Nabaltec Stock

Good day, ladies and gentlemen, and a warm welcome to the first Deutsche Boerse Scale Summit. My name is Judith, and I'm very pleased to welcome you on behalf of Deutsche Boerse. The new format brings together investors and high-growth scale issuers to enable a direct exchange on strategies, positioning and investment stories.

[Operator Instructions] And with that, I'm very pleased to welcome Johannes Heckmann, who will guide us through the presentation on Nabaltec AG. And with no further ado, I'd like to hand over to you, Mr. Heckmann.

Yes. Thanks, Judith, for your warm introductory. And I also want to welcome the audience here to our presentation. My colleague, Gunther Spitzer, our CFO, will be in the background later on for Q&A sessions. Who is Nabaltec? We are a midsized chemical company acting in specialty chemical fields.

As you can see, with 500 employees, we are acting worldwide with 3 production sites. I will come later on. We have a high export ratio and our revenue last year was around EUR 200 million with an EBIT of EUR 15.2 million. As you can see, we are a worldwide active company.

Our headquarter and main production is in Schwandorf in the heart of Europe. We are a little bit 2 hours east of Munich. And we also operate in the United States, where we have a strong footprint since 2006 with our entities, Nashtec in Texas and Naprotec in Tennessee. We also have a sales company with warehousing in Shanghai for our Asian and especially Chinese customers.

As you can see, we are very well rooted, deeply rooted in Europe with a share of 54% and as well in Germany, but with an increasing share in United States due to operations. As well, we are more opportunistic active in the Asian Pacific world.

Coming to our main 2 specialty segments or product segments, as we call them, the Functional Fillers and the Specialty Aluminas. This is how we also report. Functional Fillers segment is responsible for about EUR 145 million last year, which is 2/3 of our total revenue and the smaller Specialty Aluminas count for EUR 53 million.

EBIT margin is in the 2-digit range for the Functional Fillers and was last year roughly above 0 for the Specialty Aluminas. If what is our characteristics in our product ranges, we have in the Functional Fillers, mainly active powders for flame retardancy. As you can see, they are highly eco-friendly, smoke-reducing, and nonabrasive, and the strong character is per se the flame retardancy.

The product ranges are the characteristics how the physical and chemical properties are processed for our customers. On the oxide segment on the Specialty Aluminas, we go into a little different sector here. It's a longevity of industrial goods with wear resistency and electrical insulation as well as corrosion resistancy or temperature changes.

Our raw materials are aluminum oxide and hydroxide. Two chemical products, which are in abundance availability around the globe. This is shown here on this slide where our value chain operates. The product starts from mining bauxite, which is comparable to iron ore worldwide in a highly availability and a common process refined in the so-called alumina refineries, which are all around the globe.

And this is practically the raw material supplier for our industry where we are acting for Germany, for Schwandorf, in particular, we buy the materials in Europe. We also buy some from Brazil, depending a little bit on logistics, whereas from United States, we buy in the United States and also in Brazil.

We have typically longer-term contracts between 2 and 3 years on partly fixed pricing per year, which we roll over and renegotiate or on index pricing. So this gives us a quite good visibility. And you have to understand raw materials have a big impact on our P&L. 30% of our variable costs are depending on the raw material pricing. That's why long-term relationships with our customers are very important and crucial to our business.

Now we go into depth into the application fields. We have on the Functional Fillers side, a variety of application fields. We are not just exposed to a sector specifically. When we approach our markets, we define it through cable and wire, which is our main application field.

And behind cable and wire, there are various OEMs, of course. But the most decisive and most important in terms of development for the future are definitely data cables. And you can combine this also directly with the booming AI trend in the moment where we need a lot of data centers, which are built up in the moment in Europe as well as in the United States and elsewhere, which we are profiting from.

And of course, the second leg is energy cables for renewable energies, which has also seen and still sees a big boom. And of course, we are all in all other segments an opportunistic and lately for us, a very interesting market is the battery market, especially here for lithium-ion batteries for the e-mobility and storage. I will come later on and address this.

Here, we see in depth, again, Functional Fillers for the cable and wire. What drives this market? Of course, it's electrification, it's AI data centers and infrastructure buildup. Why is this the case?

We had a highly regulated market. So stricter fire and environmental regulations are driving that replacement and where our organic flame retardants with what we call fine hydroxides, you might step over this expression later on again, are very crucial.

And of course, electrification grid expansions are also responsible for a growing -- a rapidly growing market in the future. We shift here from high performance and customized grades, and this gives us a stable growth and premium pricing. Sorry, what happened here? I don't know. Somebody clicked on that.

As you can see, we are also in a very oligopolistic market environment or competitive environment. In Europe, we are momentarily 5 people acting. In United States, we are 2, our biggest competitor is Huber in China, where we are not so active due to high competition.

There are another 4 or 5 people, but they are not so active in Europe, and we are not that's why we show here. But in principle, you can see oligopolistic market environment. The market has a good footprint and a steady growth from a compound average growth rate according industrial REC studies of approximately 7% in the next years.

If you go to the e-mobility, I said to you, that's a very important market for us here in especial the visco-optimized, it's one part of our product range. And this is very crucial for the OEMs because they need adhesives to stack their battery cells into the battery pack. And our customers, which are big adhesive and gap filler manufacturers buy from us.

The principal properties is reduce the risk of overheating because we have a good heat transfer in our materials where the glue, the adhesive gets the heat out of the package and extends, of course, battery life and enables fast charging, which is absolutely important to the success of this future electrification of cars.

You see there is a rapid growth of 18%, almost 19% in the years to come. Just to give an example, in Q1, we grew at about 28%, which proves that we are here very successful. In this context, I want to inform you, we have just a big project going on, on the Schwandorf side with a $35 million investment to triple our momentarily capacity. Commissioning of the plant is expected beginning 2027.

Now coming to also electrobility, we have another product called boehmite, not the visco-optimized, the boehmite. We created that in the late 20s, 2017 to 2019 as a first mover. It was a coating material also for thermal heat resistant on the separator. The separator is ceramic coated also with boehmite and goes into lithium-ion battery.

This market was primarily accelerated in the development in China. We exported into China as a first mover, but we saw a big change in competition in the last 5 years. The market totally moved into China, as you might be aware. Today, about 80% or 85% of cell manufacturing is done in China. And so the separator industry moved into China. And with this high competition landscape, we have changed a little bit our strategy into a more opportunistic way of thinking.

There is a footprint in Europe, but the cell market manufacturing in Europe is pretty lagging in terms of speeding up this cell manufacturing production as well as separators due to the overcapacities in China. But I'm positive this will change in the next 3 to 5 years and also the footprint of this industry, which helps promote our product better will increase and accelerate in the next 5 years at least. So this development lagged a little bit behind our expectations.

Now switching to the Specialty Aluminas, you also see it's a very -- a variety of applications. So we are not exposed to a single market, but you can see already one pops up. This is refractory. It's a total different market.

The only thing we have in common here is really the feedstock of the materials. Refractory is strongly related, as you might or some might be aware to the steel industry, a high cyclical market, a lot of pressure. As you could see at the beginning, EBIT margin was almost to 0 or the EBIT due to this crisis in the steel industry. Momentarily, we see a turnaround. It's a stabilizing business, but still, we are working on getting a little bit away from this exposure and move more into the technical ceramics area where we see a more conservative but stronger growth.

Now here, you can see the aluminum oxides and reactive aluminas for the technical ceramics. Here, it's more about the electrification and there is a lower risk of substitution because these products are long established in the market and the technical ceramics industry is per se a very conservative industry.

This helps us from intruder of markets once you are in, you stay in, and it's a fairly stable price product mix development.

