Good morning, everybody. Welcome at our first half 2026 results presentation.

It's great to see so many of you joining today's webcast. I'm happy to introduce our CEO, Stéphane Simonetta, and our CFO, Frans den Houter.

Stéphane will kick off the presentation with some business highlights. This will be followed by Frans, who will share an update on our financial development.

Stéphane will then share an update on our strategy and actions, and provide an outlook for the remaining of the year 2026. After the presentation, we will give you the opportunity to engage directly with us in a Q&A session.

Please note that after the presentation, both the presentation and the recording of today's webcast will be made available on our website. Please welcome Stéphane to begin our presentation.

Thank you, Rutger. Let me start with our key messages.

In the first half of the year, we report positive organic revenue growth in our three segments, and particularly in Semicon. We also report an improved EBITDA margin in our three segments.

You can see the strong contribution of all the portfolio update that we have done last year, with our acquisitions and our divestments, which are all contributing positively to both growth and margins. We continue to see positive end-market dynamics based on our good position at Aalberts, aligned with four compelling global tailwinds being urbanisation, technology acceleration, reshoring, and decarbonisation.

In a nutshell, we improve our performance, we are rebalancing our portfolio, and we continue to see positive market momentum. Going into the numbers, we are reporting €1.5 billion revenue, with an organic revenue growth of 5%.

Our EBITDA margin is €225 million, equivalent to 14.4% of revenue. Another solid free cash flow with €89 million, with the earning per share improving to €1.47.

Improving organic revenue growth, improving EBITDA margin, aligned with our outlook. Now going to the operational development.

As I mentioned, we continue to be well positioned with these four global tailwinds: urbanisation, where we still see more and more people in the future that will need to live in residential, in commercial building, and it's all about comfort and energy efficiency, and that's where our portfolio is so relevant; AI adoption, being used in more and more application, is driving a very high growth in semicon equipment, and we are also well positioned into that trend; the reshoring trend continue, you produce in Europe for Europe customers, you produce in North America for North America customer, and you produce in Asia for Asian customer, that's also our strategy, and our footprint is well aligned to this trend; and at the end, we still believe in the long-term energy efficiency driver across all the end market and across all geography. We are well positioned with this long-term growth driver.

Looking at the first half of the year, you see the breakdown of our revenue by segment, by geography, and you see also that we continue to be well aligned with the Sustainable Development Goals. The key change compared to last year is that now you can see the weight of Semicon is also increasing, representing now 21% of our revenue.

You can see on the geographical side that Southeast Asia is now a bit bigger, especially after our acquisition of GVT. You can see also in North America, we continue to make further progress, aligned with our long-term ambition to double our revenue in this part of the world.

Attractive market, and we have a good and strong ability to achieve leadership position. Now giving you an overview of our performance by segment.

In Building, 2.9% organic growth, 13.5% EBITDA margin, improvement compared to last year. In Industry, 6.4% organic growth, very strong quarter, where here we are actually doing a bit better than the market, with 18.6% EBITDA margin, which is basically the best proof about all the action we took last year, continuing to invest in organic growth initiative, in operational excellence initiative.

In Semicon, we are very pleased to see an accelerated growth. Our Q2 has been very strong, and as a result, we are pleased to report 9.2% organic growth, equivalent to 14.2%, and now we see the strong dynamic in both our front-end, but also back-end.

As I mentioned, improving in our three segments. Let's go now one by one with a bit more details, by geography, product line, and end market.

Building first. As you can see, Q2 was actually a bit better, with 4.4% organic growth, and it's a mixed picture in the geography.

Strong in US, mixed in Europe, as on one hand, we continue to see positive momentum in Europe, in Benelux, in the Nordics, and early sign of recovery in Germany, but on the other hand, France, UK, East Europe remain challenging. Middle East is still a big uncertainty.

In the first half, we couldn't simply ship anything to our customers, and we are looking closely about the situation. By technology, very strong momentum on the valve, very high order book in all our boiler room technologies, and a more stable activity in our connection system linked to the residential building activity, which we also see stable.

On the other hand, we continue to see very high order book in data centre and commercial building. Talking about data centre, let me highlight one example of the many things we do.

You can see here a picture of our stainless steel air separator that is used, actually, in data centre cooling solution. This is our own IP, our own design, and what make us win is, actually, our speed to market.

We have been very fast to go from prototype to mass production to support the increased need of our customers. Going into Industry, very pleased about the results.

I think our team has been doing a fantastic job, and you see that our organic growth, it's much higher than most of the industrial index: seven, more than 7% organic growth in the second quarter, after already a first quarter, and this is the result of all our organic growth initiative, our geographical expansion, our business development initiative. We see also here strong dynamics, continued strong dynamics in aerospace, in power generation, in defence, and more stable activity in automotive and general industry.

