Aumovio SE (AMVOY) August 6, 2026 Conference Transcript

Yeah, thank you very much and a warm welcome to everyone joining us today for a Movius H1 2026 results presentation. Joining me for today's presentation are our CEO, Philipp von Nierscheid, and our CFO, Jutta Dengas. As always, all relevant documents are available for download on our IR website. Following our remarks, we will open the line for a Q&A session with our cell-side analysts. With that, I would like to hand over to Philipp.

Philipp, please go ahead. yeah thank you very much i'm very happy to be here today after missing the q1 call i'm really excited to share with you our latest news so we are now close to one year a standalone company and what you will see and what you have seen already is that we again made big progress one of the progress you can see here and i guess so after you most probably have seen the slide you're very familiar with that slide i will try to summarize it very shortly bmw has been always one of our main innovation partners and as a very innovative company we have been working with them on many different projects which we first brought to the market together with bmw so that's why we are very happy to have to be back and to deepen our long-term cooperation and strengthen the technology partnership with a very diverse portfolio of new businesses ranging from brake technologies access systems and different other electronic solutions so a portfolio of different projects which we agreed upon and which are around 1.5 billion lifetime sales and for our Mark C2 our integrated brake system we agreed to deliver and to extend the serious deliveries that through the mid-2030s so while paying these 350 million which are scheduled to be paid then for in q3 and q4 we have finalized our warranty case and we are happy to be back there with bmw extending our portfolio and working on new and fresh products and we have started actually with the first workshops the day after our announcement what you see on the next slide is then our financial results where we have in a in a demanding or environment where our sales went down with close to eight and a half percent that are made before the bmw agreement just roughly 4.3 billion euro sales and we managed while being having these sales down to keep our margin of three and a half percent um in um in the second quarter you know and although we have had quite some significant one one significant one-time event positive one-time event in q2 last year and user experience So, we do reflect this result as a very decent one and very confident that we will build on to this result and now also into the second half. The normalized free cash flow is slightly below zero. That's mainly due to the fact that we have had higher variable compensation payments than we have had last year. and that's something we actually also deemed to be necessary for our organization because why have we been missing or have been negative because we had higher variable compensation payments as you as you know we are forming our organization into a high performance organization where we do say that we are very tough on fixed costs but if we do have success in 25 we have deemed to be a very successful year so variable compensation we also pay out to have our people been participating in successful financial results and that's why we had in the second quarter a significant cash out also compared to last year significantly higher if we're looking onto the customer side we have seen that we have major project wins in asia across all business area we what we We see that the size of the structure of our order intake is quite fine, and we are happy with that. We do see that there are still challenging decisions in a challenging environment, specifically in Europe, where we do see that closing decisions have been moved into the third and the fourth quarter. So it means we have not really lost projects, but we have and we still have a very robust project pipeline. We have seen the one and a half billion BMW, which we will record now in Q3, but we have already managed to get some other projects in, so we are quite confident to reach our goals here in 2026. Within Q2, we have successfully completed the sale of our Rhein-Bürttemberg plant, and we have at the beginning of the quarter also signed the sale of our Mechelen plant in Belgium. the transaction is expected to be closed in the third quarter and with that we come closer and closer to our ultimate goal to have less than 45 production locations worldwide which shows our clear commitment towards operational excellence and to have product production costs into the right direction about r&d i'm going to talk later as well but also there we are full on track we have delivered and will deliver measurable savings you will see for the first half already above 100 utah will show and we expect them to be at more than 200 and additionally to 150 in next year in order to reach our target to be below 10 in 2027 yeah and then one topic on the customer side we have made quite some progress on the compensation for higher memory and raw material costs i mean we have concluded with the first customers and we do see that these significant headwinds which we which we experience we can discuss with our customers quite intensively and made as I said quite significant progress today we will also mention the long-term rated capital allocation framework Utah will explain what we have established and I think on the one hand side we will preserve their financial flexibility as well as supporting then the long-term value creation and that should serve as a compelling a compelling foundation for all our shareholders um do we able to be able yeah okay there the slides are back so what you can see here is that this slide shows that our technology trust strategy is translating into tangible commercial proof points across