Good morning, ladies and gentlemen. Warm welcome to Zumtobel Group's conference call on the Q1 results for the financial year 2026/27.

Joining me today, as said, is Alfred Felder, our CEO; Thomas Erath, our CFO; and for the first time, Heiner Lang, our designated CEO. Alfred will cover the highlights of the quarter, followed by Thomas with the financial performance.

Afterwards, Thomas, Alfred, and Heiner will be available to answer your questions. The report and the presentation are available on our website, where a recording of this call will also be provided afterwards.

With that, I hand over to Alfred.

Thank you, Eric. Good morning and welcome, ladies and gentlemen.

Thank you again for joining us today. Before we move into the project highlights, as Eric announced, and the financial results for the first quarter, I would first warmly welcome Heiner Lang, our designated CEO and my successor.

Heiner is joining our analyst and investor call for the first time today. As it was announced on August 17, Heiner has been appointed as the future CEO of the Zumtobel Group.

He has been a member of the Management Board since September 1st and will take over the CEO on October 1st. Heiner, I would like to give you the floor to introduce yourself before we continue with our presentation.

Thank you, Alfred. Good morning to everybody.

I'm very pleased that I have joined Zumtobel just 48 hours ago. I'm 50 years old.

23 years of thereof, I'm married with my wife, Julia. We have a son who is turning 16 in a couple of days.

I'm very happy that I could join Zumtobel in a very interesting period of time, where we have great, let's say, challenges, but also endeavors in front of us to create a new chapter for the company. Of course, it's much too early to say anything in detail today.

I'm starting my, let's say, 100 days tour to listen, to understand, but also to recognize where we have probably the shortfalls and where we have the potential, how we could develop the company into the future and then get back to profitable growth, what is our main goal and my personal ambition. I would say I would leave it like this today.

I have more to say in a couple of weeks, and then we see again.

Thank you, Heiner. As it's clear, Heiner will then conduct the half-year results in December, and I think then he will be able to tell you much more already.

Heiner will stay with us for the rest of the call, please also feel free to address any questions to him during the Q&A session. With that, as usual, I would again guide you through a couple of highlights, indicating that we are gaining traction on those strategic pillars what we have.

First one, this Blackman distribution center in UK what we did, where we provided the complete lighting solutions for an Amazon distribution center here in [Lutterworth?] .

The project covered the supply of the products, typically our high runners, the TECTON 2 and the CRAFT 2, plus the lighting system, along with the complete installation and the project management service. Here, I'm proud to say that we supported this project from the initial planning through the whole execution.

Second, Vatican. As we are the light partner of the Vatican.

Again, another highlight, the Vatican Necropolis beneath the Saint Peter's Basilica what we did, demonstrating here the expertise on the lighting. Here, the challenge is that's an underground location, is isolated from the outside, and the humidity levels here are between 98% and 100%, which is particularly demanding conditions also for lighting fixtures.

Then a very far away project, Auckland in New Zealand. That's the largest infrastructure project, the Auckland City Rail Link installation, where here we have equipped three stations with different type of luminaires, also including the drivers on DALI-2 from Tridonic.

Again, as I indicated a couple of times before, we make progress again in stadium. Here, this time, an example in Austria, the Graz-Liebenau Stadium what we did, the home of Sportklub Sturm Graz since 1902.

This was upgraded into the new floodlighting using our ALTIS G5 LED luminaires, and it's now UEFA Level A standardized. Then again, a framework agreement with Konzum in Zagreb, Croatia.

That's here, the customer is operating one of the largest retail networks in the Adria region. Here, we are doing both renovation projects as well as new projects across Croatia, Slovenia, Bosnia-Herzegovina, and Serbia, again with our flagship product, the TECTON continuous-row lighting system.

Also in the next couple of years, also up to 10 new stores are planned next to the refurbishment. Last but not least, I would just give you an update.

We are currently not allowed to share the pictures here openly from the customers' data center update. Here, this is really emerging as one of the key growth engines for our business.

Here, we have, for example, one example in quarter one for the Nordics. Here, we have secured two major projects, and typically, these projects are between €1 million and €1.5 million, where we equipped the entire light for this data center.

In addition to that project volume, these opportunities will also provide attractive recurring revenues with long-term service agreements, creating really a profitable growth in the future. Let me now give you an overview before I hand over to Thomas on the financial performance of our first quarter.