Market growth is acceptable with 4%. Momentarily, the industry is changing. I would say we are more growing plus 2% above GDP. The steel industry I addressed, it's more in the difficult area. But I must say, with a move to environmental-friendly manufacturing of steel, H2 steel, green energy usage helps our materials. We are within this industry in a specialty in a niche, and it helps to the longevity of, for example, furnaces in the glass in the steel industry, lower maintenance costs.

And I think that addresses exactly the properties of our materials and gives us good justification to have also in the near and the next future, a good footprint and the trajectory in this market.

Yes, USPs and market barriers. I told you that we have an oligopolistic world. Why? Because we are very capital intensive. To create Nabaltec or to found Nabaltec, you need probably $0.5 billion to build a plant what we have in Schwandorf.

And what's crucial for our industry is energy. Now you can say, how can you exist in Germany, a high energy cost country? And we are still there. You have to know we have a big waste incinerator plant, which is our neighbor, and we have a very special cooperation with the plant. Normally, a waste incinerator is existing for burning waste and the byproduct is energy.

So we get fairly highly competitive energy in terms of steam and electricity from this power plant. We have long-term contracts, and this is very crucial and important you have to know for the existence of Nabaltec as we are on the site in Schwandorf. That's why we also invested the money. And this is one of the top 6 or 7 waste material in plants in terms of size for other capacity. So we have room to grow at a reliable energy source for the next years to come.

Just an annotation here, the plant, the power plant undergoes momentarily a big renovation, which restricts us on certain cases in energy. They have in excess, but they have always downturns in terms of maintenance, where they -- where we are in extreme exchange of information.

So we can, how to say, compensate the lack of steam for this time by firing our own steam boilers, which we have installed to overcome that. This period will last for about another 12, 24 months. And then for the critical situation for the renovation, which is affecting us is over.

Coming to sustainability, yes, Nabaltec has committed to report -- to do a voluntary report after VSME standards, even though the Omnibus process from the EU did not oblige companies with our size to do a required reporting. We are proud of that, that we can contribute here, and we have achieved the ESG rating, silver status from EcoVadis.

Coming to the financials. As you can see, we had a quite steady growth in the last years. The last 2, 3 years was a little bit more bumpy. 2025 was especially difficult in the last quarter where a lot of unsecurity from our customers came and we had one of the worst Q4 quarters with about EUR 45 million in Q4 '25. But you can see now in the first quarter, we are picking up.

We are not at the level where we want to be, but it looks good, and I will speak later a little bit about the outlook. EBIT margin was quite strong in the last couple of years. We had in the '23, '24 or around corona '22, actually, very strong pricing power. We increased prices over the last years about 30%.

Now pricing comes a little bit again under pressure. So we try to be more growing by volume and not so much by pricing. EBIT margin was affected in the first quarter '25 as fixed majorly by higher energy prices through the gas, which we were affected as we have also gas.

We are a big gas consumer. Electric power was moderate. And with the steam, we had a stable development. On the other side, of course, we are facing higher depreciations. I will show you in the next slide our investment program. Here, you can see in the cash flow with our investment phase, you can see the cash flow on investments.

We had a cycle in 2016 to 2018, where we had a lot of activities in United States, built up the Naprotec and revamped Nashtec. And now we have another cycle here '24, '25 and also '26, we will have investment on cash flow approximately EUR 30 million, where we have built up, I mentioned the visco-optimized project, which triples the capacity on this and is about EUR 35 million in investment.

And we had a boehmite for the electromobility, which I didn't mention yet, which was also a project of EUR 22 million, plus revamping our kilns, which we need on the Specialty Aluminas side. This investment phase is done with EUR 10 million.

So overall, in this 3 years period, we will invest about EUR 90 million. And after that, we go back into a consolidation phase just for your knowledge. If you look at the Q figures right now, we were a little bit lacking this quarter 1 compared to last year's quarter, but we are in a good -- we have -- we are very positive that this -- we will catch up and grow in the next couple of quarters due to a stronger pickup of the market.

If we see now in the Functional Fillers itself, if we look at the segments here, yes, we lacked. We had a little bit of a decrease in -- mostly due to the volume. We did not have such a strong volume pickup in the first quarter as we have seen it in Q1 '25.

But here, I repeat myself, we will see a different picture in the next quarters to come as the market, especially renewables, especially through the AI development picks up strongly, and we see the turnaround here into a better development. EBIT margin, of course, went down too in the first quarter compared to last.

We had a very strong EBIT margin in the first quarter, but the influence -- the negative influence was by energy prices and the higher depreciation, which weighed on the Q1 '26 figures and EBIT.

CapEx, I have mentioned, it was much stronger. This is also influenced by the projects we are still in process to finish. On the Specialty Aluminas side, we also saw a dragging introductory, but we see the margins improved slightly. We are positive that we have now seen the rock bottom and we'll see a turnaround in the next couple of months as well.

So there is light on the horizon. CapEx amounted at EUR 1.7 million. This was still due to the general overhaul of the rotary kiln itself, but this project has been finished and the project or the rotary kilns are back in operation.

Coming to the balance sheet. As you can see, certainly, property, plant, and equipment increases by 7% due to our investment activities. We have compared to last year where we had a strong increase in inventories also due to our obligations in contracts.

And on the other side, our sales decreased. So we built up strong inventory through the winter. We depleted that again, and that's why there is a decrease. On the other side, there is nothing to mention on -- in particular. If we come to the cash flow, as I said, working capital was a little bit increasing through the -- sorry, to the slightly higher than in the last year.

Cash flow from investment activities were related to our expansion projects on visco-optimized and the overhaul of the kiln as well as in the boehmite. So the free cash flow decreased or halfened compared to last year due to the stronger activities in the projects.

But at the end of the day, cash at the end of the period was still almost at the level of 2025. And as you can see, with EUR 90 million in liabilities, we are almost debt-free in comparison to the cash.

Yes. Now coming to the outlook, I'm almost at the end. We saw or foresee a revenue growth of 4% to 6%. We confirm this. And I mentioned several times that we are very optimistic that due to the pickup of the market that we will see a change in the picture. EBIT margin was confirmed at a rate of 5% to 7%.

And now I'm at the end, 6 reasons to invest. We are in a worldwide market. We have a strong relationship to our customers over years. We are in a niche market with high entry barriers, as I showed you. The market is overall strong growing with a good trend for future megatrends like electricity and electrification.

We have a solid operating profitability. And of course, our current share price is attractive, even so it picked up by 30% in the last 2 weeks, which is good, yes, ending and I think gives us a good perspective for the future. Thank you very much for listening to my presentation, and I'm open now for discussion and answering Q&A.

[Operator Instructions] Mr. Heckmann, what is the planned annual CapEx for '26, '27 and '28?

As I said, '26, we are expecting about EUR 30 million. And then the ongoing years, we will consolidate depending a little bit on structural programs at about EUR 15 million to EUR 17 million. That's what we explained for the next couple of years. So this year, it will be a bigger chunk to finish all our projects. And next year, it will be decreasing to this range somehow.

And what opportunities does Nabaltec see for reducing its dependence on gas over the next 5 to 7 years? Is it possible to switch to biogas, hydrogen, solar, wind, batteries, et cetera? Or would it be technically visible to source all energy from the waste incineration plant starting in 2032 once the facility has been upgraded so that gas is not needed anymore?

Of course, we are trying to convert thermal processes more to steam. What we are momentarily doing is substitute our gas to electrical power. We can electrify a lot of thermal processes, which we can then switch to CO2 neutral, but it also depends a little on the pricing.

But these are the projects which are on the way where we have high temperatures like our rotary kilns, we are still depending strongly on gas, yes, fossils, but there is H2, which can be substituted, but it needs to be much more price competitive in the future to make that happen.

You are guiding for a return to revenue growth from Q2 onward. What concrete order trends or customer signals give you the confidence that this inflection is already materializing?

