Zumtobel : Q1-Q3 2024/25 Interim Report

About this update from Zumtobel Group Ag

Q1-Q3 2024/25 Interim Report (May 2024 - January 2025) Zumtobel Group AG 1 May 2024 to 31 January 2025 Overview of the Third Quarter of 2024/25 Q3 Q3 Change Q1-Q3 Q1-Q3 Change Key Data in EUR mn 2024/25 2023/24 in % 2024/25 2023/24 in % Revenues 250.5 265.5 (5.7) 828.1 840.0 (1.4) Adjusted EBITDA 13.4 19.5 (31.7) 81.1 87.7 (7.5) as a % of revenues 5.3 7.4 9.8 10.4 EBITDA 11.1 19.5 (43.2) 68.8 79.4 (13.2) as a % of revenues 4.4 7.4 8.3 9.4 Adjusted EBIT (0.2) 5.9 <(100) 41.0 45.9 (10.7) as a % of revenues (0.1) 2.2 4.9 5.5 Special effects (1.9) 0.0 (13.1) (9.1) (44.4) EBIT (2.1) 5.9 <(100) 27.8 36.8 (24.3) as a % of revenues (0.9) 2.2 3.4 4.4 Net profit for the period (5.4) 0.3 <(100) 13.0 21.4 (39.1) as a % of revenues (2.1) 0.1 1.6 2.5 Cash flow from operating results 11.0 18.0 (38.8) 69.2 78.5 (11.8) CAPEX 36.4 12.9 >100 65.4 40.6 61.2 thereof CAPEX excl. IFRS 16 12.6 9.7 29.8 35.2 32.4 8.7 31 Jan 30 April Change 2025 2024 in % Total assets 996.3 987.2 0.9 Equity 426.6 425.2 0.3 Equity ratio in % 42.8 43.1 Net debt 115.0 77.1 49.1 Headcount incl. contract worker (full-time equivalent) 5,390 5,350 0.7 Development of business by quarter Revenues development (in EUR mn) 1.2% (0.1)% (5.7)% 285.6 289.1 288.9 288.6 287.0 265.5 250.5 Q1 Q2 Q3 Q4 Revenues FY 2023/24 Revenues FY 2024/25 Adjusted EBIT development 8.8% 7.0% 7.3% 4.0% 2.2% 5.1% 20.2 25.5 21.0 (0.1)% 14.5 11.4 5.9 (0.2) Q1 Q2 Q3 Q4 Adjusted EBIT FY 2023/24 in % of revenues Adjusted EBIT FY 2024/25 in % of revenues Adjusted EBIT FY 2023/24 in EUR mn Adjusted EBIT FY 2024/25 in EUR mn 2 Zumtobel Group AG 1 May 2024 to 31 January 2025 Letter to Shareholders Dear Shareholders, Revenues recorded by the Zumtobel Group declined by 1.4% in the first three quarters of the current financial year - and by 5.7% in the third quarter alone. The Components Segment recorded a slight improvement with an increase of 1.8% in the first nine months, while revenues in the Lighting Segment fell by 1.7%. These numbers tell the whole story: The operating environment remains challenging, not only for the Zumtobel Group but also for other market participants because it is currently impossible to predict the further development of the economies in our most important markets. The geopolitical situation is tense and, naturally, external factors like inflation and the resulting costs for energy, raw materials and personnel create an additional burden. These factors have now forced us to adjust our forecasts. We originally projected at least a slight year-on-year increase in revenues but now expect a level slightly below the previous year. However, our forecast for the adjusted EBIT margin remains intact and we can confirm the previously announced range of 3% to 6%. The persistent economic weakness and steadily increasing costs are reflected in our continuous efforts to identify the locations where we can produce best and most efficiently. In the third quarter, the Management Board approved the termination of production at our French subsidiary ZG Europhane SAS in Les Andelys. This decision was not taken lightly as 84 employees are involved. Socially acceptable measures were negotiated together with the employee representatives and will result in negative special effects of roughly EUR 10 mn. Provisions for most of these costs were recognised in the second quarter of 2024/25 and included in our half-year report. A substantial reduction in costs is expected