Ladies and gentlemen, welcome to the Montana Aerospace Q1 2026 conference call and live webcast. I am Sandra, the conference call operator. I would like to remind you that all participants have been listen-only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. Webcast viewers may submit their questions in writing by the relative field. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it is my pleasure to hand over to Patrick Maurer, CFO of Montana Aerospace. Please go ahead, sir.
Welcome everyone to the Q1 2026 earnings call of Montana Aerospace. A quarter that marks the continuation of our success story and above market growth. To start, and for everyone new in the call, I'd like to reiterate the USP of Montana Aerospace. We are a game changer in the aerospace industry because, one, we have a very integrated value chain, which brings reliability to our customers and mitigates our reliance on the outside world, especially important in these turbulent times. Two, we have high material competence in aluminum, but also steel, titanium. Three, the majority of our workforce and assets is located in best cost countries, both in Europe but also Asia.
Four, we have unique process know-how, partially backed by our own IP, and overall are situated as a key player from an ESG perspective with our integrated business model. Here you see our long-term visibility of the orders, which has grown in the past from roughly EUR 4 billion in 2021 to now more than EUR 7 billion. It also shows that we are selling our products for all different platforms of the main OEMs, as well as other companies like Embraer or Gulfstream. That therefore are set up to have a clear path towards our growth ambitions and towards our revenue growth that we have in the guidance and beyond.
In addition, I like to highlight that our business model and our setup mitigates negative macroeconomic impacts or any other impact, in fact, that some of you I know are concerned about. If we look at four critical areas, or only of four critical areas for this page, I like to show you the protection that we have in these fields and like to highlight that we can, with our business model and our setup, mitigate some of the key questions that come up to many of you in terms of how we are positioned. One, material pricing. As an example, the aluminum prime material.
That is, we can pass that on to our customers in most of our contracts, either on a monthly basis or then on PO basis, which in the end limits our raw material and our raw material price exposure, from an absolute return perspective. Of course, it does have for the current macroeconomic environment where LME pricing increases, does have some impact on the working capital and also because we want to secure our supply. As said on the absolute returns, that there we do not have an impact. Second, from the sourcing perspective itself, our integrated casting and recycling setup, especially in our biggest site in Romania, leads to the fact that we are less dependent on external prime materials and especially aluminum prime materials, and therefore enhance our resilience in the supply chain.
Three, the energy pricing. While energy prices and fuel prices are increasing, the majority of our contracts in the meantime, after the COVID experience, have an annual inflation protection clause. On top, the energy we purchase ourselves is protected for the year 2026 and partially 2027 through hedging, but also through the fact that we established substantial PV capabilities or capacities over the last couple of years. All of that protects us from the current increases in the energy pricing that we see. Finally, from the demand side, so from our customer demand side, we are resilient in terms of first, because we have our buffers in our expectations and guidance towards what we can expect from the OEMs.
We have seen that we are doing the right assumptions in that regards in the meantime. Very accurate. On top, also for the moment, from a customer side, we have not seen cancellations out of the Middle East conflict. From the demand perspective, we do not see any headwinds towards our guidance or towards our current setup and results. Let's now move to the financial result of the first quarter 2026. Sales have grown by 4%, driven by the aerostructures segment to roughly or close to EUR 250 million, EUR 248 to be exact.
What seems like a slowdown in our growth trajectory is actually a pretty strong performance if you consider that our majority of the sales are in US dollars. The fixed rate from Q1 2025 changed from 1.05 roughly to 1.17 in Q1 2026. Around 10%, or close to 10% because not all sales are in US dollars, are impacted just from a fixed perspective. On top, as you will see in a later slide, the Q1 2025 was quite strong on our end, but also on the OEM side. There, in the OEM perspective, we see actually a decrease in this year's deliveries. That shows that we are actually continuing to gain market share growth. We continue to gain market share and thereby grow our sales.
