Good morning everyone here in Amsterdam at the Okura Hotel for the presentation of the half-year results. Also a warm welcome to everyone in the audience of the webcast.

Before I go to the presentation, I'd like to point out to the cautionary note regarding forward-looking statements. We have a nice key messages and we can start with the fact that we delivered strong results, a strong set of results both in half-year and especially in Q2 with an organic growth of 18% in turnover and 67.5% in result.

What we see is that the Vision Technologies performed very well and Electrification performed very well. Underlying performance is related to high market demand in Vision Technology.

What we saw in automated machinery is that we are still impacted by with a lower order intake and that has mainly to do with geopolitical circumstances and led to postponement of orders. I have to mention that we have a very good pipeline of orders, and we are looking forward that these orders are coming in the coming quarters.

What we saw is that within Electrification, we had an especially good performance in the Eemshaven, strong improvement in output and also the yield improvements. Also in onshore energy, we saw that there was a very good performance, very high growth rate due to the fact that we have a very good order book there, and also that the installation of the projects of the cable is running at a much more smooth trajectory.

The separation process is well on track. Important strategic development within the TKH Group of course, the separation of the Automation and the Electrification activities.

We have come in with a new segmentation to address the pure Electrification activities, and then the other activities within Electrification. I believe that's a good helps the transparency and information stream to make the right analysis of our business.

What we also did is that we upgraded the or replaced the forecast for Electrification into a medium-term guidance, and in that medium-term guidance, we upgraded the organic growth. That has mainly to do with the fact that we see a better performance, higher demand in the onshore Electrification activities.

I go in detail now to the half-year results, Q2. Especially important to mention besides all the growth rates here is the order intake.

I believe a very good development of the order intake, more than €500 million. We have to take into account that the order intake in the automated machinery division was really low.

When that comes back, I believe we are really performing really well. What is also good to see that not only the comparison towards 2025 showed very nice growth figures, but also the comparison to Q1 '26 showed a very good performance.

Then the half-year performance. I already mentioned that we are quite happy with a 14% organic growth.

Very nice development of the EBITA, plus 43.5%. We have a kind of stable added value and a quite high added value, and I come back later to that especially when we look into the separate divisions.

What is important to mention here is the innovation rate. It's still a quite high innovation rate.

We have seen years where we have been above 20%, but taking into account the very high organic growth and we still keep up with an innovation rate of above 16%, I believe we're doing a quite good job. To remember you that, hey, the innovation rate is a really growth engine to gain market share, and I believe we are doing quite good job there in several areas where we have seen that the market share increased.

Also important to mention here is the award we got from EcoVadis. We are with VMI in the top 1% of companies in respect of the sustainability rating.

Very important building stone for TKH in addressing our market and desires of our customers to be a very sustainable company, but not only sustainable as a company, but also especially sustainable with our technologies that can help our customers to improve their sustainability performance. The separation activities are on track and yeah, we made good steps, especially with the preparation for the EGM to get shareholder approval for the proposed separation.

We are doing that on a voluntary basis. We are not yet meeting the criteria that it's an obligation, but we consider the views and support of our shareholders as very important for the separation process.

I move into the different divisions. I would like to mention here with the Vision Technologies especially the high added value.

We continue to perform on a very high added value in this activity, which again proves the technology leadership we have here, and in that respect, the performance and rewards we get from our customers to get good margin. That translated now in the first half-year in a return on sales of more than 20%.

A very healthy activity, especially also if we look at the order book, which increased substantially. That means also that for the second half-year, we are positive in respect of the expectations, and the strong order book is a good support there.

Automated machinery, I believe still a very good performance. We saw the turnover coming down was not a surprise based on the order intake, which has been running at a lower pace in the last three, four quarters.

As I mentioned before, we see a very good order project pipeline, but postponements by many of our customers. We can come back later if you have more questions about that.

The return on sales still at a good level of 16%. It is a cyclical activity, but keeping up the EBIT margin, the return on sales at 16%, I believe is a very good job.

We see here, of course, that the order book came down substantially, and we need, in that respect, also additional orders to get our performance also in relation to 2027. What is very good, we didn't lose any market share, so that is I believe a key message here.

That the long-term drivers for the high-end equipment that we have in our portfolio—the need for greater production efficiency, increased sustainability, and especially also the higher levels of automation—are really positioning ourselves at the key trends and the technology advantages that we have. Electrification, a very nice step-up in the return on sales.

We are reporting now especially also the EBITDA margin, which is, let's say, common practice in the cable industry with our peers. There, we see a very nice EBITDA margin already of 12.6%.

