Good morning, and welcome to the Volex half-year results presentation. My name is Nat Rothschild, Executive Chairman. I'm joined today by Jon Boaden, our Chief Financial Officer. You will have seen this morning that following the RNS of our results, we've made a possible offer to acquire TT Electronics. Under Rule 2.4 of the Code, we're not going to talk about that, and we really can't talk about that other than what is in the following RNS. So I'm going to leave that to one side and take you through the highlights for the year before handing over to Jon for the financial review. And I'll then provide an update on our strategy and close with our outlook. And of course, there'll be time for questions at the end of the presentation.
So we've made exceptional progress in the first half, delivering strong organic revenue growth of 9.7%, as well as achieving underlying operating margins of 9.2%, which is within our 9%-10% target corridor. And we've achieved this while continuing to invest in our business and making significant progress in the delivery of our five-year plan. We've positioned ourselves as a key supplier of critical power and data connectivity solutions to our customers, many of whom are global technology businesses, allowing us to build deep and significant long-lasting relationships. By way of example, during the period, we've onboarded new significant customers in Medical in Europe Off-Highway in North America. Through our focus on five sectors, we are recognized as experts in attractive markets with structural growth characteristics.
Our expertise in charging was recognized by Tesla, who made us a licensed partner for their North American Charging Standard , allowing us to secure business with new customers in the first half of the year. We've opened three new state-of-the-art facilities already this year in India, Mexico, and Indonesia, delivering cutting-edge capabilities where our customers need them. And I'm pleased to report that the integration of Murat Ticaret, the global Off-Highway business that we acquired in August 2023, is going well. And we'll talk you through this in more detail later on. As is clearly demonstrated in our results today, our strategy, our investment, and our expertise are delivering significant success. At Volex, we are incredibly privileged to work with some truly excellent customers who are delivering significant technological progress on a global scale.
This supports a wide range of innovation, from the efficient harvesting of crops to curing life-limiting diseases to the decarbonization of passenger transport. We support our customers across five markets, providing mission-critical connectivity solutions across power and data where exceptional quality is paramount. Each market aligns with our core strengths and capabilities. We use our global reach to cross-sell to customers between the different parts of our organization and to support customers on a worldwide basis. At the same time, we are dynamic and able to respond quickly to changing requirements. In each of our markets, there are high degrees of customer lock-in, which limits customer churn and enables relationship building and account development. The balance between these markets supports our delivery of sustained growth through long-term customer partnerships helped by structural growth drivers. These include societal, environmental, and technological factors.
So I'll now hand over to Jon to take us through the financial and operational review.
Great. Thank you, Nat. Turning to the financial performance, again, it's another set of strong results for our business in line with the expectations that we set out back in June. Over $500 million of revenue in the first half of the year is a first, and this represents a 30% year-on-year increase. Growth is from the acquisition of Murat Ticaret, which completed in August 2023, as well as almost 10% organic revenue growth. This is a real achievement considering the challenging market backdrop. Our performance underlines what Nat was saying about our strategic market position, giving us confidence in our ability to deliver sustainable growth. Underlying operating profit increased by 27%, and we achieved a margin of 9.2%. This is the fifth year in which we've consistently delivered in the 9%-10% operating margin corridor.
This demonstrates our capability to blend together the moving parts of our business to deliver a consistent outcome. Our return on capital employed shows our ability to deliver strong and consistent returns. We've also improved profit before tax by 20% despite higher interest costs in the period. Our strong results give us confidence to increase the interim dividend to 1.5 pence per share, which is a 7% increase, and it's the fifth successive year in which we've increased the dividend. So I'll talk through each of the five sectors now, and I'm going to start with Electric Vehicles , and I'll give you some context on what we've been seeing in terms of trends and what's happening in the market.
It's worth reminding everyone that EVs are a really important market given the role that Electric Vehicles will play in the decarbonization of transport and delivering substantial emissions reductions in the future. We've achieved $80 million of revenue in the first half of the year, and that's a record for us. We've done this because we provide a comprehensive range of EV charging products, which covers charging at home, charging out of the home, but also high-speed charging networks. Over the period that we've been involved in this market, we're producing a greater level of components and increasingly specialized technology. Part of the reason for the increase in the first half of the year is due to the ramp-up to deliver specialist high-voltage connectors for one of our key customers from our facility in northern Mexico.
