Good morning, everybody. Thank you for joining.

I will quickly go through the presentation that we have posted on the website, and then I will open for questions. We are on page 3, a quick overview, and then I'll comment more back on the usual items.

Q1 was overall positive for Sogefi. We had sales growing slightly at constant exchange rate, plus 0.7%, down minus 2.3% with the effect of currencies as expected.

EBITDA and EBIT were slightly growing in absolute terms and therefore also in percentage, thanks to the containment of fixed costs, thanks to a growing contribution margin, and thanks to, at the adjusted level, to lower non-recurring items. EBITDA was 36, EBIT adjusted, 17.4.

Net income was also growing, 10.7 versus 9.8. Free cash flow without IFRS 16 positive.

We'll comment a bit more in detail here about the difference versus 2025 and also the difference with IFRS 16 free cash flow, which is different due to IFRS 16 items that I will explain later. Net financial position without IFRS 16, 4.8 million debt, almost zero debt, and 48.6 including IFRS 16.

The other remarkable piece of news in Q1 was the sale of the Precision Springs business unit, which happened as of the approval of the Q1 results last Friday. Precision Springs is a small unit in the Suspension division.

It produces small springs for automotive, but also for other industries such as aerospace, construction. We are Tier 2 here, we don't sell to OEMs, but we rather sell to Tier 1 producers components.

This unit has no synergies with the rest of the Suspension business unit, as the customers are completely different, suppliers are different, and the production processes are also very separated from the rest of the Suspension unit. Despite its small size, we're talking about 28 million revenues in '25, it's a rather complex organization split across three plants and with a lot of different production processes for different reference of products, which required a certain amount of management attention while providing little impact on the overall BU numbers.

As such, it was always considered non-core, and since we recently received an offer by a company called Associated Spring owned by the Olympic Group, a competitor of our Precision Springs business unit, we decided to accept such offer. We have signed a put option agreement, as we did for Filtration.

In France, you first need to go through the consultation of unions, and you cannot sign a binding agreement until then. That's why we signed a put option that we can exercise after the consultation process is over.

We expect to close this transaction in June or July probably this year. If you would like to have an idea of the run rate of Suspension without Precision Springs, you would have to subtract for '25 28 million revenues and almost 4 million EBITDA.

I would rather now switch to page 4 and comment on sales. As said, sales were down 0.7% at constant exchange rate.

If we look at the different geographies, we see that in Europe is plus 3.5% with the market production which has been shrinking by 1.2. North America, we were positive at plus 1 and market minus 2.

South America, the other way around, we were minus 1.9, market was up almost 4%. China in line with market at minus almost 10%, as expected for China in Q1.

India very positive with even above market, with a very, very buoyant market at plus 10%. If we switch to page 5, we have the performance by business unit.

Here again on the top we have constant exchange rate performance, plus 0.7. Air and Cooling contributed with plus 3 and Suspension was minus 0.8.

Suspension was stable in Europe, declining in South America and China, and India as we said very positive. Air and Cooling was better than market thanks mainly to Europe, where new projects were finally implemented and ramping up, we have now a plus 10% in a shrinking market, in line with market in China and a bit better than market in North America.

On page 6, our customers. No major change.

Just to note the positive performance of Stellantis, which is our main customer, and slightly decreasing Germans, GM, the others. On page 7, we have the usual bridge of EBIT performance.

If we start from EBIT adjusted in 2025, 17.1 million, 7.6% of sales in '25, we have positive contribution from volume and contribution margin in percent. We have slightly negative contributions from net fixed costs, from restructuring, from G&A, and from exchange rate.

We get to a higher EBIT in absolute value and in percent, 17 million and 6.9%. As I said before, the non-recurring items were negligible this quarter, whereas we had 2 million last year.

On page 8, we see the full P&L. Contribution margin up from 28.6 to 30.4.

We were implementing our budget actions in managing pricing and purchasing, and that was done effectively. Fixed costs stable, slightly down in absolute value, and therefore EBITDA adjusted growing in percent and value.

Non-recurring items we commented, nothing to highlight in '26. EBITDA, therefore, including non-recurring, is 36 versus 34.8.

D&A is slightly growing due to the new projects, especially in Air and Cooling. Then you see EBIT and EBIT adjusted.

EBIT adjusted, I just commented in the previous page before, is growing. No major change in financial results and in tax.

Therefore we have a net income after recurring activities, 11.7 million, 4.6-- 4.7%. I can now comment page 9, free cash flow.