With respect to the medium-term guidance of 19%, there is still headroom for growth. That will especially happen through the further utilization of the capacity that we have in our hands.

What we do also for the first time is split up the turnover for the three areas within the Electrification activities, and again, this is the pure Electrification activities consisting of four companies in the TKH Group. Very substantial growth within the offshore energy, which confirms the higher utilization rate, good improvements of the yield in the factories.

We solved the majority of the issues. We did several upgrades, and again, that was mainly fine-tuning of the technology to get where we wanted to be.

Again, the outlook is also quite positive for the offshore wind with about 92 tenders we are participating in with a total demand of more than 14,000 km. Within onshore energy, it is important to mention the 1.4 million framework agreements that we have signed.

We cannot put that into the order book, the order book is 500 a little bit more than €500 million, but it does not include of course the framework agreements. It gives you a good outlook, a good fundament to value, let's say, what the potential is of the onshore business also for the future.

Specialty cables did a quite good job. The German market was really affected with much lower investment levels in the capital good market, but they still were able to increase the turnover with 2%.

With respect to the outlook, we see that the improved operational performance recorded during the first quarters of '26 are expected to continue in the second half of 2026. Then, for the first time, we report the other business, which consists for about 75% of digitalization activities.

We saw significant growth, organic growth of more than 15%, and a very big step-up in the profitability, which is mainly being the contribution of our fiber production activities that are located in China with a very good performance of demand in the data center business, and of course, all the AI developments that you see where fiber optic is the product to do the data transmission. Also interesting to mention is the demand in the defense business.

We saw also a big reduction substantial reduction of the cost in the activities. Last year, we closed down the activities of the fiber manufacturing in Holland, moved the capacity to Poland, and that helped us to have a much lower cost base, and that also supported the improvement of the return on sales.

The medium-term guidance, I already mentioned. We see a small upgrade of the organic turnover, and that is based mainly on the outlook for the medium voltage and high voltage cables for the onshore business.

What is important to mention here is the last 12 months development of the turnover towards more than €600 million turnover, which is a different reference base as we had when we communicated the targets at the Capital Markets Day in September last year. That was my last slide, and I'd like to hand over to Elling.

Thank you, Alexander. Good morning, everyone.

Indeed, it's my pleasure to spend a few minutes on the financials of the first half. The segmentation.

We discussed the segmentation at the Capital Markets Day in September '25, where, of course, the transition from the Smart segments, which we had in the past, towards the Automation and Electrification segment was applicable. Full year '25 was still reported under the what you see here on the left part of the sheet, the Smart Vision, Smart Manufacturing, and Smart Connectivity segments.

As of this year, we will be reporting conformed the right part of the sheet here, Automation, Electrification. Indeed, also listening to the feedback of some of you, we have grouped all the to be divested activities in a segment called Other.

Therefore, you have a very clear performance indicator on how the business is running in the Automation and Electrification segments, also when you want to compare them to peers. It is also Of course, we don't like that you have a lot of work to do with our reporting segments, but we facilitate this as well as of this morning.

The last three years' KPIs and reporting have been made available on the website of TKH along the new segmentation as you see here on the right side. You can update your models accordingly.

Basically, the step from the left to the right had to do with the fact that we grouped, as I mentioned earlier, under the segment Others, those elements which are considered to be divested. Digitalization was already in that basket, but as you see, some other smaller activities have been added into this segment as well.

Then moving on to the top line and the developments in a geographical way. If you look at the sheet here, Europe still remains roughly 60% of overall revenue.

You see, of course, the Netherlands creeping up a little bit. That's on the back of the high growth of the Electrification business, which is very much centered in the Netherlands and some countries around us.

Slight increase in Asia, that's on the back of further activities of our vision activities in Asia. In North America, a substantial reduction as a share of the total revenue, and that's due to the fact that especially on the tire-building machines, there was less revenue based in North America than it was in the first half of '25.

Looking at the P&L, quite a couple of things of course already passed in the presentation of Alexander, but I just want to highlight a few things. If you look at the organic growth in the first half, 14% on top line.

We had about €16 million or 1.9% of revenue in the category of divestments. Alphatronics and Devatron were divested, and they are also, of course, already in the adjusted figures in the Other segment, just to clarify that.

If you look at our added value, Alexander mentioned slightly lower than the first half of last year. We have seen that Electrification has grown its added value, so that is an important step.

As Electrification has become a more important share in the whole, it means that it puts a little bit of pressure on the group added value despite the fact that that segment, as I mentioned, saw an increase. Then if you look at the EBITA, 43.5% increase for the first half organically.