In addition to that contract, we've also grown organically by 20% across the rest of the product portfolio. This demonstrates the appeal of our wide range of solutions and the fact that we've moved through the destocking cycle. Momentum is expected to continue into the second half, but it's worth flagging that the comparatives are tougher in H2. Longer term, we see opportunities in Electric Vehicles as adoption will continue to increase in the midterm, supported by clear government targets across multiple markets. So let's have a look at Consumer Electricals . And it's fantastic to see Consumer Electricals not just returning to growth but delivering a 7.5% organic growth. And in fact, the $132 million that we delivered in the first half of the year is not far off our all-time record performance in the first half of 2023.
That was off the back of sort of peak post-COVID period. We're really pleased with that. It's worth reminding people we really like consumer because it has a great returns profile. The growth, which is primarily volumetric, is driven by market factors and competitiveness. New technology in appliances and electronics is encouraging consumers to replace existing products. The other reason is our ability to deliver both power cords and wire harnesses in an incredibly cost-competitive way. This comes through the increased deployment of automation and vertical integration across our global operations. Looking back a year ago, we were experiencing destocking. We're now through the destocking process and firmly back into growth with new projects that kicked off in the first half of the year, but also further new projects coming on stream in the second half of the year.
There's some seasonality in demand with revenues first half weighted, which is supporting electronics companies as they prepare for the Christmas peak. Next up, we've got Medical. So you may recall from the full-year presentation, we had a very strong year in FY 2024 in Medical, and that was about customers catching up on demand due to better availability of components. As a result, we flagged a modest decline as we came into FY 2025, and that's exactly what we've seen with a reduction of 4% organically. Much of this is due, as we expected, to one-off catch-up business from 12 months ago that did not repeat. There's a lot to like about Medical as a sector, and I think what's interesting, it's really representative of our overall strengths. It's all about high quality, high technology, and high mix, but with highly demanding customers.
And customers are right to be demanding because in this space, we're supporting customers who are changing lives through the solutions that they're deploying, such as advanced diagnostics, robotic surgery, and image-guided therapy. This is an incredibly important sector to be in, and we're very proud of the strong relationships that we have in this end market, not only with well-established customers and some important new customers who've come on board in the last 12 months, but also with many startup businesses who are pushing the bounds of medical technology. Our proven history in this market, combined with the regulatory approvals held, ensure our partnerships are deep and long-term. Revenues in the second half are expected to continue at similar levels to what we've seen in the first half, with clear share gain and structural opportunities giving us confidence in the growth opportunities in Medical over the medium term.
Complex Industrial Technology represents a range of advanced solutions to meet our customers' requirements across a variety of end-use activities. And these include things such as artificial intelligence infrastructure to data centers, mission-critical aerospace and defense applications, as well as telecommunications, smart metering, and industrial automation. End market demand has varied in these different areas. Data center sales have been really strong in the first half, boosted by the continuing rollout of AI applications. We're working with two of the biggest data center and AI businesses in the world, supporting their complex requirements. For some of our other industrial customers, demand has been softer, driven by a combination of factors, which included uncertainty pending the outcome of the recent U.S. election and waiting for a more benign interest rate environment before investment is deployed.
Overall, we delivered organic growth of 4% in complex industrial technology, which in the backdrop of a difficult industrials market, again, we're very pleased with. In the long term, we see opportunities in this space as we establish ourselves as a significant force in the world of high-speed data center cables and also as the demand cycle picks up for other industrial customers, although we recognize that some of the industrial demand pickup may not arrive until next financial year. However, we have some new projects coming in the second half, which is Off-Highway is a really interesting market and one that we're really pleased that we moved into in a scale with the acquisition of Murat Ticaret last year. The first half of the year included six months of revenue from Murat Ticaret, compared to only one in the first half of last year.
