Good morning, everyone, and a warm welcome to the conference call related to our Q1 results and trading update. Before we move into the details of the Q1, I'd like to remind you of the cautionary note regarding forward-looking statements, and that you take good notice of what we have here on the screen.

The next slide shows our result development. I believe it's a quite good result development both in growth in turnover and the result, especially related to an improved performance of Electrification.

Organic growth in turnover came out at 9.6%, and the adjusted EBITA came out at €46.4 million, and that was an organic growth of 19.1%. In this slide, I'd like to especially point out that we are progressing according to plan with the process of the separation of the Electrification.

A lot of work has been done. It is a complex carve-out process, but we are very confident that we are on track and that we can keep our promise that we will announce within 12 to 18 months, starting from the Capital Markets Day in September, that we can announce major steps.

I go to the next slide to give you a little bit more color on the results of the divisions. I start with Automation with the two divisions: Vision Technologies and Automated Machinery.

Vision Technologies, we had a quite good performance with a 7.4% organic growth. What especially is good here and that looks better than what we achieved in the turnover growth is the growth in the order book, especially in Machine Vision.

We have disclosed that we have seen a substantial increase in the order intake, which also translated in a substantial higher order book for Machine Vision. We have, by the way, also seen that several peers disclosed also very positive information.

What we see is that the market is quite good for us. It relates especially to consumer electronics, the semicon, where we see that we gained new positions for specific applications, and the defense sector is doing quite well with, yeah, many new customers in our order book for the defense sector.

We also saw that Security Vision performed well, and yeah, there of course larger projects are an important let's say backup for growth, and we continue to have large projects in the Security Vision segment. I move to Automated Machinery.

As predicted in respect of and guided for due to the lower order intake that we had in previous quarters, the turnover came down with 6%, and we, yeah, foresee that the order intake will remain at a lower level. However, we see that we are continue to be well-positioned for a large sales funnel.

For the short-term, we see that there's hesitation and some postponements. However, the pressure is on with our customers to move into further automation of their factories, and the high-end innovative technology is, yeah, spot on to improve the efficiency of our customers.

We are confident that the order intake at a certain point of time will get to higher levels again. I move to Electrification.

We saw very strong growth, especially in I would say the real Electrification, which is focused on the energy transition activities. Very high turnover, more than 20% organically.

We are very happy to confirm that a big part of the growth came from the increased output levels at Eemshaven, whereas also the onshore activities are doing very, very well. We see a very high demand, and we are today almost sold out.

However, additional capacity will come on stream in the coming quarters due to some investments we initiated last year. We have the potential to further grow and support the demand from the Dutch network operators.

Specialty Cable performed slightly better than last year. We see some favorable customer developments and especially in the automation segment.

We are quite confident also with further positive development of the Specialty Cable business. We could announce yesterday, I believe officially, that we won a new contract for the offshore wind activities, 162 km inter-array cable for Vattenfall's Zeevonk offshore wind farm project.

Then I move to Digitalization within Electrification, which is the segment that we officially report, the Electrification segment. We are very positive in respect of what we have seen in the development of the Digitalization activities.

We substantially reduced our operating expense by also moving capacity from the Netherlands to Poland and making that space available for Electrification for the additional investments we are doing there. Very good to see a much lower operating expense and further a strong improved fiber optic market, especially related to the US, where we see very high fiber prices because of shortages in that market.

A positive result since a long time in the Digitalization area. Far the specific update per segment.

Then I move to the outlook where we have reiterated our outlook as communicated on March 5th, and bearing unforeseen circumstances, we expect organic growth in both turnover and adjusted EBITA. Far our presentation.

I would like now to hand over for questions.

Hi, good morning all, and thank you for taking my questions. I just have a couple, and I'll take them one by one, please.

Starting on the return on sales margin, could you discuss a bit of the moving parts between the fourth quarter of last year and this results? Because I'm trying to understand that step down.

