Montana Aerospace AG

Ladies and gentlemen, welcome to the Montana Aerospace Q1 2025 Earnings Call and Live Webcast. I'm the Divi Calls Call Operator. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and 1 on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Michael Pistauer, co-CEO and CFO. Please go ahead, sir.

Thank you very much, and hello, everybody, and welcome to our Montana Aerospace Earnings Call for the first quarter 2025. Time is passing fast. We will show you and present you the numbers for the first three months, 2025. Compare them to development in comparison to 2024. The first quarter give you an expectation of what we see as an outlook also for the next months ahead and the rough guidance and some detailed expectations from our side on the different segments. for the rest of the year and the rough outlook also for 2026. I will guide you through the presentation. My name is Michael Pfister, co-CEO and CFO of the company. Against the announcement, also Kai Arndt, co-CEO and responsible for aerostructures, could make it in time. He comes directly back from a large OEM from the US. and we will then hand over once we come to the aerostructures to Kai to give you a more detailed background of the developments there. Let's flip directly to the results which we are very happy to present. Hopefully you can see the presentation already on the necessary pages. Here we have a result which is, I don't know if you can see the presentation. Page is flipping at least from my screen. I don't see it changing. Hopefully you can see it. In any case, otherwise I just announce the page number so that you know where we are. On page number three, we still talk about Montana Aerospace as a two-segment business. so aerostructures and energy. Aerostructures is not only the main driver of the business, but also the name giver. Here we produce these mission-critical aerostructure parts for all kinds of aeroplanes and all the different stages. And I guess we can say that we are mission-critical for every commercial aircraft in the sky and also many others. Energy, second segment. Here we are powering the green innovation with our copper core products and driven by the energy transition by the large demand for new applications concerning transformation and generation. The development of the company Montana Aerospace as we see on page number four of the presentation was extremely solid and we are happy to present. We have seen strong growth in sales and what is out of our view More important is the concentration on the EBITDA, on the earnings, on the net income, and on the cash flow, which we will see also in the following pages to be strong and over-proportionate to the growth of sales. As I said, a good drive of the business is the development of the sales, and here we saw a solid growth of over 15% from first quarter 2024 in comparison to now first quarter 2025 or if you compare it two years backwards it's over 34% so every year the same procedure over proportional growth and we are well in track to our guidance of a bit more than 1.6 billion for the full year 2025 with this 400 8.8 million on sales which we generated in the first quarter. EBITDA, as we said, concentration on the results also by a good mix of customers where we were able to compensate and generate more sales and I would say also good market share with other new customers or newer customers And here in January, we were able not only to generate a good EBITDA, but also a strong development over the years. We see another growth of 32% from $36.7 million in the first quarter 2024 to $48.5 million in the first quarter 2025. Or if you compare it over the last two years, we see that we rose the EBITDA margin by by factor two from around 6% to now 12%, which is well in track with our guidance and also with our development. So of course, it's even a bit stronger than what we expected ourselves. And we're happy about this development as we see that the concept of economies of scale, scaling up a good mix of customers is working out well, and that our products are mission critical Important on the right-hand side of the space number four, you see net income, a set concentration on cash and income and earnings. We have seen, in comparison to first quarter 2024, also here a strong growth, 5.3 million versus 2.7 million in the last year. Nevertheless, it was negatively impacted by a very unfavorable development of the US dollar, mostly, or the FX. In the first quarter of 2025, we had an impact of almost $10 million only as non-cash impact on the balance sheet, which are shown in the financial result. Otherwise, our net income would have been even stronger. But I guess the development of what we see right now in the net income and the earnings EBITDA in the sales is quite promising and gives us tailwind also for our guidances for 2025 and 2026. If you flip to the next page, here we see on page number five the development of the operating cash flow and the free cash flow. Every year the same procedure. first quarter of the year is typically the weakest one concerning the cash flow. Why? Because there is a seasonality concerning the earnings, the increase of the working capital, which we will see on the later pages. There is typically a large negative impact from financing of the working capital, which influences heavily over the cash flow in the first quarter. That's what we see also in 2025. Nevertheless, in comparison to last year, 2024, we see already a positive impact. So we, in comparison to 15.8, now minus 5.4 million operating cash flow is three times better, if you may call it like that one. And therefore, with a same or similar development ahead for the next quarters to be awaited, we look quite positive also into the future. Free cash flow, similar development. And if you flip them to the next page, the impact from the cash flow is mostly driven by a good EBTA, which we saw in the previous pages. On the other hand, the negative side, but also an increase of the trade working capital. We expect strong sales in the second, third, and fourth quarter 2025. Also, I would say still some topics out of the strike of Boeing and expected higher build rates somewhere later this year, of course, impacted the need for inventory on our side. Therefore, you see in comparison to 2024, an increase in the trade working capital. Of course, we also had an increase in sales, but in comparison also to sales, it rose slightly. And the reason is we see some stronger sales ahead, and as I said, some impact out of 2024, which influenced heavily the trade working capital. Net debt, nevertheless, a crucial KPI out of our view, as we usually always envisage a cash flow strong business and a cash strong business, and therefore intend to reduce constantly the net debt level of the Montana Aerospace Group. And here we are on a good track. So in comparison to the last year, same period, so Q1 2024, by approximately 70 million. A reduced net debt is shown right now with 252 million. Saying that, we, I guess, can summarize that for Montana Aerospace, we had a very strong, solid, slightly above expectations Q1 concerning sales, but mainly concerning the earnings EBITDA, net income, and also cash flow. Small impacts out of the trade working capital, but a clear strategy. And saying that, I would like to hand over to Kai for giving you more details on page number seven and the following on the aerostructure segment and development there.

