Q2 2026 Beneteau SA Earnings Call
Speaker #1: Conference call, the participants will be in listen-only mode, at the end of the presentation you will be able to ask questions in one of two ways: click on the green hand icon on the player, to ask your question orally, or submit a written question via the box below the player.
Speaker #1: I will now hand over to Bruno Tivoyon, Chairman of the Management Board, and Nicholas Rateo, CFO. Gentlemen, please go ahead.
Speaker #2: Good evening, ladies and gentlemen, and welcome to this group Beneteau H1 2026 results presentation. communication, which has been published slightly in advance on part of the platform that made that some, obtained the press release slightly in advance, so that's why we anticipated as well the formal publication of this press release.
Speaker #2: I will start by an introduction on the S1 key highlight, Nicola, then we'll go one step further in the detailed presentation of S1 results.
Speaker #2: And then, I will talk about perspective. So let's start by the H1 key highlight for the group. we already commented the top line in July, overperforming the market in every segment.
Speaker #2: Sales were growing by more than double digits in the first semester, versus last year, a bit more on a like-for-like basis. With a better, retail performance, meaning our dealer network reduced their stock further than, what we delivered to them during the first semester, or sell-out is better than our S1, or selling in S1.
Speaker #2: But in reality, our S1 has been, very different from the first to the second quarter, a very good Q1. Thanks to different elements, but mainly the success of the product launch acceleration initiated one year ago.
Speaker #2: And the lower Q2, impacted by the Middle East conflict. Profit-wise, our European footprint is back to profit, Nicola will come back, will comment it in detail.
Speaker #2: This was not the case in US, this was not the case in a US footprint, reason why we decided to stop production in Cadillac, but we did during the summer.
Speaker #2: And initiate a sell-out process for our American brands for wind, plastron, scarab, and our American facility. Two additional initiatives were also launched during the first semester, we will come back in further detail in the perspective side.
Speaker #2: The first one is relative to electrification, with a joint venture, with Electra on Electra Marine for the electrification of the sailing market. The second one is relative to the lifetime extension, the refit, is the launch of a new program starting by Lagoon, starting by the catamaran market, and now extending to sailing monorail segment.
Speaker #2: Regarding cash, we kept a net treasury higher than 200 million euro after dividend distribution, the production plan initiated in Q1 was based on our ordering tech trajectory, before the start of the Middle East conflict, we are currently adapting it to the post-Middle East conflict market condition, and adapting our production and stock level according to this market situation.
Speaker #2: Let's come back on H1 sales. As we shared in July, we've been outperforming the market on every segment during the first semester, meaning on each of them this time market trend we've been growing on the day routing, which was the first segment to decline post-COVID and which seems to be the first one to start a new cycle of growth.
Speaker #2: We've been growing by 19% on this debuting segment in this one. On the other segment, 19% on the monorail, 8% on the multi-year, 3% on the motor yachting, this is overperforming a market which was deteriorating in the first semester, especially linked to the Middle East conflict.
Speaker #2: regarding let's focus on the US side. Now, we from our side we have from one side we have accelerated the restructuring, as I shared, in Cadillac it was somehow a necessity for the group profitability recovery, first because 30 million cumulated losses over the past 2 years, 9 million euro in S1, 1 million more than S1 last year, required another approach.
Speaker #2: Second, because the market, which was attacked by this facility, meaning the boarder, the jet boat, is continuously decreasing, without long-term development perspective. So we announced it in June, we took the decision in June and we announced it at that time, operations is now closed, and the selling process is now initiated.
Speaker #2: We have also restructured the boat club activity, your boat club, through the rationalization of the fleet, through the sale of some bases, doesn't mean we are reducing our ambition to US, to the opposite, we are focusing our energy, we are focusing our development on the seven strategic brands, it starts to pay as well.
Speaker #2: 29% growth in the first semester from our European brand to the US market, despite tariff, which progressively were implemented last year, despite euro dollar evolution, which is as well unfavorable versus S1 last year.
Speaker #2: Wellcraft is now back in the race, and growing either in Europe either in US, Beneteau is currently launching an American design of the flyer range, to be more American in America as well on the day boat segment.
Speaker #2: Infini, this US rationalization, will allow us to better focus our resources on American market expectation. These were the key highlights I wanted to share with you on the S1.
