Yes. Good morning, ladies and gentlemen, thank you for joining our media and analyst conference today. Thomas Erne, our CFO, on the table to my right, and I are pleased to present our results for the 2025 financial year and to discuss them with you. Before we move on to the results, I would like to say that it was a great honor for me to take over the management of the Feintool Group as CEO on June first, 2025. Let's now take a brief look at today's agenda. First, I will provide a short review and outline the most important market developments and their impact on our business areas, followed by some background on our operational highlights in the 2025 fiscal year. Our CFO will present the financial figures for the 2025 fiscal year.
I will conclude with our outlook, key messages, and a strategy update before we move on to the Q&A session. Let's start with the review. All the supporting materials will be available on our website, and after the presentation, you will also find a video of the conference call on our website. The Feintool Group business performance in the 2025 financial year reflects a market environment that remains challenging, with differing dynamics across regions and technologies. In this persistently challenging market environment, Feintool delivered a resilient operating performance in the 2025 financial year. Group sales amounted to CHF 661.4 million. Despite the lower volume base, Feintool achieved a positive operating results EBIT of CHF 4.7 million. This reflects the effectiveness of the restructuring and efficiency measures implemented across the group, which have significantly reduced the break-even level.
With an equity ratio of 55.6%, Feintool continues to have a robust financial base. Structural shifts towards Asia are continuing and becoming more pronounced. Feintool is strategically well-positioned to benefit from this trend, especially with our E-motor core development and production capabilities. While the pace of electrification in the U.S. and Europe has moderated, the long-term transformation towards electric drives remains intact. In the near term, hybrid and combustion engines application continue to play an important role in these regions. Market dynamics differ by country. Hybrid vehicles dominate in Japan, battery electric vehicles in China, and combustion engines in India. Across all those markets, E-lamination stamping remains a key enabling technology for electric and hybrid powertrains and a core competence of a wide range of electrified drive systems for industrial applications.
Overall business development in the 2025 financial year was characterized by a broadly saturated demand environment across regions. With this context, Feintool was able to fend its position in the core automotive markets, selectively gain market share in on-industrial and green energy applications. Our core strategy has proven successful. We are strongly positioned in our core technologies, fine blanking, forming, and E-lamination, and continue to benefit from solid demand across all drive types and regions. At the same time, we are systematically expanding our activities in electric mobility and renewable energy solutions. With our global production network of 18 plants, we ensure close proximity to customers worldwide and follow a local-to-local strategy. The strategic relevance of E-lamination stamping is underlined by the current order intake. Around 60% of new orders relate to E-motor core projects in Europe and Asia.
This includes, among others, a major contract for e-motor cores from one of our largest Chinese commercial vehicle manufacturers, as well as a significant new project in Europe for E-stamping applications. In Europe, the Feintool generated sales of CHF 383.5 million in the 2025 financial years. This is 12.4% or 10.8% in local currencies below the previous year. The decrease was mainly driven by the sharp drop in demand for laminated components for electric vehicles. Market overcapacity led to the postponement, downsizing, or cancellation of vehicle programs. During the course of the year, the focus on stabilizing the business and the restructuring measures in Europe began to show initial effects. The restructuring of the Stamping Europe business unit, including the sites in Sachsenheim, Germany, and Tokod, Hungary, has also been completed.
The full annual earnings contribution from those measures is expected to be realized from the 2026 financial year onwards, with the associated annual savings of around CHF 12 million. Sales in the first half year of 2025 were down 17.5% year-over-year, the decline in the second half moderated to 6.1%. The market environment remained challenging, the slower pace of the revenue decline in the second half indicates that the pace of the decline in Europe began to ease in the course of the year. The U.S. accounted for sales of CHF 199.8 million in 2025, compared with CHF 194.3 million in the prior year, corresponding to an increase of 2.8% or 9.6% in local currencies.
The reported decline seen in the first half of 2025 was primarily due to lower raw material prices, which account for around half of our product prices, as well as the weakness of the US dollar. While volumes sold were significantly higher year-on-year. During the course of the year, the U.S. bi-business showed market improvements. The second half experienced a year-on-year increase of around 15%, reflecting stronger underlying demand, the start up of new programs, and the benefits of Feintool's market-leading position in fine blanking and forming, particularly in application for vehicles with conventional and hybrid drives. The picture here shows our plant in Nashville, Tennessee. We just finished the fourth expansion on this plant and have added in the back of the building, and this investment is completed.
