Good morning, ladies and gentlemen. Welcome to the conference call of Belysse Group NV regarding the H1 2026 results. As a reminder, all participants will be in listen-only mode. After the presentation, there will be a question- and- answer session for analysts covering the Belysse share. Today, we have with us James Neuling, Chief Executive Officer, and François de Labarre, Chief Financial Officer. Gentlemen, the floor is yours.
Hi, good morning, and thank you, Lynn. Welcome to our first half 2026 results call. If you have not already done so, you can download our press release and this presentation from the investor relations section on belysse.com. I need to start with bringing your attention to the disclaimer on slide two. I will not read it out, but please do make sure you have read it. I will talk about the financial summary on the first half of 2026, then François de Labarre, our CFO, will take us through the financial review, and then I will give the conclusion. We will end this call, as Lynn has said, with a Q&A session with the analyst following our stock. If you can, then we have slide four on the screen there.
From a financial standpoint, we saw the first half 2026 consolidated revenue at a total of EUR 123.3 million, which represents an 8.5% year-on-year decrease. Revenue of our U.S. business increased by 0.9%, while our European business faced a decline of 20.5%. In terms of profitability, the first half adjusted EBITDA was EUR 16.8 million, which represents a decrease of 2.3% year-on-year. Our U.S. business realized an EBITDA of EUR 16.1 million, while the business in Europe realized EUR 0.8 million EBITDA. The net debt at the end of the period was EUR 147.6 million, which includes EUR 22.0 million impact of IFRS 16 lease liabilities, which results in a leverage of 4.95x. François, can I ask you to go more in depth into the financials? Thank you.
Thank you, James, and good day to you all. First, let's take a closer look at our Q2 2026 financial performance. Having a look at slide six. You can see the bridge of the revenues between Q2 2025 and Q2 2026. This is aligned to what James said. An increase in U.S., a decrease in Europe. Next slide, Q2. In Q2 2026, we saw a consolidated revenue of EUR 62 million. This represents a decrease of 8% year-on-year, of which -2% due to foreign exchanges. In U.S., revenue increased by +1.1%, driven by a +4.4% organic and -3.3% FX impact. In Europe, revenues decreased by 22%. Let's have a look at slide 7. In H1 2026, we saw a consolidated group revenue of EUR 123.3 million. It's a -8.5% year-on-year, of which -4% due to exchange rates.
In U.S., H1 volumes grew versus prior year, driven by improved customer demand, particularly in the corporate, education, and government segments. The revenue in U.S. dollar term was up by 7.8%. In Europe, H1 2026 volumes declined versus prior year due to continued market softness and ERP migration startup challenges. It resulted in temporary shipment delays and volume losses in the quarters and have since stabilized. Let's have a look at next slide. The Belysse Group adjusted EBITDA bridge. Belysse Group consolidated EBITDA for the first half of 2026 was EUR 16.8 million. This represents an adjusted EBITDA margin of 13.7% versus 12.8% last year, H1 2025. Adjusted EBITDA increased organically but was negatively impacted by the translation of Bentley Mills results due to the weakened U.S. dollar.
Adjusted EBITDA margin improved versus prior year, driven by growth and margin expansion in the U.S. market, supported by group-wide cost management and specific price increase in reaction to ongoing cost inflation due to the conflict in the Middle East. Our U.S. business adjusted EBITDA improved by 10.6% in U.S. dollar terms. The weakening U.S. dollar had a negative impact of -7% on the reported revenue and EBITDA in Euro terms. Europe adjusted EBITDA and adjusted EBITDA margin declined versus prior year due to the lower volumes despite improved unitary margin. Let's have a look at slide nine about cash flow. We ended the first half year of 2026 with a cash balance of EUR 22 million compared to a cash balance of EUR 34.5 million at the end of 2025.
The adjusted EBITDA of EUR 16.8 million was partly offset by an 8.8% increase in the trade working capital and a EUR 2.1 million increase in other working capital. During H1 2026, EUR 2 million of net income tax was paid alongside EUR 4 million in CapEx, EUR 10 million in debt repayments and interest payment, and EUR 0.6 million foreign exchange gain on cash and cash equivalents. For your information, the European business went live on a major upgrade of its ERP during H1 2026.
Quick look at the leverage chart. Net debt at the end of the period was EUR 147.6 million, including EUR 20 million related to IFRS 16 lease liabilities. Net leverage was 4.95x at the end of 2026. Total available liquidity, including headroom under the revolving credit facility, amounted to EUR 37.7 million at the end of H1 2026. Now, I will hand over the floor back to James for the conclusion.
