BELIMO Holding AG

Good morning, ladies and gentlemen, and welcome to Belimo's 2025 results presentation. My name is Stefan Gick, Head of Investor Relations, and I have here with me Lars von der Hagen, CEO, and Markus Schörch, CFO of Belimo. We are also pleased to have today online with us, Sara Bancic, our new Head of Americas. Lars will start the presentation with a business and market review. then Markus will highlight the financials, followed by Sarah introducing herself and Belimo Americas. We will conclude the presentation with the outlook and take questions at the end. With that, I would like to open our presentation and hand over to Lars. The floor is yours.

Thank you, Stefan. So, good morning, everybody here at the Hotel Widder. And, of course, also everybody who is here remotely. We look forward to the program today. And we conclude here then also with Q&As for everybody. Also, of course, those remotely. And then a reception with a light lunch, a porridge, as we call it, for those who are here. And I look forward to meeting you and talking to you this morning. Quick mention, we have Sarah Benchich here online. Today is actually a snowstorm in the U.S. Our factory is closed today. Flights have been canceled to the U.S., those that left today from Switzerland. But we still have a connection, but it might be a weak connection. But, yeah, we will keep our fingers crossed for Sarah's speech later on. 2025 was a great year for Belimo. I start here also with a photo of our employees. We have celebrated a lot last year, 50 years, Belimo. And that was also the reason why we thought we have to make it a strong year with great financial results because it wouldn't be fun to celebrate without good numbers. But what's really behind this result is our more than 2,700 colleagues who are working, highly engaged, following a purpose and a proven business model. And that's really very nice. It gives me the motivation every day to run Belimo and to see this company working. And it's just amazing. And therefore, we would like to Dive into the details. A summary of what happened last year in terms of financials. Our growth rate in local currencies was 23%. EBIT grew by 29%. And the return on capital employed was 36%. We are proposing a dividend of 10 Swiss francs per share. And the outlook, we expect mid-teens percentage sales grows in local currencies this year. Markus will later on deep dive a bit into this outlook. Some of the other elements we'll cover throughout our presentation. First, the market dynamics. Of course, a very dynamic year in terms of the data center business. Obviously, we have now had sales of 17% of our total sales in the data center business. We grew slightly less than half of the growth in 2025 that the data center business was representing. From a technical standpoint, there was also more and more, of course, liquid cooling employed, but also liquid cooling at higher temperatures that it is written here. That means temperatures around 40 degrees C for a supply temperature to cool servers. That means that there's less mechanical cooling involved. So there is a so-called free cooling and mechanical cooling combined. And this is actually quite advantageous for the applications Perlimo covers because it requires more valves to handle these systems. The overall construction market, the non-residential construction market was actually slightly down, minus 1% on average globally, but we've seen an uptick in retrofit opportunities and we'll cover this later on with two examples. And then lastly the overall economic environment of 2025 we had the geopolitical situation fueled of course also by these tariff ideas and concepts and the negotiations now again in discussion over the weekend. And we, of course, don't know what's going to happen over the next months and years, but we know it probably will keep us busy for the next three years talking about tariffs, managing tariffs and implementing tariffs. And Markus will actually deep dive a bit into that topic, what did it mean for 2025 regarding tariffs at Belimo. The dynamics and the markets are, of course, related to our strategy, to our growth strategy, and we are, of course, focused long-term. We have a long-term planning, a 10-year horizon on our growth strategy with our six initiatives. And our six initiatives, they're actually in our annual report. Remember, Warren Buffet always when asked, why are you so successful? He says, well, we are reading the annual reports. And you don't have to read all our annual report. They're getting so long. But I recommend you to read page 17. And we talk about our growth strategy there and explain the status of each of the six initiatives. We touched upon some of these initiatives on the data centers in particular. I want to mention what we did last year. We actually increased our organization for data centers. We have a dedicated sales business development organization with application consultants, with product managers, fully focused on data centers. We've expanded that. We built a data center application