all our four business areas so our purpose is that we make mobility uh safe exciting connected and autonomous and we do see that we have significant customer attractions through different awards through launches and also through ecosystem progress and as you can see for example the ecosystem progress on the autonomous and commercial mobility side where our ad components continue to gain market relevance and that our radars and sensors are being qualified for all leading ad stacks examples here nvidia and others so we do see that we really that we gain traction not only on the aurora side which i am going to go a bit more into detail on the next slide but also on the pescar side and i come to that as well on our architecture network solution hbc wins on the commercial vehicle and special vehicle side we have further broadened our portfolio and by that and diversifying out of the pure pescar business into commercial and speciality vehicle business and and in a region and an area where we do see quite some growth and quite some potential for us and on the architecture network solution we can see here we have important wins in high performance computing specifically with one of emerging autonomous mobility provider from the us we have one businesses on the telematics side on the zone control side and on ultra right-band based and that's where one of our focuses are is in asia where we do see significant improvement and significant potential for our business in safety and motion we continue to see strong customer demand for safety critical technologies I think recent awards specifically in China for airbag control, one box and other braking-related solutions are showing our success here. Also in Europe, we have reinforced our business with two other major, two other European OEMs with various awards. In user experience, we secured two serious production awards for our under-display camera technology across LCD and OLED technologies. And so you can see that across all our four business areas, we are operating in attractive technology fields, which is reinforcing our confidence in the competitiveness of our portfolios and then also the future growth capabilities and abilities in our industry. Let me today focus one more minute on one of our, yeah, highlights in our portfolio, and that is our partnership with Aurora. For us, the direction is very clear, and that's, I think, we can all agree upon. no the with aurora and the ability to scale autonomous trucking we have a great chance and a great future ahead of us we do see that the structural pressures in the u.s trucking market particularly the driver availability and capacity constraints are accelerating and that the interest in these autonomous freight solutions are constantly increasing some of you might have followed up to recent u.s policy discussions which include programs which are aimed to bring more veterans into truck driving as we do have really a scarcity here which underlies that the industry demand is increasing for technology that can add capacity and that's one very important part increase the asset utilization for carriers so we believe that this will create a long-term market with significant upside potential for this partnership for Omovio and together with all so that's one of our strategic priorities where we are working on and I mean you're following up now for the last four years and we come closer and closer towards then the production and you see that it's going to be second half of next year I mean it's an innovation might be some days earlier some days later but we are very confident that we are going to get there and what you see here and that's what we wanted to demonstrate is aurora is the from our point of view the industry leader in self-driving freight with the most mature partner ecosystem to deliver then these solutions at scale aurora launched its first generation of driverless trucks last year and has expanded its network to support 10 driverless routes in the u.s sunbelt and this expansion is accelerating customer adoption and aurora has now nine driverless customers and customers you might heard of it like hirschbach are now planning to buy 500 trucks and delivery will start the next year so this further reinforces the opportunity for us to deliver this transformative product at scale aurora now and you might have seen that last week they deployed its second generation driverless trucks without a person behind the wheel to meet this accelerating customer demand a very important next milestone and a third generation is then with our hardware today um aurora expects to deploy 200 driverless trucks on the road by the end of the year and what we are doing is now we are and that's our proof points which we wanted to share with you today here is that we have the design validation started we have and that includes validation tests and equipment readiness and the calibration facility here in Germany in English that is already operative in your brownfields in Texas we extend our facility you might have heard we are investing more than 100 million US dollar okay i'm still in are we still in can you hear you're coming here hello operator yeah you can go on thank you you can now move on okay i mean now we really need to hurry up um okay then we have the new robert i mentioned that and we are on the course of having the fallback pass field tests done five sensor trucks collecting target routes in the US yeah okay so and I have explained a whole and ready to have shown you what technology what award what ecosystems we are building up in all our for business areas and while doing that and you see we focusing our R&D on innovation and we do not rest to invest into the future and innovation is nothing which we are reducing in terms of invest but we also need to take care of having a competitive R&D cost per sales and that means our holistic approach has diverse measures which we are executing and you can see here we are sticking to our goal to have long-term less than nine percent rd and we are preparing ourselves this year in order to achieve also our long communicated target to be a a single digit rd to sales already next year but that's i leave it um and head over to you are very sorry for taking too much time okay um so thank you philip and a warm welcome um to

