Stabilus S.A.

Good morning and a warm welcome, dear ladies and gentlemen, to the Analyst and Investor Web Conference regarding the Stabilus results in the first quarter of fiscal 2026. At this time, all participants have been placed on a listen-only mode. The floor will be open for questions following the presentation. Let me now turn the floor over to your host, Dr. Michael Brixner.

Hello and welcome to our quarter one results call of the Stabilus Group. As always, you have our CFO Andreas Jäger and myself, Michael Büchner, being the CEO of the Stabilus Group in the call. And I'm happy to lead you through our results for the first quarter. And then for sure, we'll also have a Q&A session at a later stage. In a nutshell, I would say we hold our course in a very difficult market environment, as you can imagine, in the automotive and also in the industrial space. However, We had a very strong cash generation. If you compare that to the prior year, we've been doing particularly well. And we've been doing particularly well in terms of our operational management of the cash flow. Our cash flow came out with 23.9 million. And yeah, like for like last year comparison, we've been at 8.9 million. So very positive development in that term. Our EBIT margin stays strong with 10.1 percentage points. And as you all know, it's pretty much back and loaded this year round because towards the second half of the year, our efficiency program and the new launches kick in. That's why the year will be for us back and loaded in terms of the margin development and loaded on the second half of the year. Also, A good highlight was the EBIT margin we had in China. As you can imagine, and we always talked about it, the environment in China is getting tougher in terms of competition. And this is why we also took the decision not to hunt for each and every business, but concentrate also in these difficult times on the EBIT margin development. And we had an outstanding result. If you compare that also to the prior quarters and even the prior years, we had in the first quarter a record EBIT margin in China of 18%. However, I said at the beginning already, we for sure are in a challenging market environment. And you see that forefront in our revenue for sure, because the revenue was on 291 million euro, which at the end of the day is 7%. change versus the quarter one prior year, and it's becoming softer. So the first quarter is particularly kind of an impact we saw in predominantly China, due to the fact that this consumer sentiment was particularly low. Then on the other hand, we also are as we are represented predominantly in the upper segment cars and the electromobility like Tesla, we also feel the market environment. On the other hand, there is a fixed impact of negative 3.7% year over year, which at the end of the day is unfavorable for us. However, as I said before, the margin generation in China was particularly good and also the cash flow generation was on a very good level for us overall. And the EMEA and Americas region stay very strong in terms of organic development. The region we currently focus on is Asia Pacific, as you know. Our overhead reduction program is well on track. We started, as you know, this transformation program in the first quarter. So starting with October, we've been concentrating on cutting down costs on a second step in the overhead structure. You know that over the course of the past two years, we always have already concentrating on the reduction of our costs predominantly on the operation side. We've been doing automation projects in co-plants, which materialize throughout this year and the years to come. And now, as you already have been informed about, quarter one means starting October last year, we started also to cut down on overhead costs. And this transformation program is basically a boost for us for the second half of the year and the years to come. And we're basically taking out already in 2027 19 million euro in terms of fixed costs on our P&L. And this is something which gradually kicks in in the next quarters ahead of us. Net leverage ratio. You know, it's important for us to stay around three. We have four and a half as a covenant, but we want to stay well below that with our net leverage ratio. And we've been in the range of three, so three or four this time around as of December. And I would say, as I said at the beginning, we at the end of the day start in a market environment, which is Soft and challenging with a strong and good position predominantly on the cash flow. So with that, we go into the next page and I would like to draw your attention a bit more on the technical stuff. The growth drivers for here and now, the months, quarters to come, and also the next years. We invested in the past years, as you know, on the industrial power rise. Why is that particularly important for us? We started in the same thing with gas springs, right? We are the leading company for gas springs. We brought the gas spring on a very good position, nice quality, excellent costs into the market, also for all kinds of industrial applications. You find them everywhere. So we're now doing the same with industrial power rise, right? We started on the automotive side. are producing on highest quality and best cost position. The power rise now for the industrial space, we've been having revenues beyond 5 million in the first 12 months of our doings last year. So it grows double digit. And this basically receives a lot of interest of our customers. It receives a lot of technical support by our customers. And they love this product because it's very robust. It's built on automotive lines to a very nice cost position. And