TAKKT AG Aktie

Welcome to the Q1 earnings call of TAKKT AG. I would like to welcome the company's CEO, Andreas Weishaar; and CFO, Timo Krutoff, who will guide us through the presentation in a moment, followed by a Q&A session via audio line.

And with that, I hand over to you, Mr. Weishaar.

Thank you, and welcome to our earnings call for quarter 1. I'm hosting the call together with our CFO, Timo Krutoff, who will present our financials in detail in a few minutes. To start the call, let me briefly talk about the current macro picture and key financials as well as give you a short strategy update.

As we entered 2026, we already assumed continuation of a highly volatile and uncertain economic environment, and this has broadly materialized. What we did not anticipate was the outbreak of the Iran conflict and its broader implications. At the same time, it is important to emphasize that our performance is not only driven by the external environment. Over the past quarters, we have been consistently addressing internal challenges and improving our operational setup, and we're seeing early signs of progress in several areas.

Looking at Europe, the macro backdrop remains weak, particularly in Germany with modest GDP growth and continued cautious investment behavior across industrial customer groups. Manufacturing PMIs have shown some recent improvement, but given the usual lag of 3 to 6 months, this is not yet reflected in our demand. At the same time, sentiment indicators such as the ZEW indicator -- for the German speakers among us, it's Zentrum fur Europaische Wirtschaftsforschung. The economic sentiment in Germany overall has weakened significantly, highlighting the fragile environment.

With the conflict, the trajectory of a manufacturing recovery has become more uncertain again given the geopolitical escalation and its potential impact on energy prices, inflation and export-oriented industries. In the U.S., GDP growth remains higher than in Europe, but the environment is also far from stable. For Foodservices, the Restaurant Performance Index is slightly above the expansion threshold, indicating some stabilization, but without a strong momentum so far.

In Office Furniture, demand continues to recover selectively by segment. But overall, investment decisions remain cautious and volatile.

To summarize, the key takeaway for quarter 1 is that the economic environment evolved largely in line with our expectations, except for the geopolitical escalation. The Iran conflict did not materially affect quarter 1 performance, but it clearly increases uncertainty for the macroeconomic framework going forward.

Let me now walk you through our financial performance in the first quarter. As we outlined with our guidance at the end of March, Q1 was expected to be a weak quarter, and that is what the numbers reflect. Starting with sales. Group sales came in at EUR 225.7 million, with organic growth at minus 6.7%, which is consistent with the run rate we have seen in quarter 4 and throughout last year.

What we see for the first time in quarter 1 is the impact from the discontinuation of the Foodservices bid contract business. This structurally reduces organic growth by slightly more than 1 percentage point. On a like-for-like basis, excluding this effect, we therefore see a slight stabilization of the underlying development compared to quarter 4 last year.

Turning to profitability. Adjusted EBITDA amounted to EUR 5.5 million, translating into an adjusted EBITDA margin of 2.4%, mainly reflecting the lower sales level. Importantly, we were able to hold the gross profit margin stable at Industrial & Packaging and at Office Furniture & Displays.

At group level, the gross margin of 39.5% is slightly below prior year, primarily due to Foodservices. At the same time, lower marketing and personnel costs helped to partially offset the top line impact, even though they cannot fully compensate for volume effects in a weak market environment.

In parallel, we're continuing to invest into the business and our turnaround activities, particularly in areas such as commercial initiatives, system and process improvements and the continued implementation of our new operating model and leaner cost structures. This will help strengthen our operational foundation and support the return to profitable growth.

Finally, on cash generation. Free cash flow was minus EUR 9.8 million, in line with our expectations and following the EBITDA development. Net working capital development was a headwind in quarter 1, mainly due to a buildup in trade receivables compared to the low year-end position.

Let's now continue with a quick look at our TAKKT Forward strategy and our progress against the priorities we've set ourselves. I will keep this deliberately short as we -- the content is largely consistent with what we discussed in more detail at our analyst conference. Let me, therefore, give you a brief update on the progress we're making across the 3 pillars of TAKKT Forward with a clear focus on execution.

Starting with Focus. Our strategy here is to further sharpen the portfolio around our core businesses, strengthen the independence and accountability of the divisions and consistently focus on activities that contribute to profitable growth.

This also means that we are actively reviewing and exiting smaller or structurally less profitable business areas. This included measures such as the sale of Mydisplays as well as the integration of Post-Up Stand into Displays2Go and the discontinuation of the Foodservices bid contract business. We will continue this process in 2026, further streamlining the portfolio and focusing our resources on those areas where we see the strongest long-term potential.

In parallel, we have strengthened divisional leadership in two important areas. At Foodservices, Keri Llewellyn has taken over as Division President. Given the challenging situation in Foodservice, this is a very important step. With Keri's deep industry experience and strong commercial track record, we clearly expect a noticeable improvement in commercial execution and performance over time, even though the environment will continue to be demanding.

At Industrial & Packaging, Helmar Hipp has assumed the role of Division President on an interim basis. Helmar brings extensive commercial, omnichannel and e-commerce experience with a strong track record in driving profitable growth, simplifying assortments and strengthening brand positioning. In previous leadership roles, he successfully combined customer focus with disciplined execution, exactly the capabilities we need to further accelerate in I&P.

Over the past months, I had been managing I&P directly alongside my group responsibilities. During that time, I had the opportunity to work very closely with the team, gain a deep understanding of the business and jointly define key strategic priorities and actions. With Helmar now in charge of the division, this provides strong continuity and execution, while allowing me to focus on the overall portfolio development and strategic steering of the group, while Helmar and the I&P team drive the next phase of commercial progress in our core business.

On growth, our priorities remain very consistent with what we have outlined over the past quarters. We're focusing very clearly on driving new customer wins and expanding business with existing accounts through targeted commercial initiatives across all divisions. In Industrial & Packaging, for example, we have recently won a new large enterprise customer by offering integrated service solutions, ensuring compliance with mandatory safety inspections across office and production environments, combined with full digital integration into customer procurement systems. These solutions address critical customer needs, generate initial order intake and create recurring sales potential.

In Foodservices, we are marking tangible progress in building our business with emerging restaurant chains. We have developed a solid pipeline and recently onboarded another customer with an expected contract volume of around $3 million annually. In addition, we continue to strengthen the positioning of our core brands in key markets. Overall, these measures are helping us to gradually rebuild commercial momentum, even in a cautious demand environment.

And finally, performance. Here, we continue to systematically advance our operating model. Our priorities are the further elevation of customer experience across the entire omnichannel while increasing efficiency through standardization, automation and relocation of transactional processes. As part of this, we progress the ongoing rollout of the TAKKT Competence Center and selective outsourcings where scale and efficiency benefits are clear.

In addition, we are deepening initiatives in procurement, freight and warehousing, building on the progress already made in 2025. This includes supplier consolidation, best cost country sourcing and footprint optimizations.

We're focused on quality and sustainability and sustainable structural improvements, ensuring that the measures we implement translate into lasting benefits. We expect the positive impact to build step by step and become increasingly visible over the course of the second half of the year. In parallel, we continue to make progress on our IT and systems road map, which is a key enabler for automation, efficiency and future growth.

With that, over to Timo.

Thank you, Andreas. Let me now take you through the financials for the first quarter. Starting with sales for the group in quarter 1. Group sales came in at EUR 225.7 million, down 10.3% year-on-year. The development was driven by an organic decline of 6.7% and a substantial negative currency effect, mainly from the weaker U.S. dollar.

The organic development is fully consistent with the run rate we have seen in recent quarters. And as mentioned earlier, we now see, for the first time, the impact from the discontinuation of the Foodservices bid contract business, which alone weighs on organic growth by slightly more than 1 percentage point. So as Andreas mentioned, we achieved a slight stabilization in quarter 1 sales if we look at it like-for-like.

Looking at earnings development, the largest negative driver is the lower sales level, which reduced gross profit by around EUR 10 million year-on-year. In addition, we saw slightly negative effects from gross profit margin, driven by Foodservices, while margins at Industrial & Packaging and Office Furniture & Displays remained stable. This was partially offset on the cost side. Personnel costs were lower, reflecting rightsizing and structural measures. Contrary to the rightsizing impact, we incurred higher bonus costs compared to the prior year. Marketing and other costs were also reduced, supported by FX, more disciplined spend and efficiency gains.

At the same time, we continue to see increased OpEx in line with our activities to improve processes and systems. Onetime effects came in at a very similar level to prior year at just over EUR 1 million and therefore, did not materially change the year-on-year comparison. As a result, EBITDA for Q1 2026 came in at EUR 4.4 million, corresponding to an adjusted EBITDA margin of 2.4%.

Let me now turn to Industrial & Packaging. Sales in the division declined by 5.6% year-on-year with organic growth at minus 5.8%. This means the run rate remains very similar to 2025 in an environment where customer behavior in Europe continues to be hesitant, driven by economic uncertainty. The gross profit margin remained stable compared to the prior year, reflecting disciplined pricing.

On costs, expenses were largely in line with last year. This reflects two opposing effects. On the one hand, efficiency gains and a leaner cost base, and on the other hand, continued investment into commercial initiatives as well as systems and process upgrades. Onetime costs were very similar to the prior year at around EUR 0.5 million. EBITDA was at EUR 10 million for the division. Adjusted EBITDA margin came in at 7.8%, compared to 9.7% in the prior year, with the decline driven by the lower top line.

Let me now move on to Office Furniture & Displays. Sales in the division declined by 12% year-on-year. This headline number is significantly impacted by currency effects with the weaker U.S. dollar weighing heavily on reported sales. To provide a clear picture of the underlying development, we are, therefore, also showing the top line development in U.S. dollars. On this basis, sales were nearly stable in quarter 1 with 2.1% decrease, representing a clear improvement compared to Q4. Growth with business clients at National Business Furniture helped to compensate for weaker demand in other customer segments. Displays2Go came in slightly below prior year after recording positive growth in Q4.

On profitability, gross profit margin was slightly improved year-on-year. Cost positions were very similar to prior year when adjusted for currency effects. Onetime costs were significantly lower than EUR 1 million, well below the prior year level. As a result, adjusted EBITDA margin came in at 2.1%, compared to 2.6% last year. The decline is mainly explained by the lower reported sales level, while the underlying profitability of the business remains stable.

Sales in Foodservices declined by 21.5% year-on-year. This top line development was also significantly impacted by currency effects, but also by the discontinuation of our bid contract business as well as challenges in some of our sales channels. Organic sales were down by 13.9%. Around 6 percentage points of this decline are attributable to the discontinuation of the bid contract business. This is fully intentional and in line with our strategic focus on margin quality and volatility reduction. Beyond that, performance continues to be impacted by weak call center [indiscernible] with demand remaining subdued in the current environment.

Looking at profitability, the gross profit margin came in significantly below prior year. Despite substantial cost savings, particularly in personnel expenses, the lower gross profit could not be fully compensated. As a result, adjusted EBITDA margin declined to minus 4.9%, compared to the positive 1% in the prior year.

To summarize, Foodservices remains the most challenging part of the portfolio. The deliberate exit from low-quality project business weighs on the top line in the short term, while market conditions continue to be difficult. That said, the cost base has been adjusted. The strategic setup is now clearly focused on improving underlying performance going forward.

Let me now briefly cover cash flow generation in the first quarter. Free cash flow came in at minus EUR 9.8 million, compared to minus EUR 5 million in quarter 1 last year. This development was expected and broadly follows the EBITDA trend. Starting with cash flow before changes in net working capital, this line was lower year-on-year, mainly reflecting the weaker EBITDA performance.

Net working capital was a cash out in Q1, driven primarily by an increase in trade receivables. This is partially a seasonal effect and reflects the comparison with a very low year-end level. On capital expenditure, we saw slightly lower investments compared to prior year. At the same time, we benefited from proceeds from the disposal of noncurrent assets related to a real estate sale in the Netherlands, which provided a positive cash contribution. Lease repayments were broadly in line with prior year. The slight increase you see here is due to a one-off where prematurely we terminated the lease of an office building here in Germany.

Looking at our balance sheet, not much has changed here compared to the end of 2025. We can keep it short. Net financial liabilities increased slightly to EUR 138 million compared to year-end. This was mainly driven by the negative free cash flow in quarter 1, which, as discussed, was expected and seasonal in nature. Our equity ratio remained virtually unchanged at around 50%, underlining the continued solid capital structure of the group.

And with that, back to Andreas.

Thank you, Timo. Let me now come to the market environment and our priorities for 2026. Compared to our last call at the end of March, our overall market expectations and strategic priorities remain largely unchanged. Since early March, the Iran conflict has added a new geopolitical risk factor. We will discuss the potential implications for our guidance and risk assessment on the next slide, but it is already visible that this development has materially impacted macro expectations.

As a result, GDP growth forecasts for our core markets have been revised downward notably, reflecting higher uncertainty, inflation concerns and pressure on investment sentiment. Looking at PMIs, the signals are mixed. Manufacturing PMIs have remained relatively stable, which is important for our Industrial & Packaging activities. In contrast, service PMIs in Germany and the Eurozone have dropped, indicating weakening momentum in more consumer and service-oriented parts of the economy and declining business confidence.

Against this backdrop, our priorities remain clear and consistent. On the commercial side, we continue to push our omnichannel sales model, scaling initiatives that work well and roll out targeted go-to-market actions across divisions, regions and channels. The focus is on accelerating commercial recovery where we see traction while staying close to customer needs.

Operationally, we continue to leverage our new operating model. This means simplifying, automating and relocating processes, accelerating system improvements and further strengthening efficiency across the group. In parallel, we are continuing to work on rightsizing, procurement improvements and freight and warehouse optimizations, all aimed at structurally improving profitability.

Let me now walk you through our guidance for 2026. starting with the top line. As discussed before, we expect a gradual improvement in organic sales development as 2026 progresses. If you look at quarter 1 and adjusted for the discontinuation of the Foodservices bid contract business, organic development in quarter 1 showed a slight improvement compared to quarter 4. That is the trend we want to build on as our commercial measures gain traction.

At the same time, uncertainty remains elevated and visibility on demand across customer segments limited. Therefore, our top line guidance continues to reflect a broad range of outcomes with organic sales development expected to be between minus 7% and plus 3% for the full year.

Turning to profitability. We will continue executing the structural improvements initiated last year. Onetime costs related to these measures are expected to be slightly below the prior year level. Based on our volume planning for the course of the year and with measures further contributing, we target an adjusted EBITDA margin in a range of 2% to 5% for 2026, depending on our top line performance.

On cash, our focus remains on disciplined and structural improvement. We will continue to release net working capital while, at the same time, evaluating additional options to further strengthen cash generation. CapEx will be higher than last year, driven by targeted investments into processes and systems that support our IT road map. Based on this, we expect positive free cash flow for the year as a whole.

And with that, we're happy to take your questions. Over to the operator for Q&A.

[Operator Instructions] I already see that we have raised hands by Mr. Bruns. You may unmute yourself now. Mr. Bruns, can you hear us? I have sent you a request to unmute yourself. Now we can hear you.

