Polytec Holding AG

Ladies and gentlemen, we warmly welcome you to the earnings call regarding the H1 figures of 2026 of the Polytech Holding AG. I am pleased to welcome Polytech CFO Markus Muhlbock and ER Manager Paul Rettenbacher, who will guide us through the presentation shortly, after which we will move on to a Q&A session with audio line and chat. With that, I'm handing over to you, Mr. Muhlbock.

Good afternoon, ladies and gentlemen. Thank you for joining us for today's investor and analyst conference call on Polytech's half year results 2026. Let me start with a quick overview of the first half year. Polytech Group is on the right track. We continue to move forward with a clear focus on productivity and profitability. Although group sales are temporarily lower, this is no cause for concern. Quite the opposite. We have significantly optimized our product and production portfolio, resulting in an improved profitability in the first half of the year. We also made further progress in strengthening our balance sheet with a higher equity ratio and significantly lower net debt. At the same time, we have intensified our efforts to expand and diversify our non-automotive business. We are making very good progress in this area and see promising opportunities ahead. Against this backdrop, we confirm our outlook for the current fiscal year. Before I take you through the key figures of the first half year, I would like to briefly outline the strategic positioning of the Polytech Group, as this provides important context for understanding our financial performance. Our guiding principle is to apply the right strategic approach to each product area. In automotive, we remain an established tier one development and production partner with a clear focus on electromobility, disciplined investment and capital preservation. In a largely flat market, we see M&A as our primary option for future growth. In parallel, Polytech is developing smart plastic application as an attractive second growth pillar by leveraging our automotive expertise and transferring it to new markets. A diversified market approach increases our opportunities for success. We enter new markets together with our customers and develop innovative plastic solutions for industrial applications. At the same time, we can act as an industrialization and scaling partner for innovative startups, bringing their ideas from concept to industrial scale production. Naturally, one of the questions we frequently receive from our shareholders is, where do we currently stand with the expansion of our non-automotive business and when can we expect this to translate into higher sales? Let me therefore give you an update on where we stand today. The path to market in the non-automotive sector differs from what we are used to in the automotive industry. Market testing, for example, plays a particularly important role before a product can move towards full commercialization. Our smart plastics applications pipeline includes a number of promising projects at different stages of maturity, progressing from initial concept through to a market launch. Projects ranging from load carriers to applications in constructions, we are pursuing a diversified and capital efficient approach. This includes our own product ideas, co-development projects with customers, as well as partnerships. In this way, Polytech can efficiently leverage its existing expertise in materials, product development, and industrialization across new markets and applications. We first presented this slide at our annual general meeting at the beginning of June. Since then, several of the projects shown here have moved to the right, meaning they have successfully progressed to the next stage of maturity. This demonstrates that our pipeline is moving forward and that we are making tangible progress in building our non-automotive business. As mentioned, our non-automotive business is becoming increasingly important to Polytech's overall value profile. Our goal is to achieve a group revenue share of around 30% in the non-automotive sector in the mid-term. For us, mid-term means the period of two to three years. In principle, this is no longer than in the automotive projects, where the industrialization phase from winning to the order to start of production takes a comparatively time. We are focusing on reusable and industrial returnable containers. These products support efficiency, sustainability and the circular economy, ensuring stable demand and helping our customers to fulfill the European Union regulations. A strong example is Buxit, an intelligent, connected logistics solution that combines physical robustness with digital intelligence. Polytech acts as the industrialization partner and exclusive supplier. This project is a good example of how we leverage our core competencies to develop profitable new applications together with innovative partners, always with a clear focus on industrial scalability and serial production. The first products for market testing will be presented to policymakers, military, representatives and other potential customers at our plant in Ebensee this September. But before we look ahead to September, let me take you back to the first half of the year and our financial performance. Let me start with a positive look at the year-to-date performance of the Polytech share. Based on yesterday's closing price, August 12th, our share price has increased by 44.5% since the beginning of the year. In contrast, the StocksEurope 600 Automobiles and Parts Index declined by 14.9%, while the ATX Total Return Index gained 29.8%. Among the 38 prime market stocks on the Vienna Stock Exchange, Polytech ranked fifth in year-to-date performance. On a personal note, my fellow management board member Martin Resch and I each purchased around 43,000 Polytech shares at an average price of €4.58 at the end of June and beginning of July. This clearly reflects our confidence in Polytech's future development. Polytech is currently covered by three research houses with an average price target of €6.73. Most recently, Montega initiated a coverage with a buy recommendation and a price target of 10 euro. Our current market capitalization is around 107 million, approximately half of our equity. Over the coming months, we will further intensify our investor relations activities through conferences and roadshows. We look forward to meeting many of you in person and presenting Polytech's refined equity story to a broader investor audience. To remind you briefly, in fiscal year 2025, Polytech Group clearly achieved its operational turnaround, improving almost every financial KPI. We met and even exceeded our outlook and returned to positive earnings after tax. Based on this strong performance, the management board proposed a dividend of 20 cent per share, which was