center in Singapore, and we have also designed an application center for our Danbury, Connecticut location that we are building right now, that will be inaugurated in fall. Then we have started last year in particular with product developments, particular for data centers, both on the On the material side of valves, for instance, more that our valve range is completely available in stainless steel, but also in terms of the intelligent component, the sensors and the actuation and the metering, the Belimo Energy valve, with special implementation of industrial automation protocols to interface and special functionality from a software standpoint. Now our six growth initiatives, they are built on three mega trends. Always crucial that the company's success depends mainly on the underlying trends. We have three key trends. One is urbanization. That is still, and I checked the number again, 70 million people every year. We are adding to this world, so 70 million every year. We are more. And these 70 million people 80% of them, they love to live in cities, so they are clustering in cities. And in the cities, we see that trend also, that second-tier cities are developing, of course, in Asia. But also, for instance, in the U.S., cities like Austin, Nashville, or Denver are growing. And you have more densities in cities, you build higher, and this requires more HVAC building automation to manage these buildings. Then climate change, that still is the single biggest challenge for us humans in the world. Every problem we have in the world gets worse with climate change if we do not mitigate this. And the best way to reduce CO2 is energy efficiency. Energy efficiency is the biggest fuel we have and the best way to reduce CO2. Energy efficiency measures in buildings with the limo components, they have three main advantages. Firstly, they pay for themselves. I have an example afterwards. They increase the quality of life in terms of indoor air quality safety. And they make the building owner energy independent. So this is really very powerful and therefore a major trend that we are directly supporting with our business model. Then data centers. On the data centers, obviously we have the data center trend, this market segment. We have some related trends. Sarah will present afterwards the 30 segments of the buildings, how we segment these vertical markets. There are related segments such as energy storage or semiconductors who are also benefiting from the digitalization trend and the electrification trend. And then regarding our product range, so as we integrate in building automation system, we see more decentralized application, decentralized intelligence, edge devices, and so on. So it's absolutely basically playing into the Belimo product range, the digitalization in building automation and industrial automation. And therefore, very crucial for Belimo, our technology. platform of components and we have launched in November the first products built on the new digital generation. Maybe you've seen this launch video. That was – it's a 20-minute launch video. I can recommend it on our website. The new digital generation platform is a new platform. We have introduced the first platform in 2005, so 20 years ago. At the time, we were integrating damper actuators and control valves in a platform and have launched this platform and have been very successful with this. Five years ago, we invested into a new platform that, in addition to damper actuators, control valves, it integrated sensors and meters in one platform. And we brought the modularization level one degree further, so we have basically a Lego type system here, where we have as few components as possible in the platform, and it makes us very flexible. For instance, when we integrate into a automation system as indicated here on this depiction, We can change one component. Today we have about 10 different interfaces into building automation systems. For instance, the most common used in building technology is BACnet. There is a BACnet based on a physical layer, RS485, on an IP layer. And then there's BACnet Secure Connect, special cybersecurity requirements. That's also on an IP layer. There are three different layers. They need three different kind of hardware modules, and we have with this platform the opportunity to just develop one of these modules and put it across the whole range and put it on 20,000 components. So otherwise, if you do not have a platform, you have to make a discrete development for every component with a new PCP, a printed circuit board, and this is where it's not scalable. So this platform really makes us unique. There's no player in the market that has a platform in this area of application where we play. Furthermore, of course, the handling of our products, it's very consistent. In terms of the design also, the industrial design, that's important too. As we said a lot to OEMs, original equipment manufacturers, they put our components on, for instance, an air handling unit. And we have 10 Belimo products on an air handling