In Asia, the Feintool Group generated sales of CHF 80.7 million in the 2025 financial year. This is 10.3% or 5.2% in local currencies below the previous year. The decline was driven by intensified competition in the automotive market in China, which led to market share losses at the end customers supplied by Feintool. During the course of the year, the pace of the decline moderated. While sales in the first half year of 2025 were down 12.5% year-on-year, the decline in the second half slowed down to around 8.3%. Although the market environment in Asia remained challenging, this moderation mainly reflects that projects already in the pipeline started to ramp up later in a slower pace than anticipated, leading to a more gradual improvement in volumes in the second half of the year.
In India, the timing of the construction of our new production site in Pune is proving favorable as the opening is scheduled for June 2026, and the group is recording significant interest and quoting activity for production in the new plant. We are on schedule to open our first Indian production plant in Pune on June 24th. Due to geopolitical shifts, we see a lot of interest in our newest manufacturing site, especially from Japanese OEM and Tier One suppliers.
You can see here the opening in September 2024, then an update in October, and now we are nearing completion of the plant. This is a new picture. Roof is on, and the sides are on, and as I said, on schedule to open in June 2024. At this time, I would like to hand over to our CFO, Thomas Erne, for the presentation of the financial results of the fiscal year 2025. Thomas, thank you.
Thanks a lot. Thank you, Lars. We start, as you have already heard, part of that was already mentioned, but we start with the top line. In 2025, you see that we delivered a solid result actually in the market environment that was remaining challenging. Our group net sales came in 8% below prior year. On a currency-adjusted base, this decline was limited to around 4.5%, demonstrating the underlying resilience of our business. Our performance in the United States was particularly strong, excluding FX effects, as Lars mentioned already. We recorded robust organic growth of 9.6%, highlighting continued demand for our technologies and the strength and competitive position in this strategically important market. In Europe, the well-known effect in the automotive sector affected our volumes.
That said, we took decisive actions to optimize our cost structure, streamlined our footprint, and improved operational efficiency, actions that position us well for margin recovery as soon as the market normalize. The diversification strategy remains on prior years' level. Non-automotive sales are around 16% in 2025, which is supporting our strategy to diversify and grow also in markets like industrial application and energy. Overall, we remain confident in our strategy. We're strengthening our geographic balance, expanding into new segments, and investing in technologies that will support profitable growth. With this foundation, we expect to benefit from our gradually improving demand environment as we move throughout 2026. Looking at the EBITDA.
In 2025, we delivered CHF 55.6 million of EBITDA, compared with CHF 51.9 million in prior year, which is an increase of CHF 4.7 million prior year, excluding the one-off effects that we have done through the restructuring. The improvement came despite lower sales and demonstrates the effectiveness of our cost and product mix management. Revenue declined by CHF 58.2 million. We were able to more than offset this through disciplined cost control and the favorable shift in our product portfolio. Our material cost ratio improved to around 47% coming from 52% last year. This reflects a more profitable product mix and targeted sourcing initiatives. Personnel costs decreased by CHF 6.6 million as a result of the structural adjustments which we have done in 2025, and ongoing efficiency measures across the group. Regionally, the performance was mixed.
The US operation showed a stable contribution. Europe delivered a substantial improvement due to the earlier restructuring efforts that we have done. Asia remained under pressure, in line with the market environment and our expectation. Overall, the EBITDA development demonstrates that our focus on operational excellence, cost discipline, and margin quality is paying off. These actions strengthen our resilience and position as well to capture earnings upside as volumes recover. On the EBIT level, you see a similar picture as on the EBITDA. We are reporting a CHF 4.7 million EBIT for the group compared to CHF 49.3 million with restructuring costs. If you take off the one-off effects in 2024, we reported an adjusted EBIT of -CHF 2.2 million. If we compare that to the drop in sales, you see the same picture as on EBITDA.
We are operationally much, much better in shape with a different cost base, and we see already the effects now on EBIT level. The question I answered that already so that you don't have to ask it, is what kind of one-off effects did we have in 2025? Yes, you will see, you will see in our annual report that we have released accruals that we built in 2024 for the restructuring because we didn't use all of them. We had also a one-off effect due to the ramp-up of business in approximately the same amount. We can say the CHF 4.7 million that you see here is really an operational result, one-off negative set off one-off positive. Looking at the net income. Net income is at a loss of CHF 8 million.
