Zumtobel Group AG

Good morning, ladies and gentlemen, and a welcome to Zung Tobel conference call on the first half and the second quarter result of our 2025-26 financial year. With me on the call are Alfred Felder, our CEO, and Thomas Erath, our CFO. Alfred will walk you through the highlights, while Thomas will present and discuss the financial performance. After the presentation, both gentlemen will be available to answer your question. 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 and welcome, ladies and gentlemen. Thank you for joining us today for the um first half year results um the quarter two what we just have uh closed uh was a continuation of quarter one in terms of challenges in the market um again uh with um a low activities investments decisions or and processes partly passed and caused and therefore a lot of project postponement But before I go into the numbers and then in details, my colleague, Thomas, I would like to, as usual, share with you a couple of highlights illustrating the bandwidth, what we do and the activities, what we have in the different fields. On the upper left, you see the House of Falcon train station, which was designed by the star architect Santiago And here we have illuminated the entrance with this seamless Siluma light ceiling product, what basically showcased this entrance. The second one, The AWO Bank is a very typical example of refurbishment. This we have done in the past with our conventional technology and now it's a turnkey where we have used our refurbishment packages including the whole controls as well as the service. Typical example what we are running across Europe in many, many cases. The next one is one of the key highlights. Obviously, you know that in 2026, now in a couple of weeks, we will have the Winter Olympic Games in Italy. And here, this is an example of the stadium of Biathlon in South Tyrol, in Antaselva. And here, to meet the Olympic requirements, the entire complex has been upgraded. A key innovation is our thorn, Altis Generation 5 floodlight and it enhances really in every detail the competition and it elevates the experience for spectators on-site and worldwide. This project is just one of what we have been contributing in 2026 Olympic Games. After the competitions, we look forward to sharing more and additional updates and actions on the photos of the different stadiums. An example of our strategy in terms of sustainability circular lighting was a penny shop in Austria. What is here so special about this project? It's the combination of a high system efficiency. Um, the controls, um, and the, um, what, um, significantly improved the energy efficiency, the products, what we have installed here is our high running product, the tech tool. So the continuous roll lighting system, but we just launched in May, uh, this year and fitted with the vivo, um, uh, spotlights. You see for the ancillary areas and external lighting, the solution photon were installed so that includes the complete indoor and outdoor illumination, what we have done here. Another key highlight where we are very proud is the fish market in Sydney, Australia, one of the iconic buildings where we did the whole roof architectural illumination. It's really a unique masterpiece done here. The new world-class Sydney fish market creates a vibrant hat into the city. And with the commitment to sustainability, the project here minimizes the environmental impact to the responsible construction practices and innovative energy solutions. So with that, I would like to give you the overview on slide number four on our financial performance for the first half. for the fiscal year 2526. Obviously, as I said at the beginning, again, a period characterized by economic uncertainty, a very weak market environment with a lot of postponements and cancellations of certain projects. These conditions are reflected here in our performance. You see the revenue declined from $577 million to 537 million, a minus of 6.9%. And at the segment level, the picture looks as follows. The first half lighting segment generated almost 29 billion euros, while the revenue of component segment around 138 million euros. The group EBIT stood at 31.6 million, which corresponds to an adjusted EBIT margin of 5.9%. The figures clearly show that our company is still confronted with a variety of challenges, which makes it particularly important to focus on resilience and sustainability within the group. And this also includes, of course, the ongoing review of the cost structures. In page five, you see again the slide that was presented last time. where we need to take the action in basically accelerate this efficiency program, what we have started in quarter one, focusing on SG&A footprint. And you see here, it's the slide what we showed also last time with a saving of 30 to 40 million Euro by the, 28, 29 financially and 80% of those savings we plan to achieve already by 27, 28. The main levers here, as you see, are the leaner organization, the expansion of our shared service centers, both in Serbia. In Serbia, we have two locations. One is Niche and one is Belgrade and also in Portugal, followed by further automation. As indicated in the last call, we have also in a couple of months and weeks reviewed our operations, the R&D and the procurement divisions. And this comprehensive analysis helped us to identify additional opportunities and we have prepared actions for this. And these measures are projected to deliver cost savings year by year with a total impact of approximately 10 million euros in the 28-29 financial year. So you see it here on top of the bars with the blue. Our objective is not to simply achieve short term cost reductions, but to deliver structural improvement to our margins and sustainably strengthen the competitive position. By strategically expanding our global business centers in Serbia and Portugal, the group reinforcing the commitment of combining innovation with efficiency and therefore strengthening the key value drivers to underpin the sustainability, profitability and long-term creation of shareholder value. Looking ahead, we'll be better positioned to consolidate our core capabilities, streamline the process, and especially shorten the development cycles. And so we expect to see the first quantifiable effects for the initiated measures by the end of this fiscal year. And over the next four years, the savings will be increased steadily to a total volume of approximately now 40 to 50 million in 2028-2029. Ladies and gentlemen, we are convinced that the measures we have introduced will strengthen the company for the future. And in this way, we are meeting the current challenges in the market, which is impacting the whole industry and also prepared for the hopefully upside coming when the recession comes to an end. And with that, I would like to hand over to Thomas, who will explain now the Q2 and also the first half results in detail.

