technotrans SE (TTR1) Q1 2026 Earnings Call Transcript

Good morning, ladies and gentlemen, and thank you for joining our webcast on the results of the first quarter 2026 of Technotrans. My name is Frank Dernasch and I'm Head of Investor Relations and Treasury. I'm pleased to welcome you today together with our CEO Michael Finger and our CFO Natasha Sander. This morning, we will take you through four topics. First, the highlights of the first quarter 2026. Second, the development in our focus markets. Third, the financial performance in detail. And fourth, our strategic roadmap and the outlook for 2026. After the presentation, Michael and Natasha will be available for your questions in a Q&A session. Before we start, please note that today's presentation contains statements on the future development of TechnoTrans Group. These statements reflect the current views of the Board of Management that are based on corresponding plans, estimates, and expectations. They are subject to risks and uncertainties, which could cause actual results to differ materially from expectations. With that, I am pleased to hand over to our CEO. Michael, the floor is yours. Thank you.

Thank you very much, Frank, and a warm welcome from me as well. The first quarter developed pretty much according to plan. We anticipated lower revenues in the first quarter and it was good to see that we could improve our earnings, even with lower revenues. And this despite the escalated situation in the Middle East and an ongoing weak economy in Germany. So the environment remains tough. Some of our end markets are still under pressure. And at this point, we could show that our restructuring activities are paying off. This is reflected in the figures of the first quarter. In the first three months, consolidated revenue reached around 55 million euro. This was 5 million euro below previous year, and it reflects the anticipated and expected weakness in print and plastics due to the challenging environment. But again, look at the result. the EBIT margin increased up to 7% compared with 6.7% one year ago. And as I already said at the beginning, higher margins with 5 million less revenues in an even more challenging environment. This shows a very important development of Technotrans. We could show now six quarters in a row stable EBIT margin on a level of 7% plus minus. So, we are stable, we are resilient, we are no longer only talking about transformation, we are seeing the effects in our numbers. Our product mix is improving with our new ramp-ups, our technology business is supporting our profitability, our service business remains stable and profitable, our cost management is disciplined and our focus on attractive growth markets is paying off. Free cash flow improved significantly by 4.4 million euros and this is good progress despite the normal seasonal working capital build-up in the first quarter. Although we had lower revenues in the first quarter, we saw a very positive dynamic in order intake. We could win important orders in rail and data centers and in plastics. weeks. We saw a positive trend in orders. Consequently, order backlog increased by 6% to 84 million euros and the book to build ratio reached 1.1. All are good indicators for a relaxing situation in the second half of this year. Having said that, let's move to the development of our markets. As already announced last year, we have adjusted the reporting of our focus markets at the beginning of this year. Laser is no longer reported as a separate focus market. The related activities have been allocated to the remaining markets. In combination with the positive development of our focus markets, we have a more balanced portfolio. This is reflected in our share of revenue. Energy management stands for 28%, Helsinki analytics contributes 15%, print represents 31% and plastics account for 23%. Let's take a look to the markets in more detail. Energy management continued its great momentum right from the beginning. In the first quarter revenue increased to 15.4 million euro. At first glance this is 4% growth overall compared to last year. But if we exclude laser, the underlying growth is 12%. This highlights again another quarter of outstanding growth in energy management. Energy management already represents, as I said, before 28% of our revenue. It's no longer a niche, it's already the second biggest division of technocrans. And it is a question of time when energy management will become the biggest division. As you know, this market is supported by electrification, decarbonization, digitalization and AI. The momentum is still positive and we keep winning new business. As announced in our latest press release, we have won additional large orders for CDUs in the highest single million digits the dynamics in the data center business are picking up in the first half of this year we could already beat the volume from last year and more to come the future demand for cdu's is encouraging ai driven data center expansion requires efficient reliable and scaling cooling concepts we have this competence we have the products in place and we are gaining customer traction. Another strategic highlight we saw in rail business. As announced as well, we have won a big contract for battery thermal management systems in the double-digit million euro range. This is another major win and supports our strategy ready for growth as well. In addition, this long-term contract will bring high visibility. Healthcare Analytics remains a technological demanding and attractive business. Revenue increased by 3% to 8.2 million euro. This market benefits from medical progress and digitalization. From increasing precision and the high demand for semiconductor production it demands as well. This is exactly where Technotrans can play to its strengths, engineering know-how, process understanding and thermal precision. PRINT had a softer start into the year. Revenue came in at 17.1 million euros. This is 16% below last year. PRINT is currently mainly under pressure because of the weak economy, investment restraints, uncertainties around the US tariffs and currency effects from a weaker US dollar but we know this market we have a strong position and we expect demand to pick up over the course of this year plastics also remained affected by the weak economy revenue was 12.5 million euros and this is 18 percent less than last year however we are working on the future we are addressing this market with increased innovation and sales efforts. Our new energy efficient vario term systems and our compact chillers using the natural refrigerant propane. This is very well received by our customers. We see first signs of an improvement with a positive order intake already in the first quarter. So to sum it up, print and plastics are still affected by the economy. Energy management and health analytics are both continue to grow. As shown with laser, we are actively shifting our portfolio towards the areas where long-term demand is growing. At the same time, we are keeping costs under control and we are improving the efficiency of our production. And this is exactly what we said we would do.

