Good afternoon, and thank you everyone for being here with us. This morning, the Board of Directors have approved the 2026 H1 results, SIT results.

I would like to leave the floor to Paul Fogolin, the CFO of the company, and together with us today there is also Federico de' Stefani, the CEO of the group, and... I'm always available as so regardless of where I am I...

[crosstalk] ...sorry... Sorry.

That will take the floor for the overview and the Q&A section. Paul, the floor is yours.

Thank you, Mara. Good afternoon, and thank you everybody for being here today.

Let's go through the highlights of this first half of 2026. Let's say, a bit flattish on the top line.

As you can see, H1 consolidated revenues are -1.9%. There are some forex effects, but let's say overall it was a bit flat.

We have Heating at 105, that's slightly below last year, but at the same forex rate it would be in line. What we can underline over here is the positive performance of the European markets that we know that in the last few quarters they were under scrutiny, but now we have confirmed that positive performance on this market.

As for the Metering, we closed the the six months at 43.1, this also is 1.6 down and percent lower than last year, and let's say in this case the the performance was quite impact by let's say the the the decisions of some specific customers that are that are driving, that are timing, have a different timing on their deliverish planning. Given that we know that Italian market is quite concentrated, and these let's say small short-term decisions impact our our our performance and revenue recognition.

Anyway, it's a temporary effect, but as we are accounting the quarter, we have to take it into account. Anyway, the the the EBITDA of the of the six months is 17.1, it's 11.4% of revenues, it's a slight increase versus last year, while the EBIT is is at 5.4 million, over 40% improvement versus last the same period.

Net income is a positive. Last half last year at this stage, this timing of the year, it was a it was a loss.

We have a good strong performance in in in cash flow in the net debt is at 125.8, it's quite an improvement versus both the end of the year and and last year. One of the highlights that we want to point out is the transaction that was closed let's say in after the it was closed in August, and it's a it's a new financing.

It's €100 million. It provides refinancing of certain facilities that we had in place, and then new finance.

The idea is to support the the business, support the working capital, and the business plan acceleration. We just to give the flavor of the of the impact, we we we we we give here a representation pro forma as if it took place on the 30th of of June versus the reported number.

As you can see, the whole structure is different. We have a longer term and we have a extra finance that will support the the the following quarters of the group.

This was a a transaction that we were working on in the past months, and we're quite happy and satisfied with the reduction. We have a support of important pool of Italian banks.

With this capital structure, we can concentrate on on the business and on the performance delivering the the plan, our business plan. Looking at more details, as I said, the revenues slightly under 2% down versus the last half year.

Here we have some breakdowns. As I said, the the the impact of the of the forex in the Heating, and the impact on the Metering at on a specific, I'm referring to a specific customer and and geography.

Anyway, the EBITDA is improving, set 11.4%, and also to give perspective on the data, we we thought it was helpful to underline that in '26 we we are accruing MBOs that were not considered in the last couple of years. This gives us I mean this gives us more understanding of the reported numbers because in the comparison we have to take into account that H1 '26 has an item that was not present in the in the in the previous period.

As especially it underlines the fact that our perspective, our our forecast are confirming certain operating key performance KPIs that underline that we are in a different phase of the of the of the company, of the business, it underpins the turnaround that has taken that has taken place between let's say last year and the and the previous quarter. This is important to understand the numbers, but it's more important to put into perspective our future our future performance.

Another point that I think is important to underline is the EBIT, and especially the depreciation. We are starting to see, because of course it takes some time, we are starting to see a different capex mix, a different kind of product development, less capital intensive, and we are seeing that in our in the in the capex that we are doing, but we are also seeing that we are going towards production and products that are less capital intensive, and we are seeing a reduction thus in the in the D&A, and this will help EBIT as we go forward.

The other point, as I said, is the net income, which is positive versus last year, that was a it was a loss. Going into an item that is quite important in this in this quarter is the cash flow performance.

As you can see, that despite the the the seasonality, our cash flow was from operations was quite significant. We did some We were focused on accounts receivables and payables, and we performed well, and we see the impact on both net trade working capital and on financial debt.

We can go into more detail. This is the overview, and let's go into some more details on the top line.

This is the half year. As you can see, we give a breakdown by geography here, but as it's more significant looking at the details of the two of the three businesses more than looking at this at consolidated level.

I suppose to explain to to give more understanding of this period, I think Q2 is more is more let's say it gives more explanations, and as I said, it was the the half year was flattish, and we had a slowdown in the in the in the Q2. I would say that some of these issues are very much let's say temporary.

As I said, there are some short-term decisions that are taking place that impact the group turnover, decisions of regarding shipping, very much planning and shipping. That impacts the quarter.