Speaker #2: Nicola, we'll go now a bit further on the results presentation.
Speaker #1: Thank you, Bruno, for this business update. Good evening, ladies and gentlemen. Let's now have a look into the H1 result in detail. As highlighted by Bruno, the success of our product launch acceleration strategy enabled us to deliver growth or outperforming the market.
Speaker #1: And as a first consequence, to restore our profitability by 20 million euro compared to last year, spurred also by operational excellence. In H1, as just Bruno mentioned, we also announced the shutdown of our US operation in Cadillac, which is still impacting our S1 EBIT for 9 million euro, which is to be compared with the loss of 8 million euro of last year.
Speaker #1: The non-recurring effect of this decision amounts to 30 million euro, of which 20 million are related to depreciation of assets. It's a key pillar towards the restoration of our competitiveness and our profitability, in the semesters and years to come.
Speaker #1: Eventually, the net income is also favorably impacted by the earn-out following the housing division divestment, back of 2023, and we are now seeing the last impact of this divestment.
Speaker #1: Quickly, coming back on the safe bridge, which we already shared with you, breakdown of the bridge is the following: 9% of organic growth, again, outperforming the market, spurred by the innovation strategy.
Speaker #1: The 23 new models and product launched last year amount to roughly 30% of our business in H1. Enabling to outperform the market on every segment, but group Beneteau is addressing.
Speaker #1: 2% of basis effect, but we already commented, but we have to keep this in mind, the cut-off issue on the US sales, which were postponed from Q4 25 to Q1 26, but we commented back in March last year, beginning of the year, sorry, and the consequence of the ERP launch in Bordeaux of Q1 2025.
Speaker #1: Last, retail-wise, the performance is even more positive, since dealers inventory are decreasing over the course of the first semester, which is good because it's confirming the normalization of the activity as commenting during our fiscal year 25 result presentation.
Speaker #1: Let's have a look to the evolution of EBIT now. After a difficult year 2025, H1 is a significant milestone in terms of margin recovery, with 20 million euro improvement year over year.
Speaker #1: First, this is the result of our aggressive product launch strategy as already mentioned, which is delivering profitable growth amounting 10 million euro. This is a net impact of the volume, across all segment, 14 million euro, and the targeted efforts on development cost and branding activity, which are necessary investment to roll out in order to outperform the market in this difficult market environment that Bruno described before.
Speaker #1: Our continuous effort towards operational excellence is also delivering results over this first semester, with 8 million euro, as a result of the recovery in Bordeaux following the ERP implementation in Q1 2025, the improvement in labor efficiency, both in Poland and in France, despite the fact that we are accelerating the product launch, which could be a disruption in our factories, and the saving plan, which is delivering results semester after semester.
Speaker #1: Finally, the slightly impact slightly negative impact of exchange rates, mainly coming from dollar, is offset by the net impact between tariff increase year over year and the partial refund that we obtained related to the GEPA tariff in the US.
Speaker #1: When we look below the EBIT, several impacts are to be highlighted in this H1 result. First, the consequences of the decision to shut down Cadillac operation in the US impacting over-income and expenses by 30 million euro, as I said in the introduction, 20 million are related to the depreciation of assets, 10 million are cash impact, which will impact H2, related to the shutdown of the operation.
Speaker #1: Second is the financing of your boat club, in the frame of the divestment, for 3 million euro, impacting financial income and expenses in H1, since then we took control of the YBC operation and the divestment is ongoing, and should be finalized by end of Q1 2027.
Speaker #1: And last, the earn-out, relating to the housing division, impacting H1 income from discontinued operation, as it was the case in H1 24, for the first earn-out, net impact between the earn-out and the cost related to the earn-out is 14 million euro on this first semester.
Speaker #1: When we look at the net results, negative minus 21 million, we consequently have to have in mind that non-recurring items mostly the last two the two items I just highlighted are BH operation, Cadillac Michigan operation shutdown, and the housing division earn-out are waiting for 30 million euro on this net result in H1.
Speaker #1: The performance in the free cash flow is mostly impacted by the slowdown in order intake since the beginning of the conflict, as Bruno mentioned, we were planning the first semester and the year a bit better than it turned out to be, and the working capital requirement is a bit higher than it's supposed to be, and this would be adjusted over the course of H2.
