I'll now hand over to Bruno Thivoyon, Chairman of the Management Board, and Nicolas Retailleau, CFO. Gentlemen, please go ahead.
Good evening, ladies and gentlemen, and welcome to this Groupe Bénéteau H1 2026 results presentation. Communication which has been published slightly in advance on part of the platform that made that some obtain the press release slightly in advance. That's why we anticipated as well the formal publication of this press release. I will start by an introduction on the S1 key highlight. Nicolas then will go one step further in the detailed presentation of S1 results, and then I will talk about perspective. Let's start by the H1 key highlight for the group. We already commented the top line in July, over-performing the market in every segment. Sales were growing by more than double digits in the first semester versus last year.
A bit more on a like-for-like basis with a better retail performance, meaning our dealer network reduced their stock further than what we delivered to them during the first semester. Our sell-out is better than our S1 or sell-in in S1. But in reality, our S1 has been very different from the first to the second quarter. A very good Q1, thanks to different elements, but mainly the success of the product launch acceleration initiated one year ago, and a lower Q2 impacted by the Middle East conflict. Profit-wise, our European footprint is back to profit. Nicolas will comment it in detail. This was not the case in U.S. This was not the case in our U.S. footprint.
Reason why we decided to stop production in Cadillac, that we did during the summer, and initiate a sellout process for our American brands, for Wellcraft, Glastron, Scarab, and our American facility. Two additional initiatives were also launched during the first semester. We will come back in further detail in the perspective side. The first one is relative to electrification with a joint venture on Elektra Marine for the electrification of the sailing market. The second one is relative to the lifetime extension, the refit, with the launch of a new program starting by Lagoon, starting by the catamaran market, and now extending to sailing monohull segments. Regarding cash, we kept a net treasury higher than EUR 200 million after dividend distribution. The production plan initiated in Q1 was based on our order intake trajectory before the start of the Middle East conflict.
We are currently adapting it to the post-Middle East conflict market condition and adapting our production and stock level according to this market situation. Let's come back on H1 sales. As we shared in July, we've been outperforming the market on every segment during the first semester, meaning, on each of them, despite market trend, we've been growing on the day boating, which was the first segment to decline post-COVID and which seems to be the first one to start a new cycle of growth. We've been growing by 19% on this day boating segment in this one. On the other segments, 19% on the monohull, 8% on the multihull, 3% on the motor yachting. This is over-performing a market which was deteriorating in the first semester, especially linked to the Middle East conflict. Let's focus on the U.S. side now. From one side, we have accelerated the restructuring.
As I shared, in Cadillac, it was somehow a necessity for the Group profitability recovery. First, because 30 million cumulative losses over the past two years, EUR 9 million in S1, EUR 1 million more than S1 last year required another approach. Second, because the market, which was attacked by this facility, meaning the bowrider, the jet boats, is continuously decreasing without long-term development perspective. We announced it in June. We took the decision in June, and we announced it at that time. Operations is now closed, and the selling process is now initiated. We have also restructured the boat club activity, Your Boat Club, through the rationalization of the fleet, through the sale of some bases. Doesn't mean we are reducing our ambition to U.S., to the opposite. We are focusing our energy, we are focusing our development on the seven strategic brands. It starts to pay as well.
29% growth in the first semester from our European brand to the U.S. market, despite tariff, which progressively were implemented last year, despite euro-dollar evolution, which is as well unfavorable versus S1 last year. Wellcraft is now back in the race and growing either in Europe and/or in U.S. Bénéteau is currently launching an American design of the Flyer range to be more American in America as well on the day boat segment. In fine, this U.S. rationalization will allow us to better focus our resources on American market expectation. These were the key highlights I wanted to share with you on the S1. Nicolas will go now a bit further on the results presentation.
Thank you, Bruno, for this business update. Good evening, ladies and gentlemen. Let's now have a look into the H1 results in detail. As highlighted by Bruno, the success of our product launch acceleration strategy enabled us to deliver growth outperforming the market. As a first consequence, to restore our profitability by EUR 20 million compared to last year, spurred also by operational excellence. In H1, as just Bruno mentioned, we also announced the shutdown of our U.S. operation in Cadillac, which is still impacting our S1 EBIT for EUR 9 million, which is to be compared with the loss of EUR 8 million of last year. The non-recurring effect of this decision amounts EUR 30 million, of which EUR 20 million are related to depreciation of assets. It's a key pillar towards the restoration of our competitiveness and our profitability in the semesters and years to come.