I think that's fairly well. Also operational costs are well under control.

From this point of view, a return on sales at EBITA at 11.9% is a good level, I think. We had some one-off costs in the first half.

As you are all aware, we are in full swing for the separation of Electrification. That also brings some one-off expenses in the first half, as well as some of the divestments which we did, in total €4.5 million.

If you look at the line result of associates, the proceeds or the net effect of the divestment of Alphatronics resulted a small €3 million in one-off gain. On the financial results, we had seen lower interest rates and a slightly lower average debt compared to the first half last year, that helped a little bit.

Foreign exchange effects basically caused the delta between first half '25 and first half '26. If you look at our tax rate, just over 24% as a normalized effective tax rate, also something when you look at your models for '26, a little bit to in that same basket we will probably end.

On the balance sheet, of course, working capital is always a big topic. We have not been able compared to the start of the year to reduce the working capital as percentage of revenue.

It's at 18.3%, and basically in euros it increased by just over €40 million, and that's in line with the actual growth organically of the group. Despite the fact that it's a slight increase, it has some I would say qualitative aspects to this as well, because due to the fact that the order intake, especially in automated machinery in VMI, has been low, it also means that the down payments have been substantially lower than what we have seen in prior periods.

That is causing in the end an increase as a net effect. On one side, improvements within some of the working capital items, but the lack of the down payments in the end brings the working capital up compared to where we started the year.

Mind you, we of course always have a higher working capital at the middle of the year than at the end, and that's also what we are aiming for in '26. Working capital leads to a further explanation on the net debt, just over €500 million.

According to the bank covenants or leverage rate, we are at 1.8, substantially different than the 2.6 where we were last year, of course on the back of the improved results. This is a clear positive development.

If you look at some of the main items here, cash flow from operations, you will see it in the next sheet in more detail, about €95 million. I think also here, the CapEx programs both in tangibles and intangibles, close to €20 million each in the first half, we expect this to be slightly lower in the second half.

Of course, an important ticket as well has been the dividend payout in the second quarter. This leads basically to also the free cash flow as presented here, also here on the back of the swing in the working capital.

We see that H1 is greatly impacted by the change in working capital. In the end, we end up with a conversion of 15%, low, but also here we expect the second half to improve.

On the right side, you see again an overview of how working capital ratio develops during the last couple of years. Far the short explanation.

The outlook, and again, I have to be a little bit different than the couple of years before where we had a much more extensive outlook. Basically, almost going at line item.

We are not able to do that. It's not that we don't want, but in the current process we are in, we have a lot of restrictions in terms of guidance going forward as we are in a dual-track process for the Electrification activities.

Basically, what we say here is that we reiterate our outlook as we communicated during the results of the first quarter. Barring unforeseen circumstances, we expect organic growth in both turnover and adjusted EBITA in '26.

That's short, I know, but that's all I can do for you at the moment. I think so far the presentation part.

We would like to open up for Q&A, please. Yeah.

Who's first?

I was.

Good morning. Michael Roeg, Degroof Petercam.

I have a couple of questions. The first one on the balance sheet, assets for sale was zero even though your presentation showed the Other category with a couple of activities for disposal and the separation process, mainly to a sale or an IPO or something else.

I was a bit puzzled by that.

It's not that we are not working on this, we definitely are executing this, but according to IFRS, you have to pass certain hurdles in order to get to this point that it becomes part of the assets held for sale structures. That's not yet meeting those requirements at this point in time.

If I'm not mistaken, it should be likely that you sell something within 12 months for IFRS to put it in assets for sale, so that applies to Other?

That's not the only criteria, there are a couple of more. It doesn't mean that we're not meeting the target in terms of timing, but there are some other criteria which make the overall evaluation that.

Clear. Then about the margin targets for the two activities.

With Automation, you are actually already within that range that you desire, even though tire manufacturing is currently experiencing some softness, a cyclical softness. When that recovers, you are already above your target range.

Why did you not raise it like you did with Electrification?

I think there are two points. Electrification has a clear moment in the sense that there is a different kind of trajectory on where let's say the next steps of Electrification will go and the communication about it.

It doesn't mean that Automation is in a kind of dull area, or whatever you want to call it. It's just the fact that where we currently are, we still have some time left before let's say the targets are being aimed for.

In that period of time, of course, we will evaluate whether there's a necessary point to upgrade, or let's say come in with a new target itself. It's not something we have foreseen right now.

Once Electrification is separated, would it make sense for you to put separate targets on vision systems and tire manufacturing systems?

