Aumann AG (AAG) Earnings Call Transcript

Welcome to the earnings call, ladies and gentlemen, of the Aumann AG regarding the first half year figures for 2026. I'm delighted to welcome the CEO, Sebastian Roll; and CFO, Jan-Henrik Pollitt, who will guide us through the presentation and the figures shortly, [Operator Instructions] And having said this, Sebastian, the stage is yours.

Thanks. So good afternoon, everyone, and thank you for joining us today. I'm very pleased to have you with us. And for those I haven't met yet, my name is Sebastian Roll, and I'm the CEO of Aumann. And together with me today is our CFO, Jan-Henrik Pollitt. So we really appreciate your time and your continued interest in Aumann. So in the next few minutes, we will guide you through a brief overview of Aumann and the mixed market picture in the first half of 2026, the latest developments in E-mobility and Next Automation, including the progress we are making, especially in Next Automation and of course, a look at our financial performance where Aumann delivered a solid first half of the year. So with that, let me start with a brief overview of our business model. So at the core of our business, we develop and build highly automated production lines for leading international customers. So our solutions are designed around the specific production needs of each customer, combining many years of automation expertise. Historically, E-mobility has been Aumann's key strategic focus, where we provide automation solutions for applications such as electric powertrains, battery systems and other electrified components. But our automation expertise goes well beyond the automotive industry. And this is becoming more and more important for Aumann. So the global automation market is supported by strong long-term trends such demographic change, labor shortages and increasing cost pressure. With our Next Automation segment, we are using these opportunities to bring our technology and know-how into a broader range of industries. So this helps us to further diversify Aumann and take part in the long-term growth of the overall automation market. So let's take a closer look at Aumann's solutions portfolio. So our portfolio ranges from modular solutions to complex process solution and fully integrated large-scale production solutions. This gives us the flexibility to support different customer needs and different levels of production complexity. So our modular solution offer a flexible and cost-efficient starting point and can be adapted to changing market and production requirements. For more advanced manufacturing processes, we combine our core technologies such as winding, coating and testing to deliver integrated solutions. The goal is always to implement special process steps in the most efficient way. At the highest level, we bring together these technologies into complete turnkey production lines designed for high output, efficiency and quality. This broad technology base is an important advantage for Aumann. It allows us, on the one hand, to serve our established E-mobility customers, but also at the same time, to apply our automation expertise in new applications and industries. And this is exactly what we are doing with Next Automation. So this slide shows how Aumann became a technology leader in E-mobility. Starting from the traditional automotive business, E-mobility was identified as a growth market. Through targeted M&A, Aumann took the first step into e-motor technologies. Building on our know-how, we developed different solutions for the rotor, quickly followed by solutions for the stator and finally, the full e-motor assembly. After the e-motor, we leveraged our expertise to develop large-scale production solutions for battery modules and packs. In addition, we introduced our own modular systems, for example, in inverter assembly, but also right now very useful in the field of Next Automation. So furthermore, we have expanded into converting technology, enabling us to offer, for example, also production solutions for electrode manufacturing. To sum up, Aumann is a leading provider of turnkey solutions in E-mobility. And on this illustration, we show you the drivetrain of a fully electric car. And as you know, most of these components can be produced on Aumann production lines. From the outset, we have focused strongly on the E-drive unit. Here, we provide production solutions for different technologies. But our portfolio goes well beyond the E-drive unit. We also provide flexible and scalable solution for electronic components such as sensors and inverters, perfectly tailored to the needs of our customers. And the third major area is, as you know, the energy storage. Here, Aumann covers the full range from battery modules, battery packs to cell-to-X solutions and even recycling solutions, which are upcoming right now. So this expertise allows us to meet customer needs and develop new solutions for next-generation battery technologies. And importantly, once again, many of these technologies can be also applied to other industries. Having a look on the E-mobility market today and in the future. So after a strong year already in 2025, the global BEV, so battery electric vehicle sales continued to grow also, as you can see here, in the first half of 2026, which means a plus of 9% in comparison to 2025. China remains the largest BEV market with 3.6 million, but recent growth has slowed. So the U.S. market, which currently shows the lowest volume in comparison is still challenging. But importantly, for Aumann, Europe is showing a very strong momentum, reaching 1.6 million units, which means an increase of 35% in comparison to last year. Germany is close to 50%. So going forward, by 2030, BEVs are expected to make up roughly 40% of sales by 2035, even 2/3. So this means overall, growing BEV sales are expected to drive new investments in the near future. In the meantime, this brings us to Next Automation. As mentioned, we are expanding beyond the automotive sector and focusing more industries that need greater efficiency, higher productivity and less manual work. So in this context, we have moved our Next Automation segment to a very strategic approach as well. So today, we are focusing on selected growth markets beyond automotive, such as aerospace, defense and life science. What these markets have in common is a growing need for automation. Let me give you some examples that our strategy is gaining traction. So a good example here is our development in aerospace. So as you know, aerospace is gaining momentum. So demand in civil aviation is rising. Boeing and Airbus are forecasting more than 40,000 new aircraft over the next 20 years. So against this backdrop, Aumann secured first orders supporting civil aircraft production ramp. At the same time, defense budgets are boosting. So as you know, drones are our strategic focus in this area because drones combines exactly what we do best, electric motor, battery packs and the full system integration, including, which is also very important, the end-of-line testing just like in E-mobility, so means nearly same technology, but new applications. So therefore, we easily developed integrated drone assembly lines and have already secured first orders for drone motor production and end-of-line testing. So besides aerospace and defense, clean tech is also a booming industry. And here, Aumann wins orders for automated solar module disassembly solutions and in the area of photovoltaic recycling and membrane manufacturing systems for fuel cell application, targeting, charging infrastructure and off-grid solution. And finally, life science. So this sector benefits from long-term trends such as an aging population, strong investment levels and an attractive margin. So starting in the end of last year, Aumann entered the pharma market with solutions for producing skin delivered patches and oral thin films. So there -- as you can see, there are ongoing developments all over these areas. Now I would like to hand over to Jan.

