Saf Holland Se

Good morning ladies and gentlemen and welcome to the SAF Holland SE H1 2026 results call. Today's presenters are CEO Alexander Geis and CFO Frank Lorenz-Dietz. The presentation slides are available on the SAF Holland corporate website. The presentation will be followed by a Q&A session. Please note the conference call will be recorded and published on the corporate website of SAF Holland SE. Everything spoken through the unmuted microphone will be processed during the online meeting and published on the website of South Holland Se. If a participant does not wish to be recorded, they should refrain from participating in the Q&A session and keep the microphone muted. The Q&A session is exclusively for institutional investors and analysts. All other participants of the conference call are kindly asked to contact the investor relations teams directly if they have any questions. Mr. Geis, the floor is yours.

Good morning everyone and welcome to our conference call on our Q2 2026 results. Let me start with a brief overview of our second quarter performance on page 3. Overall, we delivered another solid quarter which supports the confirmation of our outlook for fiscal year 2026. Sales increased to 454 million Euro supported by an organic growth of 3.8% and the continued recovery and stabilization across our key OE markets. This positive top-line development was also reflected in our profitability. Adjusted EBIT margin increased to 9.6% from 9.1% a year ago, while adjusted EBITDA margin improved to 13.2%. At the same time, we continue to generate a strong cash flow. Operating free cash flow increased to 21 million euro, driven by further improvements in networking capital management. This strong cash generation also supported a solid balance sheet with an unchanged leverage at 2.3 times, despite the dividend payment and the ongoing execution of our share buyback program. Altogether, our second quarter performance once again demonstrates the strengths of SF Holland's business model Combining organic growth, improving profitability and a strong cash generation. On page 4, you can see the development of group sales and the adjusted EBIT development. We delivered a solid second quarter with group sales increasing by 2.6% year over year to now 454 million euro. Organic growth reached 3.8%, supported by continued strength in the EMEA trailer OE business and strong momentum in APAC. At the same time, our aftermarket business remained resilient and continued to provide a robust contribution to the overall top line. Looking at the first half of 2026, sales increased by 1.6% year over year, to 905.7 million euro and organic growth was even stronger at 4.7%, although a large portion of this was offset by adverse currency effects. Turning to profitability, adjusted EBIT increased by around 8% to 43.4 million euro in the second quarter, resulting in a margin improvement from 9.1% to now 9.6%. The performance was driven by higher volumes and benefited from our ongoing focus on operational excellence, productivity improvements, and cost discipline. Despite an unfavorable regional mix effect in the first half of the year, profitability remained resilient. Adjusted EBIT for H1 increased to 85.9 million euro, while the adjusted EBIT margin improved to 9.5%, from 9.3% a year ago. So overall, these results once again demonstrate the resilience of our business model. Moving on to the sales split by region and customer category on page five, please. Starting with EMEA, we continue to benefit from a solid trailer demand and a robust aftermarket business. As a result, the region slightly increased its contribution to group sales to around 51%. In North America, market conditions remained mixed. A positive organic growth in the truck segment, supported by initial pre-buy effects ahead of the EPA 27 legislation, helped balance a more moderate trailer market environment. Moreover, APAC delivered again the strongest growth among all regions, supported by solid demand, especially in India and Australia. Despite unfavorable currency effects, The region increased its share of group sales to more than 12%. Looking at the performance by customer segment, trailer or e-sales remained the largest category, accounting for around 49% of group sales, and growth was mainly driven by continued strong demand in EMEA and APAC. Truck or e-sales represented approximately 12% of group sales and benefited from the first recovery effects in the North American truck market. Consequently, OE sales increased by around 6% year-over-year and amounted to €276 million in the second quarter. Once again, the aftermarket business demonstrated its resilience and strategic importance, contributing a solid 39% of group sales despite adverse FX effects. Now let's turn to the development of the EMEA region on page 6. EMEA continued to perform well in the second quarter, benefiting from solid momentum in the European trailer market and a resilient aftermarket business. As a result, sales in the region increased by 3.6% year over year. Looking at the first half, organic growth reached 5.8%, broadly in line with the market development and underlining our strong market position in the region. On the profitability side, earnings benefited from the higher business volume as well as the first contributions from our efficiency initiatives in indirect area. As a result, the adjusted EBIT margin improved to 8.0%. For the first six months of 26, adjusted EBIT increased to 37.6 million euro with the adjusted EBIT margin also reaching 8%. Overall, EMEA maintained its positive momentum in the second quarter, combining solid growth with a further improvement in earnings quality. Turning to the Americas region, on page 7 please. In North America, market conditions remained challenging overall. Although, we start to see more encouraging signs of improvement during the second quarter. This was visible in the truck market. where demand benefited from initial pre-buy activity ahead of the upcoming EPA 27 legislation. At the same time, our aftermarket business demonstrated its resilience and continued to provide a stable contribution to the region's performance. Against this, sales in the Americas remained only slightly below the prior year level. On an organic basis, Q2 sales were broadly stable, while currency effects reduced top line by 1.4% year over year. And for the first six months, sales were organically 1.3% below the previous year. On the profitability side, our ongoing focus on efficiency and cost discipline continued to pay off, and measures implemented across the organization helped offset the impact of lower volumes. As a result, adjusted EBIT increased to €18.6 million in the second quarter. The adjusted EBIT margin improved to 11.1% compared to 10.2% in the prior year quarter, which had also been impacted by temporary tariff-related costs. Looking at the first half of the year, profitability remained resilient, with the adjusted EBIT margin improving slightly to 10.9%. Overall, the Americas region once again demonstrated its resilience, maintaining a solid double-digit margin, despite still challenging market environment. Let's turn to the APEC region on page 8. Our APEC region continued to be a strong growth driver in the second quarter. We saw solid demand across the region, especially in India and Australia, which resulted in an organic growth of more than 18%. However, Unfavorable FX effects remained the headwind and negatively impacted reported sales by 5.8%. Compared to the strong first quarter, sales were slightly lower due to usual seasonality and a somewhat more cautious investment behavior among certain fleet operators. Profitability also developed positively. Higher sales volumes improved operating leverage and a stronger contribution from China, supported earnings growth. At the same time, our continued focus on cost discipline helped further improve earnings quality across the region. So overall, APEC delivered another strong performance, combining double-digit organic growth with improved profitability and continued operational momentum. Having said this, I hand over to Frank, who will take you through the key financials for the second quarter and the first half of 2026.