One signal is certainly the order book grew from December or from last year significantly from EUR 32 million to EUR 45 million and -- sorry, from EUR 52 million now -- sorry, I have to read the figures. I don't have it. From EUR 62 million to EUR 66 million. So we have a strong signal in terms of order book increase.

And a lot of customers say, yes, we see an uptake in the market. There is a but, the visibility is not as good as was years before. So we have to be a little bit cautious. Things are still sensitive. They could change. But in overall, a lot of customers signal optimism to us and the proof is the growing of the order book.

And as we have received no further questions for now. One more question just came in. What are the biggest risks that could prevent you from achieving your 2026 targets?

The biggest risk would be another geopolitical crisis where the market again changes or gets in unsecurity. It would be a complete stop again. Nobody knows what the Iran war, how this will be really finished. I think we have all the industries get along now with the congestion of Strait of Hormuz, no supply chain interruptions. But if there is again something firing off that would disturb the global market. Besides that, I think infrastructures have to be done, especially in Europe, especially in U.S. and the AI will come no matter what. So I'm more on the optimistic side than on the higher risk end side.

And we have one last fast question. What is necessary to come back to EBIT margins above 10%, and when?

Definitely gross volume. We have to grow by volumes. The higher our capacity loads are, the better the cost structure becomes. And of course, in line that the gas price is again a little bit decreasing. So we have better control. I didn't mention 50% of our gas we secured.

If we get a good introductory here to secure more and it's secured by the end of the third quarter. If we have here a chance again, then the cost control is on the good side. And of course, with higher volumes, higher outputs, we also create a decrease in the burden through the depreciation.

And as we are already over time, ladies and gentlemen, please place your questions to Investor Relations. I see that there is quite an interest in Nabaltec. Thank you very much for that. We come to the end of this roundtable.

And if you have any further questions, as mentioned, place them to Investor Relations, please. A big thank you also to you, Mr. Heckmann, for your presentation and your time. I wish you all a successful day around the world and handing back over to Mr. Heckmann for some final remarks.

Thanks, Judith, for the moderation. I thank the audience for listening, and I hope I could attract Nabaltec that we will see you in the future as an investor, and I'm happy to talk to you later at any event we can -- we will participate. Thanks a lot for everybody -- to everybody. Goodbye.

Good morning, and welcome to today's Q1 earnings call of Nabaltec. Today's presentation will be held by Management Board members, Johannes Heckmann, he's the CEO of the company; and Gunther Spitzer, he is the CFO of the company. The presentation will, as always, be followed by a question-and-answer session. [Operator Instructions] But with this, I will hand over the word to you, Johannes. Please go ahead.

Thank you, Philipp, for the introductory. I also want to welcome my colleague, Gunther Spitzer. Yes, welcome, everybody, who is attending today's Q1 earnings call meeting, and I'm pleased to show you the actual financial figures of Nabaltec. For those who have not much to do with Nabaltec, the first listeners, a short overview...

We can't hear you right now. Yes. No. Just a moment. Please bear with us for a moment.

Does anybody hear me?

Now we can hear you again.

We had an interruption, my microphone and my headset didn't work anymore. Okay. Sorry about that. I think we will continue with the brief. As I said, we are a specialty alumina and hydroxide manufacturer for flame retardants materials. We are headquartered in Schwandorf, Bavaria. And in addition to our main production site in Schwandorf, we also have 2 operational sites in the U.S. In the 2025 financial year, the group, as you can see, generated revenues of EUR 197 million and an operating result of EUR 15.2 million with an EBIT margin of 7.7%. With around 500 employees who are active worldwide and have an export ratio, a strong export ratio of 76.7%.

Our sales department is supported by a lot of distribution partners we work with to supply around the globe. We have been operating, as you can see, in a long time since 1937. Now coming to the 2 product segments. As we report also, here, you can see an overview of the 2 segments, the Functional Fillers and the Specialty Aluminas with the corresponding revenue and EBIT margin for last year. Of course, as of the magnitude with EUR 144.1 million in revenue, the Functional Filler is definitely our key product segments and the aluminas are much minor.

The growth driver is definitely the Functional Fillers with fine precipitated hydroxides for cable and wire industry as well as viscose-optimized hydroxides and boehmites for applications in the e-mobility and lithium-ion batteries. In the Specialty Alumina products segment, we have specialty oxides, reactive aluminas and ceramic bodies. Further development will initially be sideways was due to the weak demand from the refractory industry, as you also can see on the weaker EBIT margin.

If you look now in detail to the market segment functional fillers, you can see that we have a broad bouquet of flowers for application fields. And there, the biggest market, as you can see, with 56% in 2025 was definitely the cable and wire market. Here, you -- what is named under the cable wire market, especially data cables, communication cables and energy cables, which are currently the most important and increasing development in the tough market.

In the battery market segment, the yellow one with 12%. We can -- we summarize our viscose-optimized hydroxides and boehmites, which are used. We still see a differentiated picture in this application fields, where the demand for viscose-optimized hydroxides continue to rise, while the sales volumes for boehmite remain momentarily low.

If we come to the specialty alumina market, of course, also a variety of applications, as you can see, the strongest are refractory and technical ceramics leaves as a main market segment. With a large number of applications for our products, we concentrate primarily on the European region. That's a differentiation to the fillers. In 2025, the refractory segment shared total revenue of 46% due to lower demand in the steel industry, but this has now been leveled off as of the becoming of this year and end of last year. So we see that we have reached the rock bottom.

Now coming to the figures highlights. As you can see here, a summary of Q1 2026. Revenues in the first quarter amounted to EUR 53.2 million, a decline of 2.7% compared to the previous year's figures. The sales volumes decreased by 3.8% but the average sales price per tonne was slightly above the first quarter of the previous year. The operating result decreased by 33.8% to EUR 2.7 million. The EBIT margin was at 5.2% in the first quarter of '26 after 7.5% in the last year. The decline in revenues, combined with increased energy costs, particularly gas and higher depreciation and amortization costs were the main reasons for the drop in the EBIT margin in Q1 2026.

The earnings per share amounted to EUR 0.2 compared to EUR 0.31 in the first quarter of 2025. If we look at the net debt as of March 31, '26, liabilities to banks were at EUR 91.3 million plus certain lease liabilities according to IFRS 16 of EUR 44.1 million, which were offset by cash and cash equivalents of EUR 92 million as of the reporting date of 31st of March '26. This brings the group's net debt to EUR 3.9 million, as you can see.

Now coming to the details on the Functional Fillers segment. Revenues in the Functional Fillers products segment decreased in this quarter by 2.1% compared to the previous year's quarter. Sales volumes were 3.6% lower, while the average price rose slightly by 1.5% in comparison to last year. The start of '26, particularly in the month of January and February was not satisfactory and weak in this segment. In our main product area, fine hydroxides, revenues decreased by 8.4% in the first quarter compared to the last year's. Boehmite revenues were down at 8.5%. Only the products area of viscose-optimized hydroxides recorded here a dynamic growth of 28% increase in revenues in the first quarter, which proved and confirmed our expectations in this field.

At EUR 3 million, the operating result in the Functional Filler products segment is with EUR 1.5 million below the level of last year. In addition to the decline in revenues, increased energy costs and depreciation and amortization are weighing on the EBIT in this product segment, particularly. Depreciation and amortization increased from EUR 2.1 million to EUR 2.7 million due to the capitalization of various projects, especially the boehmite project. The capital expenditures in this segment amounts to EUR 7.2 million in the first quarter. Investments in expanding capacities for the viscose-optimized hydroxides and gas-fired boiler for steam generation were the main CapEx.

Steam boilers is already in operation where the viscose optimized hydroxide project is still ongoing and being erected. So this is not activated yet. Let's come to the specialty aluminas. Now my navigation, it takes a while. Sorry about that. It was just a delay here. I'm sorry. This is not working properly. Now it took a while, somehow there is a problem with the line.