We do have some some accounting differences due to revenue recognition, but anyway, the the quarter was not so brilliant in terms of turnover, as you see, minus in all on all the lines, overall 6.3%. Let's go into the business.

Here we can see the Heating, let's say, at half Q2 has -4% at like-for-like forex and is in line with the previous half year it in terms always looking at it at the same rate. What do we see on the market?

We have Italy, which is a weak a weak market. Demand is is slow, is is sluggish, and we have a -12% in the quarter, -9%.

Of course, we are we do have some products and some specific products very much important for our future business regarding ventilation applications that are positive. We're not disclosing the numbers, but just to say that we are we do see some specific products and markets that are not on this overall sign year-on-year, quarter-on-quarter.

As for Europe, for us this is quite important to see that this part of the market is positive, and it I I go by heart, I think it's the third quarter that's going positive year-on-year, and quite quite important because it was in this market that we had, the slowdown in '23 and '24. We have a good improvement in Turkey in all segments of the market.

We are quite confident that this is let's say structural because we are gaining market share, so that's a very this is a very good let's say KPI. Also Central Europe, where we had big customers, let's say are going well.

While let's say Q2 had a has again a specific product line on a specific customer that brings down the UK, but anyway, just to give you an an understanding of this important market, which anyway on on a year-on-year is going 11.2% higher. As for the the America, the remote the reported number is down 6.5%, but all our forex is concentrated there, if you take it out, it's -2%.

We have three business segments, and let's say two are in this trend, while one is growing single digit. Later on, when we go into details on our outlook, we can elaborate on what we see in the future in this market.

As for Asia-Pacific, let's say -20% in all in all the ways that we can look at it. China is very weak, Australia is penalized by some changes in regulations, and here we also account the Iran market, which is we stopped shipping this year, and in the comparison it's a it's a difference that we have to take into account.

We have very much specific reasons for this for this slowdown.

In Iran it should be 10%, sir.

Yes, of course, the Iranian market for us is in historical market, we've been there forever, but of course in this moment it's a temporary stop. Let's look at the Metering, the breakdown between quarters and half year and the two units, where we know as we discussed, gas metering not so well in the residential market, so that's where the items that I explained is taking place.

If we look at commercial and industrial, our new products there, I'm recalling that we have the production of the G40, the G25, the G16, we are developing and we are very much the first ones to come out with a smart metering in these sizes in the big industrial, we are actually growing there, as you can see in the numbers, so that's important to underline the product development that has been taking place and now we are having the results in the turnover. Overall, of course, we are looking at -18% in the quarter and -9% in the half year.

We do have the water meter. Fundamentals are strong, let's say first quarter and half year is confirming over 12%, nearly 13% growth in the finished products, especially in the finished products, meaning that we are going straight to the market, to the final market, and not to the OEMs, which is another segment of the market, where we provide parts.

This is the overview of the top line. Let's look at the working capital.

Again, we are underlining that seasonality is normalized, and that's a good sign, and that's what we're expecting, and that's what we see in the inventory. On the other hand, we focused on receivables and payables, and the performance was well, we financed with the seasonality, and overall we see €10 million reduction in working capital versus last year, or 5 if we look at it on the half-year result.

Anyway, this was very important and gave us the cash flow that we see over here in this final page, where we have a current cash flow of 17, very much in line, positive working capital, positive cash flow from working capital, and capex in the range of 6 million, bringing the overall cash flow from operations to nearly 16, and the change in net debt to 13. Very very satisfied with this, and as you see, we see the benefit on the net debt, 125.8, and of course on the leverage.

Again, here we give the details of how the new financing is impacting on these balances here. You can see maybe here it's more clear than the first page, the difference between the reported and the pro forma and the debt structure, the term structure of the new financing facility.

I think I can leave the floor to Federico for the final comments.

Thank you, Paul. For the 2026 outlook, we absolutely confirm the previous guidance, and we are seeing sales increasing low single digit.

This is on the Heating & Ventilation business. We are already seeing our portfolio, order portfolio increasing, showing seasonality in the second part of the year, while on the Metering side, we expect the second part of the year to continue in line with Q2.

As far as Italy, we see that the performance in Q2 has not been as satisfactory as we wanted, but again, we're expecting recovery of the Heating & Ventilation business. We are expecting, generally speaking, Europe in Q3 to increase, and we have not so much visibility on Q4 for Europe, while for North America, we have good visibility for improvements for both Q3 and Q4.

As far as profitability, we are expecting to continue to benefit from the improved operating leverage, meaning that we have, as we've already announced, reduced our cost base, and we will continue to apply strong control of the cost basings. I think that positive result shown in the first part of the year, the first six months, as far as the cash generation, we are expecting to reduce our net financial position compared to a year, end of 2025.