Eventually, the net income is also favorably impacted by the earn-out following the housing division divestment back of 2023. We are now seeing the last impact of this divestment. Quickly coming back on the sales bridge, which we already shared with you. Breakdown of the bridge is the following: 9% of organic growth, again, outperforming the market, spurred by the innovation strategy. The 23 new models and product launch last year amount to roughly 30% of our business in H1, enabling to outperform the market on every segment that Groupe Bénéteau is addressing. 2% of basis effect that we already commented, but we have to keep this in mind. The cutoff issue on the U.S. sales, which were postponed from Q4 2025 to Q1 2026 that we commented back in March last year, beginning of the year, sorry.
The consequence of the ERP launch in Bordeaux of Q1 2025. Last, retail-wise, the performance is even more positive since dealers inventory are decreasing over the course of the first semester, which is good because it is confirming the normalization of the activity, as commented during our fiscal year 2025 result presentation. Let us have a look to the evolution of EBIT now. After a difficult year, 2025, H1 is a significant milestone in terms of margin recovery, with EUR 20 million improvement year over year. First, this is a result of our aggressive product launch strategy, as already mentioned, which is delivering profitable growth amounting EUR 10 million.
This is the net impact of the volume across all segment, EUR 14 million, and the targeted efforts on development cost and branding activity, which are necessary investment to roll out in order to outperform the market in this difficult market environment that Bruno described before. Our continuous effort towards operational excellence is also delivering result over this first semester with EUR 8 million as a result of the recovery in Bordeaux following the ERP implementation in Q1 2025. The improvement in labor efficiency, both in Poland and in France, despite the fact that we are accelerating the product launch, which could be a disruption in our factories. The saving plan, which is delivering results semester after semester.
Finally, the slightly negative impact of exchange rates, mainly coming from dollar, is offset by the net impact between tariff increase year over year and the partial refund that we obtained related to the EAPA tariff in the U.S. When we look below the EBIT, several impacts are to be highlighted in this H1 result. First, the consequences of the decision to shut down Cadillac operation in the U.S., impacting other income and expenses by EUR 30 million. As I said in the introduction, EUR 20 million are related to the depreciation of assets, EUR 10 million are cash impact, which will impact H2, related to the shutdown of the operation. Second is the financing of Your Boat Club in the frame of the divestment for EUR 3 million, impacting financial income and expenses in H1.
Since then, we took control of the YBC operation, and the divestment is ongoing and should be finalized by end of Q1 2027. Last, the earn-out relating to the housing division impacting H1 income from discontinued operation as it was the case in H1 2024 for the first earn-out. Net impact between the earn-out and the cost related to the earn-out is EUR 14 million on this first semester. When we look at the net results, negative minus 21 million, we consequently have to have in mind that non-recurring items, mostly the two items I just highlighted, RBH operation, Cadillac, Michigan operation shutdown, and the housing division earn-out are waiting for EUR 30 million on this net result in H1. The performance in the free cash flow is mostly impacted by the slowdown in order intake, since the beginning of the conflict.
As Bruno mentioned, we were planning the first semester and the year a bit better than it turned out to be, and the working capital requirement is a bit higher than it is supposed to be, and this will be adjusted over the course of H2. Net investment are in line with last year and maintained below the level of depreciation, despite the acceleration of the product launches, enhancing our operational excellence and the control in the launch of the product. The shareholder return policy has been maintained over the course of H1, which was already commented to you. Last, the treasury incidence, on which we commented back in March, which impacted the group late last year, has been totally recovered, enabling the group to consolidate a solid net cash position above EUR 200 million. I will now hand over to Bruno, who will share with you the outlook. Thank you.
Thank you, Nicolas. Let's look ahead now and remain factual as usual. The environment is and remains uncertain. Uncertain in term of conflict, Middle East, Russia, in term of inflation. Brent is now higher than $100 again. In term of interest rates, increasing again in Europe. In term of election in Europe, in U.S. That's not the ideal climate for boating industry. However, the willingness to go boating is still there. It was a good season for charter in term of booking during July and August. The second-hand boat market is still there. This was not affected last year, this year, meaning the number of transaction is still there in term of number of new buyers or repeaters. The day boat market, as I said in the introduction, starts to rebound.
It's a good sign here because the day boat market starts for us at 6 m, goes up to 12, 15. It's a good sign of resilience of this market, is the start of a new cycle for the boating. Commercial activity during the boat shows is still good. We started the season in Cannes somehow as good as last year. Last year was a good Cannes boat show for us, and this year was very close. Better in term of number of boats, slightly better in term of million euros sold during the boat show. Uncertainty is still there, but we start to be used to live with it as a market. Our role as a leader is to boost the market with the right value proposition.