We have a better free cash flow this year. This is without IFRS 16.

We have 14.3 versus 8.7. We have a higher contribution by operations.

We have slightly worse working capital, also because we use less factoring than last year. Lower capex compared to Q1, although this is just a temporary effect and we will catch up with our capex plan in Q2 and Q3.

As I said, if you look at the free cash flow with IFRS 16, there is a substantial, quite relevant item, negative item related to the renewal of a contract, of a leasing contract in China. Therefore, the free cash flow to be IFRS 16 is positive for only 7.7 instead of 14.3 here.

If we go to page 10, Suspensions. Suspensions we already commented on the sales.

What about the EBITDA adjusted? We have growing in absolute number and in margin, thanks to the contribution margin, which is up 1.5%, thanks, as I said, to effective management of pricing actions and purchases.

Fixed costs decreased by 1%, and this all allows to have a positive performance as Suspension division. Air and Cooling next page, page 11.

We have EBITDA here slightly down in percent and in absolute value, mainly due to a different product mix in NAFTA compared to last year. Contribution margin was on the other hand a bit better, but those new projects have also a higher incidence in terms of fixed costs and amortization ratio, so that's why you see declining EBITDA.

Page 12 is just a reminder about a financial situation which is very sound and with long-dated maturities, no issue here. In terms of guidance, we can skip to page 17.

We confirm that visibility, as you might imagine, has been decreasing after the start of the war. Nevertheless, Q1 was solid, as you've seen, and in Q2 we don't expect major changes to happen for the time being.

We still see orders keeping up for the time being, and the impact of raw materials will probably be limited in Q2 because of the structure of our contracts. We have fixed prices at most raw material contracts until Q2.

We have seen that energy increases in some locations, especially in Italy, a bit in Germany, but in other countries there's been so far very limited impact in terms of electricity costs due to the structure of the electricity supply in those countries, such as France and Spain. Yes, there will be a lot of volatility, but probably if there will be more remarkable effect on sector, on the margins, that would probably be shifted to Q3, Q3 and beyond.

It's very, of course, difficult as of the time being to assess what the impact could be because the situation is changing rapidly. We don't know where the petrol prices would be at the end of Q2 and Q3.

Very low visibility. Far, we can only confirm the guidance that we have given for 2026, with a low-mid single-digit revenue decline and adjusted EBIT margin substantially in line.

I would stop here and open for questions.

Good morning, everyone, and thanks for taking my questions. I have four.

The first is on the increase of raw material cost. Can you please tell us the percentage of the cost of plastics on your revenues and the percentage of the energy costs?

The second question is still related to the raw materials. I was wondering how much of the cost increase is the company able to pass through customers through renegotiations with customers, and how long does this take?

I know that the first half maybe will not be impacted, but going forward, I think that the company as the rest of the suppliers will have to renegotiate the cost increase with the final customers. Another question is if in the light of the increase in the cost of plastics, what are your expectations in terms of EBITDA margin by year-end for the Air and Cooling?

Conversely, for Suspension, I've seen that the group marked a significant improvement in profitability in the first quarter, and so I'm wondering what are your expectations for Suspensions by year-end, let's taking apart the disposal of the Springs? Thank you.

Okay. On raw material pass-through, as we have a very scattered situation across many customers.

We have some customers with the indexation on raw materials. Indexation in those cases is not a perfect indexation, in the sense that we are linked to the base raw materials, metal scrap or metal wire, metal rod, flat products.

This is the basic steel products that come out of the steel plant. In fact, we don't buy those products.

We buy already semi-final product. We buy tubes, we buy bars, we buy wire to make the coils.

In between those indexes and us, there is a sub-supplier which works for us and can provide to us what we need. Those suppliers, we also have in some cases indexed contracts on raw material, but then they usually start asking for other inflation components such as energy typically, so that maybe if scrap goes up by 5%, then they might ask 7%, 8% due to electricity cost increase.

The raw material component we can transfer easily to those customers where we have an indexed contract, it's a one-to-one transfer. The electricity component is normally subject to negotiation on both ends, on the supplier end and on customer end.

The adjustment, the process takes a few months, but we have made some experience now in '22 especially, we know that we need to move early and we also need how to negotiate individual cases based on the contract, so that we have gained some experience and we hope to be quicker and more effective than in '22 when it took quite some time to readjust the profitability. In the end, usually we go back to a similar level of profitability, that's the history we have.

