Before I hand over to your host today, please be advised there will be an opportunity to ask questions at the end of the presentation. I have now the pleasure of handing over to Ms. Ilaria Candotti , Head of Investor Relations.
Thank you, Elena, and welcome again to EGLA first 2025 results presentation. Together with me, we have the Group CEO, Marco Arduini , the Deputy CEO, Isidoro Guardalà , and the Group CFO, Matteo Perna , who will illustrate the presentation. Please note that the supporting deck and the press release are available as usual online on EGLA website, at the Investor Relations section. Now I leave the floor to our CEO, Marco Arduini. Please, Marco, the floor is yours.
Thank you. Thank you, Ilaria, and welcome as well from my side to all of you. Thank you for attending to this session. We are here to present our first half results for 2025. Let me just say a few words before starting. The second quarter in 2025 will be remembered as a turbulent second quarter. This quarter was impacted by many news that were, in some way, affecting negatively the overall environment. Tariffs and trade were a news every day in the newspaper. The volatility and the uncertainty in the economy increased. The forex fluctuation and the major currency shift was as well another topic. All this created cost pressure. We saw some costs increasing. In addition to this, we saw as well policy changes impacting as well the Green Deal. Finally, all this created some disruption in the supply chain.
The resiliency of EGLA is one of the key characteristics because the macro trends that are behind our business are remaining there. The diversification that we have created in our business model is offering us the flexibility that is capable to follow any strategy that is required. Of course, this condition is putting all of us in the condition to take action to improve margin and improve cash flow. With these premises, I want to comment this page. In this page, we have summarized the results and the key facts that are related to our group for the current situation. Our revenues overall were achieving EUR 429 million sales. It is 1.6% more than 2024. If we speak about e-mobility, e-mobility increased slightly at 0.4% compared to last year. The industrial and infrastructure business grew 3.6%.
Asia remains the key region behind the growth, both for the e-mobility and for the industrial. Europe is stable in the e-mobility and remains fragile in the industrial and infrastructure, and North America is the weakest region, both in e-mobility and industrial. Overall, this situation put us in the condition to achieve an EBITDA of EUR 44.8 million, equal to 10.4% of marginality. The situation that I mentioned impacted this marginality. Overall, our EV and order book and pipeline remains strong. Order book remains at EUR 5.1 billion, and we had some postponement of new programs in North America. The pipeline is at EUR 2.6 billion and is reflecting a strong conversion of order book in order book, and the current market uncertainty is impacting the discussion mainly in Europe and in North America. As I anticipated, we promptly reacted to the market condition with a performance improvement program.
Through this, we have launched a different initiative in Europe in the second quarter, and this initiative will be rolled out as well in North America in Q3. We have as well activated a different initiative in order to compensate the supply chain impact. Overall, thanks to this performance improvement program, this will support the result of the year. In terms of outlook, we see the guidance on the full- year 2025 that is aiming to reach a 5% increase in terms of revenues versus the full- year 2024. We see a recovery in the EBITDA margin adjusted at 12%, and we confirm as well the positive operating free cash flow from operation. With regards to mid-term guidance, this remains confirmed in view of the macro trends behind our business.
If we move to the next page, this is, of course, one page dedicated to the news that arrived last week. On July 28, EMS, that is the EGLA and FountainVest , that is an Asian investor, announced a strategic alliance to accelerate EGLA's global growth in a rapidly evolving market. ERR summarized the key highlights of this agreement, and this agreement is including a sales and purchase agreement for the transfer of the stake of EMS and a co-investment agreement in a new holding. Tikehau Capital, that is the second largest shareholder of EGLA also has expressed the support to this deal and has as well finalized a share purchase agreement. The transaction is, of course, subject to customary regulatory conditions, and it is expected to be completed by the first half of 2026.
At closing, EMS and FountainVest will jointly hold, through the new holding, 55.3% of the voting share capital in EGLA . Following the closing, a mandatory tender offer with an offer price at EUR 3.85 per share will be launched on the company remaining 44.7%. The price of EUR 3.85 per share implies a market capitalization of EGLA of approximately EUR 626 million. This is, of course, a news that we had to bring as well to this meeting in order to highlight what EMS and FountainVest have underwrite. I now pass the words to Matteo in order to enter in the details of all the financial results.
Thank you very much, Marco. On the revenue side, you see the total amount of revenues generated in the first half of 2025 was approximately EUR 429.2 million, which is implying a slight increase of approximately 1.6% compared to the first half of 2024. This is the result of basically a flattish performance for the EV and Automotive e-mobility segment, which has grown to approximately EUR 265 million compared to EUR 264 million in 2024, whilst the Industrial infrastructure solution has increased the revenues to EUR 164.2 million as well on the back of the consolidation of the Kumar business, which is approximately EUR 27.8 million. On EBITDA adjusted side, 10.4% was the total amount of EBITDA adjusted margin accounted in the first half. We have reported, in light of what Marco was explaining before, a reduction in the EBITDA margin for both business units.