As we shared in March, as we shared again in Cannes opening the season, opening the Cannes boat show during the press conference, we have four priorities for the group. The first one is to provoke the rebound by product innovation. 23 models were launched last year. It contributed to 30% of our sales in S1. It contributed to our growth in S1. 24 models will be launched during this new season. This is the second tranche, the second part of our 66 model within three years. The second priority is to strengthen our competitiveness, of course. Cadillac closure is part of it. Competitiveness on every product is part of our priority roadmap. Third one is about technological innovation, sustainable innovation in particular. The fourth one is to develop the group on new adjacent activities on top of new boats. Refit, in particular, is part of that.
Let's group on new models. The feedback was good during our dealer meetings in June and July. It started to convert into sales again during Cannes, after Cannes as well, during the last days after Cannes. As well toward accessibility, such as the Cap Camarat 6, which is the first time for seven years we launch a 6-m boat to recreate the reservoir of customer from the beginning of the Cap Camarat range, for example. As well as through the Prestige lineup improvement. It's a mix of improvement of existing boats corresponding to the customers' and dealers' expectation. It's also the case with new boats. But also in term of renewal of the core of the offer we address. The Lagoon 47 you have in front of you is one of them and is probably the biggest success of this Cannes boat show.
The new EX range for Jeanneau as well is part of the new developments for the group in term of the boating in a profitable way. If the context is difficult, as I described, again, we exceeded in Cannes our record from last year, which was better than the year before, which was better than the year before. This is at least a positive trend that need to be confirmed, of course, boat shows after boat shows and also between boat shows to make it a profitable growth again for the group. Competitiveness is the second priority, as I said. Competitiveness is about design to cost. The Cap Camarat 6 is one of them. We make it in Tunisia in a very lean design. It is a concrete example of profitable entry level or accessibility. It's about control of CapEx as well.
24 new model is a lot and is what is needed to reboost the market demand. But this is not 24 full new CapEx. This is a good combination of product improvement to fit with customer expectations and real complete new range. Competitiveness is also about inflation balance management. We talked a lot about it between 2022, 2023 and 2024. The oil increase today is a new wave of inflation that again, we'll manage in a proactive way. Competitiveness is also about saturating the existing footprint, and the launch of new model is part of it. Competitiveness is also about adaptation measure to improve the profitability and to finance the cost of launches. Again, we are pursuing our adaptation measure plant by plant, function by function, in the whole group. Sustainable innovation, the third pillar, I insist again on electrification.
Electrification is not only a trend on the automotive. It is progressively coming for the boat business. It will start by slow displacement boats, such as sailboats. The joint venture we created has an ambition to convert 10%-15% of the sailing market to the electrification, to the hybrid solutions. It's not only about propulsion, it's also about energy management on board, meaning more comfort on board, again, during the navigation and when the boat is stopped. Refit. Refit will progressively become a significant pillar in our activity. First, it's a growth engine. We delivered, as I said, in Cannes, 10,000 sailboats during the last decade. It's time to refit them during the next one. It's more than that.
It's progressively becoming a competitive advantage, allowing charter companies to extend the lifetime of their boats to reduce the total cost of ownership of their boats, and/or to improve the resale value and resale condition. So it's a competitive advantage to improve the total cost of ownership for all customers. We launched it through Lagoon on the multihull side. We are now extending it to the monohull sailing segments through Bénéteau and through Jeanneau. Let's conclude with the guidance that we can give as of today, when we're starting the season just after Cannes, after a good Cannes boat show. Starting by sales, excluding Cadillac, excluding our American brand produced in Cadillac, we expect to grow this year from 4%-9%. Again, it's difficult to predict, as some deliveries will occur between November and December, and we'll monitor that transparently with you again in the next communication.
We should reach, at group level, EUR 860 million-EUR 900 million sales this year, knowing that Cadillac facility was accounting for EUR 40 million roughly last year in our sales. Regarding profitability, we expect to turn positive excluding Cadillac, which is now rationalized. The ERP is now stabilized. We are pursuing, as I said, our cost adaptation measure to market conditions, and these savings are partly redeployed during the second semester on the development and the commercialization of the new model to generate the next year's growth. These were the key message we wanted to share with you during this conference. I propose to start the Q&A session before the conclusion. Thank you very much.
