NORMA SE Aktie

Good afternoon, ladies and gentlemen. Thank you for your patience. Welcome to the NORMA Group Q1 2026 results webcast and conference call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to Birgit Seeger, Chief Executive Officer of NORMA Group. Please go ahead.

Thank you. A very warm welcome from my side to all of you listening to this call. This is actually the first full quarterly report as the new CEO of NORMA together with the new CFO, Okan Celiker today. So as usual, after the presentation, you will have the opportunities to ask your questions, and we are very happy to answer them.

So we will share some of the results we have in our Q1 and also share some of the changes we have introduced since the start of NewNORMA, which we see some effective already in the Q1 results. So here, you see our usual disclaimer. Please pay attention to this one. And as we have done in the full earnings call from 2025, we will differentiate between NewNORMA and Former NORMA. The focus is on NewNORMA. In some topics, we still talk about the Former NORMA, and this is highlighted in the presentation.

So now we have a look at the Q1 milestones and achievements. So first of all, I have to say I'm very happy that we see a very good improvement in our profitability, which is 3.1 percentage point year-over-year improved. So this is basically coming from a cost discipline in all cost areas, and a big thank you to all of our colleagues who made this happen with us. So we see also secondly, from the pricing efforts we have taken in positive effects which is also, of course, contributing to the profitability. We see in our sales still some slight issues, which we are working on.

Debt repayment, very positive based on the water divestment. So we are net debt free currently, so a very good basis for NewNORMA. The transformation program is progressing exactly as we have planned and as we have communicated and announced to you. So we are simplifying, streamlining our organization, so -- and the cost measures are well underway according to plan and committed. We will share with you in a moment some new business wins, just some examples. We see also in M&E, strong contract. And I will share one example from our industrial applications business area, what we could win, which is just an example from several wins in this area.

So we confirm our guidance, our outlook for the financial year 2026, also based on the results we have seen in quarter 1. Of course, we are still careful with the year going ahead. However, we are confident to confirm and to see the financial year guidance.

So now let's move our attention to our business win. This is an example from Mobility & New Energy. So we see a very nice sale here, what we could achieve actually with a very nice profitability for one of our customers, a major contract. SOP is in 2029. Now you may say, well, this is only in 3 years. However, this is important for us. This is the nature of our business. This is quite in 2029 and some of the sales, we see an SOP in '27 and '28 already. However, the duration is for 7 years. So it gives us a very nice and stable business.

So the fluid lines we have sold to our customers are improving the emission regulation and are used in internal combustion engine and in hybrids. So this is very nice and very important. I think we are all aware, hybrids are gaining traction and will stay in the market, so the forecast for quite many years.

So with this, we move on to our industrial applications area, where we have several industries in focus. Actually, we have 7 focus industries where we are working on. So this is one achievement of our sales team, which we have really positioned in a different way now. So we have sold to a company building machines to basically clean bottles. So our FGR, what we call it, so a very nice sale. We could actually win this because our service is really better than the competitor. Our price was acceptable, and we have a fantastic relationship and could give technical advice, which convinced our customer that we are the right partner for this kind of business.

So this is actually a product, the FGR, what you see here on the slide, what we have on hand. So this proves again that we have the right products. In some cases, we will work on adaptions. This is a nice case where we have the product on hand, and we can use this in this industry. And there are several other industries which are out to sell this kind of products.

So let's move on now to the NewNORMA to the industrial powerhouse. What I shared last time with you, this is basically a reminder and giving some more insights what we have achieved so far. So the pillar #1 to the left is the restructuring. This is a transformation project. We have simplified the organization in the first step. We are not done with this, but we have started and see first achievements. Basically, we want to have SG&A, which are competitive, which fit to NewNORMA, and this is what we are working against. So the new organization will be really oriented against the performance. We have done this in the sales organization already, and the whole organization will be also measured against business KPIs and the one NORMA business will be the focus.

So the second pillar is the footprint. We reported already that we could close our footprint measures in China already very successfully. In North America, in Mexico, we are on the way currently as we speak, and we are evaluating currently what is the right footprint setup for plants and for sites for the NORMA Group. So we will, in the second half of this year, also present our targeted operational and also structural measures to come up with a new NORMA footprint.

The third pillar is the sales push, as you have seen already, so we confirm already this measure that we are having a bigger order intake. We could improve here, just shared these two examples. So we will increase also our plant utilization, which is very important to use the capacity we have to use the assets we have already and to have a strong customer focus. And here, I want to give you some insights in what we do.

Actually, in February, we have brought together our sales team here and had a start of the year with clearly identifying what is the new way of selling, what is our pricing strategy, what is our calculation methodology. We need to be fast. We need to be competitive. Of course, we need to be really profitable, and we have seen already the first results of this. Actually, I was 2 weeks ago at a customer, and they really confirm that they see different behavior and they have given us now additional business and really show and give us more RFQs, so we could gain more business.

The fourth pillar to the right, which is called growth. This is currently running on a low key. It's more for the midterm, which could include an M&A transaction. So we are building the pipeline currently. However, because we have a lot of homework in pillars 1, 2 and 3, which is the focus this year, and this is what we are focusing on. And with a little bit of resources, we are also working on the fourth pillar.

So from this one, we go on to give you a concrete example what we have delivered already in the transformation. So we have implemented the SBU structure or more the business-orientated structure as focused on the SBU, giving more responsibility there. And we will change our reporting as of the year 2027 to a business unit segment reporting, which follows the steering we are currently implementing in NORMA Group. Secondly, the Shared Service Center, and you see a photo from Novi Sad in Serbia, what we are expanding. We have about 80 people working there in different functions, from HR, from sales, from supply chain and various other functions where we are bundling our resources and sharing really also processes, making use of digitalization and run this shared service center where we see very positive results.

SG&A improvements we have seen in the U.S. and in Europe, headcount reduction with voluntary leavers program, which are running according to plan, a little bit better, and we foresee that we go ahead as planned and communicated to you already. So performance orientation, this is basically the sales push based on the agreements with our sales team. So we see really that we can build on the very strong gross margin we have in NORMA and really fix our top line situation.

So then to give you the key KPIs, our net sales in the Q1 2026 is EUR 208.6 million, slightly lower than 1 year ago. The basic effects are exchange rate effects, also some organic or some volume effects. Lucky enough or it's a good message is that we are having an organic growth in industrial applications, which is, of course, our focus in the growth areas.

Adjusted EBIT with EUR 6.3 million, a significant improvement towards last year's Q1, and this translates into the adjusted EBIT margin of 3%. So this is really the big step forward we have made. Of course, we are careful for the year ahead, and we are also very careful at managing the cost situation and of course, also the sales side. Net operating cash flow negative. This is Former NORMA, very important to notice, and we will later on explain how this comes together here.

And with this, I will hand over to Okan to give us some more insight in the key financials.

Exactly. Here on the next slide -- and also a warm welcome from my side, everyone. Very happy to be here and very happy also to engage with you for our quarter 1 results.

So let's deep dive a little bit more into the financial development of Q1. As Birgit mentioned earlier, a quite solid quarter in the year 2026 in terms of sales, we reached EUR 208.6 million, which is a year-over-year development of minus 5.7%. As already mentioned by Birgit, main driver of this decline is attributable to FX headwinds we saw globally and primarily -- or let's say, globally of EUR 9.7 million, of which EUR 6.8 million were related to the U.S. dollar development and EUR 1.9 million to the renminbi in the China region. In terms of volume and pricing impact, we managed an organic -- to reach an organic growth of minus 1.3%, which represents EUR 2.8 million. That means we -- on a volume basis, the business declined. However, we could offset this by positive pricing impacts, which led then overall to the minus 1.3% year-on-year.

So let's move to the next slide, to deep dive a little bit more into the performance of our business units, starting with the Industry Applications business on the left-hand side. We ended the year with EUR 66.3 million in quarter 1. This represents a decline of minus 0.6% year-on-year. And the main drivers here have been, again, the aforementioned currency impact, which basically impacted the development by minus 5.4% year-on-year. And in terms of volume and pricing impact, important to emphasize here, also mentioned already by Birgit, we've been able to increase our performance in the Industry Applications business organically with 4.9% year-on-year, which was mainly driven by a stronger demand in the APAC region and a ramp-up of a major project in, specifically, the APAC region again.

So let's look at the Mobility & New Energy business. So here, we achieved EUR 142.3 million in the first quarter. This represents a decline of minus 7.9% year-on-year. Main drivers here have been a softer automotive demand, which led to a decline on the volume and pricing side represented by minus 3.9%. And again, a currency impact also in the Mobility & New Energy business at minus 3.9% year-on-year.

On the next slide, we see the regional development. So again, starting on the left side with the Americas region. Q1 2026, we achieved EUR 65 million sales in the Americas region. This represents a decline of minus 10.9% year-on-year, again, mainly driven by FX and also by the softer automotive demand, as already mentioned. However, at the same time, we've been able to improve our EBIT margin by 1 percentage point year-on-year. And with that reached 4.6%, which is mainly due to positive pricing impacts in the Americas region in the first quarter as well as tight cost management in the region.

Moving over to the EMEA region. Here, we reached EUR 114.1 million in the first quarter compared to quarter 1 2025. This represents a decline of minus 2.9% year-on-year. Also here, we achieved a very significant improvement of our EBIT margin, 4.6 percentage points compared to Q1 2025. Main drivers here have been operational improvements and also a tight cost management.

Next is the APAC region. The first quarter sales are at EUR 29.5 million, which represents a decline again compared to Q1 2025 of minus 3.8% year-on-year. But also here, we've been able to hold the strong EBIT margin that we saw in the full year 2025 above 10%, which is a very solid performance, again, underlines the fact that we've been able to sustainably improve the operational situation in the region and at the same time, are very disciplined with our spending and cost structures.

Let's move to the next slide. So on the next slide, we see more details on our adjusted EBIT development. So we already saw the EUR 6.3 million of adjusted EBIT, representing 3% EBIT margin in Q1 2026. From left to right, we see basically the main impacts or the drivers that supported this improvement, a significant improvement from an adjusted EBIT in Q1 2025 at almost 0, which was mainly impacted, let's say, on a volume and price basis by the weakening demand that has been mentioned. And this basically led to a reduction of EUR 7 million, in terms of volume and pricing impact.

At the same time, we can see that across the material, personnel costs and other OpEx elements, we've been able to offset this negative impact from the volume reduction. Starting with the material cost, the impact year-on-year was at EUR 8.7 million. Main driver here have been a positive mix or favorable mix and at the same time, also an improved material cost ratio compared to Q1 2025. In terms of personnel costs, we could achieve an improvement of roughly EUR 3 million, EUR 2.9 million, mainly a consequence of a lower headcount and improvement in the personnel cost area.

Other OpEx, plus EUR 2.5 million. This underlines, again, the aforementioned disciplined cost management across the organization and basically helped to support the improvement of our EBIT globally. D&A and FX largely stable compared to Q1 2025. And just to round up what Birgit already described in terms of the transformation program. In the first quarter, our transformation program contributed another EUR 3.8 million to our results compared to Q1 2025.

So on the next slide, I will briefly walk you through the Q1 operational adjustments and outlook full year 2026. So in the first quarter, adjustments were limited and fully in line with our expectations on EBITDA level, we basically had an adjustment related to transformation severance and project costs of EUR 0.6 million. On EBIT level, we had an adjustment in total of EUR 1.9 million, which includes an additional EUR 1.1 million amortization of PPA. And in terms of net profit, the adjustment is at a total of EUR 1.4 million, and this is post tax. For the full year, this mean basically that our expectations are remaining unchanged. So we are still expecting a total of approximately EUR 24 million of adjustments on the EBITDA level and EUR 29 million adjustments on our EBIT level.

So here on the next slide, we will give you some more details, as mentioned earlier, on the Q1 2026 cash flow development. First of all, it's important to emphasize that on the left-hand side, our adjusted EBITDA in Q1 2026 is representing Former NORMA. So EUR 20.7 million adjusted EBITDA includes the water management business. This is in line with the provisions of IFRS 5, that we applied, let's say, in context with the water management sale that took place in the beginning of this year.

Our net operating cash flow ultimately ended up at minus 19.7% (sic)[EUR 19.7 million]. And the main driver of this negative development was the trade working capital impact with minus EUR 33.6 million, of which a significant impact was again related to the sale of the water management business. So here, particularly, we basically had to adjust for or could adjust for the supply chain financing program that have been reduced in the context of the sale as well as a seasonal inventory-related effect out of the water management business, which is also part of the EUR 32.7 million that you see here on the page.

From our net operating cash flow, if we then also deduct the interest and the tax as well as the proceeds from the repayments of the derivatives, we get to our external free cash flow of minus EUR 29.2 million. Again, important to emphasize this here, without the one-off impact out of the water management sale, our operating -- net operating cash flow would have been positive, which underlines that NewNORMA has a positive cash generation also in the quarter 1 2026.