everyone also from my side apologies again for the quite bumpy start this morning and the technical issues that we are still experiencing so um hope that we um let's do that call now in the remaining time so um i'm going to talk about the numbers and um just as a remark up front um to provide a clearer view of our underlying business performance all comments on q2 and the first half results actually refer to the figures excluding the bmw settlement effects unless i stated otherwise while the settlement had a significant impact on reported ebit and adjusted ebit our underlying financial performance remained relatively strong and this is the focus of our discussion today so let me start with an overview of our q2 performance adjusted sales in q2 came in at 4.3 billion euros compared to 4.7 billion euros in the prior year quarter the decline of 8.6 percent was mainly driven by volume and price effects of 231 million euros portfolio measures of 160 million euros and a negative foreign exchange translation effect of 60 million euros despite the lower sales base our adjusted ebit margin remains stable year over year at 3.5 percent when taking into consideration that the second quarter 25 margin was elevated by reimbursement effect in user experience as also philip pointed out earlier our underlying profitability of the second quarter was in fact stronger than in the second quarter in 25. this resilience reflects the continued benefits of our transformation measures disciplined operational execution and our ongoing r d efficiency improvements now turning to cash flow both normalized and adjusted free cash flow were lower than in the prior year quarter the main driver also philip mentioned that already was um higher than prior year variable compensation payments these payments represent a recurring seasonal cash outflow in the second quarter and were partially offset by lower capex adjusted free cash flow was impacted by ongoing transformation effects including spin-off and restructuring cash outs now turning to the next slide slide 10 turning to our first half year performance adjusted sales amounted to 8.7 billion euros representing a decline of 8.2 percent year on year this development reflects the impact of ongoing geopolitical uncertainty and continued softness in the automotive market in contrast to sales, profitability continued to move in the right direction. Adjusted EBIT margin increased from 2.7% to 3.0%, driven by the ongoing impact of our transformation measures, cost discipline, and further R&D efficiencies, despite sales and material cost and memory cost headwinds. Normalized free cash flow improved by 34% year-on-year to 130 million euros, mainly driven by lower capex adjusted free cash flow however remained on prior year level primarily driven by increased restructuring cash out overall the first half of 26 shows that even in a challenging market environment we are able to improve our profitability now on slide 11 let's have a closer look at the key financial kpis for the first half year and i start with the development of our top line as a reference point adjusted sales in the first half year amounted to 9.5 billion euros during the first half year our adjusted sales performance was also influenced by the continued execution of portfolio and footprint measures these effects amounted to minus 196 million euros primarily driven by the discontinuation of the display business and user experience amounting to 130 million euros as well as the phase out of contract manufacturing contributing minus 66 million euros excluding these portfolio effects sales for the half first half year period came in at around 9.3 billion euros looking at the remaining drivers h1 was characterized by two items sales were further reduced by 586 million euros with a large largest share coming from lower volumes and pricing effects of 434 million euros, as well as negative foreign exchange translation effects of 152 million euros. Accordingly, adjusted sales amounted to 8.7 billion euros in H1. From a regional perspective, our adjusted sales exposure remained unchanged to previous us. Now, let's have a look at the key effects of the adjusted EBIT year-on-year on slide 12. With H126 adjusted EBIT margin coming in at 3 percent, we have achieved an improvement of our profitability compared to the first half of 25. While adjusted cross-profit decreased by 96 million euros in absolute terms year on year we improved the adjusted gross margin by almost 0.6 percentage point year on year reaching now 20.1 percent in the first half 26. this improvement was supported by lower production cost and a favorable product mix adjusted net r d expenses decreased by 115 million euros now reflecting the tangible progress of our R&D efficiency initiatives and the disciplined execution of our transformation program. As a result, adjusted net R&D to sales ratio decreased to 11.9% in the first half of this year. And this improvement was even more pronounced in the second quarter with 11.4% despite the lower sales base. And that demonstrates our enhanced productivity and structurally more efficient r d organization adjusted smd and fgna expenses increased by 64 million year over year this was mainly attributed to costs associated with the build up of central functions following the spin-off despite continued discipline across all functions other items contributed 43 million euros to the increase in adjusted even it also driven by foreign