Ladies and gentlemen, good morning, everyone, and welcome to the Elmos conference call covering our results for the second quarter and first half of 2026. Thank you very much for joining us today and for your continued interest in Elmos.

Following an outstanding start to the year, we continued our strong operational execution in the second quarter. We again delivered profitable growth, further improved our operating profitability, and generated significantly higher cash flows compared with the previous year.

These ongoing positive achievements are the results of the strength of our business model, our excellent strategic positioning, and our disciplined execution. With a very successful first half behind us, we fully confirm our ambitious guidance for the full year 2026.

Our consistent operational execution continues to be recognized by the capital markets. Despite elevated AI-related volatility across the semiconductor sector in recent weeks, the Elmos share price has increased by around 50% year-to-date, resulting in our inclusion in the German mid-cap index MDAX in June.

This marked another important milestone in the company's development and will further increase our visibility among international institutional investors. Let me start with an update about the current semiconductor market.

Demand for our innovative analog mixed-signal semiconductor solutions continues at a high level. China remains a growth driver, while product ramps in Japan, Korea, and a slightly better demand across Europe and America further support our business.

Importantly, our growth continues to be driven by structural trends rather than short-term fluctuations in global vehicle production. Electrification, ADAS, software-defined vehicles, and increasingly intelligent vehicle architectures continue to increase semiconductor content per vehicle.

These trends create an attractive long-term growth environment for us. At the same time, we continue to monitor foundry capacity and the evolving semiconductor supply chain very closely.

While demand for our analog mixed-signal automotive semiconductors continues to be robust, we see clear signs of tighter 8-inch wafer capacity. AI-driven power semiconductors for data centers are also processed, at least partly, on the same wafer size as our Elmos products.

As foundries and OSATs increasingly prioritize fast-growing AI applications, automotive capacity is expected to become more constrained, resulting in higher wafer and assembly costs. We have successfully managed similar situations before.

As in the past, we expect that allocation-related cost increases will be passed to customers in a disciplined and balanced way. Recent pricing actions announced across the semiconductor industry reinforce our view that pricing may strengthen in the second half of the year.

Based on our experience during the 2021 to '23 allocation cycle, we believe Elmos is very well positioned. Our fabless business model, diversified manufacturing partnerships, and long-standing foundry as well as customer relationships position Elmos well to navigate this environment.

Therefore, we see limited downside risk and potential upside from selective pricing actions, as well as opportunities to further strengthen our market position. Our project pipeline remains very encouraging, and we continue to win excellent new business across regions and applications.

Year-to-date, we have successfully acquired new projects with a lifetime volume of more than €400 million, around 60% of our annual target. As these design wins convert into serial production programs over the coming years, they provide excellent visibility for future growth.

In addition, robotics is developing into an increasingly attractive opportunity for Elmos. We continue to expand our customer base, deepen relationships with leading robotics players globally.

Although the business, of course, as you all know, is still at an early stage, the progress we made in the recent quarters reinforces our confidence that robotics can become an attractive additional growth pillar for Elmos over time. Let me now continue with the financial highlights of the first half and the second quarter of 2026.

Sales increased by more than 15% year-on-year to €314.5 million during the first half, reflecting continued strong customer demand and successful product launches. Sales in the second quarter continue to increase, as planned, by more than 6% sequentially or 11% year-on-year to €162 million.

We are also confident about the second half of the year. Based on the midpoint of our full-year guidance, we expect H2 sales of approximately €338 million.

In addition, selective pricing action driven by the current allocation environment could provide some upside. While it is still too early to quantify the potential impact, this represents, for sure, an opportunity for the second half.

Gross margin in the first half was 45.2%, improving by 3 percentage points year-over-year. The increase is mainly due to the higher volume and cost improvements.

Like in the previous quarters, gross profit was impacted by higher gold prices in assembly as well as higher foundry and OSAT costs. At 27.5% of sales, OPEX in H1 was higher due to the one-time expense in G&A of around €12 million, resulting from the fair value revaluation of the share-based compensation.

