Earnings call transcript: Aalberts Industries Q2 2025 sees market challenges

Aalberts Industries NV reported a challenging first half of 2025, with a decline in revenue and profitability leading to a significant drop in its stock price. The company’s revenue decreased by €62 million, marking a 3.2% organic decline, and its EBITA margin fell to 13.5%, down 1.5% from the previous period. Following the earnings announcement, Aalberts’ stock fell by 13% in pre-market trading to €32.24, reflecting investor concerns about the company’s performance and future outlook. According to InvestingPro analysis, the stock appears undervalued at current levels, with analysts maintaining a strong buy consensus.

Key Takeaways

• Aalberts Industries reported a 3.2% organic revenue decline in the first half of 2025.
• The company’s EBITA margin decreased to 13.5%.
• The semiconductor segment faced a 13% organic growth decline.
• The stock price dropped by 13% in pre-market trading.
• Strategic focus remains on aerospace, defense, and operational excellence.

Company Performance

Aalberts Industries faced a challenging market environment in the first half of 2025, with notable declines in both revenue and profitability. The company experienced a 3.2% organic decline in revenue, largely driven by difficulties in the semiconductor market and German and French industrial sectors. Despite these challenges, the Building segment showed resilience with a 1.4% organic growth.

Financial Highlights

• Revenue: €62 million decline (3.2% organic decrease)
• EBITA margin: 13.5% (down 1.5 percentage points)
• Net profit: €151 million (€1.38 per share)
• Free cash flow: €56 million (€8 million improvement year-on-year)

Market Reaction

Aalberts Industries’ stock fell by 13% in pre-market trading, reflecting investor concerns about declining revenue and profitability. The stock’s movement places it closer to its 52-week low, indicating a negative sentiment among investors.

Outlook & Guidance

The company has set a full-year EBITA margin guidance of 13-14% and does not expect organic revenue improvement in the second half of 2025. Aalberts plans to continue focusing on cost optimization, operational excellence, and strategic investments in high-growth areas like aerospace and defense.

Executive Commentary

CEO Stephane Simonetta emphasized the company’s commitment to protecting its EBITA margin and optimizing free cash flow, while continuing long-term investments. He acknowledged the ongoing market uncertainty and highlighted the importance of balancing short-term and long-term objectives.

Risks and Challenges

• Continued destocking in the semiconductor market poses a risk to revenue growth.
• Challenges in the German and French industrial markets may impact performance.
• The automotive sector’s difficulties could affect future earnings.
• Macroeconomic uncertainties in key regions remain a concern.
• Supply chain disruptions could hinder operational efficiency.

Q&A

During the earnings call, analysts focused on the semiconductor segment’s challenges, the company’s M&A strategy, and inventory reduction efforts. Executives reiterated their focus on completing the GVT acquisition and managing costs effectively.

Full transcript - Aalberts Industries NV (AALB) Q2 2025:

Rutger, Moderator/Host: Good morning, everybody. Welcome to our first half twenty twenty five results publication. It’s great to see so many of you joining this webcast online. I’m happy to introduce to you our CEO, Stephane Simonetta and our new CFO, Franz den Hauter. Stephane will kick off the presentation with some business highlights.

This will be followed by Franz, who will give an update on our financial developments. Stephane will finish the presentation with an update on our strategy and this will be followed by a Q and A session. Please note that today’s webcast and the presentation will be made available later today on our website. Please let me introduce Stefan to kick off the presentation.

Stephane Simonetta, CEO, Alberts: Thank you, Rutger. Good morning everyone. Let’s start this presentation by giving you a business highlight to tell you how was the first half and give you also an operational update for each of our segments before handing over to Frans about the financial development. And I would like to start with a few key messages to summarize the situation where we are. As you have seen this morning in our press release, our first half performance has been impacted by the market headwinds and by the increased uncertainty due to the global trade policies.

This has an impact into our organic growth and that’s why as a key message of today, we are adjusting our full year outlook to reflect the market condition. But we continue to take action on what we can do to protect our EBITA margin, to optimize our free cash flow and we have made good progress on our strategy with three value accretive acquisitions that we will be sharing later today, two in The U. S, one intended in Southeast Asia for our semicon. At the same time, we are still actively looking at our divestment program to simplify our portfolio, especially within our Building and Industry segment. So in a nutshell, managing the short term challenges due to the market uncertainty, but at the same time, continuing to deploy our long term strategic actions.

Now looking back at the first half, you can see on this slide. Basically, now you see the key numbers that again will be explained in much more detail by France. So in a nutshell, the organic growth is basically the result of the end market headwinds. As you can see, we are reporting a 3.2% organic decline with actually a mixed picture between our three segments because, yes, in industry and semicon, we continue to see organic decline. Also, q two was a bit better for industry, but semicon continued to be very low.

On the other hand, we still have growth in our building segments. We are reporting a moderate organic growth of 1.4%. As a consequence, our margin is basically the result of the organic growth challenges as we have a semicon margin going down following the volume drop. Our industry margin is still solid. Right?

And building is stable compared to last year. But of course, we were expecting a bit better performance due to all the action we are taking. On the other hand, I’m really pleased that thanks to all the action we are taking on pricing excellence and organic growth, we managed to sustain a good added value margins and super pleased also to report that we are improving our free cash flow thanks to the great work from our team to reduce inventories and also to manage our capital expenditure. As a consequence due to the lower margin, our EBITA is down at €1.38 So in a nutshell, as you can see at the bottom of the slide, good improvement in free cash flow and EBITA margin under pressure. Let’s now go segment by segment and I would like to start as you can see here by a building segment.