Yes. Thank you very much, Sebastian, and also a warm welcome from my side. I would now like to share with you the financial figures for the first half of 2026. Let me begin by putting the first half of 2026 into perspective. Coming into the year, we anticipated that the challenging market environment would continue to weigh on our top line. Against this backdrop, maintaining operational discipline and protecting profitability were key priorities for us. We have made significant progress in improving our cost structure and operational efficiency over the recent months. The current results demonstrate that these measures are taking effect and that our organization is capable of delivering solid earnings even at significantly lower volumes. The market environment, particularly in automotive, nevertheless remains demanding. Investment decisions continue to take longer and both OEMs and suppliers remain cautious with their spending. We, therefore, do not see yet the broad-based recovery in automotive investment that we had initially hoped for. There are, however, clear signs of positive momentum in Next Automation. The segment is gaining traction with order intake and order backlog both developing favorably. Our expanded sales activities and are increasingly converting into concrete customer opportunities and orders supporting the continued diversification of our business. Against this backdrop, the first half developed as follows: Revenue came in at EUR 70.6 million, 35% below previous year, while Next Automation increased revenue by 23%. Despite the lower volumes, EBITDA margin remained in double digits at 10.5%, underlining the resilience of our business. Order intake amounted to EUR 65.4 million, down 27% year-over-year. Order backlog stood at EUR 115.4 million at the end of June. At the same time, we continue to have a very strong financial position with a net cash of EUR 154.4 million. So while the market environment remains challenging, we are making tangible progress in the areas we can influence ourselves, operational efficiency, diversification and our financial strength. Let me now take you through the key developments. Turning to the revenue development. Group revenue amounted to EUR 70.6 million, down 35% compared with the prior year period. The decline was primarily attributed to the E-mobility segment, where revenue fell 47% to EUR 47.4 million, reflecting the ongoing weakness in the automotive investment environment. Next Automation by contrast, continued to expand, increasing revenue by 23% to EUR 23.2 million. Let me now turn to profitability and earnings, which provides further context on the quality of our performance. Looking at the earnings side, the lower revenue level was fully reflected in our absolute EBITDA, while margins remained resilient. EBITDA amounted to EUR 7.4 million, down 35% year-over-year, broadly corresponding to the reduction in revenue. Nevertheless, the EBITDA margin held at a high 10.5% level, demonstrating the resilience of our operating model. The results also benefited from the strong project execution with several projects performing better than initially anticipated. Consequently, a number of risk provisions recognized at year-end were no longer required during the first half, resulting in a positive impact of approximately EUR 2 million from the release of provisions within our other operating income. With that, let me move on to the order intake and order backlog. The overall investment environment remains demanding, with automotive, in particular, still characterized by cautious spending and extended decision cycles. This continues to weigh on incoming orders. We are responding on 2 fronts, maintaining a disciplined cost and capacity structure while intensifying our diversification activities. In the first half, group order intake amounted to EUR 65.4 million, a decline of 27% year-over-year. This picture is, however, significantly different within Next Automation. Order intake increased by 72% to EUR 37.7 million, supported by the continued expansion of our sales activities. Our sales pipeline has also grown further, providing additional opportunities for future order intake and revenue growth. Group backlog stood at EUR 115.4 million at the end of June compared with EUR 162.4 million a year earlier. Again, Next Automation stands out positively. Its order backlog increased by 32% to EUR 61.9 million. Let me now take a closer look at the performance of our individual segments, starting with E-mobility. In the E-mobility segment, order intake of EUR 27.7 million is 59% under the previous year due to the mentioned market conditions. As a result, order backlog decreased by 54% to EUR 53.4 million. At the same time, revenue decreased by 47% to EUR 47.4 million. EBITDA is declining due to volume to EUR 5.9 million after 6 months, which means a strong margin of 12.3% after 11.9% in the previous year. In the Next Automation segment, order intake increased year-over-year by 72% to EUR 37.7 million due to the new positioning. End of June 2026, order backlog amounted EUR 61.9 million, an increase of 32%. Revenue stands at EUR 23.2 million, 23% above previous year. And EBITDA slightly increased to EUR 2.7 million, corresponding an EBITDA margin of 11.7%. Let me briefly turn to our financial position. At the end of June, Aumann continued to have a very strong balance sheet with an equity ratio of 62.2% and cash of EUR 158 million, including a net cash of EUR 154 million. It is worth noting that the equity ratio already reflects the EUR 23 million liability recognized in connection with our share buyback program, although the corresponding cash outflow took place in July. Our strong financial position gives us significant flexibility going forward. It allows to pursue attractive market opportunities, continue the expansion of Next Automation, both organically and through M&A and maintain our commitment to shareholder returns. This is also reflected in our share buyback program and our proposal to the AGM to distribute a total dividend of EUR 1.11 per share. Let me close with our outlook for the full year. Based on the current order backlog and the continued expansion of the Next Automation sales pipeline, we confirm our 2026 guidance of approximately EUR 160 million in revenue and an EBITDA margin of 6% to 8%. While market conditions remain challenging, the increasing contribution from Next Automation and our diversified business model provides an important foundation for a solid and profitable year. With that, I hand back to Sebastian again.