unit. If the industrial design looks consistent, the overall product looks better. But also it's the same handling, how you install it, how you configure it. For instance, here with the Belimo app, there's one app. There's the assistant link that's indicated here that allows Bluetooth connection. There's also NFC that's available directly on the component. So you just have a very consistent range for commissioning and, of course, for integrating. So this platform is crucial in order to, of course, supply the world with Belimo components. We also have to invest in our capacity here. So therefore, we are on track with our capacity expansion. We do follow an asset-light model. If you analyze the numbers correctly, you see that our sales per employee per FTE is 445,000 Swiss francs per employee. Our depreciation as a percentage of sales is 2.8%. So that shows the asset-light model. Also, the trend is positive. So in the past, we were around over 4% of depreciation. And over the years, this came down to now under 3%. And also, the sales per employee increased over the years. So the trend towards this asset-light model also is positive. But we still need some buildings. So one that is... In Hinville, just to focus really on our footprint, we have now several warehouses, external warehouses that we consolidate with the new building. We call it Nexus, and that's being inaugurated end of August. And we were actually invited on September 1st for a conference. Financial Analyst Day in Henville where you can visit us and we show you the new building along with other interesting things about Belimo. Then we inaugurated also Belimo China, this CSIM house, LEED Platinum building. This I was already talking about a year ago because we inaugurated in January 25. And then we have some projects in the U.S. that Sarah will talk about. Now, having a look at our growth strategy over the years. We have a growth strategy, a long-term growth strategy. It's always nice to look back and review that growth strategy. How did we do? And obviously the numbers now have been quite positive, but I would also look back if the numbers wouldn't be that good. We've implemented the first growth strategy in 2016. and had an average CAGR of 8.8% over the five years period. And then over the last five years it was a 13.8% CAGR. Over the last 20 years, 10.3% CAGR in growth. So this growth strategy is working and we actually put in the plan 2016 with the growth strategy that we would make a billion in sales, 25. And we made it, so we are quite happy ourselves that we made this number. And we have, of course, also in our growth strategy really focusing on the growth rate long-term of 9 to 11 percent as communicated previously. An organic growth rate between 9 and 11 percent, that's the long-term growth rate, obviously now fueled short-term by some of this data center growth, but that's our long-term plan. Very important regarding the profitability, the EBIT, our EBIT number. I think this chart is always good to look at because many of you are always asking, and maybe later on, what will be your EBIT in 2026? And we don't know because you see the EBIT is going up and down, that fluctuates over the year. What we see, it improved over the last 20 years from 14 to 20.8%. So that's an average of about 35 basis points. We believe that over the next years to come, we continue to improve. in that range of this 30, 35 basis points over the next five years in mid-term, long-term. But of course every year this changes and we have the fluctuation as of course indicated from the past and I think that's a good indicator to look at also what are these fluctuations that we have on that EBIT level. Now also I would like to point out that Our growth strategy works all over the world, so looking at the top 50 countries we are selling in, it really works in more than 80% of the countries we have the strategies work in terms, for instance, with sensor growth, with energy valve growth and so on. The various topics that we have in our strategy work in each of these countries, and so we have really statistical evidence that it works then all over the world, and that's very powerful. Looking at the three markets, Markus will afterwards deep dive a bit into the numbers. I want to highlight some of the typical projects that we have. So our business is really widespread amongst many buildings. We still have an order size of about 2,000 Swiss Francs per order, very small. There's a lot of orders that we are processing every day. And they go into buildings, small buildings, big buildings. And here, one example here in EMEA, that's the Hoffmann Group Munich. That's a new building with about 1,000 products in there as an example. Then the Embarcadero Center in San Francisco. That is a very nice case study that we actually have. There's also a link on this slide that brings you to this case study on our website. There's a video. This is a 48-story waterfront building in San Francisco, 40 years old, and it's owned by BCX. That's the formerly called the Boston Properties. That's