Q3 2026 Stabilus SE Earnings Call

August 3, 2026

Speaker #2: I've got this feeling so strong. Give me person to person, gonna get me.

Speaker #1: Sie hören Musik, bis der Konferenzleiter die Konferenz eröffnet.

Speaker #2: Give me person to person, don't you keep me waiting all the life. Yeah, yeah. Give me person to person, got to get me.

Speaker #1: You will hear music until the chairperson opens the conference.

Speaker #2: Don't you keep me waiting all my life. Don't you keep me waiting all my life.

Speaker #1: Sie hören Musik, bis der Konferenzleiter die Konferenz eröffnet.

Speaker #3: The analyst and investor web conference regarding the Stabilus results in the third quarter of fiscal 2026. The conference will be recorded. At this time, all participants have been placed on listen-only mode.

Operator 4: Analyst and Investor Web Conference regarding the Stabilus results in Q3 of fiscal 2026. The conference will be recorded. 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 Büchsner.

Operator: Analyst and Investor Web Conference regarding the Stabilus results in Q3 of fiscal 2026. The conference will be recorded. 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 Büchsner.

Speaker #3: The floor will be open for questions following the presentation. Let me now turn the floor over to your host, Dr. Michael Bchsner.

Speaker #4: Ja, guten Morgen, and welcome to our Q3 2026 results call. I would like to start this time around with the key takeaways for you.

Michael Büchsner: Good morning and welcome to our Q3 results call. I would like to start this time around with the key takeaways for you. First of all, yes, we completed the sale of Fabreeka and Tech Products. As you all know, starting 1 May, we had the signing on 7 May and the closing was on 23 June in 2026. Also very important to our business is for sure our personal related measures we are taking as a very important pillar to improve our business and to do a business transformation. This transformation program is basically completed. All personal measures have been taken and we are enjoying the fruits of this success. Important to know is also that we increased our covenant headroom, so our covenant now is also 3.9 throughout the year 2027.

Speaker #4: So first of all, yes, we completed the sale of Fabric and Trecht products. As you all know, starting 1st of May, we had the signing and the closing signing on 7th of May and the closing was on the 23rd of June in 2026.

Speaker #4: Also, very important to our business are, for sure, our personnel-related measures. We are taking this as a very important pillar to improve our business and to drive a business transformation.

Speaker #4: This transformation program is basically completed, right? All personal measures have been taken, and we are enjoying the fruits of this success. It's also important to note that we increased our covenant headroom.

Speaker #4: So, our covenant now is also 3.9 throughout the year 2027. This is just to have some safety and also to consider the requests of some of the shareholders and analysts, who say we are getting too narrow in terms of the headroom we're having.

Michael Büchsner: This is just to have some safety and also to consider the requests of some of the shareholders and analysts who say we are getting too narrow in terms of the headroom we are having. Now we have a sufficient headroom also for the next 12 months in rough waters. This was a great achievement of our team negotiating with our banks. You've probably read it over the course of the past week. We have an intensive work along with Synapticon and are working on robot technology. This is something I will elaborate on at a later stage. Pointing out the two most important numbers 299, so close to EUR 300 million. That's the revenue number for the past quarter, with 10.8% EBIT margin. Yes, the revenues are under pressure. We'll talk a bit throughout the conference why that's the case.

Speaker #4: And now, we have sufficient headroom also for the next 12 months in rough waters. This was a great achievement by our team, negotiating with our banks.

Speaker #4: And you've probably read it over the course of the past week. We have had intensive work along with Synapticon, and are working on robotics technology.

Speaker #4: This is something I will elaborate on at a later stage. Pointing out the two most important numbers: 299—so close to 300 million. That's the revenue number for the past quarter, with a 10.8% EBIT margin.

Speaker #4: And yes, the revenues are under pressure. We'll talk a bit throughout the conference about why that's the case. It's—and this is something I'll tell you right away at this stage—it's really driven by China and some weakness in the Chinese market. At the end of the day, we are about four and a half percent below the prior year's sales number for the third quarter.

Michael Büchsner: This is something I right away tell you at this page, it is right away driven by China and some China weakness in the market, that we are, at the end of the day, 4% to 4.5% below prior year's sales number for Q3. However, we managed, even with these lower sales, having a better EBIT margin. This is something we are particularly proud on. A big share is driven by all these efficiency programs we are doing along the line. Last year we have been at 10.5%, and this year is 10.8%, so increase on EBIT margin despite some lower revenues on Q3 this year compared to prior year's Q3. Technical stuff. On the next page, you see some more details in terms of the transaction overview for the sale of Tech Products and Fabreeka.

Speaker #4: However, we managed, even with these lower sales, to have a better EBIT margin. And this is something we're particularly proud of. A big share is driven also by all these efficiency programs we are doing along the line.

Speaker #4: Last year, we were at 10.5%, and this year it's 10.8%. So, there's an increase in EBIT margin despite some lower revenues in the third quarter this year compared to the prior year's third quarter.

Speaker #4: Technical stuff. On the next page, you see some more details in terms of the transaction overview for the sale of Tech and Fabrica—Tech products and Fabrica.

Michael Büchsner: Tech Products and Fabreeka have been a good asset for us. We, at the end of the day, acquired them with a big acquisition in 2016. However, they are basically not in the core of our business and we put them held for sale 1 May. Had the signing 7 May. It was a flawless process to selling it to the VMC Group. They, at the end of the day, have a broad portfolio in that term already, and it is very complementary to their portfolio. They have been, from the beginning, very interested. It was, at the beginning, kind of a process where we had more interested people or companies in the scope. At the end of the day, we did narrow it down to the best option we had in both thinking about the portfolio fit and also in financial terms for us.

Speaker #4: They have been a good asset for us. At the end of the day, we acquired them with a larger acquisition in 2016. However, they are basically not at the core of our business.

Speaker #4: And we put them held for sale on the 1st of May. Had the signing on the 7th of May. It was a flawless process to selling it to the VMC Group.

Speaker #4: They, at the end of the day, have a broad portfolio in that term already. And it's very complementary to their portfolio. So they've been, from the beginning, very interested.

Speaker #4: At the beginning, it was kind of a process where we had more interesting people or companies in the scope. But at the end of the day, we did narrow it down to the best option we had, considering both the portfolio fit and also the financial terms for us.

Speaker #4: The enterprise value was $92 million at that stage, and it was a successful business for us. We did grow it a lot, and the margin was exceptionally good.

Michael Büchsner: The enterprise value was EUR 92 million at that stage, and it was a successful business for us. We did grow it a lot and the margin was exceptionally good. It was in the range of 30%. Revenue and EBIT margin 2025 were also remarkable. The closing did happen on 23 June. Now, what did we sell? Just a reminder for everybody, this is basically, yes, some things in relation to management of vibration and velocity control, however, not really fitting in a perfect way to our portfolio. You know that we are concentrating now on expanding on the automation side, the robotic side. These elements, they have been to vast majority components for mechanical movements, rubber, and plastic mounts. This is, at the end of the day, what we sold.

Speaker #4: It was in the range of 30%. So, revenue and EBIT margin for 2025 were also remarkable. And the closing did happen on the 23rd of June.

Speaker #4: Now, what did we sell? Just a reminder for everybody. This is basically, yes, something in relation to management of vibration and velocity control. However, it is not really fitting in a perfect way into our portfolio.

Speaker #4: And you know that we are concentrating now on expanding on the automation side, the robotics side. And these elements, they have been to a vast majority components for mechanical movements, rubber and plastic mounts.

Speaker #4: And this is, at the end of the day, what we sold. We now have a stronger focus on our core business with the electromechanical, intelligent motion control and automation business.

Michael Büchsner: We have now a stronger focus on our core business with the electromechanical, intelligent motion control, and automation business. That is something to concentrate on because we will hear something on this playground later on with a great collaboration we have been starting along the line. What did we do in terms of this transaction? At the end of the day, as I said already, it is a wise move to basically concentrate on the core portfolio, which we do with that. We had limited synergies way forward, and we used the monies we got for deleveraging our balance sheet, and it is perfect fit to VMC Group, and they took on the complete business from us. This was a strategic decision, value-creating for both sides. Yeah, I have been touching that point already. We are progressing in a big way with our move towards industrial business.

Speaker #4: And that's something to concentrate on, because we'll hear something on this playground later on with a great collaboration we've been starting along the line.

Speaker #4: So, what did we do in terms of this transaction? At the end of the day, as I said already, it's a wise move to basically concentrate on the core portfolio, which we do with that.

Speaker #4: We had limited synergies going forward, and we used the monies we got for deleveraging our balance sheet. It's a perfect fit to the VMC Group, and they took on the complete business from us.

Speaker #4: This was a strategic decision, value creating for both sides. Yeah, I've already touched on that point. We are progressing in a big way with our move towards industrial business.

Speaker #4: Not only was there a couple of years ago when we bought the stake, which is a great success in terms of beefing up our margin and also a great success in terms of the sales opportunities we have, but we're also investing now in the smart rotary actuator business for humanoids.

