D'Ieteren Group Stock

Ladies and gentlemen, welcome to the D'Ieteren Group 2026 Half Year Results Conference Call. [Operator Instructions] Please note, this call is being recorded. Today, I'm pleased to present Francis Deprez, CEO; and Edouard Janssen, CFO. Gentlemen, please go ahead.

Well, good evening, ladies and gentlemen. Let me start with the main messages we 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, and this performance reflects strong growth at Belron, PHE and TVH and is notably driven by lower financial charges providing further uplift.

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-digit 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 where we stand. No decision has been made at this stage, neither on any specific option nor on its timing.

And 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. And as this process is ongoing, you'll understand that we are not in a position to comment further today, and we won't also be taking any questions on the specific topic. We'll keep the market informed in line with our disclosure obligations as the matters develop.

And then there's 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've had a good ride over the past 10 years. Now before we dive into details, let me highlight the key elements of the semester.

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. Also, as previously said, we're confirming our full year '26 outlook based on the strong H1 results and the expected resilience of our portfolio.

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 a 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, 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 operating -- the adjusted operating margin actually to 2.1%. The adjusted profit before tax group share was down 2/3 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 practice 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 4.1% from acquisitions. This includes 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.

And then 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.

Now 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. And then 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 minus EUR 4.7 million, helped by lower financial charges as well. I will now hand over to Edouard 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 (sic) [ EUR 452.4 million ] in H1 2025 to EUR 482 million (sic) [ EUR 482.4 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 Auto, 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 Auto. 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 Auto. 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 segment stood at close to EUR 300 million at the end of June 2026 and slightly increased versus the end of December 2025. Excluding intersegment loans, corporate and unallocated net financial debt was EUR 486.6 million. This includes the impact of the EUR 76 million (sic) [ 76.4 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 Auto, Belron and TVH. Now let me hand over to you, Francis, to talk about the latest developments across the group.

Thank you, Edouard. 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.

And 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 3, 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% stakes in the 2 AD Parts distributors, mainly in the Madrid and Galicia that Edouard 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.

And at TVH, Giuliano Parody started as CEO on September 1, bringing new leadership to the business as it continues to execute its focused growth and operational priorities. And at Moleskine, Silvano Sala Tesciat took over as CFO on the 1st of September 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.

And 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 dividend to its shareholders.

Belron also continues its deleveraging path. The leverage has now decreased to 4.3x 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 had 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. And then Belron also continued 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 a senior secured net leverage ratio continued at 4.3x compared to the 4.5x where we stood at the end of 2025. Edouard 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'll 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 '25, but remained negative at minus EUR 34 million. And the company's leverage ratio reached 1.7x 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 Auto 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 D'Ieteren Auto 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 Auto 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 markets. Such projects could lead to the suppression of more than 340 jobs. More broadly, D'Ieteren Auto 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, it has 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, Edouard. So yes, on PHE, it continued its growth trajectory in the first half of '26, combining solid growth and good operating leverage. At the end of May, PHE announced the closing of the transactions of majority stakes in 2 AD Parts distributors, Polaris and Regueira. So there is 1 month contribution from these in this half year number.

Trading cash flow stood at EUR 45 million, and leverage increased moderately following the additional financing raised to fund the acquisitions. And 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's 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% a year ago, and 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. And 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 reduced factoring as well as higher expansion CapEx.

Free cash flow reflects mostly the acquisition spend, of course, and the large distributors that I mentioned before. Leverage only slightly increased, remains at a reasonable level at 3.5x. And with that, I'll hand back to Edouard 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 FX. 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 flow stood at EUR 42 million and free cash flow at minus EUR 8 million (sic) [ EUR 8.4 million ]. Leverage remained broadly stable at 3.2x. 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 FX, 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 FX, driven by the operational performance and lower net finance costs.

As a reminder, H1 2025 -- in H1 '25, net finance costs have been increased by realized and unrealized foreign exchange losses.

Now moving on to free cash flow. It was minus EUR 8 million (sic) [ EUR 8.4 million ], notably due to working capital investments, reflecting stronger sales with increased trade receivables and inventory investments to ensure product availability and allowing top-tier service levels that characterize TVH. Net financial debt stood at EUR 901 million (sic) [ 901.4 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, Edouard. 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 improved year-over-year. The new management team is driving a comprehensive action plan to unlock Moleskine's full potential after several years of underperformance. And that program includes both strategic and operating initiatives, spanning brand strengthening, enhanced go-to-market, omnichannel 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 and 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 (sic) [ EUR 204.9 million ]. Let me quickly finish with the corporate unallocated segment. The adjusted operating result remained broadly stable at minus EUR 1.4 million. The adjusted net finance costs improved significantly to minus EUR 7.2 million as the group prepaid in June '25 EUR 500 million bridge loan that was raised at the end of '24. And as a result, adjusted profit before tax group share improved from minus EUR 16.7 million in H1 '25 to minus EUR 8.5 million in H1 '26.

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.

So 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 at D'Ieteren Automotive weakened throughout the first half of '26 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?

[Operator Instructions] Your first question comes from Alexander Craeymeersch with Kepler Cheuvreux.

And 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 leaving on Belron that is over delivering once again. So yes, first of all, I wanted to get that off my plate.

Now the questions. 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?

Yes. Second question would be on auto. 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?

And second question on auto would be whether that market share loss, which was, of course, somewhat related to models being -- 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.

And then the last question I would have would be on TVH. TVH volume growth is not translating into relative margin expansion yet. I mean 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.

Okay. Well, thank you, Alexander, for those questions. Yes, the first, and thank you also for your kind comments. On Belron on the U.S., running the claims avoidance, well, claims avoidance, as we said, had stopped declining a while back already again and started to -- not the, the claims started declining and the claims started to go up again since quite a couple of months now again.

And so 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. So in 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 automotive, yes, 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. And we do actually anticipate there's a couple of new models coming in, 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 do you get the cars delivered and therefore, can invoice them.

So what exactly will happen in H2 exactly will be more for 2027 is always a little bit difficult to predict. But so 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. So we will see where exactly that will land going forward in the months to come.

In terms of the margin, as the throw? Well, it's -- as you've seen, we've announced the intentions of the management of Automotive to prepare the future. Part of that is, of course, also addressing part of the cost base. And so that depends a little bit on how that process will be going, and there's nothing to comment on that.

It's too early. And for H2, unfortunately, as we said, we expect continued very tough situation as in H1, right, for auto. Yes. And then -- thank you Francis. Indeed, even though the performance is better at TVH, 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, that we were expecting, unfortunately, some margin dilution due to various factors, including freight costs, right, with fuel price related and also some noncash 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. with the tariff pass-through, which, by the way, has had a dilutive gross margin effect. So there is as well a bit of a differentiation country to country on the pricing and hence margin side, 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 it's -- 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. So I'm just wondering, as an outsider, like what changed between, let's say, April and today that this is now becoming a higher focus.

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. Well, that's the difference is that now we are exploring the strategic options.

Your next question comes from David Vagman with ING.

I'll refrain from asking a question on the change of CEO. I just have 4 quick questions. So first on Belron, could you disclose the volume growth, excluding recalibration so basically the previous communication. So 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 on Alexander. So what has Belron seen in the U.S. on insurance claims? So 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. And what are you seeing basically in H2?

And quickly related to Belron again, like how do you see the -- 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, so 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 this objective?

Okay. Thank you, David. On Belron, the volume growth, if you exclude the recalibration is actually plus 0.4%. The insurance claims recovery, we have actually seen uplifts in claims percentages is something we try and track on a monthly basis, so to say, to see what it is, 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 claims -- insurance claims that were happening. But I can't put specific numbers as I say, but they have been clearly there. Then on the MSR and the cash progress, yes, MSR is, 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. You may -- if you were in France by any chance, this summer 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 we get is actually very positive. So both 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. And also the consumers enjoy usually helps on no shows and things like that and so on to avoid that. So it's 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.

And so we're really pleased with the way MSR is being accepted by the market, both consumers and insurers, and it's progressing quite nicely. The cash, as you said, we mentioned that Belron is growing, thanks to strategic initiatives and cash is one of them. And so cash is also continuing on its trajectory.

On Auto, honestly, as you know, the intention was declared by the management in automotive. The process has been launched with the social partners, and it's 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. Maybe a very quick follow-up on that one. Is it like 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 specifically?

I think what has probably been different in the -- I mean, we mentioned it in our tech center, there's what's going on with the consumer sentiment. There's what's going on with the regulation, et cetera. I take the example of the mobility budget as one example. This is something that was still very small and is 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. And I've always said that at some point in time, they will pick up in their market shares. And now we start seeing that in Belgium as well. The B2B market that we are maybe made a little bit later than other markets, but this is starting to happen.

And so 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.

Your next question comes from Michiel Declercq with KBCS.

Michiel Declercq from KBC Securities. 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. So you guide for low to mid-single-digit adjusted PBT growth. You're now at 8% plus at constant currency. I understand that the impact from auto will continue in the second half, but that would basically imply almost 0% growth at the group level in the second half. I'm just trying to understand the moving parts here. Is that maybe a further deterioration at auto? Or is that more the higher comparable base at Belron? So any color on that would be useful.

Then the second would also be on Belron and sorry to come back on those -- on the claims situation. If I look a bit at the -- the insurance -- the motor vehicle insurance inflation in the U.S., we've actually seen that it's 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's say, the pre-inflationary period, that would be useful.

And then 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 effect, one of the strongest one in the recent years. I'm just trying to understand were there some price -- yes, some phasing of the price increases still in there or how, let's 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?

Okay. Edouard, do you want to take the question on the PBT?

Yes, sure. On the PBT, what we can say is that, as we explained, right, as the year develops, there are always some pluses and minuses, right? And 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.

And 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 the weaker trends at auto, as we described, which should be, again, partially offset in H2 by our other businesses.

And 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. Then 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 a bit of a black box with NAGS that may have increased more than usual in September 2025. And then the price mix was also supportive in the other regions across the board. And that's mainly windscreen complexity, I would say, in the car park and the type of cars that required service for us. So that's more or less what has been behind the 7%. And we'll see where the rest of the year will land.

If I can maybe ask a quick follow-up. So 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 or...

That's always not only a black box and how they calculate the percentage is also a black box and when they will do a change. So we will have to discover that together.

Your next question comes from Tim Ramskill with Bank of America.

Three questions from me, please. So just on the automotive side, perhaps you can help us understand the scale of the actions you're taking. So the 300-plus headcount reduction, what would that translate to in terms of a cost save? That would be extremely helpful.

And then also within automotive, is it time for you to consider other strategic options, whether that's 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.

And then as regards Belron, just interested in your thoughts on margin potential. If you sustain your margin delivery that you've achieved in the first half, you're going to be fairly close to your 25% margin target well ahead of time. So again, just interested in your thoughts on where margins could go beyond that.

And then the final question is just perhaps some quick thoughts on the shape of the pipeline as regards to M&A opportunities for both PHE and TVH, please.

Okay. Yes. On the -- on your question on the scale at D'Ieteren Auto, of course, as we said, it's too early to tell. It's work in progress, interactions ongoing with the union. However, if you look at the 344 jobs that were announced compared to the total workforce, we would be in a 10% to 15% range.

It is indeed a strict legal process, right? So right now, only an intention has been communicated. But what we can say as well is that as part of the 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, reducing marketing costs, reducing consulting et cetera, et cetera.

So -- but all of that, very important to say, strict legal process, early phase of the negotiation with the social bodies. So right now, it's 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. And that's the one that we're pursuing basically. And so there's not much else to say on that for D'Ieteren Automotive.