Thank you, Alfred. Good morning, ladies and gentlemen. A warm welcome from my side. Let me start with the lighting segment. Q2 revenues in the lighting segment amounted to 218 million euros and were 5% below the previous year. Volume decreases were recorded in the UK, APAC, Germany, Nordic and France. And were also coupled with price pressures. However, positive volume contributions were recorded in the southern and eastern Europe regions, highlighted by Italy, along with positive growth in Switzerland. Adjusted EBIT in the lighting segment increased from 17.8 million euros to 22.3 million euros. Our adjusted EBIT margin increased to 10.2%. Lower material cost a decline in personal expenses, mainly due to lower incentives and The earlier payment of the research subsidy in the amount of 1.7 million euros had a positive impact on our adjusted EBIT. Let's move to the component segment. Revenue in the component segment declined by 12.8% to 67.2 million euros in the second quarter. The difficult economic and geopolitical environment led to declining sales across all regions and also increase the price pressure. Adjusted EBIT in the component segment totaled 5.6 million euros in the second quarter. The adjusted EBIT margins stood at 8.4%. Lower material and transportation costs as well as the early payment of the research incentive in the amount of 1.8 million euros were unable to offset the decline in revenues. Slide 9 shows you the Q2 results for the group. Revenues in the second quarter declined by 6% to 271.2 million euros, mainly as a result of declining volumes and price pressure. Adjusted EBIT increased to 25 million and the adjusted EBIT margin rose to 9.2%. Overall, lower material costs, lower personal expenses and the early payment of the research subsidy in total 3.5 million euros had a positive effect on our adjusted EBIT. Slide 10, looking at the adjusted EBIT bridge, we start with the prior year, half year result of 41.2 million euros. The negative revenue impacted totaled 27.2 million euros with the decline primarily driven by volume reductions and to a lesser extent, price pressure. Looking at our COCs, lower material costs and lower personal expenses had a positive impact of 9.8 million euros. SG&A and the research cost made a positive contribution to the result, mainly due to lower personal expenses and the previously mentioned early payment of the research subsidy in the amount of 3.5 million euros. Adjusted EBIT decreased to 31.6 million euros. Slide 11 provides you with information on our income statement. As I mentioned, our adjusted EBIT stood at 31.6 million euros. Special effects were negative at 10.8 million. They include restructuring costs in connection with the closure of the US production In addition, the special effects recognized in the component segment in the second quarter include the impairment of goodwill, that was 2 million euros, impairment losses of capitalized development costs, 2.7 million euros, and an investment incentive received from Portuguese government of 1.4 million euros. After the deduction of these special effects, our EBIT totaled 20.7 million euros. Our financial result amounted to minus 5.8 million euros and net financing costs amounted to minus 4.3 million euros. Other financial income and expenses totaled minus 1.5 million euros and included the interest expense for pension obligations, FX and hedging valuation. After deduction of income taxes, our net profit for the first half year amounted to 13.5 million euros. As a consequence, earnings per share equaled 32 euro cents. Let's now move to the cash flow statement. Cash flow from operating results per year on year from 58.1 million euros to 52.7 million euros, mainly due to the decline in sales. The change in the operating items amounted to minus 20.2 million euros and resulted mainly from the settlement of accruals for variable salary components cash flow from operating activities stood at 35.5 million euros in the first half year 25 26 versus 33.7 million euros in the previous half year cash flow from investing activities amounted to minus 21.7 million euros in the reporting period In addition to investments in property, plant and equipment, this also includes capitalized development costs of 8.8 million euros. As a result, free cash flow equaled 13.7 million euros versus 13 million euros last year. Cash flow from financing activities amounted to 8.6 million euros for the first half year versus minus 20.6 million euros last year. The change compared to the prior year is primarily related to two factors, the increased utilization of first the syndicated loan agreement and second the loan from the European Investment Bank. A reduced dividend distribution also contributed to this effect. Let me finish with slide 13 and give you some comments on our balance sheet. The balance sheet structure remains stable. The equity ratio is almost flat at 42.8%. Net debt is also flat in comparison with the year-end close standing at 120 million euros. Our debt coverage ratio is at 1.47%. And with this, I hand back to Alfred.