I have a question on price increases for packaging materials. On the one hand side, they might, of course, burden your gross margins somehow. On the other hand, you are also a player in packaging. So could it be also -- could it help you raising prices for packaging products?

I can take that, I think. In general, I think, yes, of course, we are now being hit by price increases on the packaging side. And, I think, it's fairly normal in the packaging business that a lot of the supply agreements have an index associated with it. So whenever the raw material prices go up, unfortunately, we get higher prices. When they go down again, the prices lower. That's -- I wouldn't say it's a competitive advantage in either way because most of the big players have these kind of rules.

Having said that, of course, there is a -- let's see how the whole topic develops. It's always a question how much do you still have on stock or not? Do you need to do it right away? We're in tight negotiations with some of our suppliers that looking at cost breakdowns, wherever we don't have an index-based contract -- so I would say, yes, it is a topic. It's not huge so far. And yes, we'll have to look at what we do on the pricing side here. But it's the main part where we see a price increase hitting us in the whole of I&P.

And maybe can I add another question? It was not -- of course, we knew that the start of the year would be difficult. And so it's -- I would say the quarter is as expected, I would say. But you would expect an improvement for the year -- for the quarters to come. And therefore, it would be interesting how was the start in April and the start into Q2?

So thank you for the question, Christian. You're right. We saw quarter 1 broadly in line with expectations as we outlined in the prepared remarks, right? What we are seeing in April and as far as longer-term [indiscernible] order books are looking, what we're seeing in April turns out to be broadly equally in line with our expectations following the trend we've seen in quarter 1.

Maybe we should add -- let me add one additional comment to that. If I just look at quarter 1, I think we saw an improvement month-on-month. We had a very weak January. February was better. March was even better. So if we start -- so therefore, already within the quarter, I would say, it's moving in the right direction.

Thank you so much for your question, Mr. Bruns. Do we have any more questions from you? Because I cannot see any more raised hands at this moment. [Operator Instructions] but I think there are no more questions so far. And I guess, with no further questions, we come to the end of today's earnings call.

Thank you very much for your interest in TAKKT AG. A big thank you also to you, Mr. Weishaar and Mr. Krutoff, for your presentation and the time you took. Should any further questions appear at a later time, please feel free to contact Investor Relations. And I wish you all a good remaining day.

And I'm handing over to you, Mr. Weishaar, once again for your closing remarks.

Thank you, everyone, for your participation today. We will keep you updated, and we're looking forward to talk to you on the road or at upcoming conferences. We will publish our quarter results on July 30. Have a great day. Thank you.

Thank you. Bye.

Ladies and gentlemen, welcome to the analyst conference call 2026 of TAKKT AG. The company's CEO, Andreas Weishaar; and CFO, Timo Krutoff, will guide you through the presentation in a moment, followed by a Q&A session via audio line. And with that, I hand over to you, Mr. Weishaar.

Thank you very much. Welcome to our analyst conference. I'm hosting the call together with our CFO, Timo Krutoff. We've already published and presented detailed quarter 4 results at the end of February. Today, we will focus on what's ahead. I will start with a high-level overview of the last 2 years to look at where we stand. Timo will then talk about our 2026 guidance before I discuss our strategic progress and priorities. 2025 was a year characterized by a weak market environment and high volatility. Across all major regions and customer segments, we continue to feel the effects of uncertainty, contracting demand and hesitant investment behavior. Despite this backdrop, we made significant underlying progress in strengthening the company and positioning TAKKT for more resilient and scalable future. During the second half of 2024 and the first half of 2025, we addressed and resolved a number of internal challenges.

We have, among other things, talked about the phase-out and integration of the ratioform brand, the ERP migration at FoodServices and the change in brand positioning in detail in prior calls. We brought back brands and improved positioning in the market while also fixing systems and resolving additional challenges. This helped us to achieve stabilization of the top line development in 2025, but it was not enough to return to positive growth in an overall contracting market. It's now on us to continue and to win back the trust of our customers step by step. We are now, in addition, also focusing on further structural improvements, the development and implementation of our operating model, improving core processes and upgrading our technology stack. While the external environment is difficult, we choose to invest time and resources into strengthening the foundation of this business. We upgraded workflows, enhanced systems and increased the scalability of our core processes. These improvements are not always immediately visible in short-term financials, but they are crucial levers for higher performance and profitability.

Another cornerstone of our progress is to strengthen emphasis on customer proximity. In a constantly evolving market, it becomes even more important to stay close to customer needs and to respond with tailored solutions. Across all divisions, we shifted decision-making closer to our brands and local organizations, enabling teams to react faster, implement commercial measures quicker and address the specific needs of their markets better. This divisional and regional ownership is a key part of our go-to-market approach going forward. In parallel, we continue to prioritize strategic investments in the business. This includes investments into people, technology, systems and our commercial capabilities, all of which are critical for enabling future growth. These investments demonstrate our long-term commitment to enhancing competitiveness, strengthening value-add for our customers and building a more robust organization.

Finally, we have established a leaner cost base supporting earnings and profitability. The efficiency measures we initiated and implemented, from process optimization to rightsizing and procurement improvements, will increasingly contribute to our results in 2026 and beyond. These actions increase our resilience, improve overall margin quality and ensure that we are structurally prepared throughout the economic cycle and very well positioned once market conditions improve. So while the headline financial numbers of 2025 reflect the challenges, we've made decisive progress in strengthening TAKKT, sharpening our commercial focus and improving the performance of our operating model. This gives us confidence for the path ahead. And with that, over to you, Timo.

Thank you, Andreas, and a warm welcome also to all of you from my side. Let's briefly recap the full year financials for 2025 before looking into the year ahead. Starting with the top line. Sales came in at EUR 964 million (sic) [ 964.3 million ], reflecting an organic decline of 6.6% in what remained a very difficult market environment. Demand was subdued across all major divisions, with continued weaknesses in Europe and muted activity in several U.S. customer segments.

Turning to profitability. EBITDA for the year was EUR 19.8 million, and the adjusted EBITDA margin came in at 3.8%. The margin was primarily impacted by the lower top line and by a reduced gross profit margin. Finally, on cash generation, we delivered a positive free cash flow of EUR 10.3 million, driven by improved cash generation for the second half of the year. Before we talk about our guidance, let me briefly comment on the environment and our focus for 2026. The external backdrop remains volatile. We continue to see economic uncertainty, ongoing trade-related risks and persistent geopolitical tension. In recent weeks, the situation in the Middle East, especially the escalating conflict involving Iran, has added another layer of uncertainty. In our forecast, we assume GDP growth rates in our markets at a similar level to last year, with Germany hopefully seeing slightly higher growth. We will need to see how this develops in the coming months given these risks.

The picture for manufacturing PMI is similar. We've seen a positive trend over recent months and values were above the 50% threshold when we formulated our guidance. On the commercial side, we are pushing ahead with our growth initiatives across our omnichannel model, scaling what worked well for us last year and implementing additional measures where we see opportunities. We are focusing on our core customer groups, strengthening our value-add offering and accelerating commercial performance with tailored go-to-market approaches across channels and divisions. On the operational side, we continue to leverage our new operating model, simplifying, automating, and relocating processes to capture scale benefits and improve structural efficiency. Andreas will go into the specific commercial and operational actions in a moment.

Let me walk you through our 2026 financial guidance, starting with the top line. On sales, the discontinuation of the bid contract business in the U.S. will reduce organic growth by around 1 percentage point. After a modest start into the year, we expect to return to positive organic growth over the course of the year as our commercial measures gain traction. Organic sales development for the full year is expected to come in between minus 7% and plus 3%.

Turning to profitability. We will continue executing the structural improvements initiated last year. Onetime costs will likely be slightly lower than last year. Overall, we are targeting an adjusted EBITDA margin between 2% and 5%. Looking at cash generation, we will continue to release net working capital while evaluating additional options to further strengthen cash generation. We expect higher CapEx driven by investments in processes and systems that support our IT road map. Based on this, we expect a positive free cash flow for the year. Putting our full year guidance into context, we expect Q1 to be slow with sales, profitability and free cash flow coming in below prior year.

Our top line profitability and free cash flow are then expected to improve as the year progresses with a level of improvement depending on the impact of growth and performance measures as well as the overall market environment. At the same time, we assume that the economic impact related to the Iran conflict remains temporary and limited. While we have hardly any operational activities in the region, we could still be impacted by price increases for products and freight as well as by changes in GDP growth, inflation and customers' willingness to invest. And with that, over to Andreas for an overview of our TAKKT Forward strategy.

Thank you, Timo. Let me now give you an overview of where we stand with our TAKKT Forward strategy. Our strategy continues to be built around 3 core pillars: focus, growth and performance. Under focus, we're developing the TAKKT portfolio around a strong core in Industrial & Packaging. We are aligning our brands and streamlining our operating structures to serve customers with clear positioning, broader category relevance and consistent value propositions across markets. In 2025, we also improved our D2G business and will continue to leverage value creation and development opportunities for D2G.

On the growth side, our aim is to fully leverage value creation opportunities and unlock potential by expanding business with our customer base. We continue to enhance our omnichannel experience, broaden and refine our assortments and expand our service offering. Sustainability remains an important differentiator in this context as customers increasingly expect transparency and responsible choices. And finally, performance. Here, we are driving earnings and cash improvements by upgrading processes and systems and by operating more efficiently throughout the company. The new operating model, including the competence center and the increased use of technology and automation are all essential elements of this. These measures we implemented in 2025 allowed us to realize run rate savings of EUR 15 million last year, and we will continue to build on that in 2026.

Let me briefly touch on our midterm financial targets. Our overall direction and target setting has not changed, but the time line to achieve these targets has become more challenging. Given the ongoing volatility in our key markets, we now expect full target realization to be delayed by 1 to 2 years. The environment remains too inconsistent to assume a faster normalization. In terms of the individual metrics, organic sales growth, our ambition remains to grow above the market over the cycle. Market growth should be in line with GDP development. On profitability, we continue to aim for a significantly higher adjusted EBITDA margin over the midterm. The pace at which we can lift margins will depend not only on our internal execution, but also on a recovery in volumes.

This is why we're now formulating our margin ambition more flexibly. The overall goalpost remains unchanged. However, it takes the economic environment into account relative to where we are in the economic cycle. We confirm our target of a 10% margin in an economic environment with average growth. If GDP development is slower and operational leverage more limited, we target 8% margin. And in a more supportive economic environment, we remain confident that we can exceed the 10% profitability level. And finally, on cash generation, our target remains an average conversion of 50% to 60%. We remain committed to resuming substantial dividend payments as soon as earnings and free cash flow generation provides a sustainable basis for payouts. To summarize, the strategic direction remains intact and the measures we're implementing are focused on exactly these levers. Considering the current environment, we believe it is more realistic to assume a slower ramp-up before we reach the full midterm ambition.

Let's continue with our growth measures and an update for Industrial & Packaging. While we've made progress with our initiatives, the overall top line environment remains demanding and the recovery is slower than initially expected. Our ambition for the division is clear: to strengthen the business as a leading distributor for indirect MRO spend in Europe with a more focused commercial approach and a clearer product and brand offering. To move towards this ambition, we made progress with several measures during 2025. We focused on winning tenders with larger customers in our markets. One of the more recent wins was the result of a coordinated cross-functional effort with our key account management setup, where teams from product, fulfillment and sustainability work closely together to present a compelling integrated offer. With this approach, we were able to differentiate ourselves and to secure a multiyear contract with sales potential of up to EUR 5 million.

At the same time, we broadened and upgraded the product range. We added new items while removing approximately 20,000 lower-relevance SKUs as part of our 80/20 initiative. With these measures, we are broadening our assortment range while at the same time focusing on relevant products and reducing complexity from offering too many alternative options. We're making it easier for customers to navigate and are lowering supply chain procurement costs. We've increased our launch productivity by a factor of more than 3 compared to last year and generated EUR 12 million in additional sales with these products. Third, we worked on increasing brand visibility by strengthening the presence of regional and category brands. This includes the reintroduction of Vink Lisse for the Netherlands and Frankel for France where these brands have a long and successful history.

For our packaging activities, we have reactivated the ratioform brand and are continuing to strengthen our dedicated sales team and cross-functional responsibilities for this category within the I&P organization. These steps have contributed to stabilizing commercial performance in an environment that was challenging for some of our core customer groups, for example, automotive. Looking ahead, in 2026, we focus on scaling mid, large and group customers in attractive industries. We will do so by improving our regional go-to-market to position ourselves close to our customers.

Let's move on to National Business Furniture. 2025 was a difficult year for this business with the impact of DOGE-related cuts in quarter 1 and the shutdown in quarter 4. Despite the headwind, we were able to stabilize our order intake development over the course of the year. We especially saw a better development in the business segment, while government and related sectors remained weaker. Due to timing issues, the improvement in order intake was not fully reflected in our sales development in 2025. Good news is that the overall positive trend kept going into 2026. Our ambition for NBF is to position the business as the national partner for commercial furniture in North America, and that means offering something that many competitors do not. We serve both sides of the customer need.

On the one hand, we cover transactional business, individual purchase to meet an immediate requirement quickly, efficiently and with a competitive assortment. On the other, we can support project business where customers require advice, coordinated delivery of larger volumes, shipments to multiple locations and installation support from an external partner. In 2025, we focused on strengthening the transactional side of the business because this is where customer interaction starts, and where we can build momentum for project-driven opportunities.

Two measures supported this: a more strategic pricing approach, including freight integration and optimized entry-level products, which helped improve competitiveness in the transactional channel. After the upgrade of the web shop, we materially improved online performance and increased customer activity at the top of the funnel. Both actions make the transactional business stronger. And importantly, the customer contacts generated through this transactional volume give us more opportunities to expand into project work where advisory capabilities and larger orders play a greater role.

Going forward, our next steps focus on completing the sales team transformation with a fully aligned incentive structure and further strengthening lead generation to expand project revenue. The aim is to use transactional demand as a meaningful entry point and to gradually deepen customer relationships with a more complex, higher-value project solution.

Turning to Displays2go. We saw an encouraging development in 2025. While the market remained volatile, the improvements we made throughout the year led to a clear stabilization, and importantly, Displays2go returned to positive organic growth in the second half. This was a notable step forward even if the external environment continues to be inconsistent. Our ambition for D2G is to position the business as a one-stop shop for customizable display solutions, combining a strong product offering with a more service-oriented commercial approach. To support this ambition, we worked on specific measures during 2025. Our primary focus was on driving customer reengagement, and here we made visible progress. D2G is a genuine e-commerce business, and we operated with an agile team that continuously tests and iterates from AB testing on landing pages to experimenting with pricing.

This iterative approach allowed us to improve conversion rates and increased repeat buys from customers. Combined with more proactive outreach, these measures helped us to increase both customer counts and order activity over the course of the year. In parallel, we executed the first phase of our repositioning, including the launch of a revised web shop experience that better reflects our positioning as a value-add provider. This provided a clearer and more consistent brand presence. Looking ahead, the next steps are to focus on expanding customer prospecting by leveraging the strengthened brand positioning, deepening relationships with higher-value customers and continuing to refine the site experience to support sustained growth while keeping in mind that market volatility is likely to remain.

