8/4/2026

speaker
Operator
Conference Operator

Good morning, ladies and gentlemen. Thank you for standing by and welcome to the five and plus second quarter 2026 results conference call. At this time, note that all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, please press star then one on your telephone keypad. and if you require immediate assistance for the operator, please press star zero. Je vais maintenant céder la parole à Stefano Bertoli, directeur des communications et des affaires corporatives. I will now turn the floor over to Stefano Bertoli, director of communication and corporate affairs. Please go ahead, sir.

speaker
Stefano Bertoli
Director of Communications and Corporate Affairs

Bonjour à toutes et à tous. Good morning, everyone, and thank you for joining us for our Q2 2026 results conference call and webcast. We will begin with a short presentation, followed by a question period with financial analysts. Joining us this morning is Richard Perron, our president and CEO, and Alban Fournier, our CFO. We issued our financial results yesterday and posted a short presentation on the investor section of our website. We would like to draw your attention to slide two of this presentation. Information in this presentation and remarks made by the speakers today will contain statements about expected future events and financial results that are forward-looking. and therefore subject to risks and uncertainties. A detailed description of these risk factors that may affect future results is contained in our management's discussion and analysis of 2025, dated February 24th, 2026, and available on our website and in our public filings. In the analysis of our quarterly results, you will note that we use and discuss certain non-IFRS measures, which definitions may differ from those used by other companies. For further information, please refer to our management discussion and analysis. We now turn the conference over to Rishabh.

speaker
Richard Perron
President and Chief Executive Officer

Thank you, Stefano. Good morning, everyone, and thank you for joining us. While the second quarter presented a more challenging operating environment, our results demonstrated the strength of demand across our strategic end markets and the resilience of our business. We delivered another quarter of solid growth, capping a strong first half of 2026 in support of our full-year objectives. Revenue increased 28% in Q2 and 30% year-to-date, reaching just over $240 million for the first six months of the year. Adjusted EBITDA increased 10% in a quarter and reached $55.8 million year-to-date, representing growth of 24% over the same period last year. Profitability remains strong, although margins reflected higher input costs as expected and temporary reduced operational efficiencies. Most of these cost pressures are expected to be recovered over time. The equipment downtime and suboptimal operations experienced during the quarter and associated incremental expenses are temporary in nature. Turning first to specialty semiconductors. The business delivered a strong quarter reflecting structural demand across our strategic end markets. Terrestrial renewable energy had a standout quarter, with higher volumes translating into record quarterly revenue. This performance reflects our key customers' continuous expansion and reinforces our position as a critical supplier within its value chain. Commercial activity also remained very strong in space solar power. We secured significant new contracts awards in H1 and participated in a record level of bids by dollar value during the quarter. This momentum reinforces the structural growth of this end market. It also underscores Azure's position as a global leader and SolarCell Technology and a partner of choice. The quarter, however, was not without challenges. Both our renewable energy and space power businesses experienced comparable levels of unplanned equipment maintenance. Our teams responded quickly through contingency planning, operational flexibility and targeted inventory allocation. We continued to support customer demand and maintain deliveries during the quarter. Our teams continue to resolve the remaining issues and strengthen preventive maintenance measures. Beyond these temporary operational impacts, margin contraction and specialty semiconductors also reflected our middle input costs. A portion of these costs is expected to be recovered over subsequent quarters, although the timing will vary by product and customer. In the meantime, we are working to partially offset these pressures through economies of scale and continued operating efficiencies. Performance Metros also delivered a solid quarter. Segment revenue increased nearly 40%, driven primarily by our volumes of business-based products. As anticipated, margins continue to normalize from their record levels achieved last year and sustained in the first quarter. This reflects higher metal input costs and a significant increase in chemical costs in recent months. Even so, the business continues to generate profitable growth and demonstrate the resilience of its portfolio. Halfway through the year, we continue to take a pertinent approach to our outlook. Dual political risks continue to evolve rapidly and influence inflation across many regions. Virus input and operating costs remain elevated. We're also increasing production volumes and operating our equipment at high capacity while integrating a significant number of new employees. In this context, we remain firmly focused on discipline execution and operational excellence. As we enter Q3, our priorities are to improve operational and maintenance processes, advance our productivity initiatives, and execute our capacity expansion plans. These expansion plans all remain on plan. Finally, our balance sheet continues to provide us with significant financial flexibility. Organic investment remains a priority as we expand capacity to support contracted demand. We also continue to actively evaluate external opportunities that could complement or extend our capability. Near-term impacts and quality variations aside, we are building a business position to deliver sustainable, profitable growth over the long term by supplying advanced materials to critical industries. That strategy continues to be validated. Customers increasingly value secure, reliable Western supply chains, particularly in markets tied to renewable energy, space, security, and advanced technology. These trends reinforce the value of our differentiated capabilities, manufacturing footprint, and long-standing customer relationships. As a result, we remain well positioned to create sustainable value by executing our growth strategy. With that, I'll turn the call over to Alban, who will review our financial results and outlook in more detail.

Disclaimer

This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.

-

-

Investor presentation