As we have already announced in May, the stock-based compensation will be settled in cash for the time being instead of equity, meaning transfer of shares, due to the almost complete cancellation of the company's treasury shares. The underlying incentive plans or the number of shares that may be granted, of course, remain unchanged.

The only change is the settlement mechanism. Under IFRS, the change from equity to cash-settled triggers a different accounting treatment.

Please note that the €12.1 million P&L one-time impact in Q2 are also based on a share price of €180. If I look today, this is not the case, but if we look at the end of the quarter, this was the case.

At a share price of, say, around €150, the P&L impact would be a lot lower. It would be a half or less of the €12 million.

Going forward, these non-cash accounting effects will move up or down with the share price each quarter. Since they are purely valuation-driven and unrelated to the underlying operating performance of the business, they are excluded from our financial guidance, which shows the operational performance of our company.

We think this is reasonable, and this is, by the way, also what almost all other companies that run such programs do. Since 2020, share-based incentive plans have been granted to approximately 20 senior executives, including members of the Management Board.

At the time of grant, these plans had a total value of €5.4 million and are linked to the share price performance until the end of 2035. This is when the longest-running program actually runs out.

Since the first LTI programs were granted in October 2020, the company's value has increased by almost tenfold as of the valuation date, end of the quarter two. This high share price, of course, benefits shareholders while naturally also increases the value of the long-term incentive programs.

Returning to the business, operating EBIT increased to €75.8 million, corresponding to an operating margin of 24.1%. This is an improvement of nearly 4 percentage points year-over-year.

This outstanding development highlights the strength of our business model and our continued focus on profitable growth and operational excellence. Including the mentioned IFRS accounting effects, the reported EBIT reached €63.7 million in the first half of the year.

Even including the non-operational effects, the EBIT is well above the prior-year level. Capital expenditures remained very disciplined at only 2.8% of sales in H1 despite continued growth.

Our previous investments in manufacturing efficiency and test optimization enable us to support higher volumes while maintaining a lean capital base. One of the most encouraging developments is our ongoing improvement in cash generation.

Operating adjusted free cash flow reached €55 million or 17.7% of sales during the first six months, an increase of around 150% compared to last year. This underlines the successful transformation of Elmos towards a business with significantly stronger cash conversion and higher capital returns.

Ladies and gentlemen, let me finish my presentation with the market outlook and our guidance for the fiscal year 2026. S&P projects in its latest July forecast a global production volume of 91.1 million new vehicles.

This is down around 2% versus 2025. As we have, however, highlighted consistently, growth in the automotive semiconductor market is not only driven by the underlying vehicle production.

Instead, it is fueled by powerful trends that continue to drive semiconductor content per vehicle higher. On top of these structural tailwinds, Elmos is benefiting from the many design wins secured in recent years.

Together, these factors position us to continue outperforming both the automotive semiconductor market and our peers while providing a solid foundation for achieving our long-term growth objectives. Based on the strong first half execution performance, the continued high demand for our products, and the visibility provided by our product pipeline, we fully confirm our ambitious guidance for the fiscal year 2026.

We had upgraded in May a little bit. We continue to expect sales growth of 12% plus or minus 2 percentage points, supported by an operating EBIT margin of 23% to 26%.

Despite our strong growth trajectory, capital expenditures are expected to remain low at around 5% of sales, underscoring the attractive scalability of our business model. We also continue to expect excellent cash generation, with an operating adjusted free cash flow margin of 19% plus or minus 2 percentage points, and our guidance assumes a euro to U.S.

exchange rate of $1.15. Ladies and gentlemen, the first half of '26 confirms that Elmos has entered into a new phase of profitable growth and sustainably improved cash generation.

We combine structural market growth with innovation, operational excellence, and disciplined capital allocation. As a result, we are creating increasing shareholder value while maintaining an attractive financial profile.

