Zumtobel Group AG

Good morning, ladies and gentlemen, and welcome to Zumtobel Group's conference call on the Q1 results for the 2025-26 financial year. With me on the call are Alfred Felder, our CEO, and Thomas Errath, our CFO. Alfred will walk you through the highlights of the quarter, while Thomas will discuss the financial performance. After the presentation, both gentlemen will be available to answer your questions. In case you have not a copy of the report and the presentation, you may find both documents for download on our webpage. After the call, a playback of this conference call will be available on our webpage as well. And with this, I hand over to Alfred.

Good morning. Welcome, ladies and gentlemen, and thank you for joining us today for our Q1-25-26 call. This first quarter was again not an easy one for us. Market environment remains very, very challenging. In addition, the geopolitical environment also difficult. And the demand of the new construction, especially in our core markets in Europe, is weak, triggered by a lot of shifts and delays. And obviously, that has resulted in figures what we will show in a minute. But before I go into this, as usual, I would like to share with you a couple of highlights, what shows that our strategy, what we have implemented in beginning of 24. in the different growth areas is materializing um and here a couple of projects one uh proud um in our headquarter city of don't burn where we are the lighting solution provider where we have installed the state-of-the-art iot connected luminaires based on the zaga sockets with our oversense ready so the connected solution it's um the the product, what we have from DON, the ISARO PRO, what is installed here across the city. Another one, which is part of the core strategy, growing in the arena, in the sports, and here an indoor stadium in Dresden, equipped with our Altis, where we have now all type of products, including full color, comes with DMX controls, includes a complete perm key solution with commissioning involved. The next one is a shopping center in Belgrade in Serbia, where we have our factories both for components and luminaires, a refurbishment project with really our complete bandwidth of products called here the Evo, the Panos, the Tecton and the SplotFlight, where we have installed this. On the bottom left here, the campus founder lab in Heilbronn. in Germany, Innovation Campus. Here, this is a typical high-end brand ZUMTOBE product with our high-end products, like the Pano Studio Linkor, also including the whole emergency products. And last but not least, in the Italian part of Switzerland, in Bellinzona, the fortress here, which is a UNESCO World Heritage, where we have done a refurbishment product. So the outdated sodium vapor lamps from the 90s were replaced by energy-efficient storm contrast LED spotlights. and the result achieved has been the close collaboration what we had with the local authorities, the lighting designers, and the technology suppliers. And with that, on page four, let me just give you an overview, and Thomas will then share the details on our financial performance in the first quarter, a period that, as expected, was strongly characterized by our economic uncertainty and the persistently weak market environment. These conditions were also reflected in our business performance. So we have a revenue decline by 7.8% to 266 million euros. And on the segments, you see the lighting segment generated revenue of 210. while the revenues of the components remained at 70%, which means almost 12% below the previous year quarter one. Adjusted EBIT at 6.6 million, corresponding to adjusted EBIT of 2.5%. And the figures clearly show that the challenges facing our company remain strong. It is therefore particularly important that we continue to focus on resilience and sustainability within the entire group across the segments. And that includes also, of course, the review of our cost structures. And as part of this, you see on page five. We have decided to take the strategic decision to close our unprofitably relatively small U.S. production site in Highland, in New York, so upstate New York, two hours from New York City. This measure is part of our Focus Plus strategy. what we have revised last year and updated. It will allow us now to focus strongly on our core markets and align our global production network accordingly. And this we will do relatively short term so that the measures are taking, are contributing to our results. Despite this planned closure, our sales presence in the US will remain intact. We aim to continue to provide reliable service to our customers, especially on our international accounts, what we are servicing across all the continents, including the planners, the OEM, as I said, and the architects. And with this, the American markets, where we have been mainly with our brand ZoomToggle, we will serve out of our global production network. But also let me turn to a more long-term program as part of our updated corporate strategy analyzed in a first stage, our global SG&A costs in our initial phase. And based on this analysis, we are currently developing a global package of measure that will be implemented by the end of the fiscal year 28-29. The first measures have already been defined. is aimed to reduce organizational complexity, minimize the efficiency and optimize the process and overhead, increase decision speed and therefore enable more customer facing roles. As you see here from this slide, over the next four years we plan to achieve a significant cost savings in the SG&E area and this savings will increase annually and I expect it to reach a volume of 30 to 40 million euros in the fourth year. And that is the financial year 28-29. The main levers are the leaner organization, as I said, the expansion of our shared service centers. We have them already in Serbia in two locations, one in our factory location niche and in Portugal and in further process automation. We do expect to see the first effects as early as the current fiscal year, with 80% of the savings to be then achieved in 2027-2028. The associated restructuring costs will be in the single-digit million range annually up to the including 2028-2029 fiscal year. In the phase two, what we are currently starting, our efficiency program will also involve the review, the areas of operations, purchasing and R&D. And this program will build the foundation for steering our company and our employees safely through these challenging times. At the same time, we will ensure that we are well prepared for future development. This also applies to the economic recovery. that the industry is hoping for, especially, we will see it later in the page, the signs are turning a little bit more positive for the next 18 months, and we are already positioning our company to strengthen its competitive position. Ladies and gentlemen, with these measures, we are convinced that we can strengthen our company in the future and sustainably long term. And and be ready for hopefully the ramp up of the business with a better cost structure with a leaner organization. And with this, I would like to hand over to Thomas, who will explain the Q1 results in more detail.

