Thank you very much, and a warm welcome to everyone joining us today for Aumovio's H1 2026 results presentation. Joining me for today's presentation are our CEO, Philipp von Hirschheydt, and our CFO, Jutta Dönges.

As always, all relevant documents are available for download on our IR website. Following our remarks, we will open the line for a Q&A session with our sell-side analysts.

With that, I would like to hand over to Philipp. Philipp, please go ahead.

Thank you very much, Lutz. I'm very happy to be here today.

After missing the Q1 call, I'm really excited to share with you our latest news. We are now close to one year a standalone company.

What you will see and what you have seen already is that we again made big progress while forward on the cost on the The person

As I said, we are now close to one year. Can you still hear?

Hello? Is the operator?

Hello? Operator?

...made again big progress. One of the progress you can see here, and I guess so of you most probably have seen this slide, you're very familiar meanwhile with that slide.

I will try to summarize it very shortly. BMW has been always one of our main innovation partners.

As a very innovative company, we have been working with them on many different projects, which we first brought to the market together with BMW. That's why we are very happy to be back and to deepen our long-term cooperation and strengthen the technology partnership with a very diverse portfolio of new businesses, ranging from brake technologies, access systems, and different other electronic solutions.

A portfolio of different projects which we agreed upon and which are around €1.5 billion lifetime sales. For our MK C2, our integrated brake system, we agreed to deliver and to extend the serious deliveries through the mid-2030s.

While paying these €350 million, which are scheduled to be paid then in full in Q3 and Q4, we have finalized our warranty case, and we are happy to be back there with BMW extending our portfolio and working on new and fresh products. We have started actually with the first workshop the day after our announcement.

What you see on the next slide is then our financial results, where we have in a demanding environment where our sales went down with close to 8.5% made before the BMW agreement just roughly €4.3 billion sales. We managed, while having these sales down, to keep our margin of 3.5% in the second quarter although we have had one significant one-time event in Q2 last year in User Experience.

We do reflect this result as a very decent one and very very confident that we will build onto these results now also into the second half. The normalized free cash flow is slightly zero, and that's mainly due to the fact that we have had higher variable compensation payments than we have had last year.

That's something we actually also deemed to be necessary for our organization, because why have we been missing or have been negative? Because we had higher variable compensation payments.

As we are forming our organization into a high-performance organization, where we do say that we are very tough on fixed costs, but if we do have success, and '25 we have deemed to be a very successful year, variable compensation, we also pay out to have our people been participating in successful financial results. That's why we had in the second quarter a significant cash out, also compared to last year, significantly higher.

Now, if we are looking onto the customer side, we have seen that we have major project wins in Asia across all business area. What we see that the size, the structure of our order intake is quite fine, and we are happy with that.

We do see that there are still challenging decisions in a challenging environment, specifically in Europe, where we do see that sourcing decisions have been moved into the third and the fourth quarter. It means we have not really lost projects, but we have, and we still have a very robust project pipeline.

You have seen the €1.5 billion BMW, which we record now in Q3. We have already managed to get some other projects in, we are quite confident to reach our goals here in 2026.

Within Q2, we have successfully completed the sale of our Rheinböllen plant, and we have, at the beginning of the quarter, also signed a sale of our Mechelen plant in Belgium. The transaction is expected to be closed in the third quarter.

With that, we come closer and closer to our ultimate goal to have less than 45 production locations worldwide, which shows our clear commitment towards operational excellence and to have production costs into the right direction. About R&D, I'm going to talk later as well, but also there, we are full on track.

We have delivered, and will deliver, measurable savings. You will see for the first half already above 100, Jutta will show, and we expect them to be at more than 200, and additionally to 150 in next year in order to reach our target to be below 10% in 2027.

Then one topic on the customer side. We have made on the compensation for higher memory and raw material costs.

We have concluded with the first customers, and we do see that these significant headwinds, which we experience, we can discuss with our customers quite intensively and made, as I said, quite significant progress there. Today, we will also mention the long-time awaited capital allocation framework.

Jutta will explain what we have established. I think, on the one hand side, we will preserve their financial flexibility as well as supporting then the long-term value creation, and that should serve as a compelling foundation for all our shareholders.

Do we able? There, the slides are back.

What you can see here is that this slide shows that our technology trust strategy is translating into tangible commercial proof points across all our four business areas. Our purpose is that we make mobility safe, exciting, connected, and autonomous.

We do see that we have significant customer tractions through different awards, through launches, and system progress. That you can see, for example, the ecosystem progress on the Autonomous and Commercial Mobility side, where our AD components continue to gain market relevance and that our radars and sensors are being qualified for all leading AD stacks, example here NVIDIA and others.

