 80%.

Net capital expenditure remained steady at £25 million as we continued to invest in additional distribution capabilities in Italy, our product management solutions, warehouse management systems, our digital commerce capabilities and our technology platforms. This equated to an unchanged capital expenditure to depreciation ratio of 1.1 times, consistent with our typical maintenance capital expenditure levels of 1.0 - 1.5 times depreciation. In line with guidance provided in the 2024/25 full year results, we expect 2025/26 capital expenditure of around £50 million.

After accounting for the cash effect of adjusting items (the net gain related to the acquisition-related legal settlement) and with lower interest payments and lower tax charges broadly mirroring the moves in the Group Income Statement, adjusted free cash flow was £86 million (H1 2024/25: £89 million).

Net debt

Net debt decreased by £31 million over the first half to £333 million, with the free cash flow generated more than adequate to cover payment of the 2024/25 final dividend.

Committed debt facilities were £681 million, consisting of a multi-currency revolving credit facility, term loan and private placement loan. £335 million was undrawn at 30 September 2025.

The Group's financial metrics, as set out in the Alternative Performance Measures in Note 15, remain strong, with net debt to adjusted EBITDA of 1.0x and EBITA to interest of 12.6x, leaving significant headroom for the Group's banking covenants of net debt to adjusted EBITDA less than 3.25x and EBITA to interest greater than 3x.

Retirement benefit obligations

Overall, the retirement benefit net obligations of the Group's defined benefit schemes at 30 September 2025 were £9 million compared to £14 million at 31 March 2025 and £20 million at 30 September 2024. The UK defined benefit scheme (our largest scheme) had a net £nil obligation (H1 2024/25: £11 million, 2024/25: £5 million) following the completion of the deficit recovery plan. There are no further committed future deficit contributions as at 30 September 2025.

Return on Capital Employed (ROCE)

ROCE is the adjusted operating profit for the 12 months ended 30 September 2025 expressed as a percentage of the monthly average capital employed (net assets excluding net debt and retirement benefit obligations). ROCE was 15.0% compared to 15.5% for the 12 months ended 30 September 2024. The reduction reflects the lower adjusted operating profit, partially offset by lower capital employed due to reduced inventory and the impact of ongoing amortisation of intangible assets.

Dividend

The Board intends to continue to pursue a progressive dividend policy while remaining committed to a healthy dividend cover over time by driving improved results and stronger cash flow.

For the six months ended 30 September 2025 the Board proposes an interim dividend of 8.7p per share, 2% higher than for the six months ended 30 September 2024, in line with our progressive policy. The interim dividend is equivalent to approximately 39% of 2024/25 full-year dividend, in line with our normal practice of paying an interim dividend equivalent to around 40% of the prior full year dividend. This will be paid on 2 January 2026 to shareholders on the register on 21 November 2025.

Foreign exchange risk

The Group does not hedge translation exposure on the income statements of overseas subsidiaries. Based on the mix of non-sterling denominated revenue and adjusted operating profit, a one cent movement in the euro would impact annual adjusted profit before tax by £1.7 million and a one cent movement in the US dollar would impact annual adjusted profit before tax by £0.5 million.

During the six months ended 30 September 2025, there were foreign exchange differences arising on translation of £19 million, recognised within Other Comprehensive Income, of which £12 million related to the translation of intangible assets as set out in Note 6. These were partially offset by the losses on net investment hedges of£5 million.

The Group is also exposed to foreign currency transactional risk because most operating companies have some level of payables or receivables in currencies other than their functional currency. Some operating companies also have receivables in currencies other than their functional currency. Group Treasury maintains three to seven months hedging against freely tradable currencies to smooth the impact of fluctuations in currency. The Group's largest exposures relate to euros and US dollars.

RISKS AND UNCERTAINTIES

The Board has overall accountability for the Group's risk management, which is delegated to the Executive Committee and supported by the Group's risk team. The Board is fully committed to setting and embedding a sound risk culture which is aligned with the principles and ethics of the Group.