as I said, we already started after the market introduction, which happened early last year. With 5 million, we've been growing. generating in terms of revenue on a very exceptionally high margin. As you can imagine, industrial power rise, part of the industrial space and industrial business enjoys good margin at this point in time. Second position is, here is a growth driver for us, the door actuation. Door actuation, a wonderful product to be a next generation of vehicle comfort, right? It opens and closes doors automatically. It's a must have for all kinds of cars with autonomous driving, self-parking, but also it enjoys exceptionally good growth rates in China these days. So we are in Geely, in Korea, we are in Hyundai. Actually, we start Mi Auto this year and there is not a single customer who's not interested in this next generation vehicle comfort. And this takes off in the second half of the year as our customers predominantly BMW, but also Tesla wants more and also Mi Auto, so Xiaomi will fill the pipeline for the upcoming launches and we enjoy also good business wins there. And as I said before, yes, currently in China, the consumer sentiment is on a decline. We saw that October, November, December, but this technology enjoys very nice growth rates and it basically goes off in the second half of this year and will greatly help us in terms of sales. Last not least, also the third growth driver for us is automation and the automation synergies. As you can imagine, over the course of the last years, we've been working a lot on synergy generation in terms of sales and technology with our Desteco portfolio. And now, here I would like to highlight first time that we are working already also on humanoid robots. and industrial robotics systems. We have not only gripping systems, which we tailored now to humanoids and to industrial robots, but also we are with one of our OEMs, where we are already in a strong business relationship in the automotive side, who decides to produce or decided to produce humanoid robots, robots big scale, US company, US-based company. We are working on... electromechanical solutions for the hinges of humanoid robots. And this is a development project which we recently entered. And this project, along with industrial robotics, gripping systems, the opportunities we see also for us in the automation space materializes as we speak and helps us a lot also throughout the year to generate additional highly profitable margins. business. So the three growth drivers and the growth sentiment remains unbroken and unchanged. The big growth drivers, industrial power rise, automation technologies, direct tuition, they are kicking in. And as you can imagine, along with the program we are driving to do in reorganization, restructuring on the overhead side, we take and use these days and times of softer business to actively shape our future. So that's the strategic points we've been achieving over the quarter one, October, November, December. However, I would like to also go into the details of the financials with you before I hand over to Andreas for the details on the regional view. Overall revenues, as I said, 291 million in terms of Euros, organic growth was soft, minus 7%, FX impact around about 4%. And then we see here this China impact, predominantly Europe, North America growing well. In China, consumer sentiment, upper segment cars, you know, when inflation hits the fan, people decide to go for lower segment cars in difficult days. We are with our products predominantly on the top segment cars, and this leaves its marks for sure, but we assume that being a short-term effect, which at the end of the day will recover in the second half of the year from our perspective. The Steko Synergy is well on track with 1.7 million at this point in time. Our target this time around is 10 million for the year. We will achieve that. Our forecast shows that. As I said, there are several elements in the pocket, like the production of gripping systems for human weed or other elements for autonomous and robotic systems. In terms of EBIT margin, our EBIT margin came in with 29.3 million, so at 10.1%, predominantly supported by a very strong industrial business, but also by China. Because we decided in China to go for EBIT margins, not necessarily grabbing all the businesses around there. Well, knowing that the door actuation business at the end of the day has a higher margin to begin with. We said we rather focus on the high margin products and the door actuation systems in order to generate good margins for us. And this strategy materializes. It's basically an 18% EBIT margin in China, overall 10.1%. And this, at the end of the day, will also improve over the course of the year as our effects of our restructuring projects kicks in. For sure, the stake or cost synergies are still on track and we monitor them on a quarterly basis. 0.5 million. Here the target is for the year 4 million. And this is absolutely what we will achieve. Net profits are impacted for sure by FX losses. But however, also here, If X and tax expenses, they are kicking in early the year, this is something which you will see develop positively over the course of the year. And then last not least, our free cash flow, which is exceptional good. The free cash flow is on 23.9 million. We already got a question beforehand, whether this be driven by programs we teach on the financial structure, but this is basically a good management of the operational side, a good cost control, good control on the forecast in all levels on the operation side, which drives that and less financing programs. So with that, I would hand over to Andreas for some details by region.