Overall, we're up 20% for the entire period, but like for like for Murat Ticaret on an organic basis, that's up by about 7%. With an increased focus on delivering efficient production, whether that's in agricultural food production, in construction, or in mass transport, there's a big focus on functionality and features across a range of Off-Highway equipment. In addition, more stringent safety standards and environmental factors are encouraging the adoption of more modern equipment in a range of different markets. We now have significant experience in the Off-Highway space through our acquisition of Murat Ticaret, which has global customer relationships. The products in Off-Highway are complex. They're ruggedized and they're used in harsh environments, and they manage varied power and data requirements within the vehicles. Our Off-Highway business supports a range of subsectors, and this diversification is important given the cyclicality in those markets.
For instance, we've seen demand softening in agricultural customers, but at the same time, increasing from European bus and coach manufacturers. There's generally some seasonality into the second half with Off-Highway, particularly for agricultural customers. We're incredibly pleased with the progress that we've made and with the acquisition of Murat Ticaret, and we'll talk a bit more about the integration later in the presentation. So focusing on our margins, as I mentioned earlier, we're really pleased that we've maintained our profitability within our stated 9%-10% range, given the level of investment that we've made in our business. This year, we put a strong focus on cost optimization through the period, and that benefited margins by 90 basis points, more than offsetting the impact of inflation and foreign exchange rate changes.
The product mix benefit is predominantly down to the higher sales of data center products, which receive a better margin than the average across the group. In terms of acquisitions, we had a lower uplift from the acquisition of Murat Ticaret relative to the second half of last year due to inflationary pressures in Turkey. We are actively managing the inflation theme in Turkey through sensible and fair price increases and through a focus on efficiency gains and optimization, which was already part of the integration plans. The growth investments represent the spend we're making in our business to target specific areas that will support our growth through the remainder of the five-year plan and beyond, which equated to about $5 million in the first half of the year. This includes investments in salespeople, in automation technology, and in incremental capacity.
So overall, bringing all those factors together, we achieved a very decent 9.2% operating margin for the first half of the year, and it would have been above 10% without the incremental investment growth. Turning now to cash flow, underlying EBITDA improved by 31%, and we also invested more in capital expenditure than we did in the previous year, which was in line with the guidance that we gave at the full year when we said we were going to spend about 5% of revenue on CapEx. In general, cash generation is weighted to the second half for a number of reasons. We have some annual payments such as the bonus and the full-year dividends that come out in the first half, along with increased working capital ahead of the Christmas peak for consumer products.
A year ago, we were destocking and experienced lower growth, so the underlying working capital movement you see in the prior year was unusually good. In H1, inventory has increased for three specific reasons. First of all, approximately $7 million was due to the growth in our business and the additional working capital to support the 9.7% organic increase. We also invested in additional inventory for the Murat Ticaret business to support efficiency programs and deliver benefits around supply chain. The third element was in relation to various factory moves and new customer projects that were happening associated with additional capacity that we delivered in the period. Where customers are moving locations, you need to build up buffer stock to prevent disruption. Cash generation is expected to improve in the second half of the year as we are not anticipating significant incremental working capital investments.
Our interest and tax payments were higher, which was a combination of the average debt levels over the period and also the additional profit that we generated, resulting in a higher tax charge. Overall, this resulted in an outflow of $11.5 million at the underlying free cash flow level. Our net debt was 1.3x EBITDA for covenant purposes, which continues to offer us flexibility and is consistent with the same period last year. Our journey towards sustainable growth is guided by a clear, multifaceted strategy designed to maximize value for our stakeholders. First, we focus on organic growth, ensuring that our core business remains strong and competitive. Capital investments are the foundation of the growth, enabling us to maintain and expand our capabilities. And typically, we'd allocate 3%-4% of revenue towards these investments, with higher levels of 5% in the current year as previously guided.
To accelerate growth and diversify our offer, we also pursue strategic acquisitions. By enhancing our capabilities and broadening our customer base, these acquisitions add valuable assets to our portfolio. We carefully select targets that offer attractive valuations, ensuring that each acquisition complements our long-term goals. Supporting our growth initiatives is a commitment to providing sustainable returns to our shareholders. Our dividend is designed to be resilient through market cycles, and we've progressively increased payouts over time, reflecting our financial health and stability. Lastly, we consider capital returns in cases where reinvestment opportunities are limited. We currently have a pipeline of acquisition opportunities that we're exploring along with our focus on growth investments. I'll now hand back to Nat to take you through our strategic performance.