Again, especially here in the European market, we are facing the continuous challenging business environment. Market conditions are remaining difficult.

At a group level, revenues declined slightly by 0.9% to €264.1 million. Here, the Lighting Segment generated €211 million, slightly above the prior year, while the revenues especially in the Component Segment amounted to €67.5 million or a 4.8% below last year.

The adjusted group EBIT increased to €8.2 million, corresponding to an adjusted EBIT margin currently of 3.1%. These figures are in line with our guidance, clearly show that the challenges facing our company remain, but they also demonstrate that the measures we have been initiated, we are having a positive impact.

This, I think, we have discussed with you in the last call when we did the year-end, the progress what we made with our efficiency program. With this, I would like to hand over to Thomas, who now will explain these results in more detail.

Thank you, Alfred. Good morning, ladies and gentlemen.

Let me start with the Lighting Segment. Q1 revenues in the Lighting Segment amounted to €211.1 million and were 0.2% above the previous year.

Revenue increases in the Northern and Western Europe and overseas regions were able to compensate revenue declines in the DACH, Southern and Eastern Europe regions and the pricing pressure in the segment. Adjusted EBIT in the Lighting Segment increased from €11.4 million to €12.2 million.

Our adjusted EBIT margin rose to 5.9%. Cost saving and higher revenues contributed to these results.

Let's move to the Component Segment. The revenues in the Component Segment declined by 4.8% to €67.5 million in the first quarter.

With the exception of Asia-Pacific, all other regions recorded declining revenues to the difficult economic and market environment. Adjusted EBIT in the Component Segment was slightly above the prior year at €1.4 million in the quarter.

The adjusted EBIT margin stood at 2.1%. Lower material costs were able to offset the decline in revenues.

Slide 7 shows the Q1 results for the group. Revenues in the first quarter fell by 0.9% to €264.1 million as a result of the decline in the Component Segment.

Adjusted EBIT increased to €8.2 million compared with €6.6 million in the first quarter last year. Despite a revenue decline in the Component Segment, the adjusted EBIT margin improved to 3.1%, thanks to lower material costs in both segments and the ongoing efficiency measures.

Slide 8 provides you with information on our income statement. As I mentioned, our adjusted EBIT increased to €8.2 million.

Special effects were negative at €0.7 million and were related to the efficiency program. After the deduction of these special effects, our EBIT totaled €7.5 million.

Our financial result amounted to -€2.8 million, and net financing costs amounted to -€2.3 million. Other financial income and expenses totaled -€0.5 million and included the interest expense for pension obligations, FX, and hedging valuation.

Profit before tax totaled €4.8 million compared to -€3.9 million last year. Income taxes amounted to -€0.6 million.

As a consequence, net profit increased significantly to €4.2 million. Earnings per share equaled 11 euro cents.

Let's move to the next slide, the cash flow statement. Cash flow from operating results increased year on year from €12.8 million to €20.8 million, mainly due to improved profitability.

The change in other operating items amounted to -€10 million, mainly due to the reduction in provisions for variable remuneration components. Cash flow from operating activities stood at -€4.2 million versus €1.3 million last year.

Cash flow from investing activities amounted to -€12.2 million. As a result, free cash flow equaled -€16.4 million versus -€10.6 million last year.

Cash flow from financing activities amounted to €4 million versus €12 million last year. Compared with the prior year period, borrowings were €10 million lower.

Let me finish with Slide 10 and some comments on our balance sheet. The balance sheet structure remains stable.

The equity ratio is, with 43%, on prior year level. Net debt rose in comparison with the year-end close to €148 million.

Our debt coverage ratio equals 1.64. With this, I hand back to Alfred.

Before turning to our outlook, let me briefly revisit the market outlook slide from July. This already for Europe.

The underlying Euroconstruct data from June has not changed since that time. What we have seen confirms the previously committed and communicated trend.

2026 remains in line with our expectations, while the outlook, especially for 2027, continues to point towards stabilization and a gradual recovery. In other words, the sector is gradually coming out of the recession.

The cycle appears to have turned, even though the pace of recovery remains moderate, especially in key countries like Germany, and the broader market environment is still challenging. With this recovery, we continue to expect new-build growth will take the lead from 2027 onwards, which was for many years not the case, while the renovation remains a structural pillar, especially in the non-residential construction, and will be supported by regulatory and environmental requirements.

