Q1 2026: Solid start to the year confirms transformation strategy

Q1 2026: Solid start to the year confirms transformation strategy

• Results for the first quarter of 2026:
  • Group revenue at EUR 430 million (Q1 2025: EUR 423 million), year-on-year improvement of 4.7% in organic terms
  • Adjusted EBIT margin of 6.8% (Q1 2025: 4.9%) at the upper end of the target range of around 6 to 7% for 2026
  • Operating free cash flow at EUR -109 million (Q1 2025: EUR -120 million), adjusted net debt-to-EBITDA ratio at 2.1 (Q1 2025: 2.1)
• SHAPE2EMPOWER underpins competitiveness: Group repositions itself with a view to acting faster, more efficiently, and with a greater focus on the market
• CEO Thomas Jessulat: “The first quarter illustrates that our transformation is gaining traction: organic growth, improved earnings performance, and tangible advances in operations provide a resilient basis for the next step of our transformation pathway in 2026.”

Recording growth in operating profit at the outset of the 2026 financial year, ElringKlinger AG (ISIN DE0007856023 / WKN 785602) is continuing to press ahead with its transformation. Amid persistently challenging geopolitical and macroeconomic conditions, the Group generated revenue of EUR 430.0 million in the first quarter (Q1 2025: EUR 423.1 million). In this context, the divested Group company in Solihull, UK, had contributed revenue of EUR 3.1 million in the first quarter of 2025, so that the corresponding comparative base relating to the prior-year quarter was EUR 420.0 million. Additionally, revenue was diluted by currency effects equivalent to EUR 9.7 million. Organically, i.e., adjusted for currency and M&A effects, revenue increased by EUR 19.8 million or 4.7% and thus developed significantly better than the market as a whole when compared to vehicle production output, which, according to estimates by S&P Global Mobility, shrank by 3.4% worldwide and by 1.0% in Europe (excluding Russia) in the first quarter of 2026.

Organic increase in revenue with E-Mobility as growth driver
Growth was driven primarily by the dynamic ramp-up of series production for high-volume orders relating to the E-Mobility business unit. Revenue here increased by EUR 11.3 million to EUR 38.1 million (Q1 2025: EUR 26.8 million). In the Original Equipment segment as a whole, which includes the E-Mobility business unit, revenue trended slightly lower against the backdrop of sluggish market conditions. Here, segment revenue fell slightly by 0.6% to EUR 280.0 million (Q1 2025: EUR 281.8 million). Business in the other segments was robust. Aftermarket maintained its growth trajectory, expanding revenue by 7.6% to EUR 109.8 million (Q1 2025: EUR 102.0 million). Engineered Plastics increased revenue slightly to EUR 39.9 million (Q1 2025: EUR 39.0 million).

Tangible improvement in profitability – Adjusted EBIT margin within target range
With regard to earnings, measures centered around the STREAMLINE and SHAPE30 programs produced the first structural improvements in the quarter just ended. Against this backdrop and in conjunction with revenue growth, the gross profit margin rose by 260 basis points to 27.2% in the first quarter of 2026 (Q1 2025: 24.6%). Adjusted EBIT amounted to EUR 29.1 million (Q1 2025: EUR 20.5 million), which corresponds to an adjusted EBIT margin of 6.8% (Q1 2025: 4.9%). This puts the Group at the upper end of the target corridor of around 6 to 7% forecast for 2026 as a whole. Accordingly, adjusted earnings per share also improved noticeably by EUR 0.17 to EUR 0.23 (Q1 2025: EUR 0.06).

Following the investment cycle of the last two years for the series production ramp-up of large-scale orders placed with the company, the Group scaled back its investments in property, plant, and equipment as planned in the quarter just ended. At EUR 21.3 million (Q1 2025: EUR 45.0 million), or 5.0% (Q1 2025: 10.6%) of Group revenue, capital expenditure is again within the range targeted for the year as a whole. With net working capital of EUR 383.4 million (Mar. 31, 2025: EUR 454.4 million), operating free cash flow amounted to EUR -109.4 million in the first quarter of 2026 (Q1 2025: EUR -120.3 million). The cash outflow was attributable primarily to the continued ramp-up relating to high-volume series production orders in the E-Mobility business unit and the associated increase in capital requirements at an operational level. Net financial liabilities rose to EUR 413.2 million as of March 31, 2026 (Mar. 31, 2025: EUR 370.4 million). The adjusted net debt-to-EBITDA ratio (net financial liabilities in relation to adjusted EBITDA) thus amounted to 2.1 (Q1 2025: 2.1). The direction taken by the financial metrics is in line with the Group's expectations surrounding the SHAPE30 transformation strategy.

