Henning Kosman

Henning Kosman asked for an updated framework on the company's steady-state margin targets, specifically if the 6%-8% adjusted operating income margin narrative is still endorsed, and what prerequisites (e.g., U.S. and European market share, pricing, reshoring impact) underpin this. He also sought clarification on whether the -$1 billion to -$2 billion free cash flow expectation for H2 was endorsed.

Answer

CFO Joao Larangeira clarified that he was not endorsing specific numbers for H2 free cash flow but confirming the dynamic of improvement over H1. CEO Antonio Filosa stated that the company is deploying a growth strategy aimed at steady sequential improvement in all business KPIs, confirming that a 6%-8% adjusted operating income margin is a reasonable mid-to-long-term target, with further details to be provided at a Capital Market Day.

Henning Kosman asked for an updated strategic framework, inquiring if the new management team endorses a 6-8% adjusted operating income margin target in favor of volume and market share growth. He also asked about the prerequisites for this, including U.S. and European market share targets, pricing, and the impact of U.S. reshoring on costs. He also sought clarification on the free cash flow guidance for H2 2025.

Answer

CFO Joao Larangeira clarified that his previous statement on free cash flow referred to dynamics, not specific numbers, confirming H2 improvement over H1. CEO Antonio Filosa stated that the company is deploying a growth strategy for steady sequential improvement in all business KPIs, considering a 6-8% adjusted operating income margin as a reasonable mid-to-long-term target.