Looking ahead, we remain excited about the opportunities created by automotive megatrends and increasingly intelligent automotive electronics. Supported by a strong pipeline of design wins, an efficient fabless business model, and a highly committed global team, we believe Elmos is exceptionally well positioned for sustainable long-term success.

Also looking beyond automotive, we are excited by the opportunities emerging in humanoid robotics. Leveraging our proven mixed-signal semiconductor expertise, we are building a strong position in what we believe could become one of the most attractive growth opportunities for the semiconductor industry over the coming decades.

Thank you very much for your continued trust and support. I would now like to open the floor for your questions.

Thank you for taking my questions. Just on your full-year outlook, can you give a little bit more details how you think about the quarters for the second half in terms of revenue and margin development?

You stated also during your prepared remarks that pricing could be an upside to this. We are now in August, what is happening on the pricing front at Elmos?

Some bigger peers already announced this year two times price increases, and yeah, what are your expectations therefore for your company?

Thank you for your question. Maybe I was a little bit too timid in commenting on the pricing.

Of course, prices go up. This is the reality of allocation.

This is on a very good way with our customers. Most customers accept that, of course, you have to adjust to the market situation.

As chips are becoming a little bit tighter and shorter again, it may actually be a good idea to go through that together and to put a focus on securing supply, which I think is key in this situation. Consensus, I believe, is already a little bit above the midpoint of the guidance.

The good thing about the guidance range is that you only have to adjust your guidance when you're over the upper end of the guidance range. If we look at H2, we are pretty confident that we've got a very good time ahead.

Got it. Regarding the allocation topic, entering 2026, the situation was, yeah, inventory's not a headwind anymore, but then we got the Iran war, auto cycle improving, etc.

Now looks like increasingly a situation where your customers need to think about securing maybe their allocations in advance, the volumes they need. My question is, are you already seeing customers refilling their inventories, willing to take a higher inventory levels or accept higher inventory levels than two, three quarters ago where they really placed orders on short notice?

What is the customer thinking right now? Are we shifting to really building inventories again and strategically maybe a bit more than historically seen?

For the time being, I don't think so. We're in the process of reacting to allocation.

That we would actually see a rising inventory level, I don't think so for now. If we look at, say, the end of the year or maybe the first half of next year, I'm not so sure what the reaction is.

We have a pretty good track record of what the run rates at the different customers is, which is good because then you can assess what they should need. For now, I think we're still in adjustment mode.

Got it. Thank you very much.

Yes, good morning.

Good morning, Mr. Ries.

Good morning. First, congratulations to the strong performance compared to your direct competitors.

Maybe let's start with this. What product groups has maybe been the strongest driver, which gives you, compared to most other players in the automotive space, this stronger performance?

We see that ADAS is actually a thing that gets more and more real. That is real in China, that gets even more real in China, and that gets more real in other parts of the world increasingly as well.

We also ramp airbag products this year, you put so much R&D effort into them over the years and now they finally ramped. This is also nice.

If you see the illumination on the outside of cars, think of us. We'd like to help to make these things possible.

We think we've got very kind of positive segments that are really part of the automotive future.

Great, thanks. If I see illuminated cars, I think on Elmos.

Can you repeat Maybe I didn't got it right about the design wins in the first half? Want you catch in, maybe one or other, they didn't get it.

Maybe can you repeat it? Maybe how's the design Yes.

wins in the first half

year? It's €400 million lifetime value.

This is about 60%. This is maybe the more intuitive number.

It's about 60% of what we should have done for the year. Now we're kind of at half year and we're 60% done.

One reaction would be, let's lean back. The sales bonuses are all secured.

The thing is, we don't cap them when it comes to design wins, don't lean back. It could be a very good year.

Therefore

I think the pipeline for the second half for design wins looks also good.

There's no structural change whatsoever. This is running at an excellent speed.

Okay. Maybe a little bit more on robotics, no?

It's a hot topic. Also your direct competitor from Belgium said, yes, it's interesting part, but even next year, it's not a very strong contribution to sales.

Is it also the case for Elmos? Or could we also see maybe a meaningful contribution to sales starting next year?

