Grammer Aktie

Welcome, everyone, and good morning to all of you joining us today. My name is Katerina Koch, and it's really my pleasure to welcome you to Grammer's Conference Call on the results for the first quarter of 2026. Over the next 30 minutes, our CEO, Jens Ohlenschlager; and our CFO, Kelvin Wang, will guide you through the presentation. You can find the presentation along with all the materials related to our Q1 release on our website in the Investor Relations section.

[Operator Instructions] And with that, I would like to hand over to you, Jens. The stage is yours.

Thank you, Katerina, and good morning also from my side. My name is Jens Ohlenschlager. I'm the spokesman of the Executive Board at Grammer. Thank you for your interest in our company.

I will start again. I was on mute, sorry. Thank you, Katerina, and good morning also from my side. My name is Jens Ohlenschlager. I'm the spokesman of the Executive Board at Grammer. Thank you for your interest in our company. And on behalf of our entire team, I welcome each of you for today's presentation of the Grammer Group financial results for the first quarter 2026. Joining me is our CFO, Kelvin Wang. Together, we will walk you through our financial performance and the outlook of 2026.

I will begin with a brief overview of the most important developments for Q1. Q1 revenue decreased compared to last year, was accompanied by a corresponding decline in operating EBIT. Adjusted for currency effects, group revenue, however, was less impacted. The decline was less significant.

Looking at the product areas, we saw a mixed picture, while Commercial Vehicles proved resilient, Automotive remained under pressure. Regionally, EMEA kept resilient, while Americas stayed challenging. EBIT increased mainly due to exchange rate effects and operating EBIT result below the prior year level caused by the decline in revenue. However, operating EBIT margin stayed essentially in line with the full year 2025 result at around 4%. Free cash flow was negative, influenced by higher inventories and accounts receivables. Improvements in this sector expected already in Q2.

I'll now hand over to Kelvin, who will walk us through the details.

Okay. Thank you, Jens. Let me go through the numbers for Grammer first financial -- first quarter financial performance. The group revenue, EUR 462 million. This represents a decline of 5.2% compared to the prior year level of EUR 487.4 million. Without the exchange rate impact, the decline is 1.9%.

Looking at the 2 product areas, Automotive revenue was down by 9.3% to EUR 284.8 million. This reflects economic-related weak demand across all regions. Commercial Vehicle was stable and grew by 2.1% to EUR 177.2 million.

Now let's move to the profitability. The group reported EBIT rose to EUR 23.3 million. The EBIT margin ratio improved from 3.9% to 5%, mainly driven by the positive currency effect. Operating EBIT came in at EUR 18.3 million versus EUR 23.9 million last year. The operating EBIT margin ratio stood at 4%. This is close to our full year 2025 level of 4.1%, which means our profitability of 2026 Q1 is sustainable with the full year level of 2025.

A few items to flag on the operating EBIT. It was adjusted for positive currency effects of EUR 4.8 million from EBIT. While we had negative currency effect last year, we also recognized income from the dissolution provision of EUR 0.2 million. In summary, for group level consolidated, revenue below prior year, while reported EBIT and margin ratio improved.

Now let's move to the regions, starting with EMEA region first. The region proved stable in a difficult market environment. Revenue reached EUR 280.5 million, slightly below prior year level of EUR 285.2 million. Looking at the 2 product areas, Commercial Vehicles grew by 1.1% to EUR 120.8 million. The agricultural and construction equipment segment was the main driver here. Automotive declined by 3.6% to EUR 159.6 sic [ 159.7 ] million, reflecting the continued weak market performance.

For profitability of EMEA region, reported EBIT rose significantly from EUR 13 million to EUR 19.8 versus 2025 Q1, the EBIT margin percentage improved from 4.6% to 7.1%. Operating EBIT also clearly improved from EUR 15 million to EUR 18.8 million. The operating EBIT margin ratio increased from 5.3% to 6.7%. The profitability improvement sustainably comes from the operation efficiency improvement and also the favorable product mix. Operating EBIT was adjusted for positive currency effect of EUR 0.9 million and for income from the dissolution provision by EUR 0.2 million.

Now moving to APAC region. The revenue reached EUR 120.6 million, down 4.8% against prior year, but this headline figure is impacted by currency effects for reporting conversion from RMB to euro. If without exchange rate conversion impact, APAC grew by 2%. The 2 product areas developed in opposite directions. Commercial Vehicle grew strongly around by 22.7% increase. The driver was a stronger demand in the off-road business. Automotive declined by 14.7%, mainly due to a weak automotive market demand in China.