Michael Büchsner: Not only that, a couple of years ago, we bought the DESTACO, which is a great success in terms of beefing up our margin, which is a great success in terms of sales opportunities we have. Also we're investing now in the smart rotary actuator business for humanoids. This is just another pillar for us to strengthen our business. Why is that? You see that over the course of the past years, it's wise for us to invest into the industrial space. I've been mentioning that our sales have been with EUR 300 million, a little less than last year, around about 4.5%. However, our industry business, and we'll see that at a later stage, is actually improving. It is year-over-year 8% plus on the industrial space.

Speaker #4: And this is just another pillar for us to strengthen our business. So why is that? You see that over the course of the past years, it's wise for us to invest into the industrial space.

Speaker #4: I've been mentioning that our sales have been, with €300 million, a little less than last year, around about 4.5%. However, our industrial business—and we'll see that at a later stage—is actually improving.

Speaker #4: And it is, year over year, 8% plus on the industrial space. So, it was exactly the right decision we took to invest more, because also we are generating—aside from higher sales—we’re generating nowadays the majority of our profits in this playground, because the margins we are tackling with the businesses are exceptionally good.

Michael Büchsner: It was exactly the right decision we took to invest more and to foster our business on the industrial side. Because also we are generating, aside of higher sales, we are generating nowadays majority of our profits in this playground because the margins we are tackling with the businesses are exceptionally good. If you see as an example, the DESTACO business and also other business opportunities like the rotary actuators for humanoids. Please think about that. It's 30 rotary actuators per robot, per humanoid robot. You find them in all joints. We have basically a USP. What's our USP? We started along with a well-known partner, which is Synapticon, where we hold more than 10% of their shares, a collaboration where we invested a low single-digit million number to make sure that they develop along with us these robot joints.

Speaker #4: If you see, as an example, that is a good business, and also there are other business opportunities like the rotary actuators for humanoids. And you, please, think about that.

Speaker #4: It's 30 rotary actuators per humanoid robot. You find them in all joints, and we have basically a USP. So what's our USP?

Speaker #4: We started along with a well-known partner, which is Synapticon, where we hold more than 10% of their shares. It is a collaboration where we invested a low single-digit million number to make sure that they develop, along with us, these robot joints.

Speaker #4: They are basically experts in motion control, especially when it comes to software and safety. You need a safety layer for these kinds of robots.

Michael Büchsner: They are basically experts in motion control when it comes to software and safety. You need a safety layer for these kinds of robots. The humanoid robots, they need a safety layer in case power is down or other things happen. This thing, they're pretty heavy, can't fall apart or can't fall onto people. This is why there is a safety mode. Synapticon is working on the software, we are working on the mass production. As you all know, we are experts in mass production, this is why we've been expanding our business in there and are now exclusive working with Synapticon, are jointly selling these applications into the world, into robotics supplier, robotics manufacturer.

Speaker #4: The humanoid robots, they need a safety layer in case power is down or other things happen. These things are pretty heavy and can't fall apart or fall onto people.

Speaker #4: And this is why there is a safety mode. Synapticon is working on the software. We are working on the mass production. As you all know, we are experts in mass production.

Speaker #4: And this is why we've been expanding our business in there and are now exclusively working with Synapticon and are jointly selling these applications into the world—into robotics, employee robotics, supplier robotics, manufacturer. And the important thing to know is we did talk about that last week, and we're talking now about it because we wanted to gather some facts before we get to our shareholders.

Michael Büchsner: The important thing to know is we did talk about that last week, we're talking now about it because we wanted to gather some facts before we get to our shareholders, because we are known for executing what we talk about. This is what I also can tell you here, it's not like on these PowerPoint charts, we already sent first samples to our customers, not only the hardware, also including the software. This was a great success, is a great success, there is great growth coming up in that playground as you know. There is for sure headwinds we are currently dealing with. I also would like to give you an update on the headwinds. The light vehicle production on the year-to-year comparison is now for the Q3 on 22.9 million.

Speaker #4: Because we are known for executing what we talk about, and this is why I can also tell you here—it's not just on these PowerPoint charts—but we have already sent first samples to our customers, not only the hardware but also including the software.

Speaker #4: So, this was a great success, is a great success, and there is great growth coming up in that playground, as you know. There are, for sure, headwinds we are currently dealing with. I would also like to give you an update on the headwinds.

Speaker #4: The light vehicle production, on a year-to-year comparison, is now for the third quarter at 22.9 million. So if you add that up, it will not even reach the 90 million produced vehicles this year.

Michael Büchsner: If you add that up, we'll not reach even the 90 million of produced vehicles this year. This is some headwind we for sure see because the automotive business is a volume business, and we're just shy of 90 million, so we're behind the expectation of the market here. The market, actually, the original thought was that we would be above 90 million. Now it's below 90 million for the year, and this is for sure adding some pressure, along with competitive pressure in China. Asia Pacific is and remains an area of highest competitiveness, predominantly in China. We see here some pricing pressure, and this will continue. We know how to deal with it, right? We have wonderful actions in place to deal with this pressure and to come down with our costs. We're working on the purchasing side, on the operations side, dealing with our customers.

Speaker #4: This is some headwind we for sure see, because the automotive business is a volume business and we're just shy of 90 million. So we're behind expectations of the market here.

Speaker #4: The market—actually, the original thought was that we would be above 90 million. Now it’s below 90 million for the year, and this is for sure adding some pressure, along with competitive pressure in China.

Speaker #4: So Asia Pacific is, and remains, an area of highest competitiveness, predominantly in China. We see here some pricing pressure, and this will continue. We know how to deal with it, right?

Speaker #4: We have wonderful actions in place to deal with this pressure and to bring down our costs. We're working on the purchasing side, on the operations side, and dealing with our customers.

Speaker #4: However, this is just something which we—and this is the same for everybody else in the market—have to deal with. So, and then customer sentiment.

Michael Büchsner: However, this is just something which we, and it's the same for everybody else in the market, have to deal with. Customer sentiment. I mentioned customer sentiment, and we'll talk a bit about that on the next slide, that we talk about the split of the business. This is a concern as well, that the consumer sentiment is low. As I said, the industrial business is improving now. We see a light at the end of the tunnel. On the automotive space, it's still fragile. For sure, with all the geopolitical stuff around, there is a high attention of everybody on supply chain and supply chain disruption. Talking a bit about our business setting, and one thing you will see here, and this is different from last time we talked, the industrial business is gaining ground.

Speaker #4: Yeah, I mentioned customer sentiment, and we'll talk a bit about that on the next slide. Then we talk about the split of the business, but this is a concern as well, that the consumer sentiment is low.

Speaker #4: As I said, the industrial business is improving now. We see a light at the end of the tunnel, but the automotive space is still fragile.

Speaker #4: And then for sure with all the geopolitical stuff around, there is a high attention of everybody on supply chain and supply chain disruption. Talking a bit about our business setting and one thing we'll you will see here and this is different from last time we talked the industrial business is gaining ground.

Speaker #4: We are now seeing organic growth year over year of 8%. You can see that on the top left in this box—8% revenue growth versus the third quarter last year.

Michael Büchsner: We are now seeing an organic growth year-over-year of 8%. You see that on top left in this box. 8% revenue growth versus the Q3 last year. Unlike automotive, which at the end of the day, in organic way, was suffering -15% over last year. This also confirms the great initiatives we did to foster and strengthen our industrial business. Strengthening our industrial business is and remains a main focus point. Automotive is extremely important for us because the nucleus of our success is automotive. Because with economies of scale, highest level of quality expectations, this market of automotive drove us as Stabilus where we are, being a leader in many, many different segments, leading by a very nice cost setting and also extremely good performance and quality level.

Speaker #4: Unlike automotive, which at the end of the day in an organic way was suffering minus 15% over last year. And this also confirms the great initiatives we did to foster and strengthen our industrial business.

Speaker #4: Yes. Strengthening our industrial business is and remains a main focus point. Automotive is extremely important for us because the nucleus of our success is automotive. With economies of scale and the highest level of quality expectations, this market of automotive drove us at Stabilus, where we are a leader in many, many different segments—leading with a very good cost setting and also an extremely high performance and quality level.

Speaker #4: Yeah, this is why we are known in the industry for a very robust product, and this is why we also have no issues at all expanding into the robot market.

Michael Büchsner: This is why we are known in the industry for very robust product, and this is why we also have no issues at all expanding into the robot market. It's also a market which is highly competitive and asks for a lot of quality and quality aspects and, at the end of the day, quality guidelines, but we are able to deal with it. What did happen in the market over the course of the past quarter? This is an important chart for you. Automotive, yes, if you see the year-over-year change, it's even beyond the 13%, it's rather 15% organic side, driven by market weakness and pricing pressure. We see the automation and industrial machinery sector stabilizing. Distribution, independent aftermarket is growing. Commercial vehicle segment is growing. Energy and construction is growing. Aerospace, marine, rail, and defense is growing to an extent of 35% even.

Speaker #4: It's also a market which is highly competitive and asks for a lot of quality and quality aspects, and at the end of the day, quality guidelines.

Speaker #4: But we are able to deal with it. So, what did happen in the market over the course of the past quarter? And this is an important chart for you.

Speaker #4: Automotive, yes, if you see the year-over-year change, it’s even beyond the 13%. It’s rather 15% on the organic side, driven by market weakness and pricing pressure.