exchange effects. Taking all these sectors together adjusted EBIT for the first half 26 amounted to 258 million euros corresponding to an adjusted EBIT margin of three percent. Including the BMW settlement adjusted EBIT is lowered by around 100 million euros coming in at 157 million euros and an EBIT margin of 1.8 percent. So let's now turn to the performance of our business areas on the first half in the first half of 2026 our business areas delivered a mixed performance reflecting the ryan market dynamics and maturity profiles across our portfolio despite an overall challenging operating environment architecture and network solutions and user experience achieved year-on-year underlying earnings improvements in autonomous and commercial mobility adjusted sales declined by 12.6 percent year on year primarily driven by lower volumes amounting to 10.6 percent of organic sales decline it's also important to note that the first half of 25 benefited from strong sales volumes related to the eu mobility package too following the completion of this program and the postponement of the third package volumes declined in the current period resulting in a less favorable sales mix and as a consequence adjusted even decreased compared to the prior year autonomous and commercial mobility continues to invest in future technologies while ongoing cost and efficiency measures offset part of the top line happens in ans architecture network solutions adjusted sales decreased by 6.1 percent year on year mainly reflecting foreign exchange happens and lower volumes excluding foreign exchange effects the organic sales decline was 4.9 percent year on year despite the lower sales base adjusted ebit increased by almost 40 percent to 142 million euros resulting in almost two percentage points higher margin supported by the continued execution of our participant cost management and efficiency program. In safety and motion, adjusted sales declined by 6.7 percent year-on-year, reflecting market environment with the primary driver being lower volumes, amounting to 5.6 percent of the organic sales decline. Adjusted EBIT, not taking into account the impact of the BMW settlement, decreased by 16.5 percent to 131 million euros compared to the first half of 25. safety in motion continued to face headwinds from elevated material costs lower net r d expenses driven by restructuring and efficiency measures yet have not been sufficient not been sufficient to compensate overall market challenges in user experience adjusted sales declined by 6.3 percent year on year with price effects and demand shift contributing 4.4 percent of the overall sales decline year on year at the same time adjusted ebook increased for 14 million euros benefiting from improvement of operational execution adjusted for the elevated reimbursement level recorded in the second quarter of the prior year relative performance of your x was even significantly stronger user experience continues to show the successful transformation measures over the recent quarters overall continued market and macroeconomic headwinds affected the top line and earnings performance across our business areas while our transformation initiatives and self-health measures provide support on overall profitability of the group now let's turn to slide 14. adjusted ebta amounted to 605 million euros and forms the starting point of our cash flow development in the first half. Employee benefits provisions and other cash items including the reversal of non-cash items impacted adjusted EBTA considerably amounted to 125 million euros resulting in an operating cash flow before interest and taxes of 455 million euros. Cash effective investments of 193 million euros reflected a more cautious spending in the first half, which we continue in the second half if market circumstances persist. Interest and tax payments totaled 148 million euros, benefiting from lower income tax payments compared to the prior year. As a result, normalized free cash flow came in at 130 million euros. Cash effective restructuring and separation related costs continued to weigh on the adjusted free cash flow. These special effects included 230 million of restructuring-led cash outflows and 55 million euros associated with spin-off and separation activities. After taking these special items into account, adjusted free cash flow amounted to a negative 177 million euros in the first half of 2026. On slide 15, we show that our liquidity position remains a key strength of Omovio, providing both financial stability and strategic flexibility. Starting from a strong net cash position at the beginning of the year, the position remains strong at 1.2 billion euros, affected by negative free cash flow, as discussed on the previous slide, and minor changes in using liabilities. At the same time, the pension liabilities slightly decreased, mainly driven by the increase in the discount rate in Germany from 4.3% to 4.4%, which positively affected the valuation of our pension obligations overall our solid net cash position which use pension liabilities and discipline financial management provide a robust foundation to navigate ongoing market volatility while maintaining the flexibility required to execute our transformation agenda and support future growth let me now turn to our updated outlook for the full year 2026 starting with adjusted sales we now expect four-year adjusted sales in the range of 17 to 17 5 billion euros compared to our previous outlook of 17 to 18.5 billion euros the adjustment primarily reflects a lower light vehicle production outlook and the business performance in the first half of this year turning to profitability we now expect an adjusted ebit margin in the range of three percent to four percent compared to our previous outlook of three point five to five percent the refinement of our adjusted ebit margin outlook incorporates our revised