EBIT and operating EBIT were both down. Operating EBIT came in at EUR 8.1 million versus EUR 9.8 million from last year. The operating EBIT margin ratio stood at 6.7% compared to 7.7% in Q1 2025. The main reason is the unfavorable product mix impact to profit from automotive business. Operating EBIT was adjusted for negative currency impact by EUR 0.4 million. APAC remains profitable.

The main challenge is the ongoing shift in the Chinese automotive market from European and American OEMs to local OEMs, which requires us to adjust our customer mix. At the same time, this shift also creates opportunity to strengthen our position with local OEMs in China market and the Chinese main shareholder support.

Now let's turn to American regions. For Americas remains our most challenging region. Revenue declined by 18.9% to EUR 70.3 million. Without the currency effects versus 2025 Q1, the decline was 10.5%. Automotive was down 18.2%, mainly reflecting the phaseout of platforms. Commercial Vehicle declined by 20.3% due to lower volumes. Earnings turned negative at the operating level.

Operating EBIT finalized by minus EUR 3.9 million versus EUR 1.6 million from last year. The operating EBIT margin ratio stood at minus 5.5%. The revenue decline was fully reflected in the earnings. Operating EBIT was adjusted for positive currency effects by EUR 2.5 million from EBIT and reached minus EUR 3.9 million. Reported EBIT amounted to minus EUR 1.3 million. Americas stayed with negative result. However, with new projects ramping up this year, we expect a more positive contribution going forward.

Turning now to our workforce development. As you may know, we reported the numbers of employees, including temporary workers. And as an average over the period, this gives a more accurate picture. Group head count, including temporary workers came down by 5% to 13,658 employees on average, but the regional picture is more different. In EMEA region, the head count declined by 10.6%.

There are 2 main drivers. First, our restructuring measures and organizational changes. And secondly, the internal transfer of selected functions to central service. Effective from January 1, 2026, those functions are now reported under central service instead of EMEA region, where the headcount increased accordingly.

In Americas, head count was down by 16.8%. This mainly reflects the lower sales volumes in the region. APAC developed in the opposite direction with head count up by 8%. The growth is driven by intercity expansion and also the new product launches across the key locations. For example, the new Fuzhou plant with workforce ramp-up [indiscernible] head count in place to manage the new product launches.

Now let me turn to the capital expenditure in Q1 2026. In the first quarter, we invested EUR 22.8 million, which was a 16.3% increase versus EUR 19.6 million from 2025 Q1 by region. EMEA almost doubled its capital expenditure to EUR 10.9 million, but this one is mainly because of IFRS 16 leasing contract by EUR 5.1 million capitalization instead of the equipment purchasing.

APAC was at EUR 6.5 million, an increase due to high capitalization that also is for IFRS 16 that is EUR 2.2 million in leasing contract. Americas saw a decrease by EUR 5 million to EUR 2.7 million. In Q1 2025, there were higher investment for the industrialization of new projects. And for central service with a capital expenditure of EUR 2.7 million nearly remained on the level of last year.

Now let's come to the 3 metrics to cover this slide, working capital, free cash flow and net debt. Working capital increased to EUR 206.3 million, up from EUR 139.8 million at the year-end of 2025. There were 2 main reasons. First one, in EMEA region, there is a seasonal increase with sales in 2026 Q1 compared to 2025 Q4, which caused accounts receivable increase versus December 2025. Secondly, APAC region accounts receivable also increased for the new project, SOP.

The free cash flow came in at minus EUR 36.1 million versus minus EUR 6.7 million from 2025 Q1. The decline mainly reflects the reduced cash flow from the operating activity linked to the working capital movement versus than last year. Net debt increased to EUR 530 million compared to EUR 476.8 million at year-end 2025. This follows directly from the working capital development.

On an adjusted basis, net debt was at EUR 400.4 million. This figure trades the EUR 130 million subordinated loan from our main shareholders as equity instead of loan.

Let me close my part with a look at the equity, leverage and gearing. The equity increased by 6.9% to EUR 297.8 million. The main driver was the positive net result in the first quarter. The equity ratio improved from 17.3% to 18.1% on an adjusted basis, which trades the EUR 150 million in subordinated loan from our main shareholder, Ningbo Jifeng, as the equity. The equity ratio stands at 26%. This reflects a more accurate picture of our financial structure.