Speaker #4: And then we see the automation and industrial machinery sector stabilizing. Distribution-independent aftermarket is growing. The commercial vehicle segment is growing. Energy and construction are growing.

Speaker #4: Aerospace, marine, rail, and defense is growing—to an extent of 35%. Even so, all the initiatives which we've been doing over the course of the years, particularly also now with defense, are bearing fruit. We are growing; we're growing on the industrial side 8% organically, and we are growing in the sector where it really matters.

Michael Büchsner: All the initiatives which we've been doing over the course of the years, particularly also now with defense, are carrying fruits. We're growing. We're growing on the industrial side 8% organically, and we are growing in the sector where it really matters. The sectors which are highly profitable for us and where the customers really value our quality. This is something which was extremely important in the past quarter that we saw and see now the light at the end of the tunnel in that term. Let's talk a bit about the numbers. On the next page, you will find the first or the Q3 numbers. The revenue at the end of the day in organic way was -5% almost, 4.4% to 5.2%. However, you see that the organic area was -4.4%.

Speaker #4: The sectors which are highly profitable for us, and where the customers really value our quality. And this is something which was extremely important in the past quarter that we saw, and we now see the light at the end of the tunnel in that term.

Speaker #4: Now let's talk a bit about the numbers. On the next page, you will find the first, or the Q3 numbers. The revenue, at the end of the day, in an organic way was minus 5%—almost 4.4 to 5.2.

Speaker #4: However, you see that the organic area was minus 4.4%. Some areas of FX were even slightly positive, but the soft market, particularly in Asia Pacific, knocks us down in terms of revenues. As I said, the important thing is that the industrial business is holding up and getting stronger.

Michael Büchsner: Some areas of FX were slightly positive even, the soft market, particularly in Asia Pacific, knocks us down in terms of revenues. As I said, that the industrial business is holding up and getting stronger. EBIT margin, likewise. We have had 10.8%, which is remarkable considering this weakness on the revenue side. This is driven because of our high share of industry business, also driven by the good initiatives we did to strengthen our portfolio in the industrial side. On the profit, you for sure see the effect now of our divestiture. You see the sale of Tech Products & Fabreeka in this number, which was very good in terms of our profit.

Speaker #4: EBIT margin, likewise, and we have had 10.8%, which is remarkable considering this weakness on the revenue side. This is driven because of our high share of industry business and also driven by the good initiatives we did to strengthen our portfolio on the industrial side.

Speaker #4: Yeah. On the profit, you for sure see the effect now of our divestiture. You see the sale of tech and Fabrika—tech products and Fabrika—and this number, which was very good in terms of our profits.

Speaker #4: On the cash flow, you don't see this effect because, for sure, we adjusted all these effects and are currently a little lower than last year.

Michael Büchsner: On the cash flow, you don't see this effect because for sure we adjusted all these effects and are currently a little lower than last year, same time around, and in terms of percentage, it is 9.5%. This is basically driven by the lower sales and thereby less EBIT, which in EBIT the average generated driven by sales. However, the profitability is holding up very strong, and it is and will remain stable because of the good and healthy mix we have now between automotive and industry. On the next page, you see the 9-month view, so year-to-date. Actually, you see here that in terms of sales, there is a -6% almost in organic ways. Here, the FX rate is even more and having a bigger impact. The FX rate impact on the Q3 was only 0.6%. On the year-to-date, it's 2.2%.

Speaker #4: The percentage was around 9.5% for the same period. This was basically driven by lower sales and, as a result, lower EBIT, which in EBITDR we generated was also driven by sales.

Speaker #4: However, the profitability is holding up very strong, and it is and will remain stable because of the good and healthy mix we have now between Automotive and Industry.

Speaker #4: On the next page, you see the nine-month view. So, year to date, actually, you see here that in terms of sales, there is a minus of almost 6% in organic ways.

Speaker #4: Here, the FX rate is even more significant and is having a bigger impact. The FX rate impact on Q3 was only 0.6%. Year to date, it's 2.2%.

Speaker #4: So that means the organic side is kind of flat over the course of the year, and the FX impact earlier in the year was higher than it is now.

Michael Büchsner: That means, the organic side is kind of flat over the course of the year. The FX impact early the year was higher than it's now. We also think that for the rest of the year, it will be rather reflecting the Q3 FX rate than the yearly average. However, on the performance for the complete year, we are at 10.7%. There is, versus last year, for sure, this divestment effect of M&A, so that means the divestiture of -1.1% for us. You also see here that there was good cost synergies with this takeover the course of the year, EUR 1.7 million. Overall profitability also here in this view impacted massively by the sale of Tech Products & Fabreeka and the adjusted cash flow in the same range than last year.

Speaker #4: And we also think that, for the rest of the year, it will rather reflect the Q3 FX rate than the yearly average.

Speaker #4: However, on the performance for the complete year, we had 10.7%. There is, versus last year, for sure this divestment effect of M&A. So that means the divestiture of 1.1% is negative for us.

Speaker #4: And then you also see here that there were good cost synergies with the stake over the course of the year—$1.7 million overall. Profitability also here in this view was impacted massively by the sale of tech products and Fabrika.

Speaker #4: And they adjusted cash flow in the same range as last year, a little softer—driven by less revenue. However, it's still a strong position nevertheless because of the healthy business setting we have.

Michael Büchsner: A little softer, driven by less revenues, however, on a strong position nevertheless, because of the healthy business setting we have. Good. We would need to switch to the next page. The next three pages, you basically see, or next four pages, is by region, starting with an overall view on the Stabilus as a group. You see here over the course of the past five quarters how sales were doing and how profitability were doing. Over the course of the quarters, a pretty stable picture, right, in terms of the EBIT margin, the adjusted EBIT margin in the range of 10.5% to 11.2%, with a very good upset in 10.8% even in Q3 with a positive 0.3 basis points movement. In terms of sales over the quarters, pretty stable. However, as I said, the Q3 was less than the Q3 prior year.

Speaker #4: Good. So, we would need to switch to the next page. The next three pages you basically see, or next four pages, are by region.

Speaker #4: Starting with an overall view of Stabilus as a group. You see here, over the course of the past five quarters, how sales were doing and how profitability was doing.

Speaker #4: It was doing so. Over the course of the quarters, a pretty stable picture, right, in terms of the EBIT margin—the adjusted EBIT margin in the range of 10.5% to 11.2%, with a very good upside on 10.8%, even in quarter three, with a positive 0.3 basis points movement.

Speaker #4: In terms of sales over the quarters, pretty stable. However, as I said, the third quarter was less than the third quarter of the prior year. However, the business mix for us was positive, and this is why we've been generating good EBIT margins.

Michael Büchsner: The business mix for us was positive, and this is why we've been generating good EBIT margins. We would move on now to the different regions, starting with Americas. You know that early in the year we told you that we are suffering some performance issues on the side of Americas. You see here the EBIT margins gradually improving over the past two quarters. We've been at 8.8% in Q2 and now at 9.5%. This is a good indicator that not only the business gets a little stronger now in terms of also the industrial business, but also here, some of these effects of our performance-related issues in our plant of Mexico, we have been already settling, and we are on a good way to also complete this journey in order to improve our business substantially and sustainably. This is what we are working on.

Speaker #4: So we will move on now to the different regions, starting with the Americas. You know that earlier this year, we told you that we have been suffering some performance issues on the side of the Americas.

Speaker #4: You see here the EBIT margins gradually improving over the past two quarters. We've been at 8.8% in Q2 and now at 9.5%. This is a good indicator that not only is the business getting a little stronger now, in terms of the industrial business, but also that we are seeing some of the effects of our performance-related issues in our plant in Mexico.

Speaker #4: We have already been settling, and we are on a good path to also complete this journey in order to improve our business substantially and sustainably.

Speaker #4: And this is what we are working on. So on the next page, you see the EMEA picture. Here also, a similar picture—kind of stable this time around, right?

Michael Büchsner: On the next page, you see the EMEA picture. Here also, similar picture, kind of stable this time around, right? You see the upswing towards the end of last year, but then in the range of almost 12%, margin Q3, and the organic growth was also similar, 0.1%. Pretty stable compared to last quarter. We go on the next page and see, the APAC region. This basically comes down to China. Here you see a big swing, right? We see 20% over the course of the past year. This is something which is an issue which we saw coming, that's why we've been talking over the course of the last quarters about it. The economy in China is particularly soft. We saw this effect right in the Chinese New Year.

Speaker #4: You see the upswing towards the end of last year, but then in the range of almost 12% margin in quarter three, and the organic growth was also similar at 0.1%.

Speaker #4: So, pretty stable compared to last quarter. Also, not too spectacular here. However, we go on to the next page and see the APEC region, and this basically comes down to China.

Speaker #4: And here you see a big swing, right? We see 20% over the course of the past year. And this is something which is an issue, which we saw coming. That's why we've been talking over the course of the last quarters about it.

Speaker #4: The economy in China is particularly soft. We saw this effect right in the Chinese New Year, and if you remember back to our Q2, we saw it being selfed with February and March after the Chinese New Year, where many people thought it would go upwards in terms of—yeah, in terms of consumer sentiment—but actually did not.

