Good afternoon, everyone. We're waiting for everyone to connect. Good afternoon, everyone, and welcome to EuroGroup Laminations Q1 2026 financial results presentation. Joining us today are Marco Arduini, Group Chief Executive Officer, Isidoro Guardalà, Deputy Group Chief Executive Officer, and Matteo Perna, Group Chief Financial Officer. Please note that the press release and the presentation supporting today's conference call are available on the company's website in the investor relations section. 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. In order to do so, please use the raise hand function on your screen or for those dialed in, it's star nine on your keypad. I will now hand over to the Group CEO, Marco Arduini. Please, Mr. Arduini, go ahead.
Thank you, Letizia. Welcome to everyone to the EuroGroup Laminations Q1 2026 results. Letizia, please move on the presentation. 2026, as we all know, is a very turbulent year. For our industry, we see a lot of different dynamics that are impacting the overall as well trends. The key message that we want to pass is that our diversified business model is resilient to this situation in the market. Overall, our revenues are almost stable at constant Forex compared to 2025. We see different situation and trends in the two business unit. In the E-mobility solutions, we see a 2026 that is a clear transition year that is impacted by the shift in the regulation in the North American market and is impacted by the phase-out of two projects that were in production since 2018 and 2019 in Europe and North America.
These projects have been already started to be replaced by projects that are in start of production and ramp up, and are connected as well to the new projects that overall we have this year. The 2026 for the E-mobility solutions is a year where we expect a reduction compared to last year. That is for the Q1 was EUR 118 million, down 9.4% at constant exchange rate, and the lower sales are mainly coming from U.S. and Mexico markets. When we speak about the Industrial & Infrastructure Solutions Business division, we saw in this Q1 a clear confirmation of the stabilization role that there is in this business unit. Thanks to the diversification and the flexibility of the platform that we see in these markets.
Two segments that are growing compared as well to last year are clearly the HVAC and the logistics, that are, of course, showing higher value and volume compared to last year. Overall, the margin of the Q1 is impacted by all the dynamics that you see in tariff and macroeconomic uncertainty, and as well, the change in the mix. The adjusted EBITDA is EUR 17.1 million. Overall, the order book and the pipeline for the automotive business unit remains at a good level. We speak of EUR 2.6 billion for the order book and EUR 1.9 billion for the pipeline. An important activity that was completed last week was as well the refinancing that was executed with an extension of the duration to five years and was related to EUR 375 million. This refinancing was finalized with a pool of leading banks.
These activities allow EGLA to optimize the overall financial structure. In terms of maturity, the debts move from roughly two years to an average of four years. In terms of performance improvement programs, the group is actively working on many activities that are related to improvements of the performance. There are important programs in EMEA and USMCA that are, let's say, moving on in line with the target and in line with the budget. We have as well added more activities for the Operational Excellence Plan and as well other activity that are related to the improvements of the performance that are across all the companies of the group. In terms of outlook for 2026, we confirm a revenue range between EUR 700 million-EUR 750 million and an EBITDA adjusted in the range of 11%.
We confirm as well the outlook for a positive operating free cash flow from operation, including the CapEx at approximately EUR 45 million. I now pass the word to Matteo that can enter in the financial results.
Thank you, Marco, and good evening to everyone. Moving to the next slide, please. I have to say the major comment here is, as you can imagine now we will have a tough comparison with respect to the first two quarters or the H1 of 2025 compared to 2026 will be driven by a tough comparison, especially with the fact that the first part of last year was not really impacted by the change following the Trump administration, which had an impact starting from August as per last year. The major message here is that we are running consistently with our budget. Again, the Q1 performance, it's aligned with our budget and therefore this is very important for us to emphasize this fact. Therefore this has been, let's say, one of the reasons for under which we confirm our full year guidance.
Having said that, revenues you see at the constant exchange rate, we report an amount of EUR 203.5 million in terms of total revenues. I have to say this is including approximately slightly lower than EUR 10 million of raw material that we sold during the Q1 , which is impacting our revenues, having no impact on our margin, given that the material that we sold was sold at the same cost that we had in our inventory. You see, in terms of performance by segment, the Industrial, it's 0.5 + compared to last year. This is mainly driven by the Forex, given that constant exchange rate, this would have implied an increase of approximately 6%, as we said before, in terms of growth on a year-on-year basis.
For the EV & Automotive segment, you see 13.3% decrease, again, out of the Forex effect, the implied decrease was in the range of 9.4%. In terms of geography, this is mostly driven by the evolution of our business in North America, partially offset by the performance in Europe. In terms of EBITDA adjusted, the total amount it's in the range of EUR 17.1 million. This is implying a 8.4% of the margin. You see in absolute terms, the total amount of EBITDA was the same as per last year for the Industrial & Infrastructure Business, the major difference is driven by EV & Automotive segment. EBIT, EUR 1.6 million. This is following an included EUR 13.7 million D&A accounted over the Q1 . Total amount of CapEx, I have to say it's below our budget.