assessment regarding higher raw material prices as well as increased prices for memory components and in addition it also reflects the impact of the bmw settlement we are actively mitigating cost impacts through close collaboration with our suppliers redesigned to cost initiatives and compensation mechanisms. We expect to see those effects to become more visible in the second half of the year. Now, moving to cash generation, we expect normalized free cash flow to be in the range of 500 to 700 million euros compared to our previous outlook of 500 to 800 million euros. This adjustment reflects partially the impact of the BMW settlement. Importantly, the outlook range was only reduced at the upper end. This effectively implies an improvement in the underlying normalized free cash flow outlook, as we are confident in our ability to steer cash flows. Finally, let me touch on all our further assumptions. For full year 26, we now expect cash outflows related to the spin-off, disrupting activities, and partially the BMW settlement of around 600 million euros. and that income and earnings per share we still expect an improvement compared to the prior year now let's have a look at our business areas on slide 17. the outlook for architecture and network solutions remains unchanged compared to our previous outlook for autonomous and commercial mobility and user experience we have updated our outlook based on the first half 26 results and our latest assessment of market developments. For safety and motion, the revised outlook also reflects the impact of the settlement agreement with BMW. Starting with autonomous and commercial mobility, we now expect adjusted sales to decline significantly year-on-year compared to our previous expectation of a moderate decline. The assumptions underlying our previous outlook remain unchanged. when the revised outlook additionally reflects the business performance in the first half of this year and our updated view on market developments. For adjusted EBIT margin, we continue to expect a stable year-on-year development. Despite the lowest outlook, this expectation remains supported by additional cost reduction measures as part of our R&D transformation program, as well as continued this cost discipline across production, sales, and admin functions turning to safety and motion we continue to expect adjusted sales to decline moderately year-on-year in line with our previous outlook for adjusted EBIT margin we now expect a slight year-on-year decline previously we had expected a moderate improvement the revised margin outlook reflects the business performance in the first half of the year the challenging market environment and the impact of the bmw settlement agreement at the same time additional cost reduction measures across production sales admin and research and development continue to mitigate the pressure from the market environment and now looking at user experience we continue to expect adjusted sales to decline moderately year over year consistent with our previous outlook sales development continues to be primarily impacted by adverse foreign exchange effects for adjusted ebit margin we now expect a slight improvement compared to last year's level of 0.4 percent whereas our previous outlook assumed a moderate improvement the revised profitability outlook reflects the business performance in the first half of this year and our updated assessment of the market developments however our profitability expectations continue to be supported by structural measures low material costs and further gains in operational efficiency now let's turn to slide 19 and talk about our newly established capital allocation framework which becomes effective as we speak the establishment of this framework marks another important milestone in our journey as an independent listed company formalizing the capital allocation commitments communicated at our capital markets day in 25 into a clear and actionable capital deployment framework the objective of this framework is to private provide transparency about our priorities and how we think about the use of capital in the interests of our shareholders let me now walk you through the framework and the priorities that guide our capital allocation decisions on slide 20. you see our first priority is maintaining a strong balance sheet and financial flexibility. This includes our commitment to an investment-grade credit profile and a prudent liquidity position, ensuring resilience across market cycles and preserving strategic optionality. Our second priority is investing in organic growth. We will continue to allocate capital to opportunities that strengthen our innovation capabilities and support long-term profitable growth while having a disciplined approach to our spending. In this context, we confirm a net R&D to sales ratio of around 9% in the long term. And we align our target for investments with market reporting standards and introduce a cash-effective CapEx below 4.5% of sales in the midterm. Our third priority is shareholder returns. We establish a sustainable dividend policy targeting a payout ratio of around 30% of net income. And beyond that, we plan to execute share buybacks based on the availability of excess free cash flow after dividends and M&A. And finally, we will pursue selective M&A opportunities where they can strengthen our technology portfolio enhance our competitive position or offer attractive value creation potential our capital allocation framework is fully aligned with our strategic and financial targets it ensures that we balance growth financial discipline and shareholder returns in a consistent and value focused manner and will support sustainable long-term shareholder value creation and with this i hand back to lots yeah thank you juta and now we come to the q a session uh so operator please take over for the moderation of the q a session