Good afternoon. Good afternoon, everyone, and welcome to this conference call presenting B&C Speakers half-year results. I will now hand over to CEO Lorenzo Coppini and CFO Francesco Spapperi. Thank you very much. Please, Lorenzo and Francesco. Thank you. We are going to give you a short presentation with the half of the year result. Francesco, if you want to — Okay — do that, and then we are, of course, here for your question and Good afternoon to everyone. Thanks for your timing. Going through the index, the most significant information here is the very quick resume of our recent past experience in B&C Speakers. Okay. Key fact of the year, we are still in a pretty good level of EBITDA margin, still very close to 20% at group level, even considering the timing reduction on demand and even with still non-recurring costs that we are facing for some legal action that we have in place since two semesters ago. The net result of the semester is significantly bigger than the previous semester of last year, mainly because we have been able to differently and more consistently manage the financial aspect of our activities. In other words, we have limited our incurring in exchange rate cost, which was the most important aspect of last year's semester. You could see the result is that at the end of the day, the net result is better than last year. We are still a company not only resilient in terms of efficiency and cost management, but also, as you can see, in cash flow generation. Clearly, during the semester, we have paid, in May, the EUR 7.6 dividend payment, being coherent with our political policy of paying back the investors. But having considered this, we have been able to produce free cash flow, almost able to equalize the amount of dividend paid. The group remain pretty strong all around the world, thanks to our very broad geographical presence. For example, we have seen pretty good result in Italy and, apart from some specific situation, Europe remain not only the most important initial market for us, but also we have seen some more players growing around, as well as the distribution market, which is doing pretty well, especially in Europe. At the end of the day, being present in the different area of the world gives us the possibility to differentiate, clearly, our offer and even to try sort of compensating when some portion of the market are suffering with other area that are performing better. The key financial line, they represent what we have sort of introduced. Total revenues end of semester amount at 47, something around - 7% with respect to last year. Which means that the second quarter, as expected, we have still seen from the major, most important OEM, I would say, delayed on their forecast program, which means that nothing has been canceled, but mainly they have asked to postpone most part of summer or their summer forecast to September and later order. The EBITDA has reached more than EUR 9 million. The effect of our still recurring cost is around EUR 300,000. If we consider the normal cost structure, we would have been able to almost arrive at 20% of EBITDA margin. The net profit, as introduced before, seems to us pretty significant considering that it is bigger and higher than last year. The good result, as said before, it has been to limited risk on exchange rate currencies, which is not so easy in a very turbulent market like this one. And the net financial position is clearly impacted by the dividend paid in May, while on the other side, we are still solidly producing cash flow from recurring operation. Pretty quickly, the graph representing the, I say, the profit and loss, the most important index. From our point of view, it's very much important, the gross margin, which is almost stable in respect to the first half of last year, even without a portion of sales. This means that while we are waiting for the market to restart, which will happen by the end of the summer and at the beginning of the autumn, or the last part of the year, we have been able to react promptly and efficiently. The consequence is that if we are losing some volume, the real percentage of the gross margin is there, which represents, from our point of view, an important target that has been achieved. Clearly, in terms of EBITDA, the amount of fixed cost is making the big difference between one semester to the other one. In terms of geographical background, it's clearly still very much prominent, predominant, the European market, thanks to our big European OEM customers, which are doing good again, and well again, starting from September, where they have confirmed orders at the level of the beginning of 2026, at least. In this meanwhile, minor or less important OEM players, European ones, have performed pretty well, as well as the Italian market, which is becoming more important. South America, especially Brazil and the northern part of Central America, are doing pretty much well. North America, we have done a more than satisfying first half of the year. The summer was never that good this year, especially on the retail market. But we are still optimistic that they will restart, they will re-jump sooner than later. Here we have the EBITDA, while I was trying to introduce it before. Clearly, in terms of EBITDA margin, the effect of the reduced volume is more visible than at the gross margin level. But as said before, net of non-recurring costs, it would have been closer to 20% than to 19%. Net result is clearly growing in respect to last year for the reason that we have already explained. What we are stating here, profitability level preserved by tight cost control activities, is something that is clearly in place, not only in a period like this one with reducing volume, but in this time it's becoming more and more important. We are confident that most of those efficiencies are still to come. Net working capital, before the net financial position, it's important to underline that thanks to our resiliency, thanks to our capability to try to react on market trend, one of our decisions was to increase our net working capital, mainly inventory, taking advantage of still a pretty stable, if not lower, cost of components in order to be ready for the time when the demand will restart. Not only to be able to react almost just in time, but also, how do you say, benefiting from