Having said this natasha will walk you through the financials in more detail natasha please thank you michael and a warm welcome also from my side i'm pleased to explain the financial performance of the techno trans group in the first quarter of the financial year 26. let me start with the key financial message despite lower revenue we improved our profitability this clearly demonstrates the sustainably stronger quality of our earnings it also highlights the operational discipline and financial strengths we have consistently delivered over the past six quarters let me begin with the top line group revenue reached 54.9 million euro compared to 60.1 million in the previous year the decline of 8.7 percent was expected it mainly resulted from the weaker development in print and plastics due to the challenging environment at the same time energy management and healthcare and analytics confirmed their strategic importance and sustained their positive momentum turning to profitability ebit amounted to 3.8 million euro compared to 4 million euro one year ago ebit margin improved from 6.7 to 7.0 percent this positive margin development was driven by three main factors first a higher service share second a value accretive product mix in the technology segment reflecting the expansion of business in growth markets and third proactive and consequent cost management across the group all in all a very encouraging development and profitability despite lower revenue let's turn to the segments Technology revenue reached €40.2 million compared with €45 million in the previous year. This development reflects the market environment and the expected lower revenue contribution from print and plastics. However, the segment EBIT increased to €1.7 million. Consequently, the EBIT margin improved from 3.7 to 4.2%. This is a very important improvement compared to Q1 of the previous year. It shows that the technology segment is becoming more robust. The improved product mix and disciplined cost measures compensated for the lower volume. In other words, we generated more margin quality from less revenue volume. Let's move to services. the services segment once again made a stabilizing contribution to our business revenue amounted to 14.7 million euro compared to 15.2 million in the prior year quarter segment ebit reached 2.1 million euro with an ebit margin of 14.5 percent overall the margin remained at a strong level. The slight decline compared to previous year is mainly attributable to lower scaling effects due to the reduced revenue base. Our services segment remains a key pillar of our business model. It reinforces customer relationships. It supports profitability and it increases the resilience of the group. Coming to free cash flow now. Free cash flow improved significantly from minus 5.8 million euro in the prior year quarter to minus 1.4 million euro. The cash flow development in Q1 26 was still affected by seasonal working capital buildup. Inventories increased to support the order backlog and to continue growth. Trade receivables increased due to a strong revenue level in March and timing effects. At the same time, higher contract liabilities and trade payables had a compensating effect. The development of free cash flow is therefore a positive signal. It shows better cash discipline and it is fully aligned with our strategic focus on stronger cash generation. We expect a normalization of free cash flow over the course of the year. gross profit reached 16.7 million euro reflecting the lower revenue volume nevertheless gross margin improved from 29.9 to 30.5 percent on the back of a more favorable product mix in technology and a higher service share EBITDA reached 5.4 million euro compared to 5.8 million in the previous year the ebta margin improved from 9.6 to 9.8 percent net profit reached 2.4 million euro being 0.2 million lower compared to the previous year earnings per share is nearly stable with 0.35 euro per share our financial position remains very solid the equity ratio further increased to 65.5 percent net debt was 10.2 million euro compared to last year net debt increased especially due to the already mentioned build up of working capital for expected growth our net debt ebda ratio of 0.43 remains on investment grade level even in a challenging market environment techno Trans maintains a very solid financial position and a strong credit profile. This provides us the flexibility to support our growth strategy. Let me briefly summarize my part. In the first quarter, Technotrans once again proved strong operational discipline and further improved earnings quality we increased our ebit margin despite lower revenue the technology segment improved its margin while services again confirmed to be a stabilizing killer of our business free cash flow improved substantially and our balance sheet remains very robust overall we are satisfied with our profitability and see a solid foundation to build on we will use this positive momentum to consistently execute our ready for growth strategy