Let's move on to FoodServices, which remained the most challenging part of the portfolio in 2025. Unlike the other divisions, we did not see stabilization over the course of the year, and order activity in the call center channel, providing consultative expert sales advisory to customers, remained weak throughout. Our ambition for FoodServices is to position the business as a trusted partner for smallwares and food service equipment. To advance this ambition, we focused on specific measures in 2025. We worked on broadening the customer base, particularly by entering midsized restaurant chains with usually 20 to 300 locations and supporting them in the next step of their expansion journey. Building on our strengths of curated assortment, consultative services and on-time fulfillment, we're the right partner for openings and replenishment, and are leveraging customer touchpoints to increase repeat business.

In addition, we continue to scale our managed accounts business which is the core of our Hubert model. This business serves large operators of canteens and cafeterias and relies heavily on the value-added services we provide: project support, EDI connectivity, microsites, consistent product specifications and coordinated multi-location deliveries. These capabilities remain highly relevant for this customer group. And despite the overall market environment, the managed accounts business performed positively in the fourth quarter and ended the year only slightly below the prior year. Looking ahead, the next step is to focus on strengthening lead generation for the call center with increased web shop traffic and converting the sales pipeline we have developed with chains. In addition, we will extend private label equipment, accessories and parts offerings. While the market is not expected to help, the commercial priorities for 2026 for this division are crystal clear.

After the top line view, let's look at the performance measures we executed in 2025. Our new operating model is a key driver of speed, efficiency and scalability. In 2025, we made important progress in putting its core elements into place and establishing clearer structures that enable faster and more consistent execution. A central part of this is the strengthening of our core functions, the customer-relevant areas in marketing and category management and our central services teams. With clearer responsibilities, these teams can support the divisions and customers even more effectively and focus on commercial activities that truly add value. To enable this, we're consolidating transactional and repeatable processes in the TAKKT Competence Center.

Through standardization and technology-supported workflows, we reduce manual workload, improve reliability and create scale benefits. This frees up capacity across the organization and allows us to concentrate on activities that deliver high value for our valued customers. In addition, we work with an external partner for high-volume, highly standardized tasks. Outsourcing these activities ensures efficient handling of routine work and enables our internal teams to prioritize customer-facing activities. All 3 elements reinforce each other by centralizing and automating high-volume tasks and by leveraging external scale where appropriate. We give our core functions the focus they need to drive customer impact.

Let me briefly highlight what we have already achieved within the operating model. We have successfully established the TAKKT Competence Center and built the foundation for a more scalable structure. We have achieved substantial cost savings by streamlining processes and reducing complexity. And we have strengthened our capabilities in IT, data and AI, an important step toward a more digital and future-proof setup. In 2026, we will continue to roll out the operating model and take additional implementation steps to realize the full midterm savings potential.

Let me now briefly summarize where we stand with our performance program. In 2025, we achieved around EUR 15 million in structural run rate savings. These came in roughly equal parts from the 3 improvement areas. A significant portion came from the leaner operating model and rightsizing, where we streamlined structures, reduced overlaps and shifted more transactional work into the competence center. Another part stemmed from freight and warehouse improvements, including bundling of volumes and consolidation of warehouse footprint that reduced fixed costs. And finally, we achieved savings through higher sales and marketing efficiency, driven by more targeted spend, improved ROI tracking and a reduction in low-impact activities.

Looking to 2026, the next set of measures will build on this foundation. A key focus will be more efficient procurement, where we see meaningful potential from best cross-country sourcing, stronger category management and deeper supplier consolidation, areas that were only partially addressed in 2025. We will also continue the rollout of the operating model, migrating additional workflows into the TCC and increasing automation to capture future structural efficiencies. And finally, we will maintain our efforts in freight, warehousing, IT spend and other operational areas, ensuring that the improvements we achieve last year scale and continue to contribute. Together, these measures position us to reach the full run rate target of at least EUR 30 million.

And with that, over to the operator for the Q&A.

[Operator Instructions] We have already received risen hands, for example, by [ Mrs. Wagner ]. Can you hear us? I don't think she can. Let me just check. Okay. I think we're going to move on to Mr. Bruns. Mr. Bruns, can you hear us?

I think it should be better now.

Perfect. We can hear you. Thank you.

You changed a little bit on your processes, I think.

Yes, we did.

Yes, Andreas and Timo, I think if I listen to what you are doing and saying, it looks -- everything looks really good. You have better processes at outsourcing, you streamlined, automated, relocated the business. It seems that the new operating model is in place. And I can't still see any really better performance, only slightly improving operating performance. And I just wonder what might be the reason. And I was wondering if you -- I think you wanted to become a customer-centric organization, and could you share with us your promoter score for your customers and employees? I mean I could imagine that employees which are in this transformation process, of course it's a difficult situation for the company, but I would also like to know what customers think about your company. Do you have any data to share?

Thank you very much, Christian. So overall, right, you're obviously correct, right? Our great employees around the world are the foundation for our continued progress, and I want to specifically thank them for really being the ones who make all of this happen. If we look at the customer net promoter scores throughout the world and we're looking at it a little bit differentiated between the different divisions, within the division of Industrial & Packaging, we're tracking around 60 CNPS, which is a very good result, but we're not done here just yet. We see opportunities to further drive this by providing even better services. If you look at the U.S. divisions, they are all well above industry standards, particularly within the FoodService division, we're seeing marks that are above 70, which is really industry-leading and speaks to the reliability and fulfillment that also our chain customers can expect from us.

Okay. This is really -- this is frustrating. Your customers are happy in U.S. FoodService and you still have double-digit organic declines, is the environment so problematic? Or is there -- I mean, who's taking share? Is it -- I mean, because this is not an industry which declines at 10% pace.

So we have -- as you know, discontinued as part of our focus activities, the bid contract business, even though it was not margin accretive to our activities. And we are committed to becoming a more focused and higher-performing company. So this weighs on our overall growth. Also, it will have an impact on the comps for this year. And then while we have resolved the technical issues, gaining back some of specifically the longer-term customers that we unfortunately lost because of prior actions takes longer than what we've anticipated.

I would agree that while the overall -- and if you look at restaurants, same-store sales, and other indexes, right? It's not a buoyant, great industry. It is not declining at the same rate we saw 2025, our FoodService business decline, why we share -- and why we've shared very clearly our disappointment. That said, we feel that we've got a very good set of measures in place. We've got new leadership in place to drive overall presence of 2 long-standing brands, Central Restaurant Products and Hubert in the industry and build on our very good fulfillment experience as demonstrated by the CNPS scores I just said.

And may I add, do you think you're still the best owner for this business?

We do see significant value creation opportunity in the short and midterm for this business that we want to be sure to unlock for us and our shareholders.

We have no other questions so far, no risen hands. So Mr. Bruns, you're raising your hand again, please.

One for Timo now.

What do I have to do? Can you hear me still?

We can hear you.

Okay, sorry. I thought I had to unmute myself again. Yes, I was -- for Timo, I don't have a question. But on I&P, I mean, this is obviously your core business and you said that you are delisting products, which might be a good idea, but I would also be interested in what new products you play, offer to your customers and the relation between new products and established products, has this changed?

So overall, right, we're continuously refreshing our assortment, offering alternatives -- better alternatives to customers, meeting emerging customer requirements, and also delisting low profitability or low demand products, and quite frankly also phasing out some products along the way. We have seen, as I mentioned in the prepared remarks, a very good top line development as a result of our efforts that also allowed us to drive not only top line revenue but also acquire more repeat business.

Now to your question around the product types that we're introducing, it is including also selected consumables. It includes more innovative solutions in packaging. As you know, there is the new regulation around packaging coming on board as well as ensuring that we also provide customers with hazardous goods opportunities as regulations there continue to increase. These are just some examples. We're really focused on providing offering to existing customers that have existing and emerging needs, where we're the best partners to fulfill those.

Yes. I was not aware of the new regulation on packaging. Is it in Europe? Yes, obviously.

Verpackungsrecht.

In Germany, yes. Okay.

That's the German.

I have to look into it. Yes. Okay. That's a good idea to look into it. Maybe I have more questions then for Benjamin. And then maybe on the -- you also gave an outlook into 2026 and of course also in Q1, I mean Q1 is nearly finished. And obviously, there is no major improvement there, but could you also -- so you have had, of course, some headwinds for the start into the year. Is there also at the end of Q1, is there -- do you see a worsening trend? Or are there also some encouraging signs? Because I mean the macro environment obviously is not favorable.

Yes. So let me maybe talk a little bit about what we see in current trading, right? As we mentioned and commented on in our preliminary results, we expect a slower start to the year with a top line development for the group on a similar level to what we saw in quarter 4. Looking at the different divisions and business units, we see slightly positive trend from 2025 at I&P continuing into 2026, especially in March, also because of some timing effects, we see good development so far. At NBF, we see the stabilization we've shown for order intake in the presentation continuing. Compared to quarter 4, this is again a sequential improvement that we see in demand and order intake. Displays2go is a little bit spottier in the first months so far.

We're located in Fall River where the snowstorm hit, as you may know, that required a little bit of a shutdown for a good part of a week. And I've also talked about the volatility we see here with the current -- which currently translates to lower top line development. We've talked in detail about the measures we're implementing to get back to the positive trends we achieved last year and obviously eager to build on. FoodServices remains the most challenging business and is currently performing below the run rate we saw in quarter 4. As I mentioned, we have new division leadership here since January and are positive on the impact she's driving and remain confident to be able to gradually improve this business over the course of the year as the existing as well as new initiatives gain traction. So that's a little bit where we are towards the end of quarter 1.

Then maybe a question for -- also for Timo, what do you need to reach the 10% margin you target? So which -- what would be the steps? I mean, would this be additional cost cutting? Would you need maybe a run rate organic growth of 5%, or what do you need in your view to reach this?

Yes, I think there are, of course, both sides that are relevant. In general, I would say, we set ourselves the cost-cutting target of EUR 30 million. We're well on track on that. And by having done that, we are lowering our baseline from the cost perspective to set ourselves up for growth. So as soon as we see...

[Technical Difficulty]

I think we are just in 2 calls. Sorry, my colleague. But I hear you. Sorry. Can you mute me maybe? I can hear you.

Yes, I can mute you. Just a second.

So let me try again. So we did put a lot of effort in reducing our costs and therefore with our EUR 30 million cost-cutting target where we are well on track, also we are lowering our breakeven point. So having said that, I think the next real big lever coming from that, of course, again, we need to go the rest of the way. But coming from that, it is a lot about top line growth. With a lower breakeven point, as soon as we see additional sales, we should also see a significant part falling through to the bottom line of the contribution margin. So yes, in general, a good growth rate, and we don't give out precise guidance now over the last year and next years, but in the area a little bit above market growth would be needed to achieve the 10% margin target.

Mr. Bruns, if you have any further questions.

No, sorry. I'm fine with the answers and sorry for having 2 conferences here in this room. Sorry.

No worries. Thank you for the question and say hi to the other guy.

We have not received any further questions, no risen hands. [Operator Instructions] But I guess there are no further questions. So with that, I would say we come to the end of today's earnings call. Thank you very much for your interest in TAKKT AG. And a big thank you also to you, Mr. Weishaar and Mr. Krutoff for your presentation and your time. Should any further questions arise at a later time, please feel free to contact Investor Relations. And I wish you all a successful day. And handing over to you, Mr. Weishaar, once again, for your closing remarks.

Thank you so much. I echo your thanks for everyone's interest in TAKKT. Of course, the Investor Relations team and ourselves remain available for any questions. We will present our quarter 1 results on April 30. Speak to you latest then. Thank you, and goodbye.

Welcome to the Preliminary Full Year 2025 Earnings Call of TAKKT AG. The company's CEO, Andreas Weishaar; and CFO, Timo Krutoff, will guide you through the figures in a moment followed by a Q&A session via audio line and chat.

And with that, I hand over to you, Mr. Weishaar.

Thank you very much. Thank you, and welcome to our quarter 4 earnings call. I'm hosting the call together with our CFO, Timo Krutoff, who will present our financials in detail in a few moments. To start the call, let me briefly give you an overview of key developments and look back from the financial year 2025. To summarize, it was a difficult year, and we did not achieve the targets we set ourselves at the beginning of 2025. The market environment remains volatile and challenging. But we also must acknowledge that winning back customers and seeing the full impact of our commercial initiatives is taking longer than we had initially anticipated. We are progressing with our TAKKT Forward strategy and are seeing encouraging results from many of the initiatives we launched last year. I remain convinced that we're on the right track. More on that in a few moments.

Before that, let me first take a closer look back on last year. Looking at the economic environment, I want to highlight 2 topics here that you're all aware of. The first is the high level of uncertainty and volatility in the market, Liberation day and tariffs, the continuation of geopolitical conflicts, the impact of DOGE-related activities and the U.S. government shutdown, all affected the U.S. environment and, at the same time, weighed heavily on businesses in Europe.

The second topic is the continued weakness in European and particularly German manufacturing. Automotive and other export-oriented industries struggled significantly in 2025. Looking at the GDP growth. This resulted in very limited expansion in Europe with the Eurozone showing an increase of 1.3% and another year of stagnation in Germany at 0.2%. In the U.S., GDP growth remained higher at 2.1%, yet softened compared to the prior year. Despite the positive growth, job creation was very limited in the U.S. throughout 2025.

Having a closer look at the relevant markets for our divisions. Our European I&P business operated in an environment where manufacturing PMI values signal continued contraction in both the Eurozone and Germany. And where we saw a continuation, if not acceleration of negative order intake trends and job cuts. In consequence, our customers remain hesitant to invest in new equipment. In the U.S. office furniture space, we experienced a decline in demand from government customers but also from adjacent segments such as health care and education. This was a result of the DOGE activities. In Q4, the U.S. government shutdown in October and early November had a notable additional impact. Demand from business customers was also muted due to uncertainty stemming from import tariffs.

In Foodservices, the restaurant performance index remained below the expansion threshold for most of 2025 reflecting declining customer traffic at U.S. restaurants. The December report highlighted a 2% decline in restaurant sales and a 1% decline in customer traffic year-over-year. Foodservice equipment suppliers reported lower year-over-year sales in 3 of the last 4 quarters.

Let's continue with last year's results. Sales came in at EUR 946 million (sic) [ EUR 964 million ]. Adjusted for the sale of Mydisplays and foreign exchange effects, that is an organic development of minus 6.6%, significantly better than our run rate in 2024, but still a year-over-year decline. Looking at the different divisions at I&P, we saw an overall improving trend over the course of the year, especially in our focused customer segments and product groups.

Our Display business returned to positive growth and order intake in our Office Furniture business also improved steadily quarter-over-quarter. Foodservices remained more challenging with a double-digit decline in the second half of 2025. EBITDA was just below EUR 20 million, impacted by more than EUR 16 million in onetime expenses, a similar level to the year prior. The adjusted EBITDA margin came in at 3.8%, influenced by the lower top line and the lower gross profit margin. Cash generation was strong in the second half, especially in quarter 4, where we compensated for the slightly negative cash flow of the first 9 months and ended the year with a positive free cash flow of EUR 10 million. All in all, quarter 4 performance and the market environment were in line with expectations, and we closed the year at the lower end of our guidance.