good cost in terms of cost of components. Okay. The net financial position clearly is impacted by the dividend paid. There is no reason to imagine that this financial position will become zero. We will be again in an almost positive position by the end of the year. This represents the way how we have produced cash. This EUR 5.1 million represents the free cash flow produced by the recurring normal activity before financing and investment. In terms of the visibility for the second part of 2026, as said before, we are still dealing with a very short visibility, but it is to be confirmed that the biggest player on the market, they have clearly and firmly restarted, which means that they have confirmed orders for the months of September and October at levels that were recurring and normal at the end of last year, if not at the beginning of this year. Which means that with them in particular, we are on the way to recover part of what has been lost during the summertime because of this market, how to say, turbulence and uncertainty. We continue to work on flexibility in order to control more than we are used to do, control and cost efficiency in order to make any of our decision less impacting possible in terms of profitability. No particular reason, and here, Lorenzo, we confirm that from the market could arrive a message different from lasting but temporary indication about this demand not growing as expected. This is more or less what we will be working on the second part of the year in order to, how to say, reestablish result and performance in line with our beginning of the year expectation. On the appendix, we can find the profit and loss and the balance sheet statement that we have, how to say, communicated to market a couple of hours ago, where it's clear where the number are coming from. This is simply the detail of what I've tried to explain to you before. This is for the profit and loss, and this is the balance sheet at the end of the year. Here it's important to underline, the effect on the working capital, as said before, is mainly inventory for the strategic reason that I have introduced to you before. Cash is still very much strong and relevant within the group. In terms of trade receivable, we have no significant, or really, we have no matter in terms of overdoing our credit and risk. The highlights of the cash flow for the semester, and almost that's it. The safe harbor statement, I don't think it's anything interesting on you. From my point of view, from our point of view, this is the, how to say, the way to go through the most important topics. Now, it will be any question or unless you have anything to say, Lorenzo. No, I'm waiting for the question from- Any question are welcome. Yeah. Thank you, Francesco. I think we can now open the discussion in case there are any questions. Okay, Andrea. Please, you are the first. Thank you. Ciao, Lorenzo. Ciao, Francesco. Andrea. Thanks for representation. I would like to start with the outlook you provided. Maybe just a clarification on the bigger clients that you are seeing improving orders. I just want to be sure if you are referring to the OEM clients in Europe. Should we expect a better, let's say, European sales in the second half of the year? Or it was referring general bigger clients, not only OEM? No. Actually, we were specifically referring to our two largest customers, which as you all know at this point, are the French, L-Acoustics, and the German, d&b audiotechnik. The fact is that in a normal year, they would represent Last year, for example, they would represent together 30% of our global sales, consolidated number. They have given us a forecast last year, which was already indicating that they were expecting, how to say, a slowdown. But in reality, one of the two had a much bigger slowdown than expected. Which was surprising for us, but even for them, it was definitely something that they couldn't take in account. This is one of the reason of our It's possibly the main reason of our sales, how to say, minus signs. One of the biggest reason. I have to say that this is something that has kept on during the first two months of the current quarter. The good news is that starting from September, they have given us the strongest sign of recovery, and both companies are telling us that their ordering data is improving, and they expect t hey are already, of course, talking about next year, if you understand that. They think that they can recover at least at the level of 2025. What is important for everybody to understand that, I'm just stepping back a second. The main concern that we have when we see things slowing down in such a way is, of course, we never had a minus sign in our history other than when there were very strong economical crisis. I mean, of course, the COVID times was extremely bad, but it was, how to say, an external tragic reason that we all remember. The previous one was the economical crisis of 2008, 2009. This year is an awkward year because apparently there are no signs that the overall industry, meaning the event industry, is any time slower. I mean, there has not been major fraction of the final demand for a concert and therefore systems and whatever is around the concert. But definitely our major customers are, these two guys, they are both suffering for China, which is at least for our industry, definitely very low and there are no big signs of a rise. But, I can talk more extensively about that and the U.S. What is important for B&C to understand when we have this evolution, this negative evolution is the market that is slowing down or are we actually losing market share? Which is two different things. And for these two customers, which are of course key for our numbers, both sales and marginality, we are 100% sure that there is no loss in favor of some of our competitors. Okay? I want to stress this very, very strongly. On the contrary, as I have told you already, in their recent announced flagship system, B&C is 100% of the transducers and suppliers. We expect next year to be again brilliant with both of them, which in fact, they also had some delays in the transition from the old systems to the new ones. I would say that, we feel very positive about our relationship with these guys and we went down with them because they went down. Okay? When the world recovers, they