Thank you, and good afternoon to everybody. As you all know, we continue to navigate in a complex environment in which macroeconomic and geopolitical situation affects also the consumer demand.

In this context, Sabaf was able to report second-quarter results with give a positive trend with sales increase both compared to the first quarter and to the second quarter of the previous year. This good improvement is due to the strategic initiatives that are going on and that are contributing to give Sabaf a solid position as a global supplier of components for household appliances.

More specifically, in the quarter, we recorded sales at 73— €73.6 million, up by 3.5% compared to the same period of last year. Growth would be at 4.4% at constant exchange rates.

The areas where we proved specific growth was Asia and Africa. As regards Asia, we recorded a growth of 17% compared to the previous quarter of last year, and this is due to the ramp-up of the Indian plant, one of our strategic initiatives.

After some years of presence, in the end, we have good visibility on the opportunities of the backlog, and the backlog confirms that this area is giving us the some satisfaction and some some positive results. Also looking forward, we are now more positive than ever on the opportunities on in the Indian market.

As regards Africa and Middle East, the increase of 30% is partly due to the postponement from the first quarter to the second quarter of some deliveries. We all remind that first quarter was affected by the start of the conflict in the Middle East in in Iran, and so some sales have been just moved from first to second quarter.

The situation there remains complex because we know that the political situation is still critical, and so we cannot expect that the same trend stays stable for for the months and for the quarters to come. Still, there is a lot of uncertainty in this area.

Also, LatAm confirmed a very good performance, growing double-digit compared to the same quarter. This was the joint contribution of a solid market trend, especially Brazil proves to to stay as a growing market.

On the other side, we have won new new new orders with some of the players in the market that allows us to to work substantially at full capacity in our Brazilian plant. As regards US and Mexico, North America, we have flat sales, would be slightly grow slightly positive at constant exchange rate.

This is the combination of a a weak market in US, but with the increase in market share due to the sales from the Mexican plant. Still a couple of comments here as regards US.

Actually, we see a weak market in the mass market, but we see a solid performance for the high high-end part of the market. As regards our sales, this solid performance in the high end compensates lower volumes for for the mass market.

As regards Mexico, we have to say that starting from the second half, we expect a further increase in sales because new products that are already in for which we have already started production, but not sales during the second quarter, will start sales and will boost both sales and profitability of the Mexican plant starting from from H2. Also here we have a good visibility for for the second part of the year.

As regards Europe and Turkey, more in general, the market stays substantially flat. In some cases, we have been able to gain market share, especially in Turkey.

In Turkey, some of the some of our customers have difficulties due to the weakness and competitiveness of the market. We have compensated some decrease in sales on this kind of customers with a higher penetration in in other more solid customers, and this has allowed us to keep substantially stable a stable level of sales.

All that brought to an EBITDA for the quarter at €10.7 million or 14.5% of sales, which is up compared to the figure of the first quarter when it was €9.5 million or 13.6%, and slightly below compared to the second quarter when it was €10.9 million, just €0.2 million higher than than in the second quarter of '25. We have to say that all the impact of lower profitability comes from the exchange rate effect.

We have a weak dollar this year, both in Q1 and Q2, against the euro, but also against the Brazilian real and against the Mexican peso, which are other areas where where we have production, local cost, and part of sales are denominated in dollars. Part of this unfavorable fluctuation of the exchange rate has been compensated mainly through operational efficiency, and so we have been, let's say, been able to minimize, to reduce the impact of exchange rate.

As regards sales prices, they are they are stable, substantially stable during the quarter and during the half, we did not pass in increase in prices during the second half. Most of that effect will be visible in the second part of the year.

The same is as regards input costs, input costs did not impact in a material way the results, the operating results of the first half, and in particular of the second quarter. This is mainly due to the fact that the group was hedged on raw materials and also partly hedged on on energy costs.

Let's say, I repeat once again, the slight loss of profitability comes from the exchange rate, from the forex negative forex impact. Below EBITDA, we have a stable value at around €5 million per quarter as regards the depreciation, no change there, while below EBIT we have booked the adjustment for the value of the put option of MEC.

That we have a put option, we will buy 49% of MEC, the American company for which we bought, acquired the majority in '23, and the value of this minority stake is linked to the results of MEC. The results of MEC continue to improve, and so we have adjusted the value of this of of this option, this potential liability of for around €4 million during the quarter that have been recorded partly in financial expense and partly in forex forex differences.

Also, we have booked higher income taxes compared to the previous the previous the same quarter of the previous year. This is due to the fact that in second quarter '25, we booked a one-off tax benefit linked to some tax incentives for investments made in Turkey that brought to a, let's say, a positive figure on the income income tax row.

