Aumovio SE (AMVOY) Q1 2026 Earnings Call Transcript

Transcript: AUMOVIO SE – Q1 2026 Investor & Analyst Call Date: May 07, 2026

00:00:03

Operator: Good afternoon, ladies and gentlemen, and welcome to the Q1 2026 Aumovio SE investor and analyst call. At this time, all participants have been placed on a listen-only mode. The floor will be open for questions shortly. If you would like to ask a question, please press nine followed by the star key on your telephone keypad. If you wish to cancel the question, please press three followed by the star key. Let me now turn the floor over to your host, Lutz Ackermann, Head of Investor Relations. 00:00:40

Lutz Ackermann: Yeah. Thank you very much, and a very warm welcome to everyone joining us today for AUMOVIO's Q1 2026 results presentation. With me for today's presentation is our CFO, Jutta Dönges. We will provide an overview of our financial performance and operational achievements in the first quarter of 2026. As always, both press release and today's presentation are available for download on our IR website. Following our remarks, we will open the line for a Q&A session with our sell-side analysts. With that, I will hand it over to Jutta to begin with an overview of Q1. 00:01:17

Jutta Dönges: Thank you, Lutz. Good morning, everyone, and thanks for joining our call today. Let me start with a brief overview of our first quarter performance. Overall, Q1 2026 is on track to deliver our full-year outlook despite a continued challenging market environment. While our top line continues to reflect this environment, our results clearly demonstrate ongoing transformation progress and disciplined execution on profitability and cash. Adjusted sales in the first quarter came in at €4.4 billion. On a year-on-year basis, Q1 adjusted sales declined by 7.8%, equivalent to around €376 million. This decline reflects both continued market headwinds as well as ongoing portfolio and footprint measures in line with our strategy to prioritize profitability over volumes. Despite lower sales, we improved profitability. Adjusted EBIT increased by 14.3% year-on-year, reaching €169 million, compared with €93 million in the prior year. 00:02:35

Jutta Dönges: Overall, this is a strong adjusted EBIT performance in Q1, particularly given the lower sales base, clearly reflecting our tangible progress. Cash generation was another highlight of the quarter. Normalized free cash flow increased by 35.2% year-on-year, primarily driven by our disciplined CapEx approach and continued efficiencies in net working capital management, both of which remain core priorities for us. Beyond financials, we achieved several strategically important milestones. In Architecture and Network Solutions, we won a contract for the CoSmA Digital Vehicle

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Key System, marking our first end-to-end delivery of a fully integrated digital vehicle access solution. In User Experience, we secured a major order for an OLED display unit featuring an invisibly integrated under-display camera, reinforcing our leadership in advanced display solutions. 00:03:37

Jutta Dönges: And in addition, we entered a joint development with tesa on a dependable adhesive solution for displays, enabling faster corrections during production and more efficient repairs across the product life cycle. All three examples reinforce AUMOVIO's strategic and innovative strength from component supplier to a system and solution partner, with tangible order intake and near-term monetization. During the quarter, we also made further progress with footprint reduction, including closure of Changsha and the signing of the divestments of Rheinböllen in March and Mechelen in April 2026. These actions are fully aligned with our objective to create a leaner, more competitive, and more resilient operational setup. Overall, Q1 confirms that we are executing well on what is within our control. 00:04:33

Jutta Dönges: We continue to strengthen our profitability, demonstrate improved cash generation, and stay consistent in advancing our transformation, even in a challenging external environment. In the first quarter, earnings and cash flow improved despite softer sales development. Sales development in the first quarter primarily reflected lower volumes and pricing effects, combined with foreign exchange headwinds of around €150 million. This outcome is fully in line with the market backdrop and our continued selective, value-focused approach to business. In contrast to sales, profitability continued to move in the right direction. Adjusted EBIT and margin focused year-on-year, driven by the ongoing impact of our transformation measures, strict cost discipline, and further R&D efficiencies, confirming our ability to expand margins despite a lower revenue base. Both normalized free cash flow and adjusted free cash flow increased year-on-year, supported by operational improvements and lower investment levels, reflecting our disciplined CapEx approach and continuous focus on working capital optimization, demonstrating the underlying cash generation strength of our business, even in a challenging market environment. 00:05:58