Leverage stood at 3.5 compared to 3.2 at the year-end 2025 before shareholder subordination loan adjustments. After adjustments, leverage was 2.7. The gearing came in at 178% after 171% at year-end 2025. After shareholders subordinated loan adjustment, gearing stands at 93.7%.

Now I will hand back to Jens for the outlook.

[indiscernible] now to the outlook for 2026. Before sharing Grammer's expectations, let me briefly frame the market environment. Picture for 2026 is mixed across end markets and across regions. Light vehicle production is expected to decline slightly on a global level. The weakness is most pronounced in EMEA and China. The truck and bus segment, we see a steady recovery in EMEA and a substantial improvement in Americas. China is following a strong prior year.

In the truck and bus segment, we see a steady recovery in EMEA and a substantial improvement in Americas. Agricultural machinery is stabilizing worldwide after a difficult period, while large agricultural equipment is expected to decline heavily in Americas. Construction machinery shows a broad-based recovery across all regions. Material handling is expected to grow solidly worldwide with particularly strong momentum in China.

In summary, a quite mixed picture with clear signs of growth besides ongoing weaknesses in parts of automotive and large agricultural vehicles. While these trends shape the overall industry environment, the relevance for Grammer depends on multiple factors and does not apply uniformly across all regions and across all product segments. As a result, our development may differ from the general market picture outlined.

Market fundamentals are one part of the influencing business aspects. Geopolitical conditions and structures are the other part. In light of the current U.S.-Iran conflict, the ongoing Russia-Ukraine war and an unpredictable change in the trade policy, economic development remains fragile, demands volatile.

Nevertheless, Grammer is navigating quite well in these difficult conditions, achieving stable results in line with our outlook. Against all headwinds, we still expect a revenue of around EUR 1.9 billion with different regional contributions. In China, sales increase will continue, driven by local OEMs where Grammer has expanded share substantially and grounded a robust sales fundament. In Americas, new project ramp-ups in Automotive will contribute.

In terms of profitability, we are guiding for an operating EBIT of around EUR 80 million. The continued execution of our top 10 measures, efficiency initiatives, restructuring measures and cost discipline will be primary driver. As always, this outlook is subject to geopolitical developments and their impact on the global economy.

Before we close the presentation, let me briefly share some market impressions. In March, we participated in the CONEXPO in Las Vegas, the largest construction equipment trade fair in North America with broad participation from OEMs and suppliers. Grammer was on site with a wide range of seating portfolio. The response from the customers was really encouraging.

One product in particular to noticeable interest, our seating generation for off-road purposes, the MST 297 designed for drivers in the agricultural and construction equipment sector. Compared to its predecessor, it brings significantly improved suspension performance and it integrates quality standards from Automotive business into the off-road segment. This product is exemplary for what Grammer seats standing for, combining ergonomics, comfort and functionality.

Before ending and turning to the question-and-answer session, take a brief look on our upcoming events. Grammer Annual Virtual General Meeting will take place on May 22, publication of the half year results on August 14, followed by the 9 months report on October 13.

With that, we are coming to the end of the Q1 2026 result presentation. Thank you for your attention, and we are available now for answering your questions.

Thank you, Jens and Kelvin, for the detailed overview of Grammer's performance in the first quarter of 2026. As already announced, we will now move to the Q&A session.

[Operator Instructions] I don't see any questions coming up from the audience. So thank you very much to all of our participants for your attention and see you on our next publication mid of August. Thank you. Have a good day. Bye-bye.

Welcome, everyone, and good morning to all of you joining us today on this call. My name is Katerina Koch, and it's really my pleasure to welcome you to Grammer's Annual Conference for the 2025 financial year. Over the next 20 minutes, our CEO, Jens Ohlenschlager; and our CFO, Kelvin Wang, will guide you through the presentation, which you can also find on our website. Following the presentation, we will open the floor for your questions.

And with that, I'd like to hand over to you, Jens. The stage is yours.

Thank you, Katerina, and good morning, everyone. My name is Jens Ohlenschlager. I'm the spokesman of the Executive Board. Thank you for your interest in Grammer. And on behalf of our team, I welcome everyone joining us today for the presentation of Grammer's financial results. We look forward to sharing the highlights and insights of the 2025 financial year.

Joining in today's presentation, my Executive Board colleague, CFO, Kelvin Wang. Together, we will present our financial performance of 2025, talk a little about strategic initiatives and give an outlook for 2026. Let me start with a brief overview of the most important developments.