The Group has a defined risk appetite, approved by the Board, which reflects the Group's willingness and ability to absorb the impact of risk and the Board's appetite for such risks in six risk categories: strategy and change, operational, regulatory compliance, financial resilience, customer experience, and product risks. The business uses consistent impact and likelihood assessment criteria with behaviours that are mapped across the six categories of risk and are aligned to the strategy of the business and the products and services that RS Group provides.

For further information on the Group's approach to risk management see pages 36 to 42 of the 2025 Annual Report and Accounts.

Principal risks and uncertainties

The principal risks disclosed in the 2025 Annual Report and Accounts were:

1. Cyber security

2. Geopolitical and macroeconomic environment

3. Legal and regulatory compliance

4. Business resilience

5. Change initiatives

6. Talent and capability

7. Market disruption

8. Climate change

9. M&A activity

These risks have not changed since they were reported in the 2025 Annual Report and Accounts.

GOING CONCERN

Overview

In adopting the going concern basis for preparing these condensed Group accounts, the Board has considered the Group's future trading prospects; the Group's available liquidity, the maturity of its debt facilities and obligations under its debt covenants; and the Group's principal risks as summarised above. As described in more detail in the Viability Statement in the 2025 Annual Report and Accounts, our business model is structured so that the Group is a digitally-enabled global distributor of product and service solutions, providing small volumes of our suppliers' products to satisfy our industrial customers' MRO demands. We supply a very broad spread of customers both in terms of industry sector and geography. The Group is not reliant on one particular group of customers or suppliers, with its largest customer accounting for under one percent of revenue and its largest supplier less than five percent of revenue.

Financial position, liquidity and debt covenants

Our capital position is supported by regular reviews of the Group's funding facilities and debt covenants' headroom, through the Board's Treasury Committee.

The Group's net debt at 30 September 2025 was £333 million (2024/25: £364 million). Our committed debt facilities were £681 million, of which £335 million was undrawn (see the net debt section in the Financial Review for more details of our committed facilities). The earliest facilities maturing are two tranches of the private placement loan notes totalling £75 million, which come to term in the last three months of 2026.

The Group's debt covenants are EBITA to interest to be greater than 3 times and net debt to adjusted EBITDA to be less than 3.25 times, which are measured on a rolling 12-month basis at half year and year end. At 30 September 2025 EBITA to interest was 12.6x (2024/25: 10.9x) and net debt to adjusted EBITDA was 1.0x (2024/25: 1.1x) (see Note 15 for reconciliations).

Financial modelling

We frequently update our forecast and this is regularly reviewed, and the assumptions approved, by the Board.

We have undertaken reverse stress tests on the latest forecast to assess the circumstances that would threaten the Group's current financing arrangements. These included significant declines in like-for-like revenue, significant declines in revenue and gross margin and a major deterioration in cash collection, in each case resulting in adjusted operating profit margin falling to under 1% in at least one of the following five quarters. All these reverse stress tests assumed no mitigations, capital expenditure and dividends are unchanged from those forecast and no changes in debt financing. The Board considers the risk of these circumstances occurring to be remote.

Going concern basis

Based on the assessment outlined above, the Board has a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the going concern period of at least 12 months from 5 November 2025. Therefore, the Board believes that it is appropriate to continue to adopt the going concern basis in preparing these condensed Group accounts.

RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE HALF YEAR FINANCIAL REPORT

The Directors confirm that these condensed Group accounts have been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' as contained in UK-adopted International Financial Reporting Standards and that the interim management report includes a fair review of the information required by Disclosure and Transparency Rules (DTR) 4.2.7 and DTR 4.2.8, namely:

· An indication of important events that have occurred during the first six months and their impact on the condensed set of accounts, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and

· Material related party transactions in the first six months and any material changes in the related party transactions described in the last annual report.

A list of current Directors of RS Group plc is maintained on the RS Group plc website: www.rsgroup.com.