Jutta Dönges: And we also continue to make visible progress in shaping our global footprint to support long-term competitiveness. Our ramp down plan in advancing in a structured manner, fully aligned with our clearly stated ambition to simplify the manufacturing network and reduced fixed cost. The previously announced closures of our sites in Changsha, Nogales, and Babenhausen will become operationally effective in 2026. The closure of Kaunas and Lingyuan were announced at the beginning of 2026. And we also recently announced the planned divestment of Rheinböllen and Mechelen. With execution progressing as planned, we are fully on track to reach our target of fewer than 45 production locations. Now let's have a closer look at the key financial KPIs for the first quarter, and let's start with the development of our top line.

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00:06:53

Jutta Dönges: To put the quarterly performance into perspective, reported sales in Q1 2025 amounted to €4.8 billion. Following divestments with a sales impact of around €25 million, adjusted sales for Q1 2025 stood at €4.78 billion. During the first quarter, adjusted sales were also impacted by our active portfolio management and footprint reduction measures. These included minus €80 million of portfolio effects, driven mainly by the disposal of the Display business and User Experience, amounting to minus €41 million, as well as the phase out of contract manufacturing, contributing minus €39 million. Excluding these portfolio effects, sales for the quarter came in at around €4.7 billion. In looking at the remaining drivers, Q1 was characterized by two items. Sales were further reduced by €296 million, with roughly one-half attributable to foreign exchange effects and the other half to volume and pricing pressure. Accordingly, adjusted sales amounted to €4.4 billion in Q1 2026. 00:08:09

Jutta Dönges: From a regional perspective, our adjusted sales exposure in the quarter remained well-balanced. Europe accounted for 51%, North America for 21%, China for 12%, and the remaining 16% came from the rest of the world, primarily Japan and Korea. So next, I will turn to the key factors explaining the movement in adjusted EBIT on slide seven. Starting from adjusted EBIT of €93 million in Q1 2025, after accounting for deconsolidation effects of €4 million from the reported figure, we delivered a clear year-on-year earnings improvement in Q1 2026 despite the lower sales base. While adjusted gross profit decreased by €31 million in absolute terms year-on-year, we improved the adjusted gross profit margin by almost 1 percentage point year-on-year, reaching 19.9% in Q1 2026. This improvement reflects pricing discipline, material cost optimization, a better product and project mix with a clear focus on higher margin products. Adjusted net R&D expenses decreased by €36 million, representing a 6% reduction year-on-year and reflecting the ongoing impact of our R&D efficiency initiatives. 00:09:34

Jutta Dönges: The adjusted net R&D to sales ratio, however, increased from 12.2% to 12.4% year-on-year in light of the top-line decrease. Despite underlying strict cost discipline across group functions, adjusted S&D and SG&A expenses increased by €18 million year-on-year, driven mainly by temporary post-spin-off build-up costs for central functions. Other items contributed €26 million to the increase in adjusted EBIT, primarily driven by foreign exchange effects. Combining these effects, adjusted EBIT for Q1 2026 reached €106 million, corresponding to an adjusted EBIT margin of 2.4%. This represents an improvement of 0.5 percentage points compared to Q1 2025. Let me now turn to the performance of our business areas on slide eight. In the first quarter, we recorded a mixed earnings development across our business areas, with performance clearly differentiated by segments. User Experience and Architecture and Network Solutions delivered year-on-year improvements. While Architecture and Network Solutions and Safety and Motion contributed equally to overall adjusted EBIT of the group. 00:11:07

Jutta Dönges: In Autonomous and Commercial Mobility, ACM, adjusted sales declined by 13.1% year-on-year, mainly driven by foreign exchange effects and lower volumes. Q1 '25 benefited from exceptionally high EU Mobility Package 2-related