On the next slide, we will briefly recap on the balance sheet reset and initial shareholder returns. So starting with the water management divestment, which has been concluded according to the time plan and schedule. So we could basically get the net proceeds as planned of approximately EUR 650 million post tax in full year 2026. So with that, also according to our plan and previous announcement, we parked basically or earmarked a debt repayment of up to EUR 300 million in the first quarter, EUR 290 million were already repaid. And with that, we are basically very close at the communicated EUR 300 million.

The remaining debt is basically consisting of promissory notes with different maturities, also included in the EUR 98 million are basically leases around about EUR 20 million.

In terms of shareholder return, we've communicated that we are committed to return to our shareholders a total of EUR 260 million, of which EUR 53 million have been returned already in early Q2 2026 via a public share buyback offer, as you know. And with that, we can basically conclude that all in all, we are on track to reach the EUR 70 million to EUR 90 million net cash position by the end of 2026 and again, also confirm what we've shared with you within our communication on 31st March this year.

So with that, Birgit, back to you.

Thanks, Okan, for giving us this insight into the key financials. So you heard it was an encouraging start for NORMA Group in the year 2026. We have clearly defined actions on our transformation journey to build NewNORMA, to build an industrial powerhouse, and we are fully engaged to make this happen. The year 2026, we have a quite volatile external surrounding, but we are working fully on our homework to make this a successful complete year in 2026.

Given the situation, we confirm our guidance. And just to remind you, the net sales is in the range of -- we foresee in the range of 0% to 2% growth. The adjusted EBIT margin, we see in the range of approximately 2% to 4% and the net operating cash flow, we see approximately between EUR 10 million and EUR 20 million. So we have promised and we still keep this that in the second half of this year, we will invite and give a strategy update with more insights on our target vision for the year 2028.

And with this, I say thanks for the attention, and we open up for questions. Thank you.

Thank you.

[Operator Instructions] And our first question today comes from the line of Nikita Papaccio from Deutsche Bank.

The first one is on your guidance. I mean, with your EBIT margin, you're already in line with your guidance range, while net sales are significantly down compared to the 0% to 2%. What are you seeing going forward this year? Do you expect H2 to be stronger, for example, compared to H1 due to orders kicking in and restructuring measures? Or what should we see here?

Yes. So thanks, Mrs. Papaccio, for this question. So yes, we see the next quarters actually to be somewhat stronger. We have some measures in our hands, which we are working on. to ensure that we can meet the guidance of 0% to 2%. As you have seen in the Q1, we are quite lower. Of course, the exchange rate was not playing in our favor, but also without exchange rate. And with the EBIT margin, as you said, we are in line. We are, of course, also working on this to keep this. So for this reason, we keep the guidance and we confirm the guidance.

And if we think about your adjusted EBIT bridge for the next quarters, should we expect a similar tailwind from material and personnel costs as we saw in Q1?

Should I take that? Well, in terms of material costs, as of now, we expect a similar situation. However, due to the, let's say, a very volatile situation in terms of geopolitical crisis and also economical impacts out of that, yes, it's hard to predict as of now, let's say, what will happen. But with everything we know as of today, we don't see any, let's say, immediate impact on our material costs.

In terms of personnel costs, I've mentioned the EUR 3.8 million for the full year. We've communicated EUR 15 million incremental sales out of the transformation program. So we are here fully in line with our quarterly performance, if you will. So here, I would assume that this will stay more or less the same. There will be a ramp-up, let's say, towards the end of the year. But also here, we confirm again the EUR 15 million that we have communicated earlier.

And my last question, I mean, we have already May. How is Q2 evolving so far? Are you seeing any signs of improvements in the environment in a specific region or business segment?

I couldn't get the first part of the question.

Q2. Sorry...

How Q2 is evolving?

Okay. So well, currently, we don't see any specific improvements of the situation. But at the same time, we also don't see, let's say, any negative impacts that will, let's say -- yes, that will have an impact, let's say, on our performance. But again, getting back to what I said earlier, it's a volatile environment we are in as of today so far. And I think we proved that also with our Q1 performance, we are basically in line with the expectation. And as of now, as of today, this is basically what we can confirm. That also means without any, let's say, a dramatic or significant changes, yes, we would basically expect or assume that the situation would more or less stay in line with our expectations.

[Operator Instructions] And our next question comes from the line of Yasmin Steilen from Berenberg.

I have also three, if I may, and I will take them one by one. So the first one on the net operating free cash flow. I just try to get my head around the net operating free cash flow guidance. So according to the slide in the presentation, the cash out is almost solely attributable to the water management. So adjusted for this, the net operating free cash flow was already around EUR 13 million in the first quarter. So even assuming the cash out related to restructuring measures, the EUR 10 million to EUR 20 million guidance looks not very ambitious. So could you please walk me through your assumptions there?

Sure. Thank you for the question, Yasmin. Also here, as of now, we are fully, let's say, in line with our expectation. We -- when we came up with our guidance on our financial KPIs, we try to incorporate, of course, the situation with everything that we can predict in terms of external factors. As of today, we can basically just underline and confirm that we are very comfortable with our guidance for all the 3 elements, so net sales, EBIT and net operating cash flow.

As we don't know, let's say, how the situation will develop globally and also for us as NORMA. So the first quarter might look positive. And yes, as you mentioned, there is also, let's say, another impact out of the transformation program. But as of today, with everything that we know, we feel comfortable with that guidance also in terms of net operating cash flow.

Okay. Then the second one is on the new pricing strategy. Could you share more color on the measures by segment? So what is your target in terms of volume price? Is it more geared towards industrial application? Or do you also focus to increase the prices on the M&E segment?

Well, it's actually for both segments relevant. Maybe starting with M&E. M&E is, of course, a highly competitive market we are in. So -- and we have actually the right products, which our customers are confirming. We have capacity. We have the assets installed. And so we work very diligently through our numbers, what pricing we can offer to have the right market share and to work on our top line. As we have seen also in Q1, we are not where we want to be. So this is on the M&E side.

On the industrial applications, it's a little bit different. And it's also different industry by industry. We have currently 7 focus industries, plus, of course, our distribution business. And we do the pricing following each industry, what is the competition, where are we competitive and also following our cost basis in our plants, in our company. So based on this, we have worked out very individual pricing strategies that we are covering our costs, of course, that we are profitable and that we are competitive in the market. And we see here actually the first results that we can achieve nice new business in different areas.

However, pricing is very different if you talk about data centers, if you talk about white goods, if you talk about aviation. So it's for each industry, it's a different pricing, what we are applying basically.

Perfect. And I know it's very early stage. But after your discussions, the first discussions with customers in the Industrial Applications segment, how should we think about the midterm growth trajectory in this segment? What is possible also based on the order intake you have realized already? That's my last question.

Yes. Thanks for this. So we worked out really focused industries, seven focus industries. They have different growth potential, sort of in terms of numbers, of course, we will share more in our strategy update. But to give you a first flavor, the addressable market we see in these focus markets for industrial application is significantly bigger than we have in M&E.

So the next question would be, do we have the right products which fit for this application. We can broadly say, yes, there may be normal adaptations required, and we have the right engineering capabilities in-house to make this happen in a right -- actually in a really good timing, which also our customers appreciate a lot that we have this. So there is really very nice growth potential in the industrial application industries.

[Operator Instructions] There are currently no further questions. This concludes today's Q&A session and today's conference call.

Thank you for participating. You may now disconnect.

Very warm welcome to all of you. Good afternoon, good morning to this year's earnings call 2025 for NORMA Group. With me today, I have Okan Celiker, our acting Group CFO. Very warm welcome to you, Okan. It's Okan's second day. So I'm convinced Okan will present the financials in a very good manner and will ask your -- and answer your questions. Please be patient with Okan. So today, we will include basically 3 points. We will review our results 2025. We will provide the outlook for 2026. And we will, number three, give a sneak preview for our strategy for the new NORMA Group. So on the next page, you see our usual disclaimer. One important thing to note is that we have continuing and discontinued operations due to our divestment of the Water business, and we have marked this clearly as former NORMA or new NORMA in the presentation going ahead. So we will see here a summary of our achievements in 2025.

So basically, we see the closing of the water management, the divestment on the top right corner, which really marks a milestone for us at NORMA Group, where we achieved EUR 650 million of net proceeds, and this is a great enabler to build new NORMA. We will propose a dividend of EUR 0.14 per share at the next AGM this year. Also, we delivered on our guidance. However, it was a very tough and challenging year for new Norma, what we will review shortly. We have conducted this public share buyback. You are aware, and this was successfully concluded. Tonight, we will publish the results on our Internet, and you can review them. So we enter 2026 with a net debt-free situation after the water management sale, and we give significant return to our shareholders.

So this is a sharp focus what we have now, this strategic realignment and it opens the doors and gives the foundation to become really an industrial powerhouse for connecting solutions. The preview of the strategy will come later in this presentation. So let's now start with a brief recap of our financials. You have received the preliminary results in February this year already. Okan will later on give you some more details on the financials. So again, new Norma reflects the perimeter without water management going forward and the 2024 revenues, we have restated accordingly for new Norma.

So let's look at the summary. Net sales totaled to EUR 821.7 million, lower than last year. The adjusted EBIT at EUR 6.3 million, again, significantly lower than last year and the adjusted EBIT margin at 0.8%, also lower than last year. Of course, this is not what we want. This was a very tough year. And from this, we have to reset in this year to build new NORMA and to really go forward and grow in all our parameters here. Net operating cash flow, again, this is the formal NORMA view. So we achieved EUR 95.8 million in 2025. So also we have delivered in guidance. Again, this is challenging for us. It was very challenging. However, now with the divestment, with the new situation with the new strategy, we will have a good basis for new NORMA, and therefore, we are going to reset and start with this new setup. For the next financial topics, I will hand over to Okan, please.

Thank you very much, Birgit, and hello also from my side, a very warm welcome. I'm very excited to take over this role, and I'm also very much looking forward to engage with all of you going forward. So let's look at the details of our financial development on the next slide. Starting with our net sales, our jump of base in 2024 for new NORMA was at EUR 882 million throughout the year, we saw a volume impact of EUR 37 million as well as a price impact of EUR 4 million, mainly coming especially the volume impact from a weakening market demand. Then on top of that, we had a negative impact from the currency and the exchange rates here primarily impacted by the euro-U.S. dollar exchange rate totaling to EUR 18 million -- or roughly EUR 19 million, which overall got us then to EUR 822 million for the full year, new NORMA, which is in line with our guidance given in October last year.

Let's look at the next page, please. So again, we are looking at the net sales this time focused on the strategic business units. Also, again, of course, new NORMA. I'm starting with the left side, the Industry Applications business unit. Our net sales in the Industry Applications business increased year-over-year by 8%. However, this includes a reallocation of the Mobility and New Energy business of EUR 34 million roughly. On a like-for-like basis, this means our sales declined by 6% to EUR 252 million. Also inside this development is a volume and price impact of EUR 8.7 million and a currency impact of EUR 6 million. Now moving on to the right side to the Mobility and New Energy business. Our net sales year-over-year declined by minus 12%.

Of course, again, also here, including reallocation this time from the other way around, basically from mobility to industry application. That means like-for-like, the sales reduction was at 7% in the Mobility and New Energy business and the corresponding volume and price impact was at EUR 33 million, currency impact, EUR 13 million. This gets us to the EUR 570 million 2025 net sales Mobility and New Energy business. All right. Next page. So on the next page, we are looking at the breakdown by regions. Again, we are looking at obviously new NORMA. I'm starting with the left side, Americas region. The net sales declined in the Americas region by 8% year-over-year. We've been able to counteract and balance that a little bit due to initiated cost improvement initiatives in order to cover the inflation.

Overall, that got us then to an EBIT margin -- adjusted EBIT margin of 3.8% for the Americas region. Moving on to the EMEA region in the middle of this chart. In the EMEA region, our sales declined by 7% year-over-year. And the adjusted EBIT margin declined by roughly 5%, mainly impacted by extraordinary impacts in the EMEA region in the year 2025. The APAC region, the net sales development was at minus 6% year-over-year with a stable, basically very positive adjusted EBIT development from 9.5% to 10.8%, mainly driven by positive product mix impacts in the APAC region. Also important to mention here, in the future, we will focus more on the strategic business units and also the reporting of the strategic business units.

This is just as an FYI here in our presentation. And with that, we can also move to the next slide. So on our next slide, we are looking at our adjusted EBIT development. Our jump off base adjusted EBIT New NORMA 2024 is EUR 33 million. Throughout the year, we saw already mentioned strong volume and price impact reflected in the EBIT margin with minus 18%. However, we've been able to balance that a little bit with positive developments in the material cost area due to sourcing effects -- positive sourcing effects basically that supported a positive development of the material costs.