No, and this will not have a meaningful contribution next year. Any change in a big segment that goes from €150 million kind of 10 or 20% up will have a much higher magnitude in terms of growth contribution than the robotics.

This is the nature of the small emerging things, that first they seem small, but then they compound. Only with this compounding.

It's not that robotics is a growth driver for next year. It will for sure grow, but it's not a growth driver.

Next year we ramp ADAS at a big U.S. OEM, which will be a growth driver.

We have an e-fuse ramp. It's more of the very advanced car things that make us we think grow next year if we look into our books.

If I got it right, in your 2030 ambition of €1 billion, there have been no robotics at this time you made this figure,

no? Nothing.

No, no. Yeah?

This is just because if something doubles every year, it also means that kind of the statistical estimation range that you would have to give That's why we wanted to be clean. We just give nothing, and everything comes on top.

It's clear. Therefore, if it comes and maybe it gets really meaningful towards the end of the decade, it's ice on the top.

Yes, exactly.

Okay. Next also one other my take away on cash flow.

If I looking in the past, the second half was most times stronger at the cash flow side than the first half. Could it be the same this year, or is it, yeah, there's no rule on this maybe that the second half is normally better on the cash flow side?

No, no, this is this is this is exactly right. Q2 is always burdened by seasonal effects.

All bonus payments, for instance, happen after the AGM. Some other things happen in Q2.

Q2 is always and and then Q3, with rising revenue, usually a little bit rising profitability, then these you you observed rightly. There's this little seasonality in in this cash flow thing, and it's it's nicer in the second half.

Last question, you mentioned maybe the problem set is you are compete with AI on 8-inch wafer, that maybe there's some shortness, and you think you could win market shares. You did it in the past.

Is it that you maybe secured more delivery on the wafer side already? Therefore, you think because you are more ready to deliver and fulfill the requirements of your customers that you could win market shares like in the past?

Let me postpone that question a little bit. It's a little sensitive at this time.

I think we're very well positioned in this allocation. We got good relationships with the foundries.

We have reasonable discussions what our customers need and where we can help the industry in general. I think we all don't want to push senseless inventories.

We want to secure the ongoing demand, and we're having very very positive discussions at this point in time, and very responsible discussions overall. However, there is tightness, and we'll have to manage through that.

If you do it for the second time, it's a lot less scary than if you do it for the first time.

Last time, so, yeah, please go on.

Last time, we hugely benefited, we're in a positive mood.

I'm follow on in the last

We're in a very positive mood, but it's not all finished.

Yeah. Thanks a lot.

Thank you, Mr. Ries.

Yes. Good morning, can you hear me?

Yes, we can, Mr. Schaumann.

Good morning to you.

Great, great. Good morning.

First question is on actual wafer volumes due to the mentioned shortages. How confident are you that you receive sufficient wafer volumes to support expected growth until the end of the year and then going into 2027?

For this year, this is mostly done. Everything that's not in production right now is not going to have that much impact on the yearly revenue.

Generally, as I said, it's a little sensitive, but I believe we're having very reasonable discussions. We're having very good discussions.

In the end, the car should get the wafers. This is where this thing I think in the end comes down to.

Yes, there will be price increases to a certain degree, which is necessary to show the commitment of the car industry towards getting those wafers. I do not think that there will be a negative impact on our growth next year.

It could rather be the other way around.

Yeah.

Don't press me, please, for too much detail. Some things are in the making, and we are in very good mood.

Some things are in the making, and I can't completely comment on them.

Okay. A comment on the gross margin that was declined slightly.

Typically it's, yeah, more or less flat to slightly up in the second quarter. Anything that comes up to your minds?

No, Malte, hi, this is Ralf, if I may, I can jump in. Hey, you remember the first quarter with the 46.4% gross profit margin?

That was a little bit higher. We had some inventory revaluation things in the first quarter.

So 44% for the second quarter, and year-to-date 45%, I think exactly in line with our expectations. Nothing, yeah, out of the ordinary to report here, I would say.