An example I would like to highlight is that we continue to invest in technology. I think we are pleased to now have put our second HIP vessel in Eindhoven, where here it's all about removing the defect of all the parts, improving the material characteristics, and with our HIP vessel, we are putting some parts up to 2,000 bar in order to improve the material characteristics and the strength of all the components we treat.

The good news is we see more and more demand from our customer about this type of services. In Semicon, very strong dynamic, very healthy order book, and it's actually a bit better than what we expected, because we already saw a huge organic growth with more than double digit, 16% organic growth in the second quarter.

We were more expecting that in the second half, and it came earlier, our team are really doing a great job to manage the volatility and the different dynamic of the end market. Strong in front-end, strong also in back-end.

GVT is already contributing positively to both organic growth and margins, and we continue to invest capacity. Our greenfield factory in Dronten is in the final step, and we are ready for the huge ramp-up coming in '27 and beyond, also adding capacity in Southeast Asia, as we see more and more demand and request from our customers.

Great dynamic, overall all driven by AI adoption in more and more application. Innovation is also key, and I would like to highlight just one example with a robotic system we are doing for the semicon industry, with our pre-aligner, with our own design, our own technology, in order to move wafer in a very accurate way.

Just to highlight that innovation remained at the core of what we do, especially in this segment. As a last point regarding our operational development, I'm also pleased to report that we continue to make further progress with our sustainable commitments: more than 70% of our revenue linked to Sustainable Development Goals, and also now making an additional progress in our Scope 1 and Scope 2 reduction, with more than 6.6% reduction compared to last year, on track with our sustainable commitment.

That's what I wanted to say regarding our operational development. Let me now hand it over to Frans to give you an update on our financial development.

Frans?

Thank you, Stéphane. Good morning, everybody.

Happy to talk you through the first six months of this year and show you the these four important KPIs. Revenue.

Our organic revenue growth improved with 5%. You see here very clearly also in each segment we had nice step-ups.

This all converted into an EBITDA margin of 14.4%, €225 million, which is a €15 million up year-on-year. Also nice to see added value in a solid place, 65.5%.

Net profit €7 million up, bringing us €158 million in in net results. Capital expenditure, you see a a step down of more than €30 million.

Basically, that's all phasing. We will see the reversal of this in the second half year, as we have a bit of timing effects in our capital expenditure programs.

The full year guidance for capex to be on around a level of last year, €190 million, is still firmly in place. Free cash flow improved.

Nice to see third year in a row small steps up in the mid-year free cash flow, bit more better balanced in the year, driven also, of course, supported by the lower capex, and predominantly the EBITDA, which is also supporting this number. Then the net working capital was a cash out.

All in all, solid performance in the first six months. If we go to revenue, we see nice contributions of our three acquisitions.

We added Geoflow, Paolo, and GVT to the portfolio, and you see €135 million step-up in revenue. The divestments of Broen and MVI and the reduced shareholding in KAN brought the number to €178 million negative correction for the divestments, and also a negative impact from forex, €21 million.

Good to see the 5% organic revenue growth driving our absolute revenue with a plus of €68 million. On the revenue side, a good set of numbers.

To go to the EBITDA, the acquisitions, we just mentioned €24.4 million. If you do the numbers, that's more than 18% EBITDA on the companies that we acquired in the past 12 months.

On the divestments, a negative of more than €15 million, that is a little bit over 8%. So 18% on the acquisitions and 8% on the divested companies.

Small forex, €2.8 million effect. Then the organic EBITDA contribution was more than €9 million.

Good to see there also being back to growth, but also, yeah, positive impact on the EBITDA from the hard work by our business teams on driving our improved revenue to a €9 million plus. €225 million, I repeat, €15 million up versus versus last year.

On the free cash flow, of course, we see again the EBITDA and the capex effects contributing positive. On the working capital, six months rolling, we lose €25 million year-on-year.

Small plus in the in the other, there's mostly provisions and timings, almost €8 million, and then a nice €80.8 million, step-up of of €30 million. The EPS, very important slide, €0.09 improvement in the first six months driven by the M&A portfolio.

You see a plus €0.18 on the acquisitions and a minus €0.09 on the divestments. That comes, of course, with financing costs, a little bit of a tax impact negative, one a one-off element there from a divestment, a little bit of forex impact, and then really nicely €0.05 improvements from our organic performance, and €0.03 improvement for the share share buyback program.

This year share buy buyback program, we're halfway through the scheme, still continuing that, and for now, we report a €0.03 improvement to €1.47 earnings per share. Then we go to the segment reporting.

As Stéphane already talked you through the revenue and the EBITDA effects, you see the capex added here. No surprise, the total capex was down, you see that here as well in each segment.

That will reverse in the second half. Specifically in Industry and Semicon, we will see a step-up as we complete some of the divestment programs that we have ongoing.

In the third column, we added holding eliminations last year, you see also now again €13.6 million reported, €3 million up versus last year, some small effects in there. I think all in all, yeah, growth and operational excellence driving improved profitability in in the segments.