You see the EBIT with CHF 4.7 million. We have a financial result of CHF 10.8 million. Last year, the financial result was at CHF 7.9 million. Those are mainly interest effects and overall financing structure impacts. We report a loss of -CHF 8 million compared to last year's almost -CHF 50 million. Our balance sheet assets decreased to CHF 770 million, mainly driven by lower receivables, reduced inventory, and a decline in non-current assets. These developments reflect our disciplined approach to working capital management and selective capital spendings. On the liability side, our balance sheet remains also very solid. As Lars already mentioned, the equity ratio is at 55.6%, confirming our strong capital structure despite the challenging environment.
Net debt increased slightly to CHF 57.7 million, which is still at a comfortable level and reflects our disciplined investment and working capital management. Overall, the group maintains a robust financial position that provides sufficient flexibility to execute our strategy. Equity, as said before, remains at 55.6. Equity decreased to CHF 430 million for 28.1, mainly driven by CHF 8 million of net results and significant foreign exchange impacts, which were partially offset by IFRS 19 valuation effects. Despite these movements, our balance sheet, as said before, is solid and provides stability and flexibility going forward. Last slide from my side, turning to cash flow. Operational cash flow was positive with around CHF 27 million, supported by around CHF 28.5 million contribution from working capital management.
As planned, we continued our investment program, particularly in the U.S. and Asia, resulting in operative investments of CHF 55.7 million. These investments support future growth and mark the end of our high investment cycle in 2025. Overall, we generate a nearly neutral free cash flow, reflecting disciplined operations and targeted strategic investments. To summarize, 2025 was a year in which we strengthened the fundamentals of the company. We improved profitability with higher EBITDA and returned back to a positive EBIT despite a softer market environment.
The net result was impacted mainly by financial and FX effects, but operational performance clearly moved in the right direction. Our balance sheet remains solid, strong equity ratio. We have a disciplined working capital management, and the targeted investment are supporting the future growth. Overall, we enter 2026 as a leaner, more efficient, and financially resilient organization, well-positioned to capture opportunities as market conditions will start to improve. Now for the outlook, I hand over to Lars.
Thank you very much.
Welcome.
Thank you. I'd like to continue with a brief outlook. The outlook for 2026 remains cautious. Feintool expects an uneven development across its markets with a challenging environment continuing in Europe, while in the U.S. and in Asia, the group aims to build on the positive momentum of the second half of 2025. As a result, Feintool anticipates further improvements in EBIT margins in local currencies with the completed expansion in China and as well in North America. We are anticipating a much-reduced capital spending budget for 2026, and as a result, concentrate on free cash flow. Structural shifts towards Asia are expected to continue and intensify. The new production site in India, scheduled to open in 2026, will therefore strengthen the group's positioning over time.
Looking ahead, Feintool remains confident that the global mega trends towards low carbon energy generation, storage, and mobility remain intact and continue to offer attractive growth potential for its technologies. Against this backdrop, Feintool reaffirms its midterm target of achieving an EBIT margin of more than 6%. Let me give you a few examples why we are remaining optimistic. Price sensitivity, energy costs, and charging accessibility, and range concerns are making hybrids from mild hybrids to full hybrids increasingly attractive as a middle ground. These technologies offer quick wins for consumer and fleets alike without demanding major behavioral shifts. An example of a modular transmission architecture that is hybrid-capable is the highly successful 8HP transmission from ZF. Globally produced at an annual rate of approximately 3 million transmission, Feintool supplies components in all three continents.
The newly signed multi-billion contract between ZF and BMW ensures a production life of the 8HP transmission well into the late 2030s. With a wide variety of fineblanked and forged components on the 8HP platform in all regions we serve, Feintool is well-positioned to profit from extended life cycle for many years to come. The new all-electric EX60 changes the game in terms of range, charging, and price, and represents a new beginning for Volvo Cars and our customers, says Håkan Samuelsson, CEO of Volvo Cars in January of this year. The e-motor core produced by Feintool boosts Feintool proprietary GluLock joining technology for e-motor cores which enables higher motor efficiency, improved performance, and more compact designs, while offering a scalable and energy-efficient manufacturing solution.
The new Volvo EX60 launches mid-April 2026, and the motor core is produced by Feintool at our Tokod, Hungary location, and it also can be seen outside here on our tables. Furthermore, Feintool profits from the AI data center boom that is accelerating rapidly with global capacity projected to double by 2030. The immense energy demand is straining grids. Server use electrical energy to perform calculation and store data with some of that electricity energy lost as heat. This heat must be removed to prevent the equipment from overheating and breaking down. With up to 5,000 high-efficiency fans in each data center, Feintool profits from the need of motor cores for the cooling fans and secured a major order for e-motor cooling fan cores in North America.