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volumes in the first half of the prior year. The termination of this package and the postponement of the third package resulted in lower volumes and a negative mixed effect in the current quarter. Adjusted EBIT declined versus the prior year, reflecting the lower volume and less favorable product mix. Autonomous and Commercial Mobility remains a development-focused business, continuing to invest in future technologies, and execution on cost and efficiency measures helped mitigate part of the negative top-line impact. In Architecture and Network Solutions, adjusted sales decreased by 4.9% year-on-year, driven primarily by foreign exchange effects, while volumes remained broadly in line with the prior year. In contrast, adjusted EBIT increased by 61.2%, reflecting the continued effectiveness of our transformation program, disciplined cost management, and structural efficiency improvements. 00:12:27

Jutta Dönges: Our business area, Safety and Motion, delivered solid operational performance in a challenging environment. Adjusted sales declined by 7.2% year-onyear, driven by foreign exchange headwinds and volume effects. Adjusted EBIT decreased by 22.2% year-on-year, primarily reflecting these effects. Nevertheless, Safety and Motion continued to demonstrate strong underlying operational leverage, supported by its structurally robust cost base. And in User Experience, adjusted sales declined by 4.1% year-on-year, mainly due to foreign exchange effects. At the same time, adjusted EBIT improved significantly, driven by effective self-help measures, stronger operational execution, and further improvements in the cost structure. User Experience delivered the strongest earnings increase, earnings improvement versus prior year, underlying the success of the turnaround measures implemented over the past quarters. 00:13:26

Jutta Dönges: Overall, the solid year-on-year earnings improvements confirm the healthy underlying earnings dynamics of our business, even in a volatile market environment. In the first quarter, we delivered strong cash conversion, further proving the cash-generating power of our business. Adjusted EBITDA amounted to €330 million and forms the starting point of our cash flow development in Q1. Net working capital increased in Q1, driven primarily by a strong buildup of receivables of €131 million, which could only be partially offset by higher payables of €57 million. Inventories had a minor positive impact of €3 million and were not a material driver in the quarter. Cash-effective investments of €87 million underline our strict CapEx discipline. Interest and tax payments amounted to €77 million, reflecting an improvement in net interest payments, while income taxes paid remained largely unchanged year-on-year. After these effects, normalized free cash flow reached €147 million, reflecting the underlying strength of our operating model and disciplined capital allocation. 00:15:00

Jutta Dönges: Cash-effective restructuring and separation-related costs continued to weigh on free cash flow in the quarter. These amounted to €150 million in total, including €138 million of restructuring cash outflows and €12 million related to spinoff and separation. After reflecting these special items, adjusted free cash flow for Q1 amounted to minus €3 million. Overall, this performance underscores the resilience of our cash-generating profile and confirms our ability to deliver strong operational and free cash flow. Our net cash position remains a key strength and continues to

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underpin AUMOVIO's financial stability and strategic flexibility. At the end of 2025, net cash amounted to €1.389 billion. During the first quarter, this position was supported by €5 million of free cash flow, €12 million of other cash movements, and €22 million related to changes in gross financial debt, including leasing obligations and changes in derivative cash. As a result, net cash increased to €1.43 billion at the end of March 2026, confirming our strong liquidity profile. 00:16:21

Jutta Dönges: And at the same time, net pension liabilities further declined from €1.065 billion at year-end 2025 to €998 million at the end of March 2026. This reduction was primarily driven by the increase in the discount rate from 4.3% to 4.5% in Germany, which had a positive effect on the present value of our pension liabilities. Overall, our strong net cash position and disciplined financial management ensure that AUMOVIO remains well-positioned to navigate market volatility while preserving the financial flexibility required to support ongoing transformation and future growth. As outlined at our full-year 2025 results presentation in March, we will present our capital allocation strategy later this year, providing further transparency on how we intend to deploy capital in a disciplined and value accretive manner. Operating in a changing and increasingly volatile market environment, we confirm the outlook for 2026 as presented with our full-year 2025 results. Our expectations for adjusted sales, profitability, and cash generation remain unchanged. Let me quickly repeat our outlook. 00:17:47