over the medium term. The third quarter brought good news concerning sustainability: At the beginning of January, the renowned ISS ESG rating agency (Institutional Shareholder Services) rewarded our commitment with an ESG rating of C+. That meant Prime Status for the Zumtobel Group for the first time. This valuation includes nearly 100 branch-specific indicators from the areas of Environment, Social and Governance. Companies receive Prime Status when they meet or exceed the requirements defined for their branch. We intend to use this foundation to continuously strengthen our sustainability activities and establish a firm position as Prime-Status. One important aspect involves the opportunities for our stakeholders to express their opinions on the Zumtobel Group's sustainability activities at any time. Our employees, as external stakeholders, can use the Intranet, while external stakeholders can access a questionnaire on our website - and suggestions from our shareholders are, naturally, also welcome. 3 Zumtobel Group AG 1 May 2024 to 31 January 2025 In conclusion, I would like to mention one small highlight - regardless of the current numbers: As is generally known, Notre Dame Cathedral in Paris - a UNESCO world heritage site since 1991 - reopened this past December five years after the horrific fire. Here, the Zumtobel Group made a contribution in its very own way: It supported artist and light designer Patrick Rimoux, who was charged with the overall design of the lighting solution, with state-of-the-art lighting technology and know-how. For our team, this was a great project that will shine far beyond Paris. And especially in challenging times, projects like this are both confirmation and incentive - for our employees as well as for my colleagues in management and me. Dear Shareholders, we would also like to take this opportunity to thank you for your trust! Alfred Felder Chief Executive Officer (CEO) 4 Zumtobel Group AG 1 May 2024 to 31 January 2025 Group Management Report Development of revenues in the first three quarters of 2024/25 Slight decline of (1.4)% in Group revenues (FX-adjusted (1.8)%) Lighting Segment revenues slightly lower year-on-year at (1.7)% Components Segment revenues rise by 1.8% Adjusted EBIT equals EUR 41.0 mn Q3 Q3 Change Q1-Q3 Q1-Q3 Change Income statement in EUR mn 2024/25 2023/24 in % 2024/25 2023/24 in % Revenues Lighting Segment 195.9 208.9 (6.2) 652.0 663.4 (1.7) Revenues Components Segment 69.2 70.5 (1.8) 226.6 222.6 1.8 Reconciliation (14.7) (13.9) 5.5 (50.5) (46.0) 9.6 Revenues 250.5 265.5 (5.7) 828.1 840.0 (1.4) Adjusted Cost of goods sold (165.9) (176.2) (5.9) (523.2) (542.1) (3.5) Adjusted Gross profit 84.6 89.3 (5.3) 304.9 297.9 2.3 as a % of revenues 33.8 33.6 36.8 35.5 Adjusted SG&A expenses (84.8) (83.4) 1.6 (263.9) (252.0) 4.7 Adjusted EBIT Lighting Segment 1.9 11.5 (83.2) 39.9 55.6 (28.3) as a % of segment revenues 1.0 5.5 6.1 8.4 Adjusted EBIT Components Segment 2.1 (1.4) >100 13.3 4.1 >100 as a % of segment revenues 3.0 (1.9) 5.9 1.8 Reconciliation (4.2) (4.2) 0.5 (12.2) (13.9) (12.0) Adjusted EBIT (0.2) 5.9 <(100) 41.0 45.9 (10.7) as a % of revenues (0.1) 2.2 4.9 5.5 Special effects (1.9) 0.0 (13.1) (9.1) EBIT Lighting Segment (0.1) 10.4 <(100) 26.6 53.2 (49.9) as a % of segment revenues (0.1) 5.0 4.1 8.0 EBIT Components Segment 2.2 (0.3) >100 13.4 (2.6) >100 as a % of segment revenues 3.2 (0.4) 5.9 (1.1) Reconciliation (4.2) (4.2) 0.5 (12.2) (13.9) (12.0) EBIT (2.1) 5.9 <(100) 27.8 36.8 (24.3) as a % of revenues (0.9) 2.2 3.4 4.4 Financial results (3.8) (5.6) 31.9 (13.3) (13.0) (2.8) Profit before tax (6.0) 0.3 <(100) 14.5 23.8 (39.1) Income taxes 0.6 0.0 >100 (1.4) (2.4) (39.1) Net profit for the period (5.4) 0.3 <(100) 13.0 21.4 (39.1) Earnings per share (in EUR) (0.13) 0.01 <(100) 0.31 0.50 (37.7) For information: EBITDA (EBIT plus depreciation and amortisation) totalled EUR 68.8 mn in Q1-Q3 2024/25 (Q1-Q3 2023/24: EUR 79.4 mn). 