Q2 2026 Elmos Semiconductor SE Earnings Call Transcript
Key Points
- Strong financial performance with H1 sales up over 15% year-on-year and Q2 sales up 11% year-on-year, confirming ambitious full-year guidance.
- Improved operating profitability with H1 operating EBIT margin of 24.1%, up nearly 4 percentage points year-over-year.
- Significant cash generation improvement, with operating adjusted free cash flow of EUR55 million (17.7% of sales) in H1, up around 150% year-over-year.
- Robust design win pipeline, securing new projects with a lifetime volume of over EUR400 million year-to-date, about 60% of the annual target.
- Strategic positioning in growth areas like ADAS, electrification, and robotics, with expanding customer base and potential for future growth.
- Disciplined capital expenditure at only 2.8% of sales in H1, underscoring the scalability of the business model.
- Successful navigation of tight 8-inch wafer capacity, with expectations of passing on cost increases through pricing actions, potentially providing upside.
- Higher operating expenses in H1 due to a one-time EUR12 million charge from the fair value revaluation of share-based compensation, impacting reported EBIT.
- Gross margin impacted by higher gold prices in assembly and higher foundry costs, though partially offset by volume and cost improvements.
- Global vehicle production forecast down around 2% in 2026, which could temper overall market growth.
- Tightening 8-inch wafer capacity due to AI-driven demand may lead to higher wafer and assembly costs, pressuring margins.
- Uncertainty in customer inventory levels, with some customers maintaining too-low inventories due to cash constraints, potentially affecting demand stability.
- Share-based compensation now cash-settled, leading to potential earnings volatility tied to share price fluctuations, which are excluded from guidance.
- Robotics business is still at an early stage and not expected to contribute meaningfully to sales next year.
Good morning, ladies and gentlemen and welcome to the Elmos Semiconductor SE conference call regarding the results of Q2 2026. The conference will be recorded. At this time, all participants have been placed on a listen-only mode. The floor will be open for questions following the presentation.
Let me now turn the floor over to your host, Dr. Arne Schneider, CEO.
Ladies and gentlemen, good morning everyone and welcome to the LMOS conference call covering our results for the second quarter and first half of 2026.
Thank you very much for joining us today and for your continued interest in LMOS.
Following an outstanding start to the year, we continued our strong operational execution in the second quarter.
We again delivered profitable growth.
Further improved our operating profitability and generated significantly higher cash flows compared with the previous year.
These ongoing positive achievements are the
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