Jutta Dönges: For 2026 profitability, we expect an adjusted EBIT margin of 3.5% to 5%, supported by a more favorable project mix, continued R&D efficiency gains, and further optimization of our global footprint, partially offset by temporary headwinds from raw material and memory price developments. The first quarter of 2026 adjusted EBIT is fully in line with our expectations and supports this outlook. In terms of cash generation, we forecast normalized free cash flow of €500 million to €800 million underpinned by strict capital expenditure discipline, with CapEx below 5% of sales. Also, ongoing price pressure and supply chain volatility may limit further working capital improvements. That said, the external environment has become more uncertain. S&P Global Mobility's April light vehicle production forecast reflects a shift in geopolitical assumptions, incorporating a prolonged conflict scenario in the Middle East. This has resulted in higher expected oil prices, increased market volatility, and downward revision of global light vehicle production, particularly in the near term. 00:19:05

Jutta Dönges: For 2026, global light vehicle production is now expected at 91.4 million units, around 750,000 units lower than the March forecast, with reductions concentrated in Asia ex China and China. The 2027 outlook has also been revised downward, reflecting continued geopolitical stress and emerging demand headwinds in key markets. Against this backdrop, our focus remains firmly on what is within our control: disciplined execution, cost and cash flow management, portfolio focus, and continued progress on our transformation. Given the current unpredictability of geopolitical developments, including the situation in Iran, no specific impacts related to these events have been factored into our assumptions at this stage. At the same time, we will actively manage external factors where possible, maintaining flexibility

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to respond to a dynamic environment. With that, I conclude our presentation. Lutz, back to you. 00:20:12

Lutz Ackermann: Yeah. Thank you, Jutta. Operator, please take over for the moderation of the Q&A session. 00:20:20

Operator: Perfect. Thank you very much. Ladies and gentlemen, if you would like to ask a question, please press nine and star on your telephone. If you would like to cancel it, please press three and star. We have first questions coming in. And the first question comes from Christoph Laskawi from Deutsche Bank. The floor is yours. 00:20:41

Christoph Laskawi: Good morning. Thank you for taking my questions. The first one would be on current trading, if you see any sort of deterioration in Q2 with regards to call-offs, or any change in demand pattern of your customers. And also with regards to the cost headwinds that you've highlighted, could you comment a bit on the phasing of those headwinds and how the mitigation should phase two? With regards to Q2, then, could you confirm or comment on the margin potentially being in the range? And then the second question would be on the cash seasonality. You had a pretty strong start to the year. Is there any sort of guidance that you could give how we should think about the seasonality and how you would see the cash flow evolving throughout the quarters in the year? And obviously, you have a quite strong cash position, as you said, and you will introduce the capital allocation framework later in the year. 00:21:47

Christoph Laskawi: Could you just initially comment, potentially on what type of role M&A will play in that? I think currently you're obviously rather looking to dispose assets, and I would think that sort of cash distribution to shareholders would probably be further up than any sort of additions to your current portfolio. Sorry for a lot of questions, but the last block would be just on growth opportunities in the future. Aurora reported last night sounded quite optimistic on the projects that you have with them. Is this in line with what you're seeing? Is it or even potentially slightly better? And then lastly, the discussion came up a lot just on your project with Mentee. Could you potentially comment on that, where you see it, how do you see it evolving? Thank you. 00:22:36

Jutta Dönges: Good morning, Christoph. Yes, a long list of questions. I noted five questions, and if I miss anything, just remind me. So let me start with the current trading, so Q2, and whether we see any call-offs or changing demand patterns from the customers. I would say what we currently see is similar to the first quarter, where we also reported that demand was muted, and you see that in our top line. So there is no expectations on any change in this pattern. Phasing of headwinds from raw materials in Q1, obviously, there has been some headwind mainly on the raw material and memory price to a lower extent. But as we say that Q1 is supporting our full-year guidance, and the full-year guidance also contains some reflection on raw material and memory price increases. Yes, we expect that there is more to come, more increases to be seen in our numbers.