Thank you, Alex, and hello to everybody on the line. Let me start with a short overview on the EBIT to adjusted EBIT reconciliation for the group on page 10. In the second quarter of 2026, reported EBIT increased by 12.1% year-over-year to €38.7 million, driven by higher sales and improved profitability. As usual, depreciation and amortization from purchase price allocations were adjusted, and declined compared to the prior year due to expiring amortization from the IMS acquisition. Our adjustments remained very limited and included a positive one-time adjustment of provisions related to the efficiency program in the indirect area. As a result, adjusted EBIT increased to 43.4 million Euro corresponding to an adjusted EBIT margin of 9.6%. As such, the adjusted EBITDA margin improved to 13.2% and reflects our continued cost discipline and operational efficiency. Looking at the first half of 2026, adjusted EBIT increased to €85.9 million, while the adjusted EBIT margin improved to 9.5%. Moving on to page 11, where you see the bridge from EBIT to basic earnings per share. As mentioned earlier, EBIT increased to €38.7 million in the second quarter, driven by higher sales and improved profitability. At the same time, the finance result improved significantly to €-5.7 million, mainly reflecting lower unrealized FX effects as well as reduced interest expenses. The effective tax rate came in at 34.5%, While it is still affected by non-capitalized deferred tax assets relating to interest and loss carried forward, we continue to expect a tax rate of around 35% for the full year. Overall, the combination of higher profitability and improved finance results led to a strong increase in earnings. Basic earnings per shares doubled year over year to 48 Eurocent, while adjusted EPS increased to 63 Eurocent. For the first half as a whole, basic earnings per share amounted 93 Eurocent and adjusted earnings per share to 1,24 Euro, clearly demonstrating the progress we have made in terms of profitability and earnings quality. Moving to page 12, where you can see the development of the equity ratio. Equity increased by 3.1% to 500 In addition, equity was impacted by the dividend payment completed during the second quarter, as well as our ongoing share buyback program. As a result, equity ratio stood at 29.1%, at the end of June 2026, only slightly below the year-end 2025 level. Overall, our balance sheet remains very solid, underlining the continued strength of our financial position. Turning to page 13, I would like to speak about networking capital development. Networking capital increased compared to year-end 2025, mainly reflecting the usual In addition, we deliberately built inventory buffers ahead of the successful SAP S4 HANA Go Live at our Haldex facilities in the Americas in July. Trade receivables were somewhat higher due to a change in customer mix with longer payment terms, while trade payables developed preferably and offset a larger part of this effect. As a result, networking capital ratio increased to 17.6% of sales from 16.8% at year end. At the same time, we further improved the ratio compared to June last year, reducing it from 18.2% to 17.6%, mainly thanks to more efficient inventory management and improved payment terms. Overall, networking capital remained well within our target range. And now let me address the cash flow development on page 14. We delivered a very strong performance in the first half of 2026 with operating cash flow increasing to 86.6 million Euro compared to 30.5 million Euro in the prior year period. The main driver was a significantly lower cash outflow from networking capital reflecting the improvements and measures I discussed earlier. Tax payments remained broadly stable while the ABBA cash flow item benefited mainly from favorable valuation effects in ABBA assets as well as from positive changes related to deferred tax assets. Investments in property, plant and equipment as well as intangible assets amounted to 20.8 million Euro or to 2.3% of group sales and were fully in line with our full year guidance. Our investments remained focused on automation and modernization projects, the ongoing SAP S4HANA implementation, and selected production equipment investments supporting our Drive 2030 strategy. These investments also included the acquisition of real estate related to our former Italian acquisitions and the construction of our new facility in Naschig, which is scheduled to become operational next year. As a result, operating free cash flow increased significantly to €65.8 million in the first half of 2026, demonstrating the group's strong cash generation capabilities. Moving on to an overview of the leverage development on page 15. At the end of June 2026, the net debt to EBITDA ratio remained stable at 2.3 times compared to year-end 2025. despite cash outflows of 28.8 million euro for the dividend payment and 13.3 million euro for our ongoing share buyback program. Excluding IFRS 16 lease liabilities, leverage would have stood at two times. And now I hand back to Alex.