Exceptional costs, yeah, we normally report this only at year-end. We decided to also show this half year, improved transparency.

A small number here for the first six months, €3 million, mainly relate are fully related to our projects to leave Russia. Some progress there in the first six months.

We're still continuing at that. We hope to finalize it this year.

We already mentioned in the annual report that the total exceptional costs expected for this year will be around €25 million, mostly non-cash, and that guidance we still leave in place. There is expected to be more to come in the second half.

Then let's go to the balance sheet. A resilient company with you see on the right top equity and solvency in a good place.

On the left top, the debt has gone up. Of course, we drive the M&A year-on-year.

Our our ratio is still 1.9, same as it was at year-end. Versus 12 months ago, it went up because we increased debt to drive the M&A portfolio.

At the left bottom, you see our capital employed, still same level as last year, small step back on the ROCE, but that's a 12 months rolling number, I think better to deep dive on that at full year again. Very nice to close off, I think, with the net working capital, €62 million lower, that's a two days reduction.

It's inventories went down a little bit, our receivables as well, and we made a step-up in in payables, six days in total, also driving the growth of the company, and that's really increased purchasing. No payment stretch there.

Strong balance sheet in supporting our strategy. To give you a bit more insight how we are driving our strategy, I give back the floor back to Stéphane to tell you all about strategy and actions.

Stéphane?

Thank you, Frans. You have seen how did we perform in the first half of the year.

Let's see now, how did we thrive in the first half of the year? As 2026, it's only the second year of deploying our Thrive 2030 strategy.

You have seen how we continue to be well positioned with these four compelling global tailwinds. We continue to rebalance our portfolio across our three segments, across geography, across end-market application, with our organic growth and our portfolio update.

Let me give you a short update, as you can see on the right, with our four strategic priorities. I'm pleased to report that, actually, we made good progress in our four strategic action in the first half of the year: driving organic growth, optimising our portfolio, the Aalberts way being our operating model, and then further progress in our sustainable commitment.

If we start with profitable growth, I think one of the key example is the very strong momentum we see in data centre, where our order book is increasing month after month, thanks to either our flow control and boiler room technologies, either with our engineering system and prefab solution, but also with our connection and piping system. We are well positioned in both the primary loop and the secondary loop for the cooling system and solution of the data centre.

We see more than double-digit organic growth, and this is all for our Building segment. Today, it's only roughly 2% of our revenue, but we see a very good expansion in the coming months.

What make us win today is our global offering, and also our speed to market. We are quite good to go from prototype to mass production, and as you know here, speed is of the essence to support the accelerated growth, especially in North America.

Another great example of driving organic growth is our geographical expansion we are doing in our Industry segment. You see here four examples of either greenfield or capacity expansion: in Netherlands, in Mexico, in France, and in Hungary.

This is driving organic growth, and this is the result of all the investment we have done over the years. We see more and more demand for our services, either with heat treatment or surface treatment, in aerospace, in power generation, in defence, but also in automotive, like in Mexico and Hungary.

In Semicon, we are investing for the future. The growth is there.

The semicon industry remain very strong. I'm pleased to report that we are ready for the growth.

Very soon, we will start and ramp up operation in our Dronten factory in the Netherlands, where we expect the ramp-up in 2027, mostly for lithography systems. In Southeast Asia, we're adding capacity in Penang in one of our factory to support also the increased demand from the back-end customers.

Preparing for the long-term growth. On the portfolio update, just a reminder that we are well on track.

We did four transactions on the divestments, mostly in our Building and Industry segment, and we did four transactions on acquisitions in our Building, Industry, and Semicon segments. We will continue.

We have an active funnel, we still have the same M&A criteria, and the same priority also with our divestment program, where we expect to make further progress in our Building and Industry segment, continuing to rebalance our portfolio in order to have attractive EBITDA margin and organic growth updates. One example of the Aalberts way, it's the operational excellence that we continue to drive, making further progress also in our Aalberts production system, and it's all about footprint optimisation, about inventory optimisation, driving production efficiencies in our factories, and also optimising our asset utilisation in order to have a better capex intensity.

Most of the driver today are within Building and Industry segment, but also Semicon is becoming more and more relevant as we see this huge growth, an opportunity also to safeguard of our margin, continue to drive operational excellence. Now time to give you an outlook, and to be very simple, we are confirming our full-year outlook, with improved organic growth, EBITDA margin compared to last year.

Because the market dynamics are similar with what we shared in our full-year result: Building remaining a mixed picture, strong in US, more mixed in Europe; Middle East remaining a key question mark, are we going to be able to ship, but also what will be the indirect impact; and when you look at the product line, strong on valve, strong on hydronic solution, strong in data centre and commercial building, and more stable in residential building and some geography. Industry, we expect similar trend in the second half, mostly driven by our own initiative, but also continued growth, aerospace, defence, power generation, and more stable activity in automotive and a general industry.