Coming to the specialty aluminas. If you look at the revenues in this product segment, the revenue was 4.6% below previous year's quarter. However, revenue is higher than in the previous 3 quarters. So this is optimistic. The sales volume decreased by 4.4% compared to the same quarter of previous year. The average price was nearly at the same level as last year, so we did not see a deterioration here. The ceramic bodies product area recorded a 7.6% increase in revenues compared to the previous year's due to higher sales in the field of catalysts for hydrogen applications.

As in the previous year, EBIT for the first quarter was negative at EUR 0.3 million. It is largely in line with the prior year's figure of EUR 0.4 million. Rising gas price, in particular, weighed on the quarterly result. We assume that the bottom -- rock bottom has been reached now, as I already mentioned, in this segment and expect an improvement in the second quarter. If you look at the capital expenditures, these amounted to EUR 1.7 million in the first quarter of '26. Here, the last part of this amount dedicated to the expenditures of the general overhaul of the rotary kiln, which has been now finalized and commissioned.

Now I want to hand over to Gunther Spitzer, my colleague, who will guide you through the profit and loss of Q1 '26. Please, Gunther, go ahead.

Yes. Thank you, Johannes. Let's continue with the profit and loss statement of the group for the first quarter of 2026. Our revenue in the first quarter of '26 decreased by 2.7% to EUR 53.2 million. Johannes has already explained the reasons for this. In relation to our sales forecast for the entire year '26, with growth in the range of 4% to 6%, we will have to catch up in the coming quarters. We currently expect a strong second quarter and continue to anticipate year-over-year revenue growth in the second half of the year. Total performance decreased by 5.5% to EUR 52.3 million, while finished goods inventories increased by EUR 0.2 million in the same period of the previous year, they decreased by EUR 1.1 million in the first quarter of '26.

The decline in inventory is related to the overhaul of the rotary kiln. Gross profit amounted to EUR 26.4 million and was down EUR 1 million or 3.6% on the year before. In particular, unexpectedly high natural gas costs resulting from the Iran war are weighing on gross profit. EBITDA decreased by EUR 0.6 million year-on-year to EUR 6.4 million, which corresponds to an EBITDA margin of 12.2% after 12.6% in the first quarter of '25. The decline in EBITDA is attributable to a lower gross profit combined with a slight increase in personnel costs of EUR 0.2 million.

Conversely, other operating expenses decreased by EUR 0.5 million to EUR 9.5 million, primarily due to lower exchange rate losses of EUR 0.4 million. Depreciation and amortization rose sharply by EUR 0.8 million to EUR 3.6 million in the first quarter of '26. The main reasons for this increase were the scheduled commissioning of various capital projects, including the capacity expansion at boehmite and the capitalization of a lease transaction in accordance with IFRS 16 for the logistics hub at Weserport. Accordingly, the EBIT margin amounted to 5.2% in the first quarter compared to 7.5% in the year before. Functional Fillers achieved an EBIT margin of 7.6%, while the Specialty Alumina segment was negative with an EBIT margin of minus 1.9%.

Earnings per share amounted to EUR 0.20. Now I come to the balance sheet. Total assets increased by EUR 11 million to EUR 311.7 million compared to the end of 2025. This was primarily due to an increase in property, plant and equipment of EUR 10.7 million to EUR 161.1 million. This includes assets under construction amounting to EUR 32.3 million, reflecting our ongoing investment program in 2026 and new in the balance sheet, lease rights under IFRS 16 of EUR 4.6 million. The leasehold rights are related to the Weserport logistics hub.

Inventories decreased by EUR 7.8 million to EUR 43.1 million. This is mainly due to a seasonal effect as raw materials are purchased only in limited quantities during the cold season. As a result, the value of raw material inventory at the end of March '26 was EUR 6.9 million lower than at the end of 2025. Receivable and other assets decreased by EUR 11.5 million, primarily due to the reclassification of EUR 15 million fixed term deposit maturing in April '26 to cash and cash equivalents.

Accordingly, cash increased from EUR 72.3 million at the end of '25 to EUR 92 million at the end of the first quarter '26. On the liability side, equity amounted to EUR 160.8 million, an increase of EUR 2.5 million compared to the end of last year. The equity ratio is 51.6%. Noncurrent liabilities of EUR 128.2 million include provisions for pensions of EUR 30.4 million, bank liabilities of EUR 90 million and leasing liabilities of EUR 3.9 million. Current liabilities increased by EUR 3.9 million and include higher trade payables of EUR 1.3 million and higher accruals for personnel expenses of EUR 1.2 million compared to the end of '25.

A brief look at the cash flow statement. Cash flow from operating activity of EUR 13.2 million was slightly higher compared to the previous year's figure of EUR 12.9 million. The cash flow from investments in the amount of EUR 8.9 million includes the expansion of production capacity for viscosity optimized hydroxides, the overhaul of a rotary kiln and measures to ensure a reliable steam supply. Cash flow from financing activities amounted to 0 in the first quarter. Cash totaled EUR 92 million as of the end of March '26.

For the next slide, the outlook for 2026, I will give the word back to Johannes.

Thanks, Gunther, for analyzing and presenting the financials in detail here. I just want to give you now a short outlook as we see the oncoming quarter and in 2026. As you know, the order situation in '26, we will see continue to be strongly influenced by short-term factors and high volatility. The visibility, which is reflected by our customers is still mixed. Also, despite the situation, we expect a revenue growth in the range of 4% to 6% for this year compared to the previous year. We can see that now the situation despite this volatility has improved compared to the first quarter, so we can confirm the revenue growth as is.

On the earnings side, we expect an EBIT margin in the range of 5% to 7%. The lower EBIT margin compared to last year, where we had come out with 7.7% is primarily due, as you can read already due to the higher cost of material, especially for raw materials and energy. And in addition, due to the significant increase, as I mentioned and Gunther before, in depreciation and amortization due to the capitalization of the various projects, which were shortly mentioned during the presentation.

Yes. Then I think we are done with the presentation. You can see the financials where we present ourselves, the financial calendar year. We will be attending various investment conferences still. I would then hand over to Philipp again to moderate the Q&A session, and I'm very happy to answer your questions, Gunther and myself, of course.

Yes. Thank you very much, Johannes. So as said, we will now head into the Q&A. As I said in the beginning, questions will only be taken by our audio line. In order to do so, I would ask you to click the raise hand button which you see on the bottom of your screen. One additional information, those who ask question in written form before the call, we will ask you to also raise your hand again and ask the question verbally in order to the question being answered.

And with that, we see the first raised hand by Christian Sandherr. Christian, you can unmute yourself now.

First question would be on the development of the fine hydroxide, so down roughly 8%. Can you elaborate a little bit on the drivers behind it? Because historically, this one has always been quite stable. Was it volumes? Was it prices? And if it was volumes, could you share some insight on what industry or end markets were particularly weak.

It was definitely on volumes, as you could read that the prices were fairly not declining so much. It was -- it can be brought down to a few customers. I think it was -- there is no trend to be seen. Some customers have taken down their orders, but it was not -- it is a differentiated picture of the reasons. Was it a high inventory and they just lacked -- was it to some other reason. But that's not a clear picture. What I can say the good news is it changed now in the second quarter. It turned around. And so I would just read it as a short period of time. So there was not a critical structural decline to be seen. It was really just a few bigger customers who either were high in inventory. But as there is a turnaround now, I would just see it as a Q1 effect.

Okay. And then it's kind of a follow-up question on this. You already said that you see a pickup in Q2. What you're currently seeing in terms of demand, would that already be sufficient if it carries on throughout the year to meet the guidance? Or do you need additional demand pickups in the second half to get into that range?

Good. I mean we certainly need the whole year to fulfill the forecast as we -- or the outlook. I would not say we see a turnaround, but certainly, we need a consistency throughout the whole year.

Yes. But what you're currently seeing in the second quarter or especially right now, if this continues throughout the year, this would be sufficient.

