Zumtobel Group AG

Ladies and gentlemen, welcome to the earnings call of Zumtobel Group on the Q4 and full year 2025 and 2026 numbers. I would like to welcome the company's CEO Alfred Felder, CFO Thomas Erath and Head of Investor Relations Dr. Eric Schmiedchen. The gentleman will guide you through the figures in a moment, followed by a Q&A session for institutional investors and analysts via the audio line only. There will be time for questions from journalists and retail investors during today's Zumtobel Group roundtable, approximately at 3 o'clock this afternoon. And with that, I hand over to you, Mr. Schmiedchen.

Thank you, good morning ladies and gentlemen and a warm welcome from my side as well to our figures for the Q4 and pool year 2025-26 results. As said, with me on the call is Alfred Felder, our CEO, and Thomas Erath, our CFO. Alfred will walk you through the highlights of the co-op and the year, 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 and welcome ladies and gentlemen and thank you for joining us today for this call. The financial year 25-26 was again a challenging one for our business. The market conditions and the broader economic environment remained difficult and were further impacted by, as we all know, the geopolitical tensions. around the globe. In Europe, however, we began to see early signs of the demand in the new construction, especially during the fourth quarter. However, the recovery remains modest. With the AHOC announcement on July 1st, we already provided some preliminary information on our full-year figures. But before we move into the strategy update and the financials, I would like to do, as usual, share with you a couple of highlights what were driving us over the last quarters, including also here the first one, the Light and Building, where we, in the biggest light fair every three years, we have been showcasing with all the three brands an impressive program also according to the feedback of the Zumtobel's capabilities. We were able to meet numerous customers, especially a lot of new customers in Dortmund conversations and develop new partnerships and one of this is the collaboration with Legro. So that's our third partner in the building infrastructure next to ABB and Signify, which we announced. What you see here in the middle is the APOBank, a typical refurbishment project where we really gain momentum, where it was a renovation package versus the existing products with a lot of control know-how, what made us this as a success. Benni on the right side is a test pilot. Typically it's in Austria where we have been doing a combination of high system efficiency, optimal glare control. So we're here, the entire lighting solutions is designed to permanently minimize the energy consumption. A very iconic project, I reported also one and it's now completed, is this fish market in Sydney, where again, the commitment on sustainability The project minimizes the environmental impact through responsible construction practices and innovative energy solutions. And the roof here is an architectural feature that includes built-in luminaires to provide the special illumination after the sunset. We are very proud that we have been able to contribute here. and last but not least a project the American University in Cairo in Egypt which was founded in 1919 one of the leading educational institutions in the Middle East and here 136 smart classrooms and 200 laboratories on a seven kilometer campus in 12 building zones have been equipped and here Tridonic with a partner was established in the network with 20 controllers which precisely control and monitor 1100 LED escape signs. For this project, Drydonic received the International DALY Award in 2026 in the Best Emergency Lighting Integration category. Let me now give you an overview on our financial performance in the last fiscal year. Thomas, of course, will go and then into the details. We published the Group FIB series in our ad hoc announcement on July 1st, and compared with the same period of the previous year, the revenue declined by 5.2%, from 1 billion 97 million to 1 billion and 40 million euros. If you look at the segment level, the picture is as follows. Lighting segment, at 832 million euros, while the revenues of component segment amounted to 266 million euros. The adjusted Group EBIT at 42.4 million, which corresponds an adjusted EBIT margin of 4.1%. Our lighting segment remained stable in a difficult market environment and further improved its profitability The component segment, however, was confronted with the ongoing weakness in construction, as well as the increasing pressure, especially from the Far East competition. As explained in our ad hoc announcement, the net profit was significantly affected by considerably higher income taxes compared with the previous year. And here again, Thomas will explain this in more detail later on. and in view of the slightly positive net profit of only 1 million euro for the entire financial year compared to 15.5 billion euros last year, we in the management board recommended to the supervisory board and subsequently we also make this recommendation to the annual general meeting not to pay a dividend. It was not an easy decision, but taking all relevant factors into account, we believe it was the right one for us. Looking forward, our priorities are clear. Our operational excellence, a strategic focus and the profitable growth. And one of our central growth drivers is in the digital transformation of the buildings. into energy efficient, integrated and intelligent infrastructure. This is also, as I explained in one of the last calls, the main reason why we are having these cooperations with the building infrastructure providers such as Legro, such as ABB and such as Siemens. In addition, legal regulations strict energy efficiency standards and the demand for database solutions are sustainably changing our customer requirements and so we are continuously strengthening our position in this market with our intelligent lighting solutions. On this slide here you see how we in the Zumtobel Group are responding to the structural changes in our market and how this strategy is already reflected in tangible customer solutions. The bigger picture you know these five trends are reshaping our industry from moving from product to solutions, including the sustainability, including the connected data. And we are all witnessing this fundamental shift also from our customers who are more and more not asking products anymore, but complete solutions. So the key message is here. We are moving from products to integrated solutions. And this is not Merlin Observations, the direction which we are evolving our entire portfolio and the complete organization. And how does it look like in practice? Let me give you some examples. One is The value shift here in the data center sector. Data center we started to be engaged five years ago and now we are seeing and earning the fruits. Here we have to deliver more than just the illumination, the lighting solution. We support our customers from the earliest planning stages with specialized lighting design, including solutions that are tailored to the terminally demanding environment of data halls as you know this data hole still with all the energy they use to cool this down are still having temperatures up to 40 degree in there our portfolio covers here the entire family from the external areas and the data hall itself to the technical rooms the emergency lighting and the office spaces for us This is a high margin, very fast growing segment in which we are positioning ourselves as a system provider rather than a simple component supplier. In smart and connected, this transformation is evident