Ladies and gentlemen, welcome to D'Ieteren Group 2026 half-year results conference call. Throughout the call, all participants will be in listen-only mode, and afterwards, there will be a question and answer session. Please note this call is being recorded. Today, I am pleased to present Francis Deprez, CEO, and Édouard Janssen, CFO. Gentlemen, please go ahead.
Well, good evening, ladies and gentlemen. Welcome to our half-year 2026 results conference call. Let me start with the main messages I want to convey today. First, D'Ieteren Group delivered a robust first half of 2026. Our key performance indicator, adjusted profit before tax group share grew by 8.4% at constant foreign exchange rates. This performance reflects strong growth at Belron, PHE, and TVH, and is notably driven by lower financial charges providing further uplifts. This was partly offset by the challenging environment at D'Ieteren Automotive. In addition, cash generation remains solid, with trading cash flow group share increasing by close to 12% to EUR 539 million, mainly driven by Belron. Free cash flow group share stood broadly around breakeven, reflecting acquisition spend at PHE, notably in Spain, and largely compensated by Belron's very strong free cash flow generation, which grew by 89% year on year.
Second, we confirm our full year 2026 outlook. We continue to expect low to mid-single digits year on year growth in adjusted profit before tax group share at constant exchange rates. The trends at D'Ieteren Automotive weakened throughout the first semester of the year and are not expected to improve in the second half. Yet the impact of this evolution is expected to be partially offset in the second semester by the other businesses. Third, we also announced that the shareholders in Belron are currently evaluating strategic options regarding the minority shareholder stakes in the company. Those options include, amongst others, a potential listing of Belron. I want to be clear on where we stand. No decision has been made at this stage, neither on any specific option nor on its timing. Let me be equally clear on our position. D'Ieteren Group's long-term commitment to Belron remains unchanged.
We remain fully supportive of its management team as they continue to execute on a profitable growth trajectory. As this process is ongoing, you will understand that we are not in a position to comment further today, and we will not also be taking any questions on this specific topic. We will keep the market informed in line with our disclosure obligations as the matters develop. Then there is the other piece of news on our CEO transition that you may have read in the press releases. For obvious reasons, I will not comment on that. All I can say is I have had a good ride over the past 10 years. Before we dive into details, let me highlight the key elements of the semester.
At the group level, I already mentioned the 8.4% growth in our KPI at constant exchange rates and the close to 12% growth in trading cash flow group share. As previously said, we are confirming our full year 2026 outlook based on the strong H1 results and the expected resilience of our portfolio year. Belron delivered another strong performance in the first half. A top-line growth of 8.3% and adjusted operating profit growth of 16.5% at constant FX, which is 160 basis point year-on-year improvement in its adjusted operating margin, which reaches 23%. The adjusted profit before tax group share increased even by 32.5% at constant FX to EUR 306 million, further supported by lower financial charges. Second is D'Ieteren Automotive, clearly facing a challenging environment. The Belgian new car market was down by 2.4% and the market share of D'Ieteren Automotive declined to 21.5%.
As a result, the sales decreased by 10.8% and the adjusted operating margin actually to 2.1%. The adjusted profit before tax group share was down two-thirds after a record year in 2025. To adapt the organization to a rapidly changing market environment characterized by increased competition, changing regulations, increased digitalization, and the evolution of mobility practices of consumers, D'Ieteren Automotive has announced last week to the Works Council its intention to implement a transformation plan, which could result in the loss of 344 jobs. PHE then continued on its compounding growth trajectory, with sales up 10.4%, including 6% organic growth driven by market share gains and 4.4% from acquisitions. This includes the acquisitions of 2 large AD Parts distributors in Spain, which closed at the end of May.
The adjusted operating margin reached 9.6% and adjusted profit before tax group share increased by 18.4% to EUR 107 million, now representing about 22% of the group KPI. TVH posted a very solid top-line growth, sales up 7.7% at constant FX, supported by positive volume trends in almost all the regions and equipment markets. The adjusted operating profit increased by 3.7% at constant FX, reflecting the benefit from volume growth, partly offset by subdued pricing and cost inflation, notably in freight. The adjusted operating margin stood at 13.7% and the PBT adjusted group share number increased by 16.9% year-on-year, also supported by lower financial charges. Last, Moleskine.
As you know, H2 remains seasonally more important, but in H1, we showed encouraging signs of recovery with a 6.2% organic sales growth and the adjusted PBT group share of Moleskine improved to EUR -4.7 million, helped by lower financial charges as well. I will now hand over to Édouard to walk you through the group's KPI and financials in more detail.
Thank you, Francis. As you mentioned, our headline KPI, adjusted PBT group share increased by 6.6% year-on-year on a reported basis from EUR 452 million in H1 in 2025 to EUR 482 million in H1 2026. At constant exchange rates, growth was 8.4% year-on-year. As shown in the bridge, all segments except D'Ieteren Automotive contributed to the increase. The largest contribution came from Belron. Its adjusted PBT group share increased by EUR 75 million, supported both by strong operational performance and lower financial charges. PHE contributed an additional EUR 16.6 million year-on-year, TVH, EUR 7 million, and Moleskine improved by EUR 2.9 million. Finally, corporate and unallocated also improved by EUR 8.2 million, mainly thanks to lower financial charges following the early repayment of the bridge loan in June 2025.