Yes.

Okay. And could you quantify how big your exposure to data centers is within the Functional Filler segment or also within the fine hydroxide product group.

No, we cannot -- we have not this inside view because we are so diversified. And for those who are not targeting Nabaltec in specific so much, we have 2 client bases. We have compounders who are the supplier of the cable and wire manufacturers for the polymers and a bigger clientele are the compounders. And the compounders don't really disclose to us where the compounds go. Do they go into electrical cables for energy storage for energy supply or do they go in data cables. So this visibility or this in detailed visibility we do not have. It's hard to find out. You only can get a feeling if you ask the big players like Nexans and Prysmian where their direction goes.

Right. And one last question on boehmite. Has anything changed in terms of customer RFQs, anything like that? Or is it still really weak? Also maybe compared to last year, is it more inbound? Anything that could point towards the sentiment changing or at least stabilizing.

So I would say the last one, it's more stabilizing on a low level. But as I said, we get a lot of inquiries. We have a lot of products being approved. There is interest, but there is no substantial move in picking up more volume. As I said, the customer base we have who take constantly volumes are there. We see here and there an increase. It depends certainly if a customer gets a bigger project dedicated, then we will see that with our existing ones, but now an absolutely trend move, we cannot see momentarily. It's still lacking, especially in Europe. As I mentioned very often, there are enough sheet manufacturers of separator manufacturers in Europe existing. What they lack is really the pickup by cell manufacturing. And as most who are familiar with this e-mobility, there is a lack of cell manufacturing in Europe. Now there are rumors that the Chinese want to move into Europe.

We will see what comes, but this is the main reason. Our Korean customers in Korea, our Japanese customers and even the Chinese customers are there, but there is such a big price war and over volume -- overcapacity in China itself that this gives a lot of headaches to the whole industry. I've just read that 91% of the cell manufacturing is meanwhile concentrated in China. And this is one reason why the separator markets outside is just struggling.

Yes. Thank you very much, Christian. And we already have the next questions coming from Volker Bosse, Volker, you can unmute yourself now.

Volker Bosse from Baader Bank. Yes, thanks also for the details on the current trading and good to hear that...

Volker, we are losing you. We can't hear you right now. We still can't hear you, Volker. Let's give them another moment. All right. Somehow, it seems that we lost the connection to Volker, unfortunately. We can give you another moment. There is another question coming from Harry Kilby from Edison. Harry, you can unmute yourself now.

Just 2 questions from me. When do you expect the capacity expansion in the viscose optimized to be complete? And how do you -- how does this then -- how do you expect this to affect your product mix? And could you possibly give us a little bit more detail on what the margins are like in this segment? Are they higher than the fine hydroxides, for example? And then just a sort of other follow-up. Could you possibly just remind me on your natural gas hedging strategy in the year? And if you expect if the prices will stay at the levels they're at, or are you sort of mitigated against some of that versus hedging?

Okay. First question, viscose optimized commissioning of the plant is now scheduled end of year first quarter '27. Of course, we will have there a transition time of about 3 to 4 months to get quality approval for all the major customers as we move in an e-mobility or in the car industry, they have the 4M change management. For the intermediate time, of course, we have an existing manufacturing site, which is highly staff intensive. And for the new plant, we will do a fully automized plant. How does it affect? Definitely, then it has a capacity of about -- for the viscose itself, 30,000 tonnes, and it can translate into a step-up of revenue of up to EUR 40-plus million as is of prices as of today.

In terms of comparison of margin, EBIT margin, it's above the EBIT margin fine hydroxide. So it definitely is an important improvement in the mixture of results for Nabaltec. Coming to the gas philosophy or the gas strategy, yes, we are hedged until September this year for 50% of our volume. And for the rest, we float momentarily. We try to rehedge to continue that momentarily. The prices are not in favor, but we monitor this very strongly day by day and week by week. And if a point in time comes, we definitely will use that open window to hedge at least a certain quantity, though it's not our mentality to speculate.

All right, Harry. Thank you very much for your questions. We see another question coming up from Dominik Kiening. Dominik, you can unmute yourself now. Please go ahead.

Speaking from Baader Bank, I just used another mobile as my mobile did not work, obviously. Do you hear me now?

Yes.

Okay. Cool. Perfect. First one would be on -- coming back on current trading. It's good to hear that you said second quarter showed an improving trend here. Could you confirm that both segments returned to growth in the second quarter as of now? The first question. And second question is a bit of -- for curiosity. I mean In your press release, you gave encouraging remarks that you benefit from infrastructure data center projects, for example. In my view, these building activities are at full swing in the moment, and we see other companies like Hochtief, which are involved in these kind of building activities again tremendously benefiting here. So my question would be, why do you think Nabaltec is not able to ride the sentiment wave, so to say, why it is not seen as a crucial provider of products for these kind of data centers going forward.

The first question was regarding a pickup or an improvement in sales of both segments. I can answer that with a yes. Definitely, we see on both segments that there is a pickup, but still with the volatility and short visibility, but there is higher demand. Second, the impact on this construction, what you mentioned, we have to look at it in a very differentiated way. First of all, what drives our volumes, data centers. Data centers here, where I forgot to -- there was a question, I think Christian said this about the visibility of can you say what share of data centers.

What we can -- what we were told by a customer, but this was United States related, that they are now starting to slowly install more capacity in anticipation of all these data center erections. I think it takes some time. I don't know now, Volker, what you relate to construction, yes. Construction is the one side until these data cables and the interiors are designed are equipped, this takes -- it's always a delay. But I'm not the expert here. You have to talk to the cable and wire manufacturers.

I think we see a stronger demand. Is this affected to the existing data center buildup. I cannot tell. The big moves still are to come like Microsoft and there's no secret said they want to build up now in the Cologne area, this data center, it's still ahead of that. The impact probably on our business unit will be more seen in '27 or '28 ongoing. So this is not an intermediate one-to-one move. Where we see a translation in immediate volume ramp-up is with the viscose optimized in the car industry. Any car which is sold more electromobility is practically translated in more volume of our products.

So there, we have a clear market-related visibility, whereas with the other products due to the fact that we are low in the supply chain in Tier 1 or 2, that makes it a little bit more difficult to see the immediate impact. That's all I can say momentarily. But I'm sure with an announcement of one of our most important customers, U.S. that they are now starting ramping up in anticipation, that's a good sign that they get themselves into a position to follow the market.

Thank you for sharing your view on that. I mean it seems that it's a bit of -- you are a bit of undiscovered potential profit here if then the building activities will really pick up and more demand of these cables are needed. I wouldn't think so.

Yes. Thank you, Volker, for your question. And for the moment, we do not see any further questioners lined up in the queue. So if there are any further questions, I would ask you to take the opportunity now and raise your virtual hands. Let's maybe give it another moment. But that does not seem to be the case. So with that, I will hand back the word to you, Johannes, to give some final remarks to the listeners. Thank you.

Yes. Thanks, everybody, for attending. Thanks, Philipp, for the moderation here on this Q1 earnings call. I just want to summarize, we see a move in the market still even if the market is a little bit shaken, but with the momentarily picture on our clients. I am optimistic that we can move forward as according to our forecast. So this is a good news. Even with the geopolitical situation in the moment, we have a quite good chance to participate in the growing market. Thank you very much for everybody, and hope to see you at some conferences or in the next earnings call. Thanks, everybody.

I start here. Yes, I hope everybody who joined us today has a good connection. I want to welcome everybody in the auditorium today for our earnings call on the Q4 figures and preliminaries on first quarter 2026. I also welcome my colleague, Gunther Spitzer, CFO; and [ Maxi Goodman ], who will then -- from U.S, who will then guide us through the Q&A session later on. Here, I have a short annotation.