Michael Büchsner: If you remember back, that's our Q2, we saw it being soft with February, March after the Chinese New Year, where many people thought it would go upwards in terms of consumer sentiment, but actually it did not. It is and remains soft. This is driven by the automotive market for us hitting predominantly on the side of POWERISE, and likewise and similar is the margin. When we've been talking about the margin in various meetings, I always said that I expect that the Asia Pacific margin in the long run is stronger than the company margin, but in the same range than the company margin. This is something which we see as important for us. We are actually year to date on 15%, we'll be in a similar range as a target for the quarters to come.

Speaker #4: It is and remains soft. This is driven by the automotive market. For us, it is hitting predominantly on the side of power rise, and likewise, and similar is the margin.

Speaker #4: When we've been talking about the margin in various meetings, I always said that I expected the Asia Pacific margin in the long run is stronger than the company margin, but in the same range as the company margin. And this is something which we see as important for us.

Speaker #4: So, we are actually year to date at 15%. We'll be in a similar range as a target for the quarters to come. However, the organic growth we see for the next quarter is also an issue, particularly in China, when it comes to the discussion on the Asia Pacific region.

Michael Büchsner: However, the organic growth we see also for the next quarter as an issue, particularly in China when it comes to discussion on the Asia Pacific region. Good. We continue our charts here. We see the adjusted EBIT margin improved by 30 basis points in the past quarter. This is also the Q3 view, becoming from 10.5% to 10.8%. I've been highlighting that already. Similar absolute range of around about EUR 32.2 million. You see here on the right-hand side, this big swing of the divestiture gains and then for sure the adjustments, because whatever we've been making in a net way from our sale of Fabreeka and Tech Products, we for sure adjusted, and this is the upside. The net effect was EUR 44.4 million. We adjusted almost everything outside of some costs which we had. Other than that, there are some impacts in terms of lower sales.

Speaker #4: Good, so we continue our charts here. We see the adjusted EBIT margin improved by 30 basis points in the past quarter. This is also the Q3 view.

Speaker #4: We're coming from 10.5% to 10.8%. I've been highlighting that already—a similar absolute range of around €32.2 million. You see here on the right-hand side this big swing of the divestiture gains, and then, for sure, the adjustments. Whatever we've been making in a net way from our sale of Fabrika and Tech Products, we for sure adjusted, and this is the upside. The net effect was €44.4 million.

Speaker #4: We adjusted almost everything except for some costs, which we had, and other than that, there are some impacts in terms of lower sales, so revenues.

Michael Büchsner: Revenues, you see there on the left-hand side. As an effect out of that, we see that the EBIT margin in the Q3 came down a little bit, but it's in a similar range. The EBIT margin in percentage improved to 10.8%. In the next page, we see also here for sure in that view, basically the cash view in terms of Fabreeka and Tech Products impact. On the left-hand side, I will start with that. However, you see the starting point of EUR 66 million for the last year, and then basically some ups and downs in terms of M&A process, the divestment initiatives, with which also some sales-related impact. For sure, we also here adjusted the effect of the sale of Fabreeka and Tech Products.

Speaker #4: You see that on the left-hand side, and as an effect of that, we see that the EBIT margin in the third quarter came down a little bit, but it's in a similar range.

Speaker #4: And the EBIT margin in percentage improved to 10.8%. So on the next page, we see also here for sure in that view, basically the cash view in terms of Fabrika and Tech Products impact.

Speaker #4: On the left-hand side, I will start with that. However, you see the starting point of €606 million for the last year, and then basically some ups and downs in terms of the M&A process, the divestment initiatives, which each also had some sales-related impact.

Speaker #4: So for sure, we also here adjusted the effect of the sale of Fabrika and Tech Products. You see this big €79 million green bar on the right-hand side, and then the adjustment of €73.2 million, which at the end of the day brings us to a like-for-like cash flow of €28.5 million free cash flow, third quarter year to date for 2026.

Michael Büchsner: You see this big EUR 79 million green bar on the right-hand side, and then the adjustment of EUR 73.2 million, which at the end of the day brings us to a like-for-like cash flow, EUR 28.5 free cash flow Q3 year to date for 2026. There is still a lot to do. However, we all know that this Q4 of the year is the strongest quarter for us in terms of cash generation. We are confident that also here we achieve our guidance, and also as we did narrow down our guidance, we'll anyway later on talk about the latest view on that. I will switch to the next point, and this is extremely important chart for us, right? Deleveraging. Without a doubt, selling Fabreeka and Tech Products was driven as a strategic element.

Speaker #4: So there is still a lot to do. However, we all know that this last quarter of the year is the strongest quarter for us in terms of cash generation.

Speaker #4: So we are confident that we will also achieve our guidance here, and as we did narrow down our guidance, we'll anyway later on talk about the latest view on that.

Speaker #4: So I would switch to the next point. And this is an extremely important chart for us, right? Deleveraging, without a doubt, selling Fabrika and tech products was driven as a strategic element.

Speaker #4: We want to concentrate on automation technologies. We want to concentrate on human-read robots, and we want to grow in the industrial space. And this is working, coming back to that point.

Michael Büchsner: We want to concentrate on automation technologies, we want to concentrate on humanoid robots, and we want to grow in the industrial space. This is working, coming back to that point. You saw that Q3 last year to Q3 this year, the areas of industry are growing in almost all areas, predominantly in the area of independent aftermarket commercial vehicles, but also the areas of rail, air, and defense. This is something which is very positive for us. However, we've been selling Fabreeka and Tech Products because it doesn't fit to this core strategy, and we want to concentrate really on the technical things which matter to us. We took the money and did pay back debts, that's what you see here on this chart. The debt came down from EUR 631 million to EUR 554 million. Basically a delta of EUR 80 million or more.

Speaker #4: You saw that from quarter three last year to quarter three this year, the areas of industry are growing in almost all areas, predominantly in the area of independent aftermarket commercial vehicles, but also in the areas of rail, air, and defense.

Speaker #4: And this is something which is very positive for us. However, we've been selling Fabrika and tech products because they don't fit into this core strategy, and we want to concentrate really on the technical things which matter to us.

Speaker #4: We took the money and did pay back debts, and that's what you see here on this chart. The debt came down from €631 million to €554 million.

Speaker #4: So, basically, a delta of 80 million, most. And this is something which we are extremely proud of, and it brought down our net leverage ratio to 2.77.

Michael Büchsner: This is something which we're extremely proud of, and it brought down our net leverage ratio to 2.77. You would for sure ask now: Why do you go into the range of 3.9 with your net leverage ratio, the covenant? We did that just to be on the safe side, because we got a hint also from investors, analysts, and shareholders that we basically are better off if we increase the headroom, which we did with our banks, and this is the result. This is what you see here on this chart. Just a reminder, what do we owe to the banks, right? There is EUR 100 million and EUR 150 million in terms of term loan facilities. One of them will basically run out next year, so we are on a refinancing for next year.

Speaker #4: You would for sure ask now, why do you then go into the range of 3.9 with your net leverage ratio—the covenant?

Speaker #4: We did that just to be on the safe side, and because we got a hint also from investors and analysts and shareholders that we basically are better off if we increase the headroom, which we did with our banks. This is the result, and this is what you see here on this chart.

Speaker #4: So, just a reminder, what is owed to the banks, right? There is €100 million and €150 million in terms of term loan facilities.

Speaker #4: One of them will basically run out next year. So, we are on a refinancing for next year, and then there is €350 million in terms of a revolving credit facility. With a net leverage ratio of 2.77, we are actually on the safe side.

Michael Büchsner: There is EUR 350 million in terms of a revolving credit facility. With a net leverage ratio of 2.77, we are actually in a safe side because now our maximum leverage ratio, net leverage ratio is 3.5. It will be 4.0 throughout the financial year 2026, 3.9 throughout the complete year in 2027. You would ask, why is such an odd number, right? 3.9 and not four. This is something where we wanted to balance risk factors that the banks we are discussing with and wanted to get it for a minimum premium, and this is why we have been staying below the four. We are very stable with that. We achieved to delever and to pay back debts. Debt is EUR 554 million, which is, along with 2.77 at net leverage ratio, absolutely moving into the right direction.

Speaker #4: Because now our maximum net leverage ratio is 3.5. It will be 4.0 throughout the financial year 2026, and then 3.9 throughout the complete year in 2027.

Speaker #4: You would ask, why is it such an odd number, right? 3.9 and not four. This is something where we wanted to balance risk factors at the banks.

Speaker #4: We are discussing with them and wanted to get it for a minimum premium. This is why we have been staying below the four. So, we are very stable with that.

Speaker #4: We achieved to delever and to pay back debts. Now our debt is €554 million, which, along with a 2.77 net leverage ratio, is absolutely moving in the right direction. We'll continue keeping that as a main priority—to delever and to reduce our debts, for sure.

Michael Büchsner: We'll continue keeping that as a main priority to delever and to reduce our debts, for sure. Networking capital is at 20.5. There is also things to do. We have certain initiatives which we are executing as we speak, with some financial initiatives which we're still doing, also we have bi-weekly calls now with all entities to bring our inventories down, because here we are also facing some headwinds, right? Our inventories, they are basically coming down a bit and the accounts receivable and payable as well. You see here on the bottom right, a business mix, which at the end of the day, is typical for a movement to more industry, right? Payment terms are a little longer, and for sure, inventories are a little higher, but we are fighting this effect.