2025 was again a challenging year. Markets remained under pressure and geopolitical uncertainty had negative influence on our industry. The year 2025 was started with a clear commitment, execute our Top 10 program, improve profitability and strengthen the resilience of our business. And that is exactly what we -- what Grammer did.

Let me highlight the most important milestones. Operating EBIT reached EUR 75 million, well above our guidance of EUR 60 million, while at the same time, revenue was below budget and initial expectations. In the region EMEA, the consistent execution of restructuring initiatives, efficiency improvement programs and cost recovery measures were the ingredients to increase the margins. 2025, Grammer EMEA was a key contributor to the financial performance.

In Grammer Americas, we streamlined the product portfolio to focus on core competencies and core business. The Gramag joint venture was divested and the entity Grammer Industries, LLC resolved. And in Grammer China, we enlarged the position with domestic vehicle manufacturers, representing meanwhile more than 50% of the sales in this region.

In the area of sustainability, a significant milestone was reached when reducing CO2 emissions for Scope 1 and Scope 2 by 25% compared to 2019. It was a firm commitment, and we kept it. In our strategic pillar of customer excellence, product quality and delivery, reliability have been improved. Error rates were reduced to 9 nonconforming parts by 1 million delivered. Delivery rates resulted in 99% on-time deliveries. With regards to innovation and digitalization, progress was made in implementing a product life cycle management system and investments were made in production automation.

Let me give you now a snapshot of some key figures. 2025 was ended with a revenue of EUR 1.82 billion, EUR 100 million below prior year caused by ongoing market headwinds. While the product area of commercial vehicles proved resilience, automotive was under pressure and sales dropped by almost 9% compared to 2024. Looking at the operating EBIT, a substantial improvement to EUR 75 million can be noted. Operating EBIT margin improved from 2.2% to 4.1% and free cash flow turned from negative EUR 19 million to positive EUR 39 million.

Kelvin will take over to present the figures.

Thank you, Jens. Let me go through the key financial summary of the Grammer Group 2025 consolidated versus 2024. Revenue declined by 5.2% to EUR 1.82 billion. That was driven by the decrease in the automotive area declining by almost 9%. Commercial vehicle, on the other hand, slightly grew by 1.8%.

Now let's look at profitability. Well, the picture changes against the sales decrease. EBIT jumped from EUR 8.1 million to EUR 69.1 million. Operating EBIT rose from EUR 41.6 million to EUR 75.1 million. The operating margin ratio improved from 2.2% to 4.1% against the revenue decreased by 5.2%. The driver was especially the region EMEA from the consistent execution of our top 10 measures, restructuring initiatives and also customer cost compensation.

A few items to flag on the operating EBIT. It was adjusted for negative currency effects by EUR 11.3 million. We also recognized the income from the dissolution of restructuring provision of EUR 3.8 million and a deconsolidation gain of EUR 1.5 million. And now let's move to the whole picture of each region performance.

For EMEA region, revenue grew by 2.4% against the market trend. Both product areas contributed. Commercial vehicle grew by nearly 3%, automotive by more than 2%. The JAI integration contributed to the sales compensation to the market declining. EMEA region operating EBIT margin ratio increased from 2.4% to 5.9%. The contribution mainly from restructuring measures, efficiency programs, cost compensation from customers, business center relocation in Serbia benefit plus the contribution of future connective agreement at our Amberg locations.

EBIT moved from EUR 9.8 million to EUR 58.5 million. That is a substantial step forward for this region. The operating EBIT was adjusted by below factors to come to EBIT. We have the negative currency effect around EUR 4.7 million on income from dissolving of restructuring provision of EUR 0.7 million and a deconsolidation loss of EUR 0.3 million.

Moving to APAC. Revenue declined by 11.1% to EUR 477.3 million. The driver was the automotive product area with revenue falling by over 15%. It is mainly due to American and European OEMs lose market share to local Chinese manufacturers. Those local OEMs now account for more than half of our automotive revenue in China. Commercial vehicles was a different story. It is up 3%, supported by growth in the off-road segment.

Regarding profitability, EBIT and operating EBIT both declined in absolute value, primarily due to the revenue drop. However, the operating EBIT margin ratio improved slightly from 8.7% to 9.1%. That reflects the underlying efficiency of the business against the sales decrease in this region. The operating EBIT was adjusted to EBIT by the negative currency effects of EUR 0.8 million.

Now let's move to the region of Americas. For America, revenue declined by 19.1% to EUR 317 million. Automotive was the main reason, down 24% due to the project end of production and also the weak market demand. Commercial vehicle declined by 7% as a result of lower volumes. Earnings remained negative. The operating EBIT was negative at EUR 14.7 million, slightly better than 2024. The region continued to absorb ramp-up cost for our new commercial vehicle plant and also production inefficiency and cost related to the new project launches.