5 Zumtobel Group AG 1 May 2024 to 31 January 2025 Decline of (1.4)% in Revenues recorded by the Zumtobel Group fell by (1.4)% to EUR 828.1 mn in Q1-Q3 2024/25 revenues (Q1-Q3 2023/24: EUR 840.0 mn), primarily due to weakness in Southern and Eastern Europe. After an adjustment for foreign exchange effects, the decline equalled (1.8)%. Lighting Segment In the Lighting Segment, revenues were (1.7)% lower at EUR 652.0 mn in Q1-Q3 2024/25 revenues fall by (1.7)% (Q1-Q3 2023/24: EUR 663.4 mn). Positive development in the UK, Ireland and the D/A/CH region was unable to offset the negative trend in Southern and Eastern Europe and in Asia & Pacific. Components Segment The Components Segment reported a 1.8% increase in revenues to EUR 226.6 mn in Q1-Q3 2024/25 revenues increase by (Q1-Q3 2023/24: EUR 222.6 mn). This growth was generated primarily in the UK and D/A/CH region, but 1.8% partially reduced by negative price developments. In the D/A/CH region, all three countries contributed to the positive development in revenues. Northern and Western Europe recorded particularly strong growth, supported by an increase in the UK. Revenues in Southern and Eastern Europe were negatively influenced by weakness in France. The revenue decline in Asia Pacific was attributable, above all, to Macau and Australia. The negative development of revenues in the Americas & MEA region resulted mainly from disappointing sales in the USA. Q3 Change Q1-Q3 Change in % Revenues in EUR mn 2024/25 in % 2024/25 in % of Group D/A/CH 93.8 0.6 310.9 2.2 37.5 Northern and Western Europe 55.7 (5.0) 202.1 4.0 24.4 Southern and Eastern Europe 64.8 (9.0) 206.9 (7.6) 25.0 Asia & Pacific 21.6 (16.8) 66.8 (7.4) 8.1 Americas & MEA 14.5 (11.8) 41.4 (8.8) 5.0 Total 250.5 (5.7) 828.1 (1.4) 100.0 The adjusted cost of goods sold reflects a reduction in material costs as well as a positive effect from inventory revaluations. Development costs rose by EUR 2.4 mn to EUR (52.6) mn (Q1-Q3 2023/24: EUR (50.2) mn). Despite the decline in revenues, the gross profit margin rose to 36.8% (Q1-Q3 2023/24: 35.5%) supported by a reduction in the material ratio. Adjusted selling and administrative expenses (incl. research) rose by EUR 11.9 mn to EUR (263.9) mn (Q1- Q3 2023/24: EUR (252,0) mn) due to an increase in personnel costs. Adjusted EBIT falls to Adjusted EBIT fell from EUR 45.9 mn in Q1-Q3 2023/24 to EUR 41.0 mn in Q1-Q3 2024/25, and the EUR 41.0 mn adjusted EBIT margin equalled 4.9% (Q1-Q3 2023/24: 5.5%). The improvement in the material ratio was unable to offset the decline in revenues and increased personnel and other costs. Adjusted EBIT in the Lighting Segments declined from EUR 55.6 mn in the comparative period to EUR 39.9 mn in Q1-Q3 2024/25. The decisive factor for the negative development of EBIT was the decline in revenues combined with an increase in fixed costs. The Components Segment recorded an increase in both revenues and the margin in spite of the challenging market situation. Adjusted EBIT in this segment rose from EUR 4.1 mn to EUR 13.3 mn in Q1-Q3 2024/25. Special effects of Special