I think that's a very premature statement. Of course, once the separation take place, for sure there will be communication about the road forward, the strategy, etc.

of the Automation group. That can be moments where these kind of topics will be discussed, but that's too premature at this point in time.

Okay. Then my final question is on the Electrification margin.

It was 12.6% and the goal is to reach more than 19%. During the presentation, you mentioned that utilization will be one of the big drivers, but I was also wondering, will further efficiency improvements be a big component of that improvement?

Is there still a lot of benefits to get from that?

Yes, I can confirm that. There are still improvements, especially related to productivity.

We did some especially in that direction investments in the past few years, and we are taking in the returns on these investments. That helps of course to get to a different, let's say, cost conversion in relation to the turnover, and that helps of course the bottom line percentage.

If

suppose that sales would remain flat in the next 12 months, then with efficiency improvements there is already further margin upside?

Yes.

Okay.

Yes.

Clear. That's it.

Thank you.

Yep. Martijn den Drijver, ABN AMRO.

My first question is for Alexander. What prompted the CEO change?

Can you elaborate a little bit on why you decided, in conjunction obviously with the Supervisory Board, to lead Electrification?

I believe that, let's say, looking also at my age, that the future for TKH Group is in Automation. I believe that there's a very good point to hand over that activity to new leadership, bring also fresh blood in that area.

I can focus myself completely on the transition, a smooth transition of the separation of the Electrification activities, which is a very important project and which also requires full attention.

Just one follow-up. Does it have anything to do with the potential make-up of the acquirers of Electrification, strategic versus private equity mainly?

That is nice that you say that, but that's purely speculation.

We'll see. Then Digitalization is doing well, Electrification is doing well.

I'm assuming a sale, let's hypothetically assume that it will be a sale for both units. The use of proceeds within the Capital Markets Day presentation was allocated primarily to shareholder remuneration, and a portion was allocated to continued M&A in Automation.

Now you have announced a new CEO. Will that allocation change, or will it remain as is?

Maybe just to make a small correction, we have mentioned a certain category or priority of deploying proceeds when we look at capital allocation. Organic growth is the first thing in Automation.

We also look for a build-and-buy strategy. Then we have, of course, elements like share buyback, dividends, and that whole basket.

You presented it slightly different, but I think that's important to highlight that. I think at the moment, this is the strategy which we have.

This is the strategy we have communicated. This is the strategy we move on, and I don't see much change in there.

Because normally CapEx and dividend could easily be paid from your free cash flow anyway.

I still keep to the set of priorities as a list we work with.

I'll move on. On the Eemshaven, how many kilometers did you actually manufacture in the first half?

By extension, do you stand by that 600 km for the full year and that EBITDA margin above 15% for offshore? Now,

as Elling already mentioned, we cannot be too specific on the, let's say, developments of the activities, especially not looking at forward. We are meeting all the customer requirements, and these customer requirements are close to the figure that you just mentioned.

Okay. I'll leave it for now.

Thank you.

Maarten Verbeek, Degroof Petercam. I'd like to get back to Electrification and also your new targets going forward.

If I'm correct, the base level for Electrification is €525 million of '25 revenues. If I add 9%, you will need to achieve at least €680 million in '28.

If I simply double this year's revenue, you are already roughly at that level. Are you very conservative, or you mentioned already onshore energy will do much better, or are you very cautious about your offshore developments going forward?

Just to make clear, the reference point, the 9% is starting as of the 30th of June '26. The reference is €604 million going forward, and we have not specifically mentioned 2028.

We have mentioned midterm.

What is midterm?

The next couple of years.

Okay. Then, I'm a bit surprised about the current pipeline for the inter-array consisting of 92 projects and over 14,000 km, because a while ago you mentioned it was only between brackets 11,500 km and 72 projects more or less.

The talk the statement was always that is until 2030, whilst I only see cancellations and postponements. I'm a bit puzzled by tremendous upgrade in outlook whilst the market is showing actually the opposite.

It is not anymore until 2030, I believe. Jacqueline, it is 2032 that we're looking.

That makes the reference base a difference. Of course it is a fantastic outlook that we have.

That's then clear. Lastly for the moment, you have upped the outlook for Electrification for revenue and your profitability, but you have not done so for your ROCE, which was between 18% and 23%.

What will your ROCE be within this new targets set of targets?

Yeah. That's a good question.

I don't want to, let's say, shy away from answering this, but the ROCE target is a little bit dependent on the final transaction structure and the actual, call it, opening balance sheet, which Electrification will start off with. Not having, let's say, that level of flexibility where this may go in a target right now, this might be something we will address once the separation has been completed.