The operating EBIT was adjusted by below items to come to EBIT, EUR 4.9 million positive for income from the deconsolidation of Gramag Industry and the share of Grammer-MAG joint venture. Additionally, EUR 5.8 million negative unrealized currency effects. Americas is still in the turnaround model and the team is working with the solution to have a better 2026.

Turning now to the development of employees. We report the number of employees, including temporary workers as average over the year to provide a more accurate picture. Without temporary workers, we had an average of 12,116 people at Grammer, 1.8% less than the same period from last year. Group headcount, including temporary workers remained stable, down less than 1% to around 13,900 employees on average.

For the specific status in each region, America headcount declined by nearly 16%, reflecting the lower demand and our restructuring measures in the region. In central service, headcount was reduced by over 17%, primarily driven by the ongoing shift function to our business center in niche, combined with the organizational changes and the optimization of management structures.

EMEA, on the other hand, grew by 6.4%. That increase is almost entirely attributable to the integration of JAI Group, which had over 1,000 employees as of January 2025. APAC slightly up by 1% to manage the further growth. Overall, those developments reflect our capability of flexibility to volume at a timely manner and also the cost structure optimization approach.

Let me now turn to the capital expenditure in 2025. came in EUR 94 million and was slightly below the prior year level of EUR 96.3 million. By region, EMEA invested EUR 29.8 million, focused on the automotive ramp-ups, injection molding capacity and new commercial vehicle product generations. APAC came in at EUR 29.1 million, mainly directed at our China plants in Changzhou plant, Changchun plant, Shenyang plant and Beijing plant with IFRS 16 leasing significantly below the prior year.

Americas increased to EUR 26.7 million, driven by production equipment and facility for the new project, primarily at the Tupelo plant and Central Service invested EUR 8.4 million, mainly in the development of new CV site generation and our PM digitalization project.

3 metrics to cover on this slide, working capital, free cash flow and net debt. Working capital declined by 19% to EUR 139.8 million. That reflects lower inventories and reduced trade receivable benefit to the free cash flow generation. For the free cash flow improved from negative EUR 18.9 million to positive EUR 39.1 million. That is EUR 58 million improvement, driven primarily by the strong operating results and also working capital improvement.

On net debt, the headline figure increased slightly by EUR 4 million to EUR 476.8 million. This development was mainly driven by 2 factors: First, EUR 45 million negative impact versus 2024 as the hybrid loan for JAI acquisition at the end of 2024 but paid for acquisition in 2025, which caused lower debit in 2024 as cash increased, but financial liability not increased.

Secondly, the IFRS 16 lease capitalization for our new America facility increased financial liability by EUR 11.6 million. The financial liability decreased by EUR 42 million if without above 2 items impact. The adjusted net debt figure, which trades the EUR 130 million in subordinated loans from our shareholder, Ningbo Jifeng, stands at EUR 347.2 million, which is more accurate to reflect the reality of our financial structure.

Let me close my part with a look at equity, leverage and gearing. Equity increased by 4.4% to EUR 278.6 million, driven primarily by the net profit of EUR 23.5 million in 2025 and also negative impact from OCI by EUR 9.7 million. The equity ratio improved from 15.7% to 17.3%. The already mentioned EUR 130 million net debt adjustment is included as here in addition to reported figure, leading to a more accurate picture of the financial situation.

Leverage improved from [ 5.7 to 3.2 ]. That reflects the strong EBITDA performance in 2025 on adjusted basis, treating the subordinated shareholder loans as equity and adjusting for exceptional items, leverage stands at 2.3. Gearing came in at 171% and to be 85% after the adjustment of shareholders subordinated loan of EUR 130 million from shareholder Jifeng as equity. It is consistent with how we presented with last year. Across all the 3 metrics, the direction to show the balance sheet is in better shape than 2024.

With that, I will hand back to Jens for the outlook.

Thank you very much, Kelvin, for presenting the details of our financial performance in 2025. I'd like to draw now the intention on 2026 and the outlook we'd like to share. Our strategic priorities remain aligned with the ongoing transformation of the vehicle industry towards electrification, further digitalization and sustainability. Our outlook for 2026 reflects market volatility, identified opportunities and risks.