On the other hand side, we also had our first transformation program savings kicked in, in the personnel cost area, but this was negatively overcompensated especially in the direct area of our personnel costs. Other OpEx and depreciation and amortization have been largely stable. And with an FX rate impact of minus EUR 6 million, we achieved a total adjusted EBIT of EUR 6.3 million in 2025. So let's move on to the next slide. On the next slide, we see the EBIT margin development. So the EUR 33 million that we saw on the previous page is in percentage 3.7%. And with all the impacts that I've just described on the previous slide, we achieved a -- consequently achieved an EBIT margin of 0.8%, which is also in line with our guidance given in last year, which was between 0% to 1% EBIT margin.

All right. So let's look at our operational adjustments in 2025 and 2026. I'm going to start with the EBITDA. The adjustments on EBITDA level full year 2025 are mainly related to transformation -- to our transformation program and in that area related to primarily the severance payments and amounts to EUR 32 million. For 2026, we expect another adjustment on EBITDA level, again out of our transformation program of another EUR 24 million, which basically represents an acceleration of our transformation program. So we are basically pulling forward initiatives defined in our transformation program that we initially planned to conduct in the outer years into 2026. On the EBIT level, we see an adjustment of in total, roughly EUR 90 million on top of the EUR 30 million that I've just mentioned in 2025, we have here another EUR 55 million of PPA amortization, of which EUR 50 million is related that we undertook in the EMEA region and communicated also in November last year.

In 2026, we are expecting another EUR 29 million approximately. In addition to the EUR 24 million that I've mentioned earlier, this includes EUR 5 million of additional PPA amortization out of historical M&A transactions that we undertook. We expect this EUR 5 million to stay with us for the next couple of years, but on a slightly declining level. Net profit overall -- on a net profit level, the adjustment is a total of EUR 80 million roughly, which includes a EUR 10 million tax impact compared to the adjustment on the EBIT level. For the earnings per share, then consequently, we achieved EUR 2.45 in the full year 2025. And due to the fact that we are currently planning a capital increase, which is subject to the approval during the Annual General Meeting, we decided to pause the earnings per share guidance for 2026.

Okay. So next page is we can see our dividend development. So for dividend purposes, we are looking at our adjusted net income of former NORMA so that includes the continuing and the discontinued business as well as the adjusted earnings per share, again, for former NORMA. So the adjusted net income in 2025 for former NORMA was at EUR 14.3 million, and the adjusted earnings per share was at EUR 0.45. And with the dividend of EUR 0.40 that we proposed that was mentioned initially by Birgit, this results in a payout ratio of 31% for our dividend 2025, which is, again, in line with our dividend policy of 30% to 35%. So on the next slide, we see the cash flow development for full NORMA or former NORMA, again, important to mention here. So we are starting with our adjusted EBITDA of EUR 125 million for the continuing and discontinued business 2025, which already represents a reduction compared to 2024 of roughly EUR 19 million.

From there, our net operating cash flow for the full year 2025 is at EUR 96 million, which basically is just a decline of 9%. So how did we manage to reduce the decline compared to the EBITDA decline, primarily to a positive trade working capital impact, which is resulting from a positive impact out of the inventory management and also a lower supply chain financing program, roughly EUR 5 million, which also contributed here in that area. And related to our CapEx, we've been quite disciplined, and this also helped us to reach that net operating cash flow of EUR 96 million. Together with the payments for interest and for tax, we achieved for the former NORMA in 2025, an external free cash flow of EUR 52 million.

Let's look at the next page, where we will walk you through our full year net debt development. Important to mention here in the beginning, on the left-hand side, we are looking at former NORMA. On the right-hand side, we are looking at new NORMA. So starting with the left side, our net debt in the beginning of 2025/end of 2024 was at EUR 330 million. Roughly, we've managed to reduce our net debt despite, let's say, the challenging environment we've been in by roughly EUR 13 million. This was supported again by the external free cash flow that I've just walked you through of EUR 52 million. On top of that, we had dividend payouts and also other developments, let's say, within our net debt that got us ultimately then to the EUR 316 million. So if we now move to our expected net debt for 2026. We adjusted in the first step our baseline for 2026. And why is that? Because we had a net debt portion that we deducted, which is attributable to the Water business amounting to roughly EUR 10 million. And with that, our new baseline is at EUR 306 million.

Based on our guidance, which Birgit will share in a few with you, we also expect an external free cash flow in a range of plus EUR 10 million to minus EUR 10 million in 2026 and another dividend payout that we've just described. of EUR 4 million. And then, of course, we have the big impact out of the net proceeds from the Water management sale of EUR 650 million as well as the shareholder return of EUR 260 million, which then overall gets us to a positive net cash position expected for 2026 in the range of EUR 70 million to EUR 90 million. And with that, I hand over again to you, Birgit.

Thank you, Okan, sharing with us. And with this, we leave the year 2025 behind us. It was a really challenging year for NORMA, and we move ahead looking into 2026. What have we organized for 2026? What have we planned for '26? It was a very good start with the divestment and the closing of the Water management. We could reset our balance sheet and the whole year 2026 is a year of reset. So what will this look like? So let's look at the outlook. So we see here the net sales. So we foresee a growth in the area of 0% to 2%, so very slight growth. We look at the adjusted EBIT margin, and we see the range of 2% to 4%. So -- and we are confident to run this. This is based on our forecast, our internal forecast. We have the full 2 months in this year already completed and March is actually by to date and also completed. So this was leading us to this adjusted EBIT margin outlook.

Looking at the net operating cash flow, we see the range of around EUR 10 million to around EUR 20 million. If you compare with 2025, please reconsider, as explained before that this is not comparable with the new NORMA, but it's based on the former NORMA basically. So we think this is also a reasonable and good range for us. In terms of dividend policy, I want to make you aware that in the first sentence, we confirm the dividend policy. We have added one important point for us that this dividend is subject that the NORMA Group SE reports a net profit in its annual financial statements. And this together brings us the updated dividend policy. In terms of target vision for the outer years, we will provide a strategy update in the second half of 2026. This will include the content of our strategy and also our target ambition for the outer years.

So we move on now to the assumptions we have taken to come to our guidance. So starting with the top line. So we looked at the markets, and we are all aware of the situation in passenger cars and commercial vehicles, passenger cars slightly negative. Commercial vehicles slightly positive. Mechanical, a flat market and in construction, some moderate growth depending on the regions. So we have also included net sales from our business between industrial applications and ADS. This is the buyer of our Water management business in 2026, which is really planned to end by the end of the year 2026. A further important assumption is that stable geopolitical impacts like tariffs and so on. Of course, it's the question what is coming this year, but we concluded that this is the best assumption we can take for the moment.

Of course, we are watching and monitoring very careful and very diligently what's going to happen, and we will manage in our best possible opportunity any changes which are coming. Looking at the bottom line, we see the EUR 16 million one-off cost from 2025 which we have reported. So we see also the EUR 15 million from the transformation program, as you are aware, and we have reported the personnel cost inflation, we kept on a stable level compared to the last year, and we also assume stable energy and raw material prices. Again, here, we see maybe some impact, but this was the best assumption we could use for our outlook for this year. We have some cash flow drivers. So the net operating cash flow is lower than in 2025 because of the closing of the water management sale. And also important, we have now lower effects from supply chain financing, again, due to the water management sale compared to last year. And of course, we have cash-related expenses from the transformation.

FX assumptions are stable. So same FX rate in our planning for the U.S. dollar and the CNY basically. So with this, we move on to some housekeeping topics. I'm not going through all the details here. Maybe one point is important. The interest income, we have an income of EUR 5 million. However net it's EUR 1.5 million as a result of the net debt-free position and depending on the interest rate, the others, I think you will read yourself. And basically, we have explained the mechanism already for this one. Now we are moving on, and this is really the new NORMA update. New NORMA being the strategy for the outer years. And here, we are very excited to see on the next page, what we have done for the foundation.

So basically, we focused our business. We focused our business towards this industrial powerhouse, which is industrial application and M&E, mobility and new energy. What does this mean? We can deliver our connecting solutions to a very wide range of industries, and we have huge potential. So the focus makes absolute sense. We have an improved capital structure, as we've just explained, and this gives us very good flexibility to build new NORMA. We are simplifying our organization. Are we there yet? No, we are on a good way. We are making very nice progress. So this means that we reduce our SG&A to a competitive level, which is very important. And we also bring our organization in a situation that we can make fast decisions, and we have a very business-oriented steering for new NORMA.

Our footprint optimization, which has delivered very good results. We closed 2 factories in China already, and this is a great outcome here. We see very good operations. We are in the process and focusing our operations in Mexico further, and we will go on and continue our footprint optimization. So we see on the next page, what are our enablers. This is the strategic focus. So we prioritize attractive markets. Now you may say, what are these markets? And we are in the evaluation, just to give you some insights, we are talking about white goods. We are talking about aerospace. We are talking about life sciences, data centers, all of these markets, very attractive markets. And I can say we have the right products.

And maybe to give you some insights about my first months in NORMA, I've met many of our customers in the meantime, and they confirm that we have the right products, which is very good for us. However, for many of these industries, we have currently very low market share. So why is this the case? Because our focus was before not on these industries. Now with new NORMA, we focus on the right markets, and I'm absolutely confident we will have great results and great progress there. Execution discipline, so cost management and the cost management for all our cost elements is what we are improving, what we are driving daily, of course, working capital focus and operationally to have accountability, to have a performance culture in our operations will really contribute to new NORMA.

Implementation speed, again, with the reshaped organization, we will accelerate our decision-making, and we will focus on the SBUs. This means we will take business-driven decisions. We will take market and customer-oriented decision where we also focus our decision-making, our responsibilities on the business units. So what does this mean now coming really to the core of our strategy? You see 4 pillars. And these 4 pillars are the core basically and to give you some early insights. So to the left, you will see restructuring. You are aware of our transformation program as we have communicated and we are fully implementing and we will go on with SG&A improvements. We currently know that our SG&A are not so much competitive. So we will bring them with the restructuring program on a really competitive level and we will bring performance orientation inside new NORMA.

The second pillar is the footprint. And with the footprint, we talk about plants and we talk about sites. So as just mentioned, we are on a good track here. However, we will go ahead. So end of the day, we will have for NORMA plants and sites, which fits to our business to the size of our business and also to the nature of our business following our customers and our products. So we will have a target operating model, again, which really fits the new NORMA with our connecting solutions. The third pillar is a sales push. So we will and we want to have new business wins. This means to grow our order book. So with this, we have been working already and we will further work on our commercial situation, our pricing strategy and with this to increase the plant utilization across new NORMA.

So focus really on the customers, on the end markets, and we have started already to bring a target costing live in NORMA, meaning that we are competitive. We understand the markets very nice, and we have target costs and we run the measures to meet these targets. The fourth pillar is about growth. So currently, we are evaluating markets and market segments where we foresee a very good growth, organic growth and inorganic growth. And this is currently again in evaluation. An update will come in the second quarter for our strategy update. So with this, we go ahead and talk about the time line because I'm sure you are curious when this will be all executed. This year 2026 is the year of the reset, we strengthened, this foundation and we build it.

As Okan also said, we are working also on reporting on steering the business, really focusing on the customers, on the markets on our business will be detailed in the strategy update next half of 2026. The year 2027 will be the year of optimizing. So we will see performance improvement already there and the year 2028 and further out will be the years of growth where we have really positioned our structural opportunities. And then we go ahead, and I say a big thank you for listening to us, and we are looking forward to receive and answer your questions.

[Operator Instructions] And our first question is from the line of Nikita Papaccio from Deutsche Bank.

I would have 3, and we will go through them one by one. The first one, thanks for clarifying on the restructuring program and the higher cost this year because of you pushing forward the measures, as I understood. Could you maybe elaborate a bit more which measures these are and how the time line is then for 2027 and beyond, especially also on the savings side?

Okay. So I will start with the restructuring program. There's basically the transformation program as we have announced already, this is in full execution sort of -- and we will really in the strategy, look at the whole restructuring requirements and answer this then in the second half. For the known transformation program, we can give already the numbers. And maybe, Okan, you give us some insights.

Yes, exactly. So as already mentioned, we achieved savings according to our plan that we've communicated last year with regard to the transformation program. In terms of savings in 2025, EUR 4.5 million, and in 2026 EUR 15 million. That's what we are planning -- what we are expecting. And yes, to add to Birgit's answer for 2027, yes, due to the pull forward of specific initiatives, of course, we do also expect a slightly earlier kick in for certain initiatives. And as also mentioned by Birgit, we will bake that into our planning, which will be the new basis for us going forward and will be presented in H2 this year.

And the second question is on your midterm outlook. I mean, I understood fully that you are giving us a strategy update in H2. But I was thinking about your -- especially on your Mobility business. For now, you are seeing no growth in this business. I understood that you are trying to gain more market share, especially in the APAC region. Any indication how to achieve 10% margin or more in this segment? I mean, with the increase in volume, potentially you would see a decline in prices, right?

I just repeat your question because it was a little bit broken. So I understand that you are asking especially for our midterm outlook, especially focused on the APAC region where we see a 10% margin. So I mean, yes, as you rightly saw, we have currently a good margin in the APAC region. In 2025, we had really some improvement, and we are very happy about this. For the midterm outlook, we are still working on this. Regions are all different. The markets are different. They are going in different direction. So we will get the midterm outlook then as part of our strategy update to ensure we have a good evaluation of data we are giving and then we can present this with a high confidence level to you.

