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?

Yeah, yeah, it just takes a couple of seconds to put a signal to reach into unmute. Yeah, thanks for the presentation. Can I touch upon the growth opportunities in the non-auto and just to set the stage to 30% revenue share in two to three years. What's kind of the base scenario for the automotive business and maybe we can talk about absolute numbers, what is 30% with absolute numbers kind of on the back of it.

So it would be the same base as today. So let's say approximately that the 30% would make 200 million Euro.

Okay, okay. That's very clear. I mean, that requires quite a steep adoption curve. I mean, thank you for the very helpful chart where you show the value chain from product to market launch. I mean, what makes you so confident that kind of the product that are currently in the product process design, if I kind of look at the chart, it will take whatever 12 months, 16 months, 18 months for those products to reach the market launch. And then as I said, to me, the adoption rate that is applied to the 200 median is extremely punchy.

That's a good question. Thanks for that one. So actually, first answer is because I'm convinced and I have full trust in the products we develop together with our partners. These are great products and creating additional value to our customers. And I do always believe when a product creates a value for a customer and an advantage for a customer, then this will be successful. That's number one. Number two, we have the new regulations in the European Union taking place, I would say, 1st January 2020-30. So therefore, there must change something. And therefore, we are so confident that we can manage that and that we are able to increase our non-automotive business to 30%.

On the plant tray trajectory, can you help us with some revenue figures for 2026 and kind of an indication of the growth for 2027?

uh yeah um i mean i i don't want to say let's say specific numbers for for one specific product but i can can tell you it's a it's a one digit uh million amount um and yeah this is i would call it an early adapter because they Here there is a deadline as well, end of 2029. They are starting to fill the market. This year it was, let's say, below our expectations. You see there are some, let's say, challenges because, let's say, the retailer, they have to have some store, they need to implement the processes, etc. So it's not so super easy going, but there is a deadline, end of 2029.

I do expect for the next year let's say double the revenue what we what we have 2026 so this is on a on a solid base I would say okay thank you and then turning to the automotive part I mean there's recently been another wave of profit warnings in the industry we had some by the OEMs, the Volkswagen news law that was, say, at least controversial regarding closures of German plants. Can you give us an idea, given that Volkswagen is your most important customer, how much exposure you have to the German plants of Volkswagen and if there has been any talks with you on the matter of

I mean, first of all, the basis is there is overcapacity in the market. We as Polytech Group, we adjusted our capacities in the past couple of years. So that's very important. Volkswagen did not do that. but as I don't want to let's say comment on Volkswagen's strategy they did in the last couple of years just let me say that very straight the capacity is too high from the Volkswagen Group what by the way CEO of Volkswagen Group as well found out and told okay now they want to build one million less cars has this a direct impact on us? No because It's the same situation as it was the year before and same situation we see now. I do see some chances here. For sure, they are asking all the time for price declines, etc. But if you have good products, if you have a good process, then you can convince them. And that's what we did, by the way. And we got a couple of new projects from Volkswagen Group. as well projects who prior were at some competitors from us. So therefore I would, I see it as I said, so I see it with chances. I see as well that Volkswagen needs to adjust this capacity.

Okay, understood. And then last question before I get back into the line would be on the organic sales development in the first half. So stripping out the disposals and divestments, what would be the organic growth rate, please?

I mean that's hard to say and it's hard to see let's say from our reports I know because of the development of the UK activities and the closure of the Weyerbach plant but I would say there is a growth in the automotive sector if you exclude UK business if you exclude Weyerbach and if you exclude the sale of our small plant in Belgium so there is a small increase in automotive sales because of, let's say, new projects we've won in the past. Okay, thank you very much.

Thank you very much. We have another risen hand by Mr. Hedir. I just sent you an invite to unmute yourself. You may do so now. Mr. Hedir, can you hear us? Enough? Yes, now we can hear you. Hello, welcome.

Hey, perfect. Thank you so much. Good afternoon, ladies and gentlemen. My first question, first of all, congrats on the strong margin developments. My first question is regarding the SPA business. As we have seen that Q2 sales in that business area were already back above Q1. Is it fair to say that we have some kind of bottom out in that area?

Yeah, I think you can say that. But I have to comment as well. In Q2, we did a lot of stock build up for that customer, which you don't see in the turnover. But we will see in Q3 in the turnover. So I would say from a production point of view, it was not too bad. But from a turnover point of view, it was, as you said, it's like the bottom, I would call it.

OK, perfect. And with respect to your 30% target in that business area, I know that many questions regarding that topic has already been asked. But can you give us some flavor on the timeline when you expect the major orders from several other customers above that key customer that you have at the moment?

I would say next year we do see some increase. That's our expectation. But let's say the main topic will then be 2028, 2029. 2029 for full extent, but significantly in 2028. That's our expectation.

Okay. Thank you so much. And my last question would be regarding capital allocation. As you have said, dramatically optimized your balance sheet and do you see some market opportunities on the M&A side both on the automotive and also on the non-automotive business?

I mean, here and there, we do have discussions. We already had a closer look on some potential targets, but it never came to the point that we say, okay, this fits, this makes sense. But we do feel that there is, let's say, increasing activities. So we are watching that very closely, but I can't say anything specific about that.

Okay, thank you so much. Yeah, that's from my side.

Thank you.

Thank you very much, Mr. Hüther. We have another risen hand by Mr. Schnee. You may unmute yourself now. I just sent you an invite.