On the -- yes, 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're now 8 geographies. So there's always ideas to both look at geographies, but also within the geographies that we're in, and we've now done 2 acquisitions in Spain, but that doesn't necessarily mean that it's the end of the road. We don't necessarily have a national footprint yet even with those 2 acquisitions, although we made a big jump.

And so there is clearly many ideas on the table. But of course, it will always take two tango to see whether they make any sense from both sides.

And on TVH, the same, TVH has a nice -- recently even strengthened its M&A team. We 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, we're able to do so. So it's quite promising, I would say.

Margin definitely solid delivery in H1, right? Let's be clear. But let's not forget that a few important elements. First, last year, H2 is a much tougher comparable, right? So let's remain humble and as well with the effect that Francis talked about in September last year, right, year-on-year, yes.

So that's one factor. The other factor is, let's remember that we had guided to the 2028 target being spread over multiple years, right, for many reasons. And hence, yes, that seems like a realistic direction.

Your next question comes from James Rowland with Barclays.

Two questions, please. Just firstly, on the guidance on adjusted PBT group share, low single digit to mid-single digit, which you've kept unchanged with autos weakening, but partially offset by the other lines. Can we assume that you're effectively 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, could you update us on your plans regarding sort of group M&A and how you think about the portfolio at the moment? Clearly, there's a consolidation strategy that's 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?

So on the guidance, clearly, what -- so we don't want to provide anything so precise, right? But what we can say that you can read as well in our wording is that there was a better expected H1 versus H2 for various reasons and definitely a weakened situation at D'Ieteren Auto expected to be partially offset by other one. So -- so yes, so not much more to be said at this stage.

Yes. That's a confirmation of the guidance basically of the range. And capital allocation, group M&A, yes, of course, we are very much 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 well in H1, not forget about that.

And 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 a very disciplined and systematic 4-phased approach to see how far we go and whether we ultimately submit nonbinding offers or binding offers, et cetera, they pay.

So 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 ODDO.

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?

And secondly, on outlook, should I read something in you not repeating explicitly your '28 ambitions? And should I maybe read this in light of the coming change in the CEO position? How sure can we be on that the '28 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?

And 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 World Cup football.

All right. All right. Yes. With regard to the outlook questions, so simply practically in the middle of the year, we don't provide a detailed entity per entity. And in this case, given the significant, let's say, deviation at D'Ieteren Auto, we wanted to make that very clear. But apart from that, we don't provide a detail. About 2028, no, no, nothing to be said there about 2028. No changes, right, on that trajectory. Nothing to be read, no.

We're almost halfway through basically since April '25 when we talked about them. And so we're very nicely on track vis-a-vis those ambitions. And so 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, it's quite a good thing. Now staff costs are, of course, a significant portion given that's the service business at Belron. You can easily be between 15% to 20% of kind of direct labor costs that you have within Belron. That's very feasible.

And advertising cost is the other one, which, of course, advertising costs are quite significant, as you know. They can be in -- they are in the single-digit percent of sales numbers. We typically tweak it depending on what we need to do to kind of get the demand and the do nothing ratios to work to our favor. And so 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. So it's really more a top line enabler than anything else. And so we have continued to spend on advertising in H1, absolutely.

Your next question comes from Jeremy Kincaid with Van Lanschot Kempen.

Three 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 '24, 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 0 again. So yes, 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 law means you're now at a certain debt-to-equity threshold, which required the waiver. My question is, does that -- where do you sit on this threshold now? And if there were more impairments, would it be likely to see more debt waivers?

And then 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.

Okay. Well, on TVH, why so strong on the volume growth? I mean, there's a couple of factors. As you know, the kind of nonmaterial handling verticals like construction or agriculture have been growth strategic priorities for TVH, and we're having good traction on both of those actually. So we've seen very nice growth rates in the construction segments that we are, where we, in many cases, not necessarily that's very well known yet. We've added our catalogs. We've made sure we had the right SKUs on stock in all the different areas around the world where we are offering that.

And so we've seen very, very nice. And 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 SKUs there. And so customers have just discovered us for those type of spare parts.

And in agricultural 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. So we've seen nice growth in the agricultural spare parts very much. And 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 or TVH. So it's really a very commercially driven culture. And I think there's a very strong momentum at the moment, and so no reason why that should change.

Then moving on to Moleskine. Yes, the threshold. Basically, your understanding is correct, right, that according to Italian statutory rules, yes, it led to that waiver on the debt. And in the future, long story short, the answer would be yes as well.

And 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 don't get kind of the payments organized for them, and they have the conditions linked to warranty to do exactly that. So we are typically not affected by what's going on in the warranty business at Belron because we are de facto a specialist player, not linked to an OEM.

[Operator Instructions] Your next question comes from Andy Grobler with BNP Paribas.

Three 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'll 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?

And then thirdly, just quickly on Belron, cash flow was helped by much lower tax in the semester. How sustainable is that lower tax rate?

I'll maybe start with the auto question on the gross margin pressure from Volkswagen. And of course, they have a lot of pressure and they're 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's available for the bottom part of the value chain.

But that's not new, and this is something we have known since many, many years. And what we also -- but it 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. And so that's, I would say, at least as much a contributor to something that is just purely passed on from the Volkswagen Group to us.

I do expect that as they are progressing with their own restructurings and so on, that 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 need for discounting. But this is kind of a cyclical -- we've seen this going up and down over the years. And so we're 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, right, what we can say is that we do continue to see the underlying premium environment remaining favorable and hence, claims are progressing. But this is, let's say, in relative terms and not in absolute terms, right? I think this is your question.

So that relative progression is continuing, although it's not every month necessarily that it is progressing, right? But it continues. Important to flag that last year, it's 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.

Now moving on to your Belron cash flow and tax question. Clearly, there was a favorable, let's say, one-off in H1 of this year that we don't expect to see being repeated.

Your next question comes from Maxime Lejeune with Degroof Petercam.

I have 2 main questions. The first one relates to the automotive part. You mentioned that you don't expect to see any recovery in H2. Do you have any time line in mind of when we could see the first positive sign of the restructuration?

And 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?

Okay. Well, on D'Ieteren Automotive, of course, we don't know the exact timing of how these negotiations and discussions and consultation period will go with the social partners. And so it's difficult to say when you would start seeing effects on that end, at least of the side.

What we do know on the more commercial side, I would say, on the top line side, as I mentioned before, that we get the newer models coming and 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.

Actually, we are very pleased, that PHE could do these nice acquisitions in Spain, right? It's very much part of their whole story and value creation story of the bolt-on M&A and the synergies it brings to they have an excellent capability of execution there. And so let's 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's not forget that when we bought PHE, they were at 4.5x leverage, and they have deleveraged progressively over time. Now we like around 3x. But as we said, 3.5 or even a bit more for future M&A is absolutely fine and welcome.

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 you on another occasion. So have 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 lines.

Ladies and gentlemen, welcome to the D'Ieteren Group 2025 Full Year Results Conference Call.

[Operator Instructions] Please note that this call is being recorded.

Today, I'm pleased to present Francis Deprez, CEO; and Edouard Janssen, CFO. Gentlemen, please go ahead.

Well, good evening, ladies and gentlemen. Welcome to our full year 2025 conference call. It has been another year of good results, including a steady deleveraging at the Corporate and Belron levels.

And let me start with the 3 main messages we would like to convey today. First of all, on an underlying basis, our classical KPI, the adjusted profit before tax group share grew by 3.8% versus 2024 at our guidance foreign exchange rates. Second, our free cash flow remained very solid at about EUR 374 million this year, demonstrating the robustness of our portfolio. And with those results, our Board of Directors will also propose a dividend per share of EUR 2 per share to the general assembly at the end of May. And then third, in terms of outlook, we expect to pursue our growth trajectory with a low to mid-single-digit growth percentage year-on-year in our adjusted PBT group share. And this again at constant foreign exchange rates, the ones, of course, then of 31st of December 2025. The comparable tables are to be found in our press release.

Before I go into more detail on the numbers, there's also -- I would like to inform you also of an organizational setup change that we have made involving our investment directors more into our senior leadership as of now. Nicolas Saillez, our Chief Investment Officer, left the company at the end of last year, beginning of this year. And so he had, of course, over the years, the decade that he was with us, helped us shape the investment strategy of the group and really left his mark on the company. He also built a strong investment management team. So I thank very much, of course, Nicolas for all the work he's done in the past decade.

But the fact that we have now a strong team in place, we have asked Charlotte Boucqueau, Timothy Muschs and Stephan Cammaert, 3 of our Investment Directors to be part of our senior leadership team going forward so that we can continue on our strategy that has been the same since many years on origination on the one hand and on value creation with our existing activities on the other hand.

Before we dive into the details, let me highlight some of the key numbers at our activities. Belron basically delivered a record year on many metrics, more than 7% top line growth at constant FX and a strong 23% adjusted EBIT margin achieved. This exceptional performance absorbed the additional financial charges that did exist at Belron last year, of course, leading to a broadly stable adjusted PBT group share.

D'Ieteren Auto had another strong year after what was already a record 2024, and that despite a market that was down. It was down almost 8%. But thanks to a favorable vehicle mix, notably in the BEVs, the electric cars and also the great efforts from the teams from D'Ieteren Automotive, the business did achieve another robust margin of 4.7%.

PHE continued its compounding growth journey, driven by continuous market share gains but also excellent execution on their M&A strategy. The adjusted profit before tax group share at PHE grew with almost 10%, 9.7% to be precise, year-on-year.

TVH then grew 1.1%, sorry, year-on-year at constant FX. thanks to some M&A. And while it was navigating, as we've talked before, softer market conditions, specifically in materials handling and agricultural segments but continue to grow in construction. There were some negative mix effects. There were some additional freight costs. There was also some higher noncash depreciation costs and all of these together led to pressure on the margin.

And then last but not least, Moleskine continued to face a relatively challenging environment in its wholesale channel, although all the other channels, retail, e-commerce and strategic partnerships performed quite well with positive growth. But all of that together, given the size of the wholesale channel, did lead to a negative operating leverage overall.

Let me now hand to Edouard to walk you through some of the financials in a bit more detail.

Thanks, Francis. Indeed, as previously mentioned, our headline KPI, the adjusted PBT group share declined by 10.3% year-on-year on a reported basis from EUR 1.065 billion to EUR 956 million. This is primarily due to 3 things: Of course, the additional financial charges, both at Belron and at the Corporate levels; a significant foreign exchange headwinds, particularly the weakening of the U.S. dollar throughout 2025; and finally, the decline observed at both D'Ieteren Auto and TVH due to difficult market conditions.

Now if we exclude the net impact of the additional financial charges and apply December 31, 2024, FX rates to both years, our adjusted PBT group share was EUR 1.104 billion in 2024. This was the basis of our guidance. And let me remind that it included some EUR 30 million of financial revenues from the cash we had on balance sheet before the 2024 year-end financing operation. The comparable figure for 2025 is EUR 1.146 billion, representing an underlying growth of 3.8% year-on-year to what we had called the slight increase at the beginning of 2025.

In 2025, additional financial charges at both D'Ieteren Group and Belron level were roughly EUR 160 million, our share, and the adverse FX impact amounted to around EUR 30 million when restating 2025 at December 31, 2024, rates basis. Now if we look at the decomposition of our KPI in 2025, you can see that Belron represents approximately half of it, while auto is at 23%, PHE close to 20% and our 40% stake in TVH represents roughly 8% now.

Now looking at the group share financials. Sales were broadly flat but operational profitability grew by 3%. Free cash flow declined as 2024 contained exceptional items definitely at D'Ieteren Auto and also a nonrecourse factoring utilization at PHE. Yet as introduced by Francis, it remains strong at more than EUR 373 million.