Kate Ringrose, Chief Financial Officer 5 November 2025

Forward-looking statements

This financial report contains certain statements, statistics and projections that are or may be forward-looking. The accuracy and completeness of all such statements, including, without limitation, statements regarding the future financial position, strategy, projected costs, plans and objectives for the management of future operations of RS Group plc and its subsidiaries is not warranted or guaranteed. These statements typically contain words such as "may", "will", "should" "project", "intends", "expects", "anticipates", "estimates" and words of similar import are forward looking statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. Although RS Group plc believes that the expectations reflected in such statements are reasonable, no assurance can be given that such expectations will prove to be correct. There are a number of factors, which may be beyond the control of RS Group plc, which could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. Other than as required by applicable law or the applicable rules of any exchange on which our securities may be listed, RS Group plc has no intention or obligation to update forward-looking statements contained herein.

GROUP INCOME STATEMENT

For the six months ended 30 September 2025

GROUP STATEMENT OF COMPREHENSIVE INCOME

For the six months ended 30 September 2025

(1)  Please refer to Note 16 for further details of the restatement.

GROUP BALANCE SHEET

As at 30 September 2025

(1)  Please refer to Note 16 for further details of the restatement.

GROUP CASH FLOW STATEMENT

For the six months ended 30 September 2025

(1)  Please refer to Note 16 for further details of the restatement.

(2) Cash flows relating to borrowings eligible for net presentation are now presented within the line "net (decrease)/increase in revolving facility and short-term loans". The 2024/25 half year comparative of £64.9 million consists of inflow of £119.9 million re-presented from "other loans drawn down" and outflow of £55.0 million re-presented from "other loans repaid".

GROUP STATEMENT OF CHANGES IN EQUITY

For the six months ended 30 September 2025

(1) Other reserves comprises the Hedging reserve of £0.7 million (30 September 2024: £0.5 million; 31 March 2025: £0.3 million) and the Cumulative translation reserve of £45.2 million (30 September 2024: £17.9 million; 31 March 2025: £31.7 million).

(2) Please refer to Note 16 for further details of the restatement.

NOTES TO THE CONDENSED GROUP ACCOUNTS

1. Basis of preparation

These condensed Group accounts were approved by the Board of Directors on 5 November 2025 and are unaudited but have been reviewed by the auditor. They do not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006, but have been prepared in accordance with the UK-adopted International Accounting Standard (IAS) 34 'Interim Financial Reporting' and the Disclosure and Transparency Rules of the UK's Financial Conduct Authority. The Annual Report and Accounts for the year ended 31 March 2025 was prepared in accordance with UK-adopted international accounting standards (UK IAS) and has been delivered to the Registrar of Companies. The previous auditor's report on those accounts was unqualified, did not include a reference to any matters to which the previous auditor drew attention by way of emphasis without qualifying their report and did not contain any statement under section 498(2) or 498(3) of the Companies Act 2006.

These condensed Group accounts have been prepared on the basis of the accounting policies set out in the Annual Report and Accounts for the year ended 31 March 2025 except for the estimation of income tax. Under IAS 34, the tax charge for the period is calculated using the estimated weighted average effective tax rate for the year ending 31 March 2026. Where tax balances are revised due to changes in tax rates or estimates of tax liabilities for prior periods, the full effect is included in the tax charge for the first half of the year.

No accounting standards, amendments to existing standards or interpretations, either adopted in the period or issued but not yet applicable, have or are expected to have a material impact on the reported results or financial position of the Group except for IFRS 18 'Presentation and Disclosures in Financial Statements', as set out in the Annual Report and Accounts for the year ended 31 March 2025. The Group is within the scope of the OECD Pillar Two model rules, which the UK government substantively enacted in its Finance (No.2) Act 2023 on 20 June 2023, introducing an income inclusion rule and domestic minimum top-up tax applied to the Group for the first accounting period commencing after 1 January 2024. The Group has done a review of the impacts of these rules and they do not have any material impact on the reported results or financial position of the Group.

