ElringKlinger ETR: ZIL2 management said it is maintaining its full-year 2026 outlook after posting first-quarter results that outpaced a contracting automotive market, while continuing to ramp up its e-mobility business and execute cost and organizational measures under its SHAPE30 strategy.
Management cites challenging backdrop as electrification remains key trend
CEO Thomas Jessulat opened the call by describing a “challenging” external environment for the global automotive industry, pointing to rising geopolitical tensions, sanctions and trade restrictions, regulatory fragmentation, volatile energy prices, and logistics disruptions. He noted that global light vehicle production declined 3.4% in Q1 2026, even as electrification momentum “remains intact.”
Jessulat said China continues to act as the “global pacesetter,” driven by local ecosystems and technology leadership. Against that backdrop, he said ElringKlinger’s global footprint supports localized production and supply contract optimization, while the company continues to strengthen its profile through established products and growing order intake in new drive technologies.
E-mobility growth continues, while profitability remains in ramp-up phase
Jessulat highlighted momentum in e-mobility as part of the company’s SHAPE30 framework. E-mobility sales rose 42% year over year to €38 million in Q1 2026 from €27 million in Q1 2025. “The ramp-up phase of large scale series orders for cell contacting systems is further progressing,” CFO Isabelle (finance board member) said.
However, management emphasized that profitability in e-mobility is still pressured during the ramp-up. Jessulat said adjusted EBIT in the e-mobility business was negative €16 million in Q1 2026, compared with negative €15 million a year earlier, and said the development is “fully aligned with our roadmap,” with improvements expected during the year.
During the Q&A, Jessulat addressed questions about demand and capacity, saying the company sees “pretty ambitious run-ups” across several customers and confirmed strong development in the initial ramp-up phase. Asked whether ElringKlinger could fulfill higher-than-planned call-offs, he said the company does not currently see anything indicating it cannot meet demand and added, “Yes, we’re gonna be able to fulfill.”
On profitability timing, management reiterated its target to bring e-mobility into a profitable range by 2028 on a full-year basis, while noting quarterly break-even could occur earlier. In response to a question, Jessulat said, “It could be… that we see the 1 other quarter where we may break even… We wanna be very clear on 2028 is the target for the full year.”
Q1 revenue rises; group profitability improves as savings begin to flow through
CFO Isabelle reported Q1 2026 revenue of €430 million, up 1.6% year over year on a reported basis. She said results were affected by portfolio and currency effects, noting the company’s U.K. subsidiary was divested effective Nov. 30, 2025 and had contributed €3.1 million in the prior-year quarter, while currency effects diluted revenue by €9.7 million.
Excluding M&A and currency effects, Isabelle said revenue increased organically by 4.7% in Q1 2026, which she characterized as a clear outperformance versus the underlying automotive market decline of 3.4%.
Adjusted group EBITDA rose to €59 million from €42 million a year earlier (reported EBITDA was €58 million). Isabelle said the increase in adjusted EBITDA was driven by compensation received for an asset that was depreciated at the same time.
Adjusted EBIT reached €29 million, corresponding to a 6.8% margin, which management said is in line with its full-year guidance of 6% to 7% of sales. Reported EBIT was €28 million (6.6% margin), up from €20 million in the prior-year quarter. Isabelle said adjustments of less than €1 million related to exceptional items from the STREAMLINE program.
Management also discussed the impact of cost measures. Isabelle said STREAMLINE and SHAPE30 initiatives target €50 million in annual savings in total, with around €10 million realized in Q1. Jessulat later added that Q1 reflects an expected run-rate improvement and that the full impact is expected in 2027. He said some global-environment difficulties are already accounted for, and the company believes it can absorb additional impacts to some extent.
Segment performance: Aftermarket strength offsets OE pressure
In the sales mix, Original Equipment (OE) remained the largest segment at 65% of group revenue, or €280 million, and was only slightly below the prior-year level, Isabelle said. The Aftermarket segment increased sales to €110 million from €102 million, while Engineered Plastics rose to €40 million from €39 million, supported by an improved product mix.
- OE: Sales of €280 million; adjusted EBIT margin of 0.9%, improving year over year, with comparisons affected by the divested U.K. entity.
- Aftermarket: Sales up roughly 8.8% year over year to €110 million; adjusted EBIT margin of 24.3%.
- Engineered Plastics: Sales of €40 million; adjusted EBIT margin of 10.6%.
Asked about Aftermarket margins after a strong Q1, management said it expects growth to continue during the year while maintaining profitability, though Isabelle cautioned that the company sees “some impact from the war in Asia” and would monitor developments in coming months.
Management also addressed tariffs. In a follow-up question, Isabelle said the negative tariff effect discussed in the presentation was “mainly our Aftermarket business,” adding that the company increased prices last year to compensate, though “not for the full 100%.”
Cash flow, balance sheet, and capital spending
Isabelle said ElringKlinger’s net working capital was €383 million, representing 23% of sales and meeting the company’s target of keeping the figure below 25%. R&D ratio declined to 5%, with R&D spending falling to €22 million from €25 million.
CapEx in Q1 totaled €21 million, a 5% ratio, which management said aligns with full-year guidance of 4% to 6%. Responding to questions about medium-term CapEx expectations, management said heavy spending over the past two years supported the e-mobility ramp-up and that no additional CapEx is needed to meet ambitions. Jessulat added that e-mobility is not at full utilization currently, and higher utilization is expected in 2027 and 2028.
Operating free cash flow was negative €109 million in Q1, driven by higher working capital needs tied to ramp-up of large-scale orders and about €20 million in cash-effective restructuring expenses related to STREAMLINE. Net debt stood at €430 million, with an adjusted net debt to EBITDA ratio of 2.1, which Isabelle said was stable year over year. Equity totaled €686 million at quarter end, up from €666 million at the end of Q4 2025.
Looking ahead, Jessulat said light vehicle production is expected to decline in 2026 across major regions, while the medium-term outlook remains constructive, with global volumes projected to return to growth by 2030. He confirmed the company’s full-year 2026 outlook as published in March and pointed to continued focus on e-mobility contract ramp-ups, OE profitability, operating free cash flow, and net debt reduction.
The company said it will hold its annual general meeting virtually on May 12 and plans to publish Q2 results in August, with the next quarterly figures scheduled for release on Aug. 5.
About ElringKlinger ETR: ZIL2
ElringKlinger AG develops, manufactures, and sells systems and components for the automotive industry in Germany, the Asia-Pacific, North America, rest of Europe, and internationally. It operates through four segments: Original Equipment, Aftermarket, Engineered Plastics, and Other. The Original Equipment segment is involved in the development, manufacture, and sale of products and assemblies, such as metal sealing systems and drive train components; thermoplastics for drivetrains, body, and underbody applications; hybrid technologies; thermal, acoustic, and aerodynamic shielding systems; cylinder-head and specialty gaskets; battery and fuel cell components and systems; electric drive units; and exhaust gas purification.
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