the largest listed real estate developer in the commercial building space in the U.S., and it's a great success story. They have retrofitted six air handling units in these buildings, large air handling units with six energy valves. And they're saving $130,000 per year in electricity costs that they use mainly for chillers, for chilling the building, for cooling the building, and so you see the investment is about The payback is around six months. The investment was around $60,000, so the $130,000 saving per year. So it's really six months payback. It's unbelievable. Great case study again. And I recommend you to watch this video that explains in detail how that works. Another project from Asia Pacific in Vietnam, Ho Chi Minh City, the second large international airport there that's being built, phase one. There are 15,000 Belimo field devices in that phase that we have been selling and are selling in this construction project. So that also gives you a bit of an impression of an airport. There's a lot of HVAC in there and many of these Belimo components. Here also fully equipped from damper actuators. but also sensors and meters in this Vietnam airport. So if you ever land in Vietnam on the new airport, then think about the Limo that makes your landing possible. Now, I would like to also introduce talk about our building tomorrow vision. Last year in 2025, when we had our celebration activities, part of that was also looking into the future to 2025. What will be the trends in our industry? And we conducted workshops all over the world with our customers, with industry experts, to define these building trends. And these trends are in this study. We have actually them here outside. You can take a book or you can download it, of course, on the internet. And it basically talks about technology, society, economy, and the environment. And it has three trends for each, and then it also shows the implications for the industry. So it's very valuable, I think, in reading this as well. So if you read our page 17 on the annual report and read this, then you really know where the journey goes for Belimo. You know more about the business model and you learn a lot. So I recommend you also to read that Building Tomorrow study. Then let's come to some changes on our board of directors. We have, first of all, our Martin Zwissig, who is actually here today. He will be leaving our board, unfortunately, after 15 years of service. So he is, as you know, an outstanding CFO and has contributed to Belimo's growth from the board level. So thank you, Martin. And we have last year, the AGM has elected his successor with Tom Hallam, the former CFO of Shibador. Then we have also another member of the board who does not stand for re-election, Stefan Randstrand. former CEO of Tomra. He was also contributing over the last six years a lot in regarding actually our growth ambitions and was pushing us regarding our strategy in terms of growth and also very – I thank him for his contributions here to – from the board level. Then we'll have a new member that we propose at the AGM, that's Carina Ricci. Carina has a strong background in engineering, strong knowledge in data centers, and she is American, so a strong knowledge about the American market, our largest market, and brings that experience, that diversity to the board. She has been working with Eaton and with Siemens Energy for many years and has a great knowledge also in management and leadership experience. Also, with Karina, we will be three women on our board of directors. And, of course, with Sarah Denchish, we will be three women also on our executive committee. So we then have six women on our top leadership board and executive committee, which is also great. And I remember 10 years ago, there were zero on the board and zero on the executive committee. Quite happy about that as well. Now let me conclude again, coming back to our employees, our colleagues. We have been working also a lot over the last 18 months on our culture and our values, and we have created habits for each of the value, and we have conducted workshops, actually three-hour workshops, four times three hours discussion workshops with all our employees. because it's very crucial, this culture. In our performance management process, for instance, every employee selects one habit. and has a plan on what can he or she do with this habit to improve something, to leverage something, to take an opportunity and really work on one of these habits to improve our culture every day. Also great confirmation was this Best Employers Award from the Financial Times Europe. There were 1,000 companies assessed. We were ranking number seven. Second in Switzerland, which is a great external confirmation that this cultural work works. So overall, we can say good business model, good culture makes a successful company. With this, I conclude for now and would like now to – I talked about air flows and water flows, and now we have the man who will be talking about the money flow. So I give the floor to our CFO, Markus Schuch.