In a nutshell, our building growth still positive 1.4% and our EBITA is stable compared to last year 12.9% compared to 13% last year. Let me now explain you as you can see on the left of the slide why our organic growth you could say is only 1.4% because actually it’s a mixed picture. On one hand, very good growth to continue in Americas, in Asia Pacific, and in some of our product line, commercial valve, industrial valve, prefab solution, we are actually growing quite well. On the other hand, all this growth is offset by the challenge we see especially in Germany and French market, but also in our connection system product line, which is a bit lower than expected and therefore our organic growth is only 1.4%. The margin is stable mostly because of all the action we took, but of course we were expecting a better margin because all the action we took are on track, cost out, inventory, footprint, innovation and that’s what we will continue to do to manage the short term uncertainty.

So as a nutshell for our building segment, good progress on our operational excellence initiative and lower than expected organic growth but still positive. If you go now to industry, a different picture, still a solid performance 16.8% and as you can see the second quarter better than the first quarter, especially because the organic growth is also better in the second quarter than in the first quarter. But overall, you can see it on the top left of the slide, it’s a minus 5% organic growth. And we are doing very well, especially in aerospace, high growth in our defense, high growth in our power generation, very good growth. Also in APAC and Middle East, And unfortunately, this good growth are offsetted by the organic decline of the automotive market and again by the French and German industrial market, which remains soft, and this is where we don’t see improvement in the short term.

On improvement, I think we continue to take out all the cost out measures, footprint optimization, and that’s why we sustain a solid EBITDA, a bit lower than last year. That’s what we will continue to do in the future. And to conclude, we are very pleased to report that our acquisition with Paolo is actually well on track, and we already see early sign of contribution in term of growth and in terms of margin, so confirming the strategic rationale of this acquisition. So to summarize industry, organic revenue growth a bit improved in the second quarter, solid performance, thanks to all the cost out action we took. And the last segment, Semicon.

This is where we have the biggest challenge on the organic growth. You see we are reporting a first half at 13% decline revenue. This has an impact in our EBITA margin and that’s why our EBITA margin is down to 11.5%. But this is also where we are very careful in our cost out action because we have to manage the short term, but also we have to protect the long term. We don’t want to be short of capacity when the market will recover and we are fully aware that this industry, it’s about long term growth.

And yes, short term we are challenged especially on our frame and module, in our machine conditioning. We believe now the inventory adjustment from our silicon customer is coming to an end and now we are just exposed to the market trend in our semicon market. So what are we doing about it? Managing the cost, like I said, still investing for the long term in term of innovation. And of course, the key highlight, even if it’s not finalized, is our intended acquisition with GvT to enter the semicon Southeast Asia market.

And I’ll come back into that because this is where we will improve and we will enter new area for the future growth of the company. So in a summary, for Semicon, we continue to see lower demand, very careful about our q two, and that’s why our EBITA margin is under pressure. But I would say it’s also about a choice to not go too low in terms of capability and capacity. And before I hand over to France, I will just report also that we continue to make progress on our environmental performance. I’m really pleased that we sustain our percentage of revenue linked to the sustainability development goal with more than 70% of our revenue and we continue to take action on our own footprint and thanks to the work from our teams we managed to reduce 8% of scope one and scope two soon to intensity.

So continue to be on track and make good progress in the first half of the year. That’s what I wanted to report as a key business highlight and now let me hand it over to our CFO, Frans, to share with you a more update about our financial development. Thank you. Frans?

Frans den Hauter, CFO, Alberts: Thank you very much Stephane and Rucher and good to be with you here this morning and discuss the H1 results of Alberts. But before I do that, I want to thank all the colleagues in Alberts for giving me such a truly warm welcome. I really enjoy being part of the organization and I look forward to our Thrive 2030 journey. But before we do that this morning, it’s all about the first half year results. So let me dive into those in this first slide where you see four important KPIs that basically summarize where we have been working on and where we are in terms of financials.

First on revenue, we see a decline of €62,000,000 which is organically €50,000,000 and that translates into the minus 3.2% organic revenue decline driven by explained by Stephane already, building we still see small growth but industry and semicon clearly lose revenue growth. That translates into an EBITA margin of 13.5%. Yeah, that’s 1.5 below the previous six months of last year. Still very good added value as already mentioned 63% in line with previous year and also the net profit of €151,000,000 translating into €1.38 per share. Of course, we have been working hard to protect our cash position and I’m pretty pleased

Also if you compare year on year €8,000,000 up to a number of €56,000,000 yes, we lose money on EBITDA because yeah, that is the translation of the operational step back but net working capital and CapEx both deliver €80,000,000 and as such a nice free cash flow of €56,000,000 and I’ll come back to that in a bit more detail. On CapEx €100,000,000 we have been trying to rationalize our CapEx programs and phase them out adjusting to market circumstances €100,000,000 €70,000,000 improvement year on year. Also good to mention that for the full year we expect CapEx to be at a level of 200,000,000 to $225,000,000 which is also a bit lower than our earlier guidance. So, first half year results impacted by challenging markets and let’s dive a little bit more deep into the year on year comparison. Here we see the revenue coming down with the 62,000,000 already mentioned, 23,000,000 by acquisitions, we added SGP and Paolo to the portfolio.

