Belysse Group NV (BELYS) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Welcome to the conference call of Belysse Group NV regarding the H1 2026 results. [Operator Instructions] Today, we have with us James Neuling, Chief Executive Officer; and Francois de Labarre, Chief Financial Officer. Gentlemen, the floor is yours.

Good morning, and thank you, Lynn. Welcome to our first half 2026 results call. If you have not already done so, you can download our press release and this presentation from the Investor Relations section on belysse.com. I need to start with bringing your attention to the disclaimer on Slide 2. I will not read it out, but please do make sure you have read it. I will talk about the financial summary on the first half of 2026, then Francois de Labarre, our CFO, will take us through the financial review, and then I will give the conclusion. We will end this call, as Lynn has said, with a Q&A session with the analysts following our stock. So if you can, then we have Slide 4 on the screen there. From a financial standpoint, we saw the first half 2026 consolidated revenue at a total of EUR 123.3 million, which represents an 8.5% year-on-year decrease. Revenue of our U.S. business increased by 0.9%, while our European business faced a decline of 20.5%. In terms of profitability, the first half adjusted EBITDA was EUR 16.8 million, which represents a decrease of 2.3% year-on-year. Our U.S. business realized an increase in -- realized an EBITDA of EUR 16.1 million, while the business in Europe realized EUR 0.8 million EBITDA. The net debt at the end of the period was EUR 147.6 million, which includes EUR 22.0 million impact of IFRS 16 lease liabilities, which results in a leverage of 4.95. Francois, can I ask you to go more in depth into the financials? Thank you.

Thank you, James, and good day to you all. First, let's take a look -- let's take a closer look at our Q2 2026 financial performance. Having a look at Slide 3 -- sorry, having a look at the Slide 6, okay, you can see the bridge of the revenues between Q2 2025 and Q2 2026. So this is aligned to what James said. So an increase in U.S., a decrease in Europe. Okay. Next slide, Q2. In Q2 2026, we saw a consolidated revenue of EUR 62 million. This represents a decrease of 8% year-on-year, of which minus 2% due to foreign exchanges. In U.S., revenue increased by plus 1% -- 1.1%, sorry, driven by a plus 4.4% organic and minus 3.3% FX impact. In Europe, revenues decreased by 22%. Let's have a look at -- sorry, Slide 7. Okay. In H1 2026, we saw a consolidated group revenue of EUR 123.3 million. It's a minus 8.5% year-on-year, of which minus 4% due to exchange rates. In U.S., H1 volumes grew versus prior year, driven by improved customer demand, particularly in the corporate, education and government segments. The revenue in U.S. dollar terms was up by 7.8%. In Europe, H1 2026 volumes declined versus prior year due to continued market softness and ERP migration start-up challenges. It resulted in temporary shipment delays and volume losses in the quarters and have since stabilized. Let's have a look at next slide. The group EBITDA -- the group adjusted EBITDA bridge. Belysse Group consolidated EBITDA for the first half of 2026 was EUR 16.8 million. This represents an adjusted EBITDA margin of 30.7% versus 12.8% last year, H1 2025. Adjusted EBITDA increased organically but was negatively impacted by the translation of Bentley Mills results to the weakened U.S. dollar. Adjusted EBITDA margin improved versus prior year, driven by growth and margin expansion in the U.S. market, supported by group-wide cost management and specific price increase in reaction to ongoing cost inflation due to the conflict in the Middle East. Our U.S. business adjusted EBITDA improved by 10.6% in U.S. dollar terms. The weakening U.S. dollar had a negative impact of minus 7% on the reported revenue and EBITDA in euro terms. Europe adjusted EBITDA and adjusted EBITDA margin declined versus prior year due to the lower volumes despite improved unitary margin. Let's have a look at the Slide 9 about cash flow. We ended, sorry, the first half year 2026 with a cash balance of EUR 22 million compared to a cash balance of EUR 34.5 million at the end of 2025. The adjusted EBITDA of EUR 16.8 million was partly offset by an increase -- 8.8% increase in the trade working capital and a 2.1% increase in other working capital. During H1 2026, EUR 2 million of net income tax was paid alongside EUR 4 million in CapEx, EUR 10 million in debt repayments and interest payment and a EUR 0.6 million -- sorry, EUR 0.6 million foreign exchange gain on cash and cash equivalents. For your information, the European business went live on a major upgrade of its ERP during H1 2026. Quick look at the leverage chart. Net debt at the end of the period was EUR 147.6 million, including EUR 20 million related to IFRS lease liabilities. Net leverage was 4.95 at the end of 2026. Total available liquidity, including headroom under the revolving credit facility, amounted to EUR 37.7 million at the end of H1 2026. Now I will hand over the floor back to James for the conclusion.

Okay. So look, in conclusion, our first half '26 consolidated revenue was EUR 123.3 million and adjusted EBITDA of EUR 16.8 million, resulting in an adjusted EBITDA margin of 13.7%. In the U.S., the first half adjusted EBITDA improved by 10.6% in U.S. dollar terms. The weakening USD had a negative effect, 7% on the reported revenue and EBITDA in euro terms. In Europe, the reported adjusted EBITDA and adjusted EBITDA margin declined versus prior year due to the lower volumes despite improved unitary margins. Leverage is at 4.95 at the end of the first half and total available liquidity, which includes headroom under the RCF, was EUR 37.7 million at the end of the first half. I would like to thank the team who continue to work hard on commercial excellence, efficiency and costs while we are waiting for the markets to recover. I will now go back to Lynn, who will coordinate for the Q&A.

[Operator Instructions] We have a question from Michiel Declercq. I will now -- you can now ask your question. Yes. Now we can hear you.

Michiel Declercq from KBC Securities. I had a couple of questions. The first one, you mentioned there were some price increases because costs were going up. Can you give a bit more color on what you expect for the second half in terms of the phasing? Is there still some more raw material inflation to come? And how do you expect to pass this on in terms of the pricing? Then secondly, a bit on the European business, minus 20. Can you give a bit more color on the end markets, residential versus commercial? And also maybe looking a bit at the summer month, of course, quite some hot weather in Europe. Can you tell maybe a bit on the footfall that you're seeing and if this would have potentially any impact in the second half of the year? Those would be my questions.