Thermador Groupe Sa

And so Kleernox had plans to build on this land. So to ensure the development of the subsidiary, we've decided to buy the land as well. As usual, we've taken out a loan to finance this acquisition. It was the case for C2AI as well. So we've got working with our normal partners, CIC, Léonès de Banque and Société Générale. And again, these are seven year fixed rate loans without guarantees. That's the financial aspect in terms of management. There are two shareholders who will stay in the company, Francisco Quiles and Fernando Mari. And Lionel Monroe will represent Thermador Group as chairman and he will be joining them tomorrow. So they started on this integration process. So we're very happy, I would say. So it's an opportunity for us to welcome the 40 employees and directors from this company. who I'm sure have a fantastic future in Thermador Group. So welcome to all of you. So now look at the different distribution channels. It's complete. You're familiar with this chart. And just to show you where those two new companies sit in these channels. this configuration you see the key linux and cdi ri c2ai both in in the international industrial market and the international markets which corresponds to our strategy our long-term strategy which is based on industry and export So a quick look at the price effect because the negative price effect at the end of the third quarter has not changed compared to the second quarter. You see on the orange bars on this chart shows you the price effect. And remember that between 2021, 2022 and 2023, we've passed on prices beyond 20% increases to our customers. So this adjustment we're seeing now is completely natural and fairly moderate to the increases just after COVID. So new housing in France with a slightly more detailed curve than usual with housing starts and permits, building permits granted month by month. It really seems that we've gone past that low point, especially in terms of building starts. We'll keep an eye on that over the coming months. But for those who are watching for the first time, I would just remind you that new housing in France impacts only 10% of our consolidated turnover in France, and that would be PB Tube, two subsidiaries, and Thermacom. So looking at the wholesalers in electrical equipment and sanitary solutions, Coedis, that's the next slide, and you'll see for the first time for a long while, there's a positive figure for September, 1.5%. However, on the DIY side, it's slightly downbeat again. And it continues. There was a little spike in May, as you can see on the positive line, but it has not followed through to the end of the year for DIY. So a look at industry indicators index. This is the PMI index, which certainly industry will be the major part of our turnover next year with the arrival of these new companies. And you'll see that these indicators that we see in front of us now for France on the left hand side and on the right hand side for Europe are around 50. And that means that the market is stable in the manufacturing industry. And that will help our companies working in industry. A few words about turnover.

As we said, in retail, we've got not very good results.

So in terms of turnover for our subsidiaries involved in the retail markets, we've got a drop of 9.4%. And if we look at the professional channel, And that includes subsidiaries involved in public works, swimming pools, industry, and construction. So those subsidiaries... I've got showing reporting minus 1.9%. But I think it's interesting to look at the third quarter because we communicated a recovery effect on the second quarter. And indeed, we've seen an improvement through. And we see this with 13 of our subsidiaries have actually shown growth in terms of turnover in the third quarter. in spite of the price effect of minus 1.5%. So this is fairly encouraging, I would say, for this third quarter, both for construction, watering and industry, of course. And then the other elements, you'll see that there's a notion of constant scope there for the columns 2025 and 2025 constant scope. Basically, there are two subsidiaries that have brought in 5 million turnover. which is Altometering and C2AI, and they were born, which was 30th of June, and Altometering was the third quarter of last year. So you see that 5 million, you'll see that in the constant, has gone from the constant scope. So overall, if we look at the Q3, we've got plus 2.2% to constant scope. Now, the impact on our financial structure. so it remains very solid because we have equity which is above 384 million euros that's the result of our capital and the accumulation of profits so that goes along hand in hand with the capitalization of the stock market value of the company and we regularly communicate on the value of us the value of our share because that shows our management of our WCR. We're talking about stock here, so we've got 165 million euros of stock compared to 134.9 million at the end of Q3 2024. We've got the indicator of number of days of stock, which is compared to the days of sales. At the end of September, we had 196 days of stock compared to 190 days last year. So we've got a slight increase in stock. I should remind you The delivery times are about three weeks longer for our shipments coming from Asia. And that means we have to have a bigger buffer stock in our subsidiaries. And that explains part of that difference. And we think there's also an improvement to be found in terms of number of days, and we'll communicate on those dates, on those stock values at the end of December. So we're able to report a very positive net cash position. plus 85 million compared to 46.8 million this time last year. So increasing cash position. We're coming out of the watering and the swimming pool season. Those companies have not yet bought their new stock for next season. So at the end of September, there's a favorable position. And so it's what we could call a high position in terms of cash.