will recover with them in a very direct proportion. Other large OEMs, in fact, these are by far our largest. We have other OEMs which have performed okay, a couple of Italians which have actually overperformed. As I said, all Chinese have been actually badly performing, and this is our main concern is, of course I mean, the European and the Americans OEMs, I mean, companies which are selling to China are now not selling to China any longer. They are saying that this is because the government is pushing for the Chinese events to be supported by Chinese brands. Okay? In that case, I was expecting that we would be in a good position because we sell a lot of transducers to Chinese manufacturer. That is what we are trying to understand. I have to be frank with you, I mean, even visiting China recently, like a month ago, just right before all those, we really went there with the objective to understand whether we were still at the first option or not. This is something that is still something we. China is really, in this moment, is the big question mark. Also the United States to an extent, but that is a different situation. I mean, for example, the other strong reason of our not excellent performance in this first semester is because of our subsidiary in the United States, and I mean B&C North America, I don't mean Eminence, which is a different animal. B&C North America is underperforming because we have completely lost. Of course, we don't know whether this will come back and how soon. That's very important market for us all. The do-it-yourself, and I think in past meetings, we discussed this already. Most of this market is driven by Latino communities, and all these guys are like, you all know, very much prudent to run parties out in the street. If you want, it is a very immature and poorly structured market. That has really disappeared. For us, it was accounting something like EUR 3 million - EUR 4 million at the end of the year. This is the very problematic area. We are, of course, trying to understand it better. There is lots of decisions have been placed on hold because, of course, you know very well that there is a very important election in the beginning of November that may eventually change something in terms of domestic policy and it is all very complicated. Again, we do not think that we are losing market share there as well. It is really that these people are not buying stuff because they do not need audio system for their entertainment, if you want, okay? Again, the other OEMs, the Americans are doing okay, the Italians are over-performing. More or less, we do not have indication that we are losing market share in favor of someone else in our, let us say, Western OEMs. China is something that we are still investigating. Okay. Lorenzo, do you see the same, let us say, market responsiveness from the aftermarket car audio? Because also there is retail market. Exactly. Yeah. What is the response there? It's a very good question. In fact, we do see the same. You know that we had very good expectation for the year, for the car audio. We have been participating to a lot of, how do you say, lot of shows and activities. That's a slightly different market, but still is private. We are addressing the end users, and it looks like simply the end users in that category, we are talking about people that are not rich people. People that are finding a hobby, if you want, okay? It's very much depend on their economy. We all know that the U.S. economy is actually better than other, but I don't really see that is reflecting the situation of those markets. It looks like the power of purchase of the end users in that is very limited today than it was in the past. I don't know whether this is going to change or not soon. It's clearly something affecting the U.S. For example, I was asking our big guys, which are, of course, always on the front line when it comes large events. For example, in the United States, they had the World Championship, so I was personally expecting that could have been a drive, a strong drive for lots of sales, because lots of events. On the contrary, I was told that there was a sort of, things were decided last year already for these large events. For the smaller rental companies were in fact very difficult to work because all the venues were occupied and booked for the championship. So we are receiving lots of contradictory information, if you want. I'm afraid that this is something, I may sound contradicting what I say, because this is what we're always very active in running our intelligence, if you want, to understand and prevent and readdress. But this time is very confusing. Don't forget also that we don't sell to the Middle East directly, or we sell a very little amount of stuff traditionally because you don't have manufacturers there, and you don't have the glitches, or if you have, that is very small. But our customers are clearly suffering there as well. Is it 5% or 10%? There was a moment in June, if I am not wrong, I do not remember exactly the time, then people were starting to say, "Okay, now these countries will massively reinvest because they need to relaunch, and they need to recover all the ground lost, that they need to show the world that there is a place." I am specifically talking about Dubai and the Emirates. Looking at what has happened in the last two weeks, things are still that far from being— back to normal. — back to the normal. I think that the overall market is still suffering from that. My priority list is definitely China is number one question mark. The situation is that it is not clear, and we are told that no matter how important, and let us say A class production that they are running in China, they can still be using lots of copy product. This is something that we hear more and more, and from L-Acoustics, from d&b audiotechnik, but also from RCF, for example, which is a little different animal from the previous two. They have a less expensive product. They are more affordable, but they are finding China difficult as well because it looks like there is an East Asian copyist like we were not seeing in a long time before. Apparently, the government is now making a big, how do you say, a big question whether the product is original or not. We are also running some legal action against copycats, but