Aumann AG (AAG) Earnings Call Transcript

Good day, and a warm welcome to today's earnings call of the Aumann AG following the publication of the financial half-year figures of 2025. The CEO, Sebastian Roll; and the CFO, Jan-Henrik Pollitt, will speak in a moment and guide us through the presentation and the results. After the presentation, you will have the possibility to place your questions directly to the management in our Q&A session. We're looking forward to the presentation. And with this, I hand over to you, Mr. Roll.

Yes. Good afternoon, everyone. It's great to have you with us. So thanks for the kind introduction and also a warm welcome from both of us. For those I haven't met yet, let me quickly introduce myself. My name is Sebastian Roll, and I'm the CEO of Aumann. And joining me today is our CFO, Jan-Henrik Pollitt, who will share his insights a little bit later. I really appreciate your interest in Aumann in this earnings call. Over the next few minutes, we will take you through a quick snapshot of Aumann's current developments, shaping the mobility and automation markets and of course, a look at our financial performance in the first half of 2025. So let's start with our business model. We build high-end fully automated production lines tailored to the needs of our global customers. With decades of experience, industry leaders rely on Aumann Solutions to set new production standards. One of our competitive advantage is staying ahead, especially in fast-growing markets, enabling us to quickly provide customized solutions. This is while the automotive market, especially the E-mobility sector remains so attractive for us. The transition to E-mobility and the shift in products continues to drive positive momentum. In addition, the robotics and automation market is growing rapidly, driven by demographic change, labor shortages and cost pressure. We plan to expand our focus on these opportunities going forward. With our next automation segment, we will benefit from these macroeconomic trends. Let's take a quick look at Aumann's solutions. Our portfolio range from modular solutions and complex process solutions to large-scale production solutions. In modular Solutions, Aumann offers standardized sales systems. They enable our customers to react to fully flexible and cost optimized on market demands. In addition, Aumann develops production lines for complex processes such as winding, coating and testing. The aim is to implement special process steps in the most efficient way. Moreover, Aumann offers customized large-scale production solutions built for a maximum output while ensuring high quality. Thanks to Aumann's wide range of solutions, we can fully support different production goals of our customers. So this slide shows how Aumann became a technology leader in E-mobility. Starting from the traditional automotive market, E-mobility was identified as a target market. Through strategic M&A, Aumann took the first step into the E-mobility. Building on our know-how, we develop different solutions for the rotor quickly followed by solutions for the stator and finally, full e-motor assembly. After the e-motor, we continued our journey using our skills to sell large-scale production solutions for battery modules and packs. In addition, we introduced our own modular systems, for example, for inverter assembly, but also very useful in the field of Next Automation. Furthermore, we entered into a new field of converting technology. This enables us to provide production solutions for electrode manufacturing. Aumann as I said, is a leading provider of turnkey E-mobility solutions. This illustration shows the drivetrain of a fully electric car, and nearly all components can be manufactured on Aumann production lines. Right from the start, Aumann placed a clear focus on the e-Drive unit. Currently, each customer follows very different approaches in development. As a turnkey provider Aumann offers all the latest production solutions for both: stators and rotors, and we go further. With our specially developed modular system, we have expanded our portfolio to include production solutions for electronic components such as sensors and inverters. This allows us to offer customers tailored scalable solutions even in this sensitive area. Now let's shift our focus to our battery portfolio. Our success over the years is also driven by our strong position in the field of battery systems. From our perspective, we benefit for 2 reasons. Firstly, as a pioneer in technology, we cover the full range from battery modules, battery packs to cell-to-X solutions. Secondly, new designs like cell-to-pack set high demand and we deliver the production technology to match. Now let's take a look at the E-mobility market today and in the future. Battery electric vehicles sales continues to gain traction. In the first half of 2025, more than 5.9 million were sold worldwide. This means a plus of 37% in comparison to the same period last year. China stays in the lead with over 3.7 million units but Europe follows with strong growth, reaching more than 900,000 units with 22% increase compared to last year including Germany with an impressive 38% growth. The U.S. market which currently shows the lowest volume in comparison is at least growing at a steady 6%. By 2030, BEVs are expected to make up 40% of sales by 2035, even 2/3. Despite this positive growth, the industry has been slowing down since 2024. The main reasons are changing market conditions. Even the 2 major issues, future emission targets and tariffs have hurt the automotive investment climate, putting many projects on hold. Nevertheless, rising BEV sales and a more stable geopolitical situation are expected to drive new investments in the near future. Let us return to the beginning of the presentation. As mentioned, besides the automotive industry, we are shifting our focus on other industries that need more efficient operations, higher productivity and fewer manual steps and errors. At the same time, rising labor costs and the lack of skilled workers are driving companies to automate. In this context, we have moved our next automation segment from an opportunistic to a strategic approach. This segment focuses on growth industries beyond automotive, such as cleantech, aerospace, defense and life sciences. Let's take a closer look. In our segment, Next Automation, we have defined 3 strategic growth areas. Aerospace, for example, is picking up speed. Demand is growing in civil aviation and defense budgets are boosting. We are making this a priority. Drones, for example, are a perfect fit for us. Electric motor, battery packs, full system integration and end-of-line testing just like in E-mobility, same technology, new applications. Besides aerospace, cleantech is booming. German government are putting EUR 500 billion into infrastructure and climate. This is driving more investments into renewables, hydrogen and energy grids. Our third pillar is life sciences. An aging population, strong investment and healthy margins make it a very promising industry. Now I would like to hand over to Jan.