This was partly offset by D'Ieteren Automotive, where adjusted PBT group share declined by EUR 72.7 million in a difficult market environment already described by Francis, marked by a combination of lower volumes, negative price mix, tighter distribution margins and negative operating leverage. Turning to the rest of our group share financials, sales amounted to EUR 6.1 billion, broadly stable year-on-year, up 0.7% at constant FX. Solid growth at Belron, PHE, TVH, and Moleskine was offset by the decline at D'Ieteren Automotive. Adjusted operating result group share was broadly stable at EUR 663 million or up 2.2% at constant FX. This again reflects strong operating growth at Belron and PHE, an increase at TVH, and the material decline at D'Ieteren Automotive. Trading cash flow group share increased by 12% to EUR 539 million. Free cash flow group share stood close to breakeven.
Let's flag that the close to EUR 150 million spent on mainly Spanish acquisitions at PHE was largely offset by the progression of Belron's free cash flow generation. Moving to the group's financial position, the net financial debt of the corporate and unallocated segments stood at close to EUR 300 million at the end of June 2026 and slightly increased versus the end of December 2025. Excluding inter-segment loans, corporate and unallocated net financial debt was EUR 486.6 million. This includes the impact of the EUR 76 million waiver on the shareholder loan to Moleskine in the first half of 2026, following last year's impairment charge and aligned with Italian statutory accounting rules. For the rest, the evolution over the semester mainly reflects cash outflows relating to the dividend paid to D'Ieteren Group shareholders, share buybacks, and the free cash flow consumption at the corporate level.
These outflows were partly offset by dividend received from D'Ieteren Automotive, Belron, and TVH. Now let me hand over to you, Francis, to talk about the latest developments across the group.
Thank you, Édouard. At group level, we continue to actively support our businesses across their strategic priorities, including M&A execution, financing, leadership transactions at PHE, TVH, Moleskine, and also ESG and IT. Belron very much continued its focus on operational execution across all the strategic priorities, across all the regions. The famous Best of Belron competition, which celebrates technicians across the globe, took place in June in Lisbon again this year with a winner from Germany. D'Ieteren Automotive, as stated earlier, announced to the Works Council on September 3rd its intention to implement a transformation plan designed to adapt the company to the profound changes affecting the automotive and mobility markets. The business also recognized a EUR 47.2 million impairment charge on the retail to the dealerships, fully allocated to goodwill.
At PHE, the acquisition of the 51% stake in the 2 AD Parts distributors, mainly in the Madrid and Galicia that Édouard mentioned, was completed at the end of May, reinforcing its leading position in Spain. PHE also strengthened its leadership team, Lilian Leroux joining as the group Deputy CEO and Cyrille Flamant appointed group CFO. At TVH, Giuliano Parodi started as CEO on September 1st, bringing new leadership to the business as it continues to execute its focused growth and operational priorities. At Moleskine, Serrano Sala Tescat took over as CFO on September 1st as well. Now let's run through the performance of each of the businesses, starting with Belron. It delivered another strong first half, driven by growth across all the regions, higher total job volume, increasing windscreen value, and growth in recalibration and value-added products and services.
The sales as a result increased by 8.3% year-on-year at constant exchange rates or 4.7% on a reported basis. The adjusted operating profit reached EUR 820 million, up 12.3% on a reported basis and 16.5% at constant FX, with an adjusted operating margin at 23% for the first semester. The adjusted profit before tax group share increased by 28.6% to EUR 308 million, supported by the strong operational performance and lower financial charges. Free cash flow increased by 89% to EUR 485 million, and the company distributed EUR 194 million interim dividends to its shareholders. Belron also continues its deleveraging path. The leverage has now decreased to 4.3 times, and its financing conditions have continued to improve. Now, looking first at the top line, the organic growth was 7.3%, which is driven by a 3.9% increase in total volume, job volumes, total job volumes, exactly.
Favorable price mix, including continued increase in windscreen value and a positive sales contribution from the VAPS. The company also has 0.7% growth from acquisitions, and there was an adverse currency translation effect of 3.3%. The growth was actually broad-based across the regions. North America, which as you know represents more than half of its sales, delivered a 9.4% organic growth, reflecting successful execution of strategic priorities and improving demand in the insurance segment. The Eurozone and the rest of the world also delivered positive organic growth. Belron also continues to benefit from increasing vehicle glass complexity and recalibration penetration, which is now at 52.1%. You have to compare that to the 49, sorry to the 45.9% of H1 of last year, and the VAPS attachment rate has remained high at 24.6%.
Now, the strong top-line performance, combined with operational execution and positive operating leverage, drove the 160 basis point margin expansion to 23%. The adjusted operating result at constant FX was 16.5% higher year-on-year, and the company further benefited from the lower financial charges related to the repricing of the term loans, the ongoing deleveraging, and the leverage step-down credit booked in the first half of the year. The free cash flow was very strong, EUR 485 million, up 89%, as I mentioned, year-on-year, driven by operating performance, working capital inflow, lower cash taxes, and lower cash outflow from adjusting items, and the trading cash flow conversion remained high at 89%.
The net financial debt decreased to EUR 8.34 billion at the end of June, and Belron pursued its deleveraging trajectory with the senior secured net leverage ratio continued at 4.3x compared with the 4.5x where we stood at the end of 2025. Édouard will now discuss the performance of D'Ieteren Automotive.