I understand there's probably some impact from Eemshaven upgrades, but could you maybe help me understand, yeah, the other moving parts in that?

Good morning everyone. Indeed, Chase, part has to do with some of the elements you mentioned like the Eemshaven, but also you have seen that in the fourth quarter we had an exceptionally high level of deliveries across quite a few segments, including in the Automation part, and that helped basically the incremental quite a bit in the fourth quarter.

That's not something we see across the board in the Q1, despite the fact that there are some segments of course, which are highlighted by Alexander, has shown a good growth in the like-for-like towards Q1 '25.

Okay. Also just a tough comp in that sense.

Then, yeah, second question would be on I think you reference in the press release you're expecting to continue investments in Eemshaven throughout the year. Could you elaborate a bit on what actually needs to still be done there and sort of the scale of these investments throughout the year?

Should that also pressure margins for the remainder of 2026, or how should I think about that?

No, it's not specifically investment. It is improvement project.

Some detailing and fine-tuning, also related to let's say the training of operators. It's a whole package, but with very limited investments.

The investment level of Eemshaven will be substantially below depreciation level.

That's perfect. Then last question from my end, just regarding the guidance.

Obviously it's an open-ended guide for growth, and I think everyone agrees you'll probably achieve that. Could you give us any indication as to sort of the degree of growth, the scale of growth?

Is that 5% to 10%, above 10%? Any sort of, yeah, color there would be extremely helpful.

I understand that that would be helpful, but as we are in a dual track with regards to the separation of the Electrification activities, and that in line with what we disclosed already at the full-year '25 presentation in March. As a result, we are not able to disclose much detail with regards to the let's say outlook per segment, and therefore also not as a whole beyond what we state currently in the outlook in the press release.

Yeah. I had to try my luck, but thank you, Alexander, Elling.

Sympathize with you.

Yes, thank you, Operator. Good morning, gentlemen.

I have three questions, please, and I'll take them also one by one. On Smart Manufacturing, I'm still using the old terms, the organic growth decline was actually quite modest if you compare it to the order book decline of 2025, hey, -6% versus -23%.

Is that decline of Q1, is that indicative of the decline we should assume for the whole of '26? Can you perhaps elaborate on that element?

Again, this goes too much in the outlook. It's basically the question also Chase asked on the outlook per segment.

What of course is a fact that of course intake has been low for quite a few quarters, but it also means at the same time that the obligations which we have in our order book, they have to be fulfilled. That leads also to of course execution of these projects and leads to commissioning of these projects at our customer premises, and that leads to a certain revenue base.

That's basically also what we have seen at the end of last year, quite a few projects being executed and commissioned. The same applies also for the Q1, at least probably as I interpreted your own estimate for the expected reduction in Q1.

There I think you have to look at the delta coming out of it, probably a higher level of executed projects commissioned than what you had in your own estimate.

That's fair. I'll move on to Smart Vision.

You already elaborated a little bit on it, Alexander, that +7% is healthy. If we compare it to Cognex at +21%, Basler +31%—okay, there was a bit of FX there—Keyence +18%, there was a bit of FX tailwind.

Perhaps can you share your thoughts about market share? What happened with your market share?

Related to that, that order book growth or order intake, you mentioned the word substantial. Should we use the scale of mock for substantially, which would mean +35% to +45%?

We can confirm what you mentioned in let's say the bandwidth, and so that looks very good. Perhaps the comparison base was for us a little bit more difficult with Q1 last year, which was a very good quarter where we had deliveries of some big projects, especially in defense.

The good news is the substantial increase in order intake and the order in book, which gives a very good perspective for Q2 and the coming quarters. In line with what we see from the benchmarks, and in that respect, we believe that we, in some segments, even have created market share growth, and definitely not have lost the market.

That's clear. Then moving to Smart Connectivity.