Speaker #1: Net investment are in line with last year and maintained below the level of depreciation despite the acceleration of the product launches, enhancing our operational excellence and the control in the launch of the product.
Speaker #1: The shareholder return policy has been maintained over the course of H1, which was already commented to you, and last, the treasury incidence on which we commented back in March which impacted the group late last year has been totally recovered enabling the group to consolidate a solid net cash position above 200 million.
Speaker #1: I will now hand over to Bruno, who will share with you the outlook. Thank you.
Speaker #2: Thank you, Nicolas. Let's look ahead now, and remain factual as usual. The environment is and remains uncertain, uncertain in terms of conflict, Middle East, Russia, in terms of inflation, Brent is now higher than $100 again, in terms of interest rates, increasing again in Europe, in terms of election, in Europe, in the US, that's not the ideal climate for boating industry.
Speaker #2: However, the willingness to go boating is still there. It was a good season for charter in terms of booking during July and August. The second-hand boat market is still there, this was not affected last year, this year, meaning the number of transactions is still there in terms of number of new buyers.
Speaker #2: I'll repeat those. The day boat market, as I said in the introduction, starts to rebound. It's a good sign here because the day boat market stacked for us at 6 meters goes up to 12, 13.
Speaker #2: It's a good sign here of resilience, of this market is a start of a new cycle for the boating. Commercial activity during the boat shows is still good.
Speaker #2: We started the season in CAD somehow as good as last year. Last year was a good CAD boat show for us, and this year was very close better in terms of number of boats, better in terms slightly better in terms of million euros, sold during the boat show.
Speaker #2: So uncertainty is still there, but we start to be used to live with it as a market, and our role as a leader is to boost the market with the right value proposition.
Speaker #2: So as we shared in March, as we shared again in CAN opening the season, opening the CAD boat show during the press conference, we have for priorities for the group, the first one is to provoke the rebound by product innovation, 23 models were launched last year, it contributed to 30% of our sales, in S1 it contributed to our growth in S1, 24 models will be launched during this new season, this is the second tranche, the second part of our 66 model within 3 years.
Speaker #2: The second priority is to strengthen our competitiveness, of course, Cadillac closer is part of it, competitiveness on every product is part of our priority roadmap.
Speaker #2: Third one is about technological innovation, sustainable innovation in particular, and the fourth one is to develop the group on new adjacent activities on top of new boats, with it in particular is part of them.
Speaker #2: So let's go on new models, the feedback was good during our dealer meetings in June and July, it started to convert into sales, again during CAN, after CAN as well, during the last days after CAN, either toward accessibility, such as the Cap Camara 6, which is the first time for 7 years we launch a 6-meter boat to recreate the reservoir of customer from the beginning of the Cap Camara range, for example, either through the Prestige lineup improvement, it's a mix of improvement of existing boats corresponding to the customer's and dealer's expectation, it's also the case with new boats, but also in terms of renewal of the core of the offer we address, the lagoon 47 you have in front of you is one of them and is probably the biggest success of this CAN boat show, the new Eryx range for Jano as well, is part of the new development for the group in terms of the boating in a profitable way.
Speaker #2: So if the context is difficult, as I described, again we exceeded in CAN our record from last year, which was better than the year before, which was better than the year before.
Speaker #2: So this is at least a positive trend that need to be confirmed, of course, boat shows after boat shows and also between boat shows, to make it a profitable growth again for the group.
Speaker #2: Competitiveness is the second priority, as I said, competitiveness is a boat designed to cost, the Cap Camara 6 is one of them, we make it in Tunisia in a very lean design, it is a concrete example of profitable entry-level or accessibility, is a boat control of CAPEX as well.
Speaker #2: 24 new model is a lot and is what is needed to reboost the market demand, but this is not 24 full new CAPEX, this is a good combination of product improvement to fit with customer expectations and real complete new range.
Speaker #2: Competitiveness is also about inflation balance management, we talked a lot about it between 22, 23, and 24, the oil increase today is a new wave of inflation, that's again will manage in a proactive way.
Speaker #2: And competitiveness is also about saturating the existing footprint and the launch of new model is part of it. Competitiveness is also about adaptation measure, to improve the profitability and to finance the cost of launches, and again we are pursuing our adaptation measure, plant by plant, function by function, in the whole group.