From an EBITDA perspective, we have again increased versus the Q1 2025, and also again over proportional, what resulted in a 16.4% group EBITDA margin and more than 18% in aerostructures, which is already close to, let's say, benchmark performance. No adjustments were made to the Q1 2026 EBITDA results. On the next page, we see that once we move further down the P&L, the over proportional improvement continues. You see a +11% in the operating results and +131% in the final results from continuous operations to have it comparable. That is also driven by a strong improvement in the financial result with two main effects.
One is that we deleveraged our balance sheet and therefore had lower interest costs. Second, also the fixed losses, the non-cash FX losses that we experienced last year and actually experienced again in Q1 2026 have, however, reduced by roughly half. That also leads then to a strong increase in the earnings per share to EUR 0.17 up from just EUR 0.07 in Q1 2025. We get a good overview of Q1 sales and Q1 EBITDA inside of the OEM deliveries. You can see that we grew in our Q1 2026 deliveries versus 2025, despite the fact that the OEM deliveries actually were reduced by 3.4%.
That is, even without considering the FX impact, because we are, of course, talking on our side from euro values, while the OEM deliveries are quantitative output, basically. Versus the past, we see an impressive growth rate, both in the sales of 40% on average, as well as over proportional in the EBITDA of 180%. While there is a certain slowdown, we see, let's say, our trajectory continue further until we fully utilize our asset base. There's not for sure, not the end where we are at the moment, but of course, compared to very low levels in 2023, it's a bit of a slowdown in that regard. We continue to the next page.
We see a cash perspective. From a cash perspective, we have deleveraged our balance sheet further and are now at a very healthy 0.4 net debt to EBITDA ratio on the group perspective. That was backed by the cash flow from investing activities where we received EUR 62 million from the energy segment carve-out, also by a cash flow from operations, which was positive with EUR 1.4 million, which is, let's say, a plus of roughly EUR 7 million compared to Q1 2025. Despite the fact that our working capital increased because of higher metal prices as discussed, also because we are starting to protect our supply chain with metal purchases for the rest of 2026.
The working capital impact, however, should be just temporarily until the Middle East situation resolves itself and hopefully pricing comes back to more normal and reasonable levels. I will hand over to Vicky Welvaert.
Thank you, Patrick. Good morning or afternoon, everyone. Let me take a moment to address the recent leadership change following the resignation of the CEO of Montana Aerospace, as I know this is an important topic for many of you. First and foremost, I want to underline that the CEO transition is fully decoupled from the performance of the business, and it is not driven by any change in our strategy, any operational issues, nor does it affect our financial outlook in any way. Put simply, our strategic and operational continuity remains fully intact. Our strategy is unchanged, our guidance remains unchanged, and most importantly, our execution continues fully on track. Operationally, the business is performing as planned and delivering as expected.
To ensure continuity during this phase, Patrick and I have taken on interim responsibilities, working closely together and supported by a highly experienced extended leadership team across the group. This is not a situation where we are starting from scratch. Quite the opposite. We are building on a strong and well-established organization. It is also important to note that we continue to benefit from Kai Arndt's involvement as an advisor, particularly on key strategic topics which provide an an additional layer of continuity. If I can summarize the key message in one sentence, this is a transition in leadership and not a change in direction. Let me now move to slide 11. What gives us confidence in managing this transition is the strength of our organization and leadership team. We have a proven and well-functioning management structure with clear accountability across all functions, regions, and divisions.
This structure has been built over many years and is designed to deliver consistency in execution. Importantly, there are no changes to our operational setup. Our sites worldwide continue to be managed by the same experienced teams, reporting lines remain unchanged, and day-to-day operations continue exactly as before. I would also like to highlight the seniority and experience of our extended leadership team. Many of our senior leaders have been in the aerospace industry for more than 20, and in many cases, even over 30 years. This brings deep operational expertise and long-standing relationships across the industry. Supported by these seasoned leaders with extensive aerospace experience and strong functional expertise, we are also very well-positioned in terms of customer access, contract management, and strategic alignment with our key OEM partners.