Thank you, Jon. Our consistent strategy has proven to be successful, building the diverse and resilient business we have today.
We have global scale and have now delivered incredibly over $1 billion of revenue looking back over the last 12 months. We've achieved this because we have an extremely talented and hardworking team across the organization, and I cannot stress this enough. It is this team effort that has accomplished some very significant milestones, and I am continually impressed with how we exceed our customers' expectations. We are making investment in growth, deploying capital effectively to drive long-term sustainable progress. We've increased our investments to support customer requirements, ensuring we have capacity and capability to effectively partner with them. We're focused on the right markets to provide the business with a platform for growth. Each has its own distinct structural long-term drivers, providing a portfolio effect and enabling through cycle growth. Underpinning everything we do is a mindset of continuous improvement and operational excellence.
We are a vertically integrated business, and an example of this is a contract with a European EV customer where we are manufacturing the specialist cable in China, wire harnesses in Indonesia, printed circuit board assemblies in India, and building the final product in Poland. Combining these factors creates a very competitive enterprise, allowing us to maintain margins within our target range of 9%-10% for the last five years through COVID, through supply chain disruption, and through high inflationary environments, and as we explained at the full-year presentation, we continue to invest in the long-term growth of the business. Current trends towards nearshoring and regionalization are likely to receive further impetus following the U.S. presidential election result. We have capacity available right now in key locations to support our customers with their supply chain simplification projects.
Timing is critical because customers only want to move once, and we are ready for them, and in the first half of the year, we've completed expansion projects in Indonesia, Mexico, and India, adding a further 15% to the manufacturing footprint of the group. There are two further expansion projects due to complete in low-cost regions in Turkey in the second half of the year, increasing capacity in FY 2025 by 20%. We started construction on a new facility in central Mexico as well, which will come on stream next year, and along with our normal customer-led CapEx, the investment in CapEx is 5% of revenue, as previously communicated. Given our market-leading returns profile with the majority of projects giving cash payback within two years, this will support our continued growth.
As mentioned at the beginning of the presentation, we're making good progress on the integration of Murat Ticaret following the acquisition in August last year. We acquired a business with excellent customers, great engineering and innovation, but with room for improvement to bring it up to our world-class manufacturing standards. We've established a dedicated team locally with support from our global experts to roll out the Volex way of working across Murat Ticaret. This will enhance productivity and deliver efficiency gains, and we are deploying new systems and processes to improve efficiency and customer responsiveness. In line with our plans to modernize facilities, we are expanding our footprint in Turkey, in Türkiye, in lower-cost regions, increasing flexibility and competitiveness, and in addition, we are embedding our successful global supply chain processes in this business to leverage our scale in procurement discussions.
Labor inflation is a headwind as the government of Turkey delivers reforms that will stabilize the economic conditions. And given this, we are focusing our productivity improvement activity on areas that will reduce labor costs. At the same time, we are agreeing price enhancements with customers to pass through the increased input costs. We now have a dedicated, highly skilled, and experienced sales team in North America, and this will drive the next stage of our expansion. Initial progress has been extremely encouraging. We are actively quoting a number of prospective customers, and we are in the early stages of production for a major new Off-Highway project in Mexico from our facility in Tijuana. These actions are creating the foundations for our expansion in this market. Now, notwithstanding the announcement earlier today, which I'm not going to talk about, acquisitions remain a key part of our strategy.
There are a variety of key considerations that we review when we assess potential acquisitions. This ensures that any transaction provides clear benefits and enhances our value proposition. The location of the target business is important given evolving supply chain dynamics. We are attracted to businesses with deep customer partnerships in markets we understand well. To ensure a smooth transition, we assess the cultural fit of any prospective acquisitions and remain mindful of additional or adjacent capabilities that could be brought into the group. Valuation is extremely important to us to ensure that we are able to make attractive returns. In the last six years, we've acquired 12 businesses for a total of $400 million, giving a blended multiple of 5.2 x EBITDA. These businesses are generating strong returns with a last 12 months return on capital employed of 18.9%. Talk about the five-year plan quickly.