Speaker #2: Sustainability innovation, the third pillar, I insist again on electrification, electrification is not only a trend on the automotive, it is progressively coming for the boat business, it will start by slow displacement of boats, such as sailboats, the jump venture we created is, as an ambition, to convert 10 to 15% of the sailing market to the electrification, to the hybrid solutions, but it's not only about propulsion, it's also about energy management on board, meaning more comfort on board again during the navigation and when the boat is stopped.
Speaker #2: With it will progressively become a significant pillar in our activity, first it's a growth engine, we delivered, as I said, in CAN 10,000 sailboats during the last decade, it's time to refit them during the next one, but it's more than that, it's progressively becoming a competitive advantage allowing charter companies to extend the lifetime of their boats to reduce the total cost of ownership of their boats, s, or to improve our end, to improve the resale value and resale condition.
Speaker #2: So it's a competitive advantage to improve the total cost of ownership for all customers. We launched Full Lagoon on the multi-haul side, we are now extending it to the mono-haul sailing segment through Beneteau and through Jano.
Speaker #2: So let's conclude with the guidance that we can give as of today when we're starting the season, just after CAN, after a good CAN boat show, starting by sales, excluding Cadillac, excluding our American brand produced in Cadillac, we expect to grow this year from 4 to 9%.
Speaker #2: Again, it's difficult to predict, as some deliveries will occur between November and December, and we'll monitor that transparently with you again in the next communication, but we should reach at group level 860 to 900 million euro sales this year, knowing that Cadillac facility was counting for 14 million euro roughly last year in our sales.
Speaker #2: Regarding profitability, we expect to turn positive, excluding Cadillac, which is now rationalized, the RP is now stabilized, we are pursuing, as I said, our cost adaptation measure to market conditions, and these savings are partly redeployed during the semester, during the second semester, on the development and the commercialization of the new model to generate the next year's growth.
Speaker #2: These were the key messages we wanted to share with you during this conference. I propose to start the Q&A session before the conclusion. Thank you very much.
Speaker #1: If you wish to ask a question, you may do so in one of the following ways. Click on the green hand icon on the player to ask your question orally or submit a written question via the box below the player.
Speaker #1: As a reminder, if you wish to ask a question, you may do so in one of the following ways. Click on the green hand icon on the player to ask your question orally or submit a written question via the box below the player.
Speaker #1: The next question comes from Nicholas Erickson from Alvegen Holding, please unmute your microphone.
Speaker #3: Hello, good evening. Good work with the results. I have one question for you. If we look at the higher inventory with new boats in stock, would the cash balance be more like 240 million today?
Speaker #2: I imagine your question is on your end, expectation. We didn't give the guidance on that. If we come back to the year, what happened in the year, what I was saying in the introduction is, we launched the production plan at the beginning of the year, based on the commercial dynamic that we had since I would say the last 6 to 9 months at the end of the last year, 25, and even since Q2 when preparing the show to show the boats that we were proposing to the market, to the network.
Speaker #2: The middle is conflict stopped the commercial dynamic, not stopping to zero, but reduced, let's say roughly by 30 to 50% depending on the segments, during March, April, May, June, July, August is a different month.
Speaker #2: So what we face is the fact that there was a stop of 6 months, but we start a new season with a similar dynamic than the one we started it last year.
Speaker #2: Which is good somehow. However, we will not catch back retroactively what was not ordered during 6 months. So this is what we progressively adapt in our production plan.
Speaker #2: So we produce much less in S2 than what we were producing in S1. And yes, the ambition somehow is to sell during the year what we produce during the year, which is normal.
Speaker #2: But which is extremely difficult to predict when there is such a slowdown in the market due to an unpredicted event, the conflict in Middle East, in a context of seasonality of our activity.
Speaker #2: We deliver a lot of boats in Q2 for the season, July, August, and we deliver some boats as well at the end of the year for the BVI season, and for the defiscalization program of the charter companies.
Speaker #2: So globally, the production plan is adapted now for the second semester to what we perceived as a sales trajectory, for the year 2026, in order to neutralize the stock level of our finished goods.