On the other side, we had a divestment of EPC company and then a small currency effect brings us basically to the €50,000,000 revenue decline. As already stated, predominantly driven by industries and semicon, which are in a more difficult period and I think well summarized here at the bottom also driven by the pressure in automotive that is specifically hitting the industry segments. Next slide, we translate and we look at EBITA. Of course, in acquisitions and divestments we see the same companies, but then the EBITA effect, small currency effect again and that brings us to the organic decline in EBITA of €35,000,000 Basically three things: we lose €11,000,000 in semicon, we lose a similar amount in industry and then there’s the year on year effect of the holding elimination line item where we lose 7,000,000 and I’ll give you a bit more context in two slides from here and give you a breakdown also comparing with last year. So, decline mainly driven by the drop through of the lower revenue that you saw in the previous slide.

Assets, let’s go to free cash flow. Here we see in the first red bar the cash, the lower cash because of the EBITDA that was at the lower level, but then very clearly CapEx focus rationalizing our programs and phasing them out €80,000,000 recovery in cash position and then the net working capital also €80,000,000 driven by lower inventories, which is hard work driven by collecting receivables and then slightly offset by the payable position that was a bit lower, but also translation I think of good quality of cash. There’s been hard work in inventory and collecting receivables to get this 80,000,000 in our cash position. Thus, I think nicely summarized lower EBITDA offset by lower CapEx and improved net working capital. On the next slide, it’s a busy slide, but I think it summarized really well year on year what has been going on in the segments and the holding elimination.

Let me talk you through, I think Stephane commented already of course in his intro. In building, you see summarized here, yeah, the decline in revenue year on year also because of the divestments, but organic growth of 1.4% still positive and I think good to see here also the CapEx positions per segment €25,000,000 significantly lower than last year as we also try to rationalize CapEx and use the assets that we already have optimally. In Industry 4.9% revenue decline, but the revenue is still at the same level, of course, supported by the two nice acquisitions that we have added and CapEx level similar to next year also because we are still finishing some greenfields and also the normal replacement CapEx. In semicon, yeah, you see the revenue, yeah, relative big delta, so already explained by Stephane, we remain focused on the mid and the long run also supported by our acquisition that we intended acquisition that we announced, but also visible in the CapEx where we keep investing in our footprint because we really believe that the mid and the long run this will be the place to be for us. Finally, as I said, holding eliminations important line item, of course the elimination line item is more an intercompany correction.

Let’s focus on the minus 10,400,000.0 that we see here, 7,000,000 down versus last year, 7,000,000 more cost, but I think first of all good to mention that last year there was proceeds from an insurance claim included in here. So, 400,000.0 reflects half of it the normal holding cost that we have, 10,000,000 to 50,000,000 in total per year, so this is for the first six months let’s say €5,000,000 the other €5,000,000 come from the acquisition cost for the Paolo acquisition and we settled two small claims and that brings us to 10,400,000.0 on this line item. Well, again summarized at the bottom, building stable, industry resilient and semicon clearly under pressure. Now, this is a new slide where we review some key balance sheet items. I think it’s really important to also have a good look at it and I’ll talk you through.

On the left top, you see clearly that our debt position has gone up with €220,000,000 That basically reflects the Paolo acquisition that we added to the portfolio and it brings the leverage to a level of 1.6. Towards year end, the Attendant acquisition we hope to close before Christmas and that of course will then increase the leverage ratio, but we will stay below two and we will stay comfortably below the leverage ratio ceiling of 2.5 that we always announced. On the right top, the equity and the solvability, I think in a good place representing a solid company and at the left bottom, yeah, the ROCE is lower than last year which is a setback, of course, driven by the lower EBITDA, but also on the other on the capital employed side, we also see the net debt effect that I just discussed increasing our capital employed. Net working capital, yeah, also a translation of good progress already discussed there. We have made progress on inventories, which Stephane will touch on in a bit more detail.

We have been focusing on collecting the cash from our receivables and the payable position year on year has come down, so that offsets a little bit but nice improvement of our net working capital position and that I think overall gives a very strong balance sheet that will support the next steps in our Thrive 2030 journey Stephane and I think you will tell a bit more what you’re

Stephane Simonetta, CEO, Alberts: doing there. Thank you, Frans. So you have seen that we continue to remain very disciplined on all our financial KPI to manage whatever the market challenge is. But while we manage the short term, at the same time, we continue to take action for the long term. And that’s what I would like to report to you now, how we are doing, what progress did we do in the first half, you know, four strategic action as per strive 2,030 as per our last Capital Markets Day in December.

First of all, a quick reminder of the four strategic actions. You can see from the left to the right accelerating organic growth, optimizing and simplifying our portfolio, evolving our operating system and driving sustainable entrepreneurship. No change. These are still the action with a goal to refocus our company, rebalance our portfolio, and recharge our three segments. That has not changed.

What progress did we do in the first half? You can see it here with a simple scorecard and this is what we will be reporting to you every half year, every full year. So you can count us to show you the progress every time we are live and disclosing our results. Obviously, the first action, the status is not satisfactory with a negative organic growth in the first half. This has to be improved but at the same time we continue to invest in some specific organic growth initiative.

We start to see the early sign of improvement, but obviously, it’s still too soon to report progress. But I can tell you, so when you look at prefab solution, when you look at our baller room technology, when you look at our offering for data center, when you look at our US growth ambition, you’ll remember our plan is still the same, to double our revenue in The US over the next five years. Aerospace doing very well, defense as well, and also our semicon, which is all about innovation, system integration, and design to value. More to come, but obviously, the first half results are behind. On the second action, this is where we are actually making good progress with two close acquisitions, one intended acquisition.