Good, thank you very much, Michael, and a very warm welcome also from my side. I go directly into the region, and I would start with Americas. In Americas, we see in euro a minus of 5.7% in the revenue, but if we consider the ethics or the effect from foreign exchange rate translation, in America, the organic growth was only minus 0.5%. The EBIT margin at 4.7%, you're not really satisfied, and Michael already mentioned it briefly, and I will come back to that on the next slide. In EMEA, also in reporting currency, the revenue minus 1.4%. If you also factor out here, the FX impact, we are only 0.3% negative. The margin at the solid 10.8%, considering the slightly lower volume, we could even increase the EBIT margin by 1.9 percentage point. That shows on one hand that we really took out fixed costs and that we also worked on flexing our cost basis. In Asia Pacific, in the reporting currency, minus 30.6%. year on year. Michael already mentioned it, predominantly in China with the challenging market environment in automotive. But the EBIT margin, clearly the highest with 18.1%. And considering all the challenges and the lower volume, we could almost maintain the EBIT margin in percentage point. It went down only by 1.3 percentage points. If I then go now more into the details for Americas, you see again on the revenue, the minus 0.5%. We grew organically in automotive gas spring and in power rise. And if you compare that slight growth in automotive gas spring and power rise with the latest S&P data from automotive, they were slightly negative. almost minus 0.8%. So also, if we take the market as a benchmark, a solid development of the revenue. On the EBIT side, we are not fully satisfied with what we achieved in there. On one hand, we saw the volume impact. We also saw and we informed you at the year-end presentation already that we changed the allocation and the recharges of the intellectual property, right? So that had a negative impact on the EB. But then also the challenges we had in Mexico in the U.S. gas spring operation where we had a higher turnover in the workforce and that drove additional costs for training and also hampered the efficiency in the operations. If we then move on to EMEA, we can show a different picture. In EMEA, we are almost at prior year level if you look at the organic growth. We saw a slight decrease in automotive gas spring and industrial automation. On the other hand, we grew in automotive power rise. Also, if we here benchmark ourselves with information that we received from the S&P automotive market with the minus 2.2%, we delivered better numbers than the S&P number told us. If you look at the EBIT slightly lower volume, but it's clearly higher EBIT margin and even in absolute numbers and increase of the EBIT that shows we really took out fixed costs in Europe and it could also flex to the volume our production costs. The last region then that I will cover is then APEC. In APEC, we already saw the decline that Michael at the beginning told us. The major impact we saw in this minus 24.9% comes from China. It's a challenging market, as Michael already said. If you then look at the development of the EBIT, yes, in absolute number it went down, but we maintained a very solid margin of 18.1% in a very challenging time. environment. If you then look at the development of the business segment by market segment on the next slide, you saw that we slightly could reduce our portion from automotive with 54%. In Q1, we were at 57%. However, most of the segment showed a negative development. If I then continue with the net leverage and the net financial debt on the next slide, you'll see since 2024, we could decrease the net financial debt by 7.5%. And if you compare that, what we achieved in Q1 26, we could reduce the net financial debt by 13.3 million and reducing the debt and bringing down the leverage ratio is clear priority. And you also said we will bring it to 2.0 within the next two years. On the networking capital, Michael mentioned it at the beginning when we talked about the cash generation. You see during the last three periods, the networking capital came clearly down and we are now at 218.6 million. Or if you compare it to the ratio and comparison to the revenue, it came down again to 17.3%. The investments, you see them year over year. And then the first quarter, the first quarter was with 18.1, a little bit on the lower side if you look at the investment. However, this has more to do with the seasonality. For us, it maintains a priority to invest in the future, in develop new and interesting product technology, smart door actuation, electric grippers, and also the automation of our production facility remains a priority. And with that, I would give back to Michael for the outlook.