Montana Aerospace AG

Ladies and gentlemen, welcome to the Montana Aerospace 9 Months 2025 Earnings Calls. I am Valentina, the Chorus 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. Webcast viewers may submit their questions in writing via their relative field. For operator assistance, please press star and 0. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Michael Bistauer. Please go ahead.

Welcome everybody to nine months 2025 earnings call of Montana Aerospace. This is the first earnings call as a pure play aerostructures company. a goal which many of you know we followed consequently since 2023, and we are extremely happy to announce that this time we have achieved this goal to be a pure-play aerostructures company. Yes, balance sheet is still heavily impacted by the carve-out of the energy segment. We will go into detail of those aspects, but still we think aerospace is doing great. And we are more than positive and confident that we will also in the future outperform our peers in aerospace. Today's aerospace earnings call, as always, and me, Michael Pistor will guide through and we are happy to answer your questions after the presentation. of Montana Aerospace earnings in 2025. Where are we right now? We announced our strategic transition into a pure play aerostructures company already in 2023. And the reason for this statement and strategy was pretty clear. that aerospace as an industry has an extremely long-term perspective. Not many other industries can share this long-term perspective. Connected with long-term contracts, which we will then also discuss a bit later on. And we think we can outperform the market, consequently something we did in the past few years, And we can outperform also for the future, we think, because of a special setup. Why? We do have a very special approach to the market. We are situated in the meantime, a transition we had in the last three years, as a global player, still local to local, something which is under the light of tariffs and other developments more important than ever and also adds additional market share to our portfolio. We are one of the few ones in our special area we are in who has a fully integrated value chain. Something which is also for the future as we think the market still in the supply chain stays shaky is more and more important. To partner up at the end with our which are the tier ones and OEMs in aerospace industry. And last but not least, we have not only best-in-class entities, but most of our assets are situated in so-called best-cost manufacturing footprint countries. Price pressure is something which is constantly on. And certain price pressure for us with situations set up like we have is a positive momentum, which also brings us some tailwind into our development. And we have a very clear core, which helps us to perform better and better together with our customers. Let me elaborate on the carve-out, which is definitely one of the crucial topics within our balance sheet in the nine-month results. And we think that the carve-out is highly accretive for the company Fontana Aerospace. Why? We have achieved an enterprise video in the carve-out of 204 million. And before we go into the details of additional impacts, let me shortly elaborate the transition history. In 2023, when we announced that Montana Aerospace is elaborating into a pure-play aerostructures company, we tried a so-called carve-out IPO in the energy segment. We failed. We failed out of the reason that a carve-out IPO within a stock-listed Montana Aerospace was not accepted in the market and by the investors. We then have subsequently M&A possibilities worked out and more than 30 interested parties went through a very deep diligence, many of them strategists. Strategists like Siemens GE and other companies were not able to participate in a carve out due to the market share of energy segment and therefore the fear of consequences of trade commissions and merger control issues. After two years' time, we choose the highest, by far the highest offer we have received. Yes, with some impact, but on the other hand, by far the highest offer. Also, because we had some time pressure, time pressure which was given by the fact able with this condition precedent or are able with this condition precedent to shift some debt into equity with non-diluted impacts for the Montana aerospace, which I would like to explain. So, all in all, we achieved, with the carve out of energy, 3.7 million enterprise value. We avoid it as a Montana aerospace. equity injection which was planned and also guided of 30 million. This is done by the new shareholder. We have an opportunity for a so-called uncapped burnout component which is also to be paid either by good performance of the energy segment or M&A transaction or an IPO. of the energy segment by the shareholder to Montana Aerospace. And here we calculate with an amount of 40 million plus already to happen hopefully in the next year to come. And further, we have then achieved our goal as a pure play aerostructures company, which gives us or provides us, I would say, the fact of a condition precedent to fulfill the debt equity swap with the Belgium state fund in the amount of more than 66 million euro, which otherwise would have been cash effective to pay back. So all in all, we think with an amount totaling up of clearly over 320 million euro, a very creative topic for Montana Aerospace, and therefore we're quite happy also to announce. Cash index is a bit delayed. As the closing of the transaction was late in September 2025, the net net impact will be around 25% of the total amount in Q4 2025, and around 75% is expected to happen within the first half of the year, 2026. most likely even in the first quarter, 2026. Which also lead us later in the guidance to our, I would say, very optimistic and positive guidance on net debt or net cash with one-time net debt EBITDA this year and even a net cash position together with the operational business and the aerostructures cash flow in 2026. Let's go into the details of the first nine months of 2025. And here we see again a P&L, and please note this P&L is showing only anymore the aerospace business. Montana Aerospace also, as it will look forward-looking without the energy segment, with the PurePlay Aerostructures Company, which is mirrored here. And what we see is in sales, stronger than the market growth, with 15.5%, the net sales of 712 million, and as announced, the over-proportional development of the EBITDA. Yes, the quarters are not anymore completely the same. There is a kind of a seasonality. with a strong second quarter and a very strong fourth quarter to be awaited or expected, mostly even in EBITDA, which also then bring us later to a very strong EBITDA guidance for 2025 and also for 2026. The result, which shows the result of the continued operations from negative to positive within one year. And please note that the result still includes a heavy impact of a non-cash impact we have to suffer with, or digest, is the FX impact, which is in the financial result. For a detail, to be more specific, The financial results, you find the position of almost 30 million of negative impact, which resides out of IC loans, so intercompany loans from Montana Aerospace to its entities in U.S. dollar. And as the dollar changed dramatically within this year from around FX105 by the beginning of the year, to at the end of December date of 1-17. More than 10% of these almost 300 million loans are evaluated differently, even so they will never have a negative cash impact for the Montana aerospace as shown in the result. And still then, with this 30 million impact, we show a continuous operations result of three. Otherwise, it would have been 33 or even more. Catbacks, and here I would like to stress the catbacks without the energy segment for comparative reasons. Slightly lower than last year, and I would say exactly in the area of our guidance where we say always even with small additional capacity increases, we are at the level of 40 to 60 million on a yearly basis, which is far below our depreciation, therefore shows the strong cash flow, operational cash flow possibility and potential. Net debt, including the total company as it is on the year's end, or in this case the nine months end, it shows a quite significant decline in comparison to the last year, 2024. Please note that within this year, we had Besides also the CAFAT of ASTA, or energy segment, an impact which was net debt related, there was an earn-out component of the, out of the ASCO transaction. ASCO was bought by Montana Aerospace within the year 2022-2023. There was always an earn-out component within our balance sheet in the amount of 30 million. And this earn-out happened to be paid out by July 2025 in the amount of 28 million. It's a bit less than what we expected. But nevertheless, of course, this impact was also something which impacts the net debt. Without that impact on a like-to-like basis, the net debt decrease could have been even over 100 million. to be more specific, 30 million or almost 30 million lower than what we see right now. Free cash flow shows the total impact of the transactions. Transactions are just told. On the one hand, the earn out component, but also the impacts of the energy segment. the impact of the energy segment, the free cash flow shows at the level of $2.8 million. Without the impact of the additional earn-out component for the ASCO segment, the free cash flow would show an amount of over $30 million. So on an operational basis, we are extremely happy with the development and I guess If you look at the details, it shows the strong position we as a Montana Aerospace have. And additionally, with the really strong contracted sales of over $7 billion, where Kai is giving also some more color on it in just a moment, we think we are prepared more than positive for the future. Details on the results. I would like to hand over to Guy and give you more details on the development of the industry and of aerostructures, aerospace, Montana Aerospace in the last few months.