And as I said earlier, we still are working actively to make progress about divestment in our building and industry segment. The third one, the Albert Way, it’s all about the functional excellence. Where we did the biggest progress in the first half is on our operational excellence, in our footprint optimization. And I’ll show you a bit more because we are quite pleased with the progress on our inventory days, reducing ten days compared to last year, well on track with our target to be less than ninety days this year and eighty five days next year. And on sustainability commitment, also well on track, but let’s not forget that also here, it’s about investing in our people to ensure we have a future proof workforce to enable our strategy.

And as you can see, almost 400 of our leaders have been trained or went through our leadership development program. That, of course, what we will continue to do as we cannot win without our people. Now one example which I think it’s showing you and it’s not about the size because it’s still a modest order book. It’s still low revenue, but this is where we are investing. Just showing you an example of a prefab solution that we are doing in our factory with one example of what we ship and sold to data center in London and we are doing that in Europe.

We are also looking at expanding this offering also in other vertical like commercial buildings and this is also an opportunity in The US. So you are talking here about the global vertical and our modular thinking where we can use many of the things we do at Albert. You see our expansion vessel, some of the valve, and we are very pleased with the progress and we are investing in people, in footprint to be part of the growth because that’s one of the growth drivers for the coming years to come. You can see also in a summary the three value accretive acquisitions and it’s all about growth. It’s a growth agenda which also enable us to keep our leadership positions obviously aligned with our strategy.

And you can see one close acquisition for our industry segment with Paolo in The US, one close acquisition in the middle or on the right, sorry, with GeoFlow for building segment in The US. And in the middle, still an intent based on what we announced for our semiconductor segment to enter Southeast Asia. And let me tell you a bit more about this great opportunity because indeed, you could say it’s a transformative move for Albert. We are going to enter the semi con Southeast Asia market. This is going to open new growth area for us.

And the way we do it is by having synergies, intended synergies between GVT and our Albert advanced mechatronic solution. Why we are so excited about it? You are talking here about growth agenda to support GBT customers and continue their expansion where we will bring from Albert all our internal capability competencies. Second, we can also grow with our current customer and support their regional supply chain footprint development. So you are talking here about commercial growth synergy, also cost synergy, footprint, commercial.

We have many synergies identified and that’s why we still believe and we really plan to close this acquisition by end of the year because it’s going to support our organic growth and it also supports our margin profile. As you can see here, synergy that will enhance our profitability and cash. So fantastic opportunity. Let’s close it and I look forward to report more once the acquisition is closed, but not for now. And on divestment, I’m sure you remember the slide from our CMD.

And now just a reminder that we are still working on divesting potentially 4 to €500,000,000, especially in our building and industry segment, and we hope to make progress in the second half, but that’s what we’re working on at the moment. So based on the same criteria, ability to win, and market attractiveness. The Alberts Way, this is where, as you say, we are quite pleased with the progress. Our operation team did a fantastic job. Look at these numbers.

And that’s what I like when you talk about functional excellence. It’s initiative that deliver results. And you can see now, right, footprint. And footprint, we are on track with our optimization, but I think due to the market uncertainty, it’s all about scenario planning. We have a task force looking almost on a daily basis at the tariff impact.

We have made progress on inventories. As I mentioned, €110,000,000 drop compared to last year. Ten days, euros 10,000,000 saving on operation productivity on the first half and 14% CapEx reduction going down to 100,000,000 That’s what we will continue to do and that’s why we are building what we call capabilities to invest in resource and to ensure we have a continuous improvement culture so that we can repeat that year over year and not do that as a one off. Good progress, outstanding work from our team. And on the decarbonization level, also no change.

We are still working on our six levels as per our strategy and it’s actually to achieve two key objectives. The first one is our own footprint to continue to reduce our scope one and scope two emission or intensity thanks to our energy efficient programs, thanks to the usage of renewable energy, thanks also to electrification. And the second goal is to help our customers to reach their sustainability target through smart product design, through circular economy, and also through value chain collaboration. And I always like to say the sustainability agenda is good for the environment, but it’s also good for our business and good for our growth agenda. So now you may wonder, based on the current headwind, what do we plan to do as a short term?

We understand that the market uncertainty will continue. We understand that the market softness will continue for the second half. So we will continue to take the action that we took in the first half in order to protect our EBITA margin and improve our free cash flow. So continue to pursue organic growth initiative, deploy the operational excellence program as we announced last year, further accelerate cost out especially in our building segment and through operation productivity, but also purchasing saving, new area, new opportunity, continue inventory reduction, continue with our CapEx reduction, and we hope to make progress on divestments in the second half of the year. So overall, whatever are the market headwinds, we still have strong foundation.

We have clear priorities, and the full leadership will be focused on execution, is focused on execution, and that’s what we will do to manage the short term challenges. Now as a conclusion, of course, let’s go back to our outlook as we have released this morning in our press release. And you could say, based on the current market softness and market softness, based on the uncertainty, looking forward we don’t expect an improvement as you can see in the middle of the slide. We don’t expect an organic revenue growth improvement in the second half of the year. Consequently, we are adjusting our full year outlook EBITDA margin to 13% to 14%.

And you can count on us to continue to take action to protect our EBITDA margin, optimize our free cash flow, while at the same time, we will continue to deploy and invest for the long term, deploying our strategic action as Perscribe 02/1930. Thank you very much.