As we said, this is the result of the second quarter, which was again impacted by a temporary effect and as well uncertainty that we do hope will be cleared in the second part of the year. Besides the impact on the EBITDA, you can see as well the evolution on the EBIT side, which was in line with what we were expecting due to the fact that this is mainly driven by the evolution of the EBITDA, but as well the fact that over the first half, we have accounted approximately EUR 27.6 million of D&A consistent with the execution of the CapEx plan that we have executed over the last years. As expected, the CapEx are in the range of EUR 40 million, of which 75% are related to the e-mobility segment, whilst the rest is for the benefit of the Industrial infrastructure solution.
If we move to the next slide, in terms of breakdown by business unit, you can see that basically this is even split between the first half of 2024 and 2025. We have as well, on the basis of the latest input that we receive from the auditors, updated the geographical breakdown now considering the country of our final clients. This is a change compared to what we were reporting before. Therefore, you see that on the basis of new representation, Asia is now accounted for approximately 14% compared to 6% in the first half of 2024. India is still the largest region with approximately 53% over the total amount of revenues that we generated in the first half.
Main message, there was a strong increase in terms of the number of sets sold for the traction business in the first half of 2025, which were approximately 2.2 million compared to the 1.8 million that we sold in the first half of 2024. I have to say that out of the five new SOPs which were expected to be started in the first half, three of them were postponed to the next year. All of them are making reference to one customer in North America. On oil industry, it is still fragile, the performance in Europe. We are satisfied by the contribution of the growth of our Asian business. Besides India, I have to say that as well China, it keeps growing in light of all the business development activity which have been carried out over the last month from our sales force.
In terms of segment, I have to say that the energy segment was the one which was reporting the worst performance in the first half in light as well of the situation of one of our main clients in the U.S., which was indirectly impacted by the discussion on the tariff. If you move to the next slide, please. Yeah, we spoke about the evolution of the total EBITDA adjusted margin, which is approximately 10.4%, of which for the e-mobility solution business, it's approximately 10.8% compared to approximately 12.1% in the first half of 2024. I have to say that this is in line with our budget, which was already considered in the EBITDA margin on the basis of a different mix, as we commented as well last time.
What is not in line with our budget is the performance of the industrial business, which was impacted by the situation in North America, which was not expected and was on the back of the Liberation Day. We do think that this relieves the situation as a component of the year. As well, the performance and the relative impact in terms of operating scale in Europe due to the weakness of the underlying demand. On the EBIT, we spoke now DNA representing approximately 6.4% of the total amount of revenues. This is implying an EBIT reported which is in the range of 14.9% compared to EUR 40 million in the first half of 2024. If we move to the next slide, I have to say that the performance from the economical standpoint was counterbalanced by a positive performance on the balance sheet side and therefore on the cash flow generation.
We have decreased our networking capital by approximately EUR 25 million over the last quarter. You see that it was approximately EUR 290 million at the end of March and now stands at approximately EUR 265 million. This is implying an incidence of approximately 30% over the last 12 months' revenues. This is the result of a reduction of the inventory, which is now approximately EUR 365 million. The receivables are in line with what we were considering and are equal to approximately EUR 166 million. On the payable side, you see that we have reported EUR 266 million. If we move to the next slide, you can see on the simplified net debt evolution that we reported at the end of June EUR 264 million as total net debt, which is implying over the last 12 months adjusted EBITDA and net leverage ratio in the range of 2.4x.
This is including EUR 20 million cash out related to the one-off effect due to the buyback of the minorities of our operating companies in China. On top of that as well, the amount of dividend that we paid in May, which is totaling approximately EUR 7.7 million. Without the impact of both the minority buyback and the dividend, the net debt would have been in the range of EUR 244 million, implying a net leverage of approximately 2.2x. This is a positive cash generation compared to the result that we posted at the end of March. This is in line with our guidance of having a positive operating cash flow by year-end. I have to say that this is as well better compared to what we were considering in our budget.
If we move to the next slide, as Marco said, one of the first reactions which the management has taken in order to counterbalance the current market volatility was to get started with an industrial efficiency program. I'll let Isidoro Guardala outline the key terms of our industrial performance improvement program.