Sebastian, you’re still muted.

All right. Sorry. So yes, let me briefly summarize the key takeaways from the first half of 2026. So first, E-mobility. So BEV sales on the one hand, are growing, especially in Europe. However, our automotive customers are still a little bit cautious with new investments. So as a result, order intake, as you have seen, intake declined to EUR 65 million. So nevertheless, we expect this situation to change over time. As volume increases, investments have to come back in parallel. Nevertheless, in the meantime, we are making progress in Next Automation. As you have seen, order intake increased by more than 70% with a book-to-bill ratio of 1.6. This clearly confirms that our diversification strategy is working. Despite the lower business volume, we maintained a solid profitability with a double-digit EBITDA margin of 10.5%, so same level like last year. So for the full year 2026, we continue to expect revenue of around EUR 160 million with a profitable EBITDA margin of 6% to 8%. And finally, Aumann remains in a very strong financial position with a high net liquidity and a solid equity ratio of more than 60%, and that clearly set us apart from most of our competitors. So this means our priorities in the remaining year are totally clear to manage the current situation in E-mobility to accelerate the growth of -- Next Automation organically and through M&A and to use our strong financial position to create long-term value. So thank you very much for your attention, and we are now happy to take your questions.

Thank you very much for your presentation. [Operator Instructions] and [ Amit Verma ], you have placed some questions in the chat box [Operator Instructions]. Sorry, your connection is not very good, Mr. [ Verma ]. Therefore, I will read out your questions in the chat box. Please explain challenges faced in closing acquisitions. It has been 9 months since we are looking for some.

Yes. I mean we would also like to move faster, but acquisitions simply take time. We are seeing a good number of potential targets, roughly a handful, but each comes with their own specific topics that we also need to assess carefully. So in some cases, we have topic with financials. In others, we have topic with operations or also with order intake. So this is something where for us, and this was always our strategy that quality fit and strategic fit is more important than speed. And you know we have done acquisitions in the past. I'm quite sure we will do acquisitions in the future. But yes, we can totally understand your remark because also we would like to be fast on this topic.

Thank you. And, why are we not seeing large orders from aerospace and life sciences? Are we also looking at America? These are very large markets. And please explain our right to win against companies like ATS Corporation.