With the continuing progress that we've made in the first half of FY 2025, we remain confident of achieving our five-year obligations. At the halfway stage of the planned period, we've delivered revenues of over $1 billion in the last 12 months, which is a compound annual growth rate of over 20%. We need to grow by approximately 6% for the remainder of the plan to meet our target of $1.2 billion of revenue, and throughout this period, we've maintained our underlying operating margins within our 9%-10% corridor. This puts us in an excellent position, and we're excited and enthusiastic about a variety of opportunities ahead of us, and 2015 seems a long time ago given where this business was when we got involved in it.
So in summary, these are, again, an excellent set of results for the first half of the year, particularly considering the tough macroeconomic conditions. Our diverse end markets continue to provide growth in this period of variable demand with both Electric Vehicles and consumer electrical end markets recovering from destocking to grow really well in the first half. We are continuing with our targeted investment program to fuel the long-term growth of the business. With a strong balance sheet and a pipeline of potential targets at various stages, acquisitions remain an important focus. And on the back of this great set of results, full-year performance is expected to be in line with expectations while growth investments provide us with continued confidence in delivering our five-year plan. Thank you for attending our half-year results presentation, and we would now be happy to answer any questions.
Good morning. It's Henry Carver from Davy. Just a couple from me, please. First of all, within CIT, obviously, data centers have been really strong, which obviously cognizant of the diversification here coming through. But can you give us an idea of how the division did outside data centers and maybe sort of prospects for the second half there? And then secondly, just on Murat Ticaret and its expansion into the U.S., which is obviously quite a big opportunity. If that sort of goes according to the plan that you're thinking at the moment, or better, would that require more investment in capacity than the guided sort of 5% of revenue range to increase capacity in the U.S.? Sorry, yeah, the CapEx guide, would that require more money than the 5% guided? Thanks.
Okay. Good. Thanks, Henry.
What I pick up on the CIT piece, perhaps Nat, give you some comments on our opportunity in North America, and then I might just come in at the end on the CapEx requirement for that. But look, in terms of complex industrial technology, overall, it was up 4% organically. Very strong year in data center driven by the AI trends that we've talked about. Softer in the core industrial piece. And of course, there we're supporting areas such as clean technology, things like telecommunications, industrial automation. And a number of our customers have been holding off making decisions or end customers holding off making decisions on deployments of those types of end-use applications while they waited to see what happened with the U.S. election and also to wait until interest rates come down and it creates a better business case for them.
There's also some elements in there in terms of just the timing of one-off projects. Now we've got some new projects coming in into the second half. So our expectation is things start to slowly improve around that core industrial demand. But it's going to take time, I think, as you've seen elsewhere, for this industrial demand to kick in. I think we're very well positioned in the locations where we make this with real strength in complex industrial technology in the U.S., which will be a key driver of growth, but also in lower-cost manufacturing environments such as Mexico, such as India, and elsewhere that puts us in a great position as the demand starts to come back.
So look, on Murat, we bought Murat because we were buying the largest Off-Highway wire harness producer in Europe.
We've seen a situation where there's been a thinning out of the competition in North America. Mexico, although costs have gone up, is still the cheapest place to manufacture from a nearshoring perspective. People are not willing to ship these big sort of bulky harnesses from China or from Southeast Asia. What we have now, which is exciting in our business, is we have a real book of business that customers can come and see in Mexico. So we've now got an Off-Highway dedicated facility in Tijuana where we're producing for Tesla for the Cybertruck, which, although it's a niche vehicle, these are complex harnesses that are going in there. We've got two large, very interesting Off-Highway projects there. So now we can show it to customers. Customers can see that there's large amounts of activity going on right on the kind of doorstep over the border in Tijuana.
The other thing we've done is we've hired a number of extremely senior and experienced individuals from some of our kind of competition in the Off-Highway space. So we've hired, for example, the former head of Off-Highway from ECI, who we see as one of our kind of big competitors. We've taken a number of salespeople. We've taken a number of engineers. So we're kind of, I would say we're sort of all in on the Off-Highway bet for want of a better description, but we think it's a very good risk-adjusted bet because of the customer list that we inherited when we bought MT. So we think it's a very interesting area, and in terms of the capacity, the CapEx, do you want to answer that?