I had a similar question to Chase. When you mentioned further optimization steps are planned for 2026, and I understand your fine-tuning, detailing, and training remark as well, but does that mean we can still assume that what you said with the full-year results analyst meeting that from Q2 to Q4 we can count on annualized sales of €170 million to €180 million in revenue, so that 600 km, and the 15% to 17% EBITDA?

Or does this remark about further optimization have an impact on what you guided at the time? No,

we always have had in mind that we will see further gradual improvement of the output. We have met already the 50 km, but it is not yet a guarantee that we will continue on the pace of 50 km in every month for also sometimes specific reasons and the length distribution you manufacture.

We are on let's say a very good pass to move in the targets that we have set, and especially also the medium-term targets that we have set.

Okay. Then one final question, and I'll move back into the queue.

That Vattenfall Zeevonk order, would it be fair to assume that you're going to manufacture that, produce that in 2027, and which also then suggests that you're almost sold out, if not completely sold out for 2027? Can you elaborate a little bit on that?

We are not yet completely sold out, but we are getting close. Zeevonk is today planned to be manufactured in '27.

Okay. I have some further questions, but I'll move back into the queue.

Thank you.

Thanks, Operator. Morning, gentlemen.

I need some help basically understanding the growth dynamics in the Connectivity division. For that, I go back to the first half results '25 when you broke down the business in Electrification 55% of divisional revenue, something like 192, and then Digitalization 25%, something like 88, and then the other business was 20%, so that's about €70 million in the first half of 2025.

I think that somewhere in the second half of 20 '25 you decided to insert the other business or the lion's share of the other business into the Electrification segment, because the full year breakdown says 72 Electrification and 25, leaving only three for other, hey, that's about €22 million, so that's less than the €70 million in the first half. To my understanding, that other business is what you now refer to as Specialty Cable.

Is that a fair assumption?

Good morning, Thijs. The Specialty Cable has been from the beginning part of the Electrification scope.

We have mentioned that also in our CMD sheets where we highlighted which segments go into the scope of Electrification. With regards to the segment of other which you refer to, obviously with the divestment of Devetron and Alphatronics, the basket of other has been reduced substantially.

There is still a little bit left, of course, because you might recall that the Digitalization segment as well as some of the other are for divestment on the agenda. What we have highlighted in this press release are the main elements.

Digitalization, of course, is a bigger bucket, and then the other segment has reduced substantially due to the divestments already made. There is still a little bit left, but not that material to have a separate listing in our press release.

If you look roughly towards the percentages which you highlighted, then within the overall Electrification segment, the part related to what we call Electrification as disclosed in the press release makes up something between 2/3 to 70% of the total revenue.

Okay. That because I recall the revenue of Devetron, but let's say in 2024 it was €145 million, but you basically also divested some smaller entities which have disappeared now.

Nothing moved from one category to the other?

Basically not. There are some small very small amounts, but on the disclosure in H1 you will have a full overview of that.

It is not to the material level that it requires disclosure at this press release to get an understanding of the moving parts within TKH.

That's quite helpful. Then, the other questions also focused on it, but if I let's say deduct from all the let's say the comments in prior press releases, then the big ramp-up step in the first quarter of 2026, it was still a relatively easy comparison base, hey, basically since the second quarter of 2025, the Electrification business already made big ramp-up steps, hey.

Of course I understand that you try to grow it further quarter-on-quarter, but let's say the big steps have now been taken, hey. We should not expect let's say €35 million to €40 million absolute revenue increases from the second quarter onwards this year.

Is that a fair assumption?

As you heard already, we're very shy in the current environment with the dual track that we make specific statements about let's say revenues and that kind of things in the periods to go. I think with the comments Alexander already made on what is the current level of manufacturing, the levels which we have hit and still some of the elements which are up for further improvement, I think that gives you a little bit of a framework to work with.

Okay. Then a follow-up question on the offshore wind market.