unanimously approved by the annual general meeting. The total dividend of 4.4 million was paid on 11th June, 2026. Following the positive earnings development reported for the first quarter, our H1 results confirm that we remain on the right track. Let's take a closer look at the financial figures. Again, we improved all relevant earning KPIs compared with the first six months of the previous year. Consolidated sales in H1 amounted to 287.4 million, down 19.6% or around 70 million year on year. However, this decline was not unexpected. It mainly reflects the planned optimization of our product and production portfolio over the past few quarters. As already explained in our annual and Q1 reports, sales in 2026 are lower due to the divestment of our UK operations at the end of 2025 and the closure of our Weyerbach plant in Germany at the end of April 2026. As a CFO, I can accept the lower sales if those sales are more profitable, particularly when the decline is temporary. Our focus is clearly on profitable growth and better margin quality. In the medium term, we expect new projects, particularly in the non-automotive business, to increasingly contribute to sales and support renewed growth and improved profitability. And our earnings figures already demonstrate that we are moving in the right direction. EBITDA increased by 7% to 22.6 million, while the EBITDA margin improved significantly from 5.9% to 7.9%. EBIT increased by 47% to 8.3 million, the EBIT margin rising from 1.6 to 2.9%. At the end of June, Polytech Group employed 2,804 FTEs, a reduction of 802 employees or 22%. This mainly reflects the divestment of our UK operations, including 348 employees, as well as the closure of the Weyerbach plant and related workforce reduction in Germany. The improvement is even more visible at the bottom of the P&L. Earnings before tax more than tripled from 1.5 million to 5.6 million. Earnings after tax increased from 1.4 million to 4.7 million. This resulted in earnings per share of 21 cents compared to six cents in the first half year of the previous year. So the key message is clear. We are operating on a leaner sales base, but with significantly improved profitability. Our balance sheet remains strong, with the equity ratio now above the 50% mark. As of 30 June 2026, total assets decreased by 33.8 million to 442.2 million compared with year-end 2025. Despite the dividend payment of around 4.4 million, the equity ratio increased by 3.9 percentage points to 50.1%. Over the past two years, one of our key priorities has been to reduce net debt and strengthen the balance sheet. As of June 2026, net debt stood at 29.6 million, down 43% or 22.5 million compared with June 2020. Debt increased moderately because of the higher working capital. The notional debt repayment period stood at 0.56 years, while the gearing ratio was 0.13. Both indicators remain at a very comfortable level and provide us with financial flexibility for future investments. Average capital employed decreased by almost 7% to 249 million. Combined with the higher EBIT, this resulted in a significant improved ROSI from 2.2% to 9%. And finally, as of end of June 2026, Polytech Group had more than 34 million in cash and cash equivalents. So the key message here is a stronger balance sheet, significantly lower net debt year on year, and substantially improved capital efficiencies. Let's have a quick look on the turnover split. Sales in the commercial vehicle market area accounting for 18% of the group sales were slightly above the previous year's level at 51.4 million. Sales in smart plastics application amounted to 20.7 million in the first half year 2026. This market area is subject to fluctuating call-offs from a major customer. However, this volatility is part of the nature of the business and does not change our positive view of the customer relationship. We have been reliable partner for many years and look forward to continuing this cooperation on new projects. Having reviewed the first half of 2026, let's now turn our attention to the future. The outlook for 2026 remains unchanged and we can summarize in the following sentence. Stable earnings situation despite lower sales revenues. From today's perspective, the management of Polytech Holding AG expects planned consolidated sales revenues in the range of 560 to 590 million Euro for the 2026 financial year. Politec Group's lower total sales compared to the previous year are due to the divestment of the operational business in the UK as of December 2025 and the closure of the Weyerbach plan as of end of April 2026. With regard to the margin development, the company expects a stable or slightly improved earnings situation despite the lower sales and is aiming for an EBIT margin of around 3% for the 2026 financial year. and the company intends to pay an annual dividend again in the future. Polytech stands for a solid balance sheet, strong cash generation and a reliable dividend policy. Our strong market position, broad technology portfolio and clear strategic direction support our financial performance even in challenging market conditions. Demand for high quality plastic solutions remains strong across industries. We are an established tier 1 partner to leading European OEMs, while smart plastics application is development into an attractive second pillar beyond the automotive business. In short, Polytech combines strategic focus, operational excellence and sustainable value creation, providing a strong foundation for long-term growth. Finally, we would like to thank our shareholders for their continued trust and confidence in Polytech Holding AG. This concludes our presentation of the result for the first half year 2026. Thank you very much for your attention. Now it's time to hand back to the operator to kick off the Q&A session.

Yes, thank you very much. We just stopped the recording and we are among ourselves now as we are opening the Q&A session. Ladies and gentlemen, Now it's your turn. Please note that only analysts and investors are allowed to ask their question via audio line for that. For that, please click on the raise hand button below. Or if you're dialing in by phone, please press Starkey 9 to raise your hand and Starkey 6 to unmute yourself. We would like our media representatives to only ask their questions in our chat box, and I will read those questions out loud for you. On another note, we would like to continue the Q&A session in German language. Should anyone object this request, please let us know in our chat box right now. If there are no objections, I would continue this Q&A session in German. I just got the message in our chat box that we should please continue in English, so we will do so. I have two risen hands, one by Markus Reni You may unmute yourself now, I just sent you a request to do so. Mr. Vimy, can you hear us?