We do see that we really gain traction not only on the Aurora side, which I am going to go a bit more into detail on the next slide, but also on the pass-car side, and I come to that as well, on our Architecture and Networking Solutions HPC wins. On the Commercial Vehicle and Special Vehicle side, we have further broadened our portfolio, and by that, diversifying out of the pure pass-car business into commercial and specialty vehicle business, an region and area where we do see quite some growth and quite some potential for us.

On the Architecture & Networking Solutions, you can see here, we have important wins in high-performance computing, specifically with one of the emerging autonomous mobility provider US. We have won businesses on the telematics side, on the zone control side, and on ultra-wideband-based.

That's where one of our focuses is in Asia, where we do see significant improvement and significant potential for our business. In Safety and Motion, we continue to see strong customer demand for safety-critical technologies.

I think recent awards, specifically in China for airbag control, One-Box, and other braking-related solutions, are showing our success here. Also in Europe, we have reinforced our business with two other European OEMs with various awards.

In User Experience, we secured two serious production awards for our under-display camera technology across LCD and OLED technologies. You can see that across all our four business areas, we are operating in attractive technology fields, which is reinforcing our confidence in the competitiveness of our portfolio and then also the future growth capabilities and abilities in our industry.

Let me today focus one more minute on one of our highlights in portfolio, and that is our partnership with Aurora. For us, the direction is very clear, and that's, I think, we can all agree upon, no?

With Aurora and the ability to scale autonomous trucking, we have a great chance and a great future ahead of us. We do see that the structural pressures in the US trucking market, particularly the driver availability and capacity constraints, are accelerating, and that the interest in these autonomous freight solutions are constantly increasing.

Some of you might have followed up to recent US policy discussions, which include programs which are aimed to bring more veterans into truck driving, as we do have really a scarcity here, which underlines that the industry demand is increasing for technology that can add capacity and—that's one very important part—increase the asset utilization for carriers. We really believe that this will create a long-term market with significant upside potential for this partnership, for Aumovio and together with Aurora.

That's one of our highest strategic priorities where we are working on, and you're following up now for the last four years. We come closer and closer towards then the production.

You see that it's going to be second half of next year. It's an innovation, it might be some days earlier, some days later, but we are going to get there.

What you see here, and that's what we wanted to demonstrate, is Aurora is, from our point of view, the industry leader in safe-driving freight, with the most mature partner ecosystem to deliver then these solutions at scale. Aurora launched its first generation of driverless trucks last year, and has expanded its network to support 10 driverless routes in the US Sun Belt.

This expansion is accelerating customer adoption, and Aurora has now nine driverless customers. Customers you might heard of that, like Hirschbach, are now planning to buy 500 trucks, and delivery will start then next year.

This further reinforces the opportunity for us to deliver this transformative product at scale. Then we have a new hub, but I mentioned that, and we are on the course of having the fall-back pass field test done, five sensor trucks collecting target routes in the US.

Yeah.

We're back again. Good.

Yeah.

I have explained Aurora in great detail, shown you what technology, what awards, what ecosystems we are building up in all our four business areas. While doing that, and that you see, we focusing our R&D on innovation, and we do not rest to invest into the future.

Innovation is nothing which we are reducing and invest, but we also need to take care of having a competitive R&D cost per sales. That means our holistic approach has diverse measures which we are executing, and you can see here, we are sticking to our goal to have long-term less than 9% R&D, and we are preparing ourselves this year in order to achieve also our long-communicated target to be a single-digit R&D to sales already next year.

By that, I leave it and hand over to Jutta and very sorry for taking too much time.

Thank you, Philipp. A warm welcome to everyone also from my side.

Apologies again for the quite bumpy start this morning and the technical issues that we are still experiencing. I hope that we get through that call now in the remaining time.

I'm going to talk about the numbers. Just as a remark up front, to provide a clearer view of our underlying business performance, all comments on Q2 and the first-half results actually refer to the figures excluding the BMW settlement effects, unless I stated otherwise.

While the settlement had a significant impact on reported EBIT and adjusted EBIT, our underlying financial performance remained relatively strong, and this is this is the focus of our discussion today. Let me start with an overview of our Q2 performance.

Adjusted sales in Q2 came in at €4.3 billion, compared to €4.7 billion in the prior-year quarter. The decline of 8.6% was mainly driven by volume and price effects of €231 million, measures of €160 million, and a negative foreign exchange translation effect of €60 million.

Despite the lower sales base, our adjusted EBIT margin remained stable year over year at 3.5%. When taking into consideration that the second-quarter '25 margin was elevated by reimbursement effect in User Experience, as also Philipp pointed out earlier, our underlying profitability of the second quarter was, in fact, stronger than in the second quarter in '25.