Yes. So maybe starting with aerospace. I mean, the aerospace market is dominated by mainly 2 players, as you know. This is a market where you, for sure, have to convince the customers, you have to fulfill a lot of different topics just to be on the supplier list. So we are very happy that at least one of these big players is already committed on Aumann, and we are quite sure that we really see here upcoming order intake, and we have already order intakes in the first half. So Aerospace is gaining momentum step by step. And you are right, I mean, the other big player is in the United States. And even for this player, we have already offered something. Now we have to see step by step if this will also become, hopefully, orders step by step. But it takes time. Defense and aerospace is really hard to get in. But on the other side, if you are in such a market, it is, in our point of view, a very nice market.

One question that you already illuminated. Could you give some color what is the impact of traditional automotive on Next Automation segment? And please elaborate on M&A development. Is there any real project you're in advanced discussions? How many due diligence did the company in the last 2 years?

Yes. As I said, I mean, to give a flavor on this, I mean, we have always a handful of companies where we are in discussion, where we offering where we are doing due diligence from time to time and so on. But this is nothing new, honestly speaking. It's a little bit more focused right now in the way -- and I think we mentioned this also in our last earnings call in the way that we are focusing on companies within the Next Automation. So this is something which has changed a little bit on this topic. Yes. And the question, okay, as I said, I mean, what we try to do is to take our processes, to take our technology know-how and to transfer this technology know-how into Next Automation. So that means if there is something with a battery, if there's something where you have to produce an e-motor or structure, light structure, yes, then this is something where, for sure, we can deliver a customized production solution. And yes, that's what we are doing within Next Automation.

Thank you very much. And ladies and gentlemen, due to your questions you do have, we will extend the call for a few more minutes to answer them all, and I will be fast. The next question is coming from one person. First, based on H1 results, are you currently tracking towards the lower end, midpoint or upper end of the guided EBITDA margin range, 6% to 8%? Second question. Next, Automation delivered a very strong 72% increase in order intake and now represents the majority of the group backlog. Could you provide more detail on the composition of the sales pipeline and specifically comment on the role of defense and drone-related application within further growth opportunities? And the third, given Aumann’s net cash position of more than EUR 150 million and your continued focus on expanding Next Automation, could you provide an update on your M&A strategy? Are you currently evaluating acquisition opportunities in areas such as defense, aerospace, clean tech or life science?

Yes. Let's begin with the question concerning our guidance. So yes, you're right that we are currently in revenue a bit below guidance and margin, a bit above guidance. So as mentioned in the presentation, we have a good sales pipeline and promising sales pipeline, especially in the Next Automation sector. So it's a bit too early to have a clear estimation on where exactly we will be in -- with our guidance. So larger customer decisions will take place in the second half. And as soon as we have a clear visibility on these decisions, we will evaluate the guidance again. For the M&A pipeline, I think we discussed the topics. So the Next Automation question was on details of the sales pipeline. So of course, we cannot directly say or give details on the exact pipeline. But I think we have a broad pipeline during the several branches we discussed. So there is life science in the pipeline. There is drone and defense aviation business in the pipeline and also yes, some general industry topics and especially the aviation, maybe also a bit the human robot topics are also relevant in our pipeline discussions.

You mentioned a strong volume uptick in Europe BEVs. When do you expect your customers to move and invest? Will you be able to keep your margins even if volumes drop further?

Yes. I mean what we see right now is that we see within our battery business currently seeing the first upcoming large requests on this topic. And this is on the one hand for modular and packs because it seems that the decision on individual platforms and vehicle models are becoming more concrete. So this is one topic -- and hopefully, it is clearly a sign of upcoming renewed momentum. But another topic, which is a very new topic for us, but very interesting is that we see now RFQs upcoming in the market of battery recycling and refurbishment. And why is it interesting? It's interesting because we are now talking about a refurbishment of battery modules and battery packs. And we are not talking about, I don't know, 1,000, 2,000 packs a year. We are now talking of tens of thousands per year. And then it really becomes -- it's becoming interesting because then we are talking not only about manufacturing, we are talking about disassembly, reassembly of the line, and we are talking about end-of-line testing. So the idea of some car makers right now is to bring to the market also refurbished battery modules and battery packs and yes, this is a very complex assembly line. And for sure, for such assembly lines and now I try to close the loop for such assembly lines, it might be also possible at least to maintain the margin level.

And what are the lead times in Next Automation, split by subsectors until when do you have to win projects to bring them into revenue still 2026?