Yes. Thank you, Sebastian, and also a warm welcome from my side. I would now like to share with you the financial figures of the first half of 2025. Let me start with a quick overview. Based on our guidance for 2025, it is clear that we will see a lower revenue this year while maintaining a strong and attractive margin level. At the same time, we acknowledge that the market environment is still challenging. Under these circumstances, in the first half of 2025, we reached a revenue of EUR 108 million, which is 23% below the previous year and in line with our full year guidance. Our profitability remained strong with a double-digit EBITDA margin of 10.5%. Order intake after 2 quarters amounted to EUR 90 million, which is 31% lower compared to last year. Order backlog reduced from the year-end level of EUR 184 million to now EUR 162 million. Furthermore, our balance sheet remained strong with EUR 105 million net cash. Let us now jump into a few details. Based on the softer order intake and backlog over the course of 2024, we forecasted a decline in revenue for 2025. Across segments, we achieved a revenue of EUR 108.3 million, which means a decrease of 23% year-over-year. The revenue of the E-mobility segment decreased by 21% to EUR 89.4 million. And the Next Automation segment decreased from EUR 27.8 million to EUR 18.8 million as the previous year contained a larger revenue from a big order in the photovoltaic area. On the earnings side, we only see the volume effect and fortunately, no quality effect. Our profitability shows a stable result despite decreased revenues. EBITDA declined in the same proportion as revenue minus 24% to EUR 11.4 million, and the EBITDA margin of 10.5% is thus at previous year's level. The margin still remains above the expected range of 8% to 10% for the full year 2025. The solid profitability in the first half of 2025 is based on a good quality of the order backlog, a strict cost discipline in order execution and the adjusted capacities to the subdued market situation. Bottom line, 10.5% EBITDA margin means an EBIT margin of 8.5%. The achieved revenue and earnings underline the company's operational performance and volume flexibility. Order intake and order backlog decreased significantly below the previous year's levels due to the challenging market environment. We see volatile political and economic conditions, tariff dynamics and a persistently subdued investment climate in the automotive sector. On the other hand, the efforts in the next automation segment are gradually translated into order intake as the sales pipeline is rising. Across segments, we see a decline in order intake of 31% year-over-year to EUR 90 million. This also results in a decreased total order backlog of EUR 162.4 million, which means a total reduction of 44% year-over-year. However, the current backlog is still solid in terms of profitability. Let us take a look at our segments. The E-mobility segment, order intake of EUR 68.1 million is 39% under the previous year due to the mentioned market conditions. As a result, order backlog decreased by 53% to EUR 115.4 million. At the same time, revenue decreased by 21% to EUR 89.4 million in the first half of 2025. EBITDA develops in line with the volume effect by minus 19% to EUR 10.7 million, which means a margin of 11.9%. In the Next Automation segment, order intake increased year-over-year to EUR 21.9 million as the new positioning is opening new markets. The order intake includes an order in the mid-single-digit million euro range for cleantech applications. As said, the previous year contained a larger volume in order backlog and revenue due to a big order in the photovoltaics area. At the end of June 2025, order backlog amounted to EUR 47 million. After 6 months in 2025, revenue decreased 32% year-over-year to EUR 18.8 million. And the EBITDA margin is stable at 13.5% on a lower revenue level, which leads to a total EBITDA of EUR 2.5 million. By the end of June 2025, our balance sheet continues to be in a good shape with an equity ratio of 63.3% and EUR 111 million cash, of which EUR 105 million are net cash. This solid financial foundation allows us to respond flexibly to market opportunities and continue to drive the expansion of the Next Automation segment, both organically and through increased M&A activities. To conclude, we confirm our guidance for 2025. In the last years, we increased our revenue by almost 50% and EBITDA by more than 300%. Unfortunately, this year, we cannot continue this trend. The market environment and the noticeable reluctance to invest will lead to a decline in revenue to between EUR 210 million and EUR 230 million. However, on the profitability side, we can benefit from our order backlog and the flexible structure of our company. We will, therefore, also achieve an EBITDA margin of 8% to 10%. Let me hand over to Sebastian again.

Yes. Thanks. So to sum up, in the first half of 2025, we achieved strong operating results with a double-digit EBITDA margin, driven by strict cost management and order processing and capacity adjustments. Unfortunately, order intake fell to EUR 90 million, with e-mobility down about 40% due to market uncertainties, tariffs and weak automotive investments. Nevertheless, we expect to see the first signs of industry recovery once the geopolitical climate stabilizes, also supported by continued strong BEV sales across all regions this year. All in all, for 2025, as said, we anticipate lower revenues but a solid EBITDA margin of 8% to 10%. Meanwhile, we are pushing ahead Next Automation, unlocking growth beyond the automotive industry. A key focus, as you know, is aerospace and defense, backed by rising budgets and urgent needs. Due to our strategic shift, Next Automation is already growing with rising order intake. Our key goal is to accelerate this growth both organically and through M&A. Thank you very much for your attention. We are happy to take your questions.

Thank you very much for your presentation and transparency, gentlemen. If participants will now move on to our Q&A session. [Operator Instructions] We will hold the room for a moment. So Carlo can speak. The stage is yours.

Congratulations on navigating this challenging environment. I was wondering -- I have a couple of questions, but I was wondering if you could provide any details on the composition of the margins of your order intake if you're seeing the weaker environment pressuring those margins or if you expect the same around 8% to 10% EBITDA margin?

Yes. I mean, in the current situation, it's not so easy to get this kind of margin. But we really take care of this. So in the order intake, for sure, we have this kind of margins different from project to project. And in the order backlog, and I think this is something we mentioned several times, we even have a little better margin situation. What we see right now is that also, I mean, it's clear, but also we can get better prices from our suppliers as well. So that's the reason why we can manage this kind of margin level right now.