If you wish to ask a question, you may do so in one of the following ways. Click on the green hand icon on the player to ask your question orally or submit a written question via the box below the player. As a reminder, if you wish to ask a question, you may do so in one of the following ways. Click on the green hand icon on the player to ask your question orally or submit a written question via the box below the player. The next question comes from Niklas Eriksson from Älgvägen Holding. Please unmute your microphone.
Hello. Good evening. Good work with the result. I have one question for you. If you look at the higher inventory with new boats in stock, would the cash balance be more like EUR 240 million today?
I imagine your question is on year -end expectation. We didn't give the guidance on that. If we come back to the year, what happened in the year, what I was saying in the introduction is we launched the production plan at the beginning of the year based on the commercial dynamic that we had since, I would say, the last six to nine months, at the end of the last year, 2025, and even since Q2 when preparing to show the boats that we are proposing to the market throughout the network. The Middle East conflict stopped the commercial dynamic, not stopping to zero, but reduced, let's say roughly by 30%-50%, depending on the segments, during March, April, May, June, July. August is a different month.
What we face is the fact that there was a stop of six months, but we start a new season with a similar dynamic than the one we started it last year, which is good somehow. However, we will not catch back retroactively what was not ordered during six months. This is what we progressively adapt in our production plan now. We produce much less in S2 than what we were producing in S1. Yes, the ambition somehow is to sell during the year what we produce during the year, which is normal, but which is extremely difficult to predict when there is such a slowdown in the market due to an unpredicted event, the conflict in Middle East.
In a context of seasonality of our activity, we deliver a lot of boats in Q2 for the season July, August, and we deliver some boats as well at the end of the year for the BVI season, and for the defiscalization program of the charter companies. Globally, the production plan is adapted now for the second semester to what we perceived as a sales trajectory for the year 2026, in order to neutralize the stock level of our finished goods. Probably neutralizing as well the stock level in our dealer network on the year. This was the second challenge, meaning on the year, meaning is our dealer stock level now normalized? This was our assumption one year ago. We increased a bit the stock of our dealer network during the second semester of last year, neutralizing it over the year, 2025.
The challenge was will we reduce it in S1 to compensate the S2 of last year? This is what happened. We consider that we globally normalize the stock level of our dealer network. We overproduce versus what the market post-Middle East was in Q2, somehow, or in S1, and this is the challenge to neutralize that on the full year during the second semester.
Okay. Thank you very much, and good luck and good work with H2. I believe you have done a great work with turn the back the operations to profitability and keep up the good work.
Thank you very much.
Yeah.
As a reminder, if you wish to ask a question, you may do so in one of the following ways: click on the green hand icon on the player to ask your question orally or submit a written question via the box below the player.
[inaudible], I have a question on the written question. Thank you, Natasha. Can you talk about the pricing environment and discounting? Are you seeing more discount this year versus last year, and how has this progressed into Q3 and the boat shows?
I see less discount on the new boat because they are new. There is a discount level which is lower on the new models. The sooner you introduce the new models, the sooner you reduce your discount level. Not only it creates demand, but it creates as well scarcity somehow. Lagoon 47 is a good example. The catamaran market is a discount market today. We make zero discount on the Lagoon 47 as of today. I would say yes, it is increasing globally. But we keep it under control through the introduction of novelties. As I said, the risk is to overspend in CapEx doing so. That is why there are novelties which are brand-new novelties, and Lagoon 47 is a really new boat. There are some novelties which are continuous improvement of existing range of existing boats.
This is the mitigation we try to handle. But yes, there is an increased demand for discounts. The best way is to renew the value proposition. To fight against that is the value proposition.
Okay. I have a second question on the chat. For the U.S., are there residual exit costs that will impact your P&L in H2? Can you update us on the sale process of these activities?
I will let Nicolas answer that.
Regarding the H2, we do not expect major impacts. Most of the people left the facility mid-August, so we shall not expect any surprise on the H2. The remaining, I would say, uncertainty on the shutdown and maybe sell-out process might be on the inventories. Well, obviously, we took a conservative approach at the end of June. But on this item, due to the, I would say, low environment in the U.S., some distributor may be unable to send back their inventories, and that's the risk we are managing so far, which is pretty well managed at the time we speak. To answer quickly your question, we shall not expect any surprise in H2 regarding the U.S. operation. Regarding the sell-out process, it's been, I would say, an interesting summer since the decision and the announcement mid-June.
Some interests, and we are still so far discussing with the potential buyer of this activity. It's a bit too soon to talk about it, but there is still some mark of interest on the global, I would say, package, which is the brand, the activity, the dealer networks and the facility. If this option was to wind down again, because there have been other potential buyers, which at the end of the day closed the file. But if it was going to be still the case for this new potential buyer, then we will enter in a new process, which is the sell-out of the existing asset, meaning the land and the building. That's where we stand at today.