Yes. Thanks, Francis. After 2 record years, D'Ieteren Automotive faced a much more challenging first half in 2026. I will dig into that in just a minute. Sales declined by close to 11% year-on-year, and together with negative operating leverage and tight distribution margins, led to a significant decline in adjusted operating profit to EUR 47 million. The negative operating leverage hit particularly hard in retail. Free cash flow improved versus H1 2025, but remained negative at minus EUR 34 million, and the company's leverage ratio reached 1.7 times at the end of June. Now taking a quick view at the market. The pace of change since COVID is quite clear, with a slight market decline year-on-year and loss of market share for D'Ieteren Automotive in the first half.
We also see the continued decarbonization of the Belgian fleet, with new energy vehicles representing now 57% of new registration in Belgium, as well as a normalization of the buyer mix towards a growing share of private customers where DIA has less exposure, also in retail. These top-line pressures, combined with negative operating leverage and tighter distribution margins, led to a material decline in the bottom line. The adjusted operating margin declined to 2.1% from 4.5% in H1 2025, which was still exceptionally strong. The reported operating result was also impacted by a EUR 47 million impairment charge on retail, fully allocated to goodwill as a result of a lower than anticipated performance. Adjusted profit before tax group share declined by 67% to EUR 36 million, although the contribution from any equity accounted entities improved, notably thanks to Volkswagen D'Ieteren Finance.
As mentioned earlier, last week, D'Ieteren Automotive has announced its intention to implement a transformation plan to adapt the company to the profound changes that are currently shaping the automotive and mobility market. Such project could lead to the suppression of more than 340 jobs. More broadly, D'Ieteren Automotive is also scrutinizing its whole cost base and, in parallel, is accelerating its 2030 strategy based on providing an integrated mobility ecosystem throughout the vehicle life cycle. On the free cash flow side, that improved year-on-year to minus EUR 34 million, mainly due to a modest working capital inflow compared with a significant outflow last year, partly offset by the weaker operating performance. Net financial debt increased to EUR 409 million at the end of June, mainly reflecting the distributions to the corporate segment, free cash flow consumption, and higher lease liabilities. Francis will now develop the PHE results.
Thank you, Édouard. Yes, on PHE, it continued its growth trajectory in the first half of 2026, combining solid growth and good operating leverage. At the end of May, PHE announced the closing of the transactions on majority stakes in 2 AD Parts distributors, Polaris and Regueira. There is 1 month contribution from these in this half year number. Trading cash flows stood at EUR 45 million, and leverage increased moderately following the additional financing raised to fund the acquisitions. I must add that additional financing was very successful. France, which represents about 57% of sales, grew organically by 2.8%, while international activities grew organically by 11.2%, confirming the continued market share gains across the regions. M&A further contributed 4.4% to the total growth of 10.4% in the first semester.
It is worth noting that in France, higher fuel prices started to weigh on miles driven, with an impact on market volumes. Adjusted operating profit increased by 16.6% to EUR 155 million, with an adjusted operating margin of 9.6% compared to the 9.1% of a year ago. That was supported by positive operating leverage, a strong focus on costs in a context where inflation continues to weigh on transport and personnel costs. The adjusted PBT group share reached EUR 107 million, up 18.4% year-on-year. The trading cash flow stood at EUR 45 million, down from EUR 66 million a year ago, despite a stronger operating performance, mainly due to higher working capital requirements, including additional stock built and some restructuring, as well as higher expansion CapEx. Free cash flow reflects mostly the acquisition spend, of course, and the large AD Parts distributors that I mentioned before.
Leverage only slightly increased, remains at a reasonable level at 3.5x. With that, I will hand back to Édouard to talk about TVH.
Indeed. After a few tougher years, TVH is progressively recovering its growth trajectory with a top-line growth of 7.7%, as we said in the first half, and a 3.7% growth in adjusted operating profit at constant effect. The adjusted operating margin stood at 13.7%, and adjusted PBT group share increased by more than 19% year-on-year on a constant currency basis. Trading cash flows stood at EUR 42 million and free cash flow at minus EUR 8 million. Leverage remained broadly stable at 3.2 times. Reported sales growth of 5.3% is composed of 6.6% organic growth, 0.9% from smaller bolt-on acquisitions, and a negative currency translation headwind of 2.2%. Organic growth was driven by improved volume trends across all equipment markets served by TVH and in nearly all regions, except, of course, the Middle East.
Adjusted operating result increased by 3.7% at constant effects, with the benefit from sales growth and positive operating leverage being partly offset by cost inflation, notably in freight due to higher oil price and by controlled growth in other operating expenses. Adjusted profit before tax group share increased by close to 17% to EUR 44 million, 19% at constant effects, driven by the operational performance and lower net finance costs. As a reminder, in H1 2025, net finance costs are being increased by realized and unrealized foreign exchange losses. Now moving on to free cash flow. It was at minus EUR 8 million, notably due to working capital investment, reflecting stronger sales with increased trade receivables and inventory investment to ensure product availability and allowing top-tier service levels that characterize TVH.
Net financial debt stood at EUR 901 million at the end of June 2026, compared with EUR 853 million at the end of 2025, mainly reflecting free cash flow consumption and the interim dividend paid to shareholders. Francis will now cover Moleskine.
Well, thank you, Édouard. H1 is seasonally not the most important part of the year for Moleskine, yet it's worth noting that there has been a strong additional organic growth in the first half of the year, that we have EUR 0.7 million adjusted operating results and an improving adjusted profit before tax group share, thanks to lower financial charges following the shareholder loan waiver of EUR 76 million. The trading cash flow and the free cash flow slightly improves year-over-year.