Moving on, on indebtedness, our net financial position at the Corporate segment improved throughout the year. Excluding the intersegment loan to Moleskine, it decreased from EUR 908 million at the end of 2024 to EUR 542 million at the end of 2025. This is explained, of course, by the extraordinary dividend of EUR 400 million we received from D'Ieteren Automotive as well as EUR 160 million from Belron and EUR 45 million from TVH, which had allowed us to reimburse anticipatedly our bridge loan of EUR 500 million in the first half of 2025.

Now looking at the latest developments. Over the past year, the group and our businesses have continued to evolve significantly. As just mentioned, we benefited from solid dividends flows from our businesses, and we were pleased to relaunch our solidarity-based EUR 100 million share buyback program. Most importantly, our businesses were also active on the consolidation front.

First, PHE successfully completed the acquisition of Top Part in 2025, marking its entry into the promising Irish market as well as the acquisition of AD Freco in Spain. And more recently, PHE announced that it has entered into exclusive negotiations to acquire a 51% stake in 2 large distributors in Spain, further reinforcing its leadership position in that country.

On the Belron side, they completed 18 acquisitions in the year across all regions. And finally, TVH continued to position itself for growth through significant moves in its distribution network with the opening of 2 new distribution centers, one in the U.S. in Reno and one in Poland, while also making progress on the construction of the sizable Plant T in Waregem in Belgium.

There were also some significant management changes throughout the group. The collaboration ended with Christophe Archaimbault at Moleskine, the very complementary team of Thomas Boucar until recently Investment Director within our group at D'Ieteren Group; and Laure Browne, formerly CEO and Senior Executive of several consumer goods brands, including VEJA, [indiscernible], they took over as co-CEOs. In addition, in 2025, the strong credit profile of our businesses supported significant improvements in the pricing of the term loans at both Belron and PHE with strong demand from lenders.

Now Francis will take you through a great year at Belron.

Thank you, Edouard. Yes, indeed, 2025 was a record year for Belron on many dimensions. We're proud to have delivered fully in line with our outlook, posting a 7.1% growth as a guidance foreign exchange and an adjusted EBIT margin of 23%. Belron contributed over EUR 0.5 billion, EUR 518 million to be precise to the group's adjusted PBT group share and continue to demonstrate strong cash conversion as well. That enabled the company to distribute more than EUR 300 million in dividends to shareholders while also reducing its leverage to 4.5x. As a reminder, the additional financing that we completed in October '24 has temporarily brought leverage first to 5.5x and 5.2x at the end of 2024, and now we're at 4.5x. So this once again evidences the ability of Belron to deleverage quickly.

As I mentioned, Belron delivered top line growth of 7%. And while the company is, of course, active around the world, all 3 regions did contribute to that growth in 2025. The growth was also mainly organic, close to 6%. There was almost 1% of acquisition contribution. And not surprisingly, the foreign exchange headwind was rather negative, almost 3% for Belron. Particularly in the United States, in North America, we were pleased with the performance there. It finished the year on a very strong revenue momentum. And so we ended up with full year organic growth above 7%, marking a clear acceleration versus the first half of the year. The region did benefit from an improved situation around claims avoidance that has been with us for almost 18 months. And so we've seen increased claims volumes again and continue to also made progress on some of the customer segments, it was focusing on the commercial market, the cash markets in particular.

It's also important to highlight the excellent operational execution at Belron. The dedication, skills and flexibility of our technicians around the globe allowed the business to capture demand seamlessly with a continued focus on customer satisfaction and NPS scores reached once again historical levels in the high 80s. I am very happy about that.

The number of total jobs, basically the vehicle glass replacement and repair jobs but including also the recalibrations was at 17.1 million, which is an increase of 3.2% year-over-year. Belron also continued to capture value from increased in shield complexity, adding its recalibration services and of course, also the VAPS, the value-added products and services.

Now we are happy to have achieved the ambitions we set back, you may recall 3 years ago in 2022, almost 4 years ago, actually, in a very different environment at the time, delivering both strong top line growth and also the 23% adjusted EBIT margin. As anticipated, we saw a meaningful margin step-up in the second half of 2025, supported by an additional trading day but also strong focus on efficiency and cost management, which contributed as well.

Another notable achievement was to end the year with a nearly stable adjusted profit before tax group share, and that despite the additional financial charges, which, of course, were also quite significant at Belron. And on that point, the Belron lenders have clearly recognized the operational strength of the company. In July already last year, we secured a 25 bps repricing on the dollar tranche. Then there was an automatic 25 bps step down on both dollar and on euro tranches in October. And then at the beginning of this year in '26, we did another successful repricing, leading to a further margin reduction of 25 bps in the U.S. dollar tranche and a 50 bps in the euro loan part.

So evidently, cash conversion of the business is solid. We had an adjusted EBITDA growth north of 11%, EUR 1.8 billion. We generated close to EUR 430 million free cash flow, and that despite the additional cash interest costs, and this supported deleveraging and it supported the distribution of more than EUR 300 million in dividends that I talked about before.

Now looking at 2026 for Belron, what do we expect? Well, we expect a continued strong performance. As a reminder, our outlook is now based on the December '25 foreign exchange rate, and you'll find all the reconciliation tables in the press release and in the presentation later on. But our expectation is that sales will -- are expected to continue to grow by mid- to high single-digit percentages year-on-year, and our adjusted operating profit margin will also continue to evolve, improving towards the 2028 ambition of greater than 25% that we set at our Investor Day last year in the month of May.

Edouard will now take us through the performance of D'Ieteren Automotive.

Yes, indeed. Thanks, Francis. D'Ieteren Automotive, as a reminder, had a record year back in 2024, and we are proud of what the team achieved in 2025 despite a much more challenging market environment. Sales declined by 5.5% year-on-year, yet the business managed to maintain a very strong operating margin of 4.7%, which is a remarkable achievement given the context. In addition, D'Ieteren Automotive still generated close to EUR 150 million of free cash flow over the year. This solid cash generation allowed D'Ieteren Auto to close 2025 below 1x net leverage, even after distributing an exceptional dividend of EUR 400 million.

Now let me briefly frame what happened in the market in Belgium as conditions were quite different from those we experienced just a year earlier. Gross registrations fell by 7.5% to 415,000 new vehicles. In that environment, D'Ieteren Automotive gave up a bit of market share, but importantly remained the leader in the electric segment with up to 28.8% market share. Besides electrification continued to progress with fully electric vehicles now making up for 35% of new registrations, while the buyer mix continued to normalize with B2C customers accounting now for 42% of registrations.

Turning to how this translated into results. D'Ieteren Automotive deliveries decreased by 13% compared to 2024, 15.5% for passenger vehicle, partially compensated by an increase of 5.7% for light commercial vehicles. However, thanks to a very supportive mix across brands, notably driven by electrification, the decline in reported sales was limited to only 5.5%. This was further supported by sales growth in scale-up activities.

Margin performance at D'Ieteren Auto also benefited from electrification. BEV models contributed very positively to the margin with strong unit margin, particularly at Audi and Porsche, of course, the most premium brands in our portfolio and mainly in Q4 of last year. Other activities also supported the overall margin mix, notably with the scale-up pole contributing positively for the first time in 2025. Altogether, this resulted in a very strong adjusted operating margin of 4.7% coming from a record level of 5.1% in 2024.

The contribution from the equity accounted entities, especially essentially VDFin improved significantly versus 2024, which had been negatively impacted by the decline in residual values and is now back in profitability. Altogether, these elements led to an adjusted PBT group share of EUR 215 million, down by less than 10% year-on-year. Free cash flow also remained robust, as we said, close to EUR 150 million despite the slightly lower operational performance. Net debt increased to EUR 260 million at year-end as a result of the exceptional dividend paid out of available liquidity with the leverage ratio remaining very much low and under control at 0.8x net debt to EBITDA.

Now on the outlook for 2026, we remain relatively cautious in this tough market environment. The market is expected to stay challenging and increasingly competitive with further mix normalization likely weighing on the top line. Combined with expected pressure on distribution margins, we anticipate a material decline in the adjusted operating margin after 2 consecutive years at exceptional levels.

And now Francis will elaborate on PHE.

PHE, we again demonstrated the strength of the business model of -- in 2025, and the company delivered 6.3% year-on-year sales growth, of which 3.9% organic and a solid adjusted operating profit margin of 9.1%. If you think about it, its contribution to the group's adjusted PBT group share is now almost 20%, EUR 250 million and the company continued to generate free cash flow while maintaining the leverage at a reasonable level, 3x net debt to adjusted EBITDA.

If you look at the breakdown of the sales, and we knew there were fewer trading days. There was lower price inflation. There was some down trading in specific product categories. But nevertheless, both France and the international activities delivered organic growth of 2% and 7%, respectively. And this performance reflects a continued gain in market shares across its different markets and also an outstanding and consistent service level, effective product category management aligned with what customers are asking PHE to deliver.

The M&A did contribute nicely as well in 2025, an additional 2.4% contributing to total sales, notably through its entry into the Irish market in the beginning of 2025, that was, and the continued consolidation in Spain, where we added one region, AD Freco in particular.

Now the operating profit margin adjusted remained strong, 9.1%. It's marginally lower than the one of 2024. But what is important to note is that the profitability in France continued to improve, disciplined execution, disciplined cost management, and that despite some inflationary pressure that continue to exist throughout the year. At the same time, the company also made strategic investments in its international operations, which typically are also a bit of margin dilutive our acquisitions abroad. And so that explains the slight decline in the margin, but a very nice 9.1% nevertheless.

In terms of the adjusted PBT group share, we are now at EUR 182 million at PHE. That's up 9.7% versus '24. This reflects, on the one hand, some lower financial charges because we did reprice again the term loan in September last year, which basically highlights the strong credit profile PHE has been able to build over the years and its attractiveness to institutional debt lenders overall.

Free cash flow-wise, you may remember that in 2024, we benefited from a positive working capital inflow that was related to the release of a nonrecourse factoring reserve. This was now normalized in '25. We didn't have it anymore. So it results in a working capital outflow. So when excluding that effect, the free cash flow did improve and of course, mainly thanks to the strong operational results of the company. The net debt remains broadly stable, and our leverage is 3x, as I already mentioned before.

Now looking at 2026, what do we expect? Well, we expect another mid-single-digit organic sales growth rate at PHE. We also expect M&A to continue to contribute to overall growth in exclusive negotiations. We mentioned it before to acquire over 50% stake in 2 Spanish distributors in relatively large regions. They together generated about EUR 340 million in sales last year. So if that closes, this would help us representing a significant step forward in what is an important Spanish market for us overall at PHE. We do expect also the adjusted operating result margin to be broadly stable in 2026. We will have continued operating leverage. We'll continue to be disciplined on cost control. There may be some cost inflation here and there, maybe some dilution from acquisitions as we usually have. But overall, we expect a broadly stable margin there.

And with that, I hand it back to Edouard to talk a bit about TVH.

At guidance FX, TVH grew by 1.1% in sales, primarily driven by M&A. The trends seen in the first half of the year persisted in the second half and adjusted operating profit margin as anticipated, declined to 13.4%. Realized and unrealized negative FX impact in the net financial result led to a decline of 26% in the adjusted PBT group share. Free cash flow remained strong also as anticipated and leverage remained broadly stable at 3.1x.

Starting with the top line, as mentioned, at budget effects, sales grew by 1.1% year-on-year. If we look at reported figures, sales slightly decreased, which is basically explained by a flat organic growth rate. 1.2% increase, thanks to acquisitions, mainly Sincanli in Turkey and then the negative FX translation headwind of 1.6% at TVH. The environment remained one of continued typically soft activity levels, mainly in material handling and agriculture despite some improvement in the volume trends at the end of 2025.