Okay. Looking conclusion, our first half 2026 consolidated revenue was EUR 123.3 million and adjusted EBITDA of EUR 16.8 million, resulting in an adjusted EBITDA margin of 13.7%. In the U.S., the first half adjusted EBITDA improved by 10.6% in U.S. dollar terms. The weakening USD had a negative effect, 7% on the reported revenue and EBITDA in Euro terms. In Europe, the reported adjusted EBITDA and adjusted EBITDA margin declined versus prior year due to the lower volumes despite improved unitary margins. Leverage is at 4.95x at the end of the first half, and total available liquidity, which includes headroom under the RCF, was EUR 37.7 million at the end of the first half. I would like to thank the team who continue to work hard on commercial excellence, efficiency, and costs while we are waiting for the markets to recover.
I will now go back to Lynn, who will coordinate for the Q&A.
Thank you. We will now begin our question- and- answer session for analysts covering the Belysse share. If you have a question, please raise your hand by pushing the button on your screen. If you are dialing in via your phone, please press star nine to raise your hand. Once your name has been announced, you can ask your question. Yes. We have a question from Michiel Declercq. Yes, you can now ask your question.
We don't hear you.
Hello?
Hello?
Yes, now we can hear you. Yes.
Great. Sorry. Thank you. Michiel Declercq from KBC Securities. Thanks for the presentation. I had a couple of questions. The first one you mentioned, there were some price increases because costs were going up. Can you give a bit more color on what you expect for the second half in terms of the phasing? Is there still some more raw material inflation to come, and how do you expect to pass this on in terms of the pricing? Secondly, a bit on the European business, - 20%, can you give a bit more color on the end markets, residential versus commercial? Also maybe looking a bit at the summer month, of course, quite some hot weather in Europe. Can you tell maybe a bit on the footfall that you're seeing and if this would have potentially any impact in the second half of the year?
Those would be my questions.
Thank you, Michiel. Quite a few points you touched there. The price increases, I think you saw a lot of companies in the building sector and manufacturing companies face quite some inflationary pressure following the Iran situation. I think like a lot of companies, we've seen raw material inflation, and there's two aspects. Well, there are always multiple aspects to these things. We've seen raw material costs go up and it's been, I think, challenging for many manufacturing companies as that situation's gone through, and we've all observed the increase in oil prices, for example. We reacted fairly early on. You will remember at our previous call that we had, we talked about that we had done an early reaction because of the price increases. Because of that, the price increases and raw material increases always don't appear day one, they phase through.
We've done, let's say, appropriate measures to address the price increases, and we believe that we have done enough for the moment to address the concerns of the inflationary pressures that we see. I don't know, like anybody, I cannot know what the future will hold. This Iran situation, when it started, at our previous call, we talked about that we said if the war—and this is my comment back some months ago, I said if the war were to stop after only one or two weeks, the impact of it, the inflationary pressures would last longer. Some supply chain disruptions, for example, the natural gas disruption that we saw in Qatar will have a lasting impact because it just takes time to get capacity back on stream.
A similar comment is if this war were to stop today, so I echo my comment of some months ago, if the war were to stop today, those inflationary pressures would not disappear tomorrow. We have a blend out there of price increases and surcharges, and we will position those as and when the situation changes. If the situation escalates, we will be forced to respond accordingly, but I think that's kind of normal for what we see in the sector. Does that address your question?
Yes, it does. Thank you.
Okay. Thank you. For Europe, obviously, the revenue decline in Europe is - 20% or thereabout. We don't release a split between residential and commercial, but there are two factors at play. We have seen market softness, that's for sure, and we saw that coming into this year, and you saw that in our previous earnings release, that there's been a certain degree of market softness that continued. Then we went live, we upgraded our ERP system, and we did that at the end of April. I think like any company going through an ERP transition, we had some operational difficulties for a while. We'd say we're through the worst of that. So, the revenue impact is a mixture of market softness and the ERP impact. The summer footfall is very hard for me to comment on that. We remain engaged, of course, with major customers.
As you know, in Europe, we have, broadly speaking, half the business is residential-related and half the business is commercial. Whereas what we see with Bentley Mills, which is 100% commercial, and I would add on there, we're of course extremely pleased to see the USD increase at the Bentley Mills business. It's something we regularly talked about, our customers, they don't disclose to us their footfall figures and we would love that they would, and we ask them repeatedly for. We have these, say, almost frustrating conversations with our customers, say footfall is low. We ask, "Well, how low? Can you give us a comparator with last year? Is it - 3%?
Is it +2%? Because most of these big retailers have some sort of counting system of who goes in and out, but they just keep reporting to us low and not giving us precise figures. But we remain watching it. We remain in touch with important customers and certainly we would like any company in the building sector, we would realize, like we've said over the last couple of years, that there's no quick recovery coming. It's going to continue for a while. I don't want to put any timeline on that. That's not possible. But we should be realistic and just say, look, we realize that the market remains tough. And what you've seen over the years is we've right-sized our European business to that, and we've taken cost out of the organization to adjust the organization to the realities of what the market is.
Okay. That's very clear. Thank you very much for answering my questions.
Thank you.
I think we have no further questions.
Okay. Look, thank you everyone very much. As a reminder, we will publish a trading update concerning our Q3 results in October 2026. I thank all of you for your attendance and wish you all a good day. Bye.