The question was regarding the Mobility segment and its target of 10% margin overall. So it's not on APAC in specific, but globally.

Okay. Okay. Thanks to clarify this. For the Mobility segment, I mean, it's the same. It's also one of our industry segments. And there, we are also assessing this. There is also an impact what we will achieve with the restructuring, what we will achieve with the footprint. This all has an impact, of course. Also our commercial update has an impact on the offerings on our competitiveness. So -- and this will also have a significant impact, of course, on the margin level also in the Mobility segment. So here, we are also in a very detailed and deep evaluation and we'll give an update also here in the second half of 2026.

Okay. Understood. Final question for me. I mean you mentioned that you're assuming stable supply chains and tariffs and so on. What is the current situation with regards to Middle East? Any impacts you're seeing indirect or direct?

So thanks for this question. The impact in the Middle East. So basically, we have no own operations in NORMA. In Middle East, we have a business which is roughly EUR 1 million of revenue. So we see, for sure, in the freights and so on, some impact, some delays, which is getting more complex, some increased cost, of course, also in the energy. But further on for the moment, we do not see any severe impact on our operations. However, we are monitoring very closely, and we are also preparing the different scenarios, what we can do and how we can manage the situation.

[Operator Instructions] We have a question via text message. I'm just going to read that for you. It is from Harald Eggeling from ODDO BHF. What are the underlying assumptions for the upper and lower end of the guidance ranges?

Let me take that. So yes, I think we've, of course, consciously decided to give our guidance with ranges this year, of course, due to the, let's say, situation we see on the geopolitical side and also on the economical side. I think in general, our expectations and assumptions, Birgit just shared in the housekeeping part of the presentation. So there is not really something that we have to add to these assumptions that we took and baked into our guidance. So it includes stable material prices. It includes stable FX rates. We've been, however, a little bit cautious, as said, due to the developments that we see, especially geopolitically these days. But other than that, we feel very confident with our guidance and all the 3 elements of our guidance.

[Operator Instructions] We have just received another question. And your next question comes from the line of Andres Gujan from Carnot Capital.

Can you please describe what the situation is in the discussions with the unions in your factories and what the main discussion points are and how confident you are to achieve an agreement?

Yes. Thank you for this question. It's about what is the discussion with the unions. First of all, we have, of course, different situations in different sites, in different plants, there's different unions. I start about Maintal about our plant in Germany, where we have achieved just before Christmas in 2025, a very good agreement with the union, with our works council on this voluntary leaver program, and I can share also the process a bit.

It was a very constructive, a very positive process where we all shared basically the same targets and also the time line until we could conclude was very positive. It was concluded, obviously, before Christmas. So we could get all our employees, our colleagues the opportunity to take the time over Christmas, and it's going extremely well. So this is basically fully booked. So this is a very positive result. So -- and some other plants in some other sites, we are also in good discussions on the way ahead with the unions. However, it's very individual and in very different stages.

[Operator Instructions] And the follow-up question comes from Nikita Papaccio from Deutsche Bank.

Can you hear me now?

Yes.

Okay. Perfect. So another question is on your share buyback program. It just concluded, you said. Any indications for the cash return going forward in 2026?

Well, so as you said, yes, it was just concluded, and we met the target here. We will -- and we plan currently to propose to the AGM a capital reduction so that it totals together with the share buyback in the range of up to EUR 260 million. So this is what we are currently planning.

Thank you. I will now hand the call back to Birgit Seeger for closing remarks.

Thank you. Thanks for attending our this year's call. Thanks for your interest and your great question and looking forward to have the discussion in other forums or on our next Q1 call, which I'm looking forward to, and have a great day, and thanks for your interest and for contribution to New NORMA. Thank you.

Thank you very much.

Good morning, and good afternoon, everyone. Welcome to our Q3 2025 conference call for NORMA Group. I'm Birgit Seeger, and it is my pleasure to speak to you today stepping into the role of CEO for NORMA Group, which I've just started 1st of November.

Together with our CFO, Annette Stieve, I will guide you through the presentation. We will answer your questions after the presentation as is our usual practice. Please allow me to give you some background about myself. Over the past 2 decades, I've had the privilege of working across the global automotive industry as well as other industrial sectors, most recently leading Bosch's worldwide compact actuator business. These experiences taught me how innovation, operational excellence and strong customer partnerships can drive long-term success.

My assignments have been about leading transformation in complex and global environments. Whether in manufacturing, consulting or serving on the Board of international industrial companies, I've learned the importance of combining technical expertise with financial discipline and clear execution. That mindset will guide how we advance NORMA Group towards becoming the industrial powerhouse for connecting solutions by 2028. On the next page, I will give you an impression of what we have planned for new NORMA.

There are 6 points. Point number one, as seen NORMA, we will transform our company into an industrial powerhouse for connecting solutions. This means we will sharpen the strategic portfolio focus to create new NORMA. Secondly, we increased operational excellence and thereby improve margins. To achieve this, we are focusing on cost efficiency, lean processes, a resilient supply chain and improved productivity. Point number three, we strengthened the collaboration with customers. We accelerate growth in segments with high potential. This primarily means growth in segments that are geared towards a strong and broad customer base.

Point number four, we are further boosting our innovation strength and sustainable product leadership. We want to focus even more on quality, research and development, digitalization and sustainability, which are an integral part of the company's product range. Point number 5 is guided by the approach, think global and act local. We optimize NORMA's global presence and local relevance, ensuring that regional strategies are tailored to local requirements and a global optimization is achieved. Last point and the most important is our focus on financial discipline and the creation of shareholder value connected as team NORMA.

Now I want to give you an overview of our divestment of Water Management, which has been communicated already alongside the divestment process. So EUR 1 billion valuation for water management business has been achieved. Value accretive multiple of about 19.3 adjusted EBIT has been achieved. Regarding net proceeds, as it has been published on the day of signing, we aim for the 3-pillar model. We will pay off a large portion of the company's debt.

Secondly, distribute about EUR 250 million to EUR 270 million to our shareholders. This translates into approximately EUR 8 per share. The transaction is subject to approval by the antitrust authorities. Number three, we invest a reasonable amount in our growth in industrial applications to accelerate NORMA's establishment as the industrial powerhouse for connected solutions. Our true north is to reach double-digit EBIT once the industrial powerhouse is successful.

With the next page, I will summarize where we stand and what are the next steps in the divestment process. Signing took place on September 23 this year. The buyer is ADS Advanced Drainage Systems. The accounting impact is assets to be displayed at discontinued from September 30 this year, and we will see this later on in our numbers. The net proceeds are around EUR 620 million to EUR 614 million expected, and the precondition is the customary closing conditions, including the regulatory approvals. So the closing is estimated for the first quarter of 2026, subject to approval by the antitrust authorities, which will determine the date of closing.

We estimate net proceeds of between EUR 620 million and EUR 640 million. This amount will then be available for us for further use. Annette Stieve, our CFO, will explain on the next page how the value of USD 1 billion translates into net proceeds of EUR 620 million to EUR 640 million.

And with this, I hand over to Annette.

Thank you, Birgit, and a warm welcome also from my side. To provide more detail on the estimated net proceeds calculation, we have prepared this slide as a part of our updated transaction presentation from September 30, which is also available to our Investor Relations website.

Today, I would like to highlight the tax facts a bit more in detail. As communicated already end of last year with our announcement of the intended sale, the sold U.S. daughter NDS is held under the Pennsylvania Holding since the -- our acquisition in 2014. This structure brought significant tax benefits to NORMA Group over the last 11 years. As also the other operating legal entities in the U.S. are held under this asset, the same holding as a tax fiscal unity.

Within our early communication on the intended sale, it was -- we clearly communicated that we are expecting a tax rate of around 22% to 23% on the capital gain. This assumption was based on a sale via a share deal. During the negotiation with the potential buyers, it turned out that the best bidder, in this case, ADS, prefers to have the transaction in the U.S. structured as the so-called deemed asset sale. This allows ADS to treat the transaction as an asset deal for U.S. tax purposes.

As a result, they receive a step-up of the tax base of the acquired assets, which increases their future depreciation capacity. The tax benefit for ADS was estimated with an amount around USD 125 million by ADS. On the other hand, the deemed asset sale results in additional taxes for NORMA Group, which are estimated with around USD 50 million versus a share deal and an evaluation of USD 1 billion. It was agreed between the parties that the tax advantages for ADS is to be compensated by an additional portion of the purchase price. As the benefit for ADS is about EUR 125 million and our additional tax payment is about USD 50 million both, so USD 125 million and our additional tax payment is about USD 50 million.

This structure is financially very beneficial for NORMA Group and its shareholders. As the additional purchase price portion brings significant higher net proceeds. So we achieved a win-win situation for buyer and seller. With this negotiated success, we have enabled estimated net proceeds to NORMA Group of around EUR 620 million to EUR 640 million. And thus, about EUR 20 per share, what equals roughly EUR 8 per share for distribution to shareholders.

And with this explanation, I hand again back to Birgit coming to our Q3 results now.

Thank you, Annette. Let us turn our attention now to the financial results of the third quarter. Upfront, a note regarding the Water Management business. This has been classified as the discontinued operation with effect from September 30 this year. This means figures related to water management are no longer included in the revenue and earnings development for the third quarter of 2025, as well as proactively to January 1 this year.

Reclassification of some APAC business into Industrial Applications business unit is already included in the Q3 numbers. Where these adjustments have not been made, which means Water Management is included, we have indicated this on the slide. So the net sales in Q3 totaled to EUR 197 million compared to EUR 406.5 million in the previous year. The adjusted EBIT was at EUR 3.8 million versus EUR 7.5 million in the previous year third quarter. The adjusted EBIT margin was at 1.9% versus 3.6% in the last year Q3.

Now coming to the next 3 numbers, and they are continued and discontinued operations. This is the net operating cash flow was at EUR 24.5 million versus EUR 28.2 million in Q3 last year. Equity ratio of 40.5% at September 30, 2025, versus 50.2% on December 31 of last year. CO2 emissions, NORMA successfully avoided 1,193 tons of CO2 emissions, Scope 1 and 2 as of September 30, 2025. So this means our CO2 emission target we have already met for the full year.

Let us now move to the next page, where we talk about our top line development in some more detail. Compared to the same period of the previous year, sales in the third quarter of 2025 decreased by 4.3%. This development is mainly coming from negative currency effects. While volume remained relatively stable, lower prices in our mobility business contributed 0.9% to the decline in sales. As we can see in the pie chart, the right top of the chart, the regional distribution has shifted significantly towards Europe due to the divestment of water management.

Let's move on to the next page and discuss the sales development by strategic business unit. For Industrial Applications, sales increased by 12.2% in Q3 of this year. This increase was partially due to reallocation of business from our business unit M&E to industrial applications, in particular, sales from construction and agricultural machinery as well as stationary energy storage. Positive volume development led to a growth for industrial applications. Unfavorable exchange rate effects had a counter effect.

In Mobility & New Energy, sales were 10.4% below previous year. This was driven by reallocation effects and due to the impact of a cyber attack at one of our major European customers. For APAC, we recorded growth in Q3. Unfavorable currency effects contribute to the decline of the top line. Let us move to the next page to discuss sales developments in the regions. In the Americas, sales declined by 4.9% to EUR 66.3 million compared to previous year. The main reason for the decline were negative currency effects.

Adjusted for exchange rate effects, the third quarter shows growth of 1.2%. Sales in EMEA were EUR 100.9 million in the third quarter of this year, 5% lower compared to previous year. This resulted from a difficult market environment for mobility, including a cyber attack on a major customer. In APAC, sales were EUR 30.3 million in the third quarter of this year, down 0.7% compared to same quarter of previous year. The positive development of the business was offset by negative currency effects. On the next page, we will look deeper in those developments.

In the Americas, sales in the business unit, Industrial Applications recorded an increase of 15.1% compared to previous year. Top line growth was supported by reallocation effects. Negative currency effects counteracted this development. In Mobility, sales decreased by 13.6% as a result of lower volume as well as reallocation and currency effects. In EMEA, industrial application sales increased by 10.3% due to the reclassification of revenues in the current year. In M&E, sales decreased by 10.3% due to weak market demand and the cyber attack at a major customer. In APAC, industrial application sales increased by 10.3%, supported by reallocations of sales. M&E sales growth has compensated negative effects of reallocations. Unfavorable currency effects led to a sales reduction by 4.3%.

And with this, I hand over to Annette.