Speaker #4: Net working capital is at 20.5. There are also things to do. We have certain initiatives which we are executing as we speak. We have some financial initiatives which we're still doing, but also we have bi-weekly calls now with all entities to bring our inventories down, because here we are also facing some headwinds, right?

Speaker #4: Our inventories are basically coming down a bit, and the accounts receivable and payable as well. So you see here on the bottom right a business mix, which at the end of the day is typical for a movement to more industry, right?

Speaker #4: Payment terms are a little longer, and for sure inventories are a little higher, but we are fighting this effect. You see us being successful already on the inventory side to a certain share, and we'll continue that path, because the more we get into the industrial space, the longer payment terms on average get, and also the more inventory we need—because in many cases, you kind of sell products only if you have them on the shelf, right?

Michael Büchsner: You see us being successful already on the inventory side to a certain share, we'll continue that path because the more we get into the industrial space, the longer payment terms in average get, the more inventory we need because in many cases, you kind of sell products only if you have them on the shelf, right? This is something which we need to acknowledge. It's a little more capital intensive than the automotive industry, this is something which we are balancing and fighting against, we are pretty successful on that, you will see that in the coming months. On the next page, cost savings project. I can't repeat it often enough because we are progressing very well. This slide is pretty similar from the slides we've been showing over the course of the past quarters.

Speaker #4: And this is something which we need to acknowledge. It's a little more capital-intensive than the automotive industry, and this is something which we are balancing and fighting against. We are pretty successful on that, and you will see that in the coming months.

Speaker #4: So, on the next page, cost savings project, right? I can't repeat it often enough because we're progressing very well. This slide is pretty similar to the slides we've been showing over the course of the past quarters.

Speaker #4: And the restructuring expense has been executed to €7.6 million, so that's the utilization as we speak. The cash outflow in the first nine months was €7.3 million.

Michael Büchsner: The restructuring expense has been executed to EUR 7.6 million, that is the utilization as we speak. The cash outflow in the first nine months was EUR 7.3 million, so there is quite some cash still sitting there. Along or from this accrual sitting there, because the accrual was way higher, it was in double-digit million, the cost savings in the nine months was EUR 15.4 million. You see the ratio, the cash outflow was EUR 7.3 million. Now the cost savings are EUR 15.4 million. It is a highly effective and good program for us. The expected savings will even further increase. The full year 2027 effect will be EUR 19 million cost savings because, you know, we have been starting in Q1, and step-by-step, we are coming up with these savings. The EUR 32 million reoccurring cost savings in 2028.

Speaker #4: So there's quite some cash still sitting there, and along from this, accrual is sitting there because the accrual was way higher. It wasn't double-digit million.

Speaker #4: The cost savings in the nine months was $15.4 million. And you see the ratio, right? The cash outflow was $7.3 million. And now the cost savings are $15.4 million.

Speaker #4: It's a highly effective and good program for us. The expected savings will increase even further, so the full-year 2027 effect will be €19 million in cost savings. As you know, we started in the first quarter and, step by step, we are achieving these savings.

Speaker #4: And the €32 million recurring cost savings in 2028. So you see that from all angles, we do what we promised. We've been growing the industrial business.

Michael Büchsner: You see that in all angles, we do what we promised. We have been growing the industrial business. We invest where it matters. We know what to concentrate on with this divestment. At the end of the day, we are executing our cost savings initiatives. On the next page, I would like to lead you through the transformation program. It is well on track. Organizational transformation. The adjustment is in the execution phase. We have been a stronger customer focus with what we do here. We are reacting faster to the market, and this is something which we further want to strengthen and work on. There are location-related measures.

Speaker #4: We invest where it matters. We know what to concentrate on with this divestment. And at the end of the day, we are executing our cost savings initiatives.

Speaker #4: So, on the next page, I would like to lead you through the transformation program. It's well on track. Organizational transformation—the adjustments—are in the execution phase.

Speaker #4: We've had a stronger customer focus with what we do here. We are reacting faster to the market, and this is something which we further want to strengthen and work on.

Speaker #4: Then there are location-related measures. You know, these measures are the ones which take the longest because you need to be very sensitive about which locations you do what in, because they are, at the end of the day, the front runners in terms of your customer interface. They are sometimes more difficult to move than other initiatives you're doing.

Michael Büchsner: You know, these measures are the ones which take the longest because you need to be very sensitive on which locations you do what, because they are, at the end of the day, the front runners in terms of your customer interface, and they are sometimes more difficult to move than other initiatives you are doing. This consolidation of offices, production facilities is also here well on track, and there is more to come. That is definitely something which we concentrate on in the coming months and quarters. Personnel-related measures, I have been talking about that. It is executed, and that is what we are proud of. Investment. Also here, I gave the strong commitment that we will be below 6% in this year. Year to date, we have been below 6%, 5.8%. We know it is a tricky time.

Speaker #4: And this consolidation of offices and production facilities is also here, well on track. And there is more to come; that's definitely something which we concentrate on in the coming months, and on personnel-related measures.

Speaker #4: I've been talking about that. It's executed, and that's what we're proud of. Regarding investment, I also gave a strong commitment that we will be below six this year.

Speaker #4: So, year to date, we've been below 6%, at 5.8%. We know it's a tricky time. Some of the investments have a long introduction phase, particularly the ones which are important to work on the cost position.

Michael Büchsner: Some of the investments have a long introduction phase, particularly the ones which are important to work on the cost position. We will continue to invest in the new technologies and to get more cost effective. With the current business setting, we also acknowledge and see that there is less investment needed for capacities, for sure. The business is flat on the automotive side, and we will see that or see this effect, and this is something which will also continue. I would like to highlight, we are coming to the last couple of slides here, the priorities which we are working on. The swift execution of the personnel-related measures. The footprint optimization, organizational streamlining, and the cost management itself. That is something which is on the cost side. Right-hand side of this chart here, very important. However, we continue to delever with that.

Speaker #4: And we will continue to invest in the new technologies and to get more cost effective, but you know, with the current business setting, we also acknowledge and see that there is less investment needed for capacities, for sure.

Speaker #4: The business is flat on the automotive side, and we'll see that, or see this effect, and this is something which we'll also continue. I would like to highlight we're coming to the last couple of slides here.

Speaker #4: The priorities which we're working on are the swift execution of the personnel-related measures, right? The footprint optimization, organizational streamlining, and then the cost management itself.

Speaker #4: That's something which is on the cost side, right-hand side of this chart here. Very important, however, we continue to delever with that. We're ramping up the factoring, right?

Michael Büchsner: We are ramping up the factoring, we also investing nevertheless in our future with good investments in terms of humanoid robots, working partnerships in order to make it happen. On one hand side, we're managing the costs in the short, mid, and long term. That's what you can be assured of. On the other hand side, we don't miss out on jumping onto the trains of success for the future, which is equally important for us. Always having in mind that, yes, automotive is our core business where we came from, we want to strengthen our industrial business. This basically leads me to the summary of 9 months. For sure, we are impacted by the market environment. Our local for local initiative help us a lot to make us resilient. We have 10.8% EBIT margin in difficult waters and have been able to delever massively.

Speaker #4: And we are also investing, nevertheless, in our future with good investments in terms of human–robot partnerships, working together in order to make it happen.

Speaker #4: So, on one hand, we're managing the costs in the short, mid, and long term—that's what you can be assured of. And on the other hand, we don't miss out on jumping onto the trains of success for the future, which is equally important for us.

Speaker #4: Always keeping in mind that, yes, automotive is our core business—that's where we came from—but we want to strengthen our industrial business. So, this basically leads me to the summary of the nine months.

Speaker #4: For sure, we are impacted by the market environment. Our local-for-local initiatives help us a lot to make us resilient. We have a 10.8% EBIT margin in difficult waters and have been able to delever massively. We did pay back €80 million in terms of debt, and for sure, with all I told you, we are very stringently executing the STAR 2030 strategies we have on hand.

Michael Büchsner: We did pay back EUR 80 million in terms of debt. For sure, with all I told you, we are very stringently executing the STAR 2030 strategies we have on hand. With that, we go for the page where we talk about the market and economics, right? There is a moderate outlook for the quarters to come. We see some softer growth in Europe and stronger momentum in US and China going forward. As I said, particularly in the area of industrial business, things are holding up. Geopolitical tension, we always keep in mind, also in terms of securing our supply base. The basic broader light vehicle production is in the range of 90 million. Here is 92 million. Let's see where finally the number comes up.

Speaker #4: So with that, we go to the page where we talk about the market and economics, right? There is a model rate outlook for the quarters to come.

Speaker #4: We see some softer growth in Europe and stronger momentum in the US and China going forward. And as I said, particularly in the area of industrial business, things are holding up.

Speaker #4: Geopolitical tension we always keep in mind, also in terms of securing our supply base. And then, the basic broader light vehicle production is in the range of 90 million. Here, it's 92 million—let's see where finally the number comes up.