Given our more recent positioning in some of the construction segments, notably mobile elevating platforms and smaller moving equipment, TVH continued to grow nicely in these construction segments. That sales development was also marked by some adverse mix effects. Segment mix on one hand but also client mix on the other hand, with larger clients performing better volume. This, together with increased freight costs and noncash costs understand depreciation from previous growth investments led to a negative margin development as we anticipated despite a strong focus on other costs, also because if you remember, 2024 had been positively impacted by an insurance payment of EUR 6.6 million related to the cyberattack back in 2023.

TVH managed to absorb the new U.S. trade tariffs by price increases. So the impact there was minimal. However, it remained gross margin dilutive. Adjusted net finance costs evolved negatively, largely explained by some realized and unrealized FX losses and adjusted PBT group share declined by 26% versus 2024 to EUR 72 million. The lower operating result impacted free cash flow, which remained at a robust level of EUR 72 million, EUR 29 million our share. Net debt and leverage increased slightly, and TVH distributed EUR 112 million of dividend to its shareholders in 2025, which compared to EUR 73 million in 2024.

Looking at 2026, we remain relatively cautious about the trends likely to unfold for TVH. And as you know, a CEO hiring is still ongoing. We saw some improvement on the volume side at the end of 2025 and expect for 2026 at year-end 2025 exchange rates, sales to grow organically by a low to mid percentage year-on-year. While we continue to invest in future growth, we will see some ramp-up costs related to the new distribution centers in the U.S. and in Poland related to people, inventory shipments and depreciations from previous year's growth capital expenditures, which will altogether weigh on the adjusted operating result, which we expect to decline in 2026.

And now to Moleskine.

Thank you, Edouard. In February of 2026 of this year, Christophe Archaimbault, CEO stepped down from his position, and he's replaced by 2 co-CEOs, Thomas Boucar, who is Investment Director at our group since a number of years already. He's bringing 20 years of international experience in investment strategy, operational leadership. And then Laure Browne, 30-plus years of experience leading and transforming global consumer brands, retail brands as well, most recently as the successful CEO of VEJA. And we are convinced that Thomas and Laure's complementary areas of expertise will help guide Moleskine together with the rest of the team through its next phase of development. So that's a bit of an ongoing statement, I would say, on Moleskine.

And when I talk about its financial highlights of 2025, the wholesale channel, which is, of course, quite significant at Moleskine continued to weigh on the results. We had a 2.2% organic decline overall. The adjusted operating profit was at EUR 8 million. And there were also EUR 16 million financial charges, mostly related to the shareholder loan we have with them. And this led to an adjusted PBT group share of minus EUR 8 million overall.

The trading cash flow, however, was nicely positive at EUR 15 million. What is also important to note that we do our usual impairment tests every year. And so at Moleskine, the impairment test performed at the end of the period on the Moleskine CGU, the group did account for a net of tax impairment charge of EUR 77.4 million, reporting that in adjusting item.

So as I said, organic decline was about minus 2.2% year-on-year. It's actually quite a differentiated picture if you look at the channel per channel. All the channels did post a positive organic growth, except wholesale. Now not surprisingly, that's the biggest channel, and that one continued to suffer, particularly in the U.S., where some of the larger customers did continue to show a cautious inventory management that didn't really help.

Now there was also foreign exchange translation like in all activities was negative. As the case of Moleskine, it was minus 1.5%. And this decline in sales as well as this channel mix, which was a bit different than before, did lead to a negative operating leverage overall and therefore, also adjusted EBIT margin that was lower and is now standing at 6.5%.

I did cover some of the other figures in the highlights but there's also a EUR 16 million financial charge, including leases, EUR 14 million of which related to the shareholder loan and then the resulting PBT group share of minus EUR 8 million. Free cash flow wise, it's a good situation, even a better situation versus '24. So despite the lower operating results, there was less cash interest paid, lower taxes paid and a higher working capital inflow. The net debt now stands at EUR 270 million, of which the majority, EUR 255 million is the shareholder loan.

Now what do we expect for 2026 with the new team? Well, we do expect to reconnect with sales growth, low to mid-single-digit growth is what we anticipate year-on-year, and we also anticipate a growth in the operating results, thanks to some operating leverage we will see.

Let me finish by the Corporate segments briefly. Overall, on an operating level for the corporate segment, we did have an improved rental income. And you remember, D'Ieteren Immo is also part of the Corporate segment. And so we had a more than 9% increase year-on-year on rental income. But of course, the majority of the results at the Corporate segments are impacted by the financial charges we now have in '24, we still have financial income. In '25, we have financial charges linked to the debt raised at the end of 2024, which is, of course, quite different from the year before. We did, and I'm sure you remember that, reimbursed EUR 500 million, the bridge loan already by the summer last year. And so the net debt position, if we exclude the shareholder loan of Moleskine is now standing at about EUR 540 million overall.

So let me conclude the presentation part of this results call by reiterating the main elements of '25. One, the results are actually highlighting clearly the very solid underlying fundamentals of each and every one of our businesses. That proved once again being very [Audio Gap] future stamina, and we're very optimistic about the future prospects of the group overall.

Let me now pause here and open the floor to any questions that you may have. So operator, can you please take over?

[Operator Instructions] First question will be from David Vagman at ING.

So the first 2, let's say, on Belron. So is it correct that you assume organic growth of high single digit to low double digit for 2026, given that you probably include FX headwinds of, say, likely around in the guidance. And if we zoom on the organic growth for 2026, is it related to a volume recovery? Does it include the volume recovery in the U.S. So if we could zoom on the normalization of insurance claim avoidance so in that area and how much operating leverage is anticipated from this volume recovery?

Yes. And if you could give us your analysis of the normalization, let's say, of insurance claim avoidance, if you've seen it trough in Q4? Or is this expected in 2026?

And then my third question -- yes, sorry, on the group guidance. So I think there is something like an 8% gap versus consensus, it seems you're especially more cautious on TVH and Auto. So if we could zoom on these 2.

Okay. On Belron, if I start first by the top line. so our guidance for '26 is mid- to high single-digit sales growth is what we're guiding towards?

Indeed. And you have, of course, to use the year-end '25 -- at year-end '25 FX, right, which we communicate in -- the restatement is communicated in appendix, right?

Yes, exactly. You will see on our appendix, we have a column that shows exactly when you use now the December 31, '25 foreign exchange rate, what's the top and bottom line basically. So our guidance is always taking a stable foreign exchange, and we take the most recent one, which is one of December 2025. And so when we talk mid- to high single digits, it's related to that, that you have to compare it to.

And I think then you mentioned about the volumes and the claim avoidance in the U.S. as a sub element of the top line development in Belron. While you may recall that we had, in the whole first half of last year, seen that claim avoidance really being present. But then over the summer, we saw some encouraging signs that it might be getting a little bit better and that we actually in H2, we ended up the year saying that claims were again really there. And so we saw claims volume improving from our point of view, if you know what I mean.

And so basically, what it means is that when we guide for 2026, we are operating in an environment which is closer to normal again on this whole claims avoidance issue. We've seen the insurance players, yes, they've come back a little bit more to their profitability again last year. They're present again in some of the states that they may have retreated from. They're doing their usual competitive behavior, if you like, and that typically drives again people to sign up first of all, the insurance contracts and second of all, to also use their claims when they have an issue to do that. So we are in a more normal environment again from a claims avoidance point of view.

And then you had a third question, which was...

So it was on the group guidance. So where do you think you basically consensus is too high. So is it mostly TVH and Auto? And what are we missing? So especially, I think on Auto you mentioned the distributor margin...

Yes, I don't know exactly how the consensus -- the components of the consensus are but I can imagine that D'Ieteren Auto is probably something where you have noticed that in our guidance, we had '24 and '25 that were quite exceptional years and we are guiding and planning on a more -- I would call a normal year but a more difficult year where we do anticipate, yes, continued top line pressure and a material decline in the margin. And the main explanation of that may not necessarily have been reflected in what people were thinking about for 2023.

Yes. Just reinforcing that message indeed, the decline in top line and lower margin definitely...

And 2025 may have landed a bit higher than what people also had expected.

And you discussed -- you talked about the distributor margin being under pressure. Is that some specific pressure from Volkswagen?

No, I mean, as you know, this is always the case. Each time a new model is being launched, they use it and on occasion, I would say, some additional pressure on the bottom part of the value chain, which are the importers, the distributors, the dealers, et cetera. And so that's been the case since several years. And of course, that's also the case now. What you do have to note in automotive is that we are now at the beginning of, let's say, the smaller electric vehicles that will increasingly start to be offered. And so that will also have an impact on the mix overall.

And so when you say distribution margin, yes, the overall sales price of some of those smaller cars are a bit lower, while you do have a euro effect on that as well, even if the margin is more or less the same in terms of percentage.

Okay. And maybe a very quick follow-up on TVH. Then what about the search for a new CEO? I mean, how close are we to the hiring of the CEO?

The process is going very well. But as you know, these type of things always take time. And so it's -- I mean, it's a very attractive business. So we don't have all the difficulty to find strong candidates. But of course, this process is taking the time.

Next question will be from Michiel Declercq at KBCS.

I have 2 on Belron, please, and maybe a third one on TVH. So the second half margins were very strong at Belron, 24.4%, if my maths are correct. And I know you give a bit a wide range for the guidance and improvement. If I look into next year, you mentioned that the claim avoidance has normalized, so that should be a tailwind in the first half. You also don't have the transformation costs next year. I think there will also be some price increases as well. I'm just wondering why -- is there any reason that margins in 2026 should materially differ from the second half? Or if you can just highlight a bit the things that we should take into account?

And then the second question on Belron is on the North America, the organic sales growth. If I do the math correctly, that's almost 11% in the second half. Can you give some color here on the volumes? I assume they must be positive as claim avoidance has come down, but how positive are they? And how do they compare to the other regions?

And then maybe as a third question on TVH. Yes, we have seen you lowering the guidance there on the organic growth in the first half. Now you come in a bit short in the second half despite there being an additional trading day, if I'm not mistaken. You expect a recovery in 2026. Can you elaborate a bit on this on why you think this will be the case? Those would be my questions.

Okay. Well, I'll maybe start with the Belron question. You cannot just extrapolate the H2 margin of '25 and say this is the basis for the margin of 2026. It's not as simple as that. There's always a number of factors that determine what you ultimately end up having in a particular trimester or semester for that matter. This can be sector trends like claim a volumes that you talked about, it can be miles driven. Q1 is a bit more weather-driven than the other quarters in the year. There may be some cost phasing that plays a role, some operating leverage that plays differently depending on the year, some trading days effects you may have here and there. So you really cannot just extrapolate the H2 margin to H1 every year is somehow a bit different to have in there.

Yes, to the degree that claims avoidance is a bit more normalized. You should see some effect, as you say, in H1 versus H1 of last year. On transformation costs, yes, the transformation program is over but that does not mean that there are no more programs or, let's say, IT investments going on that may link to system integration or other migration costs that may somehow have an impact on the way transformation is being accounted for. So there's always -- but it's more business as usual now really. Country per country, there are certain things that may be happening. But you're right that the actual transformation program as such is somehow over now.

One more element on the volume side.

That was the other question. Yes.

In the U.S. is the fact that, yes, there was a significant improvement in the claim avoidance side. But as well, let's not forget continued progress on cash and commercial segments, right? As we had stated earlier, especially in the cash segment, they continue to -- they have rebuilt the team earlier, and they continue to deliver on that segment helped, of course, with the more favorable environment in H2.