We're trying as much as we can to have a strict control over CapEx in order to avoid any potential additional CapEx, not only compared to the budget, but as well compared to an improved, let's say, efficiency program on the CapEx. We reported EUR 9.1 million, compared to EUR 26.5 million that we accounted in the Q1 of 2025. Moving to the next slide. The major comments on this. We have, for the E-mobility business, we sold approximately 1.1 million sets in the Q1 . Basically, in line compared to the amount of sets that we sold in 2025. You see there is an increased weight for hybrid application, given that mild hybrid is representing approximately 11% of the total amount of sets that we sold, compared to 8% in Q1 2025.
Out of the 14 SOPs which are expected to take place this year, three started in the Q1, of which one in Europe, one in Mexico, and one in China. I have to remember that out of the 14, 10 are expected to get started in China, meaning that additional nine SOP will be then executed in China within the end of this year. You see, in terms of breakdown by segment, E-mobility is now representing approximately 58% over the total amount of revenues generated in Q1 , whilst Industrial & Infrastructure is 42%, and EMEA following. I have to say, a recovery and increase as well in demand for the Industrial Business in the Q1 , it's now representing 57%, whilst North America is now slightly below 30%. Asia remains at 14%. Moving to the next slide, please.
In terms of EBITDA adjusted, to me, the major message is that the E-mobility segment is impacted by the different mix that, again, was already envisaged in the budget. In the comparison with last year, it's of course, having an impact. I make a reference to the phase-out of two important projects which started between 2018 and 2019, which again, are now under a phase-out phases. This is, of course, having a negative impact in terms of mix over the margin. All such projects were partially offset by the new project which started last year and which are now in a ramp-up phase compared as well to additional projects which started this year. Make a reference to the three projects which started at the beginning of this year.
This is having a negative impact in terms of margin, but again, that was already something expected this year. We do expect to recover profitability going forward on a quarter-on-quarter basis, and this will be basically two-fold. One, it's due to the evolution of the ramp-up curve with respect to the project which started end of last year and as well this year. The second point is the execution of the efficiency program, which is expected to unleash the positive effects going forward, again, keeping momentum on a quarter-on-quarter basis. EBIT, we already said that now D&A are in the range of EUR 13.7 million. Again, this is what is impacting our EBIT reported. Moving to the next slide. After our seasonality, you see the evolution of our working capital, which is picking up at the end of March.
Now it's expected to remain somehow stable until the end of June, and then the decrease will start following June, and then at December will be the bottom of the working capital evolution. Again, this is mainly driven by the seasonality of our purchasing strategy on the raw material. I have to say that now the working capital is representing approximately 45% over the total amount of revenues on a last 12-month basis. Moving to the next slide, please. On this point, as we said, net debt is EUR 288 million, which is implying a 3.5x net leverage ratio over the last 12-month EBITDA adjusted.
Again, let me emphasize again the fact that this is expected to be the peak this year, and after that, we will start to decrease our net leverage consistent as well with the plan of positive operating free cash flow then to be generated going forward. Moving to slide number 10. As Marco said, we are confirming the full year 2026 outlook on the basis of what we said. It's important to remember to all of you that we do expect revenues to be on a full year basis in the range between EUR 700 million and EUR 750 million. EBITDA adjusted margin for the full year is expected to be in the range of 11%. CapEx, EUR 45 million. Again, we do confirm positive operating free cash flow.
Thank you, Matteo. I think we can now leave the stage to the questions with Letizia.
Thank you to the speakers today. We now have an opportunity for questions. As a reminder, if you would like to ask a question, please use the Raise Hand function on your screen. For those dialing in, it's star nine on your keypad. Once your name is announced, please unmute your line, state your company name before asking your question. The first question comes from Alberto Gegra. Please, Alberto, the floor to you.
Hi. Good afternoon, everybody. Alberto Gegra from Equita speaking. Couple of questions from my side. The first on margins. After this quite weak Q1 , you mentioned the pickup in the following ones. Can you give us more granularity, for instance, in terms of evolution of startup costs and maybe also on the pure price component that you are seeing from automotive customers in particular? The second, if you can recap the timing of the remaining 11 startup production, in particular, those on China. Thank you.
Thank you, Alberto. On the progress on the margin, as we said, the main drivers to support such increase will be, one, the evolution of the ramp-up and therefore, going forward, we will have the benefit deriving from the evolution of the ramp-up for the project which started in the second part of 2025, and then as well, the expected evolution of the ramp-up that now we are executing the Q1 of 2026. To this extent, I have to say that we experienced a major ramp-up now in Mexico with respect to an important customer of ours, which is one project replacing one of the projects that is now currently under a phase-out. Again, I make reference to a project we started in 2018, if I'm not mistaken, Marco, correct?
Again, on a quarter-to-quarter basis, we do expect an improvement in the margin with the 11%. It's mostly back in the second part of the year. After the next quarter, we do expect an improvement, not a significant improvement compared to what we reported now at the end of March. Again, the 11% is fully back in the second part of the year. That was a question on the margin. On the SOP, okay, we said now out of the 14, three started in the Q1 . We do expect approximately additional five projects to get started in the Q1 , and then the remaining will start in the H2 of this year. Again, let me emphasize that out of the 14, 10 will be launched in China. I have to say that all of them are making reference to Chinese OEMs.