Yeah. No, we've got the space. We've opened this additional facility in Tijuana.
We're in the process of building a further factory in San Luis Potosí. So it's a big upgrade to what we have there at the moment, but it's a location where we have an existing workforce. They'll be moving into the new factory. The investment in San Luis Potosí is baked into the CapEx numbers for this year. In terms of going forward, it's not hugely capital-intensive. There are other parts of our business where it's a lot more automated. This is lower levels of automation given the complexity of the product. So the CapEx requirements on any particular customer project aren't above the average for the rest of the group. So in terms of your question, does further investment in Off-Highway blend up the CapEx rate? If you put the new building to one side where we purchase land, we're building a state-of-the-art factory. In terms of the medium-term outlook, then it just blends within the 3%-4% long-term CapEx measure that we have.
Hi, Vanessa Jefferies from Jefferies. Given the very strong growth you've seen in EVs, I was wondering if you or your customers are feeling a bit different about the market over the next couple of years post the U.S. election result, given that S&P have said this week they're probably going to cut battery electric vehicle production materially, offset by some upside risk in Europe. And then how you're feeling also about your Mexico footprint there, given it might be a little bit of a target.
Yeah. Again, I've already mentioned it earlier on in this briefing, but obviously we have one big customer there, and we are a preferred supplier.
And we have a good relationship with them because we're cost-effective and cost-competitive, and we have great quality. And that business is growing. And that business, I think, will be a beneficiary of the recent U.S. presidential election. I have a sneaking suspicion. So what's so exciting about the overall EV pipeline is that the sort of legacy automotive manufacturers are still investing. They are catching up. And they are extremely slow to make procurement decisions. And so these are customers who we've been talking to literally for years, one, two, sometimes three plus years. And so although they're very slow, it gives me a lot more confidence that I can kind of see which of these OEMs are going to result in sales. And I'm not remotely concerned about the U.S. election or the change in Trump's policy towards EVs.
Because again, I hate to be sort of self-deprecating, but we are a small business, and we're a niche manufacturer, and so we're not really focused on the individual customer relationships and trying to kind of grow sales on an individual basis, and right now, the pipeline of projects in EV has really never been stronger, so I feel very, very, very excited about it.
And then just following on from the earlier question, so it looks like based on those percentages, data centers were up 40%, and the rest was down 15%. Is that right? But you continue to give this market CAGR of 7%. Are you expecting a lot of normalization in the market over the next few years, or is it just you expect to grow significantly above market?
In terms of the growth, I think it's closer to 30% on data centers and sort of around 12% on the rest of the business. And some of that, that's not really representative underlying volumes in the Complex Industrial Technology piece. It's just timing of particular customer projects. So we feel that we've got a very attractive proposition, particularly in terms of how we're able to bring together the different parts of the group. I think that's something that's been really transformational in how we're approaching some of the customer opportunities. Nat gave an example of a project. It's actually an EV project, but it's a great example. We're making in our factory in India the printed circuit boards. We're making the cable in China. We're making the harnesses in Indonesia. We're assembling everything in Poland. There's a high degree of vertical integration there.
It means we're very competitive, and we are winning business in this industrial technology space, and then in terms of the data center piece, look, it's grown incredibly well. We have some excellent products that our R&D teams have developed, which our customers cannot get enough of at the moment. It's hard to make predictions into the future about what does the AI boom look like over two, three years, but we're very comfortable with some great, really great customers, sort of best-in-the-world customers, and excellent products, and we're manufacturing in a very competitive way. We can manufacture in China for the rest of the world, and we can manufacture in Indonesia for shipping into the U.S., so as the tariffs change in the future, we feel that we're very well positioned in that respect.
I would just add again, these are customers that we've had for, in some cases, 20 + years. We have incredibly strong relationships with these data center customers. And we are winning new business. We're being shown new business opportunities. And look, I'm not someone who kind of drinks the kind of AI Kool-Aid, but it's clear that this is not a kind of fad, and it's going to continue. And so while it continues, we couldn't be better positioned. So we don't think we take it for granted. We're fighting every day for our share and to remain competitive. But we are in a very, very good position. These are household-name companies. People who don't even invest in the stock market know these companies. And we've got the best customers. Yes, exactly.