In Semicon, we are actually satisfied to see actually a higher growth than expected. We expect similar organic growth as in the second quarter in the second half of the year, and we continue to invest capacity in order to support the demand increase as we see more and more capacity request from our customers in both front and back end.

Based on this and market dynamic, we are pleased to reconfirm our full-year outlook. Let's wrap up before opening the Q&A.

As you have seen, our first half of the year 2026, we're pleased to report improved organic growth and EBITDA margin in our three segments. We are entering the second half with positive momentum and a very healthy order book.

As a consequence, we are confident to deliver a full-year outlook with improved organic growth and EBITDA margin compared to last year. You see that our portfolio rebalancing is well on track, and all our integration plan are progressing well.

We continue to deploy our capital allocation according to our policy: first, returning dividend to our shareholder, investing for our business to drive profitable organic growth, doing accretive acquisition, and continuing our share buyback program. At the end, I'm really pleased with the first half performance.

Also, I want to acknowledge the resilience and commitment from all the Aalberts teams. You can see that first half shows the strengths of our diversified portfolio, and you can count on us to continue to execute in a disciplined way our Thrive 2030 strategy.

Thank you.

As we are starting the Q&A session, I'd like to remind everyone how to join the queue. For conference call participants, please press #5 on your phone to join.

Those tuned in via the webcast, please submit your questions via the Q&A form. I would like now to give the word to Martijn den Drijver from ABN AMRO for the first questions.

Good morning, Martijn.

Good morning, Rutger. Also good morning to Stéphane and Frans, of course.

Morning.

Hi.

I have three questions, and I'll take them one by one, please. What was the reason that the Building division, despite the 4.4% organic growth in Q2, saw a decline in EBITDA margin year-on-year and quarter-on-quarter?

Can you elaborate a little bit on that development?

Maybe you want to ask the three questions, and then we go one by one?

I'd prefer to go one by one, please.

Okay. A few comments.

You are right, first of all, and I will mention three main reasons. We have had some challenge in Middle East, where we simply could not ship any goods, we have also more inventory, but our invoicing has been nil in the second quarter for the Building segment.

Second, I think as we mentioned, we continue to see a challenge in our connection system, especially in Europe, due to the low activity of the residential building. Then we have also some one-off costs, especially in this segment.

That's the three main reason where it's a bit lower than expected in the second quarter.

That one-off element, is that a material amount, a low-single-digit millions? Low single digit,

I would put a number like that on, yeah.

Thank you. I'll move on to my second question.

Semicon obviously had a blowout Q2, you already mentioned that, 16% organic growth, EBIT margin of close to 15%. How should we think about H2 and 2027 given the positive statements from ASML on the front end and Besi on the back end, and also your own statements in the press and in the presentation, a further acceleration?

Does that imply that we should think double digits in H2 and perhaps even high double digit in 2027?

I think you mean the second half '26, right?

Yeah. The H1 2026 was 16 or almost 16% growth.

You mentioned a further acceleration is expected. We know the statements from ASML and Besi.

How should we think about H2 2026 and 2027?

You are right, and let me confirm that indeed second-quarter organic growth with 16% in our Semicon segment was higher than anticipated. Actually, we can confirm that we expect the similar trend in the second half as in the second quarter.

A 15% organic growth continuation in the Semicon. We are also quite confident for 2027, but you should expect the second half organic growth similar to the second quarter for our Semicon segment.

Martijn, are you still there? Because you had a third question.

I think that we lost Martijn. We have some good backup, David Kerstens from Jefferies, perhaps you can also ask some of your questions.

Good morning, David.

Good morning.

Good morning, gentlemen. I hope you're well.

Two questions from my side, please. First, on the Industry segment, you said momentum in the second half in line with the first half, which was very strong, right, and accelerating to 7% in the second quarter, despite the impact of higher energy prices and despite the impact from the increasing pressure on the German OEM car industry.

What is the impact of those two factors, the higher energy prices on the organic growth, and how do you see the increasing pressure on the German auto industry impacting your Industry segment growth? Also margins seem to have reached a new level following the divestment of Broen at 20%.

Is that a sustainable level going forward? May be a follow-on on Semicon growth.

Very clear guidance, but I think in the fourth quarter, you will have also GVT coming into the organic growth for two months. From what I understand, GVT is growing more than 20% or 25%.

Can you give an indication what the exact revenue contribution was of GVT in the first half of this year? Thank you very much.

Thank you, David. Let me do a first few couple of answers.

On the Industry and then the price increases that we saw in the first half, I think first of all, price increases, be it from energy or from, yeah, raw material increases, we are able to price that on really well to our customers, pricing excellence is there. I would say in the mix, the total impact, 1 to 2% on pricing with inflation in there is, I think, a good proxy.

You can see that the organic growth really driven from the volume is very strong. As we said, we give no specific organic growth expectations for the second half, but in the voice, it's pretty clear we expect that to continue.