we are ready for profitable growth with that i hand back to michael for the strategy update and outlook now thank you thank you very much as natasha said we are ready for profitable growth and we are executing our strategy. 2026 is the first year of our new strategy. Ready for growth. This name is not just a slogan. It describes our ambition. We want to grow. We are facing the right markets. We have the right products in place. We want to grow profitable. And we want to generate more cash from growth. Our midterm targets are clear. By 2030, we want to increase revenue to more than €350 million. The EBIT margin should reach 9 to 12%. In addition, a substantial improvement in free cash flow is a central element of our strategy. This is ambitious, but it is fundamentally based on the markets we serve and the technologies we provide. And look at the trends around us. Artificial intelligence, electrification, decarbonization, digitalization and medical progress. These are no temporary trends. These are long-term megatrends, changing the industry. And they all need thermal management. That's why Ready for Growth is the right strategy at the right time. So, where are we standing after three months? As mentioned at the beginning, the environment is getting tougher. Geopolitical conflicts, higher oil prices and a weak economy are affecting global markets and Technotrans as well. But we are more resilient than in the past. With our four divisions and our core competence thermal management, we have a strong business model in place and print and plastics were impacted by cyclical investment restraints especially in Europe. At the same time energy management and healthcare analytics continue to grow confirmed their strategic importance of Technotrans. This balanced portfolio is an important element of the Technotrans investment case. We combine established industrial positions with fast growing applications. The demand for precise and efficient thermal management continues to rise. And Technotrans has the competence, the customer access and a global footprint to benefit. This balance helped us navigate a weaker Q1 with acceptable margins. And we are winning. Strategic important business like CDUs for data centers or battery thermal management systems for rail. So we are on track and we are just at the beginning. We are in the first year of our strategy or to be more precise, just three months are done from a 60-month strategy period. We will implement our strategy consequently and calmly, even and especially in difficult times. Let's turn to the outlook. Again, the geopolitical economic environment remains challenging but we are more resilient for the remainder of the year we expect demand to stabilize gradually with stronger momentum in the second half energy management remains our strongest growth area it is driven by an increased demand for battery thermal management systems and seed use for data centers healthcare and analytics should continue to contribute steadily in print and plastics we expect demand to improve during the year based on the positive development in the first quarter and the current order situation we confirm our guidance for the financial year 2026 we expect group revenue in the range of 240 to 260 million euro with an EBIT margin between six and a half and eight and a half percent free cash flow should come in slightly above 10 million euro. Ladies and gentlemen, let me close with three messages. The first. Technotrans is resilient. With our balanced market portfolio, we improved our EBIT margin despite lower revenues. Second one. Technotrans is positioned in attractive future markets.

These markets are supported by mega trends such as ii or electrification and the third one technical trends as a clear value creation roadmap we are ready for growth and with that said i would like to ask frank to open the q a thank you very much thank you michael ladies and gentlemen this concludes our presentation we will now open the floor for your questions if you wish to ask a question please use the raise hand feature we will enable your microphone at that time if you have dialed in by phone please press star 9 to raise your hand alternatively you can submit your question in writing writing through that chat function and we will address this in turn please remember to activate your microphone before you speak the lines are now open mr augustine has raised his hand so mr augustine please hello can you hear me yes yeah hi good day um nicholas from montega so thanks for your presentation first of all and in order of that i have three questions right now so maybe let me start with with the first one

in april you announced two bigger orders can you give us a little more detail about the timeline on these orders or these projects will they be fully executed in 2026 or in 2027 my second question is on the focus market healthcare and analytics in 2025 there was a high demand on this focus market for example for baggage scanners do you see that continuing in 2026 or with the growth of this focus market significantly decrease and my last questions I can repeat them later no worries my last question is on the focus market print can you give us a little more outlook um regarding this year do you already see a recovery in this focus market or should we expect a similar development for the rest of the year thank you yeah thank you very much mr frez um for just a second technical point we need to switch the cameras um oh yes and then i start answering your question so first one was about the order timeline regarding our

