This article first appeared on GuruFocus .
Release Date: August 11, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Adjusted EBIT margin improved significantly to 3.6% in Q2 2026, up 2.5 percentage points year-over-year, driven by strong cost discipline and transformation benefits.
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The company achieved a positive net cash position of approximately 304 million as of June 30, 2026, with pro forma net cash including short-term deposits reaching 361 million.
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Secured major new orders, including the largest project in company history in the mobility business (157 million lifetime volume) and strong order intake in industrial applications across APAC.
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Industrial applications business grew 8.4% on a comparable FX basis in Q2, outperforming the softer mobility segment and benefiting from infrastructure markets like data centers and sustainable energy.
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Transformation program is on track, delivering 6.1 million in measurable benefits in H1 2026, with a full-year target of 15 million, and the voluntary labor program in Germany completed as expected.
Negative Points
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Net sales remained broadly flat, with group sales declining 0.6% year-over-year on a reported basis and only slightly positive on a comparable FX basis, reflecting continued market headwinds.
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Mobility and new energy sales declined 4% year-over-year in Q2, impacted by softer automotive demand, particularly in Europe and APAC.
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Net operating cash flow for H1 2026 was negative at -13.1 million, impacted by the water management divestment and supply chain financing programs.
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Full-year guidance implies a weaker H2 margin compared to H1, with management expecting to land at the midpoint or below for net sales and EBIT margin, despite transformation benefits.
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The company faces ongoing challenges from European OEM capacity cuts and Chinese OEM competition, requiring continued restructuring and strategic adjustments.
Q & A Highlights
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Q: Can you provide a split between volume and price in the Q2 revenue bridge, and what is expected for H2? A: Okan Angelica, CFO: We haven't broken it down this time, but we will work on it and share it with you in the aftermath.
Q: Given the midpoint of your guidance implies a weaker H2 margin despite transformation benefits, do you expect a deterioration in the market environment? A: Okan Angelica, CFO: We hold to our earlier figures. We expect net sales to come out at the midpoint or slightly below. With margin improvements from the transformation program confirmed at 15 million, we expect the full-year EBIT margin to be around the midpoint of our guidance.
Q: Can you give a glimpse of what to expect from the October strategy update? A: Birgit Zega, CEO: We will provide a midterm ambition, insights on products and innovations in exciting markets like infrastructure, data centers, white goods, and aerospace. We will also detail what NewNorma means with more substance and numbers for each of the four strategic pillars.
Q: How will you accelerate the restructuring program amid European OEM job cuts and Chinese OEMs pushing into Europe, and how will you deal with new entrants in passenger cars and electric heavy-duty trucks? A: Birgit Zega, CEO: We are working on speedy implementation of the restructuring program. The October strategy update will present a model that incorporates these challenges. We have operations in China that are doing well and have strengthened that organization. As a global player, we are prepared to answer such market challenges.
Q: Regarding the recent major mobility project with over 100 thermal management system variants, what internal setup changes and production location in Serbia will prevent past project management issues? Are there take-or-pay or price escalation clauses? A: Birgit Zega, CEO: The Serbia plant is mature with good expertise, supported by stronger project management. We assigned a project manager with required competency and senior support. The agreement includes the best possible protective clauses after long negotiations, and our new way of working was key to winning this business.
Q: What are the main criteria for the permanent CFO position? A: Birgit Zega, CEO: The supervisory board is conducting a professional search. The criteria include a CFO experienced in managing transformations and restructuring, which is exactly what NewNorma needs.
Q: What is behind the 2 million reversal of provisions in H1, and should we expect more in H2? A: Okan Angelica, CFO: The reversal was related to a provision built in 2025, released in 2026 due to new information on the transformation program. This release has been adjusted, and there is nothing further to adjust for.
Q: What is the timing of the planned capital measures, including the capital reduction and share buyback? A: Birgit Zega, CEO: The AGM has approved all resolutions. We are working at full speed with major priority. August is a hot month, so stay tuned.
Q: Will the 29 million adjustments between adjusted and reported EBIT be booked in Q3 or Q4, and will they decrease significantly next year? A: Okan Angelica, CFO: We are at 6.7 million currently. We pulled forward some costs from 2027 into 2026 to accelerate transformation. The exact timing of provisions hasn't been decided yet; we will provide clarity with the strategy update or Q3 publication.
Q: What are the levers for higher free cash flow power going forward? A: Okan Angelica, CFO: Free cash flow will primarily be supported by improved profitability. We are reviewing other financial parameters to balance the business. With a strong focus on sustainable top-line in mobility and extending activities in attractive industry applications, we are confident in improving EBIT results significantly.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