Speaker #2: And probably neutralizing as well the stock level in order to network on the year. This was the second challenge meaning on the year, meaning is our dealer stocks level now normalized?
Speaker #2: This was our assumption one year ago we increased a bit the stock of our dealer network during the second semester of last year, neutralizing it over the year, 25.
Speaker #2: The challenge was will we reduce it in S1 to compensate the S2 of last year? And this is what happened. So we considered that we globally normalized the stock level of our dealer network.
Speaker #2: We overproduced versus what the market post Middle East was in Q2 somehow. Or in S1. And this is the challenge to neutralize that on the full year during the second semester.
Speaker #3: Okay, thank you very much, and good luck and good work with H2. I believe you have done a great work with turn the back the operations to profitability and keep up the good work.
Speaker #2: Thank you very much.
Speaker #1: As a reminder, if you wish to ask a question, you may do so in one of the following ways. Click on the green hand icon on the player to ask your question orally or submit a written question via the box below the player.
Speaker #2: So I have a question on the written question. Thank you, Natasha. So can you talk about the pricing environment and discounting? Are you seeing more discounts this year versus last year, and how has this progressed into Q3 and the boat shows?
Speaker #3: I see less discount on the new boats. Because they are new. So there is a discount level which is lower on the new models.
Speaker #3: So the sooner you introduce the new models, the sooner you reduce your discount level. Not only it creates demand, but it creates as well scarcity.
Speaker #3: Somehow. So the good 47 is a good example. The catamaran market is a discount market today. We make zero discount on the lagoon 47 as of today.
Speaker #3: So I would say yes, it's increasing globally. But we keep it under control. Through the introduction of novelties, and as I said, the risk is to overspend in capex doing so.
Speaker #3: So that's why there are novelties which are brand new novelties, and lagoon 47 is a really new boat. And there are some novelties which are continuous improvements of existing range of existing boats.
Speaker #3: And this is the mitigation we try to handle. But yes, there is an increase demand for discounts. And the best way is to renew the value proposition.
Speaker #3: To fight against that is the value proposition.
Speaker #2: Okay. I have a second question on the chat. For the US, are there residual exit costs that will impact your P&L in H2? And can you update us on the sales process of these activities?
Speaker #3: I will let Nicola apply that.
Speaker #2: Regarding the H2, we do not expect major impacts. Most of the people left the facility mid of August. So we shall not expect any surprise on the H2.
Speaker #2: The remaining I would say uncertainty on the shutdown and maybe sell out process might be on the inventories. We obviously we took conservative approach at the end of June.
Speaker #2: But on this item, due to the I would say low environment in the US, some distributor maybe unable to send back their inventories and that's what we are.
Speaker #2: The risk we are managing so far, which is pretty well managed as the time we speak. So we shall to answer quickly your question, we shall not expect any surprise in H2 regarding the US operation.
Speaker #2: Regarding the sell out process, it's been I would say an interesting summer since the decision and the announcement mid-June. Some interests. And we are still so far discussing with the potential buyer of this activity.
Speaker #2: It's a bit too soon to talk about it, but there is still some mark of interest. On the global, I would say package, which is the brand, the activity, the dealer networks, and the facility, if this option was to wind down again, because there have been other potential buyers which at the end of the day closed the file, but if it was going to be still the case for this new potential buyer, then we will enter in a new process which is the sell out of the existing asset, meaning the lands and the building.
Speaker #2: So that's where we stand. That's where we stand at today.
Speaker #3: We have two questions from Arnaud. First, could you comment the Dream Yacht Charter and Navigare business model change? Is there intention to renew the fleet by 2030 on the place you could have in this new scheme?
Speaker #3: This is the first question. And second, is epoxy and glass fiber are still very high cost. Will it impact gross margin in H2?
Speaker #2: It's I will start by the second because it's easier. I talked about inflation balance management. We know a brand is increasing, so we pass through part of the material increase to the pricing.
Speaker #2: The more we pass through full price, the more the discount discussion comes back on the table. So precisely, but as of today, what's happening on the market is what we expected to happen on the market.
Speaker #2: And this is the way we plan it. So yes, it's impacting because it's an inflation wave that makes the business more difficult. And the comparison versus last year is that the market dynamic is not the same than in '22 or '21.