Of course there is in Europe of course a lot of shouting from European politicians that they want to increase the gigawatts installed let's say as of 2029, 2030, but we are seeing some problems in the supply chain that there might be let's say production gaps in let's say late 2027, 2028. How does that potentially impact let's say cable producers, because I can imagine that for you guys it's more easy to plan those kind of investments, hey, the customers also able to spread it out.

Do you see anything of that?

No, at this moment we don't see that projects are postponed, and we see a strong tendency that there can be shortages in the supply chain related to other components that you might see at this moment, and therefore you see a well-spread let's say demand, especially related to the cable, and there could be a potential shortage in the cable if you would postpone everything to a later stage. That is also well-known at the customers, and what we also see is that in the shortage of specific components that there are of course opportunities to look at additional resources, and the last word has not yet been said about that.

We see that customers are looking to take care that, yeah, they in the end can manage the projects in the timing schedule that they have set.

Basically they are already balling you about let's say production slots in 2028, 2029 proactively?

Yes. Yes.

Okay. Okay.

That's helpful. Thank you.

Yes, good morning, gentlemen, and thank you, Tijs, for also letting me on. I have two questions, I'll do them one by one as well.

The first question is about the guidance you released at the full year '25 release, and you said that you expect organic growth in sales and profits with a soft start in Q1. I was wondering, are these results today indeed soft according to your plans, or are they maybe even better than you had imagined?

I think if you look at the overall performance there, there are some areas where of course we probably have done maybe slightly better than what was estimated. I think if you look at the perspective, and from Chase the first question was if you look at Q4, etc., there is still work for us to do.

Weak between brackets, soft between brackets, but at the same time, I think we have a good start of the year with a pretty strong fundament. If you look at the order book increase, especially in Vision, which was discussed also earlier, I think these are good steps which we have seen coming through, and that gives of course confidence.

I leave a little bit in the middle the theoretical debate on the definition of soft exactly, but there are some areas where we've probably been slightly better than what was estimated.

Because if I look at the earnings trajectory of the first three quarters last year, and this year you start soft at €46 million, then it implies that there may be an upward trajectory in the first three quarters this year instead of flattish. You cannot comment because of the separation process, I guess, huh?

It's your statement, not a question, I understand.

Then I go for my second question. The operating profit was €6 million higher year-on-year.

Based on all the comments in the press release, my perception is that tire building had a lower result, so that let's say the delta of 6 is -2 for tire building and +8 or 9 for everything else. Now within that everything else, the main recovery play is, of course, the subsea cable plant.

Again, based on all the comments, it seems as if it's much more divided between all the activities. I was wondering, is the improvement in output also leading to a strong growth in profits, or is that still to come in the next couple of quarters?

We had a really good improvement in Q1 in the offshore wind activities.

Judging by the delta in

the profit, it looks as if

there's much more potential. It looks as if there's much more potential when I look at the year-on-year growth in operating profits.

Does it make sense?

Of course, I think what we have said already that there are different elements in this Q1. Of course, there's a lot of focus on subsea.

We also highlighted that in subsea in the first quarter we still had some upgrades which were executed. From that point of view, if you transfer that into a statement going forward, of course there is different availability at some point in time.

That helps of course then the overall picture. When you talk about upside, for sure there is upside within the different elements within the group, including within Electrification with both segments offshore and onshore.

Good. Then with respect to onshore, you mentioned, hey, you're nearly sold out and new capacity will become available.

Could you roughly indicate when that is available? Is that in the second half or maybe Q2 already?

It will already come in in Q2, and so it's a whole package of smaller upgrades, productivity improvements, and some additional capacity, and again, gradually during the coming quarters that will come on stream.

Not a big bump all at once at the start of that upgrades, but gradually over the next two, three quarters

giving extra lift to the sales in onshore.

Correct?

Yes.

That's it from my side. Thank you.

Good morning. It's Maarten Verbeek of The Idea.

Firstly, you just made public the Zeevonk order. In the past, we have seen that you made this announcement public, but it was already in your order books because you were aware of that a bit earlier.

In this case, is this Zeevonk order already in your order book?