And then you had a question on TVH and its recovery. So we guide to a continuing declining margin at TVH. So yes, a recovery from the top line, low to mid-single-digit top line growth because we saw also a more favorable environment around the end of the year, mainly in material handling and agriculture, although construction remained -- again, let's say, of TVH remains strong. And in that environment, we remain cautious let's say on the margin at TVH.

Next question will be from Alexander Craeymeersch at Kepler Cheuvreux.

I would have 3. So the first one would be on TVH. I'm just wondering how you see the path back to the 16% EBIT margin target by 2028, considering that the mix and the pricing pressure that you mentioned seems to have altered that business dramatically.

Second question would be on PHE. I mean, I see acquisitions being done in Southern Europe but you probably noticed that some of the -- basically competitors in somewhat Western Europe are also announcing that they are revising their strategic options. So I'm wondering how you look at or whether you are revising your strategic options with PHE on the back of their announcement.

And then the third question, and I hope you allow me to do this, is that basically the elephant in the room, you had 2 articles, one in Financial Times and one on Bloomberg, where you're planning -- where it's stated that you're planning an IPO for Belron. I mean in the past, you've publicly stated that it's likely that one of the PE players in Belron will look for a liquidity event considering their investment horizon. But yes, I'm considering that one of the PE investors is past that horizon. I'm just wondering what, in your view, would be an ideal environment for such a liquidity event.

All right. Well, on TVH, of course, we stand very much by the ambitions that we mentioned at Investor Day for 2028. So they still very much hold. We have de facto 3 years to go. And as you've seen in the last 5 years, lots of things can happen for a global business, both positive and negative. And so we see many positive contributors that allow us to get to those margins that we have highlighted for 2028. So we don't change that at all. At PHE, you wanted to know whether we change our options with some of our competitors revising it. Well, our strategy is very clear at PHE. We're very happy to be in the leadership positions in the markets that we're in.

And when we can, we add something from time to time like we've done in Ireland, for instance, last year. And so for us, being part of the consolidation that may or may not happen at the European level is very central to our strategy. So we very much believe in the European market of spare parts that PHE is doing, and we very much believe in our approach of growing our market share, doing organic performance and complementing it here and there with some acquisitions as we do, for instance, in Spain. So for us, there is really no change in strategy. On the contrary, it just strengthens our belief that we're on the right track with PHE in Europe.

Yes. And then on the last question, yes, the Financial Times in the Bloomberg, I mean, I cannot comment on rumors that they are right about. What I can talk about is that, of course, as you know, we are at the table at Belron with other co-shareholders that at some point in time, will want to exit. That's nothing new. When that time will come, I cannot say because it's them more triggering that moment than we are. We are a majority shareholder at Belron, and we're very happy to be in that position. At some point in time, they will want to exit.

What is an ideal environment for such a liquidity event, I can think of several ones. And as you know, as our leverage at Belron will continue to go down, the number of options available or the number of environments that could be a good and attractive liquidity event for our co-shareholders will only increase. And so I think it's a dynamic statement to make of what would be an ideal environment for such a liquidity event but we'll tackle that when that moment comes. And so I know I'm maybe repeating myself a little bit, but that's not because there are rumors in the press that there's anything new to say from my point of view, from our point of view.

Okay. On TVH, could you just maybe -- coming back to TVH, I mean, could you just maybe clarify that path because, I mean, obviously, we start from a very tough environment right now. The way you see to that 16% EBIT margin, is that back into a -- from a better mix? Or is that from volumes? Or how do you see that?

Well, you need some volume. You can actually leverage -- have operating leverage from the fixed cost base that we have with the logistics footprint at TVH. We need a bit of price support, which we didn't have at all most recently but I'm very confident that also price support is there from time to time and will come back. And if you have those both elements and you combine it with good cost containment, then there's absolutely no reason why you cannot rapidly work on the margins again. And so for you -- but you need a bit of all 3. That's what we've seen in some of the very strong years that we've had, and we haven't been around so long at TVH. But in some of those years, we had a combination of those 3. And you have the combination of those 3, then there's no reason to be -- to exceed even the margins that we mentioned in our Investor Day last year.

Okay. Congrats on the good results.

Next question will be from James Rowland Clark at Barclays.

Two short ones, I hope. Just in Belron, you mentioned there that Q1 is heavily impacted by the weather usually. I just wondered if you could help us with year-to-date trading, whether you have seen any impacts from the weather? And then also on the back of the very, very strong second half performance in terms of Belron organic growth. I don't know if you provided it earlier but could you just give us an idea of volumes across North America and its other regions? And can we assume that sort of running into your year-to-date figures as well?

And then my second question is just on Belron margins. Again, you had a strong second half. You hit your 23% margin. There's a lot of talk about how you could get there after the first half results. Can you help us unpack how you did that in the end? I assume there's plenty of operating leverage but I'm just interested in the impact of pricing, marketing and so on.

And then also what are the main levers for margin growth in 2026 beyond operating leverage?

Okay. Starting with the year-to-date trading, it's very early days, and we've typically given trading update at the end of Q1 in the month of May on top line, including for Belron. But you may have noticed, of course, that there has been some serious winter in the U.S. in the beginning of this year, even a little bit at the end of last year, by the way, which helped in December but also in the beginning of this year, both in January, February and even early March. And so [Technical Difficulty]

Please standby.

Can you still hear me?

Yes, please go ahead.

I can go ahead. Thank you very much. All right. So that was a part of the year-to-date trading, which is a bit early to tell really what that impact of that extreme winter will be. You should just note that in the midst of a real snowstorm, people stay at home and maybe blocks for a couple of days, so to say. And then it's a little more in the aftermath of that snowstorm and people get out again that you do see the effect on the windshields that are there. And then that, of course, our service centers gets lots of demand and in there. So you may have some timing differences between when the actual snowstorm happens and then the impact it has on the number of jobs that show up in our service centers.

But of course, we're trying to be as agile and flexible as possible in matching capacity, supply and demand of technicians, et cetera, together. That's point number one. And then point number two, on the -- you asked a bit on the volumes, I think, for the U.S. I mean, volumes overall, we ended the year with, I think, 0.5% job growth overall worldwide. That was, of course, higher than in H1, where we were still negative in volume. So you can assume that in H2, we did have a somewhat higher overall volume growth, probably around 1.5% or so. And so the U.S. did contribute over proportionally to that. So the percentage in the U.S. has been higher than this 1.5%. So it did contribute to that. So I think you had the question there on volume U.S.

And then you asked a little bit about -- yes, the overall margin effect of H2 in the U.S., it was really a combination of factors. We did have a good cost elements and containments. We had an additional trading day. We had the transformation costs were a bit more in H1 versus H2. We had supportive pricing. We had talked about [ that ] before but there was overall supportive pricing. And there was just operating leverage given that we did have stronger volumes in H2. I talked about the claim avoidance support or rather lack of avoidance, I would say, in H2. And then the good matching of supply and demand, which is always important because it's one thing to have the volumes and you have to have the capacity at the right place.

So I think all the different pieces of the puzzle fell nicely together in H2 and helped explain the good operating leverage we have.

Next question will be from Jeremy Kincaid at Van Lanschot Kempen.

I also have 2 on Belron to start. Firstly, back to the IPO topic. One of the newspaper articles suggested that you had engaged an investment bank yourself and we're considering strategic options. I was just wondering if that means you're considering selling a portion of your Belron stake or if that's still a sacred cow to you?

And then my second question on Belron is just back to the second half margin. Looking ahead into next year, you've said the weather should be favorable. You should have a full year contribution from the State Farm contract. Also, the second half is usually softer, which suggests that the full year could be better into '26. So I'm just looking at a lot of things that I think suggests that the margin should improve. But clearly, you called out some investment in IT and trading days. But I suppose I'm still just struggling to understand the guidance or the commentary around the margin and why there should be potentially a step down from the second half. It seems like a large investment in IT. And if that is the case, can we get an idea of when that investment might come to fruition?

And then finally, just on auto, the guidance is also a little bit soft there. You mentioned that there's going to be a material decline in the margin. My understanding from those smaller vehicles was that the margin would actually be okay, but clearly, they have a lower dollar value. So it was just going to be an impact to the dollar margin. But it seems like that's not the case. I just would hope to -- if you could dig into that in a little bit more detail, that would be great.

Sure. Well, on the IPO, first of all, so we are a happy majority shareholder of Belron and have been for quite a while and will continue to be so. So indeed, it's us triggering any liquidity event reflections and so on. So we are very happy to be a majority shareholder. That's always been our base hypothesis. But as you know, we have the flexibility when the time will come when the event is being looked upon. We will have the flexibility to either keep our stake, increase our stake, decrease our stake, et cetera. But again, the base hypothesis is the one that I've been talking about in the past, is that we will remain the majority shareholder. And therefore, that it's not us triggering access to liquidity, but more our core shareholders. That's on the first point.

The second point is on the guidance for Belron. I think we were quite clear. What we said is we expect a continued adjusted operating margin improvement towards the 2028 ambition. You know the 2028 ambition. You know where we've landed in 2025. So when you say we expect a continued improvement, that's exactly what we do. We expect a continued improvement. And so I think that's quite clear. There's no particular big IT investments or what have you in the making and so on. I was more referring that in the past, we had this transformation program that's behind us now.

But there will, of course, still be country per country. I mean, there's lots of stuff going on with AI or other type of things. So it's very normal that anybody -- everybody is continuing to invest, but it's not anymore as it was in the years behind us. So in that sense, you should not look at a major IT investment that suddenly pops up.

We can add that there is not an exit rate, right, in terms of margin. So important to say, okay, '25 was closed very successfully with a 23% margin and now let's say, starts a new year with the guidance repeated by Francis.

Exactly. And then your question on Auto. Yes, it's true that smaller cars have a smaller dollar value or euro value in our case. And sometimes they have also a little bit of a lower margin percentage. It's a bit of a combination of that, that gives a less margin. And so some of our costs are, of course, fixed. Sometimes you still have to do the same advertising or what have you for a smaller model versus for a larger model. You may be in competition with more brands or different brands that may require you to invest a little bit more in the market to get to the expected market share, et cetera. So it's a combination all of these factors that we have intensified competition overall. We are in a model mix, which is more average overall.

And so there is, of course, pressure also from the OEM. You may have read it in the press. So even today, I think the Volkswagen Group is continuing to work on its costs, and it's good at the factory level but of course, also passing along part of that pressure to the downstream of the value chain of, which we are part. And so not surprisingly, everybody is -- yes, is working hard to do good cost containment. But nevertheless, we think we had a better result than planned in 2025, and it will be a bit more tougher again in 2026. So every year is a new year, and that's why we've remained more cautious on the outlook for Auto for 2026.

[Operator Instructions] And at this time, gentlemen, it appears we have no other questions registered. Please proceed.

Well, we are at 7:30 p.m., which I think more or less when we anticipated the finish of this call. So in that sense, I will thank you all very much for your presence in our '25 results and look very much forward to meeting you in the course of either of the coming days or the coming weeks or the coming months. So thank you very much, and have a great evening. Bye-bye.

Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. And at this time, we ask that you please disconnect your lines.

Ladies and gentlemen, welcome to the D'Ieteren Group 2025 Half Year Results Conference Call. [Operator Instructions] Please note this call is being recorded.

Today, I am pleased to present Francis Deprez, CEO; Edouard Janssen, CFO; and Nicolas Saillez, CIO. Gentlemen, please begin.

Well, thank you. Good evening or good morning to all of you, depending on where you are in the world on this H1 results publication of the D'Ieteren Group. We have 3 main messages for you today. First of all, is that in our normal KPI, the adjusted profit before tax group share, we landed at EUR 452.4 million, which is exactly in line with our expectations. It, of course, takes into account the fact that there were less trading days and that we have additional financial charges given the debt that we raised at the end of 2024.

