This article first appeared on GuruFocus .
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Total Sales:EUR1,332 million, with a comparable sales decline of 3.6%.
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Adjusted EBITA:EUR81 million, resulting in an adjusted EBITA margin of 6.1%.
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Free Cash Flow:EUR35 million, compared with EUR36 million last year.
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Professional Business Sales Decline:2.5% comparable sales decline.
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Professional Business Gross Margin:Stable at around 40%.
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Consumer Business Sales Decline:0.2% comparable sales decline.
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Consumer Business Adjusted EBITA Margin:3%.
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OEM Business Sales Decline:12% comparable sales decline.
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OEM Business Adjusted EBITA Margin:4.6%.
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Conventional Business Sales Decline:9% comparable sales decline.
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Conventional Business Adjusted EBITA Margin:Improved to 18.1%.
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Working Capital Improvement:EUR107 million improvement, translating to a 120 basis points improvement to 6.3% of sales.
Release Date: July 24, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Professional projects continue to grow in the United States and Rest of the World, outperforming the markets.
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Connected lighting sales to consumers remained strong, reflecting strong underlying demand.
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Continued growth in India and luminaires growth worldwide.
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Conventional business delivered a strong recovery in profitability, showcasing effective strategy execution.
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Positive employee engagement and response to the new strategy, critical for execution with focus and discipline.
Negative Points
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Professional stock and flow remained weak across most geographies, particularly in Europe.
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Retailer destocking continued to weigh on sell-in, impacting both top and bottom lines.
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KLite and OEM faced demand challenges, with KLite affected by component availability and cost inflation.
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Adjusted EBITA margin declined due to lower gross margin in consumer and higher input costs.
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OEM business experienced a 12% sales decline due to continued market softness, particularly in Europe and the US.
Q & A Highlights
Q: Can you talk about what is driving retailers to destock connected products despite strong sell-out? A: Retailers have been optimizing their inventory positions, which were previously at higher coverage levels. Now, stock levels are just on or below normalized levels, and we see convergence happening, giving us more confidence going into the third quarter. - As Tempelman, CEO
Q: How do you expect the IEEPA impact to evolve in the second half, and is it included in your guidance? A: The IEEPA process is ongoing, and while the amount and timing remain uncertain, our guidance does not include any additional impact from IEEPA that might materialize in the second half. - Zeljko Kosanovic, CFO
Q: Can you provide details on the cost savings program and its impact on the P&L? A: We are on track with the EUR180 million gross savings plan, with most savings expected in the second half due to the timing of restructuring actions. The full benefit is expected by the end of 2026. - Zeljko Kosanovic, CFO
Q: What gives you confidence in achieving a stronger EBIT in the second half despite a challenging environment? A: We expect improved top-line performance, gross margin resilience, and increased contributions from our cost resizing program. Additionally, strategic execution across performance areas supports our confidence in achieving guidance. - Zeljko Kosanovic, CFO
Q: Can you explain the margin decline in the consumer segment despite better-than-expected revenue? A: The margin decline was primarily due to underperformance in KLite and connected products, with challenges in component shortages and operating deleverage. We have plans to address these issues in the second half. - Zeljko Kosanovic, CFO
Q: How do you see the consumer margins developing in the second half compared to last year? A: We expect normalization of margins in the second half, driven by operating leverage in connected products and strong performance in India and luminaires. - Zeljko Kosanovic, CFO
Q: What is the impact of exchange rates on your margins, and could it turn positive in the second half? A: While hedged currencies are under control, non-hedged currencies are managed through gross margin discipline. It's difficult to predict, but we are prepared to manage any impact. - Zeljko Kosanovic, CFO
Q: Can you provide an update on the connected light points and its impact on performance? A: We currently have 175 million connected light points, and while we didn't include it in this release, it remains a key performance indicator. - As Tempelman, CEO
Q: How do you plan to manage price increases in challenging markets like KLite without impacting volumes? A: KLite faced headwinds due to component shortages, but we expect improvement in the second half. We have strong brand power to implement necessary price actions. - As Tempelman, CEO
Q: What is your outlook on the OEM segment given its recent performance? A: OEM performance can be volatile, but we are applying a playbook to manage costs and pricing actions. We expect better results in the second half. - As Tempelman, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