Rutger, Moderator/Host: Thank you, Frans. Thank you, Stephane, for the presentation. As we are starting the Q and A session, I’d like to remind everyone of you how to participate. For conference call participants, please press hashtag five, hashtag five on your phone to join the queue. Those tuned in via webcast, please submit your questions via the Q and A form, which I see already some of you have done.

Very nice. I would now like to give the word to Martin Den Dreiber from ABN AMRO Auto for the first questions. Good morning, Martin.

Frans den Hauter, CFO, Alberts: Good morning.

Martin Andrej, Analyst, ABN AMRO: Good morning, gentlemen. Good morning, Martin. Thank you for taking my questions. Martin Andrej for ABN AMRO. I have three questions, one each for each division.

I will do them one by one, if you’ll allow me. The Q2 was softer than in Q1 in terms of organic growth. Is that end market demand softening? Is that destocking? Can you tell us something about customer behavior and what you’re seeing there?

And in relation to that, you mentioned corrective action taken. Can you elaborate a little bit on what type of actions we’re talking about? Would be question one. Thank you.

Stephane Simonetta, CEO, Alberts: Thank you for the question, Martin. And you are right that Q2 organic growth was a bit lower than the Q1, I think, especially in our building and semicon market. So semicon, it’s basically the continued effect of the destocking for our customers. Seeing no major change. It was expected at least for us, and that’s what we have seen in the first half.

And the corrective action we took with semicon is, I say, finding the right balance, adjusting cost, but keeping the flexibility and the capacity for the long term. I think that’s and that’s also where we don’t see improvement in the second half, so expect the same activity in semicon. On building, actually you are right, the organic growth has been a bit lower than the first half and we saw a market I think impact especially in our connection system and in the German market. That’s where the second quarter so it’s market driven, but softer than expected, and that’s why the growth in the second half, I think, was only 1%, so a bit lower. And if you look at industry, you have seen that actually q two organic growth was better than the first quarter, right, from almost minus seven.

We reported minus two. So here, we saw improvement, still negative. So what we plan to do on the corrective action? I think industry, it’s all on track. And because the footprint initiatives, cost out, actually, we expect the benefit higher in the second half than in the first half.

So that’s why in the first half, almost 17%, I think it’s still a solid performance. And in building, it’s basically continuing. So the footprint benefit should also come in the second half. We just finished to close one major site at the end of the first semester. Then you continue to take operation productivity, so about flexing our costs in the factory.

It’s about direct labor, semi variable overhead, fixed cost also, a lot of s g and a cost action taken in building but also in the other segment. And it will not be for the second half but we are taking a lot of action on purchasing that should help to have a better impact also in 2026 because we are just starting to launch a new initiative on on purchasing and and basically using the power of our segments across all our business team to have more functional scale and also global scale.

Martin Andrej, Analyst, ABN AMRO: Okay. Thank you. Well, you’ve answered quite a number of questions. But to come back on Semicon, that would be my second question. My understanding you correctly that previously, the statement was we expect destocking to flush out during the summer, meaning more stabilized sales perhaps, you know, growing with the market.

Are you now guiding for the same type of development in in in in the second half? Is that the way to think about it? Or do you still expect that flushing out to occur?

Stephane Simonetta, CEO, Alberts: We don’t expect improvement in terms of organic growth in the second half. That’s our statement. We believe the destocking is coming to an end. That’s what we see. But we don’t see higher activity and higher requirements from our customers in terms of new equipment.

Martin Andrej, Analyst, ABN AMRO: Clear. And then the third question is on Industry. In the second quarter, as you already pointed out, the EBITA margin was quite strong, 17.2%. You made some remarks about production footprint, operational excellence. Is that 17.2% sustainable, you think, in H2 given the top line development?

Stephane Simonetta, CEO, Alberts: As you know, we are not giving outlook by segment, but I can tell you that we expect the benefit in the second half of all the cost out action we took in the first half. On the other hand, we don’t expect organic growth improvement in the second half based on the current market condition.

Martin Andrej, Analyst, ABN AMRO: These were my three questions. Thank you very much, gentlemen.

Rutger, Moderator/Host: Thank you. Thank you, Martin. I’d like to give the word to Chase Coughlin from Landscholt Kempen. Good morning, Chase.

Chase Coughlin, Analyst, Landscholt Kempen: Hi, good morning, gentlemen, and thank you for taking my questions. I have a couple as well, and I’ll take them one at a time, please. Maybe also starting off on semicon. Obviously, there’s been quite a lot of talk in the market the last few weeks about maybe twenty twenty six expectations for the space being a bit softer than initially anticipated. I’m curious also given the, let’s say, commissioning of your new plants, do you what are your expectations there internally?

And do you think there’s any risk of underutilization for that facility for the coming years?

Stephane Simonetta, CEO, Alberts: Thank you for the question. Let me first report that our new plant is still on track. We have actually equipment being installed and tested. So align also align with the need from our customers to have this new facility ready. And I would say the market is quite dynamic.

There are so many uncertainties that at the moment, we are really focusing on ’25 and ’26. It’s too early to say. There may be growth. It may be stable. We will report when we have more visibility.

Some months, I think we can only report that we don’t expect a recovery in the second half and ’26, still a lot of uncertainty, whether there will be growth or not, in the semicon market.

Chase Coughlin, Analyst, Landscholt Kempen: Okay. Thank you. And, my second question going back to to building and specifically in in Germany, there was another building products player who reported recently, who actually spoke rather positively about Germany saying that there was some inflection, in new dwellings and building permits. So I’m curious on where specifically you see so much weakness. Is this more from sort of the renovation side of things?