I guess that comment was that 7% seems very low compared to what you're experiencing.
Yeah.
Thank you.
Anyone else in the room with questions? Otherwise, we'll see if we have any questions over the chat or the phone. Thank you. Yes, we've had a couple of questions initially from Stephan Klepp , HSBC. Initially, he asks on data center cables, how good are the chances to win additional blue-chip customers in this area? And what are the usual applications your cables are supplied into?
Yeah. I mean, look, I mean, again, we've got salespeople out there fighting for every scrap. And I'm not going to go into sort of individual sort of customer developments, but the answer is yes. I mean, again, there's a whole pipeline of customers.
But I think I look at it, the fact that we've got sort of two of the three largest companies in the world in our stable. I regard that as a victory of sorts. I'd like to have three, but at least we have two. I can't remember what was the second part of the question.
So it's in terms of what the usual applications are. And it's really within data centers. So you have racks of equipment where you've got processors, you've got switches, you've got storage devices, and all of those need to be connected at high speed. And we make these incredibly fast cables that are connecting up all of those boxes in the data centers. So there's thousands of these cables in the data centers. And customers like the copper cables because they have lower power consumption compared to alternative technology.
And of course, as you put more power into the processors, managing power within the data center becomes your biggest headache because you've got heat, you've got to dissipate the heat, you've got to sort of manage the loads from an electrical perspective. So the fact we can produce these very efficient cables that run at incredibly high speeds and support the uptick in processing required for so much that we take for granted in normal life around applications in AI, but also streaming videos and just everything that we're used to. These products are ubiquitous within data centers. So yes, there absolutely is an opportunity to, given our credentials with two of the biggest technology companies in the world, to sell to other technology businesses. And we're exploring that.
And the life of these cables is only 18 months. So every 18 months, you have to sort of rip them out and put new ones in.
Thank you very much. The final question from Stephan is on organic sales. How do you see those going into the second half of this year? EV and data center business should remain strong. Why would you not be able to continue with strong organic growth from here?
So we see strong momentum going into the second half. As we've flagged, there are some tougher comparatives in the second half. So in terms of setting out organic growth, it looks different in the second half because there was particularly weak a year ago in consumer and EV due to destocking. And now we're through destocking, and we continue momentum into the second half. So I think that the trajectory is really good as we move into the second half of the year.
I think the key thing for me, the thing I was so pleased about in this set of results, is to show how much we've turned a corner from the destocking that we had 12 months ago, both in EV and in Consumer Electricals , and we are just incredibly competitive in both of those spaces. We are winning business in competitive situations versus others in the market because we're vertically integrated, we're highly automated, and we know exactly how to do this stuff. We know where to make it, we know how to deliver it, and we know what the customers want, and that's what's driving that growth, and if you look at EV, it is proliferating into the EV market, so we started out five, six years ago, we did one product. We do now have a whole range of products, a multitude of products.
Similar in Consumer Electricals , if you go back five, 10 years, we did power cords. Now we do power cords, we do harnesses, we do specialist connectors into that space. So it's through understanding the customer and responding to their requirements. It's through having a great team who know how to engineer these things and manufacture them. All of those things together give us strong momentum into the rest of this year and into next year. I think in terms of the five-year plan, which is ultimately the thing that as a management team, we're really excited about. As we said in the slides, we've delivered over the first half of the plan, we've delivered about 20% compound growth. We need to deliver 6% to get to the five-year plan objective, which gives us an incredible amount of confidence that we can achieve that and hit that $1.2 billion target.
Thank you. Final question from Miguel Pohl from Allianz. On slide 19, you say the ROCE excluding goodwill on your historic M&A is 18.9%. Do you have this ROCE including goodwill as well?
Not off the top of my head, but we think it's appropriate to exclude the goodwill because it's really an accounting construct, and it makes that number comparable with the ROCE that we disclose for the whole of the group, which is 19.6%, and the reason it's slightly lower on the acquisitions, it's just the nature of acquiring a business because you fair value all the assets when they come in, which is what we do. You fair value the assets, you have a residual amount of goodwill, which is an accounting construct. If you think about the returns that the businesses are generating, it's based on the assets that we've acquired in those businesses.