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00:23:44

Jutta Dönges: And I think what is important to put into perspective, in particular also for Q1, while we can pass on partially the price increases for our customers based on index clauses in the contracts, et cetera, and price negotiations, we need to take into consideration that there's obviously a time lag. So, the costs will be only visible in our P&L, and the compensation will come at a later point in time, so let's say three, six months later. And therefore, I think as Q1 was, it will be in line with the overall outlook. There will be some effects on the cost side, yeah. But we are very confident that this will be compensated later during the year, which will also mean that profitability in the second half of the year will improve overall in line with our guidance, and I think also overall, in line with our normal seasonal pattern that we see with Q1 being the weakest quarter in terms of adjusted margin and then a continuous improvement during the year. 00:25:02

Jutta Dönges: So, that is on current trading. Then cash flow seasonality, in terms of normalized free cash flow, I mean, this is, as we just explained it for Q1, this is driven by CapEx, and CapEx has been rather low in the first quarter. So we should assume that this will pick up over the next couple of quarters and that obviously then has an impact on cash flow. Overall, we confirm our guidance for the full year. If you look at adjusted free cash flows or after restructuring items, obviously, the phasing of restructuring cash outs will have an impact. And that is why, for the overall year, we confirm what we have been guiding for, there may be timing effects and different developments quarter-on-quarter. On cash distribution to shareholders, you have linked that to M&A and whether there's anything in the pipeline. On the disposal side, two main disposals we just announced in March and April. We are not looking into any other disposals as of today. With regard to cash distribution, we said that we will come with a capital allocation framework in the second half of this year, and one item of this framework will obviously then also relate to M&A. 00:26:46

Jutta Dönges: So, further update, only in the second half of this year. Growth opportunities, and you explicitly mentioned Aurora. Yeah, I mean, Aurora remains a strategically strong and very encouraging partner. We also share the positive sentiment that has been expressed following the strong Q1 results and the overall optimistic outlook. We see that Aurora is well-positioned for the next phase of what they are doing. There have been recent customer commitments, also some progress on the regulatory front, notably in California, which is all very supporting. And we continue to state what we said before. Aurora is a very important strategic partner for us, and with the expectation that production will start then in 2027, we also would see first sales and materials sales then picking up in 2028. So, confirmation of what we said before, and we are very pleased on what we currently see, how Aurora is making progress, and we, in our partnership with Aurora, are making progress. Last one was on Mobileye and Mentee. 00:28:11

Jutta Dönges: So what we have is a signed MOU that dates back to end of last year. And this MoU covers an evaluation phase. So we are looking into how a business case, a business plan, could look like, but there is nothing on production or a

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commercial agreement. So this is really on MOU on the overall evaluation of a partnership going forward. 00:28:44

Christoph Laskawi: Thank you. Just a brief follow-up, if I may, on the question if Q2 could be within the guidance range on the margin or not. Can you comment on that, or too early for now? 00:28:57

Jutta Dönges: n Well, I think we can confirm our outlook and, as I said, there is a seasonal pattern for adjusted EBIT in the quarters. So yeah, I mean, the the start into Q2 was a bit softer, but overall we are confident that we can expect what we guided before. There's no specific guidance on Q2 out there, as you know, but in the overall context, the overall picture is, as I said, confirmed. 00:29:38

Christoph Laskawi: Understood. Thank you. 00:29:40

Jutta Dönges: Thank you. 00:29:42

Operator: Thank you so much. And the next question comes from José Asumendi from J.P. Morgan. The floor is yours. 00:29:49