In September last year, you had a view about that.

Correct.

What has changed in the meanwhile?

You can say the actual process gives a little bit more dynamics to this, and the fact that we basically take back the '28 target into a midterm target also gives a little bit of new flavor to the whole topic. That's why we want to address it at the proper point in time, and that's once the transaction parameters have been clearly defined and then use that as a base point rather than constantly going back to assumptions which are no longer applicable going forward.

Tijs Hollestelle, ING. Also a couple of questions.

I do indeed appreciate the breakdown of the numbers, really helpful. Especially indeed the revenue categories in the Electrification business.

I had a question about the order book. It's €507 million, and I personally assume that most of that relates to offshore cable projects, because in specialty cables it's kind of short notice orders, I guess?

Short notice not really, but it has a different dynamics, that's correct. Your assumption is right.

Then maybe in onshore cable, a few larger orders, but basically the same dynamics. You have a lot of visibility in offshore cable production in the order book.

That's correct.

That's correct. In the past, you guided for about €170 million annual turnover in the subsea cable business.

Looking at first half, you're going to exceed that this year by a mile. Additional upside, let's say, into '27, if operationally everything is running, what kind of annual sales levels are you calculating with for offshore?

What we're calculating with is something which we are not able to disclose. Forward-looking statements related to Electrification in terms of what the second half or even '27 will be, we have restrictions as we are in the dual-track process.

We sympathize with the question you have, but I'm not able to help you very much with that. Your assumption about order book is correct.

I think also about in itself the production capacities, etc., that I can confirm, but not a specific outlook.

That's clear. Then in addition to what Martijn was asking, at what stage of an offshore wind development does a cable manufacturer typically get the order?

That is about two years before the installation will be taking place.

The installation of the foundations?

Yeah.

Two years before that, you get the order, and then when you start producing?

Two years before. The order can be even longer before.

That can go up to three, four years. We start and have the flexibility to start the manufacturing in most cases two years before the installation will be executed.

That is helpful. It's a bit strange from the client perspective.

It is a important mission-critical part of the infrastructure. What we see in general that the customers like to see headroom in respect of meeting the obligations.

That is nice, because we can also then play with the utilization of the plant by moving capacity forward or the other direction to get to the highest utilization and efficiency in the plant.

That's very helpful. One final question for Harm.

What is kind of your worst-case scenario for the second half? Because indeed the order book levels are quite low.

I agree that you're managing the costs quite well, but what is kind of a worst-case scenario in terms of further downside in in the top line in the second half?

Again, a very good question, but since it relates to a forward-looking results, yeah, we have to stay with what we already said on group level, I cannot be very specific on this. Indeed, order book is going down since the order intake is at a lower pace than our turnover.

We still have an order book, we still have work to go, we also still have time to receive orders and catch up again. That's all we can say about that.

There are no strange elements in the top line of the first half, finalizing projects, a lot of revenue recognition, this kind of underlying trends is visible in the first-half numbers of the tire business?

No.

No funnies?

No. No, it's just a very well-managed process, I think.

Yeah.

Martijn den Drijver, ABN AMRO again. On the Eemshaven, did Lochem provide any support in H1, and if yes, will it continue to provide support in H2?

What is very good that both factories support each other. We have moved also capacity from Eemshaven to the onshore business.

That is working out quite well. Also, some cables that fit better into the capabilities of Lochem, we are manufacturing in Lochem.

Okay. There was already a question about the plus 19% EBITDA margin of Electrification, and you mentioned that it was not solely, but mainly due to optimization.

What have you baked in in terms of capacity expansion? Because you were expanding in high voltage in Lochem, for example.

Is that 19% on current scope or including planned expansions?

That's including planned expansions, yes.

Okay. How much would that be roughly in terms of percentages?

Is that 10% plus, 20% plus?

Again, I come back to what Elling mentioned, we cannot be specific about the outlook.

Okay. Another question for Harm.

Can you just talk a little bit more in general terms about developments in terms of Tier 1 versus the Asian players? Because I recognize from the tire manufacturers that they're having a difficult time, but I also know that partly that is due to the fact that the Asian players are gaining market share and building capacity in Europe and other regions.

Can you please elaborate a little bit how that mix is not reflected yet in your order intake?

I think the current situation is that the reluctance to firmly place orders is not specifically Tier 1, that is in general over the whole industry. You could say there are a whole set of circumstances that create this reluctance.