Thank you, Matteo. We focus our attention to improve some key points, important key points in the operation, but also in the organization. The first point is connected to the operational excellence. We will work, we already started and applied a plan to have a major efficiency in the material, in the machine utilization, and in the labor cost. This can give us the opportunity to improve the utilization of the machinery and to increase the OEE of the product group. This was already started applying in Europe, and we will go to apply the same program in North America, starting from Mexico. The second point is connected to the supply optimization. We will improve our activity with the suppliers. We will improve our profitability on the cost of the material and also to have benefits in this kind of area.
This is strictly connected to the supply chain logistics transformation. We installed a new organization fully dedicated to this matter. We started also this from Europe, and we started also in North America through Mexico. This can give us the opportunity to optimize the costs locked to the inventory and also shrink the costs of the logistics and transportation. In view also of the new situation, we create a group of people specialized to coordinate and to governance the functional ownership of the major activities across the performance of the group.
Thank you, Isidoro. We do think that the execution of this program will allow us to match the guidance for the short term that we are now summarizing in this slide. You see that we confirm, despite the reduction envisaged in the growth of our top line, which is now expected to be in the range of 5% on the basis of the assumption of a stabilization of the macroeconomic condition in the second part of the year. At least we want to see a framework clearly defined to be able to cope with.
We do think that through the execution of our industrial efficiency program, plus supply chain recovery initiatives that we have promptly activated in the second quarter of the year, we do think that, with the expected evolution on a half-to-half basis of our business, it will be part of our ability to match the 12% margin guidance for full- year 2025. The rest of the guidance is confirmed. EUR 70 million will be the amount of CapEx executed, which will be executed this year. As we said before, we will confirm as well the ability to generate a positive operating free cash flow by year-end. The outlook for the medium-long-term period is confirmed.
Thank you, Matteo. Thank you, Isidoro. We can pass the word back to the team in order to start the Q&A session.
Thank you. Thank you to the management team. We now have an opportunity to ask questions. Please use the raise hand function on your screen, or for those dialing in, press star nine on your keypad. Once your name is announced, please unmute your line and state your company name before asking your question. First question today comes from Ms. Monica Bozzio. Please, the floor to you.
Yes, good afternoon. Can you hear me?
Yes, we can indeed.
Yes, good afternoon, everyone. Just a few questions. The first is on the order pipeline. How much of your order pipeline has been converted into orders? I was wondering if you can comment on your order trend in China, splitting between orders awarded by Western car players and orders awarded by Chinese players. This is my first question. In relation to this, I was wondering if you can share with us what are the revenues you expect from China this year? If you can share with us, I don't know if you can, the margins in China in the e-mobility segment. The third question is on the cost savings program. Do you have quantified savings for 2025? If yes, can you share with us? Thank you.
Okay. On the pipeline conversion rate, we converted approximately EUR 300 million of pipeline into order book in the second quarter of the year. I have to say that basically all of the conversion of the pipeline was concentrated in the USMCA area. China is still representing now the vast majority of our pipeline, given that, as well, the commercial discussion in Europe and North America have been temporarily impacted by the confusion and uncertainty related to the tariff situation. Given that China is still one of the few geographies where there is a clear and defined framework, I have to say that the pipeline remains very strong and it's approximately more than EUR 1.7 billion out of the total EUR 3.1 billion that we are reporting as of the end of July. I have to say, and I'll let Marco comment on the conversion against the Chinese OEMs vis-à-vis Western OEMs.
What we see is that it's increasing now the amount of new orders that we receive from Chinese OEMs on the back of where all of them are trying to identify new innovative solutions and new technologies which were maybe already adopted by certain of our clients as well in the past. Now there is a push in the Chinese market as well with respect to technologies that we adopted earlier in other geographies around the world. We do think that this, for us, is a good opportunity to continue our local market penetration. I don't know, Marco, if you want to add something on this.
Maybe just to say that we see the margin in China as well with the Chinese OEMs or for the Chinese market in line with our practice. This is connected as well to the technology that is inside our products. This is probably the reason for which we are capable as well to maintain a good marginality. In terms of X in China, the production for the Chinese market is growing and is, of course, more than 50% today. Within this percentage, there are Chinese OEMs and international OEMs that are operating as well in China. The portion of Chinese OEMs is growing. Today, it's probably in the range of 10%, 15%, but it's growing quarter by quarter.
Thank you very much. Very useful. For the cost savings, if you have a quantification, I don't know.
We have, and I have to say that the cost saving initiatives that we are now executing will represent approximately slightly less than 10% of the total amount of EBITDA to be reported in the second part of the year.
Slightly less than 10. Okay. Thank you. Thank you very much.
Thank you, Ms. Bozzio. Next question comes from Mr. Alberto Zegra. Please, the floor to you.