José Asumendi: Thank you. Thank you very much. José from J.P. Morgan. Just a couple of questions, please. Jutta, good morning. Can you please talk about the restructuring cash outflows you're expecting in 2026 and 2027? Second, when you look at your balance sheet from an overall, you know, maybe discussions with rating agencies, overall balance sheet, how much cash do you think you need to have on your balance sheet? Are we looking at 10% to 15% of sales? Do you look at it on sales? Do you look at it on net cash or on absolute cash levels? And then three, can you help us a bit more on UX? Are there any of those assets still up for sale? The display business, is it still for sale or not? And final one, this is question four. Apologies. When we look at ACM, autonomous mobility, should we expect on a fullyear basis decision to be slightly loss-making, or do you think you have the right tools to bring this division to breakeven money-making? Thank you. 00:30:57

Jutta Dönges: Thank you very much, and good to talk to you again. On the restructuring cash outflow, I just confirm what we said when we guided for 2026. We expect overall restructuring-related and a spin-off and listing-related cash outflow in the magnitude of low to mid triple-digit million euros. A part of that comes from spinning and listings, and that is in the double-digit range. There has been a recent better understanding of some tax-related payments that may come in 2026 already. So, that's why we are guiding for a double-digit impact from spin-off and listingrelated cash outflow. And for the restructuring cash out, that is unchanged for what we said before, yeah, low-mid triple digit. And that if you add that up, that brings you probably to, yeah, a mid triple-digit number. You also asked '26 and beyond. I think what we can say there will be be restructuring-related cash outs in 2027.

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00:32:28

Jutta Dönges: As of today, given what we have announced, we would expect that by 2028, this restructuring cash out will really come down. On the balance sheet, and what the right composition of the balance sheet is also in terms of liquidity, here I would ask you for your patience. This is an important part of our capital allocation strategy that will come later this year. I think as of today, we are, and I repeat myself, that we are very happy that we are in this very good, comfortable situation, that we have plenty of liquidity on our balance sheet to do what we think is strategically the right thing, and to continue on the transformation of the company. There's no update on UX. You ask whether it is for sale or parts are for sale. We just need to reiterate what we said before, and this is part of a strategic review. We will do this, perform this review over the course of the next couple of weeks, and then there will be clarity on UX. However, I must say we are very pleased with the current progress. 00:33:50

Jutta Dönges: And we see that the turnaround is working, that our measures are really effective. And we are quite confident on the overall guidance that we have given for 2026 that profitability will be increased further. And then on the other business area, ACM, you ask whether we expect this business area to bebreak even. As of today, yes, this is our ambition to really also bring overall adjusted EBIT of ACM into positive territory. However, we have significant headwinds on the top line, as we have also seen in the first quarter. And we really focus on what is under our control, cost measures, discipline with regards to production, et cetera, all these things that we can really do. And as we said before, ACM will continue to be the business area, which is very innovative and where a lot of R&D spending is necessary. And this obviously has an impact on the overall profitability. But as I said, the ambition is to reach back even this year. 00:35:21

José Asumendi: Thank you, Jutta. Thank you very much. 00:35:23

Jutta Dönges: You're very welcome. 00:35:26

Operator: The next question comes from Stephen Benhamou from BofA. Stephen, the stage is yours. 00:35:34

Stephen Benhamou: Hello. Good morning. I have three questions, please. The first one is on Europe. So there's a stronger performance in the region. I was wondering if it's mainly driven by this portfolio management, or in some divisions you are experiencing some market share loss. This is my first question. The second question is regarding your guidance. So I know that it's quite complex for you to precisely guide on what could be the impact of the current context. But I was wondering what the magnitude of the adjustment that you've made on your underlying assumptions regarding the impact of this Middle East crisis as compared to the assumptions that you had mid-March for your results. And to what extent you're able to compensate those headwinds with customers compensation given the natural lag? 00:36:35

Stephen Benhamou: This is my second question. And the last question is a more

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broader question. If the oil price stays at a high level, I would expect to have a faster transition toward electrification, and (there'll?) be EVs. To what extent this is a tailwind or a headwind for you if this EV transition materializes? Thank you. 00:37:04