Thanks a lot, Lars. And also from my side, a warm welcome. It's a great honor and pleasure to be able here to present the financial results of Belimo of last year. Lars already mentioned 2025 was a very successful year for Belimo. We have executed on our growth strategy and achieved the sales growth of 23.3% in local currency or 18.7% in Swiss francs, further accelerating our growth across all regions. For the first time in our history, we exceeded 1 billion of sales and generated 1.12 billion of turnover, a great achievement, especially in our anniversary year towards the 50th anniversary of Belimo. With regards to the regional breakdown, the Americas has now contributed about half of the sales, EMEA 38% and Asia-Pacific 13%. If you have a closer look at the composition of these growth rates, we can see that about the majority of the growth, 19.5%, is coming from volume and mix contribution. So between pure volume growth, also a lot of higher value products like the energy valve or higher value customer segments like the data center contributed to this strong performance. Then we had about 3.6% growth coming from price increases. That's mainly attributed to the region Americas, to the US, where we had in-year price increases as a compensation measure for the imposed tariffs. We'll come to that later on. And then lastly, the FX had a negative impact of 4.5%, leading then to this growth rate of 18.7% in Swiss francs. A bit of closer look into the various regions. This chart shows the development of our three regions, and you can see that all regions contributed this double-digit growth towards the overall achievement of Belimo. First, EMEA delivered an outstanding result with 12% growth in local currency or 10% in Swiss francs. And that is despite a very challenging market environment and key markets with a declining construction spend, like, for example, in Germany. So focusing on retrofit or attractive segments within EMEA made this strong result possible. EMEA also benefited from a revitalizing OEM segment, and that included some restocking and supply chain build-ups throughout the supply chain. Then Americas showed the strongest performance, with a sales growth of 32% in local currency, or 25% in Swiss francs, and that's from an already very strong basis in 2024. In there, data center accounted for about half of the absolute growth we had in the Americas. That also means that our traditional HVAC business also grew in the high teens and showing that we have got a very broad basis of this growth. That is coming from an increasing traction also of the retrofit business and then also other high-growth verticals like high-end manufacturing in the pharmaceutical or semiconductor business and also a general very strong market environment in the Americas. Asia Pacific lately had a growth of 29% in local currency, or 23% in Swiss francs, and that's despite the very challenging market environment in key markets like China. So they have the clear focus on high growth verticals, made the strong results possible. Also, their data center was an important growth driver, including some export business in the OEM business. On this chart, we can see the development of our business, of our three business lines. All business lines also grew double-digit. Damper Actuator, our most traditional business line, achieved sales growth of 14% in local currency or 10% in Swiss francs. And in there, the strengthening OEM was a key contributor to this overall very strong performance. Then control valves show the strongest performance with a sales growth of 31% in local currency or 26 in Swiss francs. In there, obviously, the data center business was an important contributor or also the move to higher end applications like the energy valve. Lastly, sensors and meters, our youngest business line, showed a growth of 25% in local currency and is developing according to our plan. In 25, sensors and meters already contributed with 5% towards the overall sales of Belimo and is becoming an important business contributor for our company. This graph shows the contribution of the data center business to the overall sales of Belimo. The data center business accounted for about 17% of the total sales in 2025 and an increasing share over the two half years. In the second half year, the contribution from data center was 18%. Overall, the data center business accounted for slightly less than about half of the total absolute growth we had last year. In there, obviously, the main contributor were the investments into the data center infrastructure and the high share of liquid cooling of these new applications. The high sales growth also translated into a strong EBIT performance and EBIT growth. EBIT grew by 29% to a total of 233 million Swiss francs, and that is corresponding to an EBIT margin of 20.8%, 159 basis points up from 2024. This increase was possible despite the negative effects both from tariffs and negative ethics development, especially in the second half year. Tariff impact were mitigated twofold, so partly by mid-year price increases we had in the Americas, and then also by supply chain flow-through, shifting about 40% of these high tariffs we had as of August 1st into this year by the flow-through of the supply chain. Just if we recap a bit what happened on tariffs until April, we had a normal tariff situation like we had years ago. So we have roughly 4% tariffs for everything we import into the U.S. That was increased then in April for one day to over 30%, and then was reduced back to 10% plus the standard tariff. So we had then until August tariffs of about 14%. They were increased then on August 1st to 39% plus the 4%. So we had 43% tariffs until mid-November when they were reduced back to 15% overall