In several areas, the reasons can be different, but in general, high energy costs, high input costs for materials. A lot of the tire elements are synthetic, based on oil.

The high oil price, the high energy price does not help the customers. The differences on trade barriers and tariffs, etc.

makes it also uncertain. In that whole environment, you see in general a reluctance.

At the same time, there is need for additional capacity and there is a need to change production technology into new technology to address the change in the demand for different kinds of tires in the world. Whether that is Tier 1, Tier 2, Tier 3, these elements are still there, all the same.

It's quite clear that there will be a moment that these projects will have to happen. As Alexander already mentioned, we are not losing any orders to any competition.

It's just that the market right now is holding its breath. We expect there will be a moment, and nobody can really predict when that will be, but there will be a moment that these orders will come in.

Whether that is from Tier 1, Tier 2, Tier 3, well, actually I think with the portfolio that TKH has to offer, yeah, where it you could say it doesn't matter where or when or who is going to order what, but it's now just, in general, a slow market.

Understood. One final question, again for Harm.

You were running VMI automated production, you had Vision under your wings. Now you have a new CEO coming in.

What will be your role in the new management board? Will that remain the same, or is it going to change?

Far, it will remain the same. As you say, we're excited to have a new team being formed.

Of course, some roles have to be redefined. We'll see.

We're excited about that.

Understood. Thank you.

A

follow-up question, Michael Roeg, Degroof Petercam. A follow-up question on the question by Tijs about producing a cable starting two years before the client needs it for installation.

You mentioned that you can produce so early that allows you good utilization throughout the entire year. I suppose that means that sometimes you have quite some cable on inventory along the next to the factory, for which there's a lot of room.

Is that on your books as part of inventory, or does the client pay the final installment upon completion and whether it's next to your factory or somewhere else, it's no longer in your balance sheet?

Exactly that last remark is the case. We get paid once we do the factory acceptance test, and then the cable is stored at the storage facilities that we have in Eemshaven.

That's reassuring. That's it from my side.

Thank you.

Trion?

Thank you. Hi, Trion from Berenberg.

Just one question following up on what Tijs asked about the inter-array cable, that revenue run rate is higher than the revenue you talked about in the past. Why was that?

Is that higher than expected volumes or is the pricing a bit higher, or maybe a better mix? What was the reason?

Want to do that, Elling? Now

what is also included is, of course, that it's not 100% cable sales. There is also accessories and services which are part of the revenue stream as we have seen also in '25.

From that point of view, it's not the only running rate in terms of if you want to convert it into kilometers or things like that. It's a combination of services, accessories, plus the connectivity part.

Okay. The €170 million that we talked about was the pure cable part

and Not fully, but that's more with the accessories. Currently, we have some other services part of it as well.

Thanks.

Maarten Verbeek again, Degroof. Could you quantify that as a percentage of offshore energy, what is services, etc.?

We just helped you with a split of the activities.

Now you're asking already for the next one. Obviously, it's a very important contributor to your profitability.

The bottom line, it does not have a big effect, because outsourced activities don't bear the cost you have when you manufacture the products or the services yourself.

Then two other ones. Firstly, you received framework contracts totally €1.4 billion within the onshore energy.

For what timeframe is this meant?

That's going up to 2032, hey?

Even a little bit beyond. It's let's say it has different end dates, of course, but the last part runs till '30 '34, I think.

Okay. Then, one for Harm.

If I now look at your cost of sales, which came down by roughly a million, whilst your revenue declined much more than that, it looks like H2, although you're not willing to give some kind of comment outlook, will decline even further from what we have seen in the first half of this year. What will you be able to manage your costs to your new sales level?

You cannot save yourself into prosperity, as we always say, hey? You cannot manage your costs down at the rate that your profitability remains the same if your revenue drops.

Obviously, hey, you can do a lot on your cost saving, that's quite clear. The only point is that we have to look at when are new orders coming in, when is the market going to return, and will we be able to then quickly scale up and pick up again and benefit from a much higher turnover then?

It is this fine balance that we're constantly managing. Obviously, you can cut costs right away, but then you will miss out maybe quite quickly on the pickup in the market.

That is the balance that we have to look for.

You will be able to reduce your costs a bit, but not an awful lot?

Oh, obviously, you can reduce your costs a lot, but that changes your organization into something that cannot be scale up again very quickly.

It's highly likely that you will be able to reduce your costs, but looking forward, you will be underutilized?

That is a particularly a point that we will not comment on. We're doing our best, and I think so far quite successful in managing our costs.