No, it's not. No, it was not in the order book at the end of Q1.

Thanks. You mentioned that the very strong order intake at Vision lifted the order book by 30 to 45%.

I see no reason why the order book of Smart Connectivity should have come down, so that would be at the cost of Smart Manufacturing, i.e. tire building.

When looking at its revenue level, that more or less suggests that there has been virtually no order intake whatsoever for Smart Manufacturing in this quarter. Attached to that, do you still expect a recovery to take place this year, because it seems that that might be, but then it will be very late this year?

Now,

we are not let's say making forecasts, but if you remember the meeting we had in the 5th of March, I mentioned already that we have a very good sales funnel. The sales funnel has potentially even further increased, but we see postponements.

We know for sure that there will be translation into orders and that we will see a kind of peak again, but when the peak will come we cannot forecast or give you guidance. Because

if I simply make some calculation then, your order book at Manufacturing would have come down to some 300 million. At a certain moment, you will have experienced major underutilization.

When will that be the case?

For the coming quarter, we certainly see that we still have quite a high utilization, not the same utilization as we had of course 1 year ago. In Q3, in Q4, the impact could come in in respect of underutilization.

However, we also have very short delivery times, and we have run an intense program. Besides, of course, if you have a lower intake that you have normally also shorter lead times, but we also have changed some aspects in our lead times, and that helps, of course, that we can react quite fast if there's demand that we will be there and that it can have already on the short term a positive impact on the utilization.

Okay. Thanks very much.

Yes, thank you, Operator. On Electrification again.

Elling, at the analyst meeting when talking about incidental costs in 2025, Lochem supporting Eemshaven, logistics, the whole transformation or transport, if you will, from Digitalization from the Netherlands to Poland, you gave guidance that those incidental costs were roughly between €10 million and €15 million. Have those costs fallen away completely in Q1, or was there still an impact from those incidental items, i.e., coming back to Michael's question, is it logical to assume a step up in or a step down in opex again going further into Q2, Q3?

That's correct, Martijn. Of course, I mentioned in the March meeting that this €10 million to €15 million had two components: one is the subsea activities and the other one the Digitalization part, the transfer of production from fiber optic cable to Poland.

The latter part has basically been completed, and there are no more one-off related costs on that end. There is still a little bit left within the first quarter in relation to the subsea activities, but not to the level as I guided for '25.

That has been reduced, but there still is a little bit.

Thank you. That was the only final question that I had.

Thank you.

Thank you.

Thanks. I was a bit confused because if I look in the annual report, the Devetron business is commented in the Manufacturing division, but apparently the revenues were booked in the Connectivity division?

I couldn't hear you, Tijs, but... Was that Devetron?

You

mentioned that the disposal of Devetron had an impact on the change in revenue, but Devetron is mentioned in the annual reports as part of the Manufacturing business.

That's correct, yeah.

Maybe I didn't ask the question in the right way, but how can we do this? In the first half of 2025, the cable business was €192 million based on your divisional breakdown.

Then on the full year breakdown, the second half revenues from that Electrification jumps to €332 million. Part of it, of course, is the ramp, I get that.

To me, it seems that a big part of what you previously reported as other has been put in that category. My question is, what is that business?

Then a follow-up on that: what is let's say the margin profile of that business? Because that is not the growth you have seen in the ramp, let's say starting somewhere in the second quarter of last year.

It's a huge jump, it's €190 million.

I think, Tijs, that probably was in your prior question. You asked if the Specialty Cable was included in that, that had been included from the beginning.

I think that's probably the one you're missing here.

The absolute step-up, there's nothing else in that?

No.

Okay. Thank you.

Many thanks for your attendance in the conference call and for the questions asked. I hope we could give you a little bit more color on where we are and what the perspective is, although we had to be, yeah, limited in respect of what we can give as specific outlook for the whole year.

Again, thank you for your participation, and we hope to be in contact with you in the coming quarters.