Thank you, Alfred. Good morning, ladies and gentlemen. A warm welcome from my side. Let me start with the lighting segment. Q1 revenues in the lighting segment amounted to 210.7 million euros and were 7% below the previous year. The sales increases in parts of southern and eastern Europe were unable to offset the negative developments in the UK as well as in the Asia-Pacific region. The fixed cost savings were not high enough to offset the decline in sales. Adjusted EBIT in the lighting segment decreased from 20.1 million euros to 11.4 million euros. Our adjusted EBIT margin declined to 5.4%. Let's move to the component segment. On slide 8, you see revenues in the component segment declined by 11.8% to 70.9 million euros. The difficult economic environment led to declining sales across all regions. Adjusted EBIT in the component segment declined to 1.3 million euros in the first quarter. The adjusted EBIT margin stood at 1.9%. Slide 9 shows the overall Q1 results for the group. Revenues in the first quarter declined by 7.8%. to 266.4 million euros, mainly as a result of declining revenues in the UK and weak sales performance in Asia-Pacific. Adjusted EBIT decreased from 20.2 million euros to 6.6 million euros. The negative revenue development had an adverse impact of 14.1 million euros. The adjusted EBIT margin was at 2.5%. Slide 10 provides you with more information on our income statement. As indicated, adjusted EBIT stood at 6.6 million euros. Special effects were negative 7.4 million euros and mainly include the cost of the closure of our US plant. After deduction of these special effects, our EBIT totaled minus 0.8 million euros. Our financial results amounted to minus 3 million euros. Net financing costs amounted to minus 2 million euros and other financial income and expenses totaled minus 1 million euros. They include interest expense for pension obligations, FX and hedging valuation. After the deduction of income taxes, our net profit for the first three months amounted to minus 4 million euros. As a consequence, earnings per share were at minus 1. Let's move to our cash flow statement. Cash flow from operating results fell from 32.4 million euros to 12.8 million euros. The change in other operating items amounted to minus 11.8 million euros. Mainly, this is the result of releasing accruals for variable salary components. Cash flow from operating activities stood at 1.3 million euros in the first quarter. Cash flow from investing activities amounted to minus 11.9 million euros for the reporting period. In addition to investments in property, plant and equipment, this also includes capitalized development costs of 5.3 million euros. As a result, free cash flow equaled minus 10.6 million euros. Cash flow from financing activities amounted to 12 million euros for the full year. Let me finish with slide 12 and give you some comments on our balance sheet. The balance sheet structure remains stable. The equity ratio is almost flat with 41.9%. Net debt increased to 134.4 million euros. This figure includes the extension of the Spennymoor lease agreement by a further 10 years. Our debt coverage ratio is at 1.98. And with this, I hand back to Alfred.