Then on Broen, you ask a little bit of guidance on the EBITDA levels for the second half of the year, yeah, of course, the impact of Broen is positive. You can see that also in the waterfalls we just showed you, we give those guidance overall over the whole portfolio.

No specifics there, but of course, in the second half, this will continue to have a positive impact. Then on Semicon, yeah, very clearly, organic growth in GVT you can deduct from the Semicon numbers, and we acquired this company at a revenue level of €107 million.

If you do the numbers now, you'll see quite a significant step-up. Indeed, we don't give guidance and expectations on an individual level, but from October onwards, GVT will be added to the organic growth calculation, and that, of course, will also help the Semicon number there.

Thank you very much. The 20% EBITDA margin in Industry in the second quarter, that is a new high for Industry, right?

Is that now the new sustainable level following the divestment of Broen?

No, we only give guidance on a company level as you know. I try to give you a bit colour where we are, and I think also from the voice-over of Stéphane, clearly per segment, on Building and Industry, we expect the second half to be continuing what we see in the first half in general terms.

Then there's the guidance on a company level, and that's where we leave it for now.

Thank you very much.

Thank you. I would like now to give Martijn den Drijver the opportunity to ask his third question, because I see that you are back in the queue.

Hello, Martijn. Do you hear us?

No, we lost him again, now I'd like to give the word to Kristof Samoy from KBC. Hello, good morning, Kristof.

Yes. Good morning.

A few questions, if I may. Just as an observation, looking at the organic revenue growth and the organic EBITDA evolution in your waterfall schemes, could you comment on the drop-through which we can expect going forward?

Because in the first year-half, it was well below 25%. Then in terms of inventory, we typically see the seasonal uptick going from year-end into first year-half, but we've seen considerable growth in Industry in the first year-half.

We also see considerable growth in Semicon. There have been already some optimisations in Building.

Could you detail maybe what the impact was of the Middle East on the days of inventory outstanding? Then finally, just on Semicon again, to make it clear, you expect similar growth in the second year-half as you have seen in the second quarter.

That means that quarter-on-quarter, you're not expecting any significant uptick in growth in Semicon anymore. Thank you.

Thank you. Let me maybe start with the last one, and then I will let Frans answer your first two.

You are right, and I confirm that you should expect an organic growth in the second half of the year for the Semicon segment aligned with our Q2, which was a bit more than 16%. That's what I can confirm, knowing also in Q4, like it was said, I think, earlier, we will also add GVT in our organic growth reporting numbers.

Yes, and let me come back on your first question on the drop-through. That's good observation, because normally, you would expect the drop-through to be of a higher level.

It's €9 million. We're happy with positive organic growth, we're happy with a positive EBITDA contribution organically, but it should be a bit higher.

Basically, three reasons: the holding elimination cost that went up with €3 million year-on-year, that's holding us back a little bit; and then we have, as Stéphane in the introduction also shared, in Building, yeah, we see lower profitability because connection systems, UK market holding us back, and also the Middle East. Those effects, yeah, hold back a little bit the step-up in organic, which we will work further on, of course, in the second half of the year.

Then you also asked about the impact of the Middle East on inventory. That's also indeed one of the drivers there.

I would say single-digit euros as an indication. Single-digit million euro impact on the inventory from Middle East.

Thank you, Frans. Thank you.

Okay. If I may, just one follow-up on Building.

You mentioned the UK situation, but you've recently took some action in Doncaster. What is the reason that the situation there remains difficult or is deteriorating?

Could you provide some more colour there?

The market trend and especially in the residential building, where we don't see, I think, as per our guidance, a flattish market. This is where also we have our biggest exposure with our connection system portfolio.

That's the two elements: market trend, residential, and product line exposure.

Okay. Thank you very much.

Thank you, Kristof. Like to give the word to Luuk van Beek from Degroof Petercam.

Good morning, Luuk.

Good morning.

Good morning. A question about buildings.

Do you see any support of the higher energy prices and the efforts to reduce dependency on fossil fuel, maybe more demand for heat pumps and things like that? Secondly, on buildings, how do you look at your portfolio?

You mentioned a couple of challenging areas. Do you think that's something that's just cyclical and will improve over time, or do you think some adjustment in the portfolio would be needed to optimally position for future growth?

Yes. I think we mentioned it.

Or let me repeat, because we start to see, you could say finally, some early sign of recovery in Germany driven by higher demand of heat pumps. All the indexes that we see are quite positive.

We don't see it yet in the short term, but this give some hope that the situation will improve maybe in the second half, but also in 2027. As there is the usual disclaimer about the government incentive: what will the German government will do to continue to incentivize the demand for house and homeowner to go for heat pump.

Start to improve, let's see, but it's, I think, compared to the previous year, a bit more encouraging. The second point, I would say it's a continuation.