The second message is that we have entirely repaid or reimbursed our EUR 500 million bridge loan now faster than planned. It was a 2-year loan. But in the first 6 months, we basically paid it back fully. And the third message is that we confirm our guidance and our outlook for the entire year 2025, as we had launched it in the month of March earlier this year.

Now on the key highlights of the results, the EUR 452 million is, of course, a lower number than the EUR 580 something that we had in H1 of last year. The difference of EUR 133 million can be explained majority-wise by the financial charges that we have both at the corporate level and at the Belron level. That's a small EUR 100 million, I would say, if you take into account and also at the group level, we do not have the financial income on the cash that we used to have in '24 anymore, of course and that is now turned into a financial charge. So that explains about a small EUR 100 million of the EUR 133 million.

And the remainder is mainly explained by D'Ieteren Automotive, which is experiencing a normal year rather than the exceptional year that we all knew about in 2024, '25 is a more normal year for auto.

In cash flow, the trading cash flow is, of course, the more relevant one, I would say, this time around, because in our free cash flow, we have the financial charges next to the taxes and the acquisitions and so on that we did. And in trading cash flow, we also reached about EUR 482 million the exact number to be precise on that one.

We qualify our results as resilient, the results of H1 2025. I mean, take the profit before tax group share numbers, they grew 7% at both Belron and PHE at Belron, if I take -- if I kind of exclude the financial charges. We are above EUR 100 million in PBT group share at East in Automotive, close to EUR 40 million at TVH. So these are the kind of key elements of the resilience, but that will come back when I give a bit more details in a minute.

If I turn to Page 4, where we give a bit of a breakdown on the top line numbers, you can see that we have a slight decline in sales group share, 2.9%. It's 2.6% if you correct for the foreign exchanges. Of course, auto is the bigger contributor to the decline because we have less cars. We had a smaller market. And so it's 11.2% less top line at automotive.

But if you take that out, we have seen growth. And it's about 5% growth at PHE. It's about 4% growth at Belron. It's relatively flat at TVH, 0.2%. The foreign exchange didn't help in that, either there and a slight decline of minus 3.6% at Moleskine. The translation of that in operating results on Page 5 is minus 4.9%, corrected for foreign exchange, 4.6%. Again, of course, auto, not surprisingly, is lower, but it is really in line with what we had expected for the year, but it's, of course, a lower number at EUR 150 million instead of the EUR 158 million of H1 of last year.

But if I take that one out, we have a growth at Belron of plus 4.9%. We were quite stable at PHE, plus 0.2% in adjusted operating results. The kind of lack of -- a lot of growth at TVH did result in a lower margin at TVH. And so we're minus 15% in terms of operating result there. And also at Moleskine, the slight decline immediately translates in a bit less bottom line as well.

Our breakdown of the PBT group share, which I gave you some highlights already, you can see on Page 6 in a bit more detail. Of course, at Belron, the number is lower given that we have clearly more financial charges, EUR 62 million to be precise. Nevertheless, they only declined EUR 42 million, I would say, in PBT group share. So it's actually a growth if you take that out.

Auto, as I said before, from a lower base, of course, also some lower absolute profitability. But as you will see, we're quite happy with the margin there, 4.5% margin at auto, up at PHE, so a positive number there. And then at Moleskine at TVH, Moleskine is really not very significant. But at TVH, we've also seen a decline in the PBT group number. And at the group level, not surprisingly, no more financial income now, instead some financial charges. We have now a negative number rather than a positive number last year.

The free cash flow number, I give you a bit more detail here on Page 7 in terms of the free cash flow is what you see here. And so the biggest difference there, of course, is the positive free cash flow that we had at the very high level at D'Ieteren Auto at the end of June of last year, while this year, the picture at the end of June is slightly negative given that we are now in a different phase of the inventory rundown and buildup than we were a year ago.

Also at PHE, we have a picture which shows a negative cash flow. It's actually the fact that they did more M&A on the one hand and that also they basically accounted differently for some of the factoring that they were doing at PHE. So and a working capital change over there. By the way, we did do some inventory buildups at both Belron and Moleskine to anticipate tariffs, and that also explains a little bit why inventories were a little bit higher at those 2 companies.

In terms of financial position, in terms of debt, well, given that we've now reimbursed our bridge loan, you can see that we have now a net financial debt situation, which moved from EUR 652 million to EUR 295 million. And so in that sense, a better number. Of course, includes the fact that we received dividends from some of our activities. These are automotive, Belron and TVH to be precise.

We also had some cash flow consumption, some treasury shares acquisition, and we paid out our own dividend, of course, to our shareholders in June 2025 for about EUR 85 million. In terms of latest developments, what are notable things on Page 9, at Belron, we did do a repricing of the dollar portion of the debt, 25 bps. I think we mentioned that before the summer.

We do see encouraging volume trends in the U.S. We'll come back to that in a minute on Belron, there was not that much volume growth in H1, but we see encouraging trends more recently there. There was some acquisition at Belron as well in Ireland, in particular, and a couple of small ones in the U.S. for about EUR 28 million. And Belron also did pay already a dividend in the first half of this year, about EUR 211 million to all shareholders, of which a good half came to us. D'Ieteren Automotive, what are the latest developments there?

We have a normalized order book, about 27,000 vehicles and also D'Ieteren Auto, and that's actually what allowed us to reimburse part of the bridge loan is that we received a dividend of EUR 400 million for them given the very strong cash flow they had at the end of December.

That was, of course, something we could do. PHE continued its acquisition. You've read that. We've talked about that when it happened, in particular in Ireland top part. So we also bought something in an additional region in Spain in the area of Tarragona, AD Freco in Spain. In TVH, we have seen softer markets, and so we'll go in a bit more detail in the numbers in a minute on H1, but we're actually changing slightly our guidance for the entire year for TVH. It won't change the overall guidance for the group because we'll compensate in other activities. But in TVH itself, we anticipate a lower single-digit top line growth and therefore, also a bit more margin decline that we had mentioned in March.

As you know, and that was the news of last week, the collaboration with Dominiek Valcke upon mutual agreement between both parties was decided to end the collaboration, and we are in the beginning of a process of looking for a new CEO at TVH. And also TVH did pay its dividends a bit more than EUR 100 million to all its shareholders.

And then last but not least, at Moleskine, we are actually quite happy to see strong consumer demand. The sell-out that we see at our main wholesale customers is actually quite positive. It's double-digit growth that we see there. However, they remain to be very cautious in their inventory policies. And as a result, the sell-in is not there. We'll get to those numbers in a minute as well. And we are in a very cautious expansion of the retail footprint again at Moleskine.

We've opened 7 retail stores I think we have a better and clearer concept of what stores we want and how to make them work in terms of traffic conversion and average ticket per consumer. And so we've done a couple of stores, primarily Europe and a couple in Asia as well. I will actually go still through the Belron numbers before I will ask my colleagues to comment on the numbers of some of the other activities.

In terms of Belron, I will immediately go to Page 12. That gives you a bit of a breakdown of the top line. And on the table on the right, you can see that the 4.1% growth is 4% organic growth. It's 1% acquisitions and then almost a negative 1% in foreign exchange, 0.9%. It's relatively similar in the 3 regions, the strongest in the Eurozone, plus 5.3%, followed by North America, 3.4% and Rest of the World, 3.3%.

There was, of course, 2 years -- 2 less trading days, and that somehow had some impact on the top line at Belron. ADAS continues to nicely develop. We're now at 45.9%, so nicely into our 4% to 6% range increase if you compare it to a year ago. And also our VAPS, value-added products and services, increased nicely to 24.8% compared to a year ago.

On Page 13, the translation of this top line into bottom line has seen an increase in our margin from 21.2% to 21.4% -- and of course, the PBT did go down given that we have now more financial charges. And as I said before, if you take that out, it's a growth of 7.1% that is in there. The transformation costs have been quite loaded on to the H1 side. So there will not be many transformation costs anymore in H2 this year. But basically, that amounted to about 26.1%, of which EUR 4 million was classified as adjusting items. And so that also plays out its role in the definition here of the adjusted margin.

Adjusting items on Page 14, you have the usual ones in there, a combination of long-term incentives of things related to amortization linked to acquisitions, customer contracts and what have you and a couple of other things that are in there. Nothing very special to mention, I would say, on that front. In terms of free cash flow and net debt on Page 15, there was a bit of more CapEx, EUR 62 million almost, so 1.8% of sales. The acquisitions were in line with last year, close to EUR 30 million. There have been, of course, higher cash interest given the new debt, and there has been a bit lower working capital inflow given that we were anticipating tariffs there.

What we were helped with is in the overall level of the net debt, which now stands at about EUR 8.4 billion. The fact that the dollar exchange rate went lower over the first 6 months of the year and the fact that we had a positive free cash flow generation in the company in itself did help to decrease the level of the net debt overall. And we are in terms of leverage ratio, also quite nicely on track. We are now at 4.73 where we were at 5.5 in October and 5.15 at the end of December. So that's really following the trajectory that we anticipate.

For D'Ieteren Automotive, I suggest Edouard to give us a bit more...

Indeed. Thank you, Francis. Hello, everyone. Moving to D'Ieteren Auto. As an intro, as explained, right, let's remember that 2024 was a record year for D'Ieteren Auto in terms of margins, in terms of free cash flow and in terms of a very solid top line in what we had called a premiumized environment.

If we go to the second slide of auto, the Belgian new car market, we see a contraction in H1 of 10.9% to 10.2% on a net basis to 235,000 gross registrations. And the D'Ieteren Auto market share -- overall market share stayed -- showed a small decline in that environment to 23.1% from 23.8% last year. Decline was mainly the result of Audi and SEAT, while Volkswagen stood strong and even increased a bit its footprint.

On commercial vehicles, an increase of 8%. Then if we look at our P&L, definitely, we see that number of new vehicles delivered, which declined by 22% year-on-year, very much the result of these 2 elements. On one hand, the decline of the Belgian market and on the other hand, our small decrease of 75 bps. Very much as expected, right, at the time earlier in the year, let's say. So no surprise there.

However, this decline in volume is partly offset by a positive price/mix as well as sales growth in other mobility services, resulting in a sales decline of 11.2% year-on-year. In terms of adjusted operating profit, a significant decline there as well, 27%, leading to EUR 115 million, largely driven by these lower volumes, like we said, compensated by this positive price mix.

We have an adjusted EBIT margin at 4.5%, still above our historical levels and very much aligned to our expectations. Important to flag here that there are numerous electric cars in our portfolio of the Volkswagen portfolio. At Audi, for example, you have A6, Q6, Q4 at Volkswagen, you have ID.7, ID.4. All of these are still a rather premium portfolio of electric of EVs, which find very well their way in the Belgian market where B2B is particularly important.

If we move to the specific market dynamics, we see that indeed electric cars now represent 33% of the market, while hybrid is still for 20%. And important to flag, D'Ieteren Auto remains the leader in EVs with a 28.4% market share. Like we said, a solid portfolio of cars, like we said as well, rather still premiumized, which help on the price/mix aspect.

We can see as well that in 2025, the private segment of the market has increased up to 45%, which is, of course, important. We had a Brussels Motor Show in Q1, which actually was quite strong, as we said earlier, and which had certainly supported this private buyer mix. If we move to free cash flow and net debt. As expected, following a record year, trading cash flow and free cash flow both declined, mainly because of a negative change in working capital, right, EUR 180 million thereof delta, resulting mainly from a lower release from inventory levels.