Except for judgements involved in estimations, no judgements have been made in the process of applying the Group's accounting policies that have had a significant effect on the amounts recognised in the accounts. The judgements involved in estimations take account of the Group's latest expectations of the longer-term impacts of climate change and environmental regulations and the current global economic and geopolitical uncertainties, and the impact was not material.

Significant estimates are those that have a significant risk of resulting in a material adjustment to the carrying amounts of the Group's assets and liabilities within the next year. The significant estimates made in preparing the accounts were in relation to retirement benefit obligations and inventory provisioning, the same as those applied to the Group accounts for the year ended 31 March 2025.

The Group have adopted various alternative performance measures (APMs) to provide additional useful information on underlying trends and its performance and position. The APMs are not defined by IFRS and therefore may not be directly comparable with other companies' APMs and are defined in Note 15.

Going concern basis

In adopting the going concern basis for preparing these condensed Group accounts, the Board has considered the Group's future trading prospects; the Group's available liquidity, the maturity of its debt facilities and obligations under its debt covenants; and the Group's principal risks.

The Group's net debt at 30 September 2025 was £333 million (31 March 2025: £364 million). Our committed debt facilities were £681 million, of which £335 million (31 March 2025: £287 million) was undrawn. The earliest facilities maturing are two tranches of the private placement loan notes totalling £75 million, which come to term in the last three months of 2026.

The Group's debt covenants are EBITA to interest to be greater than 3 times and net debt to adjusted EBITDA to be less than 3.25 times, which are measured on a rolling 12-month basis at half year and year end. At 30 September 2025 EBITA to interest was 12.6x (31 March 2025: 10.9x) and net debt to adjusted EBITDA was 1.0x (31 March 2025: 1.1x) (see Note 15 for reconciliations).

1. Basis of preparation (continued)

We have undertaken reverse stress tests on the latest forecast to assess the circumstances that would threaten the Group's current financing arrangements. These included significant declines in like-for-like revenue, significant declines in revenue and gross margin and a major deterioration in cash collection, in each case resulting in adjusted operating profit margin falling to under 1% in at least one of the following five quarters. All these reverse stress tests assumed no mitigations, capital expenditure and dividends are unchanged from those forecast and no changes in debt financing. The Board considers the risk of these circumstances occurring to be remote.

Based on the assessment outlined above, the Board has a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the going concern period of at least 12 months from 5 November 2025. Therefore, the Board believes that it is appropriate to continue to adopt the going concern basis in preparing these condensed Group accounts.

2. Segmental reporting

The Group's operating segments comprise three regions: EMEA, Americas and Asia Pacific.

(1) See Note 15 for definition and reconciliation of this APM.

(2) Please refer to Note 16 for further details of the restatement.

2. Segmental reporting (continued)

(1) See Note 15 for definition of this APM.

In the tables below, revenue is disaggregated by sales channels, by own-brand products or other product and service solutions, and also by service solutions and other. The Group's largest own-brand is RS PRO. £1,356.7 million of revenue is recognised at a point in time (six months ended 30 September 2024: £1,394.8 million; year ended 31 March 2025: £2,850.2 million) and £46.1 million over time (six months ended 30 September 2024: £46.4 million; year ended 31 March 2025: £98.3 million).

2. Segmental reporting (continued)

3. Earnings per share

(1)  Please refer to Note 16 for further details of the restatement.

4. Dividends

An interim dividend of 8.7p will be paid on 2 January 2026 to shareholders on the register on 21 November 2025 with an ex-dividend date of 20 November 2025 and the estimated amount to be paid of £40.8 million has not been included as a liability in these accounts. 

5. Retirement benefit obligations

The Group operates defined benefit schemes in the United Kingdom and Europe.

The calculation of the UK defined benefit obligation incorporated new census data and mortality assumptions consistent with those used for the preliminary results of the statutory funding valuation as at 31 March 2025. A change in the key assumptions on the UK scheme would have the following increase / (decrease) on the UK defined benefit obligations as at 30 September 2025:

6. Intangible assets