in the way buildings are optimized. Using sensor data, we help manage visitor flows, prevent overcrowding, and create the data foundation for company-wide standards in the building environment. Air Quality and Lighting. Our Light Monitor Platform enables facility managers to monitor and control entire lighting installations centrally. The next page, when it comes to sustainability and well-being, will let our actions speak for themselves. Our continued inclusion Our Phonics Index as well as this year the Ecovaris Platinum Rating which places us among the top 1% of the companies assessed worldwide provide independent recognition of our progress. Product wise, here you see an example of the Avenue Luminaire 68% recycled material, completely disassembly for repair and recycling and 80% recyclability and a guaranteed maintenance and repair upgrade availability through the entire lifecycle. This is circular economy in action, not just as a commitment on paper. With these products, We are advancing sustainability in helping our customers meet their sustainability goal while creating new business model, especially a refurbishment after the first lifetime into a second lifetime and automatically moving from a pure product business into a solution business and potentially with a business model also in a light leasing. Considering these key trends reflect the strategic logic underpinning our business. We are systematically evolving our business model here. from really selling one time the products towards a recurring higher margin revenue stream generated through services, software, and also data monetization. And at the same time, our focus on sustainable, long-lasting products and partnerships strengthen the customer loyalty and reinforces our competitive differentiation. On slide eight, Views, I would like to provide you an update where we stand with the achievements what we have announced a couple of quarters ago of our efficiency program. As we reported in recent quarters, we have already delivered substantial cost savings and in total we realized cost savings of around 16 million euros for the entire 25-26 financial year with roughly 6 million euros in associated restructuring costs. This then translates into a net impact of around 10 million euro in the first year. And let me briefly explain once more the three levels. One is the lean organization, where especially in the big departments being in sales, we have optimized the footprint, reducing hierarchical layers. And this will continue also in the other departments. Second one, Streamlining the processes. This is a continuous effort. One example is in procurement where we are reducing complexity and increasing automation. This will allow us now to lower spending, improve our transparency and manage our purchasing process more efficiently. And that is now going on in all aspects of our business. and thirdly the establishment of the shared service centers too. In Serbia we have two locations, one close to our factory or in our factory niche and one in Belgrade for more the international jobs who need international airport nearby and Portugal. And as previously communicated here our objective is to structurally improve our cost position over the next four years and by the year four and that's here in the case 28 29 we are targeting annual cost savings of 40 to 50 millions and plan to match this level in the following years importantly around 80 percent of these savings are expected to realize by year three because currently as you know we are building this up we are training the people and once this is ready we are transferring this knowledge from high-cost countries to our Global Business Centers. Obviously, we are fully aware that these steps and measures are not always easy and that they also affect our employees. We take this responsibility very seriously and are supporting the transformation process as carefully and responsible as possible. And as just said, the further development of our business model also required a consistent adjustment of our organization. My colleague Bernard Motzko, who has served as a Chief Operating Officer at Zumtobel Group since 2018, will resign from the management board and retire by the end of September 26. Going forward, we will reduce the management board to three members and anchor operational responsibility within the existing business areas. My colleagues and I are convinced that the measures we have introduced and executed will strengthen our company in the future. In this way, we are addressing the current challenges in the market. Let me give you, before I hand over to Thomas, an update on our component segment. As I mentioned earlier, this segment has now been under pressure for the third consecutive years. The revenue declined by 11% year-on-year basis and the adjusted EBIT fell to 4.6 million euros. We take this development very seriously and we have acted here on that. As reported over the past few quarters, we carefully evaluated potentially three options, selling of the segment, a joint venture with a partner or a fundamental repositioning under our own steam. And we came to the conclusion that the market is currently not prepared to offer a price reflecting the true value of our business. We have also not found yet a joint venture partner so far with whom we think we can run the combined business and create additional value. So we have therefore chosen the third one in our most value creating path. We are actively rebuilding the component segment by itself. Our strategy follows here a clear three-part approach. Keep and stabilizing our core business, the OEM business consisting of LED drivers, sensors and LED modules, extended in new markets and new applications, so remaining into the lighting. Develop also new business opportunities beyond the light. And that means the following. If we keep and Stabilize the Core, we are securing our existing core business by rigorously driving cost efficiency. Extending the core, we are pursuing new applications closely related to our existing business. And one concrete example is our rail signal project, where together with a partner, we aim to refurbish existing signal system from halogen lamp to LED for rail networks with our solutions. And in parallel, We are strengthening our capabilities in and leveraging the control business. Developing new business opportunities beyond light. We are here identifying new business areas. As you know, one of the core competences of Tridonic is power electronics. So we are perfect in converting AC to DC in thermal management and especially when it comes to monitorization for high-end applications. You see here a couple of examples. Renewable energy, the general high-power semiconductors, obviously with data center, with artificial intelligence energy and energy consumption is exploding. and everything what helps to make this transfer of energy more efficient is saving cost and here Tridonic with its competence plays a key role where we engage with data centers with power conversion here and that is making interesting applications what go beyond the lighting. We are also addressing this transformation on the leadership level. The previous CEO of the component segment has left the company and the successor will drive this strategy forward as I just have outlined. We will keep you updated as this project has started a couple of weeks back and latest with the result presented in December. I'm very confident that this clear roadmap will put the component segment on sound and future-proof footing with an increased volume and margins. So with that, I would now like to hand over to Thomas who will take you through the quarter four and also the all four quarter results in detail.