This is not the case for the year, for the this quarter, and so the comparison brings to a more important difference for which that it is visible at level of net income. The quarter closes with a net income of €0.9 million.

It was €3.2 million in second quarter 2025. I'd like to comment now the financial position of the company.

We have seen, starting from working capital, we have seen an increase in working capital driven by an increase of the level of stocks. This is linked to a choice made by the the company, by the by the group, to grant the supplies for some materials for which there were uncertainties on deliveries, and so it was necessary to grant operational continuity during during the the months to come, but also to grant a level of price that was lower compared to the the present prices.

We see starting from the second quarter, we have seen an important increase in the in the prices of the main raw materials that Sabaf uses. I refer to aluminum, to steel, iron, and to brass.

We did not have an impact on profitability in second the second quarter and will partly mitigate this impact also due to the purchase strategy and the supply strategy that brought, on the other side, to a temporary higher level of stocks that we expect to be back to more to more standard level, more normal level by the end of the year, and so to to to reduce to to reduce the impact of net working capital on on sales. During the quarter, we also paid dividends for around €7.5 million, and so net net financial position at the end of June is at €85.2 million, of which €60 million is represented by pure debt, let's say pure financial debt.

Then we have booked €19 million for the liability for the MEC minority, and €6 million debt, which is linked to the leases, let's say the the rent to to pay in future years for the real estate leases that that we have that we have in course. A couple of words now as regards the outlook.

Let's say that the general environment, general the general market sentiment has not changed, and we do not expect any material improvement on the main markets where we are. On the other side, Sabaf is self self-helping to bring some sort of growth.

The trend that we have seen in the the second quarter could gone for for the second part of the year, and we expect to be able to complete the recovery of the compared to the drop that we experienced in the first quarter. By the end of the year, we expect that sales will be up compared to 20 to 2025.

We are managing the impact of the increase of input costs partly with hedging. Most part requires and has required price list upgrades, and so we have negotiated and obtained new prices mostly mostly starting from the beginning of the second half.

Some negotiations are still on course, and so we think that this could contribute to mitigate a lot the the impact of input costs. We also continue to work internally to further improve improve the operational efficiency.

There are a lot of initiatives that goes in the direction of continuous improvement and both at the factory and as regards corporate costs. The target is to to defend the the operating profitability during during the year.

More specifically, I'm referring to further verticalization of manufacturing in India, to further automation in some of the plants, which is on course. We are also focusing more, as as announced, our expenses, our, let's say, budget for the induction operations, so that we are giving priority only to some of the projects for which we have higher visibility, and so the cost for of that structure has been reduced, and will continue to be reduced during during the months the months to come.

On the other side, we continue to think that induction can bring us some some possibility and some opportunities for business diversification, and so continue to work also in this in this direction. For the moment, I would stop here and are available and I am available for any questions that you'd like to to ask.

Thank you.

Yes, good afternoon, everybody. Thanks for the presentation and for taking my question.

I have a couple. The first one is on US.

You mentioned that mass market was kind of weak, while the high end of the market was a bit stronger. Is something you expect also to continue in the second half?

Which kind of outlook you have for the US market in general for the second part of the year? The second one is on India.

In which kind of capacity saturation are you currently working in India, and how much are you expecting to have, for example, for next year in terms of saturation?

Okay. Yes, starting from the first question.

Let's say that this trend of a sort of polarization of the market that affects the US, we see a similar trend also in Europe in reality, at least this is our feeling and the perception that we have from available figures. The comment that we have is that high-end market is less impacted by the inflation pressures, by other economic let's say elements that keep the mass demand more under pressure.

Up to when, let's say, the discretionary part of the demand remains so weak, it's possible that this trend continues. To see a recovery of the demand of the mass market, the level of confidence for consumers has to improve.

This depends of the general level of uncertainty. Of course, price inflation is a matter.

More in general, the available income affects the demand. We all have to remind that the appliance industry is still working with a level of appliances sold both in US and in Europe which is nearly double-digit below the '19 levels.

It's not yet a normal level of the market, and this has brought to this polarization of the demand. This is our analysis.

As regards India, let's say that we have to distinguish between the two product lines. One is valves, for which we are working at full capacity, and we're going to increase capacity with some small incremental investments during the second half.

This could bring our potential capacity from around €3 million, which is the present capacity, to €5 million. This is just for valves, for which we are experiencing a solid demand, even because Sabaf is offering aluminum valves that compete against local domestic brass valves, which are more impacted by the increase of the cost of raw materials.

This brings us a higher level of competitiveness also on this market. The second product line is burners, for which we are working on a specific model designed for the Indian market, which is now under the prototyping phase and test on some of the customers.