Good afternoon. Can you hear me?
Yes, we can.
Okay. Three questions from my side. The first is if you can tell us the sales contribution from Kumar embedded in the new guidance. If I'm not wrong, last call you mentioned it's some EUR 50+ million for 2025. If you can comment on the price pressure in the two segments, in particular what you are seeing in the automotive space compared to the first comment that you provided in May. One question for what you can tell us for the time being on the deal with FountainVest . Since the time schedule looks a bit long, maybe if you can comment on the regulatory condition, the most critical steps that in your view could potentially delay the closing of the sales. Thank you.
Thank you, Alberto. On Kumar, we do confirm that the total amount of revenues generated by Kumar in 2025 will be above EUR 50 million. The price pressure in automotive, I would say nothing has changed compared to what we already said in May. That was already embedded in our original guidance. There was a price reduction with certain key customers in Europe, and that was already in our budget. I have to say that with respect to the industrial business, we don't envisage as of today a further price reduction in the second part of the year. This will be as well part of our expected margin improvement to be reported in the second part of the year for the industrial business.
On the expected closing date for the deal with the partnership with FountainVest , I have to say that as you might know, EGLA is a global business with different activities in many countries. The closing is subject to the attaining of the authorization required by the Antitrust and FDI authorities in several countries. As you can imagine, this is implied in different review periods. That was already part of what was announced, and we don't have any additional color to be added to what was part of the press release.
Thank you, Matteo.
Thank you. At the moment, we do not have any questions queued. We will wait just a moment to give everyone the opportunity to raise their hands. Next question comes from Mr. Emanuele Negri. Please, the floor to you.
Yes, good afternoon, everybody. I hope you can hear me. I have a couple of questions. The first one is on your SOPs. Could you please give us an idea on the start-up production in terms of geographies you expect for the second half, and maybe also some of the pipeline you have in terms of start-up production for the next year? The other one is on Chinese OEMs. Can you give us an idea on the pipeline you expect with local OEMs for having new clients or negotiations you may have? Thank you.
Thank you, Manuele. On the SOP, as I said, we were originally expecting the 10 new SOPs to be started this year, of which four in North America, three in EMEA, and an additional three in China. As of today, to the best of my knowledge, besides the three SOPs which were postponed to next year, the rest of the SOPs have been confirmed and will be started in the rest of the year according to the original plan. I have to say that we will not disclose, but all of the SOPs which were postponed are making reference to one group. Besides this, the rest will be launched according to the original plan. That was on SOP. Next year, we will disclose the number of SOPs to be started next year in November when we will announce the fourth quarter results.
I don't know, Marco, if you want to add anything on the second part of Emmanuele's question.
To the pipeline in China, yeah, m aybe you want to say something about.
Without disclosing the names, I have to say that over the last period, we have been able to get started in the relationship with the major Chinese OEMs. As you can imagine, this is one of the main pillars as well of the potential of the partnership with FountainVest , given that we already explained in the past that, you know, in order to be able to gain market share and penetrate the local market, we need to be stronger locally in China. To do it, we need larger Chinese shoulders. We do think that through the partnership with FountainVest , we will be able to accelerate the growth and the market penetration in China, as well as the market penetration vis-à-vis the Chinese OEMs, which will allow us as well to maintain our leadership beside China, both in Europe and North America.
Okay, thank you very much. We are clear.
Thank you, Mr. Negri, for your questions. We will wait now for any other questions. Please be reminded to ask a question. You are please asked to raise your hand, or for those dialing in, press star nine on your keypad. We have a follow-up question from Mr. Zegra . Please, the floor to you.
Okay. Just a couple of summaries. Apart from these three platforms that have been delayed, in the other seven, you are having more or less the same volume that you expected at the beginning of the year, or you are also experiencing a slower ramp-up of those that have started? The second, will you have some positive impact from compensation in the second half?
On the expected ramp-up curve of the new projects expected to be started in the second part of the year, as of today, we don't have any update to be shared, and we do have a ramp-up curve which is in line with what we were considering before. On the second question, yes, as we said as well, certain supply chain actions are included, embedded in the second part of the year results.
Okay. Clear. Thank you.
Thank you very much, Mr. Zegra. We will wait a few seconds for any other questions. As we do not have any further questions, I will now have the pleasure of handing over to the management team for any final comments. Please, the floor to you.
Thank you very much for your interest in EGLA . I think we have touched the results of the first half and as well the outlook that we consider relevant for the future of this year. We remain available for any third clarification that you may need. We take this opportunity to make best wishes for this August to all of you.
Thank you very much. This presentation will now come to an end.