effects of EUR (13,1) mn were recorded in Q1-Q3 2024/25 and resulted primarily from the EUR (13.1) mn termination of production at the plant in Les Andelys (France). Provisions for the restructuring of the plant in Lemgo (Deutschland) and the closing of the assembly plant in Sydney (Australia) are also included in 6 Zumtobel Group AG 1 May 2024 to 31 January 2025 these special effects. EBIT fell to EUR 27.8 mn in Q1-Q3 2024/25 (Q1-Q3 2023/24: EUR 36.8 mn), and the EBIT margin equalled 3.4% (Q1-Q3 2023/24: 4.4%). Q3 Q3 Change Q1-Q3 Q1-Q3 Change Financial result in EUR mn 2024/25 2023/24 in % 2024/25 2023/24 in % Interest expense (2.7) (3.1) (14.8) (8.3) (8.7) (4.9) Interest income 0.2 0.2 (24.6) 0.5 0.5 12.0 Net financing costs (2.5) (2.9) (14.1) (7.8) (8.2) 5.9 Other financial income and expenses (1.3) (2.7) 51.5 (5.6) (4.7) 18.1 Financial results (3.8) (5.6) 31.9 (13.3) (13.0) (2.8) Financial results amounted to EUR (13.3) mn in Q1-Q3 2024/25 (Q1-Q3 2023/24: EUR (13.0) mn). Interest expense consisted chiefly of the interest expense for current credit agreements and finance leases and totalled EUR (7.8) mn (Q1-Q3 2023/24: EUR (8.2) mn). The other financial income and expenses of EUR (5.6) mn consisted primarily of the interest expense on pension obligations, the earnings effects from exchange rate changes and the measurement of hedges. Profit before tax totalled EUR 14.5 mn in the reporting period (Q1-Q3 2023/24: EUR 23.8 mn), and Net profit declines to income taxes equalled EUR (1.4) mn (Q1-Q3 2023/24: EUR (2.4) mn). Net profit for the reporting period EUR 13.0 mn declined to EUR 13.0 mn (Q1-Q3 2023/24: EUR 21.4 mn). Earnings per share for the shareholders of Zumtobel Group AG (basic EPS based on 42.7 million shares) equalled EUR 0.31 (Q1-Q3 2023/24: EUR 0.50). Cash flow Q3 Q3 Change Q1-Q3 Q1-Q3 Change Cash flow statement in EUR mn 2024/25 2023/24 in % 2024/25 2023/24 in % Cash flow from operating results 11.0 18.0 (38.8) 69.2 78.5 (11.8) Change in working capital 7.4 4.7 56.3 1.2 8.7 (86.8) Change in other operating items (2.8) (6.3) 55.1 (16.2) (22.3) 27.3 Income taxes paid (0.5) (3.2) 83.6 (5.3) (6.3) 15.6 Cash flow from operating activities 15.1 13.2 13.9 48.8 58.6 (16.8) Cash flow from investing activities (12.5) (7.5) (67.4) (33.1) (29.7) (11.4) FREE CASH FLOW 2.6 5.8 (55.1) 15.6 28.9 (45.8) Cash flow from financing activities (15.7) (10.3) (51.8) (36.3) (11.6) <(100) CHANGE IN CASH AND CASH (13.1) (4.5) <(100) (20.6) 17.2 <(100) EQUIVALENTS Cash flow from operating results declined by EUR 9.3 mn year-on-year from EUR 78.5 mn to EUR 69.2 mn. Cash outflows from the changes in other operating positions amounted to EUR (16.2) mn (Q1-Q3 2023/24: EUR (22.3) mn) and resulted mainly from a reduction in the provisions for bonuses, holiday leave and guarantees. These effects were contrasted by an increase in the provisions for restructuring. Cash flow from operating activities declined to EUR 48.8 mn in Q1-Q3 2024/25 (Q1-Q3 2023/24: EUR 58.6 mn). 