Guidance confirmed
In view of the good start to the year and the improved earnings performance, ElringKlinger considers itself well positioned to achieve the targets set for 2026. The Group has confirmed its guidance for the year as a whole and continues to expect slight organic revenue growth, an adjusted EBIT margin of around 6 to 7%, and operating free cash flow just within positive territory. Additionally, the Group is aiming for an adjusted net debt-to-EBITDA ratio of between 1.0 and 2.0. Alongside the other key metrics for 2026, the medium-term guidance has also been confirmed.

Asked to comment, Thomas Jessulat, CEO of the ElringKlinger Group, said, ““The results of the first quarter of 2026 are a testament to the fact that we are on the right track as regards our strategic alignment.” Our organic growth – particularly in the E-Mobility business unit – and the significant improvement in the adjusted EBIT margin demonstrate the increasing effectiveness of our transformation measures. In SHAPE2EMPOWER, we are also laying the organizational foundations needed to bolster our competitiveness in this dynamic environment. At its core, it is about shifting responsibility to where it can have the greatest impact: to the business areas, closer to business, closer to customers. We are thus positioning ElringKlinger to be more customer-focused, closer to the market, and more effective and efficient with regard to processes and structures.“

SHAPE2EMPOWER: new organizational structure for the next phase of transformation
In rolling out the SHAPE2EMPOWER program, ElringKlinger is taking a decisive step in the further refinement of its organizational structure. The aim is to focus the Group even more strongly on speed of action, market proximity, customer centricity, and efficiency. Central to SHAPE2EMPOWER is the reinforcement of entrepreneurial responsibility within the existing business units, which will in future operate as business areas. The measures to be implemented in the context of this program include establishing clearly assigned roles, simplifying interfaces, streamlining decision-making processes, and standardizing management structures at a global level. Additionally, the two former business units Metal Sealing Systems & Drivetrain Components and Metal Forming & Assembly Technology were merged to create the new Sealing Solutions & Engineered Metal Components business area effective from May 1, 2026.

Key financials for Q1 2026

* The figures for the first quarter of 2025 still include the Group company hpp UK Ltd. in Solihull, UK, which was sold with effect from November 30, 2025.

About ElringKlinger  
As a global development partner drawing on many years of expertise, ElringKlinger has established itself as one of the leading suppliers to the automotive industry, in addition to serving customers in the plastics engineering and other sectors. Since its inception in 1879, the technology group based in Dettingen/Erms, Germany, has been consistent in its efforts to provide innovative answers to present and future challenges. Today, ElringKlinger is actively shaping the future of sustainable mobility with the help of pioneering product and system solutions tailored to any type of drive platform, alongside sealing and shielding applications as well as lightweighting concepts. With a track record of two decades in the field of cutting-edge battery and fuel cell technology, the Group was at the forefront of establishing itself as an expert in e-mobility. Operating with a dedicated team of around 8,600 #transformationpioneers at around 40 locations worldwide and revenue of approx. EUR 1.6 billion in 2025, ElringKlinger is driving the sustainable transformation of the industry – brimming with passion, talent, and innovation.

Legal notice
This release contains forward-looking statements. These statements are based on the expectations, market assessments, and forecasts of the Management Board and the information currently available to it. These forward-looking statements shall, in particular, not be construed as guarantees of future developments and results referred to therein. Although the Management Board is of the firm opinion that the statements made and their underlying beliefs and expectations are realistic, they are based on assumptions that may prove to be incorrect. Future results and developments depend on a variety of factors, risks, and uncertainties that may lead to changes in the expectations and judgments that have been expressed. These factors include, for example, changes in general economic and business conditions, fluctuations in exchange rates and interest rates, lack of acceptance of new products and services, and changes in business strategy.