Much appreciated. That ends the questions from online.
Good. Thanks, Nick.
Great. Any further questions?
Thanks. It's Andrew Humphrey at Peel Hunt. Just a couple, one Off-Highway in particular. We've obviously seen a few weaker data points in agriculture in particular in the last few weeks. Clearly, that's not great for the here and now, but I wanted to ask about whether that is an opportunity to kind of have more active conversations with customers, whether customers tend to look more at changing supplier during those weaker periods when they might kind of have capacity to kind of think about other spaces.
Yeah. I mean, first of all, it's interesting because the weakness in ag is much more pronounced in North America, where we have fewer customers. It's much less pronounced in Europe. So actually, if you take John Deere, we supply into John Deere Mannheim.
John Deere Mannheim is the single best-performing John Deere plant in the entire John Deere group. So just to give you an example, it's not a kind of one-size-fits-all situation. What we are seeing is we're seeing that it's no longer we used to be able to supply from Europe into the U.S. and be as competitive as Mexico. What we're now seeing is the customers want us. They don't want the longer lead times. And so now it's enabling us to talk to people specifically about our Mexico offering. And so I think that the conversations that we're having with the Off-Highway accounts, what's interesting about our business is we can open any door with any one of these customers. They all want to talk to us. So it's a very sort of encouraging sign.
As I've said on previous sort of analyst calls and investor calls, what attracts us about the Off-Highway space in North America in particular is you can literally count on one hand companies of our competition who have the sort of size and credibility to supply into these big Off-Highway names. There's a real dearth of suppliers at the moment in the North American space. Do you want to add anything to that?
No, it's a good answer. And I think the reality is we're just very well positioned. We've got the best Off-Highway business in Europe. So you're right, as customers are looking for savings opportunities, they're looking to consolidate demand with bigger players. So that does give us an opportunity.
Thanks. And maybe one on consumer as well. You mentioned a couple of times broadening the product portfolio there, doing more harnesses as well as the power cables. That's clearly a kind of slightly different production process skill set, operational challenge. Have you talked about how much of that business today in Consumer Electricals is harnesses and whether you have a target there, whether that drives kind of particular sort of outsized growth beyond the cycle?
Well, we want to grow with our customers. We want to support our customers. If they are looking for power cords or they're looking for harnesses, we can do both. We've got a new customer coming on stream, a big German Consumer Electricals manufacturer that's going to start in H2, and that's harness business. And it's a new type of harness that we haven't done previously. So we're adopting different technologies so that we can support demand in the market.
And these products are becoming increasingly sophisticated. And as the product set becomes more sophisticated, you need manufacturing experts who can deal with the intricacies of delivering that. So we've not set out particular targets. We're taking on board new customers in harnessing, and we have good expertise there. And we see that as a growth opportunity, particularly because we're so big in power cords. Everybody who wants to buy power cords knows about us, and most of them buy from us. So the harnesses is an opportunity to grow quicker than the power cord piece.
But just add one thing to that, which is that the look, consumer electrical harnesses is one business which is all about price. And what is interesting about our footprint is we are hyper-competitive in Southeast Asia. So we can win against the competition who are producing, for example, in Mexico, in Southeast Asia.
We are uniquely set up to win a lot of business in Indonesia. And that's where the really kind of big chunky growth is going to come from in the harness side of the consumer electrical business. We can also do it in Turkey, but the arbitrage for the customer is less pronounced for Southeast Asia.
Thank you.
Great. Well, look, it was an incredibly exciting day for us. And again, I have to sort of say it again that, look, I mean, we're over $1 billion in revenue now on a look-back basis. I think when we got involved in the business, we were doing about $300 million of revenue, and we made about $7 million of EBIT from memory. That was our sort of first year of mediocrity. So it's nice to sort of continued on this journey.
And again, look, what distinguishes Volex from the competition is that we do have, as I said, an exceptionally strong senior team in this business and very hardworking people, really, really talented, detail oriented. And so we can go on now and kind of really kind of move the business forward over the next sort of 12 months. And it'll be exciting to see the next set of results in six months' time. So at that, I'd like just to close the meeting. Thank Jon. Thank you all for coming.