As this has been our key priority. We announced it, we declared it was going to be a priority, and I think we have proven it in the first six months and will continue to prove it also in the second part of the year.

Can you still hear me?

Yes, I hear you. [foreign language]

Can you still hear me?

Yes, we can. Yes, yes,

yes.

Yes.

Thank you.

Thank you.

As far as again net financial position, end of the year, we expect a significant improvement compared to the end of '25. You have to consider that also looking ahead, the new products and the new markets where we're going to enter are going to be less capital intensive than the actual Heating & Ventilation and combustion business in particular.

Metering is already less capital intensive than Heating & Ventilation, and again, the new electrical products that we're going to bring to the market are going to have the same features and be less capital intensive. Yes, overall, again, we're confirming our outlook.

We're expecting a stronger second part of the year, especially for Heating & Ventilation, while Metering, as already said, is expected to continue in line with Q2, and again, strong cost control and very strong focus on reduction of net debt. I think at this point we're here to listen to your questions, and officially we can open, I think, the Q&A session.

Thank you, Federico. Yes, we open the Q&A section.

If you could raise your hand, that will be great. Giada Cabrino, please.

Good afternoon to everybody, and thank you for taking my questions. Yes, you can hear me probably.

I have a couple. The first one is if you have experienced in recent months any price increase in raw materials and energy, if you can elaborate on your pricing strategy, are any price increases expected to be applied only to new orders, and which division still retain pricing power?

The second question is just a confirmation. You said you mentioned that you expect the same trend for the Metering division seen in Q2 for the rest of the year, it means that you will be dealing with the same dynamics as in H1, I suppose.

That's a confirmation. Another question is on your capex amount expected for the current year, and if it would be possible to let us understand the amount of the MBO, which I think it is included in your EBITDA.

Okay. Thank you so much.

Thank you, Giada. I'll take the first two questions.

As far as the trend of raw materials and energy, what I can say is that we're not expecting these factors to influence the 2026 performance. I prefer not to go into details whether this is going to be through price increase or management, but the overall impact of this is not going to be significant in 2026.

As far as the trend for Metering, yes, we are seeing an Italian customer slowing volumes also in H2, but we are going to say at least partially offset this with an increase in other markets and customers. I can mention also UK, for example, where we are gradually entering.

Yes, and again, Metering is, as you have seen, we had a certain trend in gas and a double-digit trend growth in Water Metering, which we expect to continue. As far as capex, I'll leave it to Paul.

Yeah.

It's going to be slightly higher than the double, if we were about 6 million this half year, it's going to be around 12 at full year. As far as the other number that you were asking, the amount is in the range of 1.4 in the half year.

Thank you so much.

Thank you, Giada. Other questions?

Let me check. I don't see any really at the moment any additional...

No, I have also... Hi, Mara.

I have some questions.

Okay.

Okay. The first one is about your prediction for the net debt at the end of 2026.

I would like to know if you don't think it's a quite cautious watching at the very high reduction in this half year, and if you think it could be improved and so could be less than what you're thinking and you're predicting in your communication. The other question is about the cost of financing.

You made a new financing loan of €100 million if I remember well, and I don't remember if you said which is the cost of this new financing.

Not mentioned.

You didn't mention, no. I don't know if you can mention anyway, but is

it

possible to know?

There's no issue. Let's go on the dynamics of the full year end-of-year financial position.

Yeah.

I understand your point if we are cautious or not. Let me say that some of the effects of 30 June are temporary, let's say there could be some caution in it, but I would say that there are some temporary effects in the 30th of June, we still more confident to target 130.

Yes. As for the market, the pricing of the market, let's say it's around 5% at the moment.

It is linked to our leverage, and at the moment it is around 5%.

Yes. Is fixed or it's...

No, no,

no, no.

...is linked to the Euribor?

It's a variable, yes. It's Euribor-linked with a margin,

and at the moment... Yeah.

...at the moment is around that one, yes. Sorry, okay, and just another small question about the new orders you communicated in this last month.

If you feel already the effects in the numbers, or maybe there could be have more improving for this new orders, especially in Netherlands, or I don't know, there were other orders, maybe they are already in the numbers or not? Yeah.

We we No, we we communicated the the the awarding of the Dutch tender some months ago,

and

as planned, this is expected to Because we need to develop develop the product, and as as expected, this is going to take some months for the product to be developed, we expect sales in the Netherlands to be to realize, to to to to happen, to start in H2 next year. Again, it's a very specific product for the Dutch market, and therefore, needs to be needs some still some more months to be to be developed.

What we are seeing, as we say briefly mentioned in my in my presentation today, is the order portfolio for Heating & Ventilation, which we already have as part of our portfolio, and and we're seeing that of course, we're we're still in August, a little bit early to say, but the first signs are that the Heating & Ventilation business is going to is going back to seasonality, which was very common until a couple of years ago. Then there were a couple of years last couple of years seasonality was very limited.