Thank you, Birgit. Let's have a look now at the key P&L figures of our Q3 continued business. Our material cost ratios keep improving. In Q3 '25, we were 10 bps better than in Q3 of last year. On a year-to-date comparison, our material cost ratio even improved by 60 bps. This is mainly due to further optimizations in the area of material and energy costs as well as price increases accepted by our customers. As a result of lower material costs, the gross profit margin rose by 60 bps year-to-date '25. Personnel costs in total fell in the third quarter, while the personnel cost ratio rose by 70 bps due to lower sales volumes and inefficiencies. With our global transformation, we are targeting to sustainably reduce the personnel cost ratio to a normalized level. We will give you an update on our measures at the end of this presentation.

The other expenses were up in total and also the ratio went up from 14.9% to 16.9% in Q3. The main reason for this development are the continued elevated costs for special freights and extra shifts in our Maintal plant. This topic is clearly addressed with specific measures in order to resume to a normalized cost base in due course. The sales decline and still elevated costs in the Maintal plant are reflected in the subdued adjusted EBITDA and adjusted EBIT in Q3 and also our year-to-date figures.

Nonetheless, with an adjusted EBIT margin of 0.9%, year-to-date, we are thoroughly within our guided margin corridor for the continued business of around 0% to 1%. Let's move on and take a look to our EBIT margin by region on the next slide. This, ladies and gentlemen, is for me, personally a key slide in our Q3 presentation. For the first time, we are disclosing our adjusted EBIT margin by region for our continued business. As we were frequently asked if we can really generate decent margins without water management, here's the answer.

In the APAC region, we are at 10.3% in Q3. In the American region, even with all hiccups around tariffs and consumer sentiment, we are generating solid 4.5% in Q3. What remains clearly a pain point is EMEA with an adjusted EBIT margin of minus 0.9%. This is, to a large extent, caused by sluggish sales in the region, but also by continued operational issues in our Maintal factory. These issues and their causes are identified and clearly addressed. The expected financial improvements are duly calculated, and we will revert to that later.

To sum it up and make it very clear, there is no reason at all why the EMEA region, also with even its hiccups in geopolitical challenges should not be able to be as profitable as the other regions. This year's adjustments are, of course, extraordinary in many aspects. As already mentioned before, we assume up to EUR 20 million transaction costs for the sale of the Water Management business. On top, adjustments for one-off or transformation costs up to EUR 30 million are to be expected. The PPA effects for the continued business are expected to be around EUR 6 million. Based on our ad hoc statement from last week, a noncash effective goodwill impairment depreciation of around EUR 50 million was identified for the EMEA region as a result of a mandatory impairment test.

The impairment requirement is mainly caused by subdued revenue assumptions in the EMEA region for the coming financial years. It will have a corresponding impact on our consolidated earnings after taxes, but it will not lead to a cash outflow. Accordingly, the total adjustments in the current fiscal year are expected around EUR 106 million. With these explanations, let's have a look to our net debt and equity.

Before going into these figures, please be aware that the illustrated figures refer to the continued and discontinued business combined according to IFRS 5. Our net debt slightly decreased by 0.9% against the end of '24. Due to the lower EBITDA, leverage was up to 2.4x adjusted EBITDA from 2.1x at the end of previous year. Total equity levels at EUR 585 million. The equity ratio decreased by 500 bps. Main reasons are a negative profit in the reporting period, which was predominantly impacted by the goodwill impairment in the EMEA region of about EUR 50 million and negative foreign exchange rate differences amounting to minus EUR 63.7 million. Nonetheless, the equity ratio still stands at a very solid 45%.

On the next slide, we briefly discuss our cash flow development. Likewise, the previous slide, please be aware the illustrated cash flow figures also refer to the continued and discontinued business combined according to IFRS 5. The net operating cash flow in Q3 decreased by 4.6% compared to the same period last year. This is primarily due to lower adjusted EBITDA. Year-to-date, the net operating cash flow levels at solid EUR 59.1 million, including a decrease in our supply chain financing programs of EUR 3.4 million compared to end of '24. At this point, please let me underline that the cash flows from the continued but also the discontinued operations in the current year belong 100% to NORMA Group and its shareholders.

And with that, I hand back to Birgit.

Thanks, Annette. Let's now turn our attention to our guidance. The guidance for the year 2025 has already been published with the announcement of the Water Management divestment September 23. We confirm our guidance for 2025. For the continued business, we expect sales in a range of approximately EUR 810 million up to approximately EUR 830 million. The adjusted EBIT margin in the continued business is expected to be in the range of approximately 0% and approximately 1%.

The net operating cash flow, here, we see the continued and discontinued business combined is expected in the range of approximately EUR 70.5 million to approximately EUR 95 million. For our Scope 1 and 2 CO2 emissions, we are targeting the avoidance of 1,000 tonne CO2 equivalent emissions at all NORMA Group sites in the continued and discontinued business combined. On the next page, we see details for the adjusted EBIT margin guidance 2025.

Within our guidance for the adjusted EBIT of approximately 0 up to 1%, we have included one-off effects for the current year. These one-off effects are mainly change of the CEO, the D365 ERP implementation in Maintal, including related costs and the cyber attack at one of our largest customers in Europe. Some explanation for the ERP implementation in Maintal. This project caused extraordinary implementation costs of about EUR 3.5 million and higher-than-expected follow-up costs such as special freight and additional staff allocation.

We expect these one-off costs to reach about EUR 12.5 million for this year. The root causes of the issues are identified, corresponding action plans have been set up and are in implementation. In September this year, cyber attack took place at one of our largest customers in Europe. European plants at our customers were shut down until the beginning of October. We estimate a loss of adjusted EBIT of approximately EUR 2 million. The one-off costs in the current year will sum up to about EUR 16 million.

Without these one-off effects, our guidance for the adjusted EBIT margin would have been more in a corridor of about 2% to 3%. These numbers are unsatisfying, do not meet our expectations, and I'm fully aware of the challenges ahead. Let us now come to some examples from our step-up program. The first example comes from our business unit Industrial Applications in Europe. We've recently received an order in a market segment, which is new for our fluid products, battery cooling as part of battery energy storage systems.

Our customer is a pioneer in advanced battery energy storage systems and already built a more than 1.1 gigawatt wind and solar plant in Europe. The company required a top-notch solution for the cooling system encompassing pipes and connections. NORMA Group is providing a flexible pipe solution for the customer and also improving their assembly efficiency.

The next example comes from our M&A team. In order to bring our Quick Connector technology to a wider market, we have developed a comprehensive sales strategy. This comprises the Quick Connector content store, extensive customer engagement and operational competitiveness. The Quick Connector content store is showcasing the full range of innovations in Quick Connectors. The Quick Connector finder displays the entire range and also products in development, prototypes and customized solutions for our customers.

We ensure competitiveness in production and pricing with optimizing production capabilities and maintaining competitive pricing to meet customer demand using, for example, advanced data analytics and further tools. Let us now look at progress of our transformation. Until the end of 2028, we are targeting annual savings of up to EUR 42 million versus the baseline of 2024. We will reduce our global headcount by approximately 400, 70 of those in Germany. One key element of the transformation is the optimization of our global production footprint.

Starting in China, the site transfer from Wuxi to Changshu and Qingdao has been completed by end of September. The Wuxi facilities have been closed. We have also initiated the site transfer from Guangzhou to Changshu. The Guangzhou site will be closed by end of this year. With these 2 measures, we optimize our footprint in China to run our business with 2 sites. This enables more efficient production and logistics, lower rental costs and reduces administrational costs.

Looking at Australia, we have closed our Adelaide distribution center in order to optimize the local cost structure. These measures in China and Australia will contribute its annual savings of about EUR 1.8 million from 2026 to our overall saving targets. Headcount will be reduced by a total of 51 heads. In India, we have optimized our production layout and thus generated additional 700 square meters of production space to allow for the growing industrial market in India.

At the next page, I will give you a preview on the next steps that are planned in the Americas region. NORMA currently operates 3 manufacturing sites in Mexico in Juarez, Tijuana and Monterrey. The production for our metal-based products is currently based in Juarez as well as in Tijuana. In Juarez, we have recently rented a new production location, a modern site, which enables an optimized production infrastructure with streamlined logistics and production layouts.

In the first step, we will transfer the metal production from Tijuana to our new Juarez facility. In a second step, we will transfer the production equipment from the current Juarez location to the new production site in Juarez. We are forming a single and modern metal production plant in Juarez, Mexico. These measures will contribute with annual savings of approximately EUR 1.2 million from 2027 onwards.

Let us move on to share our true knows for NORMA. Our target vision for 2028, our true knows show double-digit margins. In 2025, our adjusted EBIT without one-off costs would level at about 2% to 3%. Until 2028, we are targeting annual savings of about EUR 38 million to EUR 42 million with our transformation. Additional EUR 10 million in savings are targeted to come from the Maintal operational recovery plan.

Further on, we reach for M&A opportunities to strengthen the industrial application business. So to summarize for NORMA, I'm aware of the challenges ahead and the current situation of NORMA, which is not satisfactory. Our focus and power is to build new NORMA as an industrial powerhouse characterized as follows: We will generate a strong market position in the industrial applications market, which offers high growth potential and really good margins. Our competitiveness in the area of mobility will be significantly enhanced by product innovation and cost effectiveness. Our lean and cost-adjusted organization will be focused on key tasks and fast decision-making. Our global production and distribution network will be streamlined to support our lean and cost-efficient approach whilst offering delivery, reliability and quality in all regions.

So with this, I say thank you very much for joining our call today, and we are looking forward to answering your questions now.

[Operator Instructions] And the first question is from Nikita Papaccio, Deutsche Bank.

This is Nikita from Deutsche Bank. First, welcome, Birgit, to the company, looking really forward to work with you. Three questions from me, please. So first of all, congrats on your strong APAC margin. Could you explain what was the key driver here? And can we expect to be this the run rate going forward?

Second, I mean, we talked a bit about building blocks for 2025. Could you maybe elaborate what will drive Q4 here? And then the third question, I mean, we are seeing ongoing weakness in the EMEA mobility business. How would you tackle this weakness to see improvements here and to increase your margin?

Well, thank you, Nikita, for your questions. Well, strong APAC margin in discontinued business is clearly shown we are divesting water, and we had 2 entities in this APAC region, in particular, Kimplas, which were not that successful and therefore, the margin is uplifted. So that shows how strong our remain business, our new normal business and our core business is there. So yes, I expect the run rate like this, and I would even hope that when APAC is also be able to level up their sales a little bit that this can even improve.

Building blocks for Q4, that is an answer. Well, this -- everybody is asking themselves for the time being. I would say we are cautiously optimistic that we -- the business will develop like we expected. Why I'm saying that? At the end, we have still our -- we spoke about the cyber attack for a customer. This customer told us, okay, they might come back to usual business by 50%. So there is missing sales already, and that might stay the case for the remaining quarter.

We have things like Stellantis who were on hold in Europe. On the other hand, we know that Ford paused production because they have an aluminum supplier who was under fire. And there, we are also -- it looks that we might miss sales, which are significant. And well, chips, the chip crisis is discussed everywhere in the press. For the time being, it looks, I would say, a little bit more optimistic, but this I, as a financial guy, believe when the quarter is over. So at the end, I would say there are in the market clouds which we have to deal with. But I think it's well under control and whatever we can optimize there, we will do. Well, to be honest, I don't have your third question anymore in my head. Could you repeat that? EMEA? It was mobility.

It was about EMEA, yes.

Yes. So mobility and new energy in EMEA, that is our pain point. As said, we have this geopolitical issues here as well, combined with chip shortages, what can happen also the customers I spoke about are partially in EMEA. For sure, we have our operating problem in Maintal, but there, we are on a very good way to bring that back to due course. So that is, at the end, these pillars we have to drive, and we have to manage that cautiously and with the full attention of everybody.

And the next question is from Yasmin Steilen, Berenberg.

I have also 3, if I may. And the first one is for Birgit Seeger. First of all, many thanks for your introduction. It's highly appreciated. And I know it's far too early to discuss any NORMA specific topics. But I'm interested in your view on the light vehicle market in general, the speed of the transition from ICE-to-BEV and the change of the competitive landscape among the OEMs and the impact from China speed on the European suppliers? Or to put it the other way around, what are the biggest challenges for suppliers to be addressed in the future? That's my first question.

Then the second question is coming back to EMEA. Following the EMEA goodwill impairment on revised revenue assumptions in the EMEA region, could you please provide more color what was related to mobility and new energy? And was there also a proportion related to industrial applications? And do you still feel comfortable with the provisions booked to rightsize the cost structure in EMEA? And the last question on free cash flow. Could you provide a split between the continued and discontinued business regarding the EUR 59 million net operating cash flow and the EUR 30 million free cash flow?

So I will start with your first question. Thanks for this. I mean, yes, the changeover from ICE to eMobility is in full swing. As we all know, I would say it's with China's speed, as you clearly mentioned. And in NORMA, we are happy that we have our operations in China that we are consolidating as presented the 2 facilities. And with these 2 facilities, really with good efficient processes, we will harvest the benefits from the China business. There's very good and solid business for NORMA in China already, and we will further build on this and grow this business.

