HELLA GmbH & Co. KGaA

This conference will be recorded.

Good morning, ladies and gentlemen, and welcome to the Hella Investor Call on the results for the first half year of fiscal year 2025. This call will be hosted by Bernhard Schäfer-Barthold, the CEO, and Philippe Vignier, the CFO of Hella. At this time, all participants have been placed on a listen-only mode. The floor will be open for questions following the presentations. Let me now turn the floor over to your host, Bernhard Schäfer-Barthold.

Very warm welcome to our earnings call for the first half of 2025. I'm here together with Philippe, CFO at Hella, and Kathleen Dode, who is heading investor relations. So, starting immediately on page four of our presentation, if we look at the key figures and the key achievements in the first half. So, looking first on the sales side, so our organic sales are at 4 billion, largely at previous year level, minus 2.4% year on year. Reported sales are at minus 1.3%, with some headwinds specifically in the second quarter. If we look specifically on our business groups, lighting was down in the first half, 7.4%. Specifically, the end of larger volume projects were the reason on that sales trend. Electronics is with a continuous good momentum, a growth of 6.6%, and now at 1.6 billion on the first half. Specifically, our radar business, but as well business related to our energy management division is growing quite decent. Life cycle solution. was impacted by a weak demand on commercial vehicles. So overall, on the first half, year-on-year, down 6.6%. On a positive note, specifically on our special application business, we are now seeing that the negative trend is now ending, and we are more optimistic in terms of the development on the second half. And if we look at our operating income margin, we are largely stable to last year. We are at 6%. Our gross profit is slightly down in comparison to last year with on one hand side, some negative mix, but in comparison also to last year, we're apart. of the positive within our gross profit was also related to the sale of our people-centred business where we recognise 17 million. So the comparable we need to remind on that one as well. We're working intensively on our costs. So we see with a strict cost discipline and cost reduction, we see a continuous improvement. Our competitiveness program, which we as well accelerated, is showing step-by-step strong cost improvements in all areas, but specifically also within our R&D. So we reduced in the first six months had counts by around 3.4% overall. So this will now continuously lead also to further cost reductions in the upcoming month. We also said that within R&D, we were targeting to be below 10%. And we already see that now for the first half of the year that we reached that number. On the net cash flow, we are turning from a negative in Q1 to a good positive momentum now within the second quarter. We ended the first half year with a positive number of 114 million euros, which is an increase of around 34% in comparison to to last year. We have higher funds from operations. We are continuously managing to improve in our CAPEX spending, and as well, the factoring, which is within that net cash flow, is at 23 million and is a lower amount in comparison to prior year. In terms of our guidance, we are confirming the guidance to the end of the year. We see sales between around 7.6 to 8 billion. Our operating income will remain, well, will be between around 5.3 to 6%, and we assume to be at least at 200 million of net cash flow to the end of the year. If we move to the next page, on page five, we are quite pleased about the development in our order intake. We were able to win in lighting important new projects, specifically also in North America, but as well in China. with Chinese OEM, and this should support our growth specifically in these two regions. Even more pleased, I'm with a strong development within our electronics business. We want very important acquisitions on a lot of our new product offerings, specifically, If it comes to our solar module business and the intelligent power distribution module which we offer, we were able to win another order. And the same also on the smart car access. And to highlight as well, here on the high-voltage side, we were able to win another big business, and as well, another one on the zonal control modules with an SOP in 2028. So important acquisitions in terms of new products we have established into the market, and as well, important acquisitions the regional distribution, which we are also targeting, as you know, so that we are more balancing out and getting more resilient also going forward. Lifecycle solution is also showing a good trend in terms of order intake. So especially in the important area of trucks, but also buses, we were able to further win businesses and as well outside of of europe which will also support that that trend coming to coming to the next topic on on page six so we we started with our competitiveness program specifically on Europe early 2024, which we announced, and I made the comment that we also accelerate on the measures and add additional measures. What we have in addition now launched is the project Simplify. Simplify is focusing, is a global program. is a program where we also leverage and work together with Forvia. And the target is really to streamline specifically in all functions and as well the administrative functions our processes and our organizations, and to get leaner, more efficient, and less complex. This program should lead to gross savings of around 80 million euros until the year 2028, and we will have and as well restructuring costs, which will be up to around 100 million euros. So we believe that this program will bring us into a best-in-class organizational setup in the upcoming years. We did an intensive benchmark to leverage really on the opportunities we still have. We already have started on that program, and we believe that the combination of the competitiveness program for Europe the activities in Simplify will significantly improve our competitiveness going forward. Having said that, I would hand over to Philippe to give more details on the financial results.