Again, this backdrop, our strategic priorities remain unchanged. We are focused on capturing renovation opportunities and positioning the Zumtobel Group to benefit from the anticipated upturn in non-residential, especially new construction.

As you all know, the lighting industry typically lags behind in the construction cycle, we expected any sustained market recovery to translate into an increased demand for solution in a certain time delay. That brings me directly to the outlook slide.

The overall market environment, as we said several times, remains challenging, but with the measures we have taken in the efficiency program in place, we have set a clear course to position the company for sustainable growth and continued innovation. With the reference of these factors, we expect our revenue to be at previous year's level.

On the margins, we expect an adjusted EBIT margin between 3% and 5% for the entire year. Planned CapEx remains at approximately €50 million.

Before we take your questions, I would like to add a personal note. As this will be my final conference call as CEO of the Zumtobel Group, I would like to thank you for your trust, for your interest, and the constructive dialogue over the past years.

I have appreciated the many valuable discussions what we have over the years. I'm confident that the company is well positioned for the future, and I wish Heiner, the Management Board, and the entire Zumtobel Group team every success in the years ahead.

With this, we are ready for taking your questions. Thank you for listening.

Hello. Can you hear me?

Yes.

All right. Congratulations on the improved results.

Mr. Felder, thank you very much.

It was an absolute pleasure to join all these conference calls and conferences together with you. All the best for your future.

Mr. Lang, congrats on the new position.

Also all the best for this new position. From my side, just two questions for now.

Firstly, could you maybe give us your view on the rather significant differences in the regional developments in this quarter? Secondly, how should we think about volume development and pricing by division for the rest of the year, and what is embedded in the current guidance?

Thank you.

Perfect. Thank you very much, Mr.

Steiner. It was also a pleasure always from my end to talk to you and exchange the views.

Let me maybe start with the second question first, especially on the prices. I think we have mentioned it in the last quarters, we do see quite significant price increase not only in the raw material, be it steel, be it copper, be it aluminum, but recently also on semiconductor due to the shortage of the semiconductor what we have.

Obviously, that will lead us that also we have to increase our prices. That's already the case on the component level.

Interestingly, here, especially those Chinese competitors of us have done this already a couple of months back before the summer time. When it comes to the volume development, we are seeing in some of the products a higher volume development, but this is partly the fact that due to the higher efficiency now what the drivers do have, the customers can use lower power drivers, what are also more in volume, but less in price.

On the regional development, I think Thomas has already mentioned it, on the components level, we are seeing some development in Asia, but the rest remains flat, especially in our DACH territory. On the illumination segment, we have a good mix of growth countries, be it Italy, for example, be it UK, but also be it some overseas countries in China, as well as in South Asia.

What remains challenging is the DACH territory, especially upfront Germany, and with a flat development in Switzerland and in Austria on the illumination side.

That's very helpful. Thank you very much, and all the best.

Thank you.

yeah. Good morning, everybody.

Thanks for taking my questions. Firstly, coming back to Patrick's question also on volume and pricing, did I get this correct that the improvement in components now in the first quarter was due to better volumes, pricing still weak, but this should gradually improve then?

No. Maybe if I jump in on that, what I wanted to say is we are not really seeing an improvement across the regions in volume.

Otherwise, we would see a better growth. You've seen we have still a negative development on our top line, and that's a result of still extreme prices under pressure with a rather stable volume and also with the fact that for a lot of applications, not the higher-value drivers are used, but the mid-value drivers because they are good enough to drive this efficiency levels of LEDs.

Okay. Understood.

Then a second question, could you give us a number for the cost savings you realized now in the first quarter, and is it possible to split it in the divisions?

In the cost savings based on our efficiency program, you mean?

Yeah.

Compared to what? To the year-end or

Exactly. I think last year you realized this €10 million.

You're guiding another €40 million, €50 million. How much of these cost savings you realized now in this first quarter?

Is this possible to quantify?

It's very difficult to quantify, but we are still in the progress of this efficiency program, and we expect another significant saving this year, which will be also in the region between €7 million and €10 million.

Understood. Then, yeah, also lastly from my side, thanks, Mr.

Felder, for the great communication and everything in the past, and wish you all the best for the future.