Yes, thank you. I hope you can hear me well.

Yes, absolutely. Hello.

yeah perfect yeah hello together many thanks for the opportunity to ask questions um my first question goes a bit deeper in your products business um i'm wondering if you can share some insights about your breakdown of the materials you are using we have learned from the chemical industry that prices are going up So I remember that you are using polypropylene and polyamide and glass fibers as let's say the top three materials. Which price indications do you have for us? And are you able to mitigate those price increases from the chemicals industries? That would be my first question.

Thanks for the question. So first of all, you're right. So that's definitely the major, let's say, base materials we use. And yes, there were some significant price increases. But let's say based on our contracts, based on negotiation power, yeah, OK, we felt that, but not in a super strong way as of now. So prices went up. but prices went down again and now they went up again but at the end we do have agreements with our customers that we can partially forward that prices to our customers. So you see what I do, you see a small effect from price increases. This is a timing topic, for example, when we then forward the prices to our customers in Q3, for example, because they take some time as the prices are adjusted, etc. But the numbers are not too high, what you see in our results. By the way, there was never a shortage of materials. If you paid a price, there is never a shortage. In the beginning, the prices went up dramatically. Every supplier said, oh, I don't get anything. But at the end, it was not so bad.

Understood that what I've heard also from the chemicals industry. My second question maybe needs a bit more explanation. If you can go back to page five of your presentation, which was in the slightest very helpful to me. Can you walk us through the slide a bit with regard to profitability of those projects? So my understanding is if you're the, let's say the owner of, not the owner of the idea, but the owner of the production and all the engineering and tooling you're doing, and later the production, you should be, this project should be more profitable for you. Yeah, good question, yeah.

I guess it's clear that if we do develop a product by our own, that at the end the margin should be higher than if we were, let's say, the industrialization partner and the scaling partner with somebody. But as these products, let's say, at the current time, not on the market, and therefore it's hard to judge. But my expectation would be that if the products we develop by ourselves have the highest margin here. That's the expectation.

Okay. Thank you. Looking again on this chart, we can find something which is, I would say, not that filigree when it comes to the usage. We have something in the construction area, we have load carriers and stuff like this. have you ever elaborated on moving into areas which need more filigree or less heavy stuff so for example into the medtech industry for example in which kind in what kind of industry sorry

I mean one of our products is here you see here on that slide and this is the product I can talk about because it was already published is Bookseat and Bookseat here we see a big big potential in the in the medical industry yeah so this will be definitely a use in that industry and yeah we are trying let's say a lot of things yeah and this is just let's say an extract from what we are doing what you can see on that page or in that slide so there is more but we do not let's say develop products together, let's say very small products. So our goal or our focus is more on, let's say, bigger products. So Bookset will be one example where we go in the MET industry, but all the other ones, they are not super small products.

No, you're not looking at a single use product in any kind of industry.

Yeah.

Okay. Yeah. Thank you. I step back. Thank you.

Thank you.

Thank you very much. We have not received any further questions in the meantime, not in our chat box or Paris in hand. So I would say we therefore come to the end of Oh, and with that said, there is a question that just came in into our chat box. It says, what are the requirements on the M&A front in terms of product fit, size of the deal, profitability?

Sorry, can you repeat the question, please?

Of course. It says, what are the requirements on the M&A front in terms of product fit, size of the deal, and profitability?

Okay, got it. So it should be plastic products, right? it should be let's say or it can be in the same size as we as a group are right now so we we are not afraid about that um it must be a company let's say in critical financial situation and then we would we would have a closer look There is not that much constraints about the size, definitely not. Because I would say we as a Polytech, we have very different kind of products and therefore kind of complex portfolio. And sometimes you see competitors, they make more turnover than we with just one or two products or the same product family.

All right. Thank you so much. There is one more question that just came in. It says profitability in Q2 was slightly lower compared to Q1. What are the reasons for that concerning EBITDA, EBIT and that result?

First of all, I need to correct that because in Q1, there was a special effect included, what we reported as well in Q1. So there was the sale of our Belgium business, I guess, especially affecting Q1 was 1.7, 1.8 million. If you exclude that, the profitability in Q2 was higher. Second, what I already mentioned, there is a small price increase in the raw materials side. So these are, let's say, two reasons to explain the question.

Alright, thank you. On another note, there is one more question left. It says, how about the influence of increased mineral oil prices on material costs?

It's basically the same as the question we already took. So the mineral prices, they go to our products as a base product. And therefore, yeah, there were some price increases. And yeah, we see increased material expenses, but on, let's say, very small amounts in the Q3. So it's not a material heavy effect in our Fallen Sheet or in our PLM.

All right, thank you very much. So ladies and gentlemen, no risen hands and no questions in our chat box anymore. I would say We do it a second time and we come to the end of today's earnings call. Thank you so much for your interest in Polytech Holding AG and if you have any further questions at a later time, please feel free to contact Paul Rettenbacher at Investor Relations. A big thank you also to you, Markus and Paul, for your presentation and your time. I wish you all a successful day and I'm handing over to you, Mr. Muhlbock, once again for your closing remarks.

Thank you. Thanks to all of you on the call for taking the time and I wish you all of you a nice day and look forward to welcoming you again on our next conference call to be held on 13th November when we will present the figures of Q3. Until then, all the best, have a relaxing summer break and goodbye.