As far as our capital allocation priorities are concerned, in the current environment, we are putting priority on investing into the business to accelerate and strengthen our processes and systems with investments in IT and AI as well as developing our great team. Consequently, we will propose to suspend the dividend for 2025 at the shareholders' meeting. We are committed to resuming substantial dividend payments in the future based on sustainable earnings and cash performance.

Before handing over to Timo, let me update you on where we stand and what we achieved with our TAKKT Forward strategy throughout 2025. We are focused on our core business and play to our strengths. We follow a management approach where we have allocated a greater degree of ownership and responsibility on a divisional and local level to operate even closer to our customers. This is both true for our approach within the Industrial and Packaging division as well as for how we run our U.S. businesses.

We have strong leadership teams in place. Earlier this year, we have further strengthened the division leadership for I&P and Foodservices by onboarding outstanding industry experts who both have ample experience in developing and running successful organizations and accelerating growth. Today, all leadership teams are closer to the customers, executing plans to improve our go-to-market and operating performance and are fully empowered to do so. As part of our focused efforts, we successfully wound down our Foodservice contract business. This was a very volatile business with very low profitability. 2025, we delivered most of the orders in hand for this business and stop bidding for new projects. This will help us to focus on our core strengths and better serve customers with our service and advice-oriented positioning.

And thirdly, we further developed our Displays business, integrating the much smaller Post-Up Stand brand activities into Displays2Go. This integration is the last step in a longer process, and we have made sure that we successfully moved customers from Post-Up Stand over to D2G. Going forward, this focuses our activities and streamlines our market position.

Looking at our commercial initiatives, we started to substantially improve our assortment last year. This includes our 80/20 simplification approach, where we reduced the depth of our product range and increased focus on items that really are in demand and that drive higher value. And we are step-by-step adding new products to offer our customers a wider range of categories and develop into a one-stop shop solution provider for them.

Within I&P, we revitalized the brand landscape to increase visibility and awareness in the market. For example, we reactivated ratioform as a category brand for packaging and brought back the national brands of Frankel and Vink Lisse under the KAISER+KRAFT umbrella to leverage the brand strength we have in our portfolio. This is an important lever to win back customers and generate new business in these markets.

In Foodservices, we made progress in expanding sales with private label products and restaurant chains in line with our strategy. Private label increases our relevance. It gives us better control over margin. Restaurant chains offer great repeat business potential. EUR 5 million in sales generated in 2025, underpin the potential we see with restaurant chains as does the growing lead pipeline for 2026 and beyond. At Displays2Go, we confirmed and accelerated the positive organic growth trend from quarter 3. This is supported by rebranding and the new brand positioning to pivot towards being a service provider and to unlock higher value and repeat customers. We are encouraged by the customer response and the improved commercial performance.

And finally, at NBF, we made multiple commercial improvements, including our Design My Office approach, that leverages our strength in supporting customers with advice and additional services. Even though the environment remained challenging, this demonstrates that targeted commercial initiatives can stimulate demand and lead to higher-value project businesses. Taken together, these examples illustrate that our growth initiatives are taking hold. While we expect tailwinds from the overall market environment, the traction we see in several parts of the business gives us confidence that we're moving in the right direction and that the commercial levers we are deploying will contribute more visibly as we progress through 2026.

Let me now briefly touch on the performance pillar where we continue to strengthen the foundations of our operating model and improve the efficiency of our processes. First, we successfully established the TAKKT Competence Center, this includes a captive part where we leverage scale advantages and strengthen our IT and AI capabilities in-house. We then roll this out across the group to support the divisions with expertise that helps them to operate more efficiently. And it includes and enables a non-captive part where we standardize and relook at transactional processes, improving scalability and efficiency. We see clear benefits from the setup and will increasingly move additional processes over to the TCC during the course of 2026.

Second, we made meaningful progress in automating and accelerating core processes through the increased use of AI and system improvements. We started with simpler processes like translation of product descriptions and order entry and will now move towards additional use cases. These upgrades will only reduce manual effort, but also improve reliability and speed, 2 elements that are critical for higher service quality and better customer experience. One example for more advanced use case is automation of supplier product data integration for one of our Foodservice brands.

Here, we are using AI technology to process vendor data that is provided in very different formats. We then use semiautomatic and AI-supported workflow that categorizes, enriches and translates the product information and then feeds the content into our PIM system. This significantly accelerates our time to market, reduces manual tasks and costs and helps us to boost growth by better reacting to market trends and customer demands.

Third, we streamlined our warehouse footprint in the U.K. and in Foodservices. These measures reduce complexity, lower fixed costs and help us run logistics operations more efficiently. The consolidation steps taken in 2025 are an important prerequisite to improving margin, especially in businesses that continue to operate in a critical market environment. With these efforts, we remain on track with our run rate savings now achieving more than half of our EUR 30 million goal. This shows that the structural initiatives we have put in place are delivering the expected impact. The savings are helping us partially -- to partially offset the consequences of the lower top line and create the room to continue investing in our transformation.

And with that, over to Timo for more detailed view on our financials.

Thank you, Andreas. Let's take a deeper look at the group performance in the last quarter of 2025 before we move on to the full year preliminary results as well as the divisions. In quarter 4, group sales were 10.4% below prior year and came in at EUR 228 million, impacted by the weaker U.S. dollar and the sale of MyDisplays in 2024. Organic growth came in at minus 6.7%, with continued stabilization at I&P. OF&D and Foodservice were in low double-digit organic decline. EBITDA in Q4 came in at negative EUR 7.5 million, biggest impact for lower EBITDA remains the lower top line and very high one-offs in Q4.

Gross profit margin was 0.8 percentage points below prior year, which is mainly due to one-offs related to inventory valuation. Adjusted for these effects, the gross profit margin is 0.3 percentage points above prior year. On adjusted costs, we reduced our personnel expenses and we continue to optimize and reduce our marketing costs while also investing in our transformation with systems and process improvements. The onetime costs of EUR 12.2 million in the last quarter were mainly related to the setup of the new operating model at I&P. In addition, there were some costs related to warehouse optimizations at Foodservice and in the U.K. Due to the continued top line decline, the adjusted EBITDA margin stood at 2.1%.

Now let's take a look at the preliminary full year results for the group. At EUR 964.3 million, sales were down 8.4% year-on-year. Currency effects and the MyDisplay sale negatively impacted top line with almost 2 percentage points. Adjusted for these effects, organic growth was at minus 6.6%. Both I&P and Foodservice showed a mid-single-digit decline, while OF&D is still down double digits. EBITDA was EUR 19.8 million after EUR 55.7 million last year. Again, we see the biggest impact coming from lower sales with an additional effect coming from the lower gross profit margin.

Looking at adjusted costs, we were able to realize substantial savings in personnel expenses. Significant savings and marketing expenses were compensated by increased IT prices. These were related to improvements in process and systems, but also by a switch towards increased use of Software-as-a-Service solutions. And with that, a shift from capitalizing these expenses and instead now booking them directly into OpEx. Onetime costs were at a similar level for the prior year, and therefore, again, very significant. Here, we show that we keep investing in our future setup. Adjusted EBITDA margin was at 3.8% after 6.9% last year.

Let's now have a more detailed look at our divisions, starting with our core business, I&P. In the fourth quarter, we saw a slight improvement in the top line development compared to the first 3 quarters. This is despite the environment remaining challenging for many of our customers. Germany had a tough year in 2025. At the same time, we are seeing better developments in other regions, especially the Nordics and U.K. were performing relatively well. Gross margin declined by around 1 percentage point in 2025, partly due to more attractive pricing.

Adjusted for onetime effects, I&P realized cost savings in personnel and marketing. Transformation-related costs were higher than prior year. This is true both for one-offs and for IT costs. Onetime costs added up to almost EUR 10 million. This was mostly to the implementation of the new operating model. On adjusted EBITDA, the margin was 7.7% after 11.8% last year due to the lower top line and the gross profit margin impact.

Continuing with our performance in the U.S. At OF&D, organic sales development in quarter 4 and the full year 2025 were very similar at just below 10% minus, unfortunately. We were -- we've talked about the difficult market for NBF in the last calls. As Andreas mentioned, we saw restrictive ordering from government, education and health care customers. D2G on the other hand is performing much better with now the second quarter of positive organic growth. Margin and cost management worked well at OF&D with significantly lower marketing, personnel and other costs when adjusted for onetime effects. This helped to compensate part of the top line impact on adjusted EBITDA margin.

At Foodservices, the low double-digit organic decline continued in the fourth quarter and led to organic growth of minus 6.6% for the full year. Gross profit margin is 1.4 percentage points below prior year and impacted by freight and tariff effects as well as inventory valuation. Adjusted for one-offs, cost management allowed us to compensate for some of the top line and gross margin impact. However, we remain in a very difficult situation with this business with adjusted EBITDA profitability at minus 0.7%.

Let's now continue with cash generation for the group, where we had a strong end to the year. Cash flow before change in net working capital followed the EBITDA development in 2025. On net working capital, we continue to release inventories and also saw cash in from decreasing trade receivables. Operational CapEx was lower this year, and we had a cash in of a bit less than EUR 2 million out of the sale of real estate that we no longer use in the Nordics. After the cash out in H1, we significantly improved our cash generation in the second half of the year and closed with a positive free cash flow of a little more than EUR 10 million.

Looking at our balance sheet. Net financial liabilities increased by EUR 17.5 million to EUR 131 million. Biggest impact here was the dividend payment in May. Equity ratio was impacted by the impairment but remains above 50%. We continue to operate a very solid balance sheet. As we have already anticipated in our update in November, we did substantial goodwill impairments at the end of the year. The total impairment came to EUR 125.5 million. More than half of the amount resulted from value adjustments at Foodservice. The rest is from OF&D with the adjustments at D2G being significantly higher than NBF. The remaining goodwill for the U.S. division is EUR 40 million. So the majority of the goodwill in the balance sheet was allocated to I&P, where value in use is significantly higher than book value.

And with that, back to Andreas for the first view into 2026.

Thank you, Timo. Let me give you a brief glimpse of what we expect for the current year before we open the Q&A session. Please be aware that this is just our current view on the year, and we will publish our 2026 guidance end of March.

Starting with the environment. We expect economic uncertainty and volatility to persist. This includes a continuation of geopolitical conflicts and as we have seen over the past days, also continued uncertainty around tariffs and trade disputes. We expect GDP growth broadly similar to 2025 in the U.S. and Eurozone with a gradual improvement in Germany. Manufacturing PMIs have been trending upwards at the beginning of the year. It remains to be seen if this trend will continue and stabilize. On fiscal and monetary policy, the U.S. is likely to ease conditions while Europe could remain more constrained. Against this environment, here's how we set our priorities within the TAKKT Forward strategy.

Focus: We will continue to strengthen local responsibility and accountability. Commercial decisions are taken closer to the customers and specific to each brand and location. At the same time, we will secure group synergies to further optimize cost positions and scale activities where possible.

Growth: For growth, we will push commercial measures targeted at our core customer groups. I've talked about what we are working on earlier in the call. We will also further improve procurement by expanding best cost country sourcing, notably and implement more differentiated and more competitive pricing enabled by [indiscernible] saving. And we optimized the assortment to concentrate on fast-moving items while adding new categories to better serve customers.

And last not least, as far as performance is concerned, we will continue to leverage our operating model to digitize and automate additional processes enabled by accelerated process and system improvements. And we will work on further increasing our efficiency in freight management and warehousing. This includes an integration of freight pricing into the overall pricing process and further steps to streamline our warehouse footprint.

Looking at financials, we will give a precise guidance at the end of March when we publish our annual report. Let me still share our current view on top line earnings and cash development. We expect a muted start to the year on top line with a continuation of negative year-over-year sales development. We foresee to gradually return to positive organic growth over the course of the year as our commercial measures gain traction.

On profitability, we will continue to execute structural improvements to our cost base, some of these performance measures will result in additional onetime costs from structural improvements, while potential for short-term profitability increase remains limited, we are convinced that these measures will ensure substantial margin improvements in the mid and long term.

On cash, despite higher CapEx to fund efficiency and growth and lower contributions from release of net working capital, we target positive free cash flow driven by disciplined execution and CapEx management. We look forward to sharing an update on our strategy progress along with an output into 2026 during our analyst call on March 26 with the publication of our annual report.

And with that, we're happy to take your questions. Over to the operator for Q&A.

Thank you very much, Mr. Weishaar and Mr. Krutoff. [Operator Instructions] The first hand up from Christian Bruns.

My first question is on the loss-making Foodservice segment. Any specific idea of getting rid of this [indiscernible] bleeding there? Or is it the measures you set in your new operating model, Simplify, Automate and Relocate? Or are there specific measures there to stop the bleeding?

Thank you very much, Christian, for the question. As far as Foodservice is concerned, what we -- from an overall market perspective, what we're seeing are 2 trends or implications from; a, lower restaurant traffic; and secondly, higher input costs for restaurants that is driving lower demand overall as well as, obviously, price increases as providers pass on tariffs to their customers. In an overall subdued demand environment, we're not immune to this. This is what we're seeing. You know we spoke extensively about issues we had in 2024 and resolved in 2025.

Our business strategy does foresee, as I briefly outlined that we increased our private label as well as our parts activities, which will drive higher margin opportunities and more longer-term relations with customers as well as further expanding and building on the pipeline we've built when it comes to emerging restaurant chains who -- which are chains that are not only opening one but multiple stores and really require an excellent fulfillment provider such as ourselves. In addition, we obviously continue to work stringently exactly as you pointed out, also improving operations. We have consolidated our warehouse footprint. We've exited lower performing business so that we can focus our attention on what is driving future profitability and growth for this business.

Okay. If I may, a second question, just on the tariffs. I'm a little bit confused about the situation as I think some are. I know, of course, your -- the most important tariffs for you are for imports from China or from Asia. Is there anything -- has there anything changed from the judgment of the highest court in the U.S.? Or is there -- yes, is this also the 15% now, which is the new global tariff? Or -- just could you give some explanation?

So the announcements from the Supreme Court as well as from the administrations are still very recent with relevant information still unfolding. Frankly, not unlike what we experienced last year. Thus, it's very early to make reliable statements. As you can imagine, we're obviously tracking very closely the tariffs we pay, be it the fentanyl or the reciprocal or other tariffs throughout past years, and we're making relevant registrations to claim back tariffs should they be fully ruled out. As far as the 15% newly announced tariffs are concerned, it depends really on the business and import classification code if it results in a lower or a higher burden to the business.

As you correctly pointed out, and so does our calculation show that it's being equal to slightly positive. For example, for China, where we could see tariffs going from 20% to possibly 15%, and that is, as you will recall, only non-IEEPA tariffs under Section 301, those remain in place because they were from the prior administration. That said, we'll see how this is implemented in the coming days and weeks and we'll manage accordingly. This past year, our U.S. supply chain teams have become very good at this, I may say. And overall, we will continue to focus on best serving our customers by improving our business and our operations. What doesn't help our customers is yet another addition to overall uncertainty.