Good afternoon, everyone. Before I start with the details, let me also give you some remarks, personal remarks from my side. Of course, everybody is under the impression of today's share price development. I'd just like to mention that I'm not focused on a day or a week or a month or a quarterly development. I'm definitely focused on the sustainable development of the company, and I guess we have all the right to say that for the last past years, and there's absolutely no reason to questioning or getting negative on our business model. So we stay positive, and there's a good right to do so because we see what is happening in the market. There's no changes in the last month, so the OEM is still publishing the same rates. Our market position is getting stronger and stronger. We are winning more work packages because the customers like our business model. And it's extremely difficult to be a copycat and do the same business model wherever in the world. I guess this is still very underlined by the recent developments and the recent packages we are winning. And as said, there is absolutely no reason for getting pessimistic for the future or getting negative on our business model. I don't see that. We are winning the packages we want to win. And this is definitely also reflected in the margins we are able to create. And I guess this is giving us the right to stay positive on the business model, and we will continue the way we have chosen just a couple of years ago. Why are we a bit more pessimistic for the future? I will come to it on the next pages. Let me start first with the current development of the quarter three compared to 2024. you see that we are close to a 20% increase in quarter-by-quarter comparison and also a 17% increase in our EBITDA. As Michi already said, traditionally the strongest quarter of the year is the fourth quarter, and I'm staying positive that we will at least achieve the guidance for 2025. There is no reason we shouldn't not achieve it. We see what's coming in. And therefore, I'm quite positive that we at least achieved the guidance for 25. And let's move ahead, and then we can see about our rate assumptions and the guidance for 26. I don't see the next page now. Okay, no. Yeah, so here, as already discussed and mentioned, there is always the influence of the energy business. And as you can see, if you compare quarter by quarter, operationally, I guess we are doing pretty well in line with what we expected for the different quarters. The trajectory is absolutely healthy, and definitely it will continue like this. And for the fourth quarter, as already mentioned now a couple of times, it should even be stronger than this one. Okay, what does this mean now for for the outlook in terms of really the rate assumptions and the guidance for 2026. I guess this was one of the biggest questions and maybe a reason for some questions also later on. If I come to the guidance, as said a couple of minutes ago, from the environment we are in, you don't see any changes from the big OEMs. You don't see that they adjust their delivery announcements for 2025, but also for 2026. But if I see, well, if I look a little bit deeper into the market, I also see that Airbus announced around more than 50 gliders in Toulouse. I saw photos of one of our biggest customers, Spirit Aerosystems in Wichita, where I see more than 200 few of the largest on stock, I see that the supply chain is still influenced by fastener shortages and so on. And also we see some discussions we have on the extrusion side in terms of the volume demand for 2026. So if I combine everything of the information we get from our customers but also from our supply chain, I think this is the reason why we, probably we are a bit more conservative than the complete market. But I also like to say in the last four years, there was not a single time in one of our earning calls that we had to come with a winning warning. It was only one time, and this was a positive one. And I guess in terms of professionalism and also in terms of the conservative approach we might take in here, I guess this is simply what we see from the supply chain, but also from the OEMs. And this has been... embedded in our planning for 2026. We are not that much focused on the revenues, just to be also very clear on this one. We are focused on our margins. We are focused on the generation of cash flow, and we are focused on a lot of projects which are in the pipeline and where we are in very, very good discussions with our customers. And I'm quite positive that in the near future you will see a lot of announcements coming from our side in terms of maybe new projects where we engaging ourselves and also in terms of new contracts, we will be able to sign with the big OEMs. This will definitely give us the baseline and the fundament for the way forward. And I'm ready to take every challenge or every question on 26 and onwards. But again, I guess we are in a very, very healthy position And I'm quite positive that we at least achieve the guidance also for 26.