Please feel free to ask your questions after the presentation. We would recommend to do that and no chat because of coordination -- of an easiness of coordination here. Yes, then I will start with my introduction. For the ones who do not know Nabaltec, we are a midsized company in the chemical business in the chemical industry and one of the leading suppliers of environmental-friendly flame retardants, especially aluminas based on our 2 major raw materials of aluminum hydroxide and aluminum oxide.

We are headquartered in the heart of Bavaria in Schwandorf. In addition to the main production sites, we have 2 production sites in U.S.A. with our Corpus Christi and Tennessee plant, Chattanooga. In 2025 financial year, the Group generated a revenue of EUR 197 million and an operating result of an EBIT of EUR 15.2 million. And this guides to an EBIT margin of 7.7%. With our 500 employees, we are active worldwide, and this reflects an export ratio in the year of 2025 of almost 77%.

We are representative or represented with our sales department and distribution partners all around the world. We are operating the plant, as you can see since a long time starting in [ '77 ]. Now coming to the more crucial figures. As most of you know, we report in 2 product segments. Here, you can see the overview. It's Functional Fillers and Specialty Aluminas with corresponding revenue and EBIT margin.

The growth drivers of the Nabaltec is primarily Functional Fillers, as you can see by the ratio of revenue with product areas of ground hydroxides, fine precipitates, hydroxides, which are applicable for the cable and wire industry as well as visco-optimized hydroxide and boehmites for major applications in lithium-ion batteries for e-mobility.

In the specialty alumina, the smaller segment product segment, we have a product range of oxides, reactive aluminas and ceramic bodies, majorly developed for -- they further develop -- the development will initially be sideways due to the weak demand, as you can see from the refractory industry. If you come to the market segment Functional Fillers, you can see a very wide range of applications with examples where our products coming to.

The biggest market with a revenue share of 56% in last year is, of course, the cable wire market, especially represented by data cables, communication and energy cables, which are currently the most important and show an increasing development in a tough market environment. The battery market segment in which our visco-optimized hydroxides and boehmites are used, we still see a differentiated picture. Demand for visco-optimized hydroxides continue with a strong rise, while the sales volumes for the boehmites remain low.

If we go to the market segment, especially aluminas, here you can see our strongest field is the refractory industry and the second one is technical ceramics, which represent the major main markets, in the specialty alumina field. With a large number of applications for our products, we concentrate primarily on the European regions. In '25, the refractory segment, as I said, shares a total revenue of 46%.

Demand for that comes from the steel industry and has stabilized at a lower level to last year. Now I want to switch to the highlights in the financial figures for Q4 2025. As you can see, the revenue in the fourth quarter amounted to EUR 41 million, which is a decline compared to the previous year's figures of 7.7%. Sales volumes decreased by 7.4%, and the average price per ton was almost at the same level as in the fourth quarter of the previous year.

The operating result, EBIT decreased by 78.3% to EUR 1.2 million. EBIT margin was EUR 2.8 million in the fourth quarter of 2025 after 12.2% in the previous year, which was an exceptionally strong year. The sharp decline here in revenues and increase in energy and maintenance costs were the main reasons for the significant drop in the EBIT margin in Q4. Earnings per share amounted to EUR 0.05 compared to EUR 0.36 in the fourth quarter of 2024.

Net debt as of December -- 31st of December last year shows liabilities to banks of EUR 19.8 million, which were offset by cash and cash equivalents of EUR 72.3 million as of the reporting date year-end. This brings the Group's net debt to EUR 18.5 million. I have to notate here, excluding the fixed terms deposit of EUR 15 million. Now coming to the next slide, which shows the segment of Functional Fillers with the Q4 figures. Let's start with the revenue.

The revenue for this product segment decreased by 10.5% in the fourth quarter compared to the previous year's quarter. Sales volumes are 8.9% lower and the average price has fallen by 1.8% in comparison to last year, which was quite moderate. The sales -- the sharp decline on the revenue was unexpected and primarily reflects the short-term nature of our market and the market uncertainty in the moment.

In December, in particular, I must say, orders placed by customers were canceled at short notice, which surprised us and hit us very strong at this moment in time. This was especially noticeable in our most important product area, the fine hydroxide, which is our cash cow. In addition to boehmite, which recorded a 26% decline in sales in the fourth quarter, the visco-optimized hydroxide product also saw a decline in sales after a very strong fourth quarter in the previous year.

We come to the EBIT. The EBIT amounted in the fourth quarter at EUR 1.5 million compared to EUR 4.6 million -- which was EUR 4.6 million below the level of last year and significantly lower than the first 3 quarters of 2025. In addition to the significant decline in revenues, increased maintenance costs in the fourth quarter are weighing on EBIT in the product segment. Due to the persistently weak demand for boehmites, the product area was unable to make a positive contribution to EBIT at this moment.

If you look at the CapEx, the CapEx expenditures in this segment amounts to EUR 5.2 million in the fourth quarter. Here, investments in increased capacity boehmite completed and capitalized at the end of 2025 as well as investments in expanding capacities of -- at our visco-optimized hydroxides were the 2 major project expenditure. If we come to the next segment here, this is our Q4 for the specialty aluminas.

At 0.6%, revenues in the product segment, especially aluminas were slightly higher than in the same quarter of the previous year for the first time in 2025. However, we must point out overcapacities and weak demand continue to weigh on sales performance. Sales volumes decreased by 3.4% compared to the same quarter of the previous year. Due to an import -- improved product mix, the average price rose by 4.1% in the fourth quarter.

The ceramic bodies area recorded a 6.3% increase in revenues compared to the previous year due to higher sales in the field, especially here catalysts and hydrogen applications. After the 2 quarters with the positive EBIT, the fourth quarter is negative again with an EBIT of minus EUR 0.3 million, but slightly improved compared to the same quarter of the previous year with EUR 0.6 million.

We assume that hopefully, the bottom has been reached in this segment and expect a slight improve of the situation in the current year. Capital expenditures in this product segment amount to EUR 1.8 million in the fourth quarter. The largest part of this amount relates to expenditures for general overhaul of the rotary kiln, which now this cycle investment has been finished. As some of you might know, we had to revamp our 2 kilns in the plant, and we have finished this overhaul project.

Now I want to hand over to Gunther Spitzer, who will guide you through the profit and loss statement, the balance sheet and the cash flow in the next minutes. Please, Gunther, go ahead.

Yes. Thank you, Johannes. Let's continue with the profit and loss statement of the Group for the fiscal year 2025. Our revenue in 2025 decreased by 3.2% year-on-year to EUR 197 million. Sales volumes declined by 2.7% compared to the previous year and the average price fell by 0.5% due to a change in the product mix and currency effects. The largest negative deviation in revenues in '25 was recorded in the boehmite product area with a decline of 37.1% or EUR 4.6 million.

Overall, we slightly missed our sales forecast with an expected decline of up to 2%. Total performance decreased by 4.6% to EUR 197.4 million, while finished goods inventories increased by EUR 1.9 million in the same period of the previous year, they decreased by EUR 1.1 million in 2025. Capitalized own work increased total performance by EUR 1.4 million after EUR 1.3 million in the previous year.

Gross profit amounted to EUR 103.6 million and was down EUR 3.5 million or 3.3% on the year before. Gross profit margin improved from 51.8% to 52.5%. The main reason for this were lower material costs compared to the previous year. EBITDA decreased by EUR 7.4 million year-on-year to EUR 26.8 million, which corresponds to an EBITDA margin of 13.6% after 16.5% in '24.

The decline in EBITDA is attributable to a lower gross profit combined with an increase in personnel costs of EUR 1.2 million and higher other operating expenses of EUR 2.8 million. Other operating expenses include currency losses of EUR 2.1 million compared to EUR 0.9 million in the previous year and higher costs for third-party services, including maintenance of EUR 1.6 million compared to '24.