This product has been featured and is designed based on the requirements of the market, and so this should also boost our sales, even considering that the unit value of a burner is much higher than the unit value of a valve. We are not yet in the position to give specific figures on this because we have not full visibility on the potential sales, but we can say that in '27, also burners will contribute to the Indian growth, and bring also this plant well over the breakeven level.

In the first half, we were not yet at breakeven, could be at breakeven in second half, and then in '27, also in India, we are forecasting positive economic results.

Thank you very much.

Thank you.

Good afternoon. A few questions, maybe I start with a follow-up on the key strategic drivers, if you can give us some color also on situation in Mexico.

You were mentioning in the call that you are expecting further growth in the second half. Clarification, if you are commenting so half-on-half, compared to the current level, or compared to last year.

If you can give us some color on the visibility on this growth. On a market comment, maybe just to conclude on Brazil, on general LatAm, I was seeing some comments from your clients about a slowdown in the market.

How do you see the situation there? That is usually quite volatile.

You were also here commenting on some market share gain. Then two questions on the numbers.

Visibility for the third quarter should be quite good, I'm trying to understand how do you see the development, if we should expect, let's say, more balanced contribution from Q3 and Q4 compared to last year. Last was on the profitability.

Trying to understand here how much is the risk of price increases not fully offsetting the input cost, and if you have some additional efficiencies that can support on top of the higher volumes that you are flagging for the second half.

Yes, starting starting from Mexico. We expect that in the second in the second half, we will nearly double sales compared also to the first half.

We had sales up around 20% in H1 compared to H1 '25, but starting from July, we are nearly double doubling the level of sales. To give you some more specific figures, sales were in the range of €4.5 million.

Sales are denominated in dollars, but I translate in euros because then we consolidate figures in euro in euros, were €4.5 million in the first half, we expect to be at least at €8 million in H2. This is mainly for one big new product platform that we are now supplying, and other new projects that would bring further further that will bring further volumes will come also in 20 in '27.

We will continue to invest for capex expansion in Mexico. The the plant has been from the beginning started to host a much higher production than the present levels.

We are we started with three die-casting machines, then we've added a fourth one, and in the beginning of '27, we will add a further one, we'll increase capacity for another 25% compared to to the present level. In this moment, we are working at full capacity in Mexico with the installed capex that we have there.

As regards Brazil, let's say we have not any specific signs of slow down. We have seen for for at least of for at least of quarters now good level of sales.

Of course, the visibility that we have is limited to some months, but I do not have any information about a a a different trend for for the time being. Generally speaking, demand stays at good level, stays high.

Of course, there are the elections in Brazil in the next in October, if if I'm not wrong. This could represent a moment of uncertainty, but then let's see.

For the time being, we are working at level of sales which is higher compared what was our budget in the beginning of the year. As regards Q3 and Q4, I confirm that of course, we have a good visibility on Q3 that allows us to comment the outlook for the for the full year, even if we we have not yet a complete backlog for Q4.

We have been used in the past years to see a Q4 we- which is weaker. It's been a sort of seasonal trend that we expect that could be the same also also the year.

This is not does not imply a further drop in the market demand, but just, let's say, a policy, choices made by the customers to to close the year with the lowest possible level of of stock. In this sense, it is possible that Q4 confirms to be a weak a weak quarter as as it was in '25 as and as it was also in '20 in '24.

This is possible. As regards profitability, we have I've not much more to comment in addition to what I commented before in the sense that, yes, the impact of input cost is is there.

We we have done what we could to to minimize it, but of course, part of the impact is is there. Price lists increases cover part of this effect.

Some negotiations are still open, and we continue to work on operational efficiency. The target is to offset the impact of input costs, and day by day, we are working in this in this sense and this in this direction.

If I may follow up with a couple of additional questions. The first on the profitability, just to, say, put some qualitative trends.

Prices would be up, volumes would be up, FX broadly flattish, better than the first half, but let's say broadly flattish year-on-year, input costs up, energy and raw material. These are the three the four main.

Okay. The follow-up on MEC, because you are raising for the second time in two years, also last year you raised the value, the performance has been well above, say, plans.

Can you give us a sense of what has been achieved, what is the expectation, for example, for 2026, what is the level of profitability that you are now getting from MEC?

Yes, let's say that MEC we have been working with MEC both on the sales side, on the supply side, and on the internal performance or on factory efficiency. All these three different gears have contributed to improve profitability.

Nowadays, we are working in MEC with a stable EBITDA margin above 15 15%, which is substantially double compared to three years ago when we entered in the company. Here is where we are.

Still we have some work to do, and that could bring further satisfaction to us.

Thank you.

Thank you.

Okay. Thank you, everybody, and good afternoon, and see you soon.