Polytec Holding AG

Good afternoon, ladies and gentlemen. Thank you for joining us for today's investor and analyst conference call. At my side is CFO Markus Mühlbock. As usual, we are joining forces in the half-year and full-year calls. In summary, the results of the Polytech Group of the first half of 2025 are in line with our expectations. Sales amounted to 357.6 million, representing an increase of 2.3 percent. EBIT rose to 5.6 million, and the EBIT margin improved by 0.6 percentage points compared to the first half of 24, reaching 1.6 percent. Once again, we can report a positive net result. It amounts to 1.4 million. This is obviously not an ultimately satisfying financial performance, but still good achievement considering the market challenges that have existed for years. Vehicle production in Europe remains unsatisfactory. The forecast for the full year 2025 is once again 3% below the previous year, following an already realized reduction of 6% in 2024. We remain at the persistently low level of around 15 to 16 million vehicles produced in Europe per year. Overcapacity and the resulting market pressure on the entire industry therefore continue. Accordingly, the various measures that we at Polytech are taking to optimize our organization, our cost, our product portfolio remain necessary. We are making steady and tangible progress here. As already explained on several occasions, the painted exterior business area is particularly affected by upheavals and challenges. Polytech operates in the niche and small series segment. Large series suppliers are increasingly pushing into the upper end of this niche, having high impact on future sales potentials. To improve our future economic performance, we are working intensively on the strategic alignment and adjustment. For example, the uncertain market outlook has prompted us to significantly reduce capex in the UK as a first reaction last year. We are now realigning commercials in reaction to the significant changes in our customers' expectations. The Polytech plant in Weyerbach, which preliminary operates in the painted exterior sector, achieved its operational turnaround at the end of 2024. However, it is therefore all the more regrettable that despite all our efforts, the unfavorable market situation does not allow for a viable continuation scenario. We will close the plant in early 2026 to avoid future losses. The closure itself is not expected to have a significant economic impact in 2025 and does not change our guidance. After a phase of project postponements and cancellations in the field of electromobility, there are currently indications that activity may increase as OEMs have made strategic best decisions and also maintain options for combustion engine models. However, the outlook for volume remains uncertain, so Polytech continues to pursue a flexible investment strategy. The Polytech Solution Force has established a solid foundation in solutions for electromobility, ensuring competitiveness in key technology areas. Our smart plastics applications, the non-automotive business, focusing on reusable packaging are emerging as a key growth area beyond the automotive sector and increasingly contribute to the company's overall development. Although market challenges will remain, we believe that Polytech Group's adaptability and innovation will allow it to navigate change and seize new opportunities. To conclude my part, I would like to briefly address the changes in management. Peter Bernscher, former CCO of Polytech, has left the company. He took an opportunity in the board of Tata Steel, preliminary acting in non-automotive business. His position will not be replaced, and his responsibilities have been divided among the three board members. At this year's Annual General Meeting, two new members were elected to the Politics Supervisor Report. Dr. Abdul Fattah can look back on decades of experience as an international leader in the automotive industry. He succeeds Manfred Raust, who received the maximum age for the Supervisor Report. Bernhard Matzner heads the Audit Committee with his many years of expertise in finance. He succeeds Reinhard Schwentbauer, who had to leave the Polytech Supervisory Board due to his appointment as General Director for Raiffeisen Landesbank Oberösterreich. The Polytech Group Supervisory Board also includes the well-known members Friedrich Hohemmer as chairman, as well as Viktoria Kickinger and Frank Dusswald. Now I would like to hand over to Markus Mühlberg, CFO of Polytech Group.