We have two questions from Arnaud. First, could you comment the Dream Yacht Charter and Navigare business model change, their intention to renew the fleet by 2030, and the place you could have in this new scheme? This is the first question. Second, is epoxy and glass fiber are still very high cost? Would it impact gross margin in H2?
I will start by the second because it's easier. I talked about inflation balance management. We know our brand is increasing, so we pass through part of the material increase to the pricing. The more we pass through price, the more the discount discussion come back on the table. It's a concern precisely. As of today, what's happening on the market is what we expected to happen on the market, and this is the way we plan it. Yes, it's impacting because it's an inflation wave that makes the business more difficult. The comparison versus last year is that the market dynamic is not the same than in 2022 or 2021. So it's more difficult to pass through as it was. However, it's in line with what we anticipated. Regarding Dream Yacht Navigare, we announced our decision not to become an operator of the charter business.
However, we announced our decision to become the best player to support the charter players. Not to operate instead of them, but to support them through the product. Lagoon 47 is perfectly designed for charter operations, and this is one of the success of the start of the season. Through the refit, as I said, a 7-years-old boat or 10-years-old boat is the perfect requirement for refit. That's why we started by Lagoon 450. That's why we continued by Lagoon 42. That's why we are now doing Lagoon 42 and extending the range also to the monohull. It's not one against the other. It's not secondhand boat versus new boats. It's a way to reduce the total cost of ownership of a new boat and make a competitive advantage for the group. The new landscape for Dream Yacht Navigare is announced, it's not closed. So let's wait and see.
What we do for charter business is done for Dream Yacht Navigare, which is now a customer. Yes, we have a role to play in this new reshape. We currently discuss with the new dispositif, the way to make it accelerating the fleet renewal while globally reducing the fleet to make it more competitive. It's good to have a customer that is competitive and that is profitable also. So we intend to support this activity where we will not be shareholder anymore, but treat it as a good customer to better sell it in their product in term of service. Yes, we are part of the standardization panel, which is planned to be the new shaping of this player. If we go in the history, it was not at all a capitalistic link between us in the past, to 2021, and we were serving them.
We were capitalistically linked. We were selling them at market share level, some group. Now we will continue to serve this customer in a— I think probably better understand what are the constraint of the charter business product-wise, service-wise, total cost of ownership-wise. This is the way we will serve them to go. Obviously, the deal will be closed.
We have a last written question on here for the time being. Do you expect to keep your CapEx where they are currently despite your ongoing product plan?
Your CapEx?
Your level of CapEx.
As I said, strategically, the renewal of the product offer is key. However, controlling the cash is key. So what we generated as CapEx for the first semester is somehow a good speed of CapEx to renew the offer and growing again. As of today, the '66 plan is in that magnitude of what we were investing last year and what we are investing this year. Compared to the number of launch that we are doing in the past, we are making more launch and more animation of the range with a similar magnitude of CapEx. It is somehow better conversion rate from the CapEx to sales and profit.
There are no further questions at this time. I will now hand back to our speakers for their closing remarks.
Thank you for your attention during this call again. As I said, geopolitical situation is not easy, but the willingness to go boating is still there. It is our mission as leaders to provoke the demand and not to wait it to come back naturally. What is positive is the reception of our new product since last year. We started last season with one wave of new models. We start this season with a second wave, 23 new models last year, 24 this year. It will help us outperforming the market. The market does not like uncertainty, did not like the uncertainty of the Middle East conflict, and we have seen it. Middle East conflict is not an uncertainty anymore, it is a fact. The market is adapting to that today. This is what we start to see at the beginning of the season.
It is a bit too early to conclude really what will be the dynamic of this season. But it is not an uncertainty anymore, it is a fact. To conclude, the best way to overperform the market is to remain extremely offensive, keeping the control of our stock and our CapEx, and this is exactly what we explained up to now. So these are the priority. We are working on it. I will come back again. Competitiveness is not only a question of reserve contribution, it is also a question of accessibility of the product offer we brought to the market, is also a way to fight against inflation. So competitiveness and adaptation measure is the last priority. We are working on it by design to cost, by the localization of the production, where we put the products compared to the market conditions and through the underlying cost structure we are working on.
Thank you for your attention. Next call, Clarence?
On November 4th for the Q3 revenues. See you there. Thank you.
See you there. Thank you very much.
Bye-bye.