without the normal tariffs. So that was a flat rate tariffs of 15% until last weekend. And now we have got another tariff regime. So now we have got 15% plus 4%, so roughly 19%. And we will see what the future will bring. This is not the last time we'll talk about tariffs. In 25, we continued our investments into our growth initiatives. So our R&D investments totalled to 76 million. That's up 3.5% from last year and corresponds to 6.7% of total turnover. Our personnel expenses increased by 11.5% to a total of 295 million Swiss francs. Last year we increased our workforce by 343 full-time equivalents to a total of 2,704 at the end of the year. The regional breakdown is as follows, so 59% of our workforce works in the EMEA, 26% in the Americas and 15% in Asia Pacific. The breakdown by function is 44% work in assembly and logistic, 30% in sales, marketing and distribution, 11% in research and development and 14% in administrative and general management. This chart shows the performance of the two half years. Sales and local currency accelerated between the two half years, despite a reverse seasonality due to the short December. This shows the strong momentum we have in our business. Material expenses were significantly higher in the second half year. That was impacted, first of all, by the higher tariff, but also by the FX rates that were mainly hitting in the second half year. The other effects were increasing operational expenses in line with the constant build-up of headcounts throughout the year. Net income increased by 24% to 182 million Swiss francs. The foreign exchange burdened the P&L with 10.4 million Swiss francs compared to a 600,000 gain in the previous year. The strengthening of the Swiss francs against all currency, especially in the second half year, was the main reason. Furthermore, we encountered a slightly higher tax rate based on higher profit outside of Switzerland. Our cash flow performance reflects the strong growth of the company. Operational cash flow amounted to 185 million Swiss francs, absorbing a working capital increase of 67 million Swiss francs associated with the strong growth of our company. Free cash flow, excluding the short-term deposits, amounted to 99 million Swiss francs, reflecting our capacity expansion program. Just Lars showed that in his presentation. In the reporting period, we had a capex of 87 million Swiss francs, and the main investment was obviously the building in Hinville and the capacity expansion into this Nexus building. Looking at the balance sheet, the balance sheet is very sound. We have an equity ratio of 71% and the net liquidity of 69 million Swiss francs. We had extremely strong capital returns, return on invested capital of 28%, a return on capital employed of 36% and the return on equity of 30%. Based on this strong performance, the Board of Directors is proposing a dividend of 10 Swiss francs per ordinary share. This is up 50 rappen compared to the last year. This proposal corresponds to a payout ratio of roughly 68% and is sustainable, considering the growth ambition of Belimo and the elevated investment we will face in the coming years. It's a continuation of our dividend policy of a stable and increasing dividend over year. On this chart, we can see the development of the key performance metrics over the last five years. All figures show a very strong development. Sales growth increased to 23% and EBIT margin constantly increased to 20.8% in 2025. Capital returns improved and achieved 27.8% measured as return on invested capital and 30.2% as return on equity. Free cash flow is impacted by the investments in growth both on the working capital level and also on the investments into capacity. Furthermore, we continued our efforts on sustainability and our ESG performance is well on track. Our SPTI targets were approved and we are on track with our greenhouse gas reduction path. Our scope one and two emissions were reduced by 14% compared to our base year of 2022 and our scope three emission by product salts were also reduced by 14%. We help our customers reducing their greenhouse gas emissions and continue our efforts towards their scope 1 and 2 reduction emissions. Retrofit, as Lars already mentioned there and showed some of the examples, is a very strong example of this investment and this contribution at our customer side. Furthermore, we also contribute with the Delimo Climate Foundation, decarbonising buildings of non-profit organisations, and with that, compensating part of our greenhouse gas emissions. Our efforts are well recognised, and we are rated 888 by MSCA, and Ecovat is silver for our efforts. Let me conclude on the last year's business. So overall, 2025 was extremely successful for Belimo. We implemented our growth strategy that paid off and we could accelerate our sales growth to 23% in local currency. EBIT margin expanded by 159 basis point, absorbing the negative impact both from tariffs and the FX effects. Capital returns are very high and the balance sheet is sound. We offer an attractive dividend of 10 Swiss francs per share to our shareholders, reflecting the investments into the future close. Let me conclude with the calendar. So the annual general meeting will be held on March 23rd. The ex-dividend date is March 25th, and the dividend payment is scheduled for March 27th. We will issue our half-year results on July 20th. And as Lars already mentioned, we will host an investor event on September 1st in Hindele. And there you will have the opportunity to join the inauguration of our new building. And you will also get insights into building tomorrow and our new product family. With this, I will hand over to Sarah for a short introduction of herself and then update on the Americas business.