This resilience reflects the continued benefits of our transformation measures, disciplined operational execution, and our ongoing R&D efficiency improvements. Now turning Both normalized and adjusted free cash flow were lower than in the prior-year quarter.

The main driver, also Philipp mentioned that already, was higher than prior-year variable compensation payments. These payments represent a recurring seasonal cash outflow in the second quarter, and were partially offset by lower capex.

Adjusted free cash flow was impacted by ongoing transformation effects, including spin-off and restructuring cash outs. Now turning to the next slide, slide 10.

Turning to our first-half year performance, adjusted sales amounted to €8.7 billion, representing a decline of 8.2% year on year. This development reflects the impact of ongoing geopolitical uncertainty and continued softness in the automotive market.

In contrast to sales, profitability continued to move in the right direction. Adjusted EBIT margin increased from 2.7% to ongoing impact of our transformation measures, cost discipline, and further R&D efficiencies, despite sales and cost material costs and memory cost headwinds.

Normalized free cash flow improved by 34% year on year to €130 million, mainly driven by lower capex. Adjusted free cash flow, however, remained on prior-year level, primarily driven by increased restructuring cash out.

Overall, the first half of '26 shows that even in a challenging market environment, we are able to improve our profitability. Now on slide 11, let's have a closer look at the key financial KPIs for the first half year, and I start with the development of our top line.

As a reference point, adjusted sales in the first half year amount to €9.5 billion. During the first half year, our adjusted sales performance was also influenced by the continued execution of portfolio and footprint measures.

These effects amounted to -€196 million, primarily driven by the discontinuation of the display business in User Experience, amounting to €130 million, as well as the phase manufacturing, contributing -€66 million. Excluding these portfolio effects, sales for the half first-half year period came in at around €9.3 billion.

Looking at the remaining drivers, H1 was characterized by two items: Sales were further reduced by €586 million, with the largest share coming from lower volumes and pricing effects of €434 million, as well as negative foreign exchange translation effects of €152 million. Accordingly, adjusted sales amounted to €8.7 billion in H1.

From a regional perspective, adjusted sales exposure remained unchanged through previous quarters. Now let's have a look at the key effects on the of the adjusted EBIT year on year on slide 12.

With H1 '26 adjusted EBIT margin coming in at 3%, we have achieved an improvement of our profitability compared to the first half of '25. While adjusted gross profit decreased by €96 million in absolute terms year on year, improved the adjusted gross margin by almost 0.6 percentage points year on year, reaching now 20.1% in the first half '26.

This improvement was supported by lower production costs and a favorable product mix. Adjusted net R&D expenses decreased by €115 million, now reflecting the tangible progress of our R&D efficiency initiatives and the disciplined execution of our transformation program.

As a result, adjusted net R&D-to-sales ratio decreased to 11.9% in the first half year first half of this year. This improvement was even more pronounced in the second quarter, with 11.4%, despite the lower sales base.

That demonstrates our enhanced productivity and a structurally more efficient R&D organization. Adjusted SM&A and SG&A expenses increased by €64 million year over year.

This was mainly attributable to costs associated with the buildup of central functions following the spin-off, despite continued discipline across all functions. Other items contributed €43 million to the increase in adjusted EBIT, also driven by foreign exchange effects.

Taking all these factors together, adjusted EBIT for the first half '26 amounted to €258 million, corresponding to an adjusted margin of 3%. Including the BMW settlement, adjusted EBIT is lowered by around €100 million, coming in at €157 million and an EBIT margin of 1.8%.

Turn to the performance of our business areas. On the first half In the first half of 2026, our business areas delivered a mixed performance, reflecting the varying market dynamics and maturity profiles across our portfolio.

Despite an overall challenging operating environment, Architecture and Networking Solutions and User Experience achieved year-on-year underlying earnings improvements. In Autonomous and Commercial Mobility, adjusted sales declined by 12.6% year on year, primarily driven by lower volumes amounting to 10.6% of It's also important to note that the first half of '25 benefited from strong sales volumes related to the EU Mobility Package 2.

Following the completion of this program and the postponement of the third package, volumes declined in the current period, resulting in a less favorable sales mix. As a consequence, adjusted EBIT decreased compared to the prior year.

Autonomous and Commercial Mobility continues to invest technologies, while ongoing cost and efficiency measures helped offset part of the top-line headwinds. In ANS, Architecture & Networking Solutions, adjusted sales decreased by 6.1% year on year, mainly reflecting foreign exchange headwinds and lower volumes.