Thank you, Christian, for your questions. Ladies and gentlemen, the floor is yours. I will hold the room. And Christian, you have some more questions. Is that it?

Maybe can you a little bit more elaborate on this Design My Office initiative? I think this could be a good idea to become more relevant to bigger customers or to have an additional -- a good idea for an additional service element. What do you do there?

So overall, what you see us doing across the divisions is moving significantly closer to our customers with more differentiated services and -- where we also see the opportunity to set us apart from other market participants, right? We are an established omnichannel player that has an omnichannel experience, and as such for -- just to take the example of National Business Furniture where the team developed an on and offline service capability to cater to customers that do not really understand yet the requirements they have to fit out their office.

So they come with a budget requirement. They come with a certain room, size and they come with a requirement in terms of what number of people need to be fit in, what type of storage needs to be established and the like. We're able in record time to turn around requirements and allow for alterations and interactive alterations of demand, both on and offline, which we're seeing initially very positive results. And that gives us -- and I think that's part of the benefit of our business, the opportunity to also scale this initiative across other divisions, and other businesses where we sell furniture, but also leverage experiences into when we start fitting out restaurants.

Okay, that sounds promising. And then on your outlook, you said you are positive for the second half or to see a turnaround in top line there. But of course, visibility, I know I mean for the first quarter, your visibility will be much higher than on the second half. So what makes your -- could you add a little bit more flesh to the bone, what do you think what might trigger this turnaround?

So 2 things really. Obviously, we do have collected and built and implemented a lot of initiatives during 2025 that were set and are fundamentally improving business performance, as noted, in leading indicators we are tracking, be it performance of online channels, be it number of visits to customers, be it a number of project businesses. Leading indicators for tracking that we're seeing that we're generally moving in the right direction. In 2025, we saw that particularly larger project business decisions were pushed out given the overall market uncertainty.

And while some of the more transactional business held up, as we move into 2026, we're building on those foundations established. And we also put in place additional acceleration plans with a very detailed market by market, for example, in I&P program plan, where we play to our omnichannel strength, really leveraging the site of on as well as on-site offline with our customers and anything in between. Some of these initiatives and the additions we're introducing, they will require some additional time to materialize.

And please, overall, do not forget that our business starts rather slow into the year. The first couple of days in January, right, are general vacation days or holidays and then people return. So it's really starting the second half of January, specifically in Germany this year with the bridge and all bank holidays. So usually, that is then the time where we see additional progress. And also, we're bringing back notable commercial initiatives after the summer break that we are confident will equally support our commercial progress further.

Okay. And then maybe a last question to Timo Krutoff. The EUR 40 million left in goodwill. I assume they are related to the National Business Furniture, is that right?

Yes. The biggest -- you're correct. The biggest portion of that is related to NBF. So we have EUR 27.7 million out of those are related to NBF and then we have close to EUR 5 million at D2G and at Foodservice EUR 7.6 million. So there's a little bit left in all 3 of them, but the biggest portion is the NBF, yes.

Okay. I was -- that's really interesting because I think with this Foodservice performance, I was -- I thought it would already had been wiped out now, okay. But -- okay, it's only -- it's not so important this information, but just for my...

The next question has already arrived. The next hand is up from Stefan [indiscernible].

So just regarding the goodwill. I think there's still more than EUR 300 million goodwill or intangibles in Industrial and Packaging and also in Industrial and Packaging, of course, a margin decrease in 2025. And I just wanted how comfortable are you with the goodwill there? This is the main part of the intangibles? And what kind of scenario do you need to underline these intangible valuation that you got at the moment. So do you need to see an increase in EBITDA margin in 2026 in order to avoid any further write-downs?

So first of all, thanks for the question. And I think on the I&P side, we have a lot of headroom. So that was not at all anywhere close to any impairment risk so far. We do -- we could still even decrease the EBITDA margin by a couple of percentage points on the I&P side and still would be fine. So from our perspective, there is really no risk as of today. I&P still stays a very profitable business for us. That's also why -- one of the reasons why it is our core. So I don't -- again, as of today, there aren't significant changes in the environment, I don't see any risk.

Thank you very much for your question. And for now, we have no further questions. I will hold the room another moment if you should have any left, ladies and gentlemen, and that doesn't seem to be the case. We have come to the end of today's earnings call with that. Thank you very much for your interest in TAKKT AG. A big thank you also to you, Mr. Weishaar and Mr. Krutoff for your presentation and your time. Should you have any further questions at a later date, please feel free to contact Investor Relations. I wish you all a successful day and handing over to you, Mr. Weishaar once again for your closing remarks.

Thank you very much for the facilitation. And thank you, everyone, for your participation today. We will keep you updated, and we're looking forward to continuing our conversation when we publish our annual report and hold our analyst conference on March 26. Have a great day.

Good day, ladies and gentlemen. I warmly welcome you to the earnings call of the TAKKT AG following the publication of the Q3 figures of the fiscal year 2025. Therefore, I am delighted to welcome CEO, Andreas Weishaar; and CFO, Timo Krutoff, who will guide us through the presentation on the results shortly. Afterwards, we are happy to take your questions via audio line or the chat in our Q&A session. And with this, I hand over to you, Andreas.

Thank you, and welcome to our earnings call for Q3. I'm hosting the call together with our CFO, Timo Krutoff, who will present our financials in detail in a few minutes. To start the call, let me give you an update on our TAKKT Forward Strategy and key topics from the last quarter. We are progressing with our focus on the largest and most profitable division, I&P. In line with our strategic priority on I&P, I've taken over the role of Division President in September. I'm very much looking forward to now directly lead and manage our core business in Europe together with the divisional leadership team. Carsten Rumpf, my predecessor as Division President, stepped down from his role due to personal reasons.

We are very grateful for Carsten's contributions over the past year and wish him the very best in his future endeavors. In addition, we have simplified our organizational structure in recent months and moved TAKKT and I&P functions closer together and closer to the customer. To give you an example, responsibility for operations, our warehouses and logistics activities now lies on divisional level. It is thus better aligned with our divisional commercial activities while providing more flexibility and ensuring faster decision-making in a very volatile environment. On growth, we're targeting large group customers with more complex procurement requirements. Part of this is, for example, an intensified marketing push for a select group of high potential customers here in Germany. This includes customers from a wide range of industries, including automotive.

Despite the overall weak market, we were able to achieve positive growth with this group in quarter 3 by delivering an improved customer experience as well as a more specified product and service offering. Our actions include more personalized approaches, higher number and quality of site visits as well as tailored sales and marketing activities. This proves our strong position in the market and the excellent value proposition we can bring to our customers. We will continue to put customers first and increase our sales activities going forward. Second example here is D2G, where we have a strong and committed team that's doing an outstanding job in a challenging market. We're consistently improving our customer engagement, increasing second purchase rates and are growing our marketplace business.

We achieved a return to positive growth in quarter 3. We see this continuing in October and want to build on this success in the coming months. On performance, we diligently progressed the execution of our measures to improve cost structures and cash generation. On costs, we have made good progress with our new I&P operating model that we presented to you in July. We are building up capabilities in our TAKKT competence center in Hungary, and we've reached an agreement with the works council that includes the reduction or relocation of more than 100 FTEs in Europe, resulting in substantial cost savings in the coming years. On cash, we've delivered on what we promised in July and returned to positive cash flow in Q3, driven by release of net working capital. We will continue with these measures in the coming months and expect another good cash quarter in quarter 4.

Let's continue with a high-level view on our current priorities. We're operating in a challenging environment, but we are also seeing green shoots out of the commercial initiatives we have implemented. In I&P, our focus on serving large group customers with complex procurement requirements is paying off. We have secured several major project orders in recent months. One example is a customer for whom we supplied an individualized shelving system that came in at more than EUR 0.5 million. And we won or extended a number of preferred supply agreements with several customers, including well-known players from the defense and technology sector, making us an integral part of and partner in their procurement process for the coming years. At NBF, we're elevating our omnichannel approach using a broader and better aligned range of marketing channels.

This includes, for example, a rejuvenation of established print media. Here, we saw a strong performance of our newly designed summer catalog, helping us to achieve continued stabilization with this business in Q3. We mailed close to 200,000 catalogs. For the customers who received the catalog, we achieved almost 180% uplift in transactions compared to the holdout group that we used for comparison purposes. We continue our path of strengthening and better positioning our great and well-known brands. After reintroducing [indiscernible] in Europe, we're now bringing back [indiscernible]. In the U.S., we performed a successful brand refresh of our Hubert and our Central brands, playing to the unique and very complementary strength of each brand.

Hubert as the FoodService brand with personalized high-touch solutions as well as Central as the trusted partner for restaurant operators who need fast and seamless access to food service equipment. The feedback we receive and the early results we see confirm that we're on the right path with our brand strategy. Consequently, we will continue to strengthen and develop our brand portfolio in Europe and the U.S. In parallel to continuing with our commercial measures, we're intensifying our performance measures. This will enable us to keep investing in our business and improve profitability midterm. We're streamlining processes along the value chain and are increasing the use of AI throughout our organization. One example is that we increasingly automate the transfer of unstructured orders from e-mails into our systems.

This helps to not only save costs, but also to provide better customer service by fulfilling orders more quickly. Another example is that we now use AI for web and catalog design and creation as well as for the translation of product descriptions. Another area of focus is procurement. We're taking our procurement organization to the next level with improved capabilities and new leadership. We're simplifying our product range and are bundling purchase volumes with key suppliers globally. This will allow us to realize notable COG savings in the coming years. These activities make us a leaner, more nimble and more efficient company while supporting our continued investments into our business. The process and system improvements are well underway, and we expect further acceleration in 2026.

I will now continue with a recap of the current market environment. I can keep it short here and will focus on what has changed compared to July. In Europe, GDP growth remains subdued, especially Germany is lagging behind with recent estimates expecting Q3 to also show negative growth. PMIs have improved year-to-date, but are still in contraction territory. Businesses remain quite cautious and do not expect growth to accelerate substantially in the coming months. Looking at industries in Europe, automotive, chemicals and manufacturing remain weak, while defense, infrastructure and technology sectors are growing. GDP growth in the U.S. is slightly better than in Europe with an expected growth just shy of 2% for the current year.

However, a good amount of this is driven by the AI boom and investments in data centers. Looking at the underlying economy and our target markets, we see a more challenging picture. In the office furniture market, demand from government customers, but also from adjacent categories like health care and education remains muted. Volatility and uncertainty due to tariffs and the U.S. government shutdown is impacting customers' willingness to invest. In the FoodService market, we're operating in an environment where restaurants remain hesitant to expand and see lower traffic. The situation for larger players like Sodexo and Aramark is more favorable, which is also reflected in what we're seeing in our order intake.

To summarize, we're operating in an environment where we see more headwinds than tailwinds and that we expect to remain challenging in the coming months. Before handing over to Timo, let me briefly walk you through our financials in Q3. Overall, performance was in line with expectations. On the top line, our organic growth rate came in at minus 6.2%. And with that, it remained on a similar level to quarter 2. Both our I&P business and especially OF&D were able to continue their stabilization and improved their run rate compared to the previous quarter. This is despite the overall market environment, both divisions operate in. FoodService saw a negative growth after a slight positive growth in Q2.

In part, this is due to the higher level of previous year base in Q3. In addition to the top line impact, profitability was influenced by a lower gross profit margin. Here, we continue to see some effects out of freight and tariffs. Adjusted EBITDA margin was 4.3%, improved versus the very weak Q2, but significantly below prior year. I've already talked about our performance measures to improve profitability in the midterm. We saw better performance on cash generation, where we returned to positive free cash flow of EUR 7.6 million in quarter 3, supported by continued measures to release net working capital.

And with that, over to Timo for a more detailed view on our financials.

Thank you, Andreas. As we just said, our Q3 performance was what we expected heading into the quarter in July, given the challenging environment in our markets. At EUR 244.5 million, group sales were 9% below prior year, impacted by the weaker U.S. dollar. Organic growth came in at minus 6.2% with continued stabilization at I&P and a significant run rate improvement at OF&D. FoodService was weaker than in Q2 compared to a higher base in Q3 last year. EBITDA margin in Q3 was much better than in Q2. Compared to last year, we were down EUR 10 million. Biggest impact here remains the lower top line. Gross profit margin came in 1.5 percentage points below prior year. Here, we continue to see an impact from freight and, of course, the tariff effects.

On costs, we reduced our marketing expenditure, including personnel costs for sales reps. And we continued our transformation with investments into systems and process improvements, which will help us become more efficient in the future. Onetime costs were almost neutral in Q3 compared to EUR 3.6 million last year. Due to the continued top line decline, adjusted EBITDA margin was at 4.3% after 9% in Q3 last year. For the year-to-date development, it is very similar development as in Q3. Sales were at EUR 736 million, down 8% year-on-year. Effects from FX and the MyDisplays sales was a bit more than 1 percentage point. Adjusted for these effects, organic growth was at minus 6.5%. Year-to-date, both I&P and FoodService showed a mid-single-digit decline, while OF&D is still down double digits. EBITDA was at EUR 27 million after EUR 50 million last year.

Again, we see the biggest impact coming from lower sales with an additional effect coming from the lower gross profit margin. Looking at costs, this is very similar to Q3 with savings in marketing and personnel, while we continue to invest in our transformation. Development of onetime cost was favorable this year in the first 9 months. This will reverse in Q4, where we expect onetime costs of around EUR 10 million for structural improvements. Adjusted EBITDA margin was at 4.3% after 7.7% last year. Let's now have a more detailed look at our divisions, starting with the largest and most profitable business, I&P. Here, we see a continuation of the top line stabilization in Q3. This is despite the fact that the environment remains challenging for many of our customers. This is especially true for Germany and its automotive sector.

At the same time, we are seeing better order intake development in other regions, especially U.K. and the Nordics are performing well year-to-date. Gross profit margin development in Q3 remained similar to the first half of the year with a decline of around 1 percentage point. Adjusted for onetime effects, costs were similar to prior year at I&P. We executed on cost measures while continuing with our transformation push, leading to a higher tax spend, for example. Onetime costs were lower this year by around EUR 4 million in the first 9 months. This will, as I mentioned, change, however, with the implementation of a new operating model in I&P, resulting in substantial onetime expenses in Q4. Adjusted EBITDA, the margin was 8.4% after 12.2% last year due to the lower top line and the gross profit margin impact.

Continuing with our performance in the U.S. At OF&D, Andreas already mentioned the stronger quarter-on-quarter improvement on the top line. This is driven by both businesses, with NBF developing more stable in Q3 and D2G achieving positive organic sales growth for the quarter. With NBF, we continue to operate in an environment that is marked by uncertainty and restrictive ordering from government, education and health care customers. We saw order intake in September hold up relatively well. Some of this might have been forward buying due to the expectation of the U.S. shutdown. We'll have to see how this develops in the coming weeks. Margin and cost management worked well at OF&D in quarter 3 with a gross profit margin on prior year level and visible reduction in relevant cost positions.