We are still, first of all, doing very well in our valve business, doing very well with a very strong order book in our boiler room situation, also doing very well in North America. We continue to see market stable in residential in Europe, especially, I think, we talk about the French market, the UK market, East Europe.

Then we are challenged in term of performance still in our connection system. We still have the same strategy in term of portfolio optimisation, and we are not done in both our acquisition and our divestment, and indeed, we still have further opportunity to optimise our portfolio in both Building and Industry segment, also where we still have opportunity to do further divestments.

One further question, if I may, on automotive, where you see some mixed signs on the one hand, obviously, all the restructuring in German automotive, but also a pick-up in new car registrations. Do you see any signs of improvement after the stabilization that you're already

Too early to say. We see the market still stable.

If yes, you can see some report from index showing 1 to 2% growth. For us, with still more a stable activity.

What I think is more important is that we are doing better than the market with our own initiative, with our geographical expansion. In the first half, we have actually grew a bit better than the market, also with our exposure in automotive, thanks, for example, to the opening of our factory in Hungary, in Mexico.

We are able to grow a bit better than the market. To answer to your question, with still more stable activity in the second half.

Thank you.

Thank you, Luuk. It's still a nice queue, and I would like to ask Ruben Devos from Kepler Cheuvreux to also ask your questions.

Good morning, Ruben.

Hello. Good morning.

I had the first one regarding Semicon still. That's helpful for the H2 guidance, but just thinking about your visibility, how far forward it could stretch maybe compared to what it was a year ago.

I'm just thinking of the prior upcycle, right, during COVID, where you were also talking about quite long visibility. I think it was 12 to 24 months at some point, but then we had quite a drastic turnaround at late 2024.

Just wanted to hear a bit your sense of, yeah, the visibility you have, the firm commitments you basically get from your customers, and how that might be different from the prior upcycle, let's say. Let's start with that one.

I think you are right. I think we also mentioned it.

We have a very strong order book, and we have more and more demand for our product and solutions. The good news is we see that not only in Europe with our very strong exposure to the lithography, but also now in Southeast Asia, both in front and back end.

Not only our order book is very high, but we see more and more capacity requests coming from our customers. We are doing a lot of scenario, how could we do more?

That's not for the short term. I think we're quite confident for second half of '27.

What could we do more beyond 2027? The good news is we are ready with our footprint expansion, with our new factory.

We will be ready in '27 with our new factory in Dronten. We are adding capacity in Southeast Asia, in Malaysia.

Very promising, very strong. I think let's see how the second half will be, and then will be the time to give a new outlook, how we see '27.

That's very helpful. Then a follow-up on that, actually.

Capex fell almost 30% year-over-year. You basically have the accelerating semicon cycle, right, and then two capacity projects running in parallel.

Is that capex basically just a matter of timing or does it reflect maybe a structural shift towards serving the upcycle with less capital than the previous one? You of course have the return on capital employed at 12.5%, basically for this new project in Dronten and Malaysia.

What is sort of, yeah, the hurdle rate you're looking for here?

Thanks for your question. Maybe a few elements.

The phasing within the year, and I also explained in the intro, but let me repeat. We have €71 million of capex in the first half year, which is relatively low.

We really expect a lot of additional capex to materialize in the second half. Dronten is a significant element there where we are preparing the finalization of the project and the startup of our factory.

Total guidance for this year, also again repeating it, but good to stress it out, €190 million, which is in line with previous year. Indeed, an area where we are spending more capex than we depreciate, we're investing in the company.

We saw that in Building, we keep seeing that in Semicon, and we doing it in Industry, and specifically in Semicon for this year, we see some significant numbers. We will keep on doing that, because we will keep investing if we have good opportunities organically to drive new projects, we will keep investing.

I think the market confirms also that we have good opportunities to improve the company performance based on that. Then, of course, there's the ROCE, where indeed year-on-year, the 12.5%, it's a little bit lower.

That's a rolling number, we need to take a long perspective on that. The guidance we gave, and then we go back to the capital markets day, is basically on ROIC in the longer run, where we want to be above 18% in 2030.

That's a number that's clearly in our minds on where we want to go. That is ROIC guidance, not ROCE.

I hope that's

Yes, that's great. Then just a final smaller question regarding the data center opportunity, right?

I think it comes up in Building every quarter now. We never had that really sized, right?

Is it large enough now to move the divisional growth rate on its own? How does the margin for that activity compared to basically your traditional residential and commercial mix?

Thanks.

Thank you. I think let me repeat, because actually we started to size it.

Today, we have disclosed that it's roughly 2% of revenue of our Building segment. We see an addressable market of €1.5 billion, and we have an order book increasing, and we expect double-digit organic growth, especially in North America.

That the first sizing we have done. Count on us, I think, in our full-year result to give you a bit more transparency.

I can only tell you that we continue every month to win orders, and I'm really pleased with the work by our team, especially in North America. I mentioned a few example in the presentation, and it can be on our stainless steel ball valve, it can be on air separator also stainless steel, and we do that with our own IP, our own design, and we are super good to ramp up.