The economic framework conditions remain challenging. Geopolitical tensions persist, trade policy remains unpredictable and the regions Americas, EMEA and APAC will continue developing differently. We expect a slight increase in revenue to around EUR 1.9 billion. The growth will come primarily from Grammer China, while in the regions Americas and EMEA, the sales will remain largely unchanged.

In terms of profitability, we are guiding for an operating EBIT of around EUR 80 million. The continued execution of our Top 10 program with efficiency improvement initiatives, restructuring measures and cost discipline will be a primary driver. I'd like to remind that the outlook is subject to geopolitical developments and the impact on the global economy as well as stable exchange rates.

Beyond 2026, we also have updated our medium-term planning. By 2028, a revenue of EUR 2.5 billion with an operating EBIT margin of over 5% is targeted. This is an ambitious but realistic path forward built on structural improvements already done and ongoing and the substantial growth of sales, particularly in China and in Americas.

Last but not least, I'd like to highlight the product that represents a forward-looking step in the product segment of commercial vehicle seats. The new seating generation, MSG297 is designed for drivers in the agricultural and construction sector. With this seat, Grammer is setting new standards in comfort, ergonomics and in digital connectivity. It brings significantly improved suspension performance to support drivers' health during demanding working conditions. Also features and quality standards from the automotive sector have been integrated into the design, which makes the seat not only functional but also looking quite attractive.

Here with our today's presentation of the 2025 Grammer Group result is ending, and I'd like to thank for your attention. Giving back the word to Kati.

Thank you, Jens. Thank you, Kelvin, for the detailed overview of Grammer's performance in 2025. Now as promised we will move to the Q&A session. [Operator Instructions]

It seems that there are no questions at the moment. Of course, also after the presentation, you have the possibility to reach out to us. We are here and available to answer your questions if there are any. Thank you very much for your attention. Have a great day and see you on the next earnings release in Q1. Thank you very much.

Perfect. So I got the information that the sound is now on. So again, good morning, and welcome to our today's conference call. So in the roughly next 30 minutes, our CEO, Jens Ohlenschlager; and our new CFO, Kelvin Wang, will provide you with an overview about the first half year of 2025. Afterwards, you know the procedure as usual. There will be a short Q&A session where you're very much welcome to ask us any questions you may have after the presentation.

And with that, I'll hand finally over to you, Jens. The stage is yours.

Yes. Thank you, Tanja, and sorry for the minor sound problems at the beginning of our presentation. Good morning, again, to everybody, and thank you for your interest in our company and another warm welcome to the presentation of Grammer Group's business figures.

We look forward to providing you with an overview of our business performance in the first half of the year. I will begin with a brief overview of the most important developments. Overall, the global economy in the first half of 2025 was characterized by a high degree of uncertainty. Ongoing trade tensions and persistent geopolitical risks all negatively impacted economic performance.

This also impacted Grammer's revenue development in the first half of 2025. Despite the decline in revenue, we were able to significantly improve our profitability in terms of operating EBIT. The restructuring initiatives increasingly took effect in the first half of the year. We see us on the right track to sustainably improve our profitability.

EBIT reached EUR 24.2 million in the first 6 months of the year, operating EBIT even EUR 35.6 million. This reflects the successful implementation of our efficiency program, especially the Top 10 Measures, including capacity adjustments in the EMEA region as well as the restructuring and the future-oriented collective agreement.

Overall, the revenue dropped in H1 2025 by minus 4.5% to EUR 953.7 million. As visible on that slide, the Commercial Vehicles business has been affected by the downturn in demand. Grammer recorded a 5.4% decline in revenues to EUR 341.1 million compared to the first half of 2024. In the automotive area, the revenue went down by minus 4.1% to EUR 612.6 million despite the integration of the former JAI production sites.

EBIT was at EUR 24.2 million in the first half of 2025. Despite a decline in revenue, Grammer recorded a significant increase in operating EBIT to EUR 35.6 million. In this figure, negative currency effects of EUR 11.4 million, income from dissolving restructuring provisions of EUR 1.6 million and a negative deconsolidation effect of a U.S. Group company of EUR 1.5 million have been adjusted. The improvement in profitability in terms of operating EBIT resulted from the Top 10 Measures, especially adjustment of capacity in the EMEA region and the successful conclusion of the restructuring and future-oriented collective agreement in Germany.

Let's have now a look at the development of employees. The reported number of employees also considered temporary workers and as an average over the year to provide accurate picture. Including temporary staff, the number of employees decreased slightly by 0.4% to nearly 14,200. In Americas, a total number of 2,800 people were employed. EMEA headcount increased by 3.3% to 7,424. The increase in EMEA corresponds to the integration of the Jifeng Automotive Interior Group and its locations in Eastern Europe as of December 31, 2024.