Thank you, Markus. Ladies and gentlemen, a warm welcome from me as well. I would like to continue with the major financial figures of the first half year 2025. Polytech Group continued its positive trend and was able to improve almost every financial KPI compared to first half year 2024, despite a challenging environment. From today's perspective, the management of Polytech Holding AG keeps the outlook unchanged. We expect planned consolidated sales in the range of 650 to 700 million euro for the 2025 financial year, and targeting an EBIT margin of around 2% to 3%. Main facts and figures for first six months of 2025. Polytech increased its consolidated sales revenues by 2.3% to €357 million. EBITDA amounted to €21.1 million. This equals to a 5.9% EBITDA margin. EBIT totaled €5.6 million, coming from €3.5 million last year. EBIT margin rose by 0.6 percentage points from 1% to 1.6%. The financial result amounted to minus €4.1 million, coming from minus €5.8 million year-on-year. The reduction was a consequence of the lower interest rate level and reduced financial liabilities. Earnings after tax reached 1.4 million euro, while last year we were in the negative territory amounting to minus 2.7 million. Total earnings correspond to earnings per share of 6 euro cents, last year minus 11 cents. Equity ratio was 41.9%, similar to the high level of the last balance sheet date in December with 41.7%. Let's have a look on the Polytech Group sales split. In total, Polytech Group generated sales revenues of €357 million, which was an increase of 2.3% for €8 million compared to the first half year of the previous year. We report sales performance in three market areas. I'll start with the biggest area, the passenger cars and light commercial vehicle market area, which contributed 75.6% to our total turnover. Sales revenues of €270 million were generated. This corresponds to an increase of almost 6% compared to previous year. Market area number two, commercial vehicles. Sales amounted to €50 million and thus was at the previous year's level. This equals to 14% of group total sales revenue. Finally, market area number three, smart plastics and industrial applications. Compared to the high level of previous half-year, revenues of this market area declined by almost 15% for €6 million and amounted to €37 million in the first half-year. The share of products for smart plastics and industrial applications in the Polytech Group consolidated sales show 10.3%. Why were we able to turn the net results from minus 2.7 million in the first half year 2024 to plus 1.4 million in the current half year? In early 2024, we initiated a performance program to boost our efficiency and cost structure. In the first half year, we were able to cut our personal expenses by 2.5% or 3 million Euro compared to the same period in 2024. This amount looks even more positive if you consider that in the first half year 2025, negative one-time effects amounting to €3 million are included for reduction of headcounts, mainly in connection with the plant closure of our Weyerbach plant in Germany. Adjusted by the one-off effect, the improvement in personal expenses would be €6 million. In this context, I mentioned a number of employees. As of end of June 2025, Polytech Group employed 3,606 people, counted in full-time equivalents, inclusive leasing personnel. The number of employees was thus 7.7%, or exactly 300 FTEs lower than in the previous half year. Secondly, we were able to reduce our other operating expenses. You can read it directly out of the P&L because of the different disclosure of the individual items. For instance, we had to rent external storage for customer demands. This led to increased other operating expenses, but has been compensated by customers. The compensation is shown within turnover. Also, as expected, the interest expenses decreased by 1.8 million to minus 4.3 million euro due to lower financial debt and lower interest rates. Now let's have a look at the financial figures. The EBITDA margin, the EBITDA increased by 10% in the first six months of 2025 compared to the same period of the previous year, coming from 19 million to 21 million euro. The EBITDA margin increased by 0.4 percentage points to 5.9% compared to year on year. Earnings before interest and taxes rose from 3.5 million in the first half year 2024 to 5.6 million euro in half year 2025. The EBIT margin increased by 0.6 percentage points from 1% to 1.6% compared to the same period of the previous year. If you would adjust the explained one-time effects, the EBIT margin for the first half year 2025 would have been 2%. The equity ratio was 41.9% and was thus slightly higher than compared to year end 2024. Net debt amounted to €52 million as of end of June 2025. This was an increase of €9.8 million compared to the balance sheet date end of December 2024, mainly due to increased working capital. But if you compare net debt year on year, there was a decrease by over 26% on €19 million coming from €72 million in half-year 2024. The outlook for the full 2025 financial year remains unchanged. From today's perspective, the management of Polytech Holding AG expects planned consolidated sales revenues in the range of €650 to €700 million for the 2025 financial year and is targeting an EBIT margin of around 2% to 3%. For the whole text of the outlook, please refer to the published report. This was my statement on the half-year results 2025, and now I would like to hand over to our CEO, Markus Wehmer, for his summary.

Thank you, Martin. Hi, Markus, for your motivating financial overview. I'd like to briefly summarize what we want you to take out of this call. Polytech Group recorded slight growth in sales revenues in the first half of the year against a negative market trend. The net result remains positive even after accounting special effects of $3 million for staff reduction. Thanks to consistent measures, both net working capital and interest-bearing liabilities were significantly reduced against mid of last year. Structural and personal adjustments are already being implemented and further proceeding. In parallel, our technological position in future portfolios like electromobility and smart plastic applications is solid. Even so, overcapacity and intense competition continues to challenge the industry, and market uncertainties make planning and investment decisions difficult, We are generally confident about the future, confirmed by a stable outlook for the full year. Thank you all for listening and have a nice day.