The new management team is driving a comprehensive action plan to unlock Moleskine's full potential after several years of underperformance. That program includes both strategic and operating initiatives, spanning brand strengthening, enhanced go-to-market, omni-channel execution, operational discipline and efficiency, greater organizational alignment, and a revitalized digital marketing strategy. As mentioned in the highlights, the reported sales grew organically by 6.2% year-on-year. A good performance, especially in the retail channel, and a recovery in wholesale, mainly in the U.S. This mix led to a slight margin dilution at the adjusted operating result level.
The adjusted profit before tax group share stood now at minus EUR 4.7 million versus minus EUR 7.6 million a year ago, primarily due to the lower financial charges, as mentioned before. Net debt after the waiver stood at EUR 204 million. We quickly finish with the corporate unallocated segment. The adjusted operating result remained broadly stable at minus EUR 1.4 million. The adjusted net finance cost improved significantly to minus EUR 7.2 million as the group prepaid its June 2025, EUR 500 million bridge loan that was raised at the end of 2024. As a result, adjusted profit before tax group share improved from minus EUR 16.7 million in H1 2025 to minus EUR 8.5 million in H1 2026.
The corporate unallocated net financial debt position stood at EUR 300 million at the end of June, or EUR 487 million if you exclude the intersegment loan. To conclude, the first semester 2026 was a robust first half for D'Ieteren Group. Strong performances at Belron, at PHE, and at TVH. The improvement at Moleskine and the lower financial charges overall more than offset the challenging conditions at D'Ieteren Automotive. We confirm our full-year outlook. The trends observed into automotive weakened throughout first half of 2026 and are not expected to improve much in the H2 of 2026. Yet, the impact of this evolution is expected to be partially offset in the second half at the adjusted profit before tax group share level by the other businesses of the group.
We remain focused on supporting each of our businesses in the execution of their strategic priorities and are now opening the floor to questions. Operator, can you please take over?
Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the 1 on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the 2. If you are using a speakerphone, please lift the handset before pressing any keys. One moment please, for your first question. Your first question comes from Alexander Craeymeersch with Kepler Cheuvreux. Your line is now open.
Hey, good evening. Thank you for taking my questions. First of all, thank you, Francis. It's not yet the finish line, but thank you for the years that I have seen the company grow. Second is, of course, also good to see that you are leading on a Belron that is over-delivering once again. First of all, I wanted to get that off my plate. Now, the questions. The first question that I would have is on Belron, of course. We see nice growth in U.S.A. But of course, a part of that is related to sort of normalization of this claim avoidance. The question I have is, how long is the runway of the recovery of this claim avoidance normalization? Second question would be on auto. D'Ieteren Automotive clearly was sort of squeezed on margin plus received a sort of market share loss.
Question I would have there is that the 2.1% EBIT margin that we have seen, whether you expect this to be a trough margin. Second question on auto would be whether that market share loss, which was, of course, somewhat related to models ramping up in the H2. Do you expect to recover some of that market share loss in the second half? Because it is quite far away from the 25% that was originally marked as the target 2 CMDs ago. The last question I would have would be on TVH. TVH volume growth is not translating into relative margin expansions yet. Margins were better than what we expected, but given the market dynamics going forward, do you expect a change in this margin development, whether the operating leverage from extra volumes would actually translate in margin increase? That's it from my side. Thank you.
Okay. Well, thank you, Alexander, for those questions. First, and thank you also for your kind comments. On Belron, on the U.S., the claims avoidance, as you said, have stopped declining a while back already again, and started to not the claim avoidance. So the claims started declining and the claims started to go up again since quite a couple of months now again. Are we now completely back to fully normal? I would not say that yet, but what we see is that we see continued good development that people are having claims and are using their claims overall in the U.S. I n that sense, it's a very healthy development that we're seeing. But to kind of put a timing on when that would be running out, that's really pure speculation from my point of view. On D'Ieteren Automotive, you talked about the market share loss.
That's true. Actually, we have not been helped by the fact that we had less models being launched in the first half of this year in 2026. We had a couple of models that were working very well last year, new ones. We do actually anticipate there's a couple of new models coming in the second half year. They've already been launched, by the way. The ID. Polo, the Cupra Raval, the Škoda Epiq. Nice, smaller electric vehicles. But that once they're there, and of course, there's always a little bit uncertainty when you launch a new model. When exactly do you not only get the order, but you get the cars delivered and therefore can invoice them. So, what exactly will happen in H2, what exactly will be more for 2027 is always a little bit difficult to predict.
But in terms of market share, we do think that with the new models coming up, we have a good mix of brands and models available to work on our market share, and make it move higher again than a territory of today. W e will see where exactly that will land going forward in the months to come. In terms of the margin as the throw. Well, as you've seen, we've announced the intentions of the management of D'Ieteren Automotive to prepare the future. Part of that is, of course, also addressing part of the cost base. T hat depends a little bit on how that process will be going, and there's nothing to comment on that to say that.
It's too early and for H2, unfortunately, as we said, we expect continued very tough situation as in H1 for auto.
Yeah. And then on TVH.
Moving on to TVH.
Sorry. Go ahead.