In APAC, strong use of temporary workers was required to manage new product launches and to cope with a strong order intake from the last 2 years. A minor increase to 1,615 employees can be reported. The number of employees in the Central Services was lower by minus 85 compared to previous year's level. The reduction and transfer to the Grammer business center in Serbia started towards the end of 2024 and is becoming more and more visible.

Let me now turn to the capital expenditure for the first half of 2025. CapEx decreased by 37.1% to EUR 35 million. That includes EUR 2.6 million for assets from rental and lease agreements that were capitalized in accordance with IFRS 16. EMEA accounted for EUR 12.9 million, a minus of 29.5% compared to the previous year. These investments primarily decreased due to lower capitalization volume with focus on new product launches at plants in Czech Republic and in Serbia.

Investments in APAC amounted to EUR 8.4 million in the first half year of 2025. The previous year's figures included the leases under IFRS 7 with a total of EUR 15.7 million. Only EUR 1.2 million was recorded for leases in the first half year of 2025 in that region. In Americas, the capital expenditure increased from EUR 3.6 million to EUR 9.8 million.

The investments mainly related to new product -- production facilities and machinery for the industrialization of BMW projects. Replacement of various equipment was done in Brazil and Mexico. Last but not least, in Central Services, EUR 3.9 million were invested into the new seat generation for Commercial Vehicles as well into digitalization projects, for example, a product life management system.

Now I'd like to hand over to Kelvin, who bring us in details to the figures of H1.

Thank you, Jens. And now let's have a look at the main balance sheet figures. Working capital increased to EUR 229 million because accounts payable were removed due to the

[Audio Gap]

related to JAI acquisition reduced short-term liability. Free cash flow amounted to negative EUR 47.8 million, and the free cash flow is mainly impacted by the significant increase in cash outflow from the investing activities due to the partial settlement of the liability from the acquisition of the European business of the Ningbo Jifeng Group, which outweighed the reduction in CapEx compared to the previous year.

Net debt increased accordingly. However, this includes EUR 130 million subordinated shareholder loan from our main shareholder, Ningbo Jifeng, which can be rated as the equity instead of debt. This is why we should hear an adjusted net debt of EUR 415.2 million.

For this slide, let's have a look at our equity leverage and gearing. Already mentioned EUR 130 million debt equity adjustment is also included here in addition to the reported figures, leading to a more accurate picture of the financial situation.

Equity and equity ratio decreased due to the negative other comprehensive income of EUR 24.1 million. It's negative. Reported leverage increased to 7.2 due to the increase in the net debt. Adjusted leverage is at 3.3. Here, we consider the reclassification of the subordinated shareholder loan as well as extraordinary effects in line with the definition of the covenants with the bank. Gearing reached about 214.7% but adjusted for the subordinated loan, it is at 108%.

Now let's move to the development of each region. Let's start with EMEA region. It's Grammer headquarter and also the largest region, generating more than 50% of the revenue. Here, we achieved revenue of EUR 563.9 million, representing 0.5% increase compared to the same period last year. In addition to the high call-offs from the major customer, the integration of JAI Group also played a role here. We will provide an update on the current status of the JAI integration later in this presentation.

In EMEA, the economically induced slump in demand had a particular strong impact in the Commercial Vehicles area, where revenue fell by 4% to EUR 234.3 million. In the automotive product area, however, revenue increased by 3.9% to EUR 329.6 million.

Besides the slight increase in overall revenue in the region, Grammer was able to significantly increase its EBIT and also operating EBIT in EMEA, thanks to the restructuring initiatives that Jens previously already mentioned. EBIT amount to EUR 20 million in the first 6 months of 2025 compared to EUR 15.4 million in first half year from 2024.

Operating EBIT increased to EUR 24.4 million with a percentage to sales by 4.3% in the first half year of 2025. Let's continue with the region, APAC. APAC recorded 3.3% decrease in revenue to EUR 245.7 million, adjusted for currency effects. However, the decline in revenue was lower at 2.4%. The decrease in the region is attributable to the higher-margin Commercial Vehicles products area where we saw 10.5% decrease in revenue to EUR 65.5 million.

In the Automotive area, revenue declined slightly by 0.4% to EUR 180.2 million. In China, in particular, American and European OEMs have lost market share to local OEMs, which now accounts for more than 50% of Grammer's revenue in the Automotive product area.