At the same time, our divisional leadership teams continue to operate with the same focus and discipline that has characterized their performance in recent years. Overall, we are not relying on individuals, we are relying on a strong and experienced leadership structure. That continuity is critical, and it is a real strength in times like this. It allows us to stay fully focused on what matters most, delivering on our operational targets and executing our strategy. I would emphasize that our teams on the ground remain highly engaged, focused, and committed to delivering results. This transition is being managed from a position of strength, stability and continuity. With that, let me hand back to Patrick.
Yeah, before we come to our guidance, I like to reiterate the key pillars to continue our growth story in Montana Aerospace. Obviously, one, it's the structural growth that is the basis of our industry. We capitalize on strong end market drivers that are, yeah, different to other industries, such as strong global air travel coming more and more also from the Asian, Middle East and South American, African side. Growing aircraft order backlog. Year after year, we have experienced and seen that despite, let's say, the growth in deliveries, which could be better, but which we see constantly, there is also a growing order backlog in which the OEMs have to manage to fulfill earlier or later. Of course, the ramp up of OEMs, Boeing doing a good job, as well as others.
Second, there's our internal strength and growth pillars, vertical integration, the machine capabilities and low cost asset setup that allows us to be competitive towards our customers and compared to the competition. Our industrialization strength, we are industrializing more than 3,000 parts per year and have built up inventive capacity and strength in that field to be able to respond very quickly to OEMs, but also other interested companies, material competence and others. Finally, as you know, the aerostructure industry is still very and highly fragmented because of the setup of qualifications and, yeah, basically past history.
Also there's a huge and tremendous potential to further integrate, let's say, the whole supply chain by both M&A consolidation, but also by taking over packages where we can offer to a customer, let's say, a one-stop-shop versus competition, where the customer often has to deal with three, four, five parties and also their supply chain challenges. We can provide reliability as a one roof and one-stop-shop company. Especially in the North American market, we see more and more possibilities in that regard with our past acquisitions and our current setup. Yeah, overall, these pillars will allow Montana Aerospace to use the growth in the industry and in the market, but also to use our own strengths to grow and continue to grow above the market.
When we come back to guidance, I like to reiterate the figures we gave in the annual earnings call a month ago. Nothing has changed neither with the management decision nor with the continuing discussions in the Middle East, which one day are better than the other and fortunately positive today. We still see, let's say, 2026 sales of more than EUR 1 billion. We also see an EBITDA of more than EUR 185 million, which results in a strong 18% EBITDA group margin and even more so in aerostructures segment. On the cash conversion, we have seen some unclarity and confusion, what is included and what is not. We have clarified that in this guidance.
Our cash conversion, which we see around 50% for the year and more in the years to follow, comes from a basis of using basically an operating cash flow, including the working capital adjustments, of course, minus our maintenance CapEx that we see in the range of roughly EUR 50 million. If you look at our CapEx spend in Q1 of around EUR 11 million, that's very much in line with where we stand. Of course, on top, there could come expansion CapEx, which we diligently consider at the moment, certain projects, as well as, of course, M&A transaction, and those are excluded in the cash conversion guidance, just to be clear.
Also on the 2027 numbers, we keep a very positive view and momentum, and we don't see any change in the positive outlook that we have for that years and for the year 27 and the years to come. Therefore close the presentation and before we come to our Q&A, I'd like to one more time reiterate our strong growth potential in Montana Aerospace and our results guidance, as well as the way we can create value for our shareholders. The main points that stand behind this is our high visibility of sales and orders and our big order backlog for the next years ahead. A very strong margin profile achieved through operational excellence, fixed cost leverage, and our low-cost asset base.
A strong cash flow profile, following a period of growth investments, but, now, let's say, more and more paying off. Significant internal and external opportunities to create more shareholder value in the future. With that, I thank you for listening, and we can come to the M&A. The Q&A part.
Thank you, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the telephone. You will hear a tone to confirm that you have entered a queue. If you wish to remove yourself from the question queue, you may press star and two. Questions on the phone are requested to disable the loudspeaker mode and eventually turn off the volume of the webcast while asking a question. Webcast viewers may submit their questions in writing via the relative field. Anyone with a question may press star and one at this time. Our first question comes from George McWhirter from Berenberg. Please go ahead.