Or if you could elaborate a little bit more on that German market from the building standpoint.

Stephane Simonetta, CEO, Alberts: Yeah. Let’s see. You are right that we all expect better trend due to all new investment that are happening on the German industry. We just believe it’s too soon to promise that second half will be much better. We are still doing well in our baller room equipment.

Also in Germany, where we see the biggest pressure is in our connection system. So it’s a specific product line. It’s not all our product line, but that’s what is making us only grow, like I mentioned, with one to 2% and a bit lower than what we were expected. So we were expecting much higher organic growth. Now on this specific product line, this is where we see the biggest challenge.

Chase Coughlin, Analyst, Landscholt Kempen: Okay. That’s clear. And then my final question, I believe you booked a €20,000,000 release of provisions in the P and L in the first half. Could you maybe elaborate a little bit on what that was or if I’ve misunderstood something there?

Frans den Hauter, CFO, Alberts: Yes, of course. Indeed, release of provision of €90,000,000 comparing with €2,000,000 last year and that €90,000,000 is related to restructuring costs that come out of the balance sheet. So as announced Okay. Perfect.

Rutger, Moderator/Host: Okay. Yeah. Thank you, James.

Chase Coughlin, Analyst, Landscholt Kempen: Very much, gentlemen. Those are my questions.

Rutger, Moderator/Host: Thank you. Thank you. Well, we have some more people in the the in the queue. So I’d like to give the word to David Kerstens. Good morning, David.

Good morning.

Frans den Hauter, CFO, Alberts: Good morning, David.

David Kerstens, Analyst: Good morning, gentlemen. I also have three questions, please. I’ll take them one by one. First of all, regarding the Building segment, you’re guiding for similar organic growth trends for the second half of the year. But I was wondering what will be the impact of copper price inflation with potential tariffs of 50% on copper, which should be accretive to top line growth, right, but potentially dilutive to margins.

What’s your view on the impact here, please?

Stephane Simonetta, CEO, Alberts: Yeah. We that’s something we are actively working and I think it’s too soon to report if there will be an impact. I can tell you we have been able to manage in the first half, especially in The U. S, thanks to our pressing all the impact on the tariff. And at the moment, we don’t expect major impact based on what we know today, thanks to the latest developments.

So not something we expect to have a major impact and that’s why we are giving as an outlook a similar trend for the second half.

David Kerstens, Analyst: Okay. Okay. And then my second question is related to the acquisition of GVT in Semicon. I think in December, you highlighted that portfolio optimization, including M and A, should be accretive to margins and drive profitability towards at least 18% by 02/1930. But GVT seems to have relatively lower EBITDA margins.

I understand you have not quantified the synergy impact yet, but does it become more challenging in Semicon to get to the 18% EBITDA margin target by 2030 because of your acquisition strategy here?

Stephane Simonetta, CEO, Alberts: I think you’re absolutely right that the what they have reported in ’24, it’s not at the level where we want to be in Albert. Let’s see what they will report for ’25. I think this is still within their end, but but we are quite excited with the potential synergies that we see, as I mentioned, in terms of commercial synergy, cost synergy, footprint synergy, and we believe together, we can make it accretive from margin for organic growth and for EPS as per our long term ambition. So really, it’s about the the synergy that we have identified during the due diligence process. So let us close the acquisition first, and I really hope to be back next year to explain you a bit more in details our plan to bring it to reach our long term objective.

David Kerstens, Analyst: Okay, great. And then my final question is on the unallocated cost of €10,000,000 in the first half of the year. France, you indicated €5,000,000 was related to acquisition costs for Paolo and settled claims, small claims in the first half. What will be the figure for the second half? Will you also have acquisition costs related to GVT in the second half that will get you to the same number of around €10,000,000 so a €20,000,000 number for the full year?

Frans den Hauter, CFO, Alberts: Yes, thanks. And I think an important one. Indeed, we will have acquisition cost of GVT expected to close this year, so then we will add that as well. That will be a higher number than the one for Paolo. So, the guidance would be that the second half will be a bit higher even than the first half in terms of the normal holding cost, which are between 10 and 15 per year.

So the guidance would be based on what we now know 20 to 25,000,000 for the line item for the full year.

David Kerstens, Analyst: Okay, very clear. Thank you very much gentlemen.

Ruben Dufos, Analyst, Kepler Cheuvreux: Yeah.

Rutger, Moderator/Host: It’s time for the next person in the queue, which is Christophe Samoit from KBC. Good morning, Christophe. Good morning. Good morning.

Christophe Samoit, Analyst, KBC: Hello. Good morning, everybody. Yes, a few questions have already been answered. But I have two left. First on Semicon.

In the first quarter, you indicated that you would optimize the cost structure, but you didn’t quantify it. Can you now give us a little bit more color on the exercise you have been doing there in terms of costs, saving potential and the timing of when these costs and savings will kick in? That’s the first one. And then on the recent transaction that you announced and that you hope to close by year end. At the time of the announcement, 65% of shareholders approved with the transaction.

Is there a scenario where you would go ahead with the acquisition if you don’t arrive at 100% of shares, meaning that you could end up in a situation with 80% of shares and a continued listing in Singapore? Thank you.

Stephane Simonetta, CEO, Alberts: Thank you. Let me take the first questions. And I’m sure you have noticed that actually our margin in the second quarter was a bit better than the first quarter already for semicon. Right? Almost 10 versus 12.