EBIT in APAC decreased to EUR 17.5 million in the first 6 months of 2025 due to the revenue decline of the high-margin Commercial Vehicles product area which is unfavorable product mix. Operating EBIT was also down at EUR 17.7 million with a percentage to sales by 7.2%.

In Americas, the figure for the first half year of 2024 were adjusted retroactively following the sale of TMD in September 2024 to reflect only continuing operations. In the region, the Grammer Group of revenue EUR 165.8 million in the first 6 months of 2025, down 21.6% on the same period compared to last year.

The significant decline in revenue is attributable in particularly to the Automotive product area. Revenue fell by 26.1% to EUR 109.6 million. In Commercial Vehicles area, revenue went also down by 11.1% to EUR 56.2 million. Adjusted for currency effects, the decline in Automotive segment was 25.3%, while in the Commercial Vehicles products area, it amounted to only 4.9% due to ongoing ramp-up cost for the new Commercial Vehicles plant in U.S.A. and also the volume drop impact already mentioned.

EBIT in Americas region was negatively at EUR 5.8 million. The operating EBIT amount to negative EUR 0.2 million. The operating EBIT margin ratio was negative 0.1%. The region will remain the focus of the Executive Board's efforts to initiate the sustainable turnaround.

And this brings us to the outlook for the full year 2025 as a whole picture, for which I will hand back over to my colleague, Jens.

Thank you very much, Kelvin. Looking at the current fiscal year 2025, the Grammer Group anticipates continued challenges in an increasingly uncertain macroeconomic landscape. Weak economic conditions across Europe, particularly in Germany, combined with persistent disruptions in global supply chains and escalating trade policy tensions create a very complex operating environment that complicates our forecasting efforts.

Nevertheless, we maintain -- Grammer maintains our steadfast commitment to deliver results. This environment continues to present significant challenges for our operations. We are facing persistent political uncertainty and heightened geopolitical tension across our key markets. Trade restrictions and tariffs are escalating globally with particular emphasis on U.S. tariff policy.

These factors are creating elevated cost pressure throughout our business and impacting our operational efficiency. In response to these ongoing challenges, Grammer will continue to focus on the consequent implementation of our Top 10 Measures throughout 2025. Customer demand will vary by product area and region.

In Americas, we expect a decline in revenue. In EMEA, we expect the revenue to increase. And in China, we expect a further shift towards local OEMs, as already mentioned by Kelvin. Despite the challenges, we expect a stable revenue of around EUR 1.9 billion for the 2025 financial year. As a result, the operating EBIT is expected to increase to around EUR 60 million. However, the outlook depends significantly on further geopolitical developments and their impact on the global economy.

Following the asset deal on December 31, 2024, I'd like to provide a brief update on the integration of the project between Grammer and the Jifeng Automotive Interior Group, shortly JAI. As a 100% subsidiary of Ningbo Jifeng Auto Parts, JAI brings expertise in production of headrests, armrest and other interior components, which will further enhance our Grammer capabilities.

Implementing the Grammer SAP standard across JAI plants has been a major focus in the first 6 months of 2025, involving over 100 colleagues from both companies. I'm pleased to announce that the new system went live successfully in January 2025. This milestone represents one of the most significant and collaborative efforts in Grammer's recent history.

As you may recall, the integration has already created significant opportunities for both companies. The next slide will highlight the compelling benefits of our combined activities. In recent years, Grammer and JAI have successfully collaborated in various areas. The completed integration has strengthened our market position in the headrest and armrest segment, enabled us to approach customers under a unified brand, streamlined joint ventures -- streamlined joint production, planning expanded our footprint in EMEA and leveraged cost advantages for Grammer.

Here, our presentation is done, and I can hand over back to Tanja.

Thank you very much, Jens. Thanks, Kelvin, for the very detailed information about our first half year. And with that, we would like to start our Q&A session.

So you're welcome to ask us any questions you may have after this presentation. Please raise your hand. And I will unmute you, so you can ask your questions, directly to the audience. So far, digital silence, no questions. Again, if you have a question, please raise your hand, and I will unmute you. It seems the picture is very clear and all -- maybe raised questions have already been answered.

So with that, we would also like to end then the call today. As always, if you have afterwards questions, you want to talk directly with us, this is not a problem at all. Just get in contact, and we will answer them.

So with that, I would like to end the session. Thanks, everyone. Have a good rest of the day and hear you with the Q3 release. Bye-bye.

Thank you.