Yes, around the world, we need to adapt to the China's speed, and it's really interesting what we see in this market ongoing, and we will also learn to certain time from China how to run this business. And this is also for me, a task to work with team NORMA and I see big potential here that we are very competitive globally for the regions and also doing this with China speed. So I hand over for the next question to Annette.

Yes. Thank you. EMEA goodwill is the question. So at the end, the impairment of EMEA goodwill is clearly due to, I would say, subdued expectations concerning M&E sales in the outer years. So that is what we see in the market, that is what we hear from customers and what we share with, I would say, developments in the market. It is not at all on any kind of industrial business. Do I feel well with our cost package, what we currently communicated for restructuring and so on?

Yes, I would say I feel well with this. You will hear about that more in the course of the year. We and then -- for what we know and what is necessary currently, we feel well. A net cash flow split, that is too early, to be honest. So this -- we will provide once cash flows of all these businesses are there. But at the end, a split between water and discontinued is not what makes sense for the time being. So I ask a bit for patience on that.

[Operator Instructions] And the next question is from Marc-René Tonn, Warburg Research.

Basically, also 3. First one would be on the margin development in the third quarter compared to the 9-month period. I think you are at least sequentially improving in all 3 regions. Basically, to give you some insight, is this more like that there is, let's say, a lower amount of non-adjusted extra costs in the third quarter? Or is it, let's say, more a positive impact already from the earnings enhancement measures you have implemented, which is supporting this development in the third quarter?

Second question would be going a bit into 2026, and I know it's still early and so much uncertainty going on. But when you look at the building blocks for profitability going into next year, and you already said, let's say, 2% to 3% margin this year when adjusting for the non-adjusted extra cost. Would it be right to assume for next year EUR 10 million tailwind from the transformation program compared to this year and another EUR 10 million from the Maintal operation improvement besides, let's say, the special burden no longer being there. So that would give us, let's say, some 4% to 5%, broadly speaking, for next year.

And then, let's say, nobody really knows what will happen to the top line. But let's say, as a baseline on the same amount of revenues, would that be, let's say, the magnitude to think about in terms of EBIT margin for next year? And the third question would be regarding the net cash position after the settlement of the deal. When we look at, let's say, the cash flow projection for this year, you'll probably end up with EUR 70 million net cash after the sales. Is this figure correct? That would be the first question. And secondly, depending on when you can eventually sign and then finally close the deal, what would be a timing for -- and let's say, the possibilities also legally for dividends and share buybacks? How should we think about this going forward when it comes to shareholder returns?

Yes. Thank you, Marc-René, for your question. So first of all, margin Q3, and you're fully right, that is sequentially better, and that is because we are slightly improving in business. Clearly, it's also the first improvement or the improvements in Maintal. So we are on track there. That is indeed -- there has nothing to do with lower amount of adjustment or whatever. I think we make our adjustments very transparent so that you can follow them up. And therefore, it's a kind of sequential cautious improving. Let's keep it like this.

Building blocks for '26 -- the building blocks for '26 onwards. So first of all, you mentioned roughly EUR 10 million transformation program improvement. That is not unrealistic. So there I would make a tick mark behind it. Where I can't agree is on the EUR 10 million Maintal improvement. So if we go through the slides, the EUR 10 million Maintal improvements are promised up, they're standing following. So this we expect until the end of the transformation program until '28. So therefore, this is a longer course.

You referred to EUR 60 million net cash projection. This I cannot really follow up because finally, we always have to differentiate. So as we expect the signing in Q1 -- the closing in Q1, we will not get the proceeds earlier. So there will not be -- I don't expect a cash in before the end of the year, pretty clear about that. So I expect a closing in Q1, and as soon as we are in the hand of these proceeds, we already prepare our structures and whatever. And then for sure, we speak about the timing of share buyback and whatever. But one story is for sure, we will not keep the money decades on our accounts.

I think, as was just referring not to the figure at the year-end, but after the closing and after you receive the money, but then you should be, let's say, given that you will basically be, let's say, net cash neutral plus the EUR 70 million, which you set aside for, or which you, let's say, set aside for M&A longer term when we take the... Put it, differently, you're expecting....

I know what you mean, but there I would propose that either we and together with Sebastian speak separately because we have -- cash is always a year-to-date figure, and there is a year-end in between. So it's not a figure which is piling up. So let's speak about that separately and then we can align our views on that.

As there are no further questions from the audience, I'd like to hand the floor back to Birgit Seeger for closing remarks.

Thanks so much for the audience, and thanks to give me the chance to onboard at NORMA Group. I'm delighted to be here. We all know that the results are really challenging in a challenging market environment. As we have presented, we have a clear plan ahead, and I can say team NORMA is fully behind this and is fully supporting this, and we will make the industrial powerhouse happen. And thanks for listening, and thanks for your question. Looking forward to meet many of you and to collaborate with you.

Yes. Good morning, good afternoon to everyone. Welcome to our conference call regarding the Q2 2025 results of NORMA Group. I'm Mark Wilhelms, Annette Stieve, our CFO, and I will guide you through the following slides. We'll answer your questions after the presentation as we always do. Now let's move into the discussion of the Q2 results and proceed with the first slide.

The macroeconomic environment in Q2 has not really changed compared to Q1 when we reported sales of EUR 284.5 million. Moreover, headwinds from currency exchange, softer U.S. dollar rates put an additional pressure on our top line. As a result, our net sales totaled EUR 290.4 million in the second quarter of this year 2025.

Adjusted EBIT amounted to EUR 23.4 million in the second quarter of 2025. The adjusted EBIT margin remained relatively stable at 8.1%, a number we had delivered, for example, in 2024 or 2023 full year, and it improved significantly quarter-over-quarter. You might remember that in Q1 of this year, we reported an adjusted EBIT margin of 3.6%.

Our net operating cash flow was positive at EUR 31.6 million. Coming to the balance sheet, our equity ratio reached 47.9% at the end of June. And for our CO2 emissions, we are on track to reach our saving targets for this year.

Let's now move on to the next slide, where we show our top line development in some more detail. Compared to the same period of the previous year, sales in the second quarter of '25 decreased by 5.2% in comparison with minus 7.9% in the first quarter of 2025. However, this development represents an improvement by 270 basis points. Negative currency effects, primarily due to the softer U.S. dollar, led to a decline in sales by 3%. While prices generally remained stable, lower volume contributed 2% to the decline in sales.

Let's now move to the next slide to discuss the sales development by region. In the Americas region, shown on the left-hand side of the slide here, sales were almost at the previous year's level had it not been for the currency effects, which had a significant negative impact of 5.1% out of the 6.3% change year-over-year. As a result, sales fell to EUR 137.2 million in the second quarter.

Sales in EMEA, EMEA is in the middle of the graph, the slide. Sales in EMEA amounted to EUR 119.8 million, down 2.3% on the previous year. In a difficult environment, the decline is nevertheless less pronounced than in the previous quarter, where we reported a reduction of 12.2%.

In APAC, sales amounted to EUR 33.4 million in the second quarter of 2025, down 10.2% on the same quarter of the previous year. Generally, weak market conditions for Mobility & New Energy as well as industry applications led to this development with a strong negative currency translation effect coming on top of this one.

On the next slide, we take a closer look into those developments. Please allow me to repeat an important remark, which we already mentioned in our Q1 call in May. In the current year, the allocation of certain customer groups to the corresponding SBUs was revised. This relates primarily to construction and agricultural machinery customers, which previously were allocated to Mobility & New Energy and are now included in industry applications.

The Slide 7 actually shows more detail on those numbers. As a result, sales development in the first 2 quarters of 2025 is only comparable to the respective quarter in the previous year to a limited extent and therefore, carefully take a look on the detailed numbers here.

In Americas, these relocations led to an increase in sales of 12.6% in Industry Applications. In Water Management, currency effects had a negative impact of 4.5% in total and despite a slight growth in volume, sales declined by 2.1% in the second quarter for Water Management. In MNE, sales decreased by 19.3% as a result of tariffs messing up some markets, negative currency translation effect and the already mentioned reallocation of sales.

Let's now move to EMEA. Restrained demand in combination with the reallocation of sales resulted in an increase of 9% in Industry Applications. In Water Management, we have also reallocated some sales, which led to an increase by 41.6%. In MNE, subdued markets and the mentioned reallocation of customers resulted in a decrease by 7.2%.

And now APAC, in Industry Applications, reallocations of sales from IA to Water Management as well as a weak market combined with unfavorable currency effects caused a sales decline by 23.6%. In Water Management, mainly the reallocation of sales, but also growth in volume, which was almost completely offset by negative currency effects, summed up to an increase of 10.2%, while MNE, low volume as well as a reallocation of sales contributions and unfavorable currency effects in addition, resulted in a sales reduction of 12.6%.

On the next slide, we will report on our sales by business unit. Let's start on the left-hand side with Industry Applications. Sales increased by 7.5% in Q2 of this year. The reallocation of businesses previously allocated to MNE, especially from construction and agricultural machinery and stationary energy storage on the one hand, had a positive impact, subdued market-related demand and negative currency effects; on the other hand, had a dampening effect.

In Water Management, sales development was almost stable at minus 0.4%. Unfavorable currency translation effects, predominantly from the U.S. dollar, more than offset increases in both price and volume. The reclassification of sales in EMEA and APAC, which previously belonged to the IA definition dampened the currency effect.

Mobility & New Energy sales were 11.8%, below the level of the same quarter of the previous year. This was mainly driven by uncertainties relating to the potential global impact of trade tariffs, U.S. trade tariffs to be precise, in the reclassification of sales from MNE to IA intensified the negative trend in addition to unfavorable currency effects.

Let me now hand over to Annette Stieve, who will give you more details on the financials in the second quarter.

Many thanks, Mark, and hello, everyone, and also a warm welcome from my side. Let's start with an overview on the development of our P&L. Material costs decreased disproportionately compared to the decrease in sales. At 43.2% in Q2, the material cost ratio was 50 bps below the figure for Q2 of the previous year. As a result of lower material costs, the gross margin -- the gross profit margin rose by 110 bps in Q2 '25.

Personnel costs in total fell in the second quarter, while the personnel cost ratio rose by 100 bps due to lower sales volumes and inefficiencies. The other expenses decreased in total and remained almost stable in relation to sales. Adjusted EBITDA and adjusted EBIT improved significantly in Q2 '25 compared to Q1 this year. Our Q2 adjusted EBIT margin achieved 8.1%. The H1 margin came in at 5.9%.

Let's have a look at our adjusted EBIT margin by region in the next slide. The adjusted Q2 EBIT margin in the Americas was 170 bps up against the prior year's development. This was supported by lower costs for regular freights and a beneficial product mix.

In EMEA, adjusted Q2 EBIT margin came to 0.5%, which represents a significant improvement over Q1. In general, EBIT margin in the EMEA region was negatively impacted by the temporary structural inflexibility in personnel costs in combination with lower sales. As a result, personnel costs could not be fully tailored to the revenue level in the first 2 quarters of '25. High one-off costs in Q1 added to this development.

Adjusted EBIT margin in APAC amounted to 6.3%, which also marks a significant improvement over Q1. The main reason for the decline year-over-year was likewise increased personnel costs due to existing inflexibilities in personnel structures in conjunction with lower sales.

At the next slide, we show our operational adjustments in the P&L. This year, they are expected to include around EUR 15 million from PPA effects. In addition, we assume around EUR 20 million associated transaction costs in connection with the sale of the Water Management business. On top, adjustments from one-offs for transformation costs up to EUR 30 million are to be expected this year. Mark Wilhelms will give you the detail on our transformation in a few minutes.

Let's have a look to our EPS on the next slide. Adjusted net income for Q2 amounted to EUR 10.6 million, which was almost at the same level as previous year. Adjusted earnings per share for Q2 were at EUR 0.33, which was also almost at the same level as previous year. So also in our EPS, you can see a significant improvement quarter-over-quarter.

Let's move over to the balance sheet figures. Our net debt slightly increased by 1.7% against end of '24. Due to the lower EBITDA, leverage was up to 2.5x adjusted EBITDA from 2.3x as of June last year. Total equity levels at EUR 648 million. The equity ratio decreased by 230 basis points to 47.9% as a result of foreign exchange translation effects, which had an impact about EUR 61 million.

On the next slide, we will discuss our net operating cash flow. Net operating cash flow decreased in 2Q compared to last year. This is primarily due to the lower EBITDA and the lower trade working capital effect. Please let me point out that net operating cash flow as well as free cash flow, both are solidly positive in Q1 and Q2 -- in Q1 and H1 -- sorry, in Q2 and H1 despite significant headwinds on the top line and additional one-off costs compared to last year.

With this, I hand over back to Mark Wilhelms.

Yes. Thanks a lot, Annette. Ladies and gentlemen, after a soft start into the year, the second quarter is looking a bit better, especially in terms of our adjusted EBIT margin. Therefore, we see no reason to revise the outlook for the full year published on the 7th of March of this year.