Jutta Dönges: Thank you very much. Let me start with the question on impact of Middle East crisis in our guidance. As we said in March, and we also repeat it now, we have not taken into account any impact from the Middle East crisis because it's really difficult to predict what is clear to nobody, I guess, is how long this will continue. However, I think it's important to note that the direct impact from the Middle East crisis is very, very limited. If at all, we talk about increased transportation cost, which is not reflected in our Q1 results, as the increase in the transportation prices only started at mid-end March. And the other topic is on energy prices, where we also don't see any impact for the first half of this year because we are covered by forward buys. 00:38:09

Jutta Dönges: So, where we see some impact, and it does not have a really material financial impact is some supply chain difficulties. It takes a bit longer to get certain parts. There's this discussion around helium and what it means for semiconductor, but this then is rather reflected in the overall semiconductor situation, where we see significant price increases. And by the way, for 2026, this is something where we are not concerned in terms of the volumes. We have secured a very large part of the volumes for memories. And we have also, to a large extent fixed the prices. So Iran is not considered in the confirmation of our guidance. And as I said, there's only as of today limited impact. Oil price, whether that would be a tailwind for us, well, actually, I don't think so. As I just said, the oil price, if it all, has an impact on energy prices, and there the exposure is limited as of today. And then on Europe, there was a question, did I get that right, underperformance in some region driven by portfolio management. 00:39:52

Jutta Dönges: Well, the portfolio management decisions were mainly in Europe, so there is no other impact beyond Europe. Was that the question on Europe, and is that the answer? Is that okay? 00:40:06

Stephen Benhamou: Yeah. Thank you. But regarding the second question, it was more about the consequences of oil prices, not the direct impact. The consequences of the oil prices is potentially a faster EV transition. I was wondering if this... 00:40:19

Jutta Dönges: Oh, okay. Yeah. 00:40:20

Stephen Benhamou: EV transition is a tailwind or a headwind for the business. 00:40:25

Jutta Dönges: Okay. Thanks for repeating the question. Now I understand. I mean, as we always say, we are agnostic, so we do not have a powertrain business, and we also do not depend on EV or combustion engine cars. So, if there is a push to electric cars, I mean, that overall helps on the overall transition. But, as I said, as we

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are powertrain agnostic, this is not something that we really take into our considerations. 00:41:03

Stephen Benhamou: Okay. Thank you. And maybe, if I may, a last question. It's regarding what you said for the DRAM prices. So you've covered most of your volumes and pricing for 2026. I would assume that the negotiations for 2027 will start. Given that the DRAM prices surge between 70% to 90% year to date, I was wondering to what extent... what could be the impact for 2027, given the negotiation that will be based on the higher price? 00:41:41

Jutta Dönges: Yeah, you are right. 2027 is the focus. I think we explained that before in March that we are looking for volumes to secure the volumes, but we do that in very close alignment with our customers. And the focus is really on getting the volumes. And then we discuss with our customers how the increase in the prices can be shared. So that is part of the overall price negotiations or compensation negotiations with our customers. But the focus is first of all on getting the volumes. And therefore, it's really important to understand what the volumes are that our customers are looking for. So that's a close cooperation that is taking place right now. And just to come back on 2026, to reiterate that, I think I said it's a very large part of our volumes that we need, is covered. To be more precise on that, 90% of 2026 requirements are covered in volumes. 00:42:58

Stephen Benhamou: Thank you. 00:43:01

Operator: Next question comes from Harry Martin from Bernstein. Please proceed. 00:43:09

Harry Martin: Hi. Yeah, good morning. The first question that I had, I just wanted to ask about China. So we're back to underperformance versus the LVP and Q1 order intake, with the Chinese OEMs was somewhere around €750 million in lifetime revenues. So is this underperformance and the slower order intake just transitory, related to the weaker market, or is there still some adaptations to the portfolio you need with the local OEMs in China? 00:43:50