Speaker #2: So it's more difficult to pass through as it was. However, it's in line with what we anticipated. Regarding Dream Yacht Navigare, we announced our decision not to become an operator of the charter business.
Speaker #2: However, we announced our decision to become the best player to support the charter players. But to operate instead of them, but to support them.
Speaker #2: Through the product and lagoon 47 is perfectly designed for charter operations. And this is one of the success of the start of the season.
Speaker #2: Through the refit, as I said, I mean, seven years old boat or 10 years old boat is the perfect requirement for refit. That's why we started by lagoon 450.
Speaker #2: That's why we continued by lagoon 42. That's why we are not doing lagoon 452. And extending the range also to the Monorel. It's not one against the other.
Speaker #2: It's not secondhand boats versus new boats. It's a way to reduce the total cost of ownership of a new boat. And make a competitive advantage for the group.
Speaker #2: The new landscape for Dream Yacht Navigare is not is announced. It's not closed. So that's wait and see. But what we do for charter business is done for Dream Yacht Navigare, which is now a customer.
Speaker #2: And yes, we have a play. We have a role to play in this new reshape. And we currently discussed with the new dispositive the way to make it accelerating the fleet renewal while globally reducing the fleet to make it more competitive.
Speaker #2: And it's good to have a customer that is competitive. And that is profitable. So we intend to support this activity where we are not will not be shelter anymore.
Speaker #2: But treat it as a good customer to better sell it in their product in terms of service. And yes, we are part of the standardization panel, which is planned to be the new shaping of this player.
Speaker #2: If we go in the history, it was not at all capitalistic linked between us and in the past to 2021. And we were selling them.
Speaker #2: We were capitalistically linked. We were selling them at market share level somehow. And now we will continue to serve this customer in a having probably better understand what are the constraints of the charter business, product-wise, service-wise, total cost of ownership-wise, and this is the way we will serve them tomorrow.
Speaker #2: Of the deal will be closed.
Speaker #3: We have a last written question on here for the time being. Do you expect to keep your capex where they are currently despite your ongoing product plan?
Speaker #2: Your capex?
Speaker #3: Your level of capex.
Speaker #2: As I said, the strategically the renewal of the product offer is key. However, comparing the cash is key. So what we generated as capex for the first semester is somewhat good speed of capex to renew the offer.
Speaker #2: And growing again. So as of today, the 66 plan is in that magnitude of what we were investing last year and what we are investing this year.
Speaker #2: This is compared to the number of launch that we are doing in the past. We are making more launch and more animation of the range with a similar magnitude of capex.
Speaker #2: So it's somehow better conversion rate from the capex to sales and profit.
Speaker #1: There are no further questions at this time. I will now hand back to our speakers for their closing remarks.
Speaker #3: Thank you for your attention during this call again. As I said, geopolitical situation is not easy, but the willingness to voting is still there.
Speaker #3: So it's our mission as leaders to provoke the demand and not to wait it to come back naturally. One dispositive is the reception of our new product.
Speaker #3: Since last year, we started last season with one wave of new models. We start this season with the second wave, 23 models last year, 24 this year.
Speaker #3: It will help us outperforming the markets. And the market doesn't like uncertainty. They don't like the uncertainty of the Middle East conflict and we have seen it.
Speaker #3: Middle East conflict is not an uncertainty anymore. It's a fact. So the market is adapting to that today. This is what we start to see at the beginning of the season.
Speaker #3: It's a bit too early to conclude really what will be the dynamic of this season. But it's not an uncertainty anymore. It's a fact.
Speaker #3: And to conclude, the best way to overperform the market is to remain extremely offensive. Keeping the control of our stock and our capex. And this is exactly what we explained up to now.
Speaker #3: So these are the priority we are working on it. I will come back again competitiveness is not only a question of resident contribution. It's also a question of accessibility of the product of our report to the market.
Speaker #3: It's also a way to fight against inflation. measure is the last priority we are working on it. By the design to cost, by the localization of the production where we put the products compared to the market positions.
Speaker #3: And through the indirect cost structure, we are working on. Thank you for your attention. And next call, Clarence. On November 4th for the Q3 revenues.
Speaker #3: Are you there? Thank you.
Speaker #2: I'm still there. Thank you very much.
Speaker #3: Bye-bye.