In view of the continuing volatile economic development, the Management Board does not expect business to develop and to pick up substantially in the further course of the year. However, we anticipate a revival of business in parts of our customer industries in the second half of the year, mainly in Water Management and Industry Applications.

NORMA Group focuses on improving its profitability. Our business activities are strategically aligned accordingly. In the remaining slides, I would like to give you an overview of our step-up progress before we will talk about our transformation programs.

Let's begin with a good example of our efficiency measures. Here, we talk about the production plant in Poland, where we implemented a semi-automatic flex line -- flex assembly line for cooling lines. Initially, 4 operators per shift were required in a manual production cell with more than 60% manual labor content. This means that the potential for automation has not yet been fully exploited. The production cells and tools were originally tailored to a specific product group. As a result, we had to cope with low flexibility and the high risk of delays for nonconforming, i.e., poor quality products.

Our colleagues in Poland found the solution in a flexible and semi-automatic assembly process that led to a substantially more efficient station layout. The work is now carried out as a one-piece flow, which results in better economics for the operator as well as higher productivity. Quick tool changes enable process flexibility, for example, when adapting to different customer requirements. In the end, the plant reduced the number of operators per cell from 4 to 1, a reduction of 75%.

Ladies and gentlemen, we are aware that current sales figures are not satisfying. We are, however, committed to improve them. For this reason, we would like to present 2 step-up projects from our growth initiatives in the sales area that we are particularly proud of. The first project is related to Industry Applications. Our colleagues on every continent have worked tirelessly to take a share of the data center mega trend. While NORMA Group already supplies data centers worldwide with various products, dedicated sales teams are working on further business opportunities.

Our latest product launch in Asia Pacific region was a stainless steel quad cable camp. The cable clamp is designed to secure up to 4 cables simultaneously. It offers outstanding mechanical stability, improved protection and efficient use of space in a highly demanding environment. Our new product allowed us to win an order from a major U.S. customer in Malaysia for data center cabling. In the U.S., our colleagues are working on solutions for the cooling systems of data centers. As you know, we are experts in fluid management, and therefore, the management of coolant is also one of our areas of expertise.

The U.S. team is working with its customers, DIXON and MFCP to explore opportunities with key OEMs in this segment. Overall, this success marks a great step forward in our industry application strategy as we are targeting data centers with our step-up initiatives since 2023. So stay tuned. There's more to come.

In the second project, there's a special highlight from the SBU Mobility & New Energy. At investor meetings, we are often asked how extensively we supply Chinese players in the market for e-mobility. In the past quarter, there have been some notable successes that I would like to share with you here in the call.

NORMA Group has received new orders from 12 e-mobility customers in China, including traditional and new OEMs as well as Tier 1 suppliers. These customers cover a wide variety of vehicles with various drive types, including light vehicles, smart cars, SUVs and robotaxi models. NORMA Group components are used in critical thermal management systems for electromobility, such as battery thermal management, coolant circuits, heat pump systems, just to mention a few. So the answer to your question is, yes, the NORMA technology is also used in local Chinese OEM products, and we are making inroads into these customers.

The projects presented today are intended to help us improve our revenues and profitability. Along with our efficiency and growth measures, we are working to ensure that the shift in our SBU sales mix from MNE, which is automotive essentially to IA improves the margin quality. A double-digit margin at group level is what we are targeting for in the midterm, as you all know.

Now ladies and gentlemen, as already announced during our Q1 call, we shared details on our global transformation. As a reminder, we want our group to adapt to a NewNORMA, which is characterized by an ever-changing market environment and the need for lean and efficient structures. Our target is crystal clear. We want to remain financially strong and increase our flexibility and thus be able to seize opportunities offered to us by the market. We want to invest in innovation and successfully transform our company towards an industrial powerhouse.

Our target vision is outlined at the next slide. The target that we are pursuing with all our measures is absolutely clear. NORMA Group is to become a focused supplier of connection technology for fluid -- for industrial and mobility customers or as we call it, an industrial powerhouse. We will differentiate us as an innovative, high-quality driven solution provider. The new setup will follow a lean organization under 2 sales segments, Industry Applications and Mobility & New Energy. As a result of the global transformation and once all measures are fully implemented, our group should return towards a double-digit adjusted margin. The entire transformation process is expected to be fully implemented until 2028.

Let's now deep dive into what this covers on the next slide. We've laid the foundation for a global transformation based on 3 major blocks of measures: lean organization. As a part of our measures, we will streamline the organization under the 2 sales segments, Industry Applications and Mobility & New Energy. By this, we understand an extremely efficient structure that is clearly geared towards customer needs and fast decision-making processes. In connection with the optimization of our global production network, any duplicate structure in administration will be eliminated and further efficiency gains achieved. Overall, this will speed up our process and significantly reduce overall administrative costs.

Second point on the list, OpEx, we have identified significant potential savings in other costs. These range from insurance to service contracts to rent payments. By adapting our business model with a clear focus on our synergetic core business, we can eliminate costs of several million euros per annum in operating expenses.

Third one is footprint. We will optimize our global manufacturing footprint over the coming years. As already mentioned in the last call, NORMA Group has expanded its manufacturing locations by several acquisitions over the past decade. This has led to a footprint which is rather fragmented and not streamlined according to the current market environment. We will thus optimize our footprint by integrating smaller production facilities into larger locations and thus achieving economics of scale.

The start of the global transformation program has been initiated. At the following slides, I will give you some further details. Lean organization, the first block on this slide. Within the measure block of lean organization, we are targeting global savings of up to EUR 30 million per year. As a reminder, we will achieve these savings also in connection with our optimization of the global production network. We will eliminate any duplicate structure in administration and are targeting for further efficiency gains.

We kindly ask for your understanding that we cannot comment on any potential headcount measures right now at this point as selective HR measures are subject to prior collective consultation with social partners where applicable.

OpEx in the middle of the slide, most of the OpEx savings have already been identified and the implementation of the first measures has been started. As mentioned, the identified potentials cover insurance contracts, service contracts as well as rent payments. In total, we are targeting annual savings in OpEx of about EUR 12 million from 2028 on. About 2/3 of the targeted savings are expected to be fully effected from the year 2027 on.

Footprint. Our key target is the optimization and the increase in efficiency in all regions. During the last call, we gave you an impression of our approach when we reported on our Wuxi plant relocation in China. Two further footprint measures have been initiated in the meantime. One, we will also move our site in the Changzhou city to our larger premises in Changzhou. This measure is expected to be finalized until the end of this year. Together with the already announced footprint measure in Wuxi, we will reduce the number of production facilities in China from 4 to 2. This will enable a streamlined Chinese administration as well as a better space utilization in the plants without losing any production capabilities in China.

Second, we will close our warehouse in Adelaide, Australia and combine it with a warehouse in Melbourne. This project is also expected to be finalized until the end of this year. These are just 2 further footprint optimization projects, which we can already announce. Details and progress of other intended measures will be announced depending on customer contracts and negotiation with social partners. All measures outlined here are tracked and regularly reported on by a dedicated project management office within NORMA. This ensures that we achieve our ambitious goals within the time frame that we set ourselves.

At the next slide, I will give you an overview of the estimated cost and benefits related to this global transformation. For the global transformation, we expect cumulative savings for the years 2025 to 2028 in the range of about EUR 82.5 million to EUR 91.5 million in comparison to the 2024 baseline. Already next year, meaning 2026, we expect a major part of the intended measures to be executed. We do expect cumulated onetime costs related to the global transformation in the range of EUR 54 million to EUR 61 million, the bulk of which will already be accrued in the current year.

All transformation-related implementation costs will be adjusted in our EBIT. As you can see at this slide, we do expect not only costs, but also benefits in the current year. To be more precise, some of the costs and benefits already accrued during the first half of 2025. As you can see in our H1 report, costs in the amount of EUR 2.9 million were booked. On the other hand, our adjusted EBIT margin increased quarter-over-quarter significantly despite the headwinds on the top line, a clear proof that we are embarking on the right path. All measures for the years 2025 and '26 have a high degree of maturity in terms of both costs and benefits. In light of the current economic environment and our ambitious targets, we will proceed with these measures as planned.

With a closer look on the expected benefits, you will see that a bulk of the measures will be implemented in 2026 and will show the full year saving benefits in first time in the year '27. In total, this means that we will have a payback on the measures for the year '25 and '26 already in 2027. Moreover, also from a cash perspective, we will be positive for these measures in the year '27.

On the other hand, we have consciously left some key decisions on further measures open for the period from '27 onwards. This is due to the dynamic market environment in which we do not have to necessarily make certain decisions today. This will have an impact on costs and benefits only on the medium term. Moreover, we want to leave as much freedom as possible for our new CEO, Mrs. Seeger, to shape the future and bring in her extensive know-how from transforming companies. Based on our current assumption, we have, therefore, listed indicative estimates for possible additional costs and benefits on the slide, but please note that these may change once our new CEO has been fully onboarded.

At the next slide, I will give you a brief summary on our path towards becoming an industrial powerhouse. The path is defined by 3 pillars as shown on this slide. I have already elaborated on the first pillar on the left-hand slide, our global transformation over the past couple of minutes. The target of which is clear, we want to drive our earnings per share by substantial savings and invest into our future revenue streams, especially in the industrial applications area.

The second pillar for our path is M&A., the middle block on this slide. There are 2 major projects under this pillar. The first one is the divestment of our global Water Management activities. All work streams are progressing according to our schedule, and we are confident to finalize the process around year-end. The second major project is to invest into selected IA targets. Our focus in this project is absolutely on the strategic fit. We have started a structural process to identify potential targets. Any potential M&A target must be supportive not only for our IA growth, but of course, also contribute to our margin targets. We are carefully reviewing any opportunities without any need to rush. Quality clearly takes priority over speed on this one.

The third pillar is our step-up program. Whilst the first 2 pillars have clearly defined time frame, step-up is meant to be a continuous process. It is about a change of mindset within our employee base in order to foster continuous progress in both efficiency and growth measures in our business units and the entire organization. All in all, these 3 pillars together play an important role in our way towards becoming an industrial powerhouse. We have clearly defined action plans and internal project management for all 3 areas. Thus, we are firmly convinced that these measures will enable us to achieve our ambitious goals.

Before coming to a summary of our transformation, let me please give you an overview of our capital allocation priorities on the next slide. We've frequently been asked about our capital allocation strategy over the last couple of months. Based on this, we have communicated our priorities after divestment of our Water Management activities, for example, during our AGM in May. The 3 priorities consist in a trifold measures as follows: deleverage. We want to significantly delever our company after the divestment of our Water Management activities. It is not only about paying back debt to borrowers. This step will also help us to lower the interest payments and thus support the EPS growth.

We are targeting our vision of an industrial powerhouse, a leverage of about 1.5x adjusted EBITDA is seen as appropriate for a steady state. But now what do we mean with steady state? For us, this means the time after successful transformation and after the integration of potential M&A targets. In the meantime, and depending on the transaction size, the leverage might differ. But once we've entered in the future into the steady state, we should have a leverage in the desired corridor.

Second point, value-creating M&A. As set out before, we are targeting value-enhancing investments with a clear focus on strategic fit. Again, quality takes priority over speed. Third block, important, shareholder returns. We want to give our shareholders a fair share in the proceeds from the water business sale, most likely through share buybacks and/or special dividends. The Executive Board and the Supervisory Board will discuss the details together after the sales process is successfully completed, and we know and understand the proceeds. Moreover, we stick to our long-term dividend policy and want to distribute about 30% to 35% of our adjusted annual group earnings.

Continuous investment. Only if we stay ahead of the curve from a technological and product point of view, we can convince our customers and thus generate attractive returns. We will, therefore, keep our annual CapEx target where it is with about 5% of revenue. Our focus is on product innovation and further automation as well as digitalization. This capital allocation enables us to optimally combine the core elements of successful business management for a listed company. We maintain and strengthen a solid financial foundation. We invest strategically in the future and thus the company's earnings potential. We allow our shareholders to participate appropriately in our success.

Ladies and gentlemen, what we have outlined today marks our path from a vision towards our target of becoming an industrial powerhouse. Once successfully implemented, the NewNORMA will be characterized by the following success factors. We will have a stronger market position in the industry application market, which offers a high growth potential and good margins. Our competitiveness in the field of mobility will be significantly enhanced by both product innovations as well as cost effectiveness.

Our lean administration will be focused on key tasks and faster decision-making processes. And our global production and distribution network will support our lean and cost-efficient approach while offering highest delivery, reliability and quality. All of the measures we have presented are building the base for our financials and sustainable attractiveness, not only for our shareholders, but also for all other stakeholders.

And with this, ladies and gentlemen, I would like to thank you very much for joining the call, and we are now looking forward to your questions.

[Operator Instructions] And the first question is from Marc-René Tonn, Warburg Research.

A very comprehensive introduction you gave to the transformation program. Now a couple of questions from my side would be regarding the cash out, I think you elaborated on that from the transformation program. Perhaps you could, from the total cost, give us some indication how much you would expect in terms of cash out and whether these will be more front-end loaded.