Thank you, Francis. Indeed, even though the performance is better at TVH, and we are happy to see growth coming back, the message as we observe it on the margin development is very much in line with what we had said at the beginning of the year, if you remember. We were expecting, unfortunately, some margin dilution due to various factors, including freight costs, with fuel price related and also some non-cash cost of goods sold increases, such as inventory write-downs, combined with some control on OpEx.
That said, as well, what is important to remember is that while the volumes recover at TVH, pricing trends are not yet recovering besides in the U.S. where the tariff passed through, which by the way, has had a diluted gross margin effect. There is as well a bit of a differentiation country to country on the pricing and hence margin size, as we said, a more favorable situation in the U.S. versus less in Europe.
Okay. Very clear. If I maybe squeeze in one more, and I know you can't say much about this potential listing, et cetera, but I'm just wondering, it was already published in the financial papers in January that the minority shareholders are looking for strategic options. There was no announcement in Q1 press release, which would have been sort of an easy thing to do. Today, the interest rates are higher now than in January. I'm just wondering, as an outsider, what changed between, let's say, April and today, that this is now becoming a higher focus? Thanks.
Well, as you know, each time I got that question in the past, I basically said that the moment has not come, because at some point in the future, we may get a knock on our door to start talking about potential strategic options. That's the difference is that now we are exploring the strategic options.
Okay. I will leave it at that. Thank you very much. Again, thank you, Francis, and the rest, of course. Thank you.
Your next question comes from David Vagman with ING. Your line is now open.
Good evening, everyone, and thanks for taking my question. First, thanks, Francis, of course. I refrain from asking a question on the change of CEO. I just have 4 quick questions. First on Belron, could you disclose the volume growth excluding recalibration? Basically the previous communication. My question is basically how is the general volume of cars on which Belron is working evolving, or did evolve in H1? Then second question on Belron, a bit related to the question of Alexander. What has Belron seen in the U.S. on insurance claims? If you could quantify the insurance claims recovery. I understood from some auto services companies in the U.S. that it was bottoming or let's say troughing, but not really yet recovering. What are you seeing basically in H2?
Quickly related to Belron again, what was basically the progress you had on mobile recalibration and the progress in the cash market in H1? Then last question on auto. On auto, you have this restructuring just announced. Is it enough to put you back on track to achieve the 4% EBIT margin that was the target for 2028? Or is the Belgian auto market evolution really calling for a material downward revision of these objectives? Thank you.
Okay. Thank you, David Vagman. On Belron, the volume growth, if you exclude the recalibration, is actually +0.4%. The insurance claims recovery, we have actually seen uplifts in claims percentages. This is something we try and track on a monthly basis, to see what it is. It always takes a while before you get the last month, et cetera. But we have seen, if I just look at H1 of this year, really encouraging positive percentage increases on the insurance claims that were happening. But I cannot quote specific numbers, as I say, but they have been clearly there. Then on the MSR and the cash progress, MSR of course, in the U.S., was the first country that was launched. In the meantime, it has been launched in a couple of other countries.
If you were in France by any chance this summer, you may have seen the advertisements on the MSR that we now also have in France, and we have it in more and more countries now. The consumer and insurance feedback again is actually very positive. B oth the insurers like it very much as an additional service feature that we can go to the end customers, rather than having them come to us. T he consumers enjoy that very much. So it helps on no-shows and things like that and so on to avoid that. So it is a very good way to be a better service company, which is the ultimate objective of Belron as it has been for many, many years. We are really pleased with the way MSR is being accepted by the market, both consumers and insurers, and it is progressing quite nicely.
The cash, as you said, we mentioned that Belron is growing thanks to strategic initiatives, and cash is one of them. Cash is also continuing on its trajectory. On auto, honestly, as you know, the intention was declared by the management in D'Ieteren Automotive. The process has been launched with the social partners, and it is really impossible to say anything meaningful about where that will lead to at this point in time. So we really have to first go through the process and work together with the other partners on the way forward.
Okay. Thanks, Francis. Maybe a very quick follow-up on that one. Compared to the time at the CMD, so basically May 2025, has the evolution been very significantly worse than you had feared? Any particular evolution in specifically
I think what has probably been different, we mentioned it in our tech centers, there's what's going on with the consumer sentiment, there's what's going on with the regulation, et cetera. Take the example of the mobility budget as one example.
Yeah.
This is something that was still very small and it's being pushed more and more within Belgium. The mobility budget is a change in consumer behavior that does have an impact on that. What I think is also there, but that was somehow to be expected, that of course, the arrival of the Chinese brands is now more and more visible. I've always said that at some point in time, they will kick up in their market shares, and now we start seeing that in Belgium as well. The B2B market that we are maybe made it a little bit later than other markets, but this is starting to happen. Step by step, this increased competition forces us to prepare well for the future, so that we can defend our market leadership position that we have here in Belgium.
Thanks, Francis.
Your next question comes from Michiel Declercq with KBC Securities. Your line is now open.
Yes. Hi, Michiel Declercq from KBC Securities. Thanks for taking my question, and also thank you, Francis, for the last couple of years. You leave a completely different company in a positive way, I would say. I had some further questions. The first one would be a bit on the group outlook. You guide for low to mid-single digits adjusted PBT growth. You are now at 8%+ at constant currency. I understand that the impact from D'Ieteren Automotive will continue in the second half, but that would basically imply almost 0% growth at the group level in the second half. I am just trying to understand the moving parts here. Is that maybe a further deterioration at D'Ieteren Automotive or is that more the higher comparable base at Belron? Any color on that would be useful.