latest press releases the first press release was about our business in in the railway sector we have announced the battery thermal management systems in the lower double digit million euro digits and we also said this is a long-term contract and we expect first volume kicking in by end of this year followed by further revenues in the following years the second announcement was about data center business our cdus for data centers they will completely capitalized within 2026 second question was about healthcare and analytics if i remember it was all about the baggage scanner and for sure we see a continuous trend in this area this is also driven by legislation and there is still a lot to to substitute in several airports across the globe and we see constantly orders kicking in in this area and it supports our revenue also this year and even beyond and last the last question was about print and the outlook in this market yes the print market as we said in the speech is affected by the economy by the u.s tariffs by also the weaker us dollar and for sure this is market is under pressure but we see first signals that it may come back soon so we hope to see a recovery in the second half of this year thank you very much maybe just on the first question on the on the railway order and can give us maybe a little in a little number of volume and what of what we can expect in 2026 executed yeah for for 2026 as is you can make a simple mass double digit a lower double digit

million euro range in orders so we see a low single digit million a portion in q4 this year great thank you very much you are welcome mr frears so thank you um very much mr frears and now let's turn to mr augustine yes hello good morning um i think yes um many things are in the right place and you had a quite a good profitability on the technology side um Here is one question, how exactly did you or have you been able to adapt the cost base for plastics and print quite quickly?

Is this a possibility to shift capacities between the single end markets or did you refer to things like temp workers or actually did you introduce somewhere short-term work a good question thank you for asking mr. Augustine so first of all yes we did we have shifted capacity from print to energy management as both areas are located in one production area production plant so this was possible indeed and of course we have used short-time work especially in

meiner sagen where our plastics business is based and in in particular areas also in print all right thank you and then um some coming back to the let's say the roadmap of uh volume expansion going forward um would it be correct if we say that we should already anticipate q2 orders as you have two larger orders already mentioned there q2 orders overall above q1 orders and then also consequently q2 revenues above q1 revenues yes we hope so so um the

business as we projected should pick up over the course of this year and indeed we had a good order intake in Q1 which will kick into our production immediately over the course of the next two quarters and with that said we should expect higher revenues in the second quarter and of course in the second half all right thank you very much you're welcome thank you mr augustine so let's take a look currently i do not see any more raised hands are there additional questions

there are also no questions in the chat just is there anything else this seems not to be good the case so um yeah please let me hand over to michael for the closing remarks then yeah thank you very much frank and uh indeed we have talked already hello is there hello one question yes who is it it's stefan michael from lbbw mr michael yeah linked via phone sorry for that yes then let's go back um okay you can

hear me okay i actually have two questions if i'm made of the first one i mean i would like to come back to the sales development in in print which which was was very vegan just in the first but i could you despite probably the development in the new appliance and in the service business meaning maybe probably the service piece is more stable or also declining and and did the insolvency of manroland sheet fat have a negative impact on on this development as the first one yeah so i hope i understood your question quite right because the tone was very calm i think i i got it that

it was all about the insolvency process of man roland and the effect of technotrans The answer is yes, we have been affected. Manroland is a long-term customer of Technotrans and the effect is in the low 100,000 euro range around that point. And it had not such a significant impact than we saw 11 years ago when there have been insolvency for the first time. but nevertheless of course this is a customer a long-term customer which is now gone okay thanks for that second part and maybe i stated again is uh yet development in the new appliance and service business the technology and service business in the print market has there been any different development of both this service business in print yeah was a question the technology business in print so no there is no no big deviation compared to the past it is down to the cyclical development and the weak economy that we also saw less service activities and as natasha mentioned in her speech due to lower absolute numbers in revenue in service, we also saw a short decline in the margins, if I got that right, Natascha? Yeah.

Okay. And the second question from my side is on, you mentioned that you had short time work at the first quarter.

Could you quantify the savings from the short time work and will the short time continue in the second quarter of this year? yes the effect of the savings was low we continue for print in april and for plastics we continue the short work in q2 but for the second half of the year we do not plan any short work so far thanks for that go back into the queue yes thanks mr michael so let's take a look a second time are there any more questions let's check it again so this seems not

the case so back to michael please yeah thank you very much and as i said a couple of seconds ago thanks for your questions we have talked a lot during the last couple of weeks our next corporate event is the agm in munster where we would like to welcome all of you again it is on may 29th And our next reporting date is on August 4th, where we present our half-year figures. And in addition to that, we will participate on several conferences as usual. On behalf of Natascha and Frank, I would like to say thank you. Thank you for participating on the call. Thank you for your patience and your interest in technotrans. And hope to see you again soon. Thanks for joining today and goodbye.