Good afternoon. Thank you very much for the questions. I've got two, please. Firstly, on the guidance on cash flow, in terms of what you expect for net cash at the end of this year, if I take the 50% cash conversion and also assume the majority of the asset proceeds this year, is it fair to assume that you end up with a net cash position in the higher double-digit euro million range?
Yeah. Let me answer that. Yeah, we clearly see a net cash position in the higher double-digit range. Of course, it depends on any strategic CapEx or M&A decisions that we make, but without those, clearly, yes. Yeah.
That's great. Thank you. The second one was on the reason for the raise of the cash conversion target for next year. Is it mainly due to improved profitability, or is there anything else to think about in terms of working capital or CapEx?
No, I think, I mean, we are confident with the figures, and since we have experienced a lot of discussions with investors and analysts over the last couple of weeks, we wanted to give more clarity and more guidance in that regards. It's basically just to make public the discussions we had with, yeah, all of you.
Super. Thank you very much.
Thank you, George.
The next question comes from Josh Sullivan from JonesTrading. Please go ahead.
Good morning.
Good morning. Hello.
Just wanted to zero in on the market share gains you highlighted in the prepared remarks. Where are you being most successful taking share or what product line specifically?
Yeah. I mean, for sure in the areas where we have vertical integration as well as with the Vietnam low cost setup. In Vietnam, we have qualified, let's say, the second OEM in the meantime. A lot of possibilities are coming from that side, but also from many other fields. Definitely there we see a good momentum from just being extremely competitive in that regards, but as well as the integration model. In our Romanian site, but also in the U.S. setup, especially with the acquisition of ASCO in the past, where we have machining and surface treatment capabilities and also the extrusion side, we see more and more that the OEMs value this setup and that more and more packages are coming to us for discussion.
Yeah, basically with our setup and the fast speed of industrialization possibilities that OEMs often need when they see some problems arising, we have this momentum of market share gain and getting additional packages without losing others.
Then if I take that, and I appreciate your 27 guidance, you know, takes a discount to the OEM's airframe production forecast, which is prudent. However, if we think of the market share gains you're making here, as well as the eventual restocking needs across the industry, how can we frame Montana's growth rate just relative to what the actual airframes that do come out of the OEMs over the next two years?
Well, I mean, we have, of course, a certain market share growth also expected in those figures, but with very conservative build rates, as said. To compare and to say what is coming from exactly which direction for that, it's a bit too early at this point in time. I mean, if we gain, let's say, more packages than is currently on the horizon or that are already signed and can industrialize them faster, then of course the guidance could or we could outperform the guidance clearly. Of course, also then if the OEMs perform better than they do, then that would change the respective numbers and the relative, let's say, growth on both of these pillars.
Just one last one on M&A. Given the leadership transition here, and I understand that, you know, you're trying to keep some continuity across the company, but what is your perspective on the current M&A environment, looking at either large assets or small assets? Just wanna hear your thoughts.
I mean, I would say we have a reasonable size as a target from a company perspective, somewhere in the range of companies with EUR 100 million-EUR 300 million in sales, in that range. That's the target range that we look at. To go out of that doesn't make much sense from, let's say, not overtaking ourselves, and on the other side, not purchasing very small assets unless they are extremely strategic. That's the target range. I think the change in management has not a major impact on the M&A pipeline, nor whether we, let's say, pursue one of them.
It's mostly based on whether they make strategic sense for us, whether we see a benefit to further strengthen the partnership with the OEMs, and therefore provide value for both sides with such an acquisition. On top, let's say we are evaluating for every M&A path, also internal investments that could fulfill a similar purpose.
Thank you for the time.
Yes, you're welcome.
As a reminder, if you wish to register for a question, please press Star followed by one. The next question comes from Olfa Taamallah from ODDO BHF. Please go ahead.
Thank you. Hi, Patrick. Hi, Vicky.
Hello.