This helped to compensate part of the top line impact on the adjusted EBITDA margin. At FoodService, we see organic growth of minus 5.5% year-to-date. After positive growth in Q2, the run rate was negative in Q3 against a much higher base and in line with expectations. Year-to-date, our gross profit margin is down around 1 percentage point and impacted by, again, freight and tariff effects. In addition, we also see an impact from lower vendor rebates due to lower purchase volumes this year. We managed down costs, but not enough to compensate for the lower top line. Adjusted EBITDA margin was slightly positive in Q3 and pretty much neutral year-to-date. Let's now continue with the cash generation of the group.

Cash flow before change in net working capital followed EBITDA development in the first 9 months and in quarter 3. On net working capital, we released net working capital in Q3 after the buildup in the first 6 months. Contributions here came out of inventories and trade payables mostly. Operational CapEx was lower this year, and we had a cash in of a bit less than EUR 2 million out of the sale of real estate that we will no longer use in the Nordics. With the positive free cash flow we generated in Q3, we mostly compensated the cash out of the first 6 months. We will continue with our cash performance measures and significantly release inventories and trade receivables in Q4. In July, we announced that we would also look at additional cost -- cash contribution opportunities.

We have evaluated measures, especially a potential larger sale and leaseback transaction. In the end, we decided against it. It didn't make sense economically. Looking at our balance sheet, it's pretty much unchanged compared to end of June. Net financial liabilities are at EUR 154 million, slightly higher than last year end of September. Equity ratio is at 54% and with that towards the upper end of our target range of 30% to 60%.

Let me conclude my comments with my personal view on our financial performance in Q3. We are operating in a difficult environment and see continued top line pressure that's impacting our profitability. We are working on structural improvements that enable us to keep investing in the business and successfully transform the business by improving processes and systems. This is not a sprint, but an endurance effort. This is a turnaround we are working on, but we remain a robust business and generate positive free cash flow. And we have a strong foundation in our customer base and a high degree of loyalty. And therefore, I'm very much looking forward on realizing our potential in the coming months and years. Thank you, and back to you, Andreas.

Thank you, Timo. Looking at the remainder of the year, volatility remains high. In this environment, we've narrowed our guidance today with an expected organic growth rate between minus 8% and minus 4%. This means that we expect quarter 4 to come in on a similar run rate to quarter 3. Our adjusted EBITDA margin will likely come in towards the lower range of the 4% to 6% margin corridor. We do expect profitability in Q4 to remain at the level we saw year-to-date, which was 4.3%. Given the current macro risk resulting from ongoing trade disputes and the U.S. government shutdown, we cannot fully rule out a profitability of just below 4% for the full year.

I've talked about our performance measures to structurally improve our cost base at the beginning of the call. We do expect notable onetime costs of around EUR 10 million out of these measures in quarter 4. This will likely result in a full year effect similar to that of the prior year of EUR 17 million. For cash flow, Timo already mentioned that we evaluated options for additional cash flow contributions and prioritize midterm profitability over short-term cash generation. For the full year, we expect free cash flow to come in between EUR 10 million and EUR 20 million. Given the lower sales and earnings development, there is an increased risk for impairments towards year-end. We will finalize our multiyear plan in the coming weeks and then see where we stand.

Before we come to the Q&A, let me briefly summarize key points from today's earnings and my view on TAKKT. We're making progress with the execution of our TAKKT Forward Strategy. Due to the difficult environment and internal challenges, positive impact of our measures take longer to materialize than we expected at the beginning of the year. Our performance measures will allow us to elevate performance and increase investments into the business. We have a clear path going forward, and I remain confident that we will unlock substantial value for shareholders in the coming years. We have a clear portfolio focus addressing attractive markets with high margin potential.

We operate in a market-leading position with repeat and long-lasting customer relationships, offering opportunities to grow with our customers and beyond. We're working on performance measures for EBITDA and cash improvements and will return to improved and more resilient earnings in the coming years. We follow a clear strategy and road map underpinned by targeted investments in our capabilities and a clear execution focus. Our extensive and continuously growing sustainability offering is providing further growth opportunities. We remain committed to shareholder-oriented capital allocation, including dividends. As mentioned in July, we will decide on dividend payment for 2025, taking into account cash generation this year, expected cash flow for 2026 and CapEx requirements to further strengthen our processes and systems.

And with that, we're happy to take your questions. Over to the operator for the Q&A.

Yes. Thank you very much, Andreas and Timo, for your presentation and to dive into your numbers. [Operator Instructions] And in the meantime, we have one hand up from Christian Bruns. You should be able to speak now.

Yes. Thank you for the presentation of Q3 figures. And welcome, Timo to the management team. My questions are, could you give us an update on also your divestment candidate? So I think I haven't heard -- I wondered that D2G did a good operational development or at least okay operational development. And second, what's going on there? What are the options and plans for this business? And then you talked about the impairment risk. I think that's mainly on the FoodService, but maybe also on D2G division. And I think in FoodService, there's still a lot of goodwill in the balance sheet. Could you give us an idea how much impairment could be? That are my first 2 questions.

Thank you very much, Christian, for the 2 questions. I'll comment on D2G and then hand over as far as impairments are concerned to Timo. So as far as the D2G review is concerned, we're making progress. At the same time, we recognize that the market environment in the U.S. continues to be very volatile, which is also something we're considering as part of our strategic review. We have, as mentioned, a strong and committed team at D2G and their performance has notably improved these past months. We think there's a good opportunity to position ourselves as a one-stop shop offering a wider range of high-quality customizable display solutions. And frankly, we're not under any pressure to commit to a decision prematurely. So we will continue to work through this and keep you posted. Do you want to comment...

Yes, Christian, thanks for the welcome and for the questions. Yes, the impairment topic is a little difficult topic right now because we are in the middle of our budget planning and multiyear planning process, which we typically then present to the Supervisory Board beginning of December. So therefore, none of the numbers we're looking at right now are, I would say, well enough calculated to actually come up with a real number. But of course, since we've done the [indiscernible] impairment test last year, and we did have to do the impairment, therefore, there is no headroom left. Otherwise, that would have been different. In general, as you can see on the numbers, of course, we are in a difficult environment with all our U.S. businesses from the market perspective. And well, again, I can't talk about real numbers yet because they're just not done yet, but we are going to talk about a significantly high multimillion euro number on the impairment risk side. But again, as soon as we know enough or are fixed for that, we'll probably come back on that.

Okay. But it will be below -- it will not be a 3-digit number? Or is it too early to say this?

It is too early to say that. I can't rule it out. I can't confirm it we'll see. Again, you know how our budgeting process works, right? It's a couple of months of detailed calculations, so we're not done.

And I will move on to Thilo Kleibauer.

Yes. Hopefully, you can hear me now?

Yes.

Perfect. I've, yes, 2 questions. The first is on the gross margin. The gross margin further deteriorated in Q3, and you expect for the full year also a gross margin more below 39%. So what is the reason behind this? And is the gross margin pressure across all regions and business segments? Or is there a particular reason why the gross margin is down?

And my second question is regarding the plans for a larger sale and leaseback transaction, you said that these plans are stopped now. Maybe you can give us the background and what was the rationale to consider this and also to, yes, do not fix it.

So I'll hand over to Timo to address growth in further detail, right? As we mentioned in our prepared remarks, we're very focused on turning this business around, moving towards a solid performance in the outer years, which means we're really optimizing not for the short but really for the mid and long term. And this has been the backdrop for our decision on the sale and leaseback that Timo, maybe you want to comment on a little bit in further detail.

Sure. So let me start with the gross margin. So in general, yes, you're correct. Of course, the gross margin went down. The biggest effect on that is really the negative impact from the tariffs and the freight, especially the tariffs, even just mathematically, even if we pass through 100% of the tariff increase, the margin just from a mathematical point of view changes and is reduced. So that's the one part. Besides that, I mean, there's a short-term and a long-term answer. On the long-term effect, we do see a lot of stabilization now in the margin and also some improvement chances. I think on the pricing side over the last years, inflation was a topic.

So price increases, including tariffs were quite significant, but we also need to take care that we don't price ourselves out of the market. So what we're doing right now is focusing more on the cost of goods sold there, especially the efficient procurement is our biggest lever we are working on so that the cost savings on that side, hopefully, we're pretty confident actually on that one have a positive effect on the gross margin. So therefore, we do think that in the future, we will remain somewhere between 39% and 40% from the margin perspective. On the sale and leaseback, yes, I mean, we've done or looked at things like that. For us, we, of course, looked at different opportunities.

If we would need to raise money, there's always the potential of getting money from the banks through regular debt or a sale and leaseback and the terms of all the sale and leaseback options we saw were just not favorable. It was, to be frank, just too expensive. And at the same time, if you look at our balance sheet and our debt ratio, we are very well financed. There was really no current need for any additional financing and therefore, a very unfavorable rate of leasing it back just wasn't a good thing. It would have helped short term with the cash position, of course, but long term, we would have to pay too high amount each month, which we decided against.

Okay. But do you expect -- so you mentioned also a real estate disposal in the Nordics. Do you expect in the course of the restructuring now further facilities, which might be up for sale?

I think just to be clear, the EUR 2 million that came out of the sale in the Nordics, that's already in the numbers. So we did that. In the short term, there are no bigger effects to be expected. In the midterm, I think we'll need to see how we structure the business and what bigger restructuring effects are going to come. I'm probably going to talk about that next year.

[Operator Instructions] We have one more question in our chat box. Given the current earnings and free cash flow trends, could you please provide an update on your dividend policy? In light of the comments just made on dividends, is the previously announced minimum dividend of EUR 0.60 per share no longer valid? Can you at least confirm that the dividend will also be paid in 2025 regardless of the amount?

Thank you for the question. As I mentioned, we will discuss and decide on a dividend proposal when we have visibility on the cash generation in 2025 as well as our plans for 2026, including what our internal CapEx demands are for the coming year. As I mentioned earlier, shareholder return remains a high priority for us, while we will also make sure to continue paying out dividends responsibly and sustainably.

And we have one more hand up. Christian again.

Yes. If there are no other questions, I take the opportunity. Could you give us an update on the tariff situation and your pricing? Are you done with your pricing adjustments?

So thank you, Christian, for the question. As you know, we've got 2 factors that really come to play here. First, it's the direct impact from tariff that translates into higher freight costs, which we did see to some extent, also impacting, as Timo mentioned, our gross profit margin. And we were able to compensate that mostly through price increases, which we have done early in the process and where we also now see competition following the path of passing on the price increases in the U.S. And that said, right, there's obviously also the second indirect impact that we're seeing on the overall demand that is also driving an overall higher degree of uncertainty, right? But yes, we have passed on and will continue to pass on any price increases that we see or any tariff increases.

Okay. And maybe I would like to have a follow-up because also as I saw the questions on the dividend. I think you mentioned that you will look at this topic by looking at the free cash flow generation in 2025, which you have already gave a guidance of EUR 10 million to EUR 20 million. And also the free cash flow projection for 2026. So I would assume you would not choose a dividend, which is above your free cash -- projected free cash flow 2026 at least.

As an ingoing assumption, I think that's [ spot on ].

Yes. Okay. So because it should be sustainably...

Exactly. That's what we mentioned. That's what we're very focused on. We want -- we recognize the importance of the dividend. Having said that, we want to ensure we pay out sustainably and responsibly.

Yes, of course. And if in the years to come or maybe the short term, midterm, there will be a divestment of one of your subsidiaries, which are noncore now. Would you then consider prioritized acquisitions? Or would you also think about a special dividend you can release funds from the business by...

So our focus is on developing our divisions by improving these and then subsequently developing these over the coming years, right? We believe that there is a buy-and-build opportunity in the future for I&P primarily for -- given if you look at the market structure, indeed primarily within Europe that we will then have to see [indiscernible] against alternative cash and resource actions.

Okay. And also congratulations to your new job as more operational job, yes, even more operational.

And we have one more question in our chat box. Personnel cost was EUR 44.8 million for the quarter. Is this a sustainable level? Or was there any one-off effect?

So we didn't have any real one-offs, just timing, right? We're talking about below EUR 1 million in the quarter 3. So in general, we can say, well, sustainable on the personnel cost side is a little difficult to answer because, of course, there are a couple of changes. On the positive side, I think for the future, there is still some of the structural things we've mentioned before, outsourcing some of what we're doing and also moving some of the things we do to best cost countries, which in our case would be in Hungary.

At the same time, we are setting up, and this is what I mentioned earlier, we're in the process of now developing the budget plan for next year and the multiyear plan. And of course, we need to set up our organization ideally for the future. So therefore, again, is it sustainable? I think we'll need to look into different areas where we might invest some in the next years at the same time, use AI and different things we've implemented to reduce. But ballpark numbers, I would say it's an okay-ish assumption, might be some changes, but not huge.

In the meantime, we have received no further questions. That means we come to the end of today's earnings call. Should further questions arise at a later time, please contact Investor Relations. Thank you for joining, ladies and gentlemen. A big thank you also to you, Andreas and Timo, for your presentation and the time you took to answer the questions. Have a lovely remaining week, successful business. And with this, I hand back to Andreas for some final remarks.

Thank you, everyone, for your participation today. We will keep you updated, and we're looking forward to continuing our conversation when meeting you on the road or at conferences in the coming weeks. Our quarter 4 earnings call will be on February 24. Have a great day.

Good afternoon, ladies and gentlemen, and I warmly welcome you to the earnings call of TAKKT AG following the publication of the first half year figures of 2025.

I'm delighted to welcome CEO, Andreas Weishaar; and CFO, Timo Krutoff, who will speak in a moment and guide us through the presentation and the results. [Operator Instructions]

And with this, let's start, so we are happy with the first 6 months, and I hand over to you, Andreas.

Great. With the technical stuff out of the way, let me go again. Welcome, everyone, and thank you for joining us for our quarter 2 earnings call. This is the first call I'm hosting together with our new CFO, Timo Krutoff, who has joined us 3 weeks ago. Timo, I'm very happy we have you on board. I very much enjoyed your onboarding and our close collaboration over the last few weeks. I look forward to jointly continuing our work on implementing our TAKKT Forward Strategy and improving our performance sustainably in the coming months and years. Timo, over to you for a short info.

Thank you, Andreas, and a warm welcome to all of you also from my side. I'm very happy about the opportunity to have TAKKT's finance function as CFO for at least the next 3 years, and I'm especially looking forward to get to know you and discuss your view on TAKKT, our outlook and our strategy today and in the coming months.

But first, I want to very briefly introduce myself. In the past, I held several management positions in finance in the ThyssenKrupp Group. These included being CFO of Presta Camshafts, which is now Dynamic Components and after that, the CFO and CEO role at Bilstein. In my last role, I was the CFO of the engine manufacturer, Deutz. So I have industry experience in the automotive and service area and adjacent segments. And with that, hopefully good understanding about how our customers operate and what's relevant for them. In addition, I've successfully led finance organizations in turnaround situations and developed and executed transformation programs. I am convinced that I can add value and make a difference at TAKKT. I see a lot of potential in our group, and Andreas and myself, together with the team, will work on realizing these potentials. But for now, back to you, Andreas.