Speaker #4: This is something which has, in the past quarter, been at 22.9 million vehicles produced, and it's a little shy of this number if you extrapolate it to four quarters.

Michael Büchsner: This is something which has, in the past quarter, being with 22.9 million vehicle produced, in a little shy of this number if you extrapolate it to 4 quarters, it should be in the range of 90 million to conclude the year for us. Talking about conclusion, I would like to also point out our guidance, which we did narrow down, within the original guidance we gave. We will end up being at EUR 1.15 billion roundabout. We will be in the range of 10%, maybe a notch higher, in the range of 10% in the EBIT margin adjusted and the free cash flow at EUR 90 million roundabout for the year. There's only 2 more months, as you know, right?

Speaker #4: But it should be in the range of €90 million to conclude the year for us. So, talking about conclusion, I would also like to point out our guidance, which we did narrow down but kept within the original guidance we gave. So we will end up being at around €1.15 billion.

Speaker #4: We will be in the range of 10%, maybe a notch higher, but in the range of 10% in the adjusted EBIT margin, and the free cash flow at around €90 million for the year.

Speaker #4: There are only two more months left, as you know, right? For us, the year ends at the end of September, so there is August and September to go.

Michael Büchsner: For us, the year ends on the end of September, there is August and September to go, we're confident, very confident that we reach these numbers. Good. With that, I would hand over back to our host, we would start the Q&A session.

Speaker #4: And we're confident—very confident—that we will reach these numbers. Good. So with that, I would hand back over to our host and we would start the Q&A session.

Speaker #1: Thank you, Dr. Bchsner. So, ladies and gentlemen, if you have joined by telephone and would like to ask a question, please press star 9 and the pound key on your telephone keypad.

Operator 4: Thank you, Dr. Büchsner. Ladies and gentlemen, if you have joined by telephone and like to ask a question, please press star 9 and pound key on your telephone keypad. If you would like to withdraw your question, press star 3 and pound key. If you are connected online and listening via the web interface, please click the telephone handset button and then the raised hand icon. This will allow you to ask your question verbally as well. If you would like to ask a question, please press star 9 and pound key on your telephone keypad. We already have two questions. The first question is from Mr. Klaus Ringel of Oddo BHF. Oh, sorry, Mr. Ringel, could you again ask to ask a question?

Operator: Thank you, Dr. Büchsner. Ladies and gentlemen, if you have joined by telephone and like to ask a question, please press star 9 and pound key on your telephone keypad. If you would like to withdraw your question, press star 3 and pound key. If you are connected online and listening via the web interface, please click the telephone handset button and then the raised hand icon. This will allow you to ask your question verbally as well. If you would like to ask a question, please press star 9 and pound key on your telephone keypad. We already have two questions. The first question is from Mr. Klaus Ringel of Oddo BHF. Oh, sorry, Mr. Ringel, could you again ask to ask a question?

Speaker #1: If you would like to withdraw your question, press star 3 and the pound key. If you are connected online and listening via the web interface, please click the telephone handset button and then the raised hand icon.

Speaker #1: This will allow you to ask your question verbally as well. So, if you would like to ask a question, please press star 9 and the pound key on your telephone keypad.

Speaker #1: So we already have two questions. So the first question is from Mr. Klaus Ringel of Otto BHF. Oh sorry Mr. Ringel could you again ask two to ask a question?

Speaker #1: I just pressed the microphone button twice. So you should be—could you please ask your question, or ask two? Yeah. Thank you. Thank you, Mr. Ringel.

Operator 4: I just did two times the microphone button. Could you please ask your question or ask to. Thank you. Thank you, Mr. Ringel. Now it's your time. I'm sorry again. Mr. Ringel, you can ask your question now. We cannot hear you at the moment. Maybe you are muted.

Operator: I just did two times the microphone button. Could you please ask your question or ask to. Thank you. Thank you, Mr. Ringel. Now it's your time. I'm sorry again. Mr. Ringel, you can ask your question now. We cannot hear you at the moment. Maybe you are muted.

Speaker #1: So, now it's your turn. I'm sorry again. Mr. Ringel, you can ask your question now. We cannot hear you at the moment—maybe you are muted.

Speaker #2: Can you hear me now?

Klaus Ringel: Can you hear me now?

Speaker #1: Yeah.

Operator 4: Yeah.

Operator: Yeah.

Speaker #2: Hi, good morning. So sorry. Yeah, thanks for taking my question. I would be interested in a kind of qualitative outlook on the business looking ahead, because when you did the pre-release about two weeks ago, some investors were—yeah—asking, a bit concerned how you want to fill the revenue and especially the earnings contribution from the assets that you have sold.

Klaus Ringel: Hi, good morning. Sorry. Thanks for taking my question. I would be interested in the kind of qualitative outlook on the business looking ahead, because when you did the pre-release about two weeks ago, some investors were asking a bit concerned how you want to fill the revenue and especially the earnings contribution from the assets that you have sold. If you just could give a comment how these ramping up projects, whether door actuation business with Autoease or from this defense order for the rocket engines or maybe even from the humanoids, if you see the potential to fill the gap or even to generate growth with upcoming projects. I know it's too early to ask for guidance for next year, but maybe some qualitative statements on the prospects from the ramp-up here looking ahead. Thank you.

Speaker #2: And so if you could just give a comment on how these ramping up projects—whether it’s the actuation business with AutoEase, the defense order for the rocket engines, or maybe even the Humanized—if you see the potential to fill the gap or even to generate growth from these upcoming projects.

Speaker #2: So, yeah, I know it's too early to ask for guidance for next year, but maybe some qualitative statements on the prospects from the ramp-ups here looking ahead.

Speaker #2: Thank you.

Speaker #1: Absolutely. I'm happy to do that. First of all, we talk about these growth angles, right? You mentioned the door actuation. The door actuation is going very well.

Michael Büchsner: Absolutely. I'm happy to do that. First of all, we talk about these growth angles, right? You mentioned the door actuation. The door actuation is going very well. We've been launching it with Xiaomi in China. We are now filling the pipeline of parts. They start the Xiaomi production in August. Similarly, in Europe with BMW, we are the supplier for door actuation for starting with the BMW X5 series. They are also here now in filling the pipeline for in terms of sales. Both activities happen over the summer period, which actually is August and September. It's too early to say yet how this progresses then for the next year, coming back to your question also in the future. For the time being, it's absolutely in accordance, slightly a notch higher than our expectation. That's on terms of door actuation.

Speaker #1: We've been launching it with Xiaomi. In China, we are now filling the pipeline of parts, and they will start the Xiaomi production in August. Similarly, in Europe with BMW, we are the supplier for door actuation, starting with the X5 series.

Speaker #1: And they are also here now in filling the pipeline in terms of sales. So both activities happen over the summer period, which actually is August and September.

Speaker #1: So, it's too early to say yet how this progresses, then, for the next year—coming back to your question also regarding the future. But for the time being, it's absolutely in accordance, slightly a notch higher than our expectation.

Speaker #1: That's in terms of door actuation. When it comes to the defense area, we are in the execution. You mentioned the propulsion system; there is a rocket propulsion system, a nuclear propulsion system, where we deliver the remote handling equipment.

Michael Büchsner: When it comes to the defense area, we are in the execution. You mentioned the propulsion system. There is a rocket propulsion system, a nuclear propulsion system where we deliver the remote handling equipment. This is running on track. It's exactly in terms of our forecast, running on our forecast level and also making good progress. The humanoids is currently on a stage where we see first sales for next year. This will be on the low single-digit million sales for next year, but kicking in as well next year. However, this year only by sample parts. This is important to know. The thing which goes positive is in general terms, all these industrial businesses. That's the point, and you're referencing also to the information we gave to the capital market 2 weeks ago, the industry of automotive in general terms is lagging behind.

Speaker #1: This is running on track. It's exactly in terms of our forecast—running on our forecast level and also making good progress. The Humanoids is currently at a stage where we see first sales for next year.

Speaker #1: This will be on the low single digit million sales for next year. But kicking in as well next year. However this year only by sample parts.

Speaker #1: Yeah, this is important to know. The thing which goes positive is, in general terms, all these industrial businesses. However, and that's the point—and you are referencing also the information we gave to the capital market two weeks ago—the industry of automotive, in general terms, is lagging behind.

Speaker #1: And this is something which we, and I mentioned that as headwinds, we took into consideration narrowing down the guidance. Why is that? Because we know that, and we had exchange with our OEMs beforehand—for sure, we always know this information from their EDIs a little beforehand. And nowadays, you probably have heard over the course of the past last days that the majority of the bigger-scale automotive suppliers, automotive customers, have been dampening their outlook for the next quarter a bit.

Michael Büchsner: This is something which we, and I mentioned that as headwind, we took into consideration narrowing down the guidance. Why is that? We know that, and we had exchange with our OEMs beforehand, for sure, we always know this information from their EDIs a little beforehand. Nowadays, you probably heard over the course of the past last days that the majority of the bigger scale automotive customers have been dampening their outlook for the next quarter a bit. This is something which we saw coming already a couple of weeks ago. This is why we said, okay, let's consider that in our doings. Hopefully, it turns out a little better than this expectation is from the OEMs. Our current guidance on one hand includes this cautiousness of these automotive suppliers because we got this heads up a little earlier, for sure, with our EDIs.