So and the action we are taking is first to, of course, take out all the variable cost. Variable cost in our factories, in our operation, so that has been taken. We are also adjusting our s g and a to the level is an absolute minimum to not compromise the long term. That’s basically what we have been doing. We’re still trying to do a bit better also on the purchasing side, but that’s why we say the 11.512% is actually, you could say, our choice even if it is not satisfactory compared to last year, but to find the right balance compared to the long term growth also to be ready to do all the synergy work with the intent acquisition with GBT.

That’s the action we have been taking. So also, semicon, cost and SG and A has been taken out.

Frans den Hauter, CFO, Alberts: Yeah. And then your second question on GVT and the answer is no. So we really want full control over the company. That’s also where our bid assumptions are based on and we’re confident that we have an attractive proposition. But that process is of course for GVT to comment on because it’s a discussion between their management and their shareholders.

But we’re confident we have a good proposition for them, so let’s wait the coming months how that will work out.

Christophe Samoit, Analyst, KBC: Okay. Thank you. I have no further questions.

Rutger, Moderator/Host: Thank you, Christoph. Now I’d like to give the word to Christoph Groilich, Berenberg. Good morning, Christoph. Good morning. Good

Christoph Groilich, Analyst, Berenberg: morning. Thanks for taking my questions. There’s also two from my side, least, if I may. And the first one is regarding the semicon business. I was wondering after the minus 13% organic growth that we’ve seen in H1, if you could roughly quantify how much of that is attributed to customers destocking compared to general underlying end market trends?

And then I was wondering, implied in your guidance for the second half that we see a similar organic growth trend. If you look at the comp base, I mean, that gets a lot easier, especially in Q4. So if I take into account it’s easier comp base, does that actually mean that the situation is getting worse from here? Yes, that

Christophe Samoit, Analyst, KBC: will be my first question.

Christoph Groilich, Analyst, Berenberg: And then the second topic would be the JVT acquisition. You could just remind me what is the time line to reach or obtain the shareholder approval? And then also in the press release, you are flagging an immediate EPS accretion. Could you quantify that what you’re expecting there in 2026 when taking into account the financial expenses for the investment?

Stephane Simonetta, CEO, Alberts: Thank you for the question. Let me take the first one on the Semicon. So in the first half, most of it is coming from destocking that we have seen from all our customer. As you remember, it started in q four and that has been the major driver. We see lower demand and that’s what we don’t see at the moment, second half getting better.

That’s why we are adjusting our outlook. We don’t see that it it will be worse, but we don’t see an improvement in the second half of the year. That’s basically the the reason for adjusting our outlook. When you talk about the GBT acquisition, I think the vote is expected in the in in September. So that’s where that’s why we also report that following the vote, we expect to close before end of the year.

And you understand that before we talk about all the synergies and all the potential, like the previous question, our first priority is to close this acquisition. Then we can be more open and transparent about all the synergies and and action and opportunity we see following this acquisition.

Christoph Groilich, Analyst, Berenberg: Yeah, that’s very clear. Thank you. And just maybe to confirm, so when you provided the guidance for H2 in semi comm, you took into account that the comp base is getting a lot easier in Q4?

Stephane Simonetta, CEO, Alberts: We took all the latest outlook from all our customers because we have, of course, have a good collaboration with them, and that’s what we believe is a realistic outlook. There are still opportunity like our customer mentioning also in 2026, but for the second half, we don’t see improvement in our organic growth.

Christoph Groilich, Analyst, Berenberg: Great. Yeah, that’s very helpful. Thank you.

Rutger, Moderator/Host: Thank you. Perhaps on the GvT timeline? We just discussed him.

Frans den Hauter, CFO, Alberts: Yes, Stephane. There’s one more question.

Rutger, Moderator/Host: Yes, it’s Ruben Dufos from Kepler Cheuvreux. Good morning, Ruben.

Ruben Dufos, Analyst, Kepler Cheuvreux: Hi. Good morning, Good morning. Yes. I just had three questions as well. I think I’m sorry if I repeat a question that has already been answered because I was a bit later to the call.

But it rather revolves around your the margins, right? So I was thinking about the quantification of the moving parts. I think the 13% to 14% full year guidance, is that mostly operational deleverage from lower volumes? Or is there other factors like product mix or pricing pressure that we have to think about? Yes.

And then I have a follow-up on that.

Stephane Simonetta, CEO, Alberts: Thank you for the question. Let me just repeat the first half and then answering the in the first half, the margin drop, it’s mainly linked to two key points, right? The lower volume in our industry and semicon. And that’s what we expect also in the second half of the year plus also, like Frans mentioned, higher extraordinary holding costs compared to last year. So mostly driven by lower volume impacting our organic growth in industry and semicon.

Ruben Dufos, Analyst, Kepler Cheuvreux: Okay. Okay. So the I guess, in H1, sort of the revenue decline was $60,000,000 I think the EBITDA decline was $30,000,000 So let’s say, percent sort of drop through. I guess, is that I mean, typically, you had 25%, right, drop through, but that 50%, is that fair to assume that continues? Maybe, yeah, 25, but then if an upcycle would happen.

Yeah.

Frans den Hauter, CFO, Alberts: Yeah. So I think there are three elements. So first of all, indeed, if you look at the drop through of the EBITDA of 32,000,000 on the revenue of 50, we first need to correct the holding elimination line item that Stephane said. I think second, we lose €11,000,000 in semicon half year on half year, but there’s also a decision to protect our capabilities and Stephane explained in his introduction, yeah, we also look at in the long term and make sure we’re ready for the upturn. A third element in comparing is that in industry segment we have been continuing operational excellence programs where we expect also some further results in the second half.