It's quite clear that if your revenue drops, that even if you manage your costs quite in a very good way, that the profitability drops a little. So.

Michael Roeg again. I have a question about the Vision Systems activity.

I imagine that one of the most important components is image sensors, but there's probably some memory chips in there as well and microcontrollers. Some of these types of chips are going up in price, some are going up exponentially in price.

Can you pass on everything to the client? Second of all, was part of that solid organic growth in the first half of the year also price-driven next to volume-driven?

Now

the price-driven effect was limited. You always have price increases and introductions of new products and systems for which you have different pricing, and that can support also your margin, depending on what the innovation level is and the USPs you have.

What we see is that the scarcity of certain components has not really impacted us a little bit. Also for the second half-year, we see at this moment that we will be impacted limited, the impact will be limited, and we can pass on fully the component price increases towards our customers.

Thank you.

Yeah.

Can we do the Teams questions now?

Hi, good morning all and thank you for taking my questions. This is Chase from Kempen.

I recognize you can't say much about forward-looking outlooks, but I will try to get a bit more detail on the first half regarding the Electrification margin. It's obviously a 12.6% EBITDA.

Could you break it down a little bit if there was a large margin step-up in the second quarter, or do you think the first quarter and second quarter were broadly similar in terms of margin? That would be my first question.

You started yourself with a kind of disclaimer to your question. I'm afraid I have to repeat that a little bit in terms of forward-looking statements.

I think what we have mentioned that the operational improvements which we have made in the last couple of quarters, that we believe that will not stop as of the 30th of June. The benefits of that definitely are there.

I will shy away from giving a specific percentage in terms of EBITDA improvement.

Okay. No, that's still helpful.

Then I wanted to touch back on the onshore energy cables. I know there's been some discussion over the last few quarters about the international expansion there.

Could you provide a bit more of an update on that? When do you see that potentially becoming sort of a real growth driver, or is that already, yeah, let's say, pushing the organic sales growth as well?

We see a good development with our position also abroad, internationally within Europe. Part of this success is already in the order book and also in the turnover.

For the medium term, there's, yeah, very big opportunities.

Okay. Then final question going back to Vision.

There's been a lot of discussion obviously from yourselves, but also from peers about sort of implementing AI tools and sort of enhancing functionality and value add for clients there, and I'm curious on basically where do you see TKH Vision in terms of, yeah, the competitive landscape? Do you feel that you're exceeding expectations in terms of AI implementation, or do you see some peers perhaps growing that side of the business faster?

Just any sort of commentary around the strategy incorporating AI into Vision, please?

With respect to of course peers, what is going on with peers we cannot comment. What we can see is that AI is, yeah, mission-critical for the development and of of the Vision Tech technologies.

We already had longer time ago a very strong software play, and that software play has been smoothly transformed in in an AI play. We we did quite some investments in a AI competence center in Amsterdam, and at the same time, we saw that in several companies in the group, also further investments have been made into AI.

It is different difficult to compare with with competition, but based on the market share that that we see and the opportunities we see, I believe we are doing a quite good job with our position in the in the AI with the AI tools.

You would argue that you're growing market share in the first half at least within Vision?

I believe it's difficult to exactly say that we gained market share, because the comparison basis is difficult. Some of our competitors are in different areas.

In general, we see especially in the defense sector that we are gaining market share, and I believe it's difficult to comment exactly the market share gains in other segments.

Okay. No, that's very helpful.

Thank you, Alexander, Elling.

Thanks, Chase.

Thanks.

Do

we have another question?

Good morning. I had three small questions left.

The first one is actually on Digitalization. With you've had about a swing of €16 million at EBITA line, I think.

Can you size a bit how much that came from sort of the pricing that you point to in the press release, and how that compared to maybe also the volumes out of China and Poland? Of course, you had the benefit of closing the Dutch operation.

A bit of the, what I was looking for is a bit the split here causing the €16 million EBITA swing. Then, within that, how much of your fiber volume is now going into AI data center and defense-related demand, please?

Maybe if I start with the second part of your question. What we refer to in our press release that basically the data centers, AI, as well as defense, they are taking up a lot of capacity in the existing market.

It's not exactly the same as us deploying into these same two segments. We're very much focused when we talk about our fiber optic-related business on the AI part and less on the defense.

As these two segments are growing so quickly, it basically means that the whole industry, which has been building up capacity for the telecom industry, is shifting gears towards complete new industries. That shift we have well taken on, that transition.