This is a significant milestone as it marks Feintool's market entry into the North America with e-lamination stamping technology. For 2026, we call it 1 destination, many routes. The global transition toward cleaner propulsion is continuing, not as a single unified shift. Instead, 2026 reveals a world where each region is taking its own path, shaped by economics, policy, and consumer behavior. Feintool follows those trends closely. Three strong and independent regions, 18 production plants uniquely positioned Feintool to adapt and profit from the regional needs and developments. In the U.S., we'll be launching the first motor core production for data center cooling systems. In Europe, we'll supply the latest generation of BEV vehicles with GluLock joined motor cores.
In Asia, we position ourselves in some of the fastest-growing markets with our own plant in Pune, India. What ties all together is the recognition that our business and electrification is not a one-size-fits-all journey. The destination may be shared, a lower emission future, but the ways we get there will be as varied as the markets we serve. I want to close with a thank you. To Feintool's Group development in a difficult and challenging market environment affects you, our shareholders. We sincerely thank you for your trust you have placed in us and our strategy. We are aware that the adjustments to the European business pose major new challenges for our employees. We would therefore like to thank them for their commitment and dedication. We also thank our customers, worldwide employees, and all our business partners for their longstanding and trusting cooperation.
Because we make more than parts, we make commitments. Thank you very much. At this time, I would like to invite you any questions you might have, towards Thomas Erne, our CFO, or myself, and I'll be more than happy to answer the questions as good as we can. It was clear. Thank you a lot. Please feel free to ask any questions you have there. Good.
Was it a good presentation?
I think so, yes. If you go out, you will see both major products that we have. We have the e-motor core, brand-new, just came off, still warm almost from our production lines in Tokod, Hungary. Then as well, the motor core for the data center cooling fans is out there. We also see still a lot of our traditional hybrid capable parts where we really see extended life cycle. I think that helps a lot, Feintool. Maybe I want to continue in that course that we see. On one side, we see a clear shift towards electrification, but it's much slower than anticipated, especially in Europe and North America, much lower volumes. At the same time, the strength of Feintool is that we never gave up our traditional business.
We profit from existing programs that will have now extended life cycles of 5 to 10 years that we see already. Example, 9-speed on Mercedes transmission was scheduled to end by 2028, extended to 2035. Just one example with the 8-speed, extended to the end of 2030. I think this is a very strong strategy that we are remaining in the traditional technologies, live on with the extended life cycles, and invest heavily in electrification and also in the right markets. I can say personally, I'm in China next week and will be in June in India. We have a lot of interest in India. India will be the fourth largest automotive market by next year with 5.5 million vehicles.
We see this as a hub for many companies, especially Japanese, who want to invest less in China as an alternative, as a geopolitical shift. This is, I think we have taken the right decision and are now ready in June to start production by September in India. Time completion is end of June, and production equipment will be ready to produce by September 2026. The plant we have, it can be doubled in size. We do a phase 1 with about 5 fineblanking machines. We start in the automotive sector on seating components mainly and transmission components, and then have the possibility to double the size of the plant when we see the growth. Yes, please.
Use the microphone, I think.
Thank you for the presentation. One question. You said you're losing market share in Asia, and I was wondering what measures you're taking.
Yes. This is a very important point because we have not really lost any programs. I was talking about customers.
Okay.
The difficulty with Feintool, we don't really have our own products. We are 100% producing components for OEMs Tier One, and we, of course, are always at the mercy of the development of the programs we are on. Sometimes we are lucky because, you know, the same part gets, as a platform, going to several more vehicles or sometimes it happens something else that they get reduced. The reduction was really due to effects from our customer side. We have not lost any major programs, but some of our customers have phased out certain or pushed out by competitive situation. China is very, very competitive, it's a very strong market.
There's also one design of successes in China if you not sell to European companies or German OEMs, but if you are able to produce and sell to Chinese OEMs. We have four years ago, we have started electrification with the e-motor components and will be close to 10 million sales already on e-motor. Selling to Chinese OEMs, the big order we got was for a commercial, like a light delivery trucks, like those FedEx or those light delivery trucks. That's sold to a Chinese OEM. We will be growing. We just had some market share loss from our customers.
Thank you.
Yeah. Okay. Good. I also would like to thank Joel and his team for putting the conference together. Thank you very much. Joel is our media director for the Feintool Group communication specialist. Thank you very much.