I think that's what, as a data center owner, they are looking for. They look for global companies that can ramp up, that can provide quality, and I think this is where Aalberts offering is quite unique.

Promising, still a small number of our Building segment, but I look forward to share more in our full-year result presentation.

All right. That's great.

Thank you very much for your comments.

Thank you, Ruben. Like to give the word to Rajesh Patki from Barclays.

Good morning, Rajesh.

Yes, good morning, all. I've got three questions, please, if you don't mind.

We can go one by one. First one is on the Semicon business.

Thanks for the top-line guidance for strong growth there. I guess the next question on that would be, how should we be thinking about the incremental dollar of revenue dropping down to EBITDA?

Just a follow-up on that, you talked about capacity addition for this business. Once that is complete, will you be in a position to service a 20 to 30% demand CAGR over the next three years, or will you need to add more capacity?

That's the first question. Thanks.

First question, as we don't provide outlook by segment, right? I think here, we are pleased, first, to have improved a lot, I think in the first half compared to previous year, our EBITDA margin.

I think it shows the strength of our portfolio, and we are focusing now to support the high demand from our customer, but also adding capacity, adding cost in our operations, in our capability to support the growth. Because as I mentioned, we see this similar growth in the second half, but we are getting capacity request without order from our customers.

I think our biggest customer have made it public, they expect 30% growth this year, they are asking their supplier to be ready for 30%. Work is in progress to ensure we don't miss the upturn.

Far, I can confirm that we have our capacity plan well aligned with the demand increase from our customers.

That's very clear. The second question is on margins.

The added value margin has grown more than 200 basis points in the first half year-on-year. Can you talk about what has driven that, and do you think that is a sustainable level going forward?

Follow-up on that as well, the EBITDA margin has grown only by 90 basis points. Is the difference between the two related to fixed cost investment in the Semicon business?

Thank you. Good observation, and indeed a good step-up in our added value.

In all honesty, there is also positive contribution from our M&A that we have done, the mix effect. Specifically, if you look at the divestments that we've done in Industry, they typically carried a lower added value.

However, also very good pricing discipline. We saw price increases on raw materials, on energy, general cost increases, and we were able to price that on really well to our customers.

I think, yeah, as a guidance, we have a target to be around this level, we want to sustain this number. That's why we keep on also executing the pricing discipline and making sure we drive towards that number.

Then I think on the EBITDA, I think your question was I think more on the drop-through again. Can you repeat exactly the point you were asking?

No, I just meant the added value margin was up more than 200 basis points, but the EBITDA margin was up 90 basis points. The lower improvement in EBITDA margin, is that related to fixed cost investment in the Semicon business or is there something else in there?

That's why we say this goes back to the drop-through. We saw, yeah, the holding elimination costs, the margin in Building specifically, and the Middle East and the UK connection systems that Stéphane commented on, holding us back a little bit.

That's the reason why you see the added value not one-on-one translated into the margin.

Got it. Thank you.

Lastly, on M&A, can you talk a bit about how your pipeline is looking? Are you focused on any specific regions or businesses, and do you see much opportunities on increasing the scope for your Semicon business?

Thank you.

Let me confirm we still have our three same priorities and to do further acquisition. I think we are well on track with our portfolio rebalancing, as you have seen also.

We still have the same priorities: so in Building, looking at further expansion in North America, and also from a portfolio optimisation, especially in our commercial building, where we see high exposure to building consuming more energies, and exposed to key verticals like data centre, healthcare, hospitality. That's still the priority, and we have a good funnel to look at target.

Also water treatment is actually one of our priority. Second, in Industry, is to continue what we have been doing, I think Paolo was a great example.

Continue to expand in North America, but also looking in Europe in higher exposure to key verticals in order to rebalance our exposure between automotive and non-automotive. We have a good funnel in Europe for bolt-on acquisitions.

In Semicon, after having done, of course, GVT, we are now fully focusing, and I'm really pleased with the progress by our team to do the post-merger integration. Soon, it will be time to go to the next one, and we already have a funnel to continue to look in Europe, in Southeast Asia, additional M&A to expand, I think, our portfolio and to become more and more an integrated module provider, right, in order to support our customers in both front-end and the back-end.

We can see, actually, more and more synergies, and more and more there is a need to have global supplier, global partner. I think that is where we are well positioned.

Here also, we have a key funnel. I think in Semicon, you should not expect some move in 2026, but I think we still have some further acquisition to be done in the coming years.

Very clear. Thank you very much.

Chase Coughlan from Van Lanschot Kempen. Good morning, Chase.

Hi. Yes, good morning, all, and thank you for taking my questions.

I just have two. Firstly, on Building, previously, we saw the stock levels at wholesalers and distributors were at relatively low points.