Thank you, Michi, and good afternoon. I hope everybody can hear me good. I'm in the parking slot of the supermarket and I don't see the presentation, so it's a little bit challenging today, but of course I'm happy to be in the call and can answer all the questions which hopefully come later. As you can see on page 7, this is the Q1 of the aerostructures segment, and from my point of view, it shows definitely the potential we have in this segment if the volume is kicking in. So we had some stable demands in most of the programs, but in others there was a lot of volatility in the demand from several programs, very unpredictable to plan for. This is also then reflected in the working capital, of course, but we expect that this is simply the, well, But it's coming from the last years where we had, Michi mentioned it, the Boeing strike and some other topics. And also for Airbus, you see the deliveries by yourself. April was, again, for the big OEMs, not a real fantastic month. You see that in Airbus, they announced 56 deliveries. Boeing will be 40-ish, more or less on the level of the average of the first quarter, but not more. So this gives us the challenge in terms of the following months to come, how to plan for it. And this, as Michi said, is also reflected a little bit in the working capital, but we managed to bring this down and we will see that over the next months to come that also here, we hopefully then will have the impact from the good EBITDA into the cash conversion. In numbers, if you compare Q1 24 to Q1 25, it's a 7% growth rate. only I like to say because of course this is then again reflecting that the growth rate with the OEMs is not as big as maybe we saw in the newspapers and the announcements but on the other side the growth rate on the EBITDA from 29 to 39 is reflecting a 36 percent in terms of growth and again this is from my point of view, showing how strong the company is if we get the volume, if we get some other businesses, not only relying on the OEMs. So also space is a very fast-growing market for us, and we are winning some good packages on this side. We had some NRC payments from the OEMs for several industrialization projects we are doing right now. So this is all reflected in this number, and again, it's showing the potential of the aerostructures segment The outlook, and I guess there will be also some questions on the tariffs. This is, again, a very volatile discussion we have there with the global setup of the aerostructure segment, of course. There are very, very different impacts from the tariffs. For the moment, and as Michi said, I'm just coming from Seattle, there's definitely also a willingness from the OEMs to solve it for the supply chain. And you can easily imagine we are talking about 10,000 suppliers having more or less the same problem. So somehow the OEMs have to step in and to balance it if there is any impact. And from yesterday's discussions, I definitely think that there will be the support which we which we might need if there is no solution from the politicians. So that's good. In terms of the growth rates, deliveries, if we start talking about Boeing, then you can see that there's still the ceiling of the deliveries on the 737, and hopefully in the next weeks or maybe months to come, the FAA will release this, and then, of course, the growth rates will come like announced by Boeing. I think they are in a pretty good shape operationally to fulfill everything to make this happen. And for Airbus, it's more or less the same. We saw some impacts on the A350, for example, but overall, it's a stable growth and we're winning more and more work packages with better margins. Obviously, as you can see, I'm quite positive that we at least will make it to the guidance for this year. Yeah, that's so far from the aerostructure segment, and I'm happy to answer questions after the presentation.