On the other side, looking on your profitability in the second quarter, I think you had a pretty strong profitability in the Americas segment in Q2. Was it more a product mix issue? Or was it -- did you even experience some benefits perhaps from tariffs in the competitive environment in this market?

And I think probably still pretty early, but when you talk about, let's say, the priorities or, let's say, the -- what you want to do, and I think very clear statement which you made with regard to deleveraging. But looking at the, let's say, fair share distribution to shareholders and, let's say, cash out envisage for M&A, are you prepared to already give some more split here or a more precise split, particularly as you, let's say, seem to be expecting your M&A activities to be mainly focused on 2026, which would be pretty quickly. So perhaps some statements there, whether you have already some targets in sight, which you are looking at.

Well, that's, I would say, a very good summary of questions. I propose, Mark, that you are starting and then I step in.

Kind of a mixture from forward-looking and past quarter questions, very hard to keep track of. Let's go through them in your sequence. I mean the cash out, we mentioned that in 2025, we will accrue. I mean, accrue means we accrue, there's no cash out. The accrual typically is for redundancy costs, handshakes and the like. The cash out for this about EUR 30 million will primarily happen '26, '27. Those numbers are typically in the middle of the program.

The other costs you see there on that slide towards the back end that will be true cash out in that very year like in '28. Therefore, key point is cash out numbers, '25 move those to '26 for the cash out. The rest, you might, given the preciseness of the numbers, take as they are because it about fits.

The next question related to the margin in Americas in the second quarter. We did some price changes to our water customers in the year that has helped in general, the U.S. business is heavily towards the water business, which is margin stronger. So that should help us. And also, it is a bit of catch-on effect from Q1 points that were booked in the first 3 months of the year.

Annette, do you want to add something to that?

Yes. So that is, on the one hand, I would say it's in particular, really the catch-up. We had a pretty weak Q1. We knew that we could start later with our -- due to weather patterns with our water business digging the projects in the earth. That's a typical spillover effect. On top, I think we did a great job, not only in water, but really also in every business group in order to, at the end, negotiate with our customers and to, at the end, bring over our tariff burdens, which are roughly around EUR 3.5 million, EUR 4 million, and we were able to, at the end, recharge nearly the biggest bulk of it, so 90% to our customers, which is really absolutely great achievement.

Is it going on like this? To be honest, I don't have a glass ball because finally, we don't know what the President of the United States is all doing with tariffs. It will always show a little hesitation because, first of all, he throws something out and then he is willing to negotiate. That makes things not really easier. But at the end, we are really happy that we had such an achievement to bring that over, and we will go on like this.

Another part of your question revolved around how to share the proceeds of the water business. The end of the day, as we don't know for sure where this will end up with, it is still very, very premature to make a statement here. As we've said, we want to deleverage the company. We want to do it in IA, in the industrial area, some acquisition, and then there will be, in my opinion, a nice chunk to be distributed. But putting precise numbers to it is simply too early as the negotiations for the sale of the water business are not yet finished. The process is still ongoing. Therefore, we have to wait in sending out clear signals.

I think that's the same, Mark. Marc, you asked for more details on these 3 pillars under fully with Mark Wilhelms. And also in terms of leverage, I think we showed a perspective where we should be once we did the transformation in between, that is the question then of the details. For sure, we will delever and bring our debt down first. That's the first step to start with. And then it comes step by step with the acquisition, the potential one and things like this. I hope that I got everything or if we remain with something.

Perfectly fine.

The next question is from Pal Skirta, Bankhaus Metzler.

It's Pal from Metzler. I have 2, if I may. The first one is a more technical one. Based on your full year guidance for adjustments of EUR 65 million. And if I'm doing the math correctly, it looks like there is still approximately EUR 53 million left to be booked this year in adjustments. Could you please provide some color on the phasing of the remaining adjustments? Specifically, how much should we expect to recognize in the current quarter and then in the fourth quarter?

And then I also have a follow-up regarding your industrial business, given that we had many moving parts this year, like the new tariff agreement between the U.S. and the European Union, the German federal government spending programs, the big beautiful bill in the U.S., which potentially can trigger a CapEx cycle, thanks to more generous depreciation schemes.

I was wondering if you could share with us what you are hearing from your customers? Do you expect the second half of the year to improve in the industrial field relative to the first half? And in particular, could the fourth quarter see a stronger momentum, stronger environment, especially as we now have more certainty around the tariff situation between Europe and the U.S?

Yes. Thank you, Pal, for your question. So maybe I start with a more technical one in terms of adjustments, what we see there. As already said, we cluster our expected adjustments this year also, again, so it seems to be our figure for the time being in 3 pillars. We have, on the one hand, the typical PPA effects, EUR 15 million, what NORMA has since ages. On the other hand, we have this EUR 20 million that mostly is connected to the water -- the sale of the water business. That is finally then also based on how much we get. And for sure, we have a very good, the best in the world, I would say, but also not a cheap investment bank with us, and they will then become -- get their proceeds what is dependent on the final price.

The EUR 30 million, to give more color on this one-off for the transformation costs, there I ask you really for understanding. We will come up later in the course of the year with more details. But for the time being, we are started to be in contact with our respective partners and committees. And therefore, we don't want to split that more for the time being. It's consisting out of on the one hand, OpEx and on the other hand, different other pillars, what we already mentioned.

Then your second question related to what we hear in the market -- from the market in terms of improvement for the second half of the year. As I indicated during the presentation, there is some positive outlook, but I think we all need to recognize the world over the last 3, 4 years got more complicated, much harder to read than ever in the past. NORMA stands ready to support the customer with deliveries. We are ready to go to ship. But the hose clamps and so on, the customers only buy and order when they need them. How those big build or investment programs of the government will ripple through our customer base and how visible that will be for us is pretty hard to say right now.

Finally, we are still in a very volatile environment. And it is really also the world is shaky over geopolitical things. There will be an important meeting later in the week for the world. So these are all things which are reflected there. It's hard at the end to estimate, yes.

The next question is from Nikita Papaccio, Deutsche Bank.

Lot of my questions were already answered. But I have 2 left. So the first one on your transformation program. You mentioned that there are cost savings for 2025 of EUR 4.5 million. How much did you realize already in H1? Or differently asked, what can we expect for H2? Is the majority -- so did you recognize any of the EUR 4.5 million in H1? And then the second question, I mean, we are well into Q3 already. So what can you see across regions and segments? Maybe you can outline some differences compared to H1?

Well, thank you, Nikita. I will start with the first one. And after that, I give over to Mark again. Well, I would say roughly half of it, 50% we already realized in H1. And the rest we expect for H2. That is a pretty concrete answer.

So Mark, now it's with you.

Yes. Thanks. You asked for some details on Q2. You know we are not supposed to get too much into the details of the current year -- of the current quarter. But nevertheless, the water business is doing pretty nicely. The overall automotive business, given the summer months is when most customers are on vacation will be kind of softer overall, for the rest of the year, we remain cautiously optimistic. And as Annette Stieve said, there are many things happening that may cause everybody of us to change his course and this view as a consumer. There are many reasons for consumers to be very careful with their spending.

Nikita, I hope this answers your question.

Yes.

And the next question is from Yasmin Steilen, Berenberg.

I have 3, and we'll take them one by one, please. So the first one, you highlighted the order win with 12 e-mobility customers in China, including traditional and new OEMs. Could you confirm that every single contract is in accordance with your double-digit profitability target for Mobility & New Energy? And are there any price reductions reflected in this contract? That's my first question.

Yes. Those contracts are in our margin target. So that should actually help us on the path towards 10% EBIT margin. Keep in mind, not all those orders will be shipped in the next couple of weeks. The Chinese are fast, but it's not something you will see in the Q3 numbers.

Anyhow, Yasmin, you can always rely on this we are doing since I would say, more than 2 years. We are not accepting any more any kind of calculated EBIT margins less than double digit. The only exception might be, so we always calculate like this and take it. There can be an exception when then a program turns out really under the estimate of volumes. This we cannot bake in. But at the end, since 2 years, we are doing that already, and we will go on like this.

And price reduction, well, that is a normal habit in automotive. Not all of them, but some of them have set in there the usual 1%, 2% coming. But this depends, as Annette said, also on the volumes being ordered by the customer.

Finally, we are not -- thank goodness, not back on the track as in front of COVID. So we are really, really greedy with price reductions, and we demand normally more. So -- and then now when we look to tariff and all these things, we even demand more. So therefore, we are well underway in our price achievements. And therefore, the answer is really limited.

Perfect. And within the new contract wins, what is the customer split between the Western European, U.S. and Asian OEMs approximately? So assuming the ramp-up, so basically in 12 months or 18 months?

That's Asian customers, mostly Chinese customers.

Okay. No. But when we then look in kind of 12 to 15 -- 16, 18 months from now, what would be the customer split for NORMA as a group between the Western European, U.S. and Asian OEMs approximately?

Give me the chance that we answer that to you next time a bit more, because we really have to look inside. And I'm just hesitating. It is most -- it's Asia, let's keep it like this. And it is mostly China, maybe also India, this time for the time being, not sure.

Okay. And then finally, just more for housekeeping. Do we have more color on the expected disposal gain tax rate you have to pay after the planned Water Management sale? So is it still the wide range or anything more narrow...

There nothing has changed. Unfortunately, the U.S. government is working a lot of things, not so much in changing their tax rules. So that depends fully on our -- first of all, on the price we get, but there has nothing changed. And then it's a question if we can finally also maybe give some favors to the potential buyer and that we can price that in. But first of all, our tax payment towards the government directly will remain in percentage the same.

So basically 22% to 25%.

Yes, roughly 21%, 22%, so roughly like that.

[Operator Instructions] And the next question is from Peter Rothenaicher, Baader Bank.

In Americas and Asia, you definitely had a relatively positive margin development in the second quarter. On the other hand, EMEA is definitely very disappointing with this 0.5% EBIT margin in the second quarter. So you mentioned some inflexibility. But on the other hand, the step-up program in EMEA is working for many years now. Can you please comment when do you expect here a significant improvement? So you mentioned some transformation measures regarding China closure of some sites, or warehouse in Australia. But what is happening in Europe? And how fast can you overcome this inflexibility?

Yes. Unfortunately, the answer is again step by step. So what we are facing in Europe. In Europe, I think we made great progress. That's true. But at the end, we suffer much more in Europe also by dampening sales. So this -- I would say, we have not only the things out of U.S. tariffs, also the Ukraine-Russian conflict, everything like this is ending up in a slow demand. So this is what we see here. Also, I would say, for Europe, the story e-mobility or not, the different legislation, how will the European community behave. That doesn't make it easier. So therefore, we see there really a slowdown demand. That is, on the one hand, market environment, hesitation, a lot of insecurities.

On the other hand, we mentioned in our Q1 that we had and that is done. But for sure, we have, at the end, this exchange of our ERP system, which is done and over, but there we suffered in Maintal from higher special freight that took longer that we were running again according to expectation than we expected, but it's done. Anyhow, there are still things to do. We have too much personnel on board in order to safeguard these things. And step-by-step, we will phase that out again. But that was, on the one hand, a margin eater in particular, in the Q1, we had a poor effect. Then we -- other one-offs, well, we have now -- this year, we have 2 CEOs on board. And for sure, we have to pay for some time...

Both on payroll.

On the payroll and have to pay for both. So therefore, that is also a significant impact what took place in the EMEA region finally.

But would you expect then quarter-by-quarter some improvement here in profitability in EMEA?

For sure, we expect day by day an improvement and track it like this, but it will again go step by step, yes.

Then a technical question. If I look at the regional segment split in the holding and consolidation line, you had seen a positive result in the second quarter, which is completely unusual, I would say. What is the background for that?

Yes. To be honest, Peter, this answer I will give you afterwards. I have to look it up. I'm not really sure where you are, but we can give you the really detailed technical answer. We will provide you right after.

As there are no further questions from the audience...

If I shortly can ask you. So I'm seeing you when I'm slipping quickly my things, EUR 129,000 in the consolidation. Are you meaning this one?

Just give me a second. I have to open up his line again. Just one moment, please.

Okay. We check it after. Thank you. So it should not be significant. This is what I was willing to say, but we do that after. Sorry for interrupting you.

No problem. The line is open for Mr. Rothenaicher.

Okay. Typically, you have here a negative adjusted EBIT in holding consolidation of, let's say, EUR 2 million or EUR 3 million. In the second quarter, it was positive EUR 0.2 million. But you can...

So that's how it. So give me a chance to give -- to just go into that. But it was last year. What I can see here already the same impact. So that seems to be an extraordinary vice versa business case, but we showed it last year the same. We will come back to you with a concrete answer.

Okay. And now as we have no further questions, I would like to hand the floor back over to Mark Wilhelms for closing remarks.

Yes. Thanks a lot for joining our call. Thanks for the active preparation. Hope to see you all around for the next call when we will report further news around the transformation strategy as well as hopefully on the water business. Again, goodbye.

Thank you.