If you remember last year, we were really using this very strong order book with which we had started at the beginning of the year and as well lower inflow from trade payables, mainly with our core supplier. In terms of adjusting items, EUR 43 million negative, mainly a significant LTIP, so incentive plan payment of EUR 39 million after, of course, the very strong performance of last year, the result of a very strong performance of the management teams.

And finally, the decline in operational results led to an EBITDA declining 17% year-on-year. In terms of net debt, important to flag that following the payment of this EUR 400 million dividend. The net debt to LTM EBITDA stands at a very reasonable 1.5x at the end of June, which is, as we said, very much as we had expected.

All right. I suggest we move to PHE and that Nico, you can maybe enlighten us a bit on PHE.

Sure. Hello, everyone. So PHE did deliver a very solid set of results, quite in line with our expectations, by the way. So the sales increased by 5.2%. And remember, we had a bit more than 2 trading days less this first half. So that's almost 2% growth that we didn't see because of that.

Organic growth was 3.4% and then the rest comes from acquisitions. And the acquisitions were already mentioned by Francis was Freco in Spain and Top in Ireland. They grew market share in all territories in France, Italy and Spain. So they were quite convincingly ahead of their direct competitors in each of these markets.

The adjusted operating profit margin was slightly down to 9.1%. And that's again really mainly to the fact that these 2.3 trading days were missing in the first half of 2025. There was nothing really to mention about the adjusting items. They're pretty much similar to what you already have seen in previous report results.

And the adjusted PBT, as you have seen, is up almost 7%. In terms of free cash flow and net debt, the trading cash flow was EUR 66 million, again, completely in line with our expectations. And the free cash flow was lower mainly due to the fact that they indeed had these 2 acquisitions in the first half and also because there was a cash outflow from working capital versus last year when there was a release because of the nonrecourse factoring, if you remember. The net debt increased slightly and still very reasonable. That's about it.

All right. That's PHE, and I suggest we go to TVH.

TVH, exactly. Same effect that we have seen at Belron and MPHE on trading days, of course, in H1 '25 versus H1 '24. But overall, activity levels that remained rather soft at TVH in H1. In MPA, the core market, right, low utilization rates of rental companies that we see both in Europe and the U.S., the 2 main markets as well some softness in the APA segment.

However, in construction and CPA, decent performance and solid growth and development there also from TVH, especially in SEMs smaller moving, but also overall in throughout construction. Geographically, we can see a differentiated picture in H1, better volumes in Southern Europe and North America with a bit less growth in Northern Europe, LatAm and Asia.

But overall, this leads us to sales that came in at very close to EUR 850 million, representing a year-on-year growth of only 0.2%, of which flat organic growth and 1.7% from acquisition and a negative currency impact of 1.5%. There, we see the very international activity of TVH with this negative currency impact of 1.5%.

This is, of course, the soft market environment, totally in line with the revised outlook for the year for TVH that Francis elaborated upon earlier. In terms of adjusted operating result of EUR 121 million, we have a decline of 15.1% year-on-year, very much reflecting a negative operating leverage, actually from this limited revenue growth, right? Earlier in the year, we had expected and guided for stronger growth aligned also with the historical performance of TVH.

And that combined with some inventory-related cost of goods sold increases -- and of course, last year, we had EUR 4.1 million of cyber-related insurance income. This inventory-related COGS increase comes from various causes, some FX, a tiny piece of tariffs of around 20 bps and some inventory cleanups and reduction releasing some costs thereof the inventory. All of that leading to an adjusted operating profit margin of 14.3% from 16.8%. So definitely, this negative operating leverage overall that is very perceptible.

Similar impact on the adjusted profit before tax group share that amounted to EUR 38 million. However, to be flagged, free cash flow generation remained strong at EUR 38 million with a trading cash at EUR 78 million, very much the result that in this tough environment, they have compensated by keeping CapEx under control.

If you remember, last year, there was the important acquisition of Sincanli in Turkey and this year, significantly less acquisitions. And finally, working capital under control. In terms of net debt, not much to be said. TVH paid a dividend of EUR 111 million and a debt which was pretty stable. That's it for TVH.

Yes. I think you can always read both for PHE and TVH a bit more details on the 1 or 2 pages that are after the executive summary. But I think in the interest of time and to allow for more questions, I suggest we continue with Moleskine.

So Moleskine, it was a sales decline organic of 3.2% with a negative currency impact. So in total, we had sales under pressure at 3.6%. As Francis mentioned, it was mainly due or seen in the wholesale channel. where we see actually quite positive trends in terms of sell-out. The sell-in hasn't been there in the first part of 2025. But you know what the only thing between sell-out and sell-in is the inventories and by a sense, it's filled. So at some point, we do expect to see some improvement there.

Another area of improvement actually or positive trends were direct channels. So e-commerce and retail were all positive year-on-year. Obviously, because of that slight sales drop, there was also a bit of pressure on the margin that you've seen in H1, although I have to say that H1 is probably not the largest weight in Moleskine.

As you know, the company is making most of its revenues and profit in the second part of the year and mainly in the fourth quarter. Adjusted PBT was almost flat. As you have seen, the free cash flow -- the trading cash flow was indeed negative, and that's mainly because of the conscious decision by management to prebuild inventories ahead of tariffs, and that's the reason why you see this change in the shape of the free cash flow.

That's about it on Moleskine. Maybe...

A quick word on corporate and allocated just to say that logically in 2024, we had financial profits, right, related to our average cash position throughout the year. And this has resulted into financial charges in 2025. But we have communicated clearly, I believe, on the structure of our debt and the fact that we repaid already half so that the bridge loan anticipatively -- so this slide is self-explanatory.

All right. Thank you. And so we can wrap up by saying that we are confirming or reconfirming our guidance and outlook for the entire year. And in the appendix, you see the specific details that are behind all of that, but we reconfirm that entirely. I suggest that at this point in time, we open up for questions from the audience. So I give it back to the moderator.

[Operator Instructions] And your first question comes from the line of Michiel Declercq with KBC Securities.

Two on Belron, please. First is on the margin front. I understand, of course, that there was a bit of an impact from the trading days. But I'm just wondering, you mentioned or you highlighted during the Capital Markets Day as well for this 23% target, at least 23% by the end of this year. This would imply quite a big step-up to more than 24% in the second half of the year, which seems a bit of a stretch.

Can you maybe elaborate a bit on this if this 23% target is still intact? And what might be driving this big improvement in the second half? Is it also trading day related and also probably a bit the further normalization of the claims avoidance?

And then the second question also on Belron. You mentioned that volumes are improving a bit. Now of course, it's a bit blurry with the trading day impact in the first quarter. But if I do a bit of the math and look at the first versus the second quarter, I don't really see this volume improvement yet.

And more specifically, I have the feeling that the price/mix effect was a bit more negative in the second quarter versus the first quarter. If you maybe could elaborate a bit on that. Is that related to the fact that you go more towards the cash market? And then maybe a very small third follow-up question. If I look at the organic growth for the rest of the world at Belron, it looks like there was a bit of a big step down in the second quarter. Just trying to understand what is driving this. Those would be my questions.

All right. So on the margin, yes, of course, we confirm the margin that we have given our guidance for the entire year. Why we believe this is credible? Well, there's a couple of things that make us confident that the evolution is there. We do expect some stronger volumes in H2. It's linked to advertising, to capacity, to some footprint investments that have been done. It is continued progress in channels like cash that we do in the U.S., et cetera.

As you know, we've also started in July doing some PPA service for one of the additional larger insurers in the U.S. and so on. So there's a couple of elements that give us some elements on the an expectation of stronger volumes. If I add to that, that the summer volume trends have also been supportive, that helps in that. We also have some trading days impact, of course. We're going to recuperate at least one at the end of the year. There are also actions that have been taken that we continue to take to work on cost containment, where that may be required or where that's relevant. But all the regions basically have their plans in either there or have already taken action.

And also the transformation costs, as I mentioned before, have been very much front-loaded to H1, and there's not that much to be spent anymore in H2, which may have a bit of an effect as well. So there's a couple of elements that somehow lead us all in this direction to say that we're confident that we can count on a good H2 at Belron.

You mentioned something about the price/mix effect Q2, Q1 and whether that's linked to cash. No, not really. There's no effect that if you do more cash and we do grow in the cash market in the U.S., certainly, you would see a change in the price/mix effect because of that. And you asked something about the Rest of the World, whether in the organic growth, there was something there in Q2 versus in Q1. There's also not that particular. The Rest of the World is, of course, a combination of very different markets.

Now you have U.K. on the one hand, you have Australia and New Zealand on the other hand and Scandinavia and a couple of other countries that are in there. So it's a bit of a mixed thing. There is no particular thing to note, as I said, the growth rate was about 3.3% overall in H1. And yes, in that sense, it was not very different from the growth in North America, for instance, where it was 3.4%.

Yes. It's just because I thought that in the first quarter, it was closer to 6% despite the trading days. So that's would imply roughly flat in the second quarter. I was just wondering if there was an explanation for that or -- if you can come back on this later.

[Technical Difficulty] particular thing that pops out to my mind, I have to say.

Your next question comes from the line of David Vagman with ING.

The first one is from Belron. So looking at H1, we kind of a flattish margin, only slightly up. Can you explain the lack of operating leverage? So despite having 4% organic growth in sales, stable volumes. So I guess all of the growth came from the price mix. And then you mentioned that Belron suffered from the negative impact of direct labor cost and marketing spend. Can you explain this?

And also maybe quantify the margin impact that we had from, let's say, labor cost and marketing in H1 and how much they could still impact H2 basically? So that's a bit my first question on Belron. And then secondly, on the adjusted PBT group share, can you quantify the guidance? I know you reiterate the guidance, but it's slightly vague. So the consensus is around EUR 930 million, EUR 940 million adjusted PBT group share.

Is this a figure you feel comfortable with basically? Or alternatively, if you don't want to quantify, if you could like reiterate basically the guidance or adjust, let's say, the guidance for each business? I understand TVH you're adjusting you reiterated kind of the guidance. So maybe talk a bit about the other division.

All right. So maybe on the guidance, I will leave that to Edouard in a minute, but maybe on Belron first. So well, there is a margin uplift. So it did go up with 21 basis points. There was indeed some higher labor costs that were there. There was more advertising. And the volumes were, in that sense, a bit less than anticipated. amongst others in the U.S..

So volumes were, amongst others were somewhat weaker in the U.S. And some of that investment in the addition pay that had happened at the end of '24, both in the U.S. and in some of the European countries have contributed to some of those direct labor costs things that have been there. It's not a mix of between cash commercial and insurance that in the U.S. that would have had -- that did not have much of a dilutive effect, I would say. And then as I said, the transformation costs, we had anticipated it more evenly throughout the year.

But actually, it does make a lot of sense if you think about it, to have front-loaded everything because we're at the end of our transformation program. And so that basically means the investments are almost entirely behind us now. And that explains a little bit why you had less margin uplift in H1. On the guidance overall...

The guidance overall, yes, for sure. So indeed, all in all, you understood well that there is no change in the outlook. And let's flag that it seems to have been well understood, right, by the market there. I don't think there is a need to repeat it, even though it has been well understood. And of course, if there are specific questions, we can answer it.

And maybe a follow-up then on the H1, H2 at Belron because you've reiterated several times across the presentation that it was exactly in line with what you expected. So typically, at Belron, they have a weaker margin in H2 because I think of more technician training, because of more bonuses paid, et cetera. So typically, this will be a super atypical year, let's say, for Belron, you confirm that with, let's say, a much stronger margin...

[Technical Difficulty] it's not the only time that we've had years before where the H2 was stronger than H1. So in that sense, it's one of those years.

Trading days.