Yeah. That's fair.

Any pricing effects are not in there, right? Because they only start now.

So That was exactly. The pricing effect more or less started at the end of Q3, right?

Exactly. Or some weeks earlier, but it's kind of that you won't find a gross margin pricing effect.

Also, generally, we pass on cost. Then you would see no effect at all.

When you say yes, with the growth that you see over the course of one year, usually the second half financially is a very good time of the year.

Right. Thanks.

Thank you, Mr. Schaumann.

Yes, good morning, gentlemen. I have two questions.

The first one is related to the stock options. Is now everything done with Q2, or will we see further effects on the cash and the earnings side in Q3 and Q4?

As we continue to cash settle, there will be effects on cash, but the effects on earnings of course can be positive and negative. If I look at the share price, where is it currently?

Somewhere between €140 and €150. Maybe €145 or so.

Then you would see a gain of probably something in the high single digits in Q3 if the share price now stayed exactly flat. The IFRS 2 standard is a little complex one, and the valuation that takes place is an Excel sheet that doesn't fit on a toenail.

Generally, you will see when you go down from €180 to say €145, you'll see pretty significant gains, book gains. It's all extraordinary, we exclude it from operations, because we think these fluctuations more or less cloud the picture of what is happening in the real business.

That's why we will always report that, but we think we should also provide the number and guide the number that is not impacted by such effects.

This is Ralf. As long as we stay on the cash-settled mechanism for the time being, you will see some extraordinary earning volatility every quarter because I have to remeasure at the current share price every quarter.

That's the thing going forward. Again, that's extraordinary, not in our operational performance.

What should we expect on the cash side for Q3 and Q4? Can you maybe

This is excessively hard to predict because it depends on the share price and a lot of other things. Honestly, I can't say.

Basically, it's same mechanism, right? If some threshold will be shared, I would say little.

Yeah.

You don't know. You really don't know, because it really depends on the development of the share price that

The reaction of people to it.

Yeah. It's so hard to predict.

Even if you knew the share price, then you'd also have to know the volatility and a lot of other things that go into these models that we just say we need to exclude that. It's not so easy.

Yeah. Then the second question is related to the visibility of your customers.

Yep.

In the past, you also mentioned that especially from Chinese customers, there's a very short-term behavior. Did that change anything or, in general, how is customer behavior and your visibility on that?

No,

I think the general nature of the different regions has not at all changed. This has been the same over the past 10 years or so, and I kind of at least in my lifetime, I don't expect any changes.

Generally, I believe what customers recognizes that you have to be a little bit more disciplined in putting your orders in. A year ago, some customers that have been not so disciplined in putting orders in because they operated under the assumption that chips would always be there in the quantity you desired even at very short notice.

I believe now we are through the adjustment period that most people know chips are not there at very short notice in every quantity that you could potentially desire. People try to put in their orders kind of in line.

However, the logistical challenges in a fast-moving economy remain. That means short-term ordering still remains to be a substantial topic in certain regions.

Okay. This is now more on the real demand, or still dependent also on inventory levels on the customer side?

Generally we are, I believe, in a pretty balanced situation. People have reached the inventory levels they desire.

Sometimes we think they are too low, but there you go if that is their desire, or their need for cash. We also have parts of the automotive value chain that is really cash-strapped, and you can advise them to have more inventory.

However, they may advise you that they don't have the cash for more inventory. We think part of it is nevertheless too low, but unlikely to change in the short term to an adequate level.

I think we are in a balanced inventory situation, not much build-up, not much drain.

Okay. Thank you.

Thank you, Mr. Spang.

Ladies and gentlemen, this is the end of our conference call on the H1. Thank you very much for your participation and your questions.

I hope to meet some of you in our upcoming roadshows in London and in Brussels and during the investor conferences in September. I guess I meet almost all of you.

Thank you very much for your support and your interest in Elmos. Enjoy the summer, the rest of the summer.

Goodbye for now. Take care.

Stay confident. Thank you.