Vantiva S.A.

Ladies and gentlemen, welcome to Vontiva S.A. 2026 results conference call shared by Tim O'Loughlin, CEO, and Lars Ilan, CFO. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. If you would like to register a question, please press star 1 on your telephone keypad. Just to remind you all, this conference is being recorded. We'd like to inform you that this event is also available live on Bantiva's website and with synchronized slideshow. During this conference call, statements could be made that constitute forward-looking statements based on management's current expectations and beliefs and are subject to a number of risks and certainties that could cause actual results to differ materially from the future results expressed, forecast, or implied by such forward-looking statements. For a more complete list and description of such risks and uncertainties, refer to Ventiva's filing with the French Autorité des Marchés Financiers. I would like to hand over the call to Tim. Tim, please go ahead.

Thanks, Thierry. Good day, everyone. Welcome to our first half 2026 results presentation. I'll move to slide number four. Let me start with the key highlights of the first half. One of our major achievements of the first half was a successful extension of our debt maturities completed at the end of the period. This is a really positive step in our recovery journey and will help reduce our financing costs on a go-forward basis. On the business front, Q2 unfortunately continued some of the negative trends that we saw in Q1 and Our performance was impacted by supply volatility and some pronounced unfavorable phasing within the year. Our broadband activity was almost flat at actual exchange rates, but the demand for the video products continued to decline. Despite all of that pressure on the top line, our EBITDA margin remained resilient at 5.8%, which was nice to see. Another positive achievement from this period was generating free cash flow. Despite the lower EBITDA and reduced support from working capital, we were able to maintain some positive free cash flow. Looking ahead to the second half, I'm anticipating stronger activity supported by a catch-up in demand due to that aforementioned phasing issue. However, the second half remains dependent on component availability, and it is quite a volatile environment from a component standpoint. Everyone knows and is familiar with the memory issue, for example. Regardless, we're confirming our guidance of positive free cash flow for the full year. Before I conclude this section, I would inform you that the general meeting will be held. We will hold an extraordinary general meeting in September of 2026 to authorize the transfer of the company's listing from Euronext to Euronext Growth. We also had intended to have an authorization of a convertible bond issuance at that meeting. We are here announcing that we will delay the board vote and the subsequent shareholder vote of that convertible bond until 2027. If we move next to slide number five, take a look at a couple of key financial figures. Revenue decreased by 14.7% to 734 million euros during the first half of the year. This decline was primarily driven by ongoing market weakness and unfavorable foreign exchange movements. If you look at it from a constant exchange rate standpoint, revenue declined by 8.9% year over year. Despite the pressure on revenue, EBITDA remained solid at 43 million euros, reflecting the benefits of the implemented reorganization measures and the enhanced operational flexibility achieved across the group. While affected by lower volumes and reduced working capital support, free cash flow remained positive at 30 million euros compared with 95 million euros during the first half of 2025. If we now move to slide number six, Q2 performance remained broadly consistent with the trend observed in Q1. Broadband activity was largely stable in the first half, declining slightly on a reported basis, but growing modestly at constant exchange rates, and it was supported by strong demand in North America versus Eurasia. In video, demand continued to decline significantly, a trend that was exacerbated even more so by temporary component supply constraints. Revenue was also impacted by unfavorable phasing, which we expect to reverse in the second half, supporting a stronger level of activity in H2. If we move to slide number seven, as mentioned in my opening remarks, We're confirming our guidance for positive free cash flow for the full year. I'll now hand over to Lars, who will present the detailed accounts.

Thank you very much, Tim. Over the next few slides, I will walk you through the H1 results in a bit more detail. So as Tim just mentioned, revenue decreased by $127 million to $734 million this year. and the impact of lower volumes and mix brought EBITDA down from 66 million last year to 43 million this year. This represents 5.8% sales and decline of 177 basis points versus last year. After deducting depreciations of 26 million, EBITDA stands at 17 million for the semester and reduction of 18 million from last year. PPA amortizations is roughly in line with last year's figures but we see a significant 40 million euro improvement in non-recurring items. This is mainly driven by lower risk thresholding reserves as we are now reaching the end of our targeted cost optimization program. This leaves us with a positive EBIT of 2 million and improvement of 20 million from last year. After deducting interest and tax, the net result for continuing operations was negative 66 million euros, an improvement of €7 million from last year, and including the discontinued activities, the full group result improved by €227 million to a negative €68 million. The remaining table on this slide details the components of the free cash flow, which I will cover in more detail on page 11. Page 9 set out the components of non-recurring items between EBITDA and EBIT, which, as mentioned earlier, is mainly explained by the reduction of restructuring costs. Page 10 sets out the bridge from EBIT to the group's net result. And net interest was in line with last year's figure, but other financial expenses increased by $11 million to $28 million, which is entirely linked to the accounting impacts from the refinancing. So as we were recognizing the new debt, we had roughly $28 million of additional costs recognized just for this operation. Taxes decreased by $5 million year over year. On page 11, you can see the variance in free cash flow versus H1 last year. As noted earlier, EBITDA was down by 23 million year-over-year due to lower activity, partly offset by 7 million lower capex and 6 million lower restructuring payments. Working capital contributed a positive 57 million variation in the period versus a positive 118 million in the last period, resulting in a 61 million negative variance year-over-year. Pension payments decreased by nearly 5 million, while financial payments decreased by 7 million. Cash tax payments increased by 6 million, mainly due to a tax refund we received in the same period last year. Together, these movements bring us to a free cash flow of 30 million for the first half. On page 12, you can see the liquidity and debt position at the end of the period. So we ended a period with 21 million euros in cash on hand, and our Wells Fargo credit facility had additional availability of €6 million, giving us a total liquidity of €27 million. The net debt, including operating leases, ended at €536 million and increased €28 million since the beginning of the year. This concludes my presentation, and we will now open the floor for questions.