We have a good deployment of the fiber optic portfolio into the data centers that is driven by the North American market to a big extent. There we have seen that as this massive, let's say, CapEx programs by very big clients in data centers will consume capacity over the next couple of years, that fiber prices have seen a positive move up as capacity for certain fiber types is simply not there.

I will shy away from specific margins and fiber prices, but an important part has to do of the improvement you refer to coming out of price improvement, basically margin gain.

All right. Then regarding Vision, actually a bit of a follow-up on Michael's question, just I think you pointed to, yeah, machine pointed to the semiconductor, consumer electronics, and battery sort of leading your growth of 12%.

Also, APAC very strong. I guess these three, let's say, end markets, they're quite cyclical and correlated, right?

What are these three combined as a percentage of your Vision sales?

They're I would say for 3D more important than for the 2D segment, and they are creeping up towards close not half, but getting close to half of the 3D sales, and as I said, less for 2D.

Okay. All right, and just a final question on bolt-on acquisitions.

I think you talked about the prospect of that in Automation for some time. Obviously, you've been very busy on the separation process, but is M&A sort of on hold, you'd say, until the separation is complete, or would you still pursue sort of a Vision bolt-on during this process?

No, I think let's say this is part of the strategy. If we are busy or not, we will keep on executing the strategy.

This is on the agenda, and this is what we are following through. There's no stoppage due to the fact that we do other things.

That's not the way how we execute the strategy.

Right. That's it from my side.

Thank you.

Thank you.

Two more follow-ups, Martijn den Drijver, ABN AMRO. Can you refresh our memory with regards to net working capital as percentage of sales, because it used to be that you had a target of 15%

to

17%? 12% to 15%.

12% to 15%. Is that still applicable after the divestments?

I don't recall from the CMD that you actually gave a post-divestment target, but maybe you have, but I just don't remember it anymore.

No, we have not given a specific one, but clearly you see different, let's say, elements of working capital having more impact on the two segments. That's something which definitely will become more clear after the separation itself.

Now it is a mixed basket. As I said, we have not taken back the 12% to 15% specifically currently.

As Harm already explained, the impact of the order intake, that is a major issue when we look at the working capital level, which is 18% for the group.

Okay. Then my second question is with regards to Vision.

You mentioned that the 2D unit has merged its brands, that's possibly the first step. Can we expect more in the second half and into 2027 on the back end, actual savings on the normal things when you integrate companies?

Can you elaborate a little bit on that?

That's actually ongoing. We mentioned in the Capital Markets Day in September that these steps are being taken.

We have, of course, acquired in the last number of years quite a group of companies. Of course, from alignment in terms of R&D roadmaps, etc., we've taken further steps towards integration of these agenda topics across some of the organizations.

That, of course, helps on one side the OpEx level, but clearly it also improves commercial opportunities for the group, and that's also where the benefit can be seen.

Would you say that you've already realized a part of it, or is the majority still to come?

What is the majority on it? We have done steps, but we are not complete.

Got it. Thank you.

Tijs Hollestelle. Still one follow-up on the offshore wind projects.

You probably have seen that in the UK in January there was an allocation round being awarded. I think most of the projects have been won by RWE.

Is RWE now actively tendering with TKH on the cables? Is that part of the 92 projects you're mentioning?

What do you expect on answer?

Sorry.

We cannot disclose of course specific negotiations with customers.

Is RWE part of the 92 projects, because you mention 92 projects, I assume that commercial people of TKH are talking to these companies?

I believe I can say yes,

yeah. But 92 projects, if I basically do a rough rundown of the actual projects out there, yeah, I do not get to that amount.

Are you also including Vietnam and Korea, Taiwan?

No. We are focusing on Europe, these are all European projects.

I believe at this point of time there's no Asian project in Taiwan, could be one or two, but I believe I'm not sure there. The majority is in Europe, including the UK.

Then the 92 projects also include projects which are years from

Of course.

from a consent right now?

Yeah.

Then again, in theory, could you be in a tender with RWE at the moment, or was that already the case, let's say, in 2025?

It is too specific about the customer, and we have a very high market share, we have a number-one position, I believe that gives you already a good reference where we are active.

Yeah. Thank you.

Okay. No questions anymore, then I'd like to thank you all for the good questions, and also in the webcast of the analyst, and a big thank you for attending this important half-year update.

For me, it will be the last time I will be presenting the results, next year you have to cope with my successor. I'd like to thank you all for, let's say, your commitment to TKH, and especially also the audience and shareholders committed to TKH.

I hope, of course, to see you often again, perhaps in a different role. If it would be an IPO with Electrification, I might see you back.

If not, then again a big thank you for your commitment to TKH and the relationship with