I may have two questions. First, I would like to follow up on the market share question. Wondering if you could specify how the scale within the revenues, I mean in terms of organic revenues and maybe on which programs you have been successful so far, and whether it is temporary or not. Maybe if also you can give us an idea about potential market gains in coming years. The second question is related to the potential launch of share buyback. What may trigger such a decision, and when should we expect the move? Thank you very much.
On the first question of market share, we see momentum across all platforms, basically. Of course, there are in tendency quite a lot of possibilities on the short-haul planes because the delivery targets for Airbus and Boeing on A320, 737, they are very ambitious, so they need reliable partners and therefore there are a lot of good possibilities for us with our integrated setup to, let's say, to win packages there. The same is true for the wide-body planes, like basically across all platforms.
From the share buyback perspective, I mean, we see with the recent changes macroeconomic environment, but also, let’s say some miss or some confusion, I would say in the spin-off of the energy segment, the management changes that compared to the underlying basics of Montana Aerospace, the stock market price is on the lower end, and therefore that could prove attractive also for our board of directors to initiate such program. From a time perspective, I mean, I would see that not too long out in the next weeks.
The next question.
I hope that answers. Yeah. Yes?
The next question comes from Christian Bader, from Zürcher Kantonalbank. Please go ahead.
Yes. Good afternoon. A couple of questions from me. The first one being, in terms of the revenues in the first quarter, can you please comment whether you gained or whether your business grew with all customers, at least in constant currency terms? Or have you delivered a bit less to one of the bigger OEMs or one of the other smaller customers?
Yeah. I mean, in general, let's say there is, of course, more growth from the one OEM side than the other for the moment. As you have also seen, I think, by their delivery rates, but that doesn't translate one to one to our deliveries, so that's not related. Last year, however, there was a strong momentum in Q1, especially on, yeah, one of the short haul platforms. There we have experienced last year very strong sales, which are then more constant rather than strong growth compared to, yeah, the other platforms. I would say across the variety of platforms also, wins on additional smaller companies or smaller OEMs. Different scenes. Yeah.
Okay. Did you grow the satellite business?
In Q1? We did, yeah.
Okay. All right. My next question is relating to FX hedging. From my memory, you have been hedging your US dollar exposure in the past. I was wondering, did you do that also in the first quarter, and which impact did it have on your results?
Yes. We also did that in the first quarter of 2026. Sales are, of course, unhedged, the hedge benefit comes in between EBITDA and financial results. Let's say the full impact you see in the net result. Basically, sales are unhedged and therefore on the sales side you see the impact of a changing FX rate.
Okay. Did you benefit from hedging in terms of for your first quarter results?
Yes. I mean, as we have discussed in our guidance and in, let's say, in the detailed ad hoc, we have an FX rate of 1.18, 1.19 assumed for our guidance. We have hedged below that. Of course it's not. In terms of compared to the guidance, we have benefited in Q1, yes. Compared to the spot rate, there were a lot of ups and downs, so it was the average FX rate was 1.17. In that regards, it was quite neutral for Q1.
Okay. All right. My last question relates to the tax rate, which has been extremely low in the first quarter. Can you maybe provide some guidance on what to expect for the full year, please?
I mean, for the, for the full year, we continue our guidance in that regards. Yeah, for Q1, to be honest, yeah, the, that's of course also some reflections that refer to the prior year. Some, especially on the North American side, you typically have final tax results. Yeah, I think there's something special in the tax rate for Q1.
All right. You can't give us any guidance for what we should model for the full year in terms of tax rate?
I mean, for the full year, we again see a low double-digit euro rate for taxes. Yeah. That's, I think that's the guidance we can give there.
All right. Okay. Thank you.
You're welcome.
Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Patrick Maurer for any closing remarks.
Thank you everyone for listening in to the Q1 earnings call. One more time to reiterate, we believe the company is structurally and organizationally very well set up to deliver on our guidance and potentially above that. We look forward to talking to you on a personal note or then again in the half year earnings call. Thank you very much.
Thank you.
Ladies and gentlemen, the conference is now over. Thank you for choosing Conference Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.