But this is really whatever.

It's still a record level. That's thanks to our buyers, in particular in the subsidiaries, but also our accountants who keep an eye on customer payables and work regularly with them to have this low-risk position with the customers. In terms of loans, I mentioned the two new loans for the shares in C2AI and Equinox, so 47.6 million compared to 32.6 through those new loans, and we've continued to reimburse our existing loans. according to the installment repayment schedules. We also wanted to make a comment on customer receivables. I think everybody has heard about the increased number of bankruptcies and so forth, so we're very vigilant about that. And we have risks which are considered as low and controlled. In the next slide, it shows you the development in cash position, which the white bars show the end of December position for those previous 10 years. But you can see that it is a very high level at 85 million, but that's in relation with our investments. We planned 9.3 million investments at the beginning of the year. At the end of June, we decided to go down to 6.6 million. That's simply because those projects, the difference of 2.7 million, those would be projects that should have been delayed to next year. We've also got projects that will be paid for before the end of the year. The major ones would include property, which is 2.4 million. and we will maintain that amount for 2025 and in major investments there's in terms of capex there's also there's the automation project for logistics at spherical and that's 1.7 million that will be paid by before the end of december for that automation project We've also got projects for buildings for next year in Alsace for the purchase of a plot of land for a district labo and an extension project for SFERECO to accommodate the new automated solution. So those will be CAPEX investments for next year. And then that moves us onto our share price. In the short term, it's fairly rational, and the long term, it's pretty irrational, let's be honest. But if we take it over a long period, and this is over a period of 10 years, and you can see that every day on our website, in real time, day after day, And this is from yesterday, and that shows an overall return for Thermonogrup at 10.3%, compared to 8.6% for the CAC40 in general. A few words about the prospects, and then we're going to move on to fairly short-term solutions, given the unstable political situation in France in terms of the government. which is obviously not going to help some of our businesses, in particular new housing. So these outlooks are fairly prudent for the next few months because we've got no certainty about what's going to happen. It could, for example, have an impact on the morale of the households and reduce their spending, for example, in terms of spending on housing, new housing. So for the grants, MaPrimeRénov' and the CEE grants schemes, MaPrimeRénov' is really at its lowest point, and we think that it won't have any great effect on the activities of the group in the longer term. However, the energy savings certificates, which is a mechanism financed by the energy providers and therefore paid for by consumers, This measure will certainly be extended from January the 1st, 2026, because we're going to be moving into the sixth period of these energy-saving programmes in France. And this period will begin in 2026 and finish in 2030. However, we are still waiting for the decree concerning that energy renovation programme. It was expected for autumn. In the autumn of 2005, we still haven't got it yet. It's true that autumn is not yet over, but things have slowed that down, especially in the government. In terms of DIY, Our customers say that footfall in their shops, DIY shops, is not good. The morale of the French people, the French spender, is low. So our retail activities have no real outlook for the immediate future. Public works, unfortunately, it's the same sort of trend. The political context in France is not encouraging public work projects. They're generally financed by state funds. And the upcoming municipal elections are not helping that either, because things tend to grind to a halt during those periods. So no great shakes for the fourth quarter. However, for industry, more positive, because our market shares are low, so we continue to find organic growth through new products, new markets, new customers. Moving on to acquisitions, there's nothing significant or sufficiently advanced to talk to you about today. But in general terms, we're of course oriented towards opportunities with European companies, preferably in the area of industry or the water cycle markets. And that answers one of the questions we've already had on the webinar, because we've asked if these acquisitions could be made in China, and the answer to that is no. We've got enough to do in Europe, not to go to any other continents for the moment. The second question concerns acquisitions.

Thierry, who asks... He's wondering if that allows the group to find new customers in the agri-foods business.