The second would also be on Belron, and sorry to come back on the claims situation. If I look a bit at the motor vehicle insurance inflation in the U.S., we have actually seen that it is coming down in the first half and continues to do so. Can you maybe tell us in terms of the claims filings, how much we are still below, let us say, the pre-inflationary period? That would be useful. And also, I understand that you now guide for the volumes both in terms of core and ADAS, but I still model it as the core VGRR volumes. And if we look at the first half, we have seen a very strong price mix effects, one of the strongest one in the recent years.
I am just trying to understand where there is some phasing of the price increases still in there, or how, let us say, the almost 7%, how should we see this going forward? Should that come down a bit? Or any explanation why this was particularly strong this quarter or this half year? Thank you.
Okay. Édouard, do you want to take the question on the PBT?
Yeah, sure. On the PBT, what we can say is that, as we explained, as the year develops, there are always some pluses and minuses, right? As communicated clearly, I think the trends at D'Ieteren Auto have indeed weakened throughout the first half of the year, and are not expected, unfortunately, to improve in the second half of the year. Hence, this will lead to a weaker, a negative impact, let's say, that should be partially offset in H2 at the level of the adjusted PBT group share by the group's other businesses. Partially offset, that's very important, right? Clearly, we do not provide guidance on a half-year-on-year basis, but we gave a growth rate range for our KPI on a full-year basis, and we have no reason to change that.
On the back also of the strong performance delivered in H1, and despite these weaker trends at Auto, as you described, which should be, again, partially offset in H2 by our other businesses. Despite, let's remember that there is a tougher comparable base for Belron, of course, in H2 versus H1.
For the group as a whole. Okay. On the Belron claims, I honestly don't have the answer to the pre-inflationary period, and now are we entirely back. It's not something I have here at hand, unfortunately. On the price mix, yes, it has indeed been quite nice at 7%. In the U.S., the pricing was notably supported by an increase in NAGS, probably partially incorporating tariffs, I would assume. It's always with a black box with NAGS. That may have increased more than usual in September 2025. The price mix was also supported in the other regions, across the board. That's mainly windscreen complexity, I would say, in the car park, and the type of cars that require service for us. T hat's more or less what has been behind this 7%. We'll see where the rest of the year will land.
Thank you. If I can maybe ask a quick follow-up. You mentioned the next price increases were in September of last year. Is there anything still expected for this year in terms of further price adjustments?
That's always not only a black box on how they calculate the percentage, it's also a black box on when they will change. We will have to discover that together.
All right. Thank you.
Your next question comes from Tim Ramskill with Bank of America. Your line is now open.
Thank you. Good evening, gents. 3 questions from me, please. On the automotive side, perhaps you can help us understand, excuse me, the scale of the actions you are taking. The 300 plus headcount reduction, what would that translate to in terms of a cost save? That would be extremely helpful. Then also within D'Ieteren Automotive, is it time for you to consider other strategic options, whether that is partnering with other OEMs or a more meaningful mix change to your own distribution versus third-party retail capabilities? I know you referenced a little bit more operational leverage in your own business in the statement. As regards Belron, just interested in your thoughts on margin potential. If you sustain your margin delivery that you have achieved in the first half, you are going to be fairly close to your 25% margin target well ahead of time.
Again, just interested in your thoughts on where margins could go beyond that. The final question is just perhaps some quick thoughts on the shape of the pipeline as regards M&A opportunities for both PHE and TVH, please. Thank you.
Okay.
Yeah. On your question on the scale at D'Ieteren Automotive, of course, as we said, it is too early to tell. It is work in progress, interactions ongoing with the unions. However, if you look at the 344 jobs that were announced compared to the total workforce, we would be in a 10%-15% range. It is indeed a strict legal process, right? Right now only an intention has been communicated. What we can say as well is that as part of this intention, they are also working more broadly on the cost base. It was also announced as part of the intention, possible site closures, possible reductions across the cost, right? That is reducing marketing costs, reducing content costs, et cetera. With all of that, very important to say, strict legal process, early phase of the negotiation with the social bodies.
Right now it is only an intention, and to be continued.
Yes, on the other strategic options to explore with D'Ieteren Automotive, well, there is a strategic plan 2030 that D'Ieteren Automotive has, and that follows, that is the one that we are pursuing basically. There is not much else to say on that for D'Ieteren Automotive. On the pipeline of M&A at PHE and TVH, yes, there is always a pipeline of ideas for sure. In the markets where PHE is active, there are always opportunities. As you know, we have added Ireland last year as a geography. We are now at 7, 8 geographies. T here is always ideas to both look at geographies but also within the geographies that we are in.
We have now done 2 acquisitions in Spain, but that does not necessarily mean that it is the end of the road, that we do not necessarily have a national footprint yet, even with those 2 acquisitions, although we have made a big jump. So there is clearly many ideas on the table, but of course, it always takes 2 to tango to see whether they make any sense from both sides. On TVH, the same. TVH has recently even strengthened its M&A team. W e have a nice pipeline of potential. Some of them are more active than others. But we have a good view of where we would like to add if we are able to do so. I t is quite promising, I would say. On Belron.