Part of the contract is a hard fight, it's not given, but we know how to do it and so we will move accordingly. Cost of plastics...

Plastic... ...plastics is around-- Plastics is around, considering a 60% of average raw material on sales, the plastic is around 25 on sales.

Only for

Air and Cooling. Only for Air and Cooling.

Sorry, it's 60% the cost on sales, and plastic 25% the cost on sales. Is it correct?

Yes, just for Air and Cooling. Okay.

Okay.

With regard to the margins, so far we don't have reasons to assume that we don't reach the budget. The guidance we gave at the end of '25 of maintaining EBIT adjusted figures for both business units should be maintained, with Suspensions a bit better and Air and Cooling temporarily down due to mix effect that we expect to recover later on.

Of course, this is based on a situation which is, for the time being, still stable, but that could be unstable, most probably would be unstable over the next few quarters. We don't have any indication of how big shocks could be and how long it would take to recover.

Very clear. Thank you.

Thank you very much.

Thank you. Good morning, everybody.

On Precision Springs, could you share with us what was the performance in Q1? I suppose it's a small portion of your business, but we assume stability for this year, maybe growth, just to have an idea of what could be your assumption in the full-year guidance contribution.

In terms of volume, strictly referring to volumes, in Europe and North America, do you expect to outperform overall this year based on the new Standard & Poor's indication for volumes? Third is on the usual update on the Romanian plant, just to understand how the profitability is progressing in these big plant.

Thank you. Okay.

On Precision Springs, we published the figures for 2025, 3.8 million EBITDA reported. If we go to adjusted, it's a bit better.

It's slightly above 4, 4 million euro EBITDA, and that's also something that we expect to be stable. This business is not volatile as automotive.

It has been performing quite stable, with a few percentage points growth, not major swings in the annual revenues. That's the number that I would take for adjusting the group figures.

A bit more 4 million 4 million EBITDA and EBIT about 3. In North America and Europe, we outperformed in Q1.

In the mix of sales for 2026, we still think that we can do a bit better than market here. Not probably for the whole year at the same pace that we have seen here.

Probably NAFTA better than the market due to some new products that should kick in later. Europe was a bit of a surprise how much we overperformed, maybe not this level over the course of the next quarters.

Your last question was...

On the Romanian plant.

Romanian plant, we gave an update after the full-year call with the COO of the Suspension business unit. The plant is now progressively being loaded.

It's now working with setup processes that are now working, it's going to be the main plant for taking European programs going forward. We are now transferring part of the OE production.

It's still not at full regime, we still have spare capacity, and the economic performance is not yet where we want it to be, and that will happen maybe in a couple of years more when it will be fully loaded and working at full efficiency.

Thank you, Michele.

Sorry to bother. Just a final question on the Suspensions for the heavy duty.

I know that the company could be willing to dispose it as it is a non-core. I was just wondering what kind of margins should we figure out by year-end, and what could be a sustainable margin for these operations, if you can help us?

Thank you.

Heavy Duty is separated from passenger cars. I wouldn't call it non-core.

It's not as non-core as Precision Springs. Precision Springs is completely different set of products.

Heavy Duty is much more in line from production processes with passenger cars. It's just a bigger product, but same production processes, similar suppliers, it's not as detached from the rest.

Having said that, yes, it's a separate business, separate customers, the two businesses could be separated without any loss of synergies. We don't have anything ongoing for the sale of this business right now.

The company was a top performer sometime ago, with EBITDA margins close to 20%. Now it's the bottom of the performance scale within the business unit.

It has gone through some very relevant market changes over the years. We had some very profitable products where Chinese competition entered and compressed the margin substantially.

We had operational issues for the last three years in some of the plants, which weighed substantially on the performance. We have now a new management, a turnaround program which is underway, we hope to be able to maybe not get very very very quickly back to the numbers we once had, but certainly to restore a decent level of profitability.

For 2026, we hope to have it back in positive EBIT territory, although there is quite some work to do to get there, and also it much depends on the market. As the cycles in the heavy-duty market are very, very short.

There are cancellations of orders very quickly and then start of production as quickly. In this situation where due to the conflict and other disruptions, we have an impact on the supply chain.

There might be temporary drops in demand for trucks, which, of course, we cannot foresee for the time being. High volatility, turnaround ongoing, we should be back in positive territory end of the year, hopefully, or beginning of the next year.

Thank you very much.

Thank you very much, everybody, and see you at the next conference call. Goodbye.