Elringklinger Ag

Ladies and gentlemen, welcome to the conference call on the preliminary reviews for the year 2025. I am Sergan, the chorus call operator. I would like to remind you that all participants will be in listen-only mode and the conference being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on the telephone. For operator assistance, please press star and zero. The conference must not be recorded or broadcast. At this time, it's a pleasure to talk to you.

Ladies and gentlemen, hello and good afternoon, and thanks for being available today. I welcome you to our conference call on the preliminary and unordered figures of the fiscal year 2025. I'll start with some remarks on today's release. Afterwards, I will hand over to our CFO, Isabelle Dahmen, who will walk you through the financials down to the EBIT level. As usual, you will then have the opportunity to ask questions. Please note that the outlook as well as the financial details will be published together with the final and audited figures on March 26. The company closed the year in an environment still marked by considerable uncertainty and volatility. At the same time, the group continued to prepare for the next phase of its transformation, reflected in high levels of investments to launch additional serious projects in the field of cell contacting systems. Despite these upfront costs, the year-end performance was strong, with operating free cash flow reaching 2% of sales. The ramp up of battery component projects progressed further, driving significant sales growth in the e-mobility business unit. In addition, the group successfully implemented its streamlined program, achieving a sustainable reduction in personnel costs. Overall, the company mainly met, or in some areas even slightly exceeded, its full year guidance targets. Let us have a quick look on the markets. Across major automotive regions, the powertrain mix shows clear structural differences. In North America, internal combustion engine vehicles continue to hold a dominant share, supported by market preferences and comparatively slower electrification dynamics. Europe, by contrast, sees a higher share of all electric vehicles as well as hybrid vehicles. Within the second half of the decade, There will be a significant shift towards all electric. A lot of new programs of the established players are going to ramp up. However, long-term forecasts point to a decisive shift. By 2030, all major auto regions are expected to accelerate strongly toward fully electric vehicles. Projections indicate that Europe and China will experience some of the fastest growth in battery electric vehicles, while North America is also set for a substantial increase by the end of the decade. In summary, although today's powertrain landscape varies widely between regions, the trajectory toward fully electric mobility by 2030 is clear and consistent around the globe. Let us have a closer look on the pure electric mobility, because this will be our core growth market with regard to cell contacting systems, or other components from our broad range of e-mobility solutions. Across all major automotive regions, including China, Europe, and North America, the shift toward electric mobility is firmly underway with strong growth projected through 2030. When considering our large-scale projects, you will see that we are covering quite a good share of those vehicles, especially in Europe and also North America. China continues to lead the global transition to electric vehicles and shows a different market development with regard to the rising importance of pure local players. Overall, the market of all electric mobility is expanding across all major regions and significant growth is expected throughout the coming years. The shift towards e-mobility is well underway and continues to accelerate. Let me now hand over to our group CFO, Ms. Isabelle Damo.

Thank you for handing over, Thomas. Let me first come to the preliminary and audited figures on slide number five. Summing up, we have successfully concluded the 2025 financial year and laid the foundation for our future transformation. We have generated sales revenue of 1.6 billion euro, which is a decrease to previous year's figure on a reported level. But there have been M&A effects from the divestment of our entities in Severland and Beaufort amounted to €159 million. In addition, we have been faced with headwinds from the exchange rate of €40.4 million. Excluding these effects, we achieved an organic sales of 2.1%, which likely exceeded our guidance given in March 25. The group reported adjusted EBIT of 88.6 million euro in the financial year under review, which corresponds to an adjusted EBIT margin of 5.4%. Therefore, the group achieved a level at the upper end of the guidance range, which was around five. If you take into account that the earnings of the e-mobility business unit currently remain in negative territory, with an adjusted EBIT of minus 62 million euro, It shows that Ellen Klinger's classical business generates reliable cash flows and creates sufficient financial room for strategic investments. All in all, adjusted EBIT margin is fully on track to continuously improve profitability of the group in the medium term. Regarding the other metrics, we've seen strong effort in the fourth quarter. Due to an active working capital management, we achieved a level of 285 million Euro in the financial year 2025. At 17.4% of the group revenues, net working capital ratio was even lower than prior years figure. The target set in March 25 to maintain a net working capital ratio of under 25% of group revenue was therefore clearly fulfilled. In line with the lower level of working capital and despite the high level of investments for the ramp up of the large scale immobility projects, we have generated an operating fee cash flow of 32.6 million Euro in the financial year 2025. With a ratio representing 2% of sales, we have achieved our target range of 1 to 3% of group revenue. As a result, net financial debt was kept at a low level. It amounts to 288 million euro. As a result, the net debt to EBIT ratio stood at 2.0 and fulfilled the guidance given in March 25, when we had appointed to a figure of around two. When adjusted EBITDA for the one of the section shape 13 streamline measures that adjusted net EBITDA ratio would even amount to 1.5 compared to 1.2 in the previous year. Let me briefly reconnect these results to our transformation strategy, Shape 30. Shape 30 outlines our roadmap for transforming the group in response to the profound changes shaping our industry. The strategy is focused on enhancing our profitability and strengthening cash flow performance. To ensure long-term success, we continuously monitor global market developments. and align our product portfolio accordingly. This enables us to remain well positioned for the future and to act with maximum flexibility as market dynamics evolve. This includes terminating non-performing products, divesting capex-intense business areas, and consolidating our global footprint. In an effort to position a group effectively for the future, Alvin Klinger implemented Streamline, a global program to scale back staff costs in 2025. The measures on a streamlined NCF30 will translate into a significant reduction of the group's cost level. As planned, the initial benefits of these measures will be seen as early as the current financial year. The measures will take full effect from 2027 onwards. In parallel, we enter the next steps of transformation by ramping up several large-scale immobility orders. With the ramp-ups, we return to our normalized capex spending after an intense investment cycle, as main investments have been done. The full and audited figures for fiscal 2035 will be released on March 26th in the morning. A press conference is scheduled for the morning, followed by an analyst conference call in the afternoon. The then released figures will include the full set of financial statements and therefore more details on the financial KPIs. Moreover, we'll provide you with an outlook on the fiscal year 2026. The invitations for the calls will be sent out in due time. Ladies and gentlemen, thank you for your attention and now Thomas and I are happy to answer your questions.