Thank you. Timo will present our detailed financials later on. But first, I want to give you an overview on where we stand with our financial performance, our TAKKT Forward Strategy and how we're adjusting to the challenging environment. Before we talk about quarter 2 performance, let's look at the bigger picture.

As you have seen, we adjusted our full year outlook on Tuesday last week. This is due to the continued market weakness and the persisting economic uncertainty with the tariff situation and other topics. We sell equipment to business customers in the current environment, the willingness to invest in the business or even to replace products is quite limited. We remain committed to our strategy. We're making good progress on the performance measures and also with our commercial initiatives, yet we do not operate independently from our environment. So let's have a closer look at quarter 2.

We've already expected another challenging quarter to our quarter 1 performance at the end of April, both due to the tariff impact and due to internal topics still playing a role. And while the initial very high level of tariffs was adjusted to lower values in May, there was no lasting solution to the tariff dispute in quarter 2, creating continued uncertainty. More on that in a moment when we take a closer look at our markets.

For our top line performance in Q2 was slightly better than in Q1 with a minus 5.7% organic sales development. This was overall in line with our expectations in April. I&P and OF&D performed similarly to Q1, while FoodService saw a strong improvement and achieved slightly positive organic growth. This was versus a very weak quarter 2 at FoodService last year. Thus, overall, a continuation of the top line stabilization we have now seen for 4 quarters in a row.

On gross profit margin, we were 0.5 percentage point below prior year at 39.2%. We cautioned against the potential tariff impact on gross profit margin in our Q1 call. Looking at Q2, we see that we did a good job with the price adjustment we put through in our U.S. activities. But we still saw an impact from increased freight costs, especially after the U.S. and China agreed on the tariff pause and imports picked up again. Given the lower top line and the gross profit margin impact, we had weak profitability with an adjusted EBITDA margin of 3.6% in Q2, where we are intensifying our performance measures to improve profitability both short term and midterm. More on that in a few minutes.

On free cash flow, we saw a cash out of EUR 4.3 million after a cash in of the same amount last year. This is mostly due to the lower level of earnings in quarter 2. And we also still have relatively high inventory levels as our U.S. businesses placed larger import orders after the U.S.-China tariff agreement. In addition to cost management measures, we're focusing on cash generation in the second half and expect a turnaround and positive free cash flow in the remainder of the year.

To give you some background, let me talk about the environment. We've already touched on the macro picture, and these are topics you're all familiar with. So just to summarize, despite the tariff pause, which was announced in May, there remains relevant downside risk from the trade and tariff situation. Due to this, our customers remain very hesitant to invest in their business. While the very recent agreement between the U.S. and the EU might reduce the level of uncertainty, it is still a notable headwind for export-oriented customers, especially those of our I&P division. And there's still no longer lasting agreement between the U.S. and China.

Looking at the GDP growth, we see very limited growth in Europe with the 1.0% growth rate in the Eurozone and pretty much a flat development in our home market in Germany. U.S. growth is only slightly better at an expected 1.5% for 2025 and showing a quarter-on-quarter slowdown this year. Looking at our industry trends, we also see headwinds. The PMI for the manufacturing sector has increased over the course of the first half of the year, but remains in contractual territory just below the 50-point threshold. Typically, we see an improvement in the PMI reflected in our order intake with a delay of between 3 and 6 months, we'll have to wait if this will materialize. So far, sentiment has improved, but the willingness to spend and invest remains dampened.

Looking at another data point, we see the negative sales trend in German manufacturing to continue in job cuts versus prior year accelerating from minus 0.5% to minus 1.8%. This is from an Ernst & Young report for quarter 1 based on statistical data. So quite a difficult environment for many of our customers.

This impression is also supported by what we are hearing out of the market from peers and competitors. Especially in Germany, there are several market participants who are currently seeing double-digit declines in the relevant product categories. And we're also seeing similar numbers on B2B marketplaces. Compared to these numbers, our current performance at I&P is a bit better than what we see in the market. At the same time, we had a weaker year last year, due to the internal topics. So the base might be a bit weaker for us.

Switching over to the U.S., we're seeing a lower demand for office furniture indicated by a significantly lower online search volume for office furniture, keywords. Investment decisions are postponed due to the challenging and volatile environment, especially in the U.S. B2B office furniture market. We as well as federal market participants see continued impact from much lower order numbers and order volumes from federal government customers in our office furniture business in OF&D. This is related to the efforts from DOGE to significantly cut government spending.

Customers in the health care and education sectors are partly impacted as well, and we record lower order numbers in the first half of the year from all of them as well.

For the FoodService activities and relevant indicators, we see the restaurant performance index fluctuating around the 100-point threshold with some readings below and some slightly above the 100-point mark. So this suggests flat development for our customers and with that only limited demand for all products. This then leads to a slight contraction in the U.S. food service market in quarter 2 with key challenges from tariff disruptions and overall cautiousness from customers due to the economic and policy uncertainty.

Having a closer look at the environment of our customers, we see restaurant traffic expected to decline about 3% year-over-year in 2025 and an increase of restaurant closures. Here, smaller and independent restaurants are affected disproportionately while restaurant change proved to be more resilient. So all in all, both the challenging macro environment and also a difficult situation on our markets, which limits customer demand.

Let me now give you a brief update on where we stand with our TAKKT Forward Strategy and what we're currently working on. On focus, our objective is to build on our strengths and unlock the full potential of our most profitable businesses. Here, we have streamlined the TAKKT AG and I&P organizational structure. This included the refocusing of our operations group function, where we implemented a regional logistics teams, bringing them much closer to the regional divisions and customers. We have also made good progress on evaluating and further exploring strategic options for our Displays2go business. This business has shown promising operational development in the last few months. We're still evaluating several options, and we'll keep you updated as soon as we have concluded our review.

On growth, we are working very diligently to scale our business with larger customers who have more complex procurement needs. We increased the number of customer visits to operate closer to the strategic purchases and end users. We're seeing promising results out of that, and we're on the right track. Looking at our U.S. activities and FoodService, in particular, we see good results out of our focus on integrating spare parts into our product range, and roll out targeted marketing approaches for these products. We're seeing promising results here with realized sales above expectation.

So, overall, we're on the right track, and we will continue with our growth initiatives. However, the impact of these initiatives is impacted by the current economic environment. But as I said, we're building the foundation for future growth, and we expect our initiatives to pay off sooner rather than later.

And third topic, we're putting an even stronger focus on improving our performance in accelerating our cost and cash management measures. These include both structural improvements as well as adapting our spend to lower demand. With these measures, we will realize midterm savings of at least EUR 30 million, more on that on the following slide.

Let's now look at the performance measures that we are working on as part of our TAKKT Forward Strategy. Given the limited potential of top line improvements in the current environment, we're stepping up our efforts to improve profitability and cash generation. Our activities include both structural changes, which will positively impact our efficiency and profitability in the medium term and adjustments of our spend to the lower demand we now expect for the second half of the year.

Let me give you an overview of the most important initiatives that are already underway. We're improving our sourcing with a more strategic approach, for example, by bundling volumes at fewer vendors, and we're reducing the complexity of our assortment with a rigorous 80-20 approach. We've already made progress with improvements in our freight and network setup and continue to push for more. This should help us to increase our efficiency and reliability and fulfillment, saving costs, but also improving customer experience at the same time.

We have several measures in place to increase our efficiency in marketing and other costs. This includes improvements in online marketing, but also further evolving our go-to-market approach with our omnichannel activities. And we're implementing improved processes and systems and will make use of automation and AI to increase efficiency.

In our core business, I&P, we have implemented a new operating system and are building up a shared service center. We're expecting substantial improvements in customer experience, but also cost savings out of this. More on that in a moment.

In addition, we have set up our drive performance initiative and have identified measures to substantially cut nonessential spending and accelerate structural cost improvements across all relevant cost positions. Out of these measures, we expect full year savings of at least EUR 30 million over the midterm, as mentioned earlier.

The second focus topic is cash. You have seen that we had a cash out of EUR 9.3 million in the first half after a very strong cash performance last year. Timo will give you more insights into the development of the last half year in a few moments. Prior to this, let me give you an overview on what we're working on the balance of this year. The biggest impact in H2 should come from a reversal of changes in net working capital. We will substantially release inventory that we built up due to the tariff situation. And we continue to work on improving payment terms and expect lower day sales outstanding, which also add to our free cash flow in the second half.

In addition, we are currently evaluating other options to generate free cash flow contributions. Out of these, we think we can add another EUR 30 million and with that compensate for the higher cash out from increased onetime costs this year. As you can see, we're quite active with cost and cash management and expect both short-term and long-term improvements out of these measures.

Let's now have a closer look at our core business, I&P. Here, we've already talked about our new operating model in our Capital Markets update end of March. We have made progress and started in the implementation phase. Let me briefly summarize what we're doing here. Our future setup in I&P is threefold. First, we will outsource recurring and transactional activities to an external partner. This includes tasks in order management and also basic financial functions, among others. This will increase flexibility and lower our cost base. Second, we are currently building up a competence center in Hungary. There, we're both building up additional capabilities, for example, in IT, automation and AI implementation and we're shifting some supporting and back-end functions over to the shared service center from our local activities across Europe.

With centralized service center operations, it is easier to implement state-of-the-art processes and systems and increase efficiency with standardized workflows. And the third pillar is our core functions. These are tasks that really add value to our customers and that allow us to differentiate ourselves from competition. It also includes steering and oversight for the division. With the outsourcing shift into shared service centers, we're establishing an environment where we can put all our attention and focus on how to best serve our customers.

So to summarize, we are streamlining our organization to increase customer focus. We're using state-of-the-art digital processes and are removing manual and transactional tasks. We're improving processes, systems and technologies with the help of established external partners and increasing flexibility. The full implementation of the new model is expected to take around 1 year. Midterm, this will allow us to realize material run rate savings contributing to our target of EUR 30 million.

And with that, over to Timo for a more detailed view on our financials.

Thank you, Andreas. Let's have a closer look at our performance for Q2 and the first half year. Starting with the TAKKT Group and the view on the last quarter. Sales came in at EUR 240.3 million, down 7.7% compared to prior year. On reported sales, we continue to see the portfolio impact from the divestment of MyDisplays at the end of last year, accounting for minus 0.6%. And with a much weaker U.S. dollar we saw in Q2, we now also had a negative foreign exchange impact of minus 1.4% on TAKKT level after positive FX effects in Q1. Adjusted for those impacts, organic growth was at minus 5.7%.

As Andreas mentioned before, the slight improvement and continued stabilization compared to Q1 despite the challenging environment.

Let's continue with EBITDA development. Reported EBITDA was significantly below the previous year at EUR 5.7 million after EUR 13.2 million last year. This is mostly due to lower top line with an impact of around EUR 8 million. Gross profit margin was at 39.2% compared to 39.7% prior year. We have talked about our countermeasures to the tariffs in detail in our Q1 call, and we've been quite successful in passing on price increases to customers in our U.S. business. So when you hardly see any direct tariff impact on gross profit margin from higher cost of goods sold in the U.S.

What we are seeing is still an impact of freight costs at the U.S. divisions that we also saw in Q4 of last year and Q1. And we also faced temporarily higher freight costs after the tariff agreement between China and the U.S. Everybody placing orders, they had held back led to constrained capacities and somewhat higher prices. Overall, we are in line with expectations and the guidance range with a gross profit margin, and we expect to see a gross margin improvement in the second half compared to the low level of H2 of last year.

On costs, we continue to realize savings on personnel, while marketing and other costs remained flat. On personnel, savings would have been even higher if not for a positive effect in the prior year, we saw a release of provisions for bonus payments. So the EUR 1.3 million in savings would be closer to EUR 4 million if we really look at it like-for-like. Onetime costs, mainly from personnel changes were lower than last year at EUR 3 million compared to EUR 4 million last year. Out of the implementation in the new I&P operating model, we expect significantly higher onetime costs in the second half.

The profitability on adjusted EBITDA was at 3.6%, therefore, 3 percentage points below prior year, where we were at 6.6%. The lower profitability was due to the decline in gross profit margin and higher cost ratios. Of course, this is a profitability level by far or far below of where we want to operate the business. As Andreas explained in detail, we have implemented a broad range of cost management measures and expect positive effects out of these, both short and midterm.

Let me then continue to the year-to-year review in the first half of 2025. I will keep the comments a bit shorter here since developments are often the same for Q2 and first half year in total. Sales were at EUR 491.7 million, and with that 7.1% lower than prior year. On reported sales, positive FX effects from Q1 and the negative Q2 impact canceled each other out. The portfolio impact from the divestment of MyDisplays was minus 0.4% in H1. Adjusted for those impacts, organic growth was at minus 6.7%. All divisions, unfortunately, still with a negative development. I&P and FoodServices more stable with mid-single-digit decline, while OF&D was down low double digits in percentage terms.

Let's now look at costs and profit in the first half year. Reported EBITDA was EUR 16.9 million compared to EUR 29.9 million in the first half of 2024. On the EBITDA bridge, you can see this is mainly a result of the low top line with a EUR 15 million impact, but also due to lower gross profit margin with a EUR 5 million impact. Of the EUR 20 million lower gross profit, we compensated around EUR 7 million with lower spend on marketing, personnel and other costs. Onetime costs were EUR 4 million compared to EUR 7 million last year. Adjusted EBITDA margin is at 4.3% after 7.0% last year. For the full year, we are working to increase profitability and expect a slight improvement compared to H1.

Let's now continue with the performance on the divisional level and first with our core business, Industrial and Packaging. Andreas has talked about the continued weak market environment in Europe manufacturing. The manufacturing PMI has shown a positive trend, but we are still below the expansion threshold. So top line performance in Q2 has been virtually the same as in Q1 with organic growth coming in at a minus 5.7% in the first half. Looking at our different regions, we see Switzerland and the Nordics holding up relatively well and more or less on prior year's level. Germany with a stronger export orientation of the economy and also France are more difficult currently with a double-digit decline in H1.

Looking at profit, gross profit margin remains below prior year by 1.2 percentage points and impacted by the commercial decisions to be a little more aggressive on pricing. In addition, we also saw higher freight costs out of price increases at I&P. Still, we are at comparably high gross profit margins at I&P at more than 42%. Adjusted for onetime expenses, costs were similar to prior year at I&P. So the cost savings we pushed through were counteracted by higher expenses for some commercial initiatives and transformation-related costs as, for example, for tech and consulting. Onetime costs were lower this year at I&P with EUR 1.4 million after EUR 3.3 million last year. On adjusted EBITDA, we generated a margin of 8.9% compared to 12.2% last year. So a significantly lower profitability compared to prior year due to the profit margin, lower cost ratios.

