Melexis Nv Ieper

Good morning, welcome everyone joining us today for the Melexis third quarter 2026 earnings call. I'm Philip Ludwig, investor relations and with us today are CEO Marc Biron and CFO Karen Van Griensven. Earlier today we published our press release and presentation which can be found on our website. We will start with some brief remarks on the business and financials before taking questions starting with Marc Biron. Marc, the floor is yours.

Thank you, Philip. Hello everyone and welcome to this earnings call. I will start with an overview of the strategic developments and the operational highlights of the third quarter. And then Karen will walk you through the financial results and outlook. We made further significant progress in executing our strategy to win in high-growth markets. In China, we signed a master purchase agreement with BYD. It means that we become a direct supplier in BYD's procurement ecosystem. We are excited to work even more closely with BYD's team and align our technology roadmap to drive generation of electric vehicles. We have also introduced our first chip fully localized manufacturing in China, demonstrating our commitment to match our local customer operational requirements. Order momentum from China remains very strong. Our sales reach a record level in Q3, and the order book points to further sales growth in Q4. We have opened a new office in Pune, in India, to expand our local engineering and sales team with the ambition to accelerate growth in these emerging markets. In particular, we see significant growth opportunities in two wheelers, vehicle electrification, solar market, and smart energy metering. Now, turning to some operational highlights. Steering and braking and thermal management application continue to drive our core automotive demand, which has represented 80% of total sales in Q3. Outside of automotive, sales for energy applications such as solar panel and heat pump their positive trend the third quarter also mark a major milestone for robotics as our design wins are translating into active customer production volume these rams with solid order already placed for 2027 establish a clear growth trajectory for melexis Our commitment to accelerate growth is visible in the product launches of the third quarter, with an even split between automotive and non-automotive applications. In addition to the product I just referred to, a current sensor, with a full local Chinese supply chain, we introduce a cooling fan driver optimized for demanding applications such as the supply system of data centers. We have also introduced a low-cost magnetometer that provides robust tempering protection for smart utility meters, especially well suited for the Indian market. We have also extended our 3CBN technology, which measures gas and liquid pressure in the liquid cooling system used in the EV and in the AI data center. Looking ahead, we will continue to invest in areas that grow faster, such as thermal management, steering and braking, and the battery management system. At the same time, we are also winning new business as we have sharpened our competitive offering, which will translate into increased sales over the next quarters. I will now hand it over to our CFO, Karen Van Griensven, to provide more details on our financial results and outlook.

Thank you, Marc. So sales for the third quarter of 2026 were 223.7 million euro, an increase of 4% compared to the same quarter of the previous year, and an increase of 3% compared to the previous quarter. And the euro-US dollar exchange rate evolution had a positive effect of around 1%. The gross result was 91.1 million euro or 40.7% of sales, an increase of 9% compared to the same quarter of last year and an increase of 4% compared to the previous quarter. R&D expenses were 13.6% of sales, G&A was 6.5% of sales and selling was 2.2% of sales. The operating result was €41.3 million or 18.5% of sales, an increase of 9% compared to the same quarter of last year and an increase of 7% compared to the previous quarter. The net result was €31.3 million or €0.78 per share. an increase of 14% compared to 27.5 million euro or 0.68 euro per share in the quarter of 2025 and an increase of 2% compared to the previous quarter. Now looking ahead, so Melexis confirms its second half 2026 outlook which is for sales to be between 445 and €435 million, with a gross profit margin around 41% and an operating margin around 18%, all taking into account a EURUSD exchange rate of 1.12 for the remainder of the year. For the full year 2026, Melexis expects CAPEX to be around €40 million. This concludes our remarks. We can now take your questions.