Excluding foreign exchange effects, the organic sales decline was 4.9% year on year. Despite the lower sales base, adjusted EBIT increased by almost 40% to €142 million, resulting in almost two percentage points higher margin, supported by the continued execution of our disciplined cost management and efficiency program.

In Safety and Motion, adjusted sales declined by 6.7% year on year, reflecting market environment, with the primary driver being lower volumes, amounting to 5.6% of the organic sales decline. Adjusted EBIT, not taking into account the impact of the BMW settlement, decreased by 16.5% to €131 million compared to the first half of '25.

Safety and Motion continued to face headwinds from elevated material costs. Lower net R&D expenses driven by restructuring and efficiency measures yet have not been sufficient not been sufficient to compensate overall market challenges.

In User Experience, adjusted sales declined by 6.3% year on year, with price effects and demand shift contributing 4.4% of the overall sales decline year on year. At the same time, adjusted EBIT increased to €14 million, benefiting from improvement on execution.

Adjusted for the elevated reimbursement level recorded in the second quarter of the prior year, relative performance of UX was even significantly stronger. User Experience continues to show the successful transformation measures over the recent quarters.

Overall, continued market and macroeconomic headwinds affected the top-line and earnings performance across our business areas, while our transformation initiatives and self-help measures provide support on overall profitability of the group. Now let's turn to slide 14.

Adjusted EBITDA amounted to €605 million, and forms the starting point of our cash flow development in the first half year. Employee benefits, provisions, and other cash items, including the reversal of non-cash items, impacted adjusted EBITDA considerably, amounted to €125 million, resulting in an operating cash flow before interest and taxes of €455 million.

Cash-effective investments of €193 million reflected a more cautious spending in the first half, which we continue in the second half if market circumstances persist. Interest and tax payments totaled €148 million, benefiting from lower income tax payments compared to the prior year.

As a result, normalized free cash flow came in at €113 million. Cash-effective restructuring and separating separation-related costs continued to weigh on the adjusted free cash flow.

These special effects included €230 million of restructuring-related cash outflows and €55 million associated with spin-off and separation activities. After taking these special items into account, adjusted free cash flow amounted to a negative €177 million in the first half of 2026.

On slide 15, we show that our liquidity position remains a key strength of Aumovio, providing both financial stability and strategic flexibility. Starting from a strong net cash position at the beginning of the year, the position remains strong at €1.2 billion, affected by negative free cash flow, as discussed on the previous slide, and minor changes in leasing liabilities.

At the same time, net pension liabilities slightly decreased, mainly driven by the increase in the discount rate in Germany from 4.3% to 4.4%, which positively affected the valuation of our pension obligations. Overall, our solid net cash position, reduced pension liabilities, and disciplined financial management provide a robust foundation to navigate ongoing market volatility, while maintaining the flexibility required to execute our transformation agenda and support future growth.

Let me now turn to our updated outlook for the full year 2026. Starting with adjusted sales, we now expect full-year adjusted sales in the range of €17 billion to €17.5 billion, compared to our previous outlook of €17 billion to €18.5 billion.

The adjustment primarily reflects a lower light vehicle production outlook and the business performance in the first half of this year. Turning to profitability, we now expect an adjusted EBIT margin in the range of 3% to 4%, compared to our previous outlook of 3.5% to 5%.

The refinement of our adjusted EBIT margin outlook incorporates our revised assessment regarding higher raw material prices, as well as increased prices for memory components, and in addition, it also reflects the impact of the BMW settlement. We are actively mitigating cost impacts through close collaboration with our suppliers, redesign-to-cost initiatives, and compensation mechanisms.

We expect to see those effects to become more visible in the second half of the year. Now moving to cash generation.

We expect normalized free cash flow to be in the range of €500 million to €700 million, compared to our previous outlook of €500 million to €800 million. This adjustment reflects partially the impact of the BMW settlement.

Importantly, the outlook range was only reduced at the upper end. This effectively implies an improvement in the underlying normalized free cash flow outlook, as we are confident in our ability to steer cash flows.

Finally, let me touch on our further assumptions. For full year '26, we now expect cash outflows related to the spin-off, restructuring activities, and partially the BMW settlement of around €600 million.

For net income and earnings per share, we still expect an improvement compared to the prior year. Now let's have a look at our business areas on slide 17.

The outlook for Architecture & Networking Solutions remains unchanged compared to our previous outlook. For Autonomous and Commercial Mobility and User Experience, we have updated our outlook based on the first-half 2026 results and our latest assessment of market developments.

For Safety and Motion, the revised outlook also reflects the impact of the settlement agreement with BMW. Starting with Autonomous and Commercial Mobility, we now expect adjusted sales to decline significantly year on year, compared to our previous expectation of a moderate decline.