honestly, it looks like trying to fish with your hand. You know what I mean? At least the process requires time and effort, and you go against the most important ones based on our information, but not the only one, the sole one, so it could be a never-ending fight. Yeah. Again, the outlook is, I would say, conservative for the current year, and it's pretty optimistic that we will recover our position in terms of sales in the next year, especially thanks to the overall big OEM. Distribution in China is something that we need to understand better. You know that now we're now finally — Good — forever promoting Eminence Pro, which is this B&C design made in China. There are a lot of good feedbacks. It will take time, and with it in China, which is important. Also there are many different information, many different rules. Some are very good and promising, some are still a little bit confusing. But it looks like there is definitely a sign that the market is slowly but surely looking better the next three months than it was six months ago. This is a market fact. Okay. Thank you, Lorenzo. Maybe if we can jump on the cost side. I've seen that margins held up very well despite lower volumes. The last time we spoke, you were saying that you were planning a price adjustment on the product, so an increase in pricing list from June. I was wondering if also the third quarter, we can expect improvement in gross margin, or we can Gross margin, as Francesco anticipated before, will mostly count on the fact that we have. When there was the big post-COVID hysteria, whatever it is you say, we had to hire a lot of people, temporary jobs, mainly, but we sort of inflated too much our organization, and what we have done in the past six months was to bring it back to a more reasonable number. Our aim now, which comes together with the need we have to invest in a new assembly line for our main factory in Italy, we have initiated a very strong, how do you say, efficiency program that goes from, I do not know, the new line, which we are starting, and the adoption of. We have reached an agreement with an Italian company which is expert in AI solutions for mid-size company, manufacturing company. We are trying to look for efficiency there. All of this efficiency, while at the same time we are increasing the number of, we are investing in new people for the R&D and the sales team. Okay. I am under the impression that, not under the impression. No, it is a fact that we have initiated a process that we will see. in 2023, 2024, we were too many people in production and maybe too little people in R&D and sales. So we are sort of rebalancing this. Of course, we have many different tools. It is not an easy journey because, of course, you have at the end of the day to lose some people on the way. Back to gross margin, I think that what you will see during the next months, and you will see that the percentage cost, the cost impact of direct labor is going back to a more reasonable number, which is a good thing. In terms of materials, raw materials, the situation is pretty stable. We have not seen any major jumps or in one direction or the other. It is pretty stable and flat, I would say. Yes. We try to take advantage of our financial position, as said before, in order to invest on the most recurrent inventory components, in order to not only saving money, but avoiding eventual potential future increase on cost, on their cost, and being ready for any additional single additional piece to be asked on the following weeks. Giving some more visibility to you, Andrea. Yes, we made a slight price adjustment between spring, in many cases effective June 1st. We have no expectation to do anything at any other correction, including U.S., where we made, how do you say, first step ahead to recover for the duties. But as I said, we will be working on gross margins, trying to make direct labor and especially cost of components as more efficient as possible. Okay. Thank you. Quick. Does anyone else have a question? Let me just a follow up, Francesco. Sorry again, just to confirm. In the next quarters, is your priority to invest in inventory? What's your priority in use of cash, that you generate a lot of cash? Also, this quarter was very good. I calculate EUR 4 million of free cash flow generation if we exclude the dividend, so it's impressive. I just want to understand, what's your priority in terms of capital allocation for the business? Keep investing all in inventory, we're required to, how do you say, to rent double space of what we still have on our end. So the level of the inventory is already more than enough for any future short-term, how do you say, re-jump on the demand or restart of the demand. We are working hard on the After many years, we are almost ready to invest significantly on a new production line with higher level of automatization, more, how do I say, more consistency on stable quality control. So potentially, many apart or potential investment to create a different offer to the customer. The short-term major investment will be upgrading the production line, which is another of the important priority we are working on. Okay. Cool. Thank you. One thing that I would like to which I think is a very good news, as you may remember, we have changed. In June, there has been a very important change in the company. We have changed our global sales manager, and of course, the one that retired was almost 20 years with us, who was a very well-known professional in the marketplace, and he was really a pillar of the company. The guy that we have selected after this short time, it was just three months, plus always, which was not very, how do you say, full of activity for the group, or at least for Florence. The guy, we are super happy with him, and he is proving to. We know already that we have done a very good choice, and it is really bringing lots of new ideas, how to address an always evolving market. That is a very good news. For a small organization like ours to have such an important element to go away and be substituted was not. We shouldn't have given it for granted that the substitution was good, but in fact, it is extremely good. Okay, thanks. Perfect. No other question, I think. We can end the conference call here. Thank you, everyone, and we look forward to see you at all the future events.