On Belron and margin, definitely solid delivery in H1, right? Let us be clear. But let us not forget that a few important elements. First, last year, H2 is a much tougher comparable, right? L et us remain humble as well with the NAGS effect that Francis talked about in September last year, right? Year-on-year. So that is one factor. The other factor is let us remember that we had guided to the 2028 target being spread over multiple years, right? For many reasons. Hence, yes, that seems like a realistic direction.
Very helpful. Thank you.
Your next question comes from James Rowland with Barclays. Your line is now open.
Hi, evening. 2 questions, please. Just firstly on the guidance, on adjusted PBT group share, low single digit to mid single digit, which you have kept unchanged, with autos weakening but partially offset by the other lines. Can we assume that you are essentially pointing to the bottom end of that low single digit to mid single digit range? Considering consensus sits at the top of that at the moment. Secondly, on capital allocation.
If we sort of project into the mid to longer term in a world where Belron may well be listed, can you update us on your plans regarding sort of group M&A and how you think about the portfolio at the moment? Clearly, there is a consolidation strategy that is ongoing in your TVH and PHE subsidiaries, but how do you think about the group structure, and the holding 5 subsidiaries that you have at the moment? Thank you.
On the guidance, clearly, we do not want to provide anything so precise, right? What we can say, that you can read as well in our wording, is that there was a better aspect of the H1 versus H2 for various reasons. D efinitely a weakened situation at different D'Ieteren Automotive expected to be partially offset by the other one. So, not much more to be said at this stage.
Yeah. That is the confirmation of the guidance, basically, of the range. Capital allocation, group M&A, yes, of course, we are very supportive of PHE, TVH, and the other businesses when they have meaningful M&A to do. By the way, Belron did 15 small acquisitions as of in H1. Do not forget about that. As a group, we continue, as we have done, to always have a deal flow, to look at potential files, to see where we can go, and then have our very disciplined and systematic 4-phased approach to see how far we go and whether we ultimately submit non-binding offers or binding offers, et cetera, pp. That actually continues, that strategy. So it remains our intention over time to do both. To do and help grow our existing businesses, and at some point in time, we may add another growth pillar.
That has not changed, that strategy.
Your next question comes from Thijs Berkelder with ABN AMRO Oddo. Your line is now open.
Yeah, thank you for having me. First question is on your outlook per segment. You only adjust the automotive outlook and are keeping the outlook for the other sectors unchanged. Is that correct? Secondly, on outlook, should I read something in you not repeating explicitly your 2028 ambitions, and should I maybe read this in light of the coming change in the CEO position? How sure can we be on that these 2028 ambitions still stand? Next to these outlook questions, I have a couple of questions on Belron. Can you maybe update us on the staff base at Belron versus year-end and the attrition rates taking place in that staff base? Can you maybe indicate what the staff costs in percentage of turnover have been, as well as potentially the extra marketing costs taken in H1, maybe because of higher costs related to the FIFA World Cup?
All right. Yeah. With regard to the outlook questions, simply, practically, in the middle of the year, we don't provide a detailed entity per entity. In this case, given the significant, let's say, deviation at D'Ieteren Automotive, we wanted to make that very clear. Apart from that, we don't provide a detail. About 2028, no. Nothing to be said there about 2028. No changes on that trajectory. Nothing to be read. No.
We're almost halfway through, basically, since April 25 when we talked about them. We're very nicely on track vis-a-vis those ambitions. They're very much still there to continue to be our medium-term guidance. On the Belron side, by the way, the attrition rates of staff have actually continued to improve in most of the countries, not necessarily in all countries, but in most of the countries. That's quite a good thing. Staff costs are, of course, a significant portion, given that the service business at Belron. You can easily be between 15%-20% of direct labor costs that you have within Belron. That's very feasible. Advertising costs is the other one, which of course, advertising costs are quite significant, as you know. They are in the single digits percent of sales numbers.
We typically tweak it depending on what we need to do to get the demand and the do-nothing ratios to work to our favor. We are more looking at it as a way to develop the top line than as something where you say, "Oh, can I save some costs here and there?" I t's really more a top-line enabler than anything else. We have continued to spend on advertising in H1. Absolutely.
Okay, thanks.
Your next question comes from Jeremy Kincaid with Van Lanschot Kempen. Your line is now open.
Good evening, gentlemen. 3 questions from me. The first on TVH, you had a strong improvement in organic growth there, broad-based. Could you just go into some of the detail as to why it was so strong? I suppose I'm just trying to get an idea of how permanent this might be. I note that in the first half of 2024, you had a similar increase in organic sales growth. It went from 0% up to 6%, 6.5%, and then we had 18 months of zero again. Yeah, just trying to understand how permanent this could be. My second question is on Moleskine and the debt waiver. If I understand the mechanics correctly, there was an impairment which under Italian statutory accounting rules means you're now at a certain debt-to-equity threshold, which required the waiver. My question is, where do you sit on this threshold now?
If there were more impairments, would it be likely to see more debt waivers? My final question is, we've seen some announcements from the OEM vehicle manufacturers, and they've said that aftermarket glass is potentially not approved for their warranties. I was just wondering what Belron's position on that is and if you're in any discussions with the OEMs. Thanks.
Okay. Well, on TVH, why so strong on the volume growth? It's a couple of factors, as you know. The non-material handling verticals like construction or agriculture have been growth strategic priorities for TVH, and we're having good traction on both of those, actually. W e've seen very nice growth rates in the construction segments that we are, where we're in many cases not necessarily that very well-known yet. We've added our catalogs. We've made sure we have the right SKU on stock in all the different areas around the world where we are offering that. W e've seen very nice. So that's there to stay because we have now these models and makes within the construction industry in our catalogs. We have now the warehouses and the SKU there. C ustomers have just discovered us for those type of spare parts.