7 Zumtobel Group AG 1 May 2024 to 31 January 2025 Cash flow from investing activities amounted to EUR (33.1) mn (Q1-Q3 2023/24: EUR (29.7) mn). In addition to investments in property, plant and equipment, this position also included investments of EUR 9.7 mn (Q1-Q3 2023/24: EUR 6.1 mn) for capitalised development costs. Free cash flow at Free cash flow equalled EUR 15.6 mn in Q1-Q3 2024/25 (Q1-Q3 2023/24: EUR 28.9 mn). EUR 15.6 mn Cash flow from financing activities totalled EUR (36.3) mn in Q1-Q3 2024/25 (Q1-Q3 2023/24: EUR (11.6) mn). The year-on-year change resulted primarily from the repayment of a EUR 30.0 mn loan with the European Investment Bank (EIB). The year-on-year reduction in the dividend payment represented a contrary effect. Asset position Balance sheet data in EUR mn 31 January 2025 30 April 2024 Total assets 996.3 987.2 Net debt 115.0 77.1 Debt coverage ratio 1.20 0.73 Equity 426.6 425.2 Equity ratio in % 42.8 43.1 Gearing in % 26.9 18.1 CAPEX 65.4 64.2 thereof CAPEX excl. IFRS 16 35.2 50.8 Working capital 227.7 225.6 As a % of rolling 12 month revenues 20.4 20.0 Stable and solid The balance sheet total of the Zumtobel Group equalled EUR 996.3 mn as of 31 January 2025 and balance sheet remained nearly unchanged from the last balance sheet date on 30 April 2024 (EUR 987.2 mn). structure Working capital totalled EUR 227.7 mn as of 31 January 2025 and was EUR 2.1 mn higher than on 30 April 2024 (EUR 225.6 mn). As a per cent of rolling 12-month revenues, working capital was nearly constant at 20.4% (30 April 2024: 20.0%). The equity ratio was also comparatively stable at 42.8% as of 31 January 2025 (30 April 2024: 43.1%). Equity increased slightly by EUR 1.4 mn over the level on 30 April 2024 from EUR 425.2 mn to EUR 426.6 mn. Net debt rose to EUR 115.0 mn as of 31 January 2025 (30 April 2024: EUR 77.1 mn). The balance sheet structure of the Zumtobel Group remains stable and solid. 8 Zumtobel Group AG 1 May 2024 to 31 January 2025 Outlook for the 2024/25 financial year Revenues slightly below prior year (earlier guidance: revenue growth at least slightly above previous year) Adjusted EBIT margin of 3% to 6% confirmed The current operating environment is challenging, not only for the Zumtobel Group but also for other market participants because it is impossible to predict the further development of the economies in our most important markets. Moreover, the geopolitical situation remains tense. The Zumtobel Group sees a continuation of the present weak demand, especially in new construction, and further negative effects on market activity through long decision cycles by customers and project delays. External factors like energy, raw material and transport prices as well as constant high personnel costs, inflation and interest developments also have a significant influence on the global economy, our customers and, in turn, on the development of our company. In view of these developments, the Management Board of the Zumtobel Group has adjusted the revenue forecast to reflect the difficult market conditions and weak customer demand. The previous guidance called for at least a slight revenue growth over the 2023/24 year, but the Management Board now expects revenues slightly below the prior year in 2024/25. The focus remains on operating efficiency and long-term strategic initiatives in spite of these challenges, and the objective is to successfully steer the company through the current market environment. The Management Board therefore confirms the outlook for the adjusted EBIT margin, which is expected to range from 3% to 6%. Dornbirn, 6 March 2025 The Management Board Outlook on 2024/25: Revenues slightly below prior year and adjusted EBIT margin of 3-6% Alfred Felder Thomas Erath Chief Executive Officer (CEO) Chief Financial Officer (CFO) Bernard Motzko Marcus Frantz Chief Operating Officer (COO) Chief Digital Transformation Officer (CDTO) 9 Condensed Consolidated Interim Financial Statements as of 31 January 2025

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