OK, we will obviously improve our position in Spain. But in France, we're already suppliers to the agri-food business, but for products that Kinox don't necessarily already have and vice versa. So there are synergies to be found with products like pumps that we already sell in France. And these are resilient industries, so there'll be work to be done there. In terms of the price effect, going back to my slide, it should stabilize at close to minus 1.5% for the second quarter. semester but next next year it's pretty sure we'll be moving towards slight inflation because most of our suppliers in Europe in Europe two-thirds of our supplies are already talking about increases in prices in 2026 staff finally as I mentioned at the beginning of the webinar and I'm going to talk about again with Patricia who will give us more additional information. You know that we are particularly attentive to the absenteeism rate, which has increased in the last few years, and we're hoping to have an impact on that. We are not going to lie down and accept it. It's been the case in many countries, this increase in many companies in the country. We've got to be careful to introduce equitable measures so that the people who are 100% at work all the time don't suffer from the absenteeism of people who are maybe taking advantage of the very secure French system. But there'll also be measures to accompany our employees. to encourage more presence in our companies. Yes, we're talking operating preventative actions in recent years. We've got the quality of life and working conditions survey, which is every three years, and we're up to the third version. That gives rise to a number of actions in terms of working conditions. So that's a really good tool that helps our employees to express their thoughts any dissatisfaction they feel and any suggestions for improvement. That's the first tool. The second was to work on MST, musculoskeletal disorders. So a lot of our people work in logistics, of course, and so people have been with us a very long time. So as they get older, of course, the MST is more difficult as they approach retirement. So we're accompanying them on that particular aspect of posture, in particular. We've been doing that for two years now, and it's working pretty well. It's called MaVision. And it also includes people who are on the phones, in the offices, and not just the people in the warehouses. and those profiles have joined us, joined the program and that's been financed mostly by Groupama which is our insurance company which works our health insurance program. We've also working on inner soles, so orthopaedic correction for inner soles in working shoes, additional comfort for people who who have to wear safety equipment PPE and therefore that includes safety shoes. We were working with the work doctor and with the work psychologist to help people with well-being at work and that means that in some cases we can offer support to our employees in the work environment and that's a plus of course. And there's another project that I wanted to tell you about, which we've been working on for more than 18 months, and that is to run medical check-ups, and we're doing that with a clinic in Lyon, and potentially in Bourg-en-Joliot, which is nearer to us. So this is for employees over 50 and based here in Saint-Quentin-Felavier. And I think in two days, all the slots were filled. So 17 employees will be having a full medical checkup for prevention in terms of different illnesses. And that's obviously a big thing. and given the interest that people are showing that we'll be continuing with that in 2026 opening up new slots for employees and those those are all about prevention of course and to allow our employees to feel good at work and for those that are not so not feeling so good to feel better physically or mentally In terms of prevention, of course, diagnosis and tests are particularly oriented towards cardiovascular and, of course, cancers as well. So what we want to try and do is to do prevention to avoid accidents, serious health accidents of that sort. I also would like to mention that we were involved in October, for Pink October, for the fight against breast cancer, and we've broadened that scope throughout the group to support the Ligue de la Cancer, the League Against Cancer, and there were running races to help with that. And we're going to finish with outlooks, looking towards the past. You can see on this slide organic growth by quarter. Each bar shows growth per quarter. And you'll see that this is the first positive quarter for a couple of years. I don't want you to I'm not going to extrapolate and suggest that the fourth quarter will be plus 4% we of course we're hoping for a recovery but I think it's going to be very progressive and we have to be cautious with those predictions so we finished with our predictions on the and our slides and the first questions are coming in so Thierry would like to know what the impact of the variation of the dollar or the increasing strength of the euro is having on transport. So three questions there. So you start with the dollar, Patricia. So just to remind you, we pay 30% of our purchase in dollars and we hedge in spots. So it's not very exotic, but it allows us good visibility to our subsidiaries to monitor their purchases in dollars. So we've seen an improvement in the rate, of course, and this improvement started because we've had about six months of stock we're starting to make to see a benefit now so on the on on this near the second half of the year and the indicator will be the commercial margin of course the profit margin and in particular subsidiaries that evolved in diy because those subsidiaries which buy from asia We spend 130 million a year and 30%. I was just wondering why you asked me the question again. It's 30% and the total value is 130 million a year from Asia. And transport...