In agriculture as well, we've actually seen very good progress again in the agriculture. That was a bit more tough in the last couple of years, but we've seen nice growth in the agriculture spare parts very much. I would say the second thing that has really given extra dynamism, which I also believe is structural in nature, is that there's been a lot more commercial drive again within the TVH teams across the regions. I can talk about the way they talk about the key account management, the way they look at every single opportunities, the way we try to align the digital campaigns towards our websites and e-commerce on TVH. So it's a really a very commercially driven culture, and I think there's a very strong momentum at the moment, and I saw no reason why that should change.
Then moving on to Moleskine.
Yeah, the threshold.
Yeah, the threshold. Basically, your understanding is correct, that according to Italian statutory accounting rules, yes, it led to that waiver on the debt, and in the future, long story short, the answer would be yes as well.
Then on the non-approval for warranties of aftermarket glass from OEMs, again, we as Belron hardly touch warranty jobs. Because a warranty job, you typically go to your OEM dealer, otherwise you do not get the payments organized for them, and they have conditions linked to warranty to do exactly that. So we are typically not affected by what is going on in the warranty business at Belron because we are de facto a specialist player, not linked to an OEM.
Great. Thank you. All the best with the future, Francis.
Ladies and gentlemen, as a reminder, should you have a question, please press star 1. Your next question comes from Andrew Grobler with BNP Paribas. Your line is now open.
Hi. Good evening. 3 from me as well, if I may. Firstly, on Belron, I know this topic has come up around claims. Just with the insurance companies having put up their deductibles as prices go up, do you think that you will go back to historic levels of claims or have those levels come down permanently through that process? Secondly, on Automotive, just if you could talk through the extent to which there is gross margin pressure from Volkswagen as they deal with their own issues. To what extent is that in place, and do you expect that to continue? Then thirdly, just quickly on Belron, cash flow was helped by much lower tax in the semester. How sustainable is that lower tax rate? Thank you very much.
I will maybe start with the auto question on the gross margin pressure from Volkswagen. Of course, they have a lot of pressure, and they are trying to pass that pressure further down the value chain. We know that. We know that each time they launch new models that they may reduce the distribution margin that is available for the bottom part of the value chain. But that is not new. This is something we have known since many years. But this is not necessarily pressure from Volkswagen. Given that there is more intense competition, of course, from time to time, we do have to give a little bit more discounts or make efforts for customers to make the choice in our direction. That is, I would say, at least as much a contributor to something that is purely passed on from the Volkswagen Group to us.
I do expect that as they are progressing with their own restructurings and so on, they will more and more again be in a position where they can offer competitively priced vehicles where you would not necessarily need that much needs for discounting. This is a kind of a cyclical. We have seen this going up and down over the years, and so we are now in a phase where yes, there is less gross margin available for a number of reasons that I mentioned.
With regard to the claims levels at Belron, what we can say is that we do continue to see the underlying premium environment remaining favorable and hence claims progressing. This is, let us say, in relative terms and not in absolute terms. I think this is your question. That relative progression is continuing, although it is not every month necessarily that it is progressing. It continues. Important to flag that last year, it is in H2 that we started seeing this significant progression in the market with the whole insurance market having done the turn, et cetera, and hence that comparable will be tougher as well year-on-year. Moving on to your Belron cash flow and tax question. Clearly, there was a favorable, let us say, one-off in H1 of this year that we do not expect to see being repeated.
Thank you very much.
Your next question comes from Maxime Lejeune with Degroof Petercam. Your line is now open.
Hi. Thanks for taking my question. I have 2 main questions. The first one relates to the automotive part. You mentioned that you do not expect to see any recovery in H2. Do you have any timeline in mind of when we could see the first positive sign of the restructuration? The second one is related to PHE. The leverage rose to 3.5. Is there any ceiling for you, or do you still have room to do further bolt-on M&A? Thank you.
Well, on D'Ieteren Automotive, of course, we do not know the exact timing of how these negotiations and discussions and consultations periods will go with the social partners, and so it is difficult to say when you would start seeing effects on balance, at least of the other side. What we do know on the more commercial side, I would say for the top-line side, as I mentioned before, that we get the newer models coming. As those new models will come, I guess you will successively start seeing again that we can work on our market share and therefore, hopefully also on the number of volumes that we can invoice. Yeah.
On PHE.
PHE.
Actually, we are very pleased that PHE could do these nice acquisitions in Spain. It is very much part of their whole story and value creation story of the bolt-on M&A, the synergies it brings too. They have an excellent capability of execution there. Let us not forget that on a pro forma basis, it would of course be a bit lower, but hence, yes, they continue to be able to continue, to do their bolt-on M&A strategy, and we expect that to continue going forward. Let us not forget that when we bought PHE, they were at 4.5 times leverage, and they have deleveraged progressively over time. Now we like the around 3 times, but as we said, 3.5 or even a bit more for future M&A is absolutely fine and welcome.
Perfect. Thank you very much.
There are no further questions at this time. I will now turn the call over to management for closing remarks.
Well, thank you very much for all your calls and your questions, and looking forward to meeting on another occasion. It has been a great evening.
Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your line.