Jutta Dönges: Well, actually, I would argue that China actually showed very positive momentum in Q1 2026 with regards to the order intake. We see ongoing customer engagement, and we have been quite successful in securing new and strategic awards. As we explained before, the business area that is doing well in China is SAM. And on top, I think that Q1 was in particular also strong with regards to our business area ANS, in particular in China. So, I think that the split of the overall order intake also demonstrate we are doing fine. We are actually doing well in China, and the share of order intake with Chinese OEMs stays at the same level as also reported for 2025, so with close to 60% with Chinese OEMs. So that is actually going in the right direction and is confirming our strategy to really focus on China. 00:45:01

Harry Martin: Okay. And then I had a follow-up on the non-automotive growth

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opportunities. You know, it has become a real trend for Tier One suppliers to spend earnings calls talking a lot about then non-automotive use cases for the technologies in the portfolio. You know, it's notable to me that you haven't really focused on that, even though some do exist. Do you think it's counterproductive versus focusing on the core strategy, or, I mean, do you have any other thoughts about the long-term potential in some other end markets as well? 00:45:37

Jutta Dönges: I would not say that we are not focusing on this. Actually, we are looking into this to expand our product range and also get into non-automotive sectors. We are not at a point where we can talk about this in public, but take for granted that we are looking into this, and when there is an update, we will communicate. 00:46:04

Harry Martin: Got it. Thank you very much. 00:46:07

Operator: And the next question comes from Vanessa Jefferies from Jefferies. Please proceed. 00:46:15

Vanessa Jeffriess: Hello. Thank you for taking my question. Just firstly, on order intake. I understand there's a large one-off last year and lots of uncertainty, but even when we look at the first quarter versus, say, the fourth quarter of last year, I mean, is there anything else we should be aware of in that decline? And second, I was just wondering if you could just talk a little bit about the medium-term targets that you set out last year and kind of your confidence in achieving those on, you know, three and five-year basis, just given what's changed, I mean, maybe which division you think, you know, the backdrop has changed the most in. 00:46:49

Jutta Dönges: Yes. Thank you, Vanessa. On the first question, the overall order intake, as you rightly pointed out, when you look at ACM, it's hard to compare the numbers to the first quarter of 2025 because there was a major award, significant amount. And if you would take that out, then, the comparison to Q1 2026 would be different. I think overall, what we see is the timing effect. So several OEMs have postponed their sourcing decisions, and we expect award decisions to be postponed. They are not off the table, but they basically only come later, and that is a temporary deferral of our order intake then, obviously. We have seen, as we also show in our presentation, very good and strong order intake in SAM, in UX. We have very good, major wins also in ANS. And I think for UX, what you can see, and you probably remember when we talked about 2025 and the low order intake compared to the prior year in UX that has been now partially recovered. 00:48:15

Jutta Dönges: We said that the low order intake in 2025, in the last quarter in particular, that was because of a postponement of a sourcing decision, and this has now landed into the first quarter of 2026. So that also shows that our confidence in our strong pipeline is correct and that we are impacted by delayed decisions on the customer side. Medium-term targets, we confirm them as of today, so nothing really

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to update. And also with regards to the BAs, there is no change in the overall midterm to long-term outlook. That's all confirmed as of today. 00:49:08

Vanessa Jeffriess: Thank you. 00:49:10

Jutta Dönges: You're welcome. 00:49:13

Operator: Thank you. There are currently no further questions. Once again, if you would like to ask a question, please press nine and star on your telephone. We will wait a moment to see if there is another question coming in. That seems not to be the case. So that concludes the Q&A session, and I will hand back to Lutz Ackermann for some closing remarks. 00:49:44

Lutz Ackermann: Yeah. Thank you so much, and thank you to all of you for participating in today's conference call. If there are any further questions, don't hesitate to reach out to us, and we will be happy to speak to you. The next conference call and the next reporting date is on August 6. We're looking forward to that. And with that, we would like to conclude today's call. You may now disconnect. Thank you very much and goodbye.

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