For Asia, 30% of our purchases.

from the 1st of March with signed contracts with two two transporters for to have fixed prices and so with so that will help us in terms of purchasing in terms of value but also better monitoring and so better quality These new people have a more structured approach to this. So we're improving our costs and hopefully we're not able to communicate on the gain that we've made to the end of June. But we are expecting to see a gain there. We'll communicate on that later. So, no impact of the tariffs, because we buy practically nothing from the US, but there are indirect impacts of course, because as you know, suppliers, Chinese suppliers are particularly offensive, and they're looking to recover volumes in Europe that they've lost in the US and some of our suppliers are suppliers to the USA as well. I've got a question from Cornice. In English.

So do you have a cash pooling in place?

Yes, for the French part. For France, we have put it in place. For Spain, we're going to put it in place. And that's what we're planning. And that allows us to increase the cash position for the whole of Thermidor Group. and have investments on a consolidated basis. And we remunerate our subsidiaries when they have profit, when they have, sorry, a positive cash position. So they earn a commission on positive cash position. Ah, yes. Here's a question. What are you planning to do with this strong cash position between now and the end of the year? Okay, so of course we'll have some cash to pay our dividends in April next year. And maybe you'll remember that Thermador Group is one of the few companies that has never reduced the absolute value of its dividends. So I think that's going to take a substantial part. Any ideas, Patricia, for the rest? Well, we'll finance our investments, our capital investments. Sorry, beyond, the question was besides CapEx. So next year there will be investments, of course. and the working cash requirement, so WCR. Growth is coming back. Stocks have been rebuilt. Subsidies will need cash for stocks. And of course, we're obviously very cautious, but we'll continue to invest that money. So to balance out the cost of our borrowings that comes out level. So we had a positive balance of 1 million in terms of net profit last year. Question from Jean-Pierre linked to cash.

So the question is... Sorry, I missed the question.

So the question of a possible increase in capital, Patricia will answer that later. But for an acquisition, an increase in capital is something we've never done before to get to raise cash. We could do it, of course. And I see that Jean-Pierre would sign up for that if we thought it was useful to do that.

But for the moment, that's not one of our options.

In terms of use of cash for acquisitions, I think you've answered that partly. I think we should say that once the interest rates are good and there's no guarantees on the loans, and the fairly low rates over seven-year periods for fixed rates. I think it's something that we have. We should use that tool. We have access to it. And I should remind you, last year, we made two acquisitions last year, which were financed from equity for 3.4 million. and SEDECO's acquisition too was from its own equity. Of course this will all depend on how interest rates changes and our relationship with some of our banks. So it's also an opportunity to work with our banks and show them that we are loyal to them. What about an acquisition in the UK? When I mentioned Europe, in my heart, the UK is still part of Europe. Yes, so we've got to work with, we work with the UK with SIFCO and we've also... If we do see an opportunity for an acquisition in the UK, we would happily jump on it. And of course, Neil, our interpreter, will be happy with that. A question from Thierry. With the group growing every year, is there a reorganisation of work for logistics in the warehouses? No, not particularly linked to the size of the groups. It depends on the size, the number of companies. logistics problems are handled inside each subsidiary. Svarko, Audreya, the bigger companies with a large number of people in their warehouses and even Thermador too, but for the moment, besides the automation project at Svarko that Patricia talked about before, there's no major change No different working times. We hope to serve our customers in the best possible way in a working day rather than in two or three shifts. So for the moment, no change.

No major change.

Is there anything you'd like to say? So in industry... Our trading allows our customers, all our customers who are at the end of their business days, means that we receive their orders the next morning and because we're well organized we can prepare during the day and the customer can be delivered within 48 hours. So if we had quicker logistics, we could go quicker, but that costs money, of course. And that's not what the customer wants. But in our trading system allows us to close the switchboard at 5 p.m. and this software allows us to carry on working through the night basically. Cherry is asking us if we are present at Investier Day. No, we decided not to go to Investier Day this year for budgetary reasons because the cost to the group was €35,000 and in difficult years like the one we're having at the moment Of course, it's all relative, of course, but we wanted to limit our expenditure, and that's why this year we decided not to attend.