Could you just speak to where those sit today? Was there any pre-buying effect in the second quarter, and how do you expect sort of inventories to progress throughout the course of the year?

Then my second question would be on the Dronten plant, which you flagged as, yeah, sort of on track to ramp up in 2027. Could you give any indication on how fast you expect this plant to be sort of comfortably utilised, any kind of sales indication, as well as, yeah, what kind of depreciation step-up we can expect on the P&L on the back of that plant becoming operational?

Thanks. Thank you very much.

Let me start with the first, and I will let Frans answer the second one. The first one, I think what happened over the past year, right, with the famous destocking about wholesaler, we see that more as a new normal.

I think the wholesaler have been used to have low inventory, and of course, we have also been used to deliver more just-in-time, and it's all about delivering on time. We still see the same very low inventory at the wholesaler overall, right.

Then product line by product line, depending on the raw material price exposure, there is some additional buy from some customers in order to avoid all the coming price increase or inflation. In some technology, we see some pre-buy, but I would say overall, it's still about the same situation, and we don't see yet restocking in this segment compared to the previous year.

Maybe on the depreciation, yeah, earlier, we already indicated asset under construction way over €200 million, majority of that related to Dronten. I think that's at least two statements we made.

Depreciation guidance should be around €6 million for this location.

Perfect. Thank you.

Okay. Now I would like to give a third attempt to Martijn to ask his third question we're waiting for now for quite a bit of time.

Martijn?

Yes, I apologize. I had some issues.

I wanted to come back to Industry, please. If general industry's machine builds and automotive were stable, that represents roughly 75, 80% of your sales, how did you get to 7% organic growth in Q2?

Can you elaborate a little bit on that? My second question also in Industry, would it be fair to say that given the ramp-up towards commissioning in Dronten and the GVT expansion, not only in Malaysia, that you're incurring opex in 2027, excuse me, in 2026, in preparation of taking those plans really into sales mode?

In other words, are those opex investments not hampering your 2026 EBITDA margin already in Industry?

The first one, you are right that what we see by stable is the market, right? We are doing better than the market.

I think that's where I'm really pleased with the work done by our team in the Industry segment, all our business development plan, like the HIP expansion that we are doing. We see more demand, and let's not forget that aerospace, power gen, and defence are going quite well, we say a high-single-digit organic growth.

We see that in both part of the world. In automotive, even the market is flattish, we have actually had a better growth than the market with the additional service and our exposure to some new platform, where customers can maybe move or have the same activity, but when they move operation from West Europe to East Europe, for example, for us, it could mean additional volume or additional services, even if the number of car they produce is the same.

Same, we see the same trend also in North America. I think the simple answer is we did better than the market.

Clear.

Sorry, could you repeat your comment, Martijn?

I asked whether the GVT expansions in Malaysia and the expansion in Dronten, the two new plants, whether that was not already resulting in opex investments, therefore EBITDA margin in Semicon is probably hampered a little bit in 2026.

No, very clear, and indeed, we are investing there, and we are planning to commission those plans. That will bring some opex.

Most of it is capex, of course, but there's always some. I think that is a minority, and that is not a factor in our EBITDA numbers that you see, it's not material.

The moment we will start to operate those sites, it will contribute in a positive way. There is no leakage on EBITDA because of the opex on capex investments, nor in GVT, nor in Dronten.

Okay. My final question for you, Frans, is there any component of working capital that we should be aware of in H2 in terms of how free cash flow in the second half will develop?

Normally, you have a release of working capital. Is there any element or development that we should take into account that could influence that normal seasonality?

No, I think not other than what we saw in the first half. In the ramp-up, there is an impact, because your payables and receivables and also inventory increases.

There is in that sense a bit of a negative. We saw that in six months.

How that exactly will evolve in the second half, that's difficult to forecast. If that further enlarges, it's a positive thing, because that's the result of further growth, and that's what we want.

There are no other one-off elements that you should take into account on working capital. I think, if you look at cash flow, there's clearly the capex that you should not extrapolate.

That's a phasing element, and so that will be a significant switch in the second half.

Understood. Many thanks.

Thank you.

Thank you.

It's good to see that we also have some questions actually coming from the Q&A form, and one I would like to address to Frans, and that is whether you could comment a little bit on your full-year outlook for holding cost.

That's a good question indeed. We saw €13 million in the first six months, €3 million up.

Basically, the run rate we saw in the first six months, you take that as an assumption for the second half, basically doubling it. There's always, yeah, the question, what are the one-offs that we will encounter.

Last year, we had some gains from divestments and book gains. The year before that, we had some income on claims.

That's always a bit the unknown. As a basic assumption, I would just keep H2 in line with the first half.

Thank you. There were some other questions submitted, but I think they've been answered already during the call.

I think that we are concluding today's webcast. I'd like to thank everybody to join today.

Again, later today, we will make the presentation and also the recording of today's webcast available on our website. Thank you so much.

Thank you.

Thank you. Enjoy your day.