Speaker #1: This is something which we saw coming already a couple of weeks ago. This is why we said, okay, let's consider that in our doings.

Speaker #1: Hopefully, it turns out a little better than this expectation is from the OEMs. Our current guidance, on the one hand, includes this cautiousness of these automotive suppliers because we got this heads-up a little earlier, for sure, with our EDIs.

Speaker #1: On the other hand side we see very positive development on the door actuators the defense area and in general terms industry. And this is something which we see also going forward because I mentioned that our automotive business in an organic way is down 15% quarter over quarter quarter three last year to quarter three this year however the way more positive and profitable industry business is up 8% year over year and this is something which we think will be also strong in the quarter to come.

Michael Büchsner: On the other hand, we see very positive development on the direct rate of the defense area and in general terms, industry. This is something which we see also going forward, because I mentioned that our automotive business in an organic way is down 15% quarter-over-quarter, Q3 last year to Q3 this year. The way more positive and profitable industry business is up 8% year-over-year. This is something which we think will be also strong in the quarter to come. It will leave some marks on the sales side in terms of this automotive space. We are making up some of it with more profitable industry business. This shift from automotive industry, which is volatile, to the industry business with a good margin profile, is working very well.

Speaker #1: However, it will leave some marks on the sales side in terms of the automotive space. But we are making up some of it with more profitable industrial business.

Speaker #1: So, this shift from the automotive industry, which is volatile, to the industry business with a good margin profile is working very well. We've been basically putting the money into the right basket with this initiative to strengthen the industry business.

Michael Büchsner: We've been putting basically the money into the right basket with this initiative to strengthen industry business. I hope that answers your question.

Speaker #1: I hope that answers your question.

Speaker #2: Yeah, that's very helpful. Thank you. Second, I just want a clarification on the cost savings. You said you have these €15.4 million year-to-date in 2026, and you’re targeting about €19 million for 2027.

Klaus Ringel: Yeah, that's very helpful. Thank you. Second one will just be a clarification on the cost savings. You said you have the EUR 15.4 million year to date in 2026, and you target about EUR 19 million for 2027. The incremental savings is then the EUR 19 million, or is it just something like three to four million?

Speaker #2: So the incremental savings, is that the $19 million, or is it just something like $3 to $4 million?

Speaker #1: The incremental savings will be the $4 million. So as we stand here today, that $15.4 million—we will add another almost $4 million for the rest of the year, because there are only two more months to go now, and we had this steep ramp up. We wanted to execute all the savings early in the year.

Michael Büchsner: The incremental savings will be the EUR four million.

Klaus Ringel: EUR four million. Okay.

Michael Büchsner: As we stand year to date at EUR 15.4 million, we will add another almost EUR 4 million for the rest of the year because there's only two more months to go now, and we had this steep ramp up. We wanted to execute all the savings early in the year. There is EUR 4 million to come. We have the run rate for 2027, which is the EUR 19 million. Out in 2028, it will be up to EUR 32 million even because then there are some more operational savings coming.

Speaker #1: So, there is $4 million to come, and then we have the run rate for '27, which is $19 million. And then out in '28, it will be up to $32 million, even, because then there are some more operational savings coming.

Speaker #2: Okay, that's very helpful. Thank you.

Klaus Ringel: Okay, that's very helpful. Thank you.

Speaker #1: Absolutely. Thank you very much for your question. Are there further questions?

Michael Büchsner: Absolutely. Thank you very much for your question. Are there further questions?

Speaker #3: There is another question from Ms. Yasmine Steilen from Berenberg. The stage is yours.

Operator 4: There is another question from Miss Yasmin Steilen from Berenberg. The stage is yours.

Operator: There is another question from Miss Yasmin Steilen from Berenberg. The stage is yours.

Speaker #4: Many thanks. I have three questions, if I may. So, the first on APAC. Could you elaborate in a little more detail the reasons for the sales weakness in APAC Auto? You refer to the softer market environment, while based on your slides the light vehicle production volumes in APAC seem stable in Q4 and Q3.

Yasmin Steilen: Many thanks. I have three questions, if I may. The first on APAC. Could you elaborate a little bit more detail the reasons for the sales weakness in APAC auto, because you refer to the softer market environment while based on your slides, the light vehicle production volumes in APAC seem stable in Q4 and Q3. Do you feel comfortable to keep the adjusted EBIT margin in APAC above 10%, or do you require additional cost measures in this region? That's my first question.

Speaker #4: And do you feel comfortable keeping the suggested EBIT margin in APAC above 10%, or do you require additional cost measures in this region? That's my first question.

Speaker #1: So that's good. Let's start step by step, Yasmine. The first question is: in Asia Pacific, we've been down 18% year-over-year. As you know, that is what we have in the numbers, and you're absolutely right, the light vehicle production in general terms was basically flat.

Michael Büchsner: That's good. Let's start step by step, Yasmin.

Michael Büchsner: That's good. Let's start step by step, Yasmin. The first question is, in Asia Pacific, we've been down 18% year over year. As you know, that is what we have in the numbers. You're absolutely right. The light vehicle production, in general terms, was basically flat. However, if you look into the details of the light vehicle production, the light vehicle production was predominantly strong in the small segment cars, in those OEMs also where there is low technical fitment of product. We are strong there with gas springs. This is also why we see there on the gas spring side a positive sign. However, if you go to the typical vehicles where you would have a POWERISE, like the Cherys, like the Western OEMs, unfortunately, we hear in the press that the Western OEMs are just losing their shirt.

Michael Büchsner: The first question is, in Asia Pacific, we've been down 18% year over year. As you know, that is what we have in the numbers. You're absolutely right. The light vehicle production, in general terms, was basically flat. However, if you look into the details of the light vehicle production, the light vehicle production was predominantly strong in the small segment cars, in those OEMs also where there is low technical fitment of product. We are strong there with gas springs. This is also why we see there on the gas spring side a positive sign. However, if you go to the typical vehicles where you would have a POWERISE, like the Cherys, like the Western OEMs, unfortunately, we hear in the press that the Western OEMs are just losing their shirt.

Speaker #1: However, if you look into the details of the light vehicle production, the light vehicle production was predominantly strong in the small segment cars, in those OEMs also, where there is low technical fitment of product, and we are strong there with gas springs, right?

Speaker #1: This is also why we see there on the gas spring side a positive sign. However, if you go to the typical vehicles where you would have a power rise, like the Cherys, like the Western OEMs, unfortunately, and we hear in the press that the Western OEMs are just losing their shirts.

Speaker #1: Also, to a certain extent, Tesla is still there, but also the known bigger Asia-Pacific suppliers for bigger cars, or producers of bigger cars like Geely, have had their difficulties in the last quarter, particularly in the last quarter, and this is basically what we saw.

Michael Büchsner: Also to a certain share, still Tesla there. Also the known bigger Asia Pacific suppliers for bigger cars or producers for bigger cars like Geely, they are having had their difficulties in the last quarter, particularly in the last quarter. This is basically what we saw. Our biggest customer is, as you know, on global scale, VW. This is also something where we're strong at in China. Unfortunately, for example, VW, you hear it in all the media, is basically suffering as well this weak market and particularly a competitiveness issue. With this lower sales on that end, for sure, we have a good stake in the Western world customers on the OEM side, they're a little softer than we would have seen last year. This is the reason. Overall light vehicle production, yes, they produce the cars.

Speaker #1: Our biggest customer is, as you know, on a global scale, VW, and this is also something where we are strong in China. Unfortunately, for example, VW—and you hear that in all the media—is basically suffering as well from this weak market and particularly a competitiveness issue. And with these lower sales on that end, for sure, we have a good stake in the Western world customers on the OEM side, and they're a little softer than we would have seen last year.

Speaker #1: So this is the reason overall light vehicle production—yes, they produce the cars, but if you go into the segment analysis and then you divide it between Western world and local Chinese OEMs, then you see some shifts. And there are some vehicles out there—I mean, BYD is also losing some share, but they're still doing well in their volumes. But as you know, they produce the powertrains on their own, and this is something, in conjunction with the Western world OEMs being a little softer, which hurts us there.

Michael Büchsner: If you go into the segment analysis and you divide it between Western world and local Chinese OEMs, you see some shifts. There are some vehicles out there. BYD is also losing some shares, but they're still doing good in their volumes. As you know, they produce their POWERISE on their own, and this is something in conjunction with the Western world OEMs being a little softer, which hurts us there. The second part of your first question was the 10% EBIT margin. The 10% EBIT margin, we will defend, and we'll be even a little higher than that. Why is that? There are two elements to that. In Asia Pacific, one thing is we still have some cost levels we do. The Chinese now, as they're under pressure, they are rapidly working on technical changes.

Speaker #1: So, the second part of your first question was the 10% EBIT margin. The 10% EBIT margin we will defend and it will be even a little higher than that.

Speaker #1: Why is that? There are two elements to that in Asia Pacific. On one hand, we still have some cost levels we do. The Chinese now, as they're under pressure, they are rapidly working on technical changes.