That doesn't mean we'll never go again, but for this year, we're not.

Of course, it's unfortunate that for a company of a medium size like our own, it's a big amount of investment, 55,000 euros, whereas, of course, for a big company, it's nothing really. So are you thinking about buying back shares in the Anglo-Saxon way? No, we don't. What do you mean in the Anglo-Saxon way? I should say that's the way I understand it. That means we buy back shares to destroy them and therefore increase the value of our shares. We're not going to do that. because our objective is really to promote the liquidity of the share, i.e. the volume of transactions. The lack of shares on the market would be an advantage. We're too small for that to be of any advantage to us. What is the impact of AI on the group? So, the creation of a steering company is working on AI in our processes, and the first process that was worked on was order capturing, the OCRization of orders. That means recognition, character recognition. So we wanted to increase this proportion using AI to capture these orders automatically. so we are working with a an erp publisher to integrate ai that's the first project that we've adopted and then the knowledge of our sales teams technical teams and sales teams so our technical data sheets this is a subject which is of interest to us to work on and to secure of course ai always raises a question of security we've chosen to have solutions in-house And we've set up what we call an AI permit to train our employees in the use of AI to ensure they understand the rules to be respected. Now, we developed that with a young lady who's who's introduced this AI permit, which has been used by 140 of employees. So we're going step by step with AI. We're measuring the return on investment. And in particular, we want it to be a tool for employees to allow them to work on certain tasks using AI. So there's lots of IT involved, of course, but not only. So operational teams will be increasingly called upon.

So productivity gains, probably, yes.

To answer your question, Jean-Francois, but we can't measure that for the moment. We... We've taken all these initiatives because we believe that AI will be part of our lives, of course, as was internet before. But we've already integrated AI because we've been working on a sourcing module, which is used by six of our subsidiaries, which is a sales forecasting tool But you need to feed the machine, you have to feed the beast, so that will continue. That's part of the works we plan to go back to, and we're planning that at the moment. Jean-Louis. wondering if there's a plan to change the stock market in the medium term. No, no, Thermidor will stay on the existing stock market which of course is restrictive in terms of regulations and accounting standards but it does give us an easy vision to get through the next stages of our development. It's true that we do suffer from the regulations, the excessive regulations, but as we're already organized to respond to those requirements, we believe that we should continue in that same way and maybe ask the regulators to be more moderate and slacken a bit their regulations. And that's why we've decided to stay there. So Thierry, asking about cyber attacks in terms of confidentiality, we never... address these questions with investors. So I won't talk about that. But just to say that we have people inside Thermador working on these topics, and they work internally on cybersecurity, because we're really aware of the danger. Don't worry. It's a risk that has been identified and controlled. I have no more questions for the moment. It's 6.49pm. The impact on the future tax policy, I'm very familiar with Jean-François. I really don't know what the tax policy will be in the future, but what is sure is that the shareholders are particularly solicited. because it can put them in a bad mood but apart from that I don't think that corporation tax will be changed in a major way and because ThermoToc was never sought to optimize its operations fiscally I don't think that we will be facing any changes from a tax point of view. This morning we looked at the next finance law for 2026, the budget So we've got the CVAE tax, that's all.

And we will gain from that.

We're not taxed in terms of exceptional contributions. So there's very little impact at our level. But those are subjects we keep an eye on, of course, and we were monitoring that only this morning. There's no impact for the moment. So no holding planned to be set up in the Cayman Islands for Thermidor Group. No major impact. So there's a few minutes left if you have any more questions. But if it's not the case, we're going to bring this webinar to a close. 94 participants. Very assiduous. So thanks to all of you for your loyalty, your presence, and your questions, and your interest in Thermador Group. And I wish you all an excellent evening. The next webinar in a few months, in January, to report on the full year 2025. Thank you to you. Good evening.