Thank you. Maybe just if I may add qualitatively, we have, I think, mentioned it that there are a couple of phases in this program.

We are currently in the phase that we have built up resources in our global business centers. This is up and running.

This last quarter and the next two quarter, we will train this people in the different functions, be it lighting planning, be it in the all administration in the finance and Thomas Erath's orbit. Once this is ready, we need to see that they are well trained, then we will shift the competence completely there, and that would automatically then result in reduction of cost in high-cost countries.

Obviously, it depends a little bit how fast all these people are up and running, but the target is again what Thomas said, a high single-digit additional savings what we plan for this year.

Thank you.

Hi, everyone. Thank you for the time and good morning.

First off, thank you, Mr. Felder, for all the earnings calls, and it was a pleasure to meet you lately as well at the Light + Building.

Welcome to Dr. Heiner.

I have two questions, please. Just to follow up, maybe three.

The first one is on gross margin improvement actually, the 70 basis points to 37.4%. Just if you could help us how much of that improvement should we consider structure versus any benefit that might have arisen in Q1?

If I may add here, also how much of the gross savings are actually dropping through EBIT as well? Thank you.

That's the first one.

The gross margin improvement, I think a lot has to do that we are still continuing to aggressively try to save cost on the materials on one side. Here, we have made despite the fact that costs are increasing, gain additional cost savings.

Then as I said, the gross margin improvement in some countries already in the illumination business as well as in the components business, we have been able to increase prices and hand it over to the market, to the customers. Simply also it's a little bit easier because our friends from China are extremely highly under pressure.

I'm pretty sure you have studied their balance sheets. They are deeply negative, and that's a result that the whole market has been able to push this price increases through.

With your question regarding savings dropping to EBIT, our savings are stated gross, as you know. We have material shifts in our material ratio, and we need to increase the prices that we keep our margins stable.

If you look only at our savings program, I would say the savings coming to the P&L are below €5 million, but very close to €5 million.

That's very helpful. Thank you.

Then I had a follow-up on the regional mix. Obviously, Asia and Americas grown particularly well in Q1.

I'm just trying to go back. You mentioned Asia was particularly impacted by components, I'm just trying to understand, is Americas' performance due to, let's say, a weaker Q1 comparator or are you seeing any main, let's say, project-led applications such as the data centers, sports and infrastructure that could help you grow throughout the year in Americas as well?

Thank you.

Yeah. As we should not over-evaluate the Americas and as well as some parts of Asia because in the US, our revenue is relatively little compared with the total revenue we do.

That's true for both the components business as well as for the lighting business. The good news is that we have been able to stabilize the business there.

When it comes to Asia, we have a significant growth in both segments, lighting and components, in China. When we talk about larger countries, we are very proud on the progress what we do both again in components and lighting on Italy, also in some of the Eastern European countries, I would name one like Romania, where we have a high double digit.

Obviously, as we have indicated, we have continued to invest in the Middle East territory despite the war. We have been able to gain traction here and have a growth.

On the other hand, I don't want to hide that especially in the DACH territory on components level here, first of all, Germany is remaining extremely weak.

Thank you so much. I just have a quick third one, if I may, on working capital.

I think it rose to 22.2% of rolling sales and it contributed to a weaker free cash flow. I just wanted to get a sense if this is seasonal and should we expect to normalize throughout the year?

Thank you.

You're fully right. This is a seasonal effect, and this should flat out throughout the year.

Thank you so much. Again, congratulations.

Yes, thanks. Just a quick follow-up question on the high performance transformer you talked about in the past with the use case for the data centers.

Is there any update you could provide us on this topic or a timeline would be helpful? Thank you.

On the data center from the components level?

Power conversion.

Yeah. We are intensively worked on the power conversion.

It's still too early to communicate, but we are with the key customer having good discussions on progress. All the indicators what we do have signalize that we have here a clear differentiation.

Obviously, between middle of 2027 and end of 2027, we would see the first momentum, and then I think Heiner, in this case, will be able to share this with you. All in all, it's looking very promising.

Sounds promising. Thanks.

Thank you again for listening. Just last statement from my side.

Please extend the same support what you did to me also to the new team led by Heiner, and Heiner will then conduct together with Thomas the Q2 or the half-year call beginning of December. Have a great day.

Thank you.