Let's now move over to the U.S. activities, starting with our division, Office Furniture & Displays. On reported sales, we saw the impact of the MyDisplays divestment here with a minus of 1.9%. For organic growth, we were at minus 12.6% for the half year and so a slight improvement from Q1 to Q2. Displays2go performed slightly better with a high single-digit organic decline, while NBF was down in the low double digits. In our office furniture business, we are facing several headwinds at the moment. First is an overall weakness in business-to-business office furniture sales due to the degree of uncertainty and the tariff impact. CEO confidence indicators show relatively low values in recent months, and this translates to a lower order volume.

In addition, we see the impact of DOGE efforts in order from -- sorry, in orders from federal customers, which are down more than 40% year-over-year. In addition, as Andreas mentioned, this is also impacting our sales in the Healthcare and Educational segment. On profit, as expected, gross profit margin was below prior year, but still on a good level at 43.1%. The lower gross margin level was to a large part, a conscious decision to adjust the very high margin to a more competitive level. In addition, we still see an impact from higher freight costs here at NBF. On costs, we are doing a good job compensating a large part of the lower absolute gross profit. So we managed to keep cost ratio stable when we adjust for onetime costs. These did not have much of an impact in H1 with less than EUR 1 million and with that also slightly below prior year.

Despite the good cost compensation, we are, of course, not on the profitability level we want to achieve with our OF&D business.

Let's now look at FoodService, starting with the sales development. Here, we saw a return to positive organic growth in Q2 and with this also a significant improvement compared to Q1. So we continue to head in the right direction here after a very difficult year at FoodService last year. But it's also true that we are running against a very weak base in Q2. So we have to wait and see how the coming months will develop.

Looking at the profitability side. On the gross profit margin, we improved to 28% versus 26.6% last year. Here, we had a slight negative impact from tariffs in the second quarter. On costs, we see marketing, personnel and other costs on prior year's level in H1. Marketing was impacted by an increased focus on selling products on marketplaces. Here, we see good growth opportunities. Personnel costs are impacted by the rebuild of our sales teams that we talked about in our last calls. We are still missing top line given our current cost structure. So we are currently operating with a negative adjusted EBIT -- sorry, EBITDA margin.

In H1, we stood at minus 0.7%, very similar to the minus 0.6% last year. We are working on improving profitability at FoodServices and expect to return to positive margins in H2 and also for the full year. But obviously, still a way to go to substantially improve our profitability in this business.

Let's now continue with cash generation for the group. Cash flow before change in net working capital was substantially lower than last year at EUR 11.4 million. This is a consequence of lower EBITDA in H1. Looking at changes in net working capital, we significantly released net working capital last year. This year, we temporarily invested in net working capital. A large part of that was higher inventory in the U.S. divisions, first in preparation of the tariffs in Q1 and now after the agreement to lower tariffs between, especially now here, U.S. and China, we again placed larger orders to suppliers overseas. We also saw an impact of lower prepayments. We typically receive these in connection with larger orders and project business.

And with customers being very hesitant to commit to these projects, we are also seeing less prepayments curve, EUR 3 million compared to cash in of EUR 14.1 million last year. Consequently, operating cash flow was much lower than last year at EUR 2 million. CapEx was slightly lower than last year. Payments of lease liabilities didn't change much. In total, this led to a free cash flow of minus EUR 9.3 million in the first half of this year. Andreas talked about the cash measures we have implemented and are executing in H2. We will secure a cash turnaround and return to positive free cash flow in Q3 and Q4. The focus point of our efforts will be a substantial release in inventories, but we also work on a visible improvement in DSO and expect this to positively contribute to the free cash flow.

A quick look on our balance sheet. The biggest change here compared to year-end 2024 came from the dividend payment of EUR 38 million in May. Together with the negative free cash flow, this led to an increase in net financial liabilities to EUR 151 million. A third of this is consisting of lease liabilities. Compared to 12 months ago, you can see we are on a very similar level with our net financial liabilities. Equity ratio is now at 55% and with that, still towards the upper end of our target range of 30%. So we continue to operate with a very solid balance sheet in this challenging environment we are in. That's a key strength for us and allows us a high degree of flexibility and independence.

Let me conclude my comments on our financial performance with my personal view on the group. In the past 3 weeks, I got to know a very dedicated team here at TAKKT that is driving the transformation and working diligently to improve the commercial side of the business as well as our financial performance. We have a very attractive business model, a loyal customer base and our market position provides a lot of opportunities. In addition, there are a lot of aspects we can improve on. This is what motivates me to take over the responsibility for TAKKT in the CFO role, and that's what I'm working on together with the team to deliver. We are very focused on improving profitability and cash generation in the coming quarters and midterm. I'm looking forward to keep you updated on our progress here.

And with that, back to you, Andreas.

Thanks, Timo. I've talked about our environment and our performance measures in detail at the beginning of this call. So I'll be a little briefer here. As far as the overall economy is concerned, we see persistent uncertainty around the tariff situation that is affecting investment decisions and order behaviors of our business customers in our markets. We see good demand in some areas, for example, from customers in defense, but this is not sufficient to compensate for the weakness in other segments.

Looking back at our expectations in April, there's both good news and bad news. Good news is that the direct tariff impact was less pronounced. We reacted quickly and managed to limit the impact on our gross profit margin. Bad news is that we saw and will most likely continue to see a substantial indirect impact. Yes, we now do have an agreement between the U.S. and the EU. But while this makes it easier to plan ahead for customers at I&P, it is still a substantial headwind, especially for German manufacturers. So what we have seen in Q2 and to some extent, expect to continue to see is the indirect impact of tariffs.

Sentiment indicators are improving, we remain cautious and we'll have to see if and how fast this translates into our order intake. July so far looked better than the previous months. But as I already said, it's too early to declare this a continuing trend yet. In the U.S., we see a slowdown of GDP growth, which is expected to continue into the second half. Biggest topic here is the uncertainty and impact of cost increases being passed on to consumers on overall demand. In addition, we also see a very restrictive government spending, which is affecting our NBF business specifically. Q3 is traditionally the most important quarter for this customer segment. We will see how this develops in the coming months.

Let's then talk about what we can influence and what we're working on. High priority is on the continued implementation of our TAKKT Forward Strategy and here specifically on our performance measures. This includes the implementation of our new I&P operating model and the buildup of a shared service center approach. We have already made good progress here and expect to shift additional tasks from other European locations to the center in the coming months. This will lead to additional onetime expenses, but also already to realize savings in H2. Given the lower top line, we're accelerating our cost management measures in H2. I've talked about what we're working on earlier in the call. This includes both structural improvements that we're implementing, for example, in sourcing or with our processes and systems and IT, and it includes adjusting our spending to lower demand for all relevant cost positions.

In addition to cost management, we prioritize cash measures. Timo already talked about our initiatives to structurally improve our cash conversion cycle. While there's a lot of focus on costs and cash, we also continue to execute our commercial initiatives. We see promising results [indiscernible] measures, we -- while the impact of these measures currently is not enough to compensate for the weak environment, we're making progress here and are building the foundation for future growth by putting our customers at the center of everything we do. We specifically focus on bright spots where we see the most potential, for example, in defense, infrastructure and life science, and we will continue to focus on customers in these markets.

Let's now come to our expectations for the second half of the year. We have updated our outlook last week due to the continued weakness in our markets and the high degree of volatility. For the top line development, we now expect an organic growth rate between minus 9% and minus 2%. This implies that we no longer expect a significant improvement in the second half compared to the first. I've already mentioned that order intake in July was better than in the previous months, but we're now entering a time where order intake is relatively low over the summer break. So the development in September will be much more relevant. And we see both downside risks and upside opportunities out of the environment. So the guidance range remains relatively broad for the moment. Given the lower top line, we have also updated our profitability expectation and now guide for an adjusted EBITDA margin between 4% and 6%.

We expect positive impacts out of the measures we have implemented and identified. This will partially compensate the lower gross profit in H2 and should lead to a slight margin increase in H2 compared to H1. For free cash flow, we're working on substantial improvements in H2. We will reverse the negative cash out of EUR 9 million and expect to generate free cash flow in the low to mid-double-digit million euro range. This will come out of structural improvements with a reduction of 5 to 10 days in our cash conversion cycle, and we are evaluating additional opportunities for cash contributions to compensate for the higher cash out from onetime expenses.

Two additional comments on what we expect for the second half. We saw the negative FX impact on reported figures in quarter 2. This will most likely have an even bigger impact in quarter 3 and quarter 4. So reported sales and reported EBITDA will be impacted by the lower U.S. dollar and reported EBITDA will, in addition to -- will, in addition, be influenced by higher onetime costs than last year. For the full year, we expect onetime costs similar or somewhat higher than the EUR 17 million we incurred last year.

Before we come to the Q&A, let me briefly take an even broader perspective on where we stand and talk about my view on TAKKT as an investment. I was convinced of TAKKT's potential when I took over the CEO role 1 year ago, and I'm even more convinced that we are on the right track 12 months later. Our current financial performance is not where we want to be. We have a detailed and convincing strategy that we're executing to improve our financials. I'm seeing progress in many key metrics, but in the current environment, it takes time for our measures to fully gain traction. At the current level, I'm also certain that we're an attractive investment with our continued implementation of the TAKKT Forward Strategy, our results will improve. Success remains in our hands.

To summarize the investment proposition, we have a clear portfolio focus addressing attractive markets with high margin potential. We've made progress in strengthening the I&P as core with the buildup of the shared service center approach and will take additional steps in the future. We operate in a market-leading position with repeat and long-lasting customer relationships, offering opportunities to grow with our customers and beyond. We have shown our resilience in EBITDA and cash generation in the past and will return to performance already in the second half of the year. We follow a clear strategy and road map underpinned by targeted investments in our capabilities and new execution focus, an extensive and continuously growing sustainable offering, providing further growth opportunities. And we combine our track record of attractive and reliable dividends with a shareholder-oriented capital allocation.

And with that, we're happy to take your questions. Over to the operator for the Q&A.

Thank you so much, Andreas and Timo, for your presentation and the dive into your first half year. So dear participants, we are now open for your questions. [Operator Instructions] And by now, we have the first virtual hand from Christian Bruns.

Yes. Hello? Let me start. First of all, yes, good to have you on board, Timo, and I'd like to -- look forward to meeting you in person. I hope that there will be a possibility in the next weeks or in the weeks to come. So my first question is on your transformation or on your shared service center. I mean, I think that you will have massive layoffs in maybe, I think, in Stuttgart. And I also wonder -- and of course, a buildup then of the staff in Hungary. And I just wonder if -- what you can say about your talks with the Workers' Council, the employees. I know also that's difficult in such times to keep employees happy and motivated. And I know that TAKKT also looks at Net Promoter Scores as well for customers as well as for employees. And yes, is it -- do you -- are you confident to manage this without demotivating the existing staff? That's my first question.

Thank you very much, Christian. And to answer your first remark, of course, there will be the opportunity to also closely engage with Timo over the coming weeks and months. As far as your question is concerned related to our shared service center buildup, right? As we mentioned, this is an approach that we're pursuing focused on 3 priorities. First and foremost, we set out to better serve our customers. In order to do this, we need internally to upgrade our systems and processes, moving currently manual tasks into automated, with artificial intelligence, enhanced processes, freeing up capacity from employees to not do transactional manual tasks, but moreover, really provide value as they are really focused on towards our customers. This will imply a change in the profiles of many jobs, right?

And this will also mean that activities -- there will be new activities created, new jobs created. There will be activities that are changing. But yes, you're right, there's also activities that will no longer be performed within the current location. They may be either fully automated or they may move to shared service center captive or noncaptive. What is important is that, first and foremost, as I mentioned, we do this to increase our customer focus, which will even further elevate our already very solid and very good cNPS score. The second element I want to highlight is, if you listen to our employees, they will tell you exactly that, namely that our processes are sometimes too cumbersome, activities are still too manual, right? So we've embarked on a very constructive dialogue that is ongoing with the Workers' Council to find an appropriate way forward and solution that will be respective of all parties.

Okay. Good to hear that. Maybe can I add a follow-up question on -- because I didn't -- I'm not sure if I got it right, do you expect a positive EBITDA margin for the FoodService division for the full year? I was not sure if I heard that correctly.

Chris, the answer is yes.

By now, there are no further questions. So at this point, just a reminder, if there's still open topics you would like to discuss, just let us know or Andreas and Timo explained everything so well. But in the meantime, we come back to Christian. So just move on with the follow-up questions.

Sorry. Okay. If no one else, then of course, I take the opportunity. You said that order intake in July was better than in the previous months, if I listened correctly or if I heard this outlook correctly. And -- but you also took that in perspective that August is not the most important month, but September is more important. Nevertheless, what do you mean with better than an improvement in order intake? I mean I think your order intake is most of the times, I think, it's only 1 or 2 weeks, I think, duration until the order is executed. So does that mean you had a better start in or you expect a better start in August? Or is that too much?

So we're book and turn business, right, where we -- as opposed to book and bill with long lead times. So what we're seeing for the first couple of weeks in July, and as you can imagine, we're tracking this very closely, is that compared to prior months year-over-year, we're performing overall better, right, but still slightly negative.

Yes. Okay. So that fits into the picture of the course of the year, I think. And...

Right, what I would say is, right, a dot is a dot, 2 dots are a line, 3 dots are a trend. So what we're seeing is a good development, right? And we're tracking it really closely division by division. August usually is a period where sales go down due to summer vacation period, right? We're seeing some of that coming. As we outlined, it will be September, also considering government season in the U.S. that we're really watching carefully.

Okay. And maybe a follow-up on your U.S. business and looking at your inventory, I think you stepped up inventories also with regard to the tariffs there. Is that right? So if you look at the working capital movement, is that you ordered more from Asia to sell it in the U.S. in the first half of the year. Is that right? Or is there also inventory buildup in Europe?

Timo?

I can do that. Yes, it's indeed mainly in the U.S. I mean there is a little bit in Europe. It's seasonal anyways. We have seen that last year as well. But the main reason really is, yes, we were very cautious on what was going on in the tariff situation, especially between the U.S. and China. And as soon as that was -- I can't really say solved, but postponed or we were sure what we could do. After a while, we did build up inventory again. You need to know that our Incoterms mean that as soon as its latest hits the ship, it's our inventory. So there was a very quick effect from us doing the orders until it hit our books. So that's why it was already then in the June numbers and therefore, in the first half year.

No, by now, there are no further questions. So if there's a last one you would like to ask, just please go ahead.

No, I really have no further questions. I would like to get into discussion with Timo and of course, also with Andreas in person, as I said before. And yes, that would be nice if you could arrange that in the weeks to come or in the months to come at least. And I wish you all the best.

So everything seems to be answered by now. So yes, this means we come to the end of today's earnings call, but should further questions arise at a later time, so please feel free to contact Investor Relations. And yes, a big thank you to you, Andreas and Timo, for your detailed presentation and the time you took today. So from my side, it was a pleasure to be your host today. Have all a lovely remaining week. And with this, Andreas, I hand back to you for some final remarks, which concludes our call.

Thank you for your time and interest in TAKKT, and thank you, Christian, for your questions. Our next earnings call will be on October 28. We will keep you updated on any progress and look forward to talking to you individually in the meantime. Have a great day.