Depreciation and amortization expenses decreased from EUR 11.9 million in the previous year to EUR 11.6 million in the reporting period. Accordingly, the EBIT margin amounted to 7.7% in the fiscal year 2025 compared to 10.8% in the year before. Functional Fillers continue with a double-digit EBIT margin of 10.4%, while the Specialty Aluminas achieved only a slightly positive EBIT margin of 0.3%.

Earnings per share amounted to EUR 1.10. We proposed paying a dividend of EUR 0.29 for the 2025 financial year, the same as in the previous year. Now I come to the balance sheet at the end of December 2025. Total assets increased by EUR 2.4 million to EUR 300.7 million compared to the end of 2024.

This was primarily due to an increase in property, plant and equipment of EUR 10.5 million to EUR 150.5 million, including assets under construction of EUR 28.9 million, reflecting our investment program in '25. Other non-current assets decreased by EUR 15.3 million due to the reclassification of fixed term deposits of EUR 50 million to other current assets. Inventories increased by EUR 3 million to EUR 50.9 million.

This is a result of building up stocks of raw materials in the amount of EUR 4.3 million and a decline of finished and unfinished goods of EUR 1.3 million. Compared to the end of 2024, cash decreased from EUR 86.5 million to EUR 72.3 million at the end of December '25. On the liability side, equity amounted to EUR 158.3 million, an increase of EUR 5.1 million compared to the end of last year.

The equity ratio is 52.6%. Noncurrent liabilities of EUR 123.5 million include provisions for pensions of EUR 30.3 million and bank liabilities of EUR 90 million. The average interest rate for bank liabilities was 2.5% in '25. Current liabilities decreased by EUR 0.3 million and include higher trade payables of EUR 1.8 million and lower tax and other liabilities of EUR 2 million compared to the end of 2024.

A brief look at the cash flow statement. Cash flow from operating activity of EUR 15.8 million decreased by EUR 19.3 million compared to the previous year. In addition to the lower operating income of EUR 7.4 million, changes in working capital, in particular, reduced operating cash flow by EUR 4.9 million in 2025.

By comparison, changes in working capital increased operating cash flow by EUR 5.8 million in the same period of the previous year. After deducting payments for investments of EUR 24.8 million, free cash flow amounted to minus EUR 9 million. The cash flow from financing activity of minus EUR 3.5 million includes a dividend payment of EUR 2.6 million. Cash amounted to EUR 72.3 million at the end of 2025.

For the next slide, the preliminary figures for the first quarter and the outlook for 2026, I will give the word back to Johannes.

Yes. Thanks, Gunther, for your presentation and the financial figures from last year. I just want to jump in now with the preliminaries of Q1 2026. As you can see on this chart, we had compared to the last quarter of 2025, a quite good start. The revenue for the first quarter amounted at EUR 53.2 million, still representing a decline of 2.7% compared to the previous year's figures.

Both product segments, Functional Fillers as well as Special Aluminas reported lower revenue in the first quarter compared to the prior year. The EBIT margin here was at 5.2% in the first quarter of 2026 impacted by the EBIT margin. EBIT was impacted especially by higher energy costs, particularly for gas, as you're all aware, with the situation of the Iran war as well as a rising depreciation and amortization due to the capitalization of assets.

We still are in a high investment cycle at this point in time due to the construction of our major projects, fine hydroxides -- visco-optimized hydroxides and the [ finish ] of boehmites. These both had a negative impact on our EBIT in the first quarter of 2026. The detailed figures on the first quarter will be released or published May 21 in 2026.

Now coming to the last slide, we still -- even we had slower start compared to last year, we will confirm our forecast for 2026. Despite the economic situation, we expect the revenue growth in the range of 4% to 6% for the year 2026 as well as on the earnings side, we expect an EBIT margin in the range of 5% to 7%.

The lower EBIT margin in 2026 compared to last year with 27.7% is primarily due, as I said, to the higher cost of materials here in corporate with especially the higher raw materials and energy. In addition, due to the significant increase in depreciation and amortization, we were burdened due to this capitalization of various projects.

Still, if we look into the order situation in '26 we see still a short-term order intake by customers and a high volatility because the markets are still very unsecure as the situation hasn't improved in Iran.

But if we look at the customer feedback in the moment in time, there is optimism in the order demand, which gives us a good feeling for the next months to come in the second half of the year. That's why we also confirm our revenue and EBIT margin as just shown.

Yes. Then we are just done with our presentation. And I would now go into the Q&A session.

[Operator Instructions] Let's proceed with the first question from Christian Sandherr.

Christian Sandherr from NuWays. First question is on the fourth quarter. Mr. Heckmann, you mentioned a lot of unexpected cancellations. Do you have any color on why that was the case?

Frankly speaking, it's really hard to say. Some people, I think, made a rigorous cash management and they just were destocking. Some others were just unsecure what happens in the next couple of months. And I think this is a mixture for the sharp decline. But a clear picture is not taken. These were just some sounding of some customers.

But were they cancelled or were they pushed out?

No, they were pushed out. Cancellation, as I said, a strong cancellation within was not seen. It was just the orders were not taken. There were no order incomes at end of November normally. You saw that it was just a weaker demand.

Has this changed in Q1 or do you still see short-term cancellations for no reason?

Not so strong as we saw in the last quarters. I think the order book increased again as you -- and I think there's more stabilization through the first quarter. So cancellations are not that high. Now of course, in the first, as I said, if you have a destocking effect in December, you have a stocking effect in the consecutive months.

But I think when we look at the various -- the 2 product segments and also with various customers, there is a big improvement. Of course, it's not at the level of Q1 '25, but improvement is there, the trend is there.

If you look at the sounding as well in the refractory, especially alumina sector as well in the Functional Fillers, especially visco-optimized as well as the cable and wire industry, we get quite a good response in terms of what the people expect. This gives us a lot of optimism, but still the order intake is still of a shorter range. Now we are at 6 weeks approximately, but we have a rebound definitely.

And then I have a question on the Cable & Wire business. So first one, Nexans, they reported their Q1 figures, and they were cautiously optimistic on improving demand from France, Italy and Spain, but they also highlighted data centers being a key driver. So there's 2 questions. Do you also see this increased demand from further European countries in Europe?

And secondly, I'm also aware that data centers, you keep highlighting it as one driver. Is it possible for you to quantify how this demand has developed? So I don't know, does end applications data centers have growth in the double digits or is there a way of kind of putting a number on to this?

To answer your last question, frankly speaking, no, there is not -- we cannot exactly say if this grows by 10%, we grow by 8% or 15%. No, we don't have this visibility or we don't have this transparency, I must say, in the market. We see what you say the customers reflect to us that they are getting prepared to increase their volumes for this situation.

As you must know in the audience, we have 2 kinds of customers. We have the compounders who sit before the cable wire manufacturers like Nexans. And we have Nexans who are also vertically integrated and buy directly from us and make their own compounds. So of course, if you talk to them, they can give you more transparency, but they are more -- don't disclose. They are just sometimes don't give you -- they give an orientation of what they publish, but not internal information.

On the compounder, don't have a clear visibility because they always tell us, yes, we sell to the big [ lake ] were a lot of cables, but we see, of course, AI is very important in terms of building up infrastructure by all the server farms and so on. This is reflected, but clear figures, I cannot give you.

Okay. And then a question also on margins. So for the full year, you guide 5% to 7%. Q1, you had above 5%. And usually, the first and the fourth quarter are the seasonally weaker quarters in terms of margins. So what is baked in for the second and third quarter so that you have the 5% at the lower end?

It depends now on various components. Certainly, of course, if we -- and we expect growth in revenue, which means a growth in output, we will strongly grow by quantity than by price, definitely. We will improve our specific costs. We have a rigorous cost program internally, of course.