The assumptions underlying our previous outlook remain unchanged, while the revised outlook additionally reflects the business performance in the first half of this year and our updated view on market developments. For adjusted EBIT margin, we continue expect a stable year-on-year development.

Despite the lower sales outlook, this expectation remains supported by additional cost-reduction measures as part of our R&D transformation program, as well as continued cost discipline across production, sales, and admin functions. Turning Turning to Safety and Motion, we continue to expect adjusted sales to decline moderately year on year, in line with our previous outlook.

For adjusted EBIT margin, we now expect a slight year-on-year decline. Previously, we had expected a moderate improvement.

The revised margin outlook reflects the business performance in the first half of the year, the challenging market environment, and the impact of the BMW settlement agreement. At the same time, additional cost-reduction measures across production, sales, admin, and research and development continue to mitigate the pressure from the market environment.

Now looking at User Experience, we continue to expect adjusted sales to decline moderately year over year, consistent with our previous outlook. Sales development continues to be primarily impacted by adverse foreign exchange effects.

For adjusted EBIT margin, we now expect a slight improvement, compared to last year's level of 0.4%, whereas our previous outlook assumed a moderate improvement. The revised profitability outlook reflects the business performance in the first half of this year and our updated assessment of the market developments.

However, our profitability expectations continued to be supported by structural measures, lower material costs, and further gains in operational efficiency. Now let's turn to slide 19 and talk about our newly established capital allocation framework, which becomes effective as we speak.

The establishment of this framework marks another important milestone in our journey as an independent listed company, formalizing the capital allocation commitments communicated at our Capital Markets Day in '25 into a clear and actionable capital deployment framework. The objective of this framework is to provide transparency about our priorities and how we think about the use of capital in the interests of our shareholders.

Let me now walk you through the framework and the priorities that guide our capital allocation decisions. On slide 20, you see our first priority is maintaining a strong balance sheet and financial flexibility.

This includes our commitment to an investment-grade credit profile and a prudent liquidity position, ensuring resilience across market cycles and preserving strategic optionality. Our second priority is investing in organic growth.

We will continue to allocate capital to opportunities strengthen our innovation capabilities and support long-term profitable growth, while having a disciplined approach to our spending. In this context, we confirm a net R&D-to-sales ratio of around 9% in the long term, and we align our target for investments with market reporting standards and introduce a cash-effective capex below 4.5% of sales in the mid-term.

Our third priority is shareholder returns. We establish a sustainable dividend policy targeting a payout ratio of around 30% of net income.

Beyond that, we plan to execute share buybacks based on the availability of excess free cash flow after dividends and M&A. Finally, we will pursue selective M&A opportunities where they can strengthen our technology portfolio, enhance our competitive position, or offer attractive value-creation potential.

Our capital allocation framework is fully aligned with our strategic and financial targets. It ensures that we balance growth, financial discipline, and shareholder returns in a consistent, value-focused manner, and will support sustainable long-term shareholder value creation.

With this, I hand back to Lutz.

Thank you, Jutta. Now we come to the Q&A session.

Operator, please take over for the moderation of the Q&A session. Thank you.

Good morning. Thank you for taking my questions.

I'd like to start with the capital allocation.

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Can you hear me okay?

You can hear me? Then thanks, guys, for taking my questions.

I hope this works.

and

Good morning, everyone. I will check that you can hear me.

Apparently, you need to open the line, yeah.

Hi, can you hear me now?

Hello? It seems to be that in the webcast we can hear you, but not on the phone.

Maybe you can [unclear] solve the problem?

Yeah.

It seems to be that the line is not open. You can hear the people asking the questions on the webcast, but not on the line.

Please fix that. [unclear] Operator, are you still there?

Can you

Thank you.

He can hear us, we can't hear him. Yeah.

That's the problem.

How do we solve it? Maybe

Can you hear me now? Testing, 1, 2, 3.

Can you hear me?

Yeah. If we cannot solve the problem now, it would be our proposal to set up later today a Q&A possibility for you that you can ask questions, because I think this is not the way it should work, and we really apologize for this.

Let's find out when we can do that. You should be all able to ask questions.

I think this is not the way we want to have it. Maybe last question [unclear] to the operator now, if there is an opportunity to let the analysts ask the question that we can also hear it.

Otherwise, we would do it in a separate slot that you all have the opportunity to do so.

Okay. I think everybody can hear me.

We will reach out to you and in order to make sure that you can ask the questions. Sorry for that.

However, we have to stop the call now at this point in time, and we will come back to you shortly. From me, speak later.