So that brings that percentage a bit more in perspective.

Ruben Dufos, Analyst, Kepler Cheuvreux: Okay. And then something unrelated to rather to semicon. I think you’ve said that the construction of the new location in Drumton is on track with equipment being installed and tested. Just curious, given the current market softness, how are you thinking about the pace of this ramp up? Will you align the pace of bringing this capacity online with the market recovery to protect margins?

Or how should we think about that?

Stephane Simonetta, CEO, Alberts: I can only confirm that the pace is fully aligned with our customers. We are working very closely. And again, it’s about managing the balance between short term and long term. And the long term, the growth is still there. And the long term, this capacity is still needed.

So it’s fully aligned with our customer. That’s what I can tell you now.

Ruben Dufos, Analyst, Kepler Cheuvreux: Okay. And a final question just on the inventory reduction. I think you’ve already gone a long way now in H1. But, yeah, what’s the additional potential for further improvement in the second half and into 2026, please?

Stephane Simonetta, CEO, Alberts: I think we we are well on track. You’re absolutely right. So first of all, we need to continue and sustain this level to be less than ninety days, and we are well on track also to deliver our ’26 target as shared earlier during the year to be at eighty five days. Maybe it’s good to give

Frans den Hauter, CFO, Alberts: a bit of extra color because indeed ten days reduction and really good work by all our teams. It’s also fair to add that we two days improvement is driven by the Paolo acquisition that typically brings a lot of revenue and not so much inventory and also the Forex exchange was helping us with two days. So I think six days of real progress, but you see, yeah, some elements like Forex of course and M and A impact are also to be considered. So also if we give guidance for the full year, please take that into consideration as well.

Ruben Dufos, Analyst, Kepler Cheuvreux: Alright. Thank you for the color. Thanks very much.

Martin Andrej, Analyst, ABN AMRO: Thank

Rutger, Moderator/Host: you. Thank you, Ruben. I’m happy to see that also, we received quite a bit of questions also via our web. So I’ll pick one which I think is quite relevant. It’s an a question about the full year ’26 EBITDA margin, the target of 16%, whether that is still achievable.

Stephane Simonetta, CEO, Alberts: Yeah. Fully understand the question. Let me first repeat that our priority right now is to continue to take action to protect our margin for 2025. That’s where all our team is focusing. And then regarding ’26, we will get back in February to update our new target for 2026 based on the current market condition.

Rutger, Moderator/Host: Thank you, Stephane. I have a question also for Frans about CapEx. Can you elaborate a little

Frans den Hauter, CFO, Alberts: bit more on the CapEx towards 2030 as mentioned in the CMD? Very good. Good question. So indeed, let me repeat. For this year we guide on a CapEx level of 200 to 02/25 and it is based on the current portfolio.

For next year, we expect a similar amount organically, so no M and A impact taken and after that level of CapEx will come down as we now have modeled and it will be around 200,000,000 say 27,000,000 onwards. The number that has been mentioned in the Capital Markets Day, which is higher is a preliminary number based on also a very larger company. So we mentioned €4,500,000,000 of revenue there with an active M and A agenda. There was an indicative CapEx number of €250 and €300 I think that’s five years from now and a lot of open questions. I would like to focus on the guidance on the current portfolio, which I hope we clarified this morning.

Thanks for the question though, very important one.

Rutger, Moderator/Host: Thank you, Frans. There’s another question coming in, and that’s about the status of the divestments. Do you could give any color on the progress here? And how could divestments potentially also benefit your net debt or EBITDA? Great question.

Stephane Simonetta, CEO, Alberts: I think I can only repeat what I’ve said that we are actively working on it. In our industry and building segment we hope to make first progress in the second half of the year, continue next year. The goal is still the same, 400,000,000 to 500,000,000 revenue. And the divestment we intend to do should help us to improve our net debt position and also improve our leverage ratio.

Frans den Hauter, CFO, Alberts: Very good. Thank you.

Rutger, Moderator/Host: Well, similar topic on the subject on m and a. Do you expect, Stefan, also to do still more acquisitions in the second half of this year?

Stephane Simonetta, CEO, Alberts: It’s a it’s a great question. But first, we need to close our intended acquisition. That’s priority number one. We need to close the great opportunity we have with GBT. Yeah.

Then we are

Rutger, Moderator/Host: still looking at potentially bolt on acquisition, but the second half priority is clearly GBT. Thank you. Very clear. There’s another one on the capital allocation, perhaps one for you, Frans. The 75,000,000 share buyback program is nearly completed.

Yeah. Do you intend to propose an additional share buyback program in the second half? No.

Frans den Hauter, CFO, Alberts: I think share buyback is it’s good to have a program this year and I’m really happy with capital allocation policy of Albert’s where this is a final consideration. So we always look at strength of the balance sheet, we invest in our business, we look of course at M and A and then if it comes to shareholders very committed to the 30% of net result dividend and then just to rehearse a bit how the sequencing is, there’s excess cash available we look at share buybacks and that is a discussion we do after we close our books in discussion with our Supervisory Board in February.

Rutger, Moderator/Host: Thank you very much. I think that we have had all the questions. Yes. I think we’ve managed to answer all of them. So as we conclude today’s webcast, I would like to thank everybody.

Also, thanks Franz, Stephane for joining us today.

Frans den Hauter, CFO, Alberts: Thank you. Thank you. Enjoy your day. Bye.

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