By pricing, I think we have to very cautiously watch the market. I heard that in some industries, if the energy prices continue to rise that people will adjust it by pricing. Momentarily, we do not see that in the market or if the market is receptive. Our goal is more volume-driven, momentarily and improve specific costs as well as have a rigorous internal cost management so we can improve the margin.

Of course, as I outlined already in the presentation, energy prices, especially gas hits us. We have 50% secured until the end of third quarter and with 50% we float, which hurts us in the moment a little bit. But all the other internal costs, we try to improve over the time now. And we saw some onetime effects in the first quarter on OpEx, which should be not appearing in the next quarters to follow. So there is the variance in also in the margin improvement.

5%, it's fair to say that it's a conservative approach, the 5%, the low end of the guidance range.

Yes.

Okay. And then I have one final question. This is on the visco-optimized products. Do you have -- I mean, you built up capacities now or you're still in the process of finalizing this. But do you have kind of a visibility on what customers are needing over the next 1 or 2 years? I mean it's kind of a similar story for now with boehmite, right?

You basically started from close to 0. It's been growing quite some time. Boehmites, the demand has fallen off a cliff. So it's kind of insignificant in the overall sales mix now. And the question would be, do you have like a kind of a contractual visibility or anything like this that the visco-optimized products are in demand for the foreseeable future.

Before I answer your question, I would just give one more background information. The major difference between the boehmites and the visco-optimized lays where they are consumed as geographic reason where they are produced. As you recall, the boehmite went or goes specifically or is tailor-made for this separator. The separator manufacturing was always concentrated in Asia.

It started in Korea and then it moved into China. And the separator is then going into the cells and the cells are sold to the OEM. So there are 3 steps from -- which we had to overcome. And everything was concentrated in China. And China, of course, put its hands on the vertical integration of all goods related to electromobility. Now with the visco-optimized, we go into the thermal interface modules, which is majorly gap fillers and the adhesives.

The adhesives are produced directly at the source where the OEMs need it. So we are talking to the adhesive to the gap filler manufacturers and they go directly to the OEMs, OEMs are the assemblers. So we do not have this competition first out of China because the adhesive gap fillers are sitting in Europe. They are sitting in United States, they are sitting in China and in Asia.

What we see momentarily, the major producers, and I don't want to name them, but roll out their capacities all over the centers of e-mobility in the world. That's why we have a quite strong growth momentum. Of course, we are one of the first movers with this particular products again in the market. And we will have a softening effect because we will not be alone in this world.

But as I said, in the centers of consumption, especially in Europe, we see it now rolling out in the United States, and we see also we grow with the people in China. This is a different story because we do not compete within the supply chain, this vertical supply chain where the separator has to go to the cell manufacturer and the cell manufacturer practically demands what separator you want to buy where and then they go to the OEMs.

Here, we are much closer to the OEM. and this is a big advantage. Of course, now coming to your question, we have a clear picture what the development will be as it reflects what the customers tells us. But at the end of the day, it always depends how many electrical batteries for each car are assembled because for each assembled battery, you need all these components for the thermal interface module.

That's what we call TIM where we are applied to. It's a 2 digit -- a strong 2-digit rising market in terms of what we see on our dynamics. It will be a very big market in terms of overall needs because this is momentarily the best goods to apply for thermal management in batteries. So this is what we can see in the next 3 to 5 years. And of course, there will be always turn ways.

But as I said, with all the introductory I gave you, I don't see it as we felt with boehmite. With boehmite, we had to really like compete into a market into China, which closed, really closed down its doors for people coming from the West. I have to tell so strongly, they protected their own market. This is not the case here because we are closer to the OEM and the OEM in the final stage judges which [ kilns ], which products I want.

And so we are closer to the end manufacturing market. I think we are in a good position that the capacity will build up. We are just in the process by year-end, around year-end this year, we will commission the plant for these new products where we have then capacities of 20,000 tonnes to 30,000 tonnes plus extra where we can then really maneuver very well in this market.

And the first mover has always an advantage in this market to quickly continue. And what makes me very confident and I cannot tell more that now we roll out also in other geographic regions simultaneously. We see that now that there is a multiplier happening. This was not the case with boehmites. With boehmites, we're always dependent in the geographic region.

First, it was the Asia periphery and then it started more and more concentrated into China and the policy of the Chinese government then made the market to go in a different direction where we practically were kind of, I wouldn't say cut off, but limited in our actions. And that's the situation and the difference between the visco-optimized and the boehmites at this point. Any other questions?

We can continue with the next question from [indiscernible].

Just 2 questions from me. How much of the guided revenue growth next year is visible in the current order book versus how much from demand recovery? So what's the split between visible in the order book versus demand recovery? And then a second question, just on the slightly longer outlook. Do you expect your EBIT margin to go back to that sort of 7% to 9% range from '27, '28 onwards?

In terms of mostly will be -- growth will be coming from demand. And of course, some will come from more rigorous strategy that we grow our volume into certain markets. But it will be volume driven. On the EBIT margin, of course, we are now momentarily hit by certain factors which we have not -- we cannot influence, but we work on it.

And if the price or the portfolio mixture is right where we say we grow stronger in the visco-optimized, perhaps we gain some momentum with boehmites again and especially the flame retardant fillers stay at a price level with a stronger gross volume, we will definitely improve our EBIT margin into that direction you recommended.

'26 will be definitely a tougher year. We will see how long this conflict in Iran will last and if the markets ease, especially on the energy side. But for the years to come, as you recall, we have an objective to keep a 2-digit EBIT margin in the long run. This is our goal, and we want to push that in the right direction.

Of course, we need a good product mixture with higher value-added products, but our portfolio is there and with a strong growth demand, especially for the Functional Fillers where we just outlined AI, cable and wire has a very good baseline here and even the consumers like Nexans indicate there a quite good scenario. I'm optimistic that the EBIT margin improves again over the next years to come.

I quickly follow up with a potential other one. You mentioned in the report that you saw pricing from China due to overcapacity, specifically in Turkey. Do you think that this is sort of going to go broader across Europe or do you think it will -- are you hoping it will stay more localized to Turkey?

It's a good question. As I said, I'm not a prophet. I cannot say this will not happen [ potentially ]. We see that people come here and there into Europe and Turkey is Europe. Europe was a play field. You have to look at the quality demands, certainly, which goods they attack, which level they attack. There are, of course, differentiations in quality and price on the one side.

What we saw also and got feedback that they offer here and there, but then all of a sudden, they are not reliable on certain logistics on confirmations of pricing, they switch quickly. And this is not a policy the consumers in Europe or elsewhere like so much. It might work for really like the low-end quality products in various application fields.

But for the higher end, you cannot afford to switch around. But as I said, it does -- I have not a clear no, they will not. Momentarily in Europe, we see them besides Turkey, nowhere else. Functionally, as I said, one customer, there was a call for Chinese, but that was not really happening. That's what I can say in the moment. Any other questions from the audience?

It doesn't seem like it. There are no further questions in the line. I think we can wrap up this call. Mr. Heckmann. Would you like to share any closing remarks?

Yes. Okay. As I said at the beginning, we had a good rebound compared of Q4 in Q1. We were not quite satisfied in terms of what we have expected for the first quarter, but it makes us optimistic and all the feedback what we get momentarily even in a tough situation, in the tough environment with all the geopolitical challenges we face, but I'm optimistic for the next 2 quarters to come.

And we will see here that we are moving along our outlook or forecast what we have just given to you. But we have to do our internal homeworks, of course, and we have to stay close to the situation. Overall, as I said, with the troubled waters, we look quite optimistic into the near future.

At this point, I would want to thank you also in the name of Gunther and you -- for this earnings call for the first quarter of 2026 and with our annual wrap-up for last year's report. And I hope we see you in the next publication then after we did our Q1 report. Thanks for the audience. Thanks for listening and still have a nice weekend for the Germans, a nice and longer weekend. Thank you.

Thank you very much. Goodbye.

Thank you. Bye. Goodbye.