Last year we had almost no seasonality, 49.5% first part and 50.5% in the second half. We're seeing we're seeing this trend to to to go back to to previous years' trends.

Okay.

Usually Q3 Q3 is is heavier than than is the most important one than the other the other three quarters.

Okay. Thank you very much.

Sure. Thanks.

Thank you, Fabio. Other questions?

In the meantime... Filippo, Filippo Mazzoleni.

Yes, hi. Can you hear me?

Yeah. Thank you.

Hi. Nice to meet you.

I'm Filippo from Alantra. I have two questions.

The first one regards the improvement in profitability that was achieved despite soft revenues. As volumes recover, should we expect the operating leverage to kick in and become more visible in the second part of the year and also 2027?

My question is if this would be the main driver for the expected profitability. The second one about Europe that delivered strong performance in Heating & Ventilation.

Do you see this a temporary outperformance driven by specific markets or the beginning of a broader recovery in demand across the region? Thank you very much.

Thank you, Filippo. About about the the profitability improvement and related to the operating leverage, yes, we do expect it.

11.4% EBITDA is not our target for for the end of the year, absolutely not. Mainly reason being like like you correctly mentioned, as volumes will restart due to seasonality and due to new projects, especially in Heating & Ventilation, we do expect EBITDA percentage margin to to to increase.

As far as the second question, Heating & Ventilation Europe, yes, there has been a very strong performance in Turkey in particular. Turkey, a Turkish market is made of let's say two main players: the the local ones and those who produce in Turkey for export, more or less 50/50.

There has been an increase in both these these players, these segments of the market, and also we have been increasing our market share there. Very strong performance for Turkey.

Hopefully it's going to be sustainable. We also seeing recovery from markets like Italy and Germany, expecting recovery from from especially in Q3 from other markets, the performance of Europe will not be driven only by or mainly by by Turkey, but also other markets like the one I just mentioned are expected to to to start performing and increasing.

I'm talking about, all all the markets that that and all the products that we sell in Heating & Ventilation. Let's not forget that we are in Italy in particular and in Europe in general, Italy, Germany, we also have strong focus on on the on the market of cooker hoods.

We have established 70% joint venture SIT MBT, which is which is, performing strongly and is expected to to continue to to get market share in the cooker hoods residential market.

Fabio Tornaghi, yes. Fabio, the floor is yours.

Thank you. I just wanted to ask some color about the recent deal with Sonexos for the data center and BSS solution, if you wanted to add something about it.

It's a technology agreement. We're working hard to enter that market with heavy big-size fans.

Obviously, the market is well protected by the incumbents, and our strategy is not to be a me-too solution provider, but really wanted to be able to transfer technology and the benefits coming from the technology into that market. We believe that that market needs energy efficiency and also needs a performance in terms of noise.

Those data centers are obviously very energy-consuming and very noisy, and therefore we have identified Sonexos as the best partner to support us through their unique technology to reduce by one order of magnitude the level of noise that the fans moving air do make in the appliance. We're working hard with them.

We do not expect very short-term results, but I think that it was necessary, and it is going to be absolutely crucial to be perceived as a highly technological player compared to the incumbents, which are mainly Germans, who have been in that market for quite a while, while on the other side strategically we decided only recently to develop, recently meaning a year, a year and a half ago, to develop a product dedicated to that market. Again, our fan together with Sonexos technology is able to dramatically reduce the level of noise, and again, we think noise is one of the key features that are perceived and appreciated in that market.

No sales in the very short term, but we're expecting to enter that market relatively soon.

Thank you.

Thank you, Fabio. I don't know if there are other additional questions.

Let's say so, just to to take your time for having let's say eventually additional questions. A soft top I would like to summarize this quarter as a soft top-line quarter, driven mainly by temporary effects, three temporary effects: one is Iran and USA war; the second one is the key client smart metering, gas metering, which was postponing the recognition of sales, okay, even if we have confirmed the orders; and third one is of course the U.S.

U.S. dollar effect.

Then we have a a let's say a very a very profitable anyway quarter, and this this is the profitability is based on consistent profitability since quarters, okay, a strong cash generation quarter, and finally a quarter and a semester that can give us confidence to confirm the outlook for the full year. I would summarize like that this these results.

Let's see if there are additional questions. I don't see any.

Next quarter will be on the 4th of November for the third-quarter results, nine months results. September, October we will be in let's say in the market to see some some of you, some investors, either in Italy and outside Italy.

Finally from all of us, we wish you a very good summer and happy holidays. Thanks for being with us.

Thank you all.

Thank you so much. Bye-bye.

Thank you.

Thank you.

Bye.

Bye-bye.