If I may a quick follow-up. In terms of margins, this project in China, which is the gap compared to the Western project?
There is a gap, honestly speaking, as you can imagine as well, given that it's the major Are now the first project that we are now entering the business with additional Chinese OEMs compared to those which were already part of our portfolio. I have to say that the margin are below on what we report now in Europe and North America, stands more in the range of 7% and 8% compared to the above 10% or 15% that we are usual to report against other customer of us. Again, it should be as well read on the fact that it was important to get started in a relationship with such OEMs.
Yeah. Thank you, Matteo.
Thanks, Alberto. Currently, we do not have any questions queued. We will wait just a few moments to give everyone the opportunity to ask a question. In order to ask a question, as a reminder, please use the Raise Hand function on your screen, or for those dialing in, a star nine on your keypad. We now have a follow-up question from Alberto Gegra. Please, Alberto, the floor to you.
Maybe also a question on the industrial side, since you mentioned it in March, an expectation for quite a significant growing volume. If you can confirm this trend, maybe just a bit more color here on the sub-segment of the industrial, and maybe also an update on the strategic developments in India and China.
Okay. Let's get started from China and India. This year in China, I have to say that we do expect to make a turnover above EUR 100 million, whilst in India, we do expect to reach a turnover which will be above EUR 55 million. Again, this is something that we expect to achieve this year in India. It's important to remember that last year we accounted approximately EUR 48 million of revenues under the Indian business. With respect to the evolution of the industrial different sub-segments, I have to say that compared to last year, we see a positive evolution in terms of volumes for the so-called home segment, which is reporting an increase of more than 10%, already announced and reported in terms of kilo that we sold last year. As well, the other industrial application is reporting more than a 10% increase.
I have to say that the sub-segment which is growing the most is the transformer business, under which we reported a more than 30% increase in terms of volume. These are the major segments which reported a significant increase compared to last year.
Clear. Thank you again.
Thanks, Alberto. Currently, we don't have any questions queued. We will wait just a few moments to give everyone the opportunity to ask a question. We have a question from Alberto Francese. Please, Alberto, the floor to you. Please remember your microphone to unmute yourself.
Hello, hello.
Hello, hello.
Yes, sir.
Can you hear me?
Yes.
Yes.
Okay. Sorry. I'm out of the office. I have Alberto Francese, Intesa Sanpaolo. I have a couple of questions. First one regards raw materials. If you can give us a little bit of color, if you see any impact coming from the Gulf conflict. How do you see raw material evolving during the year? The second question regards the saturation that you have in your industrial sites, and if there is a difference between the different geographies where the sites are located. Thank you.
Yeah. Maybe let Marco to add some color on the evolution of the potential impact on our raw material base. Let's get started from the saturation. Now, in China, we are now in the range of 65% in terms of saturation rate. In North America, the auto business is running between 55%- 60%, whilst the Industrial is more in the range of 60%- 65%. Europe, auto is in the range of 60%, whilst Industrial is more in the range of 55%. That's the average saturation rate that we are now reporting in the Q1 . In terms of raw material, it's important to remember to all of you that under the contracts that we have in place with our customer, all of the potential impact arriving from an increase in raw material will be a pass-through basis to our customers.
I have to say that as of today, Well, I let Marco to add some color on the electrical steel. What we see, it's an increase in the quotation and the line price for the alloy, which is an important effect of what is happening in the Gulf. I always want to say that other raw materials like, how do you say, tungsten, are as well increasing, which are not in our product but again, are in our toolings, which are then part of what we sell to the customers.
Yeah. Maybe just, again, to underline that, of course, the tension that are coming from the world that we see today are impacting the energy. Overall this is, as we know, is a key driver in the production of steel. If this process continue, we will see, of course, as well, effect in all the raw material, steel, alloy, and et cetera. On top of this, we need as well to remind that Europe has diminished the quota of steel that can be imported from the rest of the world in order to, let's say, secure that there is a protection for the local production that is made in Europe. This quota will, for sure, create additional condition for increase of prices for the steel in Europe in the H2 of this year.
The other point that is as well impacting the European market are, let's say, the condition and the measure that are related to the so-called CBAM, that are, let's say, expected to be executed retroactively, starting from the beginning of this year, but that will be only confirmed later by the European regulation. Overall, the three trends that we see coming from the energy increase from, as well, the new tariff and quota that will start in Europe from the H2 of the hear, and the effect of the CBAM, for sure will create a pressure for increase of prices in the H2 of this year.
Please, Alberto, remember to unmute your line. Thank you, Alberto. Currently, we don't have any questions queued. We will wait just a few moments to give everyone the opportunity to ask a question. As there are no further questions, I will now hand back to the speakers for any final comments before bringing this presentation to a close. Please go ahead.
Again, thanks for your interest and your attention in Q1 2026 results. Thank you for your question, and we remain available for any further requests of information you may need. Thanks to all of you.
This presentation will now come to a close.