Melexis Nv Ieper

Welcome, everyone, joining us today for the Melexis first quarter 2026 earnings call. I am Philip Ludwig, Investor Relations Director, and with us today are our CEO, Marc Biron, and CFO, Karin Vankeliensven. Earlier today, we published our press release and presentation, which can be found on our website. We will start the call with some brief remarks before taking questions, starting with Marc Biron. Marc, the floor is yours.

Thank you, Philippe. Hello, everyone, and welcome to this earnings call. I will share some highlights about our business performance and strategic progress, and then our CFO, Karen Van Grisven, will provide the financial overview and outlook. The results of our first quarter were fully in line with our expectations, taking into account the seasonal factors like the Chinese New Year and the changes of the automotive incentive schemes. Importantly, our profitability grew already in the first quarter, driven by our operational improvements and disciplined cost control. We recorded a 2% increase in sales year over year, which put us on track to achieve our first half 26 sales outlook. Automotive applications have represented 89% of our total sales this quarter. our solutions continue to fully capture the structural growth trends of electrification, ADAS, and premiumization. For example, we are growing multiple opportunities in thermal management with our Trifidium pressure sensor and motor drivers. Trifidium, a world premier launch in 2014, provides accurate and robust pressure sensor technologies which enable easy range extension by optimizing battery performance. Furthermore, we are seeing increased opportunities in ADAS as the industry continues its structural shift towards sear-by-wire and drag-by-wire architecture. Those are safety critical applications which fit perfectly with our portfolio of inductive and magnetic position sensors. Outside of automotive, We have introduced two more new products this quarter. The first one is a new motor driver designed for cooling fans which are used in servers and data centers. We have also a high-precision inductive position sensor tailored for the operation of mechanical joints in robots. Combined with our unique Tactaxis technology, which provides a sense of touch to the robot, we are accelerating the development of physical AI. Last week, we were proud to join the Hanover Messe with our customer Y-Motion to demonstrate how we are working together to integrate our TAC-Axis finger module into the next-gen robotic hands. This is a critical step to deliver the human-like dexterity needed to break the gap between physical AI hardware and intelligent touch. In Q1, we have posted visible progress in our strategic objectives. we have strengthened our presence in China by establishing a woolly foreign-owned enterprise. This WUFI is a pivotal step in our localization strategy, providing the foundation for our end-to-end supply chain. Shortly following the launch of our integrated smother at the end of last year, we have already received an innovation award from one of our top Chinese customers. This expansion of our product portfolio opens up new power module customers and captures growing 800V applications in autos and in energy storage systems. Last but not least, we have achieved an important milestone with one of our top Chinese OEM customers, as we have been recently recognized as a direct supplier, confirming our very good relationship with them. I will now hand it over to Karen to comment on our financials.

Thank you, Mark. And hello, everybody. So the sales for the first quarter were 202.1 million euro. And the euro-US dollar exchange rate evolution had a negative impact of 4% on sales compared to the same quarter last year, but no impact compared to the previous quarter. The gross result was €80.6 million, representing a gross profit margin of 39.9%, and this is a 7% increase in gross results compared to Q1 of last year, demonstrating the recovery from cost-of-yield improvements as anticipated, and ongoing cost-control actions on top of that. Operating expenses remained controlled with R&D at 14.5% of sales, G&A was 6.8% and selling expenses were 2.2%. This led to an EBIT of 33.2% or 16.4% of sales, a 14% increase year over year The net result was 23.1 million euro or 0.57 euro per share. Looking ahead now. So turning to our outlook, Menexis confirms its guidance. We expect sales in the first half of 2026 to be around the same level as the previous year. And we expect sales in the second half of 2026 to grow. compared to the first half. And for the first half of 2026, we expect a gross profit margin around 40% and an operating margin around 17%. So no change in guidance. And this is taking into account the Euro-US dollar exchange rate of 1.7%. For the full year 2026, we expect capex to be around 40 million euro. And this concludes my remarks.