The trading days play a role in -- and of course...

Okay. And then a very quick follow-up on Edouard remark that the market is well understood, that the guidance are reiterated that's valid for each participation? Or is it a group thing? I mean apart from the TVH or I mean...

Yes, yes. It's clearly the case for the group that we confirm the guidance. And given that we lower for the specific case of TVH, it will be compensated by the other activities. Some of it is below EBIT level between EBIT and PBT group share, yes, in the different other activities.

And your next question comes from the line of Alexander Craeymeersch with Kepler Cheuvreux.

Alexander from Kepler Cheuvreux. First one would be on TVH, and I'm going to try to focus a bit on TVH here. So you previously highlighted like limited sales growth at TVH due to the MPA and APA markets. But you already flagged it in May, and I think you flagged it in the beginning of the year. So there's not really a new development. So I was just wondering what has changed in recent months that led you to revise this outlook from mid-single digit to low single digits and why you didn't lower it during the Investor Day.

Second question would be on the negative operating leverage in TVH. You had flat sales, but that means then that you had lower volumes and that was offset by higher prices? Or do you -- does it mean that you have like new capacity coming up and that wasn't underutilized? And the third question would be on auto. Just today, I think it was announced that the EV Polo could be launched earlier than expected. Do you anticipate this to have a meaningful impact because this was highlighted in the Investor Day.

Okay. Well, in TVH, yes, of course, this kind of softer market, we have been seeing for a while. It was more patchy maybe a good year or 1.5 years ago, and then it became a bit more across the different regions and especially in the historically important verticals like MPA and then also APA. So a bit more across the board, I would say, in TVH. And so to the extent that it remains a bit across the board, that would be one of the reasons why we would see no immediate signs of improvement to that.

But we do see some signs of improvement here and there. However, it's not because you have some signs of improvement on the volume side here and there that you mainly have it also on the pricing side. And so the overall translation, the top line growth is, of course, price times volume. And so where we have seen some recent improvements on volume, we may not necessarily have seen it on the price. And so that's why we've opted to say, well, it's probably good to be a bit more cautious and what it may mean in the short term for this year.

Now it doesn't change, I think, the growth profile of TVH in the medium term. In May, we gave a medium-term outlook for TVH. That does not change. So very much sticking to that, sticking both to the ambition and what we think is realistic. But for this year, 2025, we thought it would be good to be a bit more cautious on that.

And if you have a bit less top line, given the initiatives that are up and running at TVH and the fact that they are, of course, set up for future growth, you do have a bit of margin dilution more than we had originally anticipated at the beginning of the year. That's basically the logic, I would say, in why we've shifted a little bit within TVH.

About auto and the EV Polo, well, like we said, right, there is already a good portfolio of EVs, right, in the different brands. We said 28% of the electric market share in the electric car market in Belgium. And adding Polo and electric Polo would definitely be potentially a car which is a bit more on the lower end in terms of price. So it could be welcome. But like we said, there is currently a very solid portfolio of cars. So we don't expect -- it's just an addition that will be welcomed, yes.

Yes, exactly. We will -- and we know that in the years to come, there will be smaller electric vehicles coming out. And also the Volkswagen Group is lining up for that and is trying to -- in terms of its timing, its pricing and et cetera, to be competitive because some other brands have already launched some of those lower-cost electric vehicles as well.

Okay. Maybe if I can just have a small follow-up on TVH or actually, yes, it's a bit more on the new CEO that's coming in or at least needs to be chosen still. I was just wondering, is this going to be a different style or what specific qualities are you looking for, for this position? And also, what does it mean to the commitments to the 2028 targets for this business?

Yes, it doesn't change the strategy and the overall ambition going forward, but the type of profile that we are looking for, given that we have that ambition for the future is, of course, somebody that kind of can contribute to help the whole organization of TVH to continue to grow because it is a growing company. There's lots of opportunities in all the verticals and all the regions.

And to do that growth in a sustainable and profitable manner, that's the strategy of TVH basically. We, of course, is somebody who kind of can fit well with the DNA of the company. It's a company of growth. It's a company of commercial drive of trying to be innovative and ahead of the market. They're very good at service, very responsive at service and remain very entrepreneurial. It's an entrepreneurial company. It's also a family-based company.

And so these are the -- we are, of course, looking for leadership. And fortunately, we have lots of great talent at TVH. But of course, the CEO, the future CEO will also be able to take a leadership role within that setup. So that's what we're looking for as TVH gets grower, and it's already very international as a company, and so it will continue to be that way.

And your next question comes from the line of Kris Kippers with Degroof Petercam.

A couple of small ones remaining. First one, looking, of course, at the leverage evolution across the group, you've now quickly solved the leverage at the holding level with nice cash upstreams. Can we anticipate dividend flows from the entities to continue now? Or is it something which will be steered due to that cash at the holding level?

And secondly, then linked to that, how comfortable do you feel with leverage levels at PHE, TVH well above or around 3x? Is that an issue? Or it's not something you're looking at for future transactions? That's the first question.

Okay. Sure. So indeed, in terms of leverage evolution, we are very satisfied of the leverage evolution, both at Belron and at the corporate level, very much in line with our plan following the shareholder reorganization last year. We do expect the dividends to continue very much so indeed, I think we had described that also at the Investor Day. So we do expect -- we have dividend policies in place with the different activities. As we've said, PHE right now is the one not contributing and that of course, because they are nicely focused on M&A, which is also very positive on the synergy side. So we do expect dividends to continue like this year.

Of course, the exceptional part of the dividend at auto that was exceptional, it was a onetime. And going forward, it will be more of a normalized dividend. Then PHE and TVH, around 3x. I think we said as well at the Investor Day, 3x in terms of leverage is very much a level we find adequate for that kind of a business because it's a good way to lower the cost of capital. And it also provides some means. There is sometimes a bit of tax optimization as well.

And it also provides some means to finance inorganic growth, right, at which PHE is definitely, they have excelled on that, right? So -- but also for TVH, last year, we had the acquisition -- so around 3x is very much what we have in mind. And we said that they could sometimes go a bit above that typically for PHE, which is active in a market where there is room for consolidation. It's something we could see, but on a relatively temporary basis.

Yes. Okay. And then just second question, going back to Belron. We've seen indeed some softness in general in the U.S. market. Volumes have turned in general on the Belron level. But could you share with us the current situation in the U.S. given the cash market still, of course, taking a steep part of the market. How is your positioning right now? And how are the summer months? Could you give us some insight on that?

Well, I can reiterate what I said before, I saw some summer volumes that are trending positively. That includes the U.S. So in that sense, that is also true for them.

And on the cash market, your market share, is that moving up or given...

We have been happy with our efforts in cash. So in cash, we've been doing quite well and had nice growth rates there, and there's no reason to believe why that should change in the coming months. So yes, cash has been an increased focus, as we said before, and we're growing in cash, but of course, from lower levels.

Yes, indeed, correct. And then just a small third question on PHE. You clearly mentioned some cost inflation stickiness staying there. Does it imply you're going to adjust your cost base somewhat? Or what are the measures taken? Are you happy with the current margin?

Well, there are always -- I mean, the management takes always a hard look at the cost basis. It is something that they've built over the years. It's a muscle that they've built over the years. So we know they're doing the work there. There is nothing specific to mention this year from that point of view.

And your next question comes from the line of Andy Grobler with BNPP Exane.

Just one remaining one around tariffs. You mentioned that you got the inventory in a couple of businesses ahead of [Technical Difficulty] how is that kind of moving through the remainder of the year? Is that impacting your business across Moleskine across so on and so forth? A little bit more detail on that would be fantastic.

Yes, I'm not entirely sure whether I understood your question correctly. I think you were asking whether the inventory buildup that had happened in anticipation of tariffs, whether that would continue like that or whether that would change very much like that. I think what we wanted to do, we have more or less done.

Of course, we have to continue to monitor what the tariff impacts will continue to be. And so far, we've had only very limited tariff impacts in H1 on our businesses, partially because we anticipated that through inventories, et cetera. We're going to have to see a little bit how that plays out. Some businesses like TVH, of course, do push pieces around the world in all directions and in all forms and shapes. And of course, the tariff situation continues to evolve.

And so we have task forces in every single business monitoring what the tariff implications might be and trying to, with as much agility as possible, anticipate things, react upon things and make things work so that our customers can continue to be served and achieve their things. Now we do not anticipate massive changes in inventory policy in the coming months because of that. But nothing particular to note, I would say, on that front.

Okay. So in terms of reiterating the guidance, the assumption is still that tariffs and trade policies not have impact on the business through the second half of the year...

Yes. I think our guidance has always been set without any massive external shocks or whatever. And so we -- of course, if there would be another Liberation Day coming up, hopefully not.

You can also say that now we have a bit more clarity, right, on the tariffs since Liberation Day unless new elements would come.

Your next question comes from the line of Jeremy Kincaid with Van Lanschot Kempen.

I have 3 questions on Belron. The first one is just on the growth within the Eurozone. Last year, you obviously did double-digit organic growth, and that's now slowed to mid-single digit. I was just hoping you could provide some color around the moving parts with that.

My second question is then on the Capital Markets Day, obviously, one of the strategic pillars for Belron was to grow and expand into new geographies. And I can see from your website that you now have a presence in South Korea, I think Thailand or Vietnam, one of those and also Brazil. Just curious as to how those markets are going and potentially, if you could compare the rollout of your network in those markets to when you expanded in other international geographies, it would be interesting to compare and contrast how that's going.

And then just finally, I'd love to push more a little bit on your comments around how the recent trading performance is showing encouraging volumes. Do you think this is the end or the turning point of the whole claims avoidance trend in the U.S.? Or do you think that's just a temporary spike in demand in the summer months?

Okay. On the Eurozone growth for Belron, of course, we're not going to necessarily do double-digit every single year. So the comparison gets, of course, a little bit tougher, especially with the milder winter that we may have had this year in the Eurozone. At the same time, we're actually quite happy with the volume growth that we have seen in several of the European countries. But with the less trading days effect, et cetera, in the end, if you look at what you see in the end result in H1, it looks less spectacular, of course, than last year. But so in several of the European markets, we've had very good growth rates. In some other ones, it was a bit of a tougher situation, but that's not abnormal, so I would say.

So all in all, in the midst between the 3 regions, they actually did have the highest top line growth of the 3 regions within Belron. And so it shows kind of the robustness overall, I would say, of the European markets within.

In new geographies, don't forget that when we do things in Thailand and so on, this is still very much under a franchisee model. So this is not something you're going to see a lot of effect of into Belron's numbers. The business in Thailand, for instance, is going very well, actually. So we the current, let's say, branches that we have are going very well.

We're adding the branches as we want to, but it is together with a local partner, and it's a franchisee model. So you will not see a lot of effect there. And it's too early to speculate whether -- when those markets would have a certain maturity where we would potentially do corporate owned or not.

So this is really, I would say, not yet moving the needle from that point of view. But it is interesting and it's good and it's important that we can start building our brand in some of those markets there as well. And then thirdly, in terms of the claim avoidance U.S., it's really too early to tell anything.

Yes, you see some forms of normalization in the insurance markets here and there. But is that now, as you say, the end of the "[indiscernible] phase", really too early to tell. But of course, we're monitoring that very closely.

And I'm showing no further questions at this time. I would like to turn it back to Francis Deprez for closing remarks.

Well, thank you very much, all of you for having dialed in into our call from wherever you were in the world. And we're looking forward to speaking to maybe to some of you as part of the road shows that we will be engaged in as of tomorrow. So thank you very much, and have a great evening, all of you.

Thank you, presenters. And this now concludes our presentation. Thank you all for attending. You may now disconnect.