Speaker #1: So our technical changes to come down with costs, they are on the run, they're in progress and will execute upon them, and this will help us to get to maintain this margin position.

Michael Büchsner: Our technical changes to come down with costs, they are on the run. They're in progress, and we'll execute upon to them, and this will help us to maintain this margin position. That's one point. We also will further strengthen our industrial business, not only in the region Europe and North America, but also China. This is why I'm confident that I stabilize the margin in China, even if the competitive pressure will be continuing. I hope that's answering your first question.

Speaker #1: That's one point. And then we also will further strengthen our industrial business, not only in the region Europe and North America, but also China.

Speaker #1: And this is why I'm confident that we stabilize the margin in China even if the competitive pressure will continue. I hope that's answering your first question.

Speaker #4: Yeah, very good. So just to clarify, it's more of a customer mix issue and pricing has not deteriorated, but we've at least seen a slight softening in the price erosion.

Yasmin Steilen: Yeah. Very good. Just to clarify, it's more a customer mix issue and pricing has not deteriorated, but slightly, at least we've seen a softening of the price erosion we have seen in the H1.

Speaker #4: We have seen in the first half, so I would say we see...

Michael Büchsner: I would say we see a softening of the price erosion. There is still year-over-year 5% price erosion, almost six. This kind of the pressure on the pricing side, they will be maintained in China. This is a given, right? Everybody in this industry is under pressure in terms of pricing. The important thing to know is that we have the technical levers to counterbalance this deterioration of the pricing. The other part is, as you well said, is the market softness predominantly of Western world and higher-ranked vehicle segment classes. These two elements are important, and 6% is around about 5% to 6% is price erosion.

Speaker #1: There is a softening of the price erosion. There is still year-over-year 5% price erosion in almost six, yeah. But this kind of pressure on the pricing side will maintain, maintain in China.

Speaker #1: This is a given right, because everybody in this industry is under pressure in terms of pricing. The important thing to know is that we have these technical levels to counterbalance this deterioration of the pricing. And then the other part, as you well said, is the market softness, predominantly in the Western world and higher ranked vehicle segment classes.

Speaker #1: So, these two elements are important. And 5% to 6% is price erosion.

Speaker #4: Okay, perfect. Then on the humanoid robots business: you mentioned in the presentation that up to 30 actuators are included in a robot. So what's the content per robot, roughly, and what's the split in terms of value contribution between you and Synapticon?

Yasmin Steilen: Okay, perfect. That's clear.

Michael Büchsner: In this basket.

Yasmin Steilen: On the humanoid robot business, you mentioned in the presentation that up to 30 actuators are included in the robot.

Yasmin Steilen: On the humanoid robot business, you mentioned in the presentation that up to 30 actuators are included in the robot. What's the content per one robot, roughly, and what's the split in terms of value contribution between you and Synapticon?

Yasmin Steilen: What's the content per one robot, roughly, and what's the split in terms of value contribution between you and Synapticon?

Michael Büchsner: The content for the time being, this is basically, we are talking now still at premature levels. We are basically producing on sample purposes. You can calculate that depending on the size of the joint, it is anywhere between, in a final stage, in two, three years, at EUR 100 to 250 per joint.

Speaker #1: The content for the time being and this is is basically we we were talking now still at premature levels and we are basically producing for on sample purposes but you can calculate that depending on the size of the of the joint it's anywhere between in a final stage in two three years at 100 to 250 euro per joint.

Speaker #1: Yeah. The value creation in that term between Stabilus and Synapticon is probably rather 40% to 40% is on 30 to 40% is on Synapticon and in the range of 70 60 to 70% on Stabilus.

Michael Büchsner: The value creation in that term between Stabilus and Synapticon is probably rather 30% to 40% is on Synapticon, in the range of 60% to 70% on Stabilus. The hardware is still the more expensive part because it requires a lot of precision parts. The software is pretty much scalable. I am a little cautious with this number. I tell you why, because this pretty much depends on the volume, right? Software you do buy a license, then the software depends just up to you buy a million, two or three or 10 million parts, then the software cost per part come down significantly. Whereas a lot in terms of the mechanical parts is driven by the bill of material. As a rough estimation, in years from now, EUR 100 to 250 would be the cost of such a joint.

Speaker #1: The hardware is still the more expensive part because it requires a lot of precision parts and the software is pretty much scalable. I'm a little cautious with this number and I tell you why because this pretty much depends on the volume right because software you do buy a license and then the software depends just up do you buy a million two or three or 10 million parts and then the software costs per part come down significantly whereas a lot in terms of the mechanical parts is driven by the bill of material but as a rash estimation so in the in in years from now 100 to 250 euro would be the cost of such a joint.

Speaker #4: Okay, thanks. That's very clear. And then, finally, just on the goodwill—so we have seen that cargo sales have stabilized, up 5% year over year in the third quarter.

Yasmin Steilen: Okay, thanks. It is very clear. Finally, just on the goodwill. We have seen the DESTACO sales have stabilized, up 5% year-over-year in Q3. However, organically still down in the first 9 months. Do you still feel comfortable with the goodwill and the intangibles that are related to this DESTACO on your balance sheet, or should we expect some right-sizing?

Speaker #4: However, organically, still down in the first nine months. So do you still feel comfortable with the goodwill and the intangibles that are related to this cargo on your balance sheet, or should we expect some right-sizing?

Speaker #1: That's too early to talk about it in detail. For sure, we do a goodwill analysis every month and every quarter. For the time being, we are confident, and that's why we also passed the third quarter with the goodwill that we have in place.

Michael Büchsner: That is too early to, in detail, talk about it. For sure, we do a goodwill analysis every month and every quarter. For the time being, we are confident, that is why also we passed Q3 with the goodwill which we have in place. For sure, the reduced sales is something to consider in this equation. These considerations are ongoing. It pretty much depends on how also the business will develop in Q4, particularly when it also comes to the humanoids and the effect of the humanoids. We are currently in discussions with various customers, are in the preparation of our outlook. The outlook for next year will be, we are in just the midst of the budgeting planning, basically go hand in hand to Q4 and the full year result.

Speaker #1: But for sure, the reduced sales is something to consider in this equation, and these considerations are ongoing. It pretty much depends on how the business will develop in the fourth quarter, particularly when it also comes to the humanoids and the effect of the humanoids.

Speaker #1: We are currently in discussions with various customers and are in the preparation of our outlook, and the outlook for next year will be—and this is where we are just in the midst of the budgeting planning, basically going hand in hand to the fourth quarter and the full year, the full year result.

Speaker #1: And this is basically something which we will review over the course of the next two months and then eventually come up with changes or not.

Michael Büchsner: This is basically something which we will review over the course of the next 2 months and then come up with eventually changes or not changes. It pretty much depends on the budgeting, and it is too early to say how the effect over a year will be, because there are a lot of moving elements in there. For Q3, we have been confident and had the goodwill on a level which was still good and acceptable.

Speaker #1: It pretty much depends on the budgeting, and it's too early to say how the effect over a year will be because there are a lot of moving elements in there. But for Q3, we've been confident and had the goodwill on a level which was still good and acceptable.

Speaker #4: Okay, perfect. Thanks very much. All very clear, and I'll step back into the line. Thank you.

Yasmin Steilen: Okay, perfect. Thanks very much. All very clear and I will step back into the line. Thank you.

Michael Büchsner: Thanks, Yasmin.

Speaker #1: Much Yasmin. Further questions.

Operator 4: At the moment there are no more questions, but I will just read out my text again. If someone wants to ask a question, then please press star 9 and pound key on your telephone keypad. If you are connected online and listening via the web interface, please click the telephone handset button and the raised hand icon, and then you can also ask a question.

Operator: At the moment there are no more questions, but I will just read out my text again. If someone wants to ask a question, then please press star 9 and pound key on your telephone keypad. If you are connected online and listening via the web interface, please click the telephone handset button and the raised hand icon, and then you can also ask a question.

Speaker #2: No more questions, but I will just read out my text again, so if someone wants to ask a question, then please press star-nine and pound key on your telephone keypad.

Speaker #2: Or, if you are connected online and listening via the web interface, please click the telephone handset button and the raised hand icon. Then you can also ask a question.

Speaker #1: Good, good. If there are no further questions, it's also understandable because we are in the midst of vacation time—right, early August.

Michael Büchsner: Good. If there are no further questions, that's also understandable because we are in the midst of vacation time, early August.

Speaker #2: Right.

Speaker #1: If there are no further questions, we would close the call, and I would wish you a still good summertime, and if you haven't had them, good vacation.

Operator 4: Right.

Operator: Right.

Michael Büchsner: If there are no further questions, we would close the call, and I would wish you a still good summertime, and if you haven't had them, good vacation.

Speaker #2: Perfect. Thank you, Dr. Bchsner. No more questions. Have a nice day.

Operator 4: Perfect. Thank you, Dr. Büchsner. There are no more questions anymore.

Operator: Perfect. Thank you, Dr. Büchsner. There are no more questions anymore.

Michael Büchsner: Thank you very much. Bye everybody.

Operator 4: Have a nice day.

Operator: Have a nice day.

Speaker #1: Thank you. Bye. Good day.

Michael Büchsner: Thank you. Bye. Good day.