SCHMID Group N.V. Class A Ordinary Shares (SHMD) Earnings

Management highlights

• Balance Sheet Transformation and Capital Restructuring - Raised 33 million euros in new net capital via convertible financing and standby equity arrangements - Reduced total outstanding debt by 31 million euros through a May 2026 debt-to-equity swap, bringing total debt down to a sustainable 23 million euros and creating new debt capacity for future growth - Still remains under NASDAQ monitoring requirements with higher regulatory filing costs through February 2027 • Cost Reduction (Sprint Program) - Completed Sprint 1, which reduced German overhead full-time headcount by more than 40 positions, achieving an annualized run rate of 4 million euros in fixed labor cost savings, lowering the company's break-even point - Launched Sprint 2, a purchasing cost reduction program targeting at least 5% savings on material purchasing expenses (which account for over 50% of total company expenses); management expects most savings to be achieved by end-2026, with design-to-cost improvements for high-cost components rolling out in 2027 • Operational Milestones and Capacity Expansion - Delivered the first Infinity Line H Plus system for 700x700 mm panel-level packaging to a U.S.-based customer - Consolidating two leased Chinese manufacturing locations into a single, company-owned campus in Zhongshan, Guangdong province; the 11 million euro investment will double Chinese production capacity, with operations expected to launch in Q4 2027 - The Malaysian facility is fully operational and currently expanding to meet growing demand from a key regional customer • Order Intake Momentum - Driven by capacity investments for Flipchip BGA substrates and AI server boards, order intake reached 52.3 million euros in the first eight weeks of Q3 2026, bringing year-to-date order intake to 96.6 million euros, a record backlog level - Growing high-end equipment orders are balancing production loading across both German and Chinese manufacturing locations

Guidance

• Full-year 2026 revenue guidance is maintained at a minimum of 100 million euros • Adjusted EBITDA margin guidance was revised downward from the prior expectation of over 12% to a new range of 6% to 9% for full-year 2026 • Full-year 2026 order intake guidance of 125 million to 150 million euros, which was raised in July 2026, is maintained, with management now expecting full-year order intake to land in the upper half of the guided range • Most of the recently secured and projected order intake will be recognized as revenue in 2027

Segment performance

For H1 2026, total consolidated revenue was 46.0 million euros, up from 16.6 million euros in H1 2025. The Equipment segment generated 39.4 million euros in revenue, representing 85.7% of total H1 2026 revenue, a sharp increase from 10.7 million euros in H1 2025. The Spare Parts and Services segment generated 6.4 million euros in revenue, representing 13.9% of total H1 2026 revenue, growing from 5.9 million euros in H1 2025. The company's overall gross profit margin for H1 2026 was 21.2%, lower than management expectations due to lower production scale and a revenue mix shift toward lower-margin China-sourced production. Adjusted EBITDA was negatively impacted by 420,000 euros in Sprint restructuring costs, one-time share-based compensation for C-level executives, and increased capital structure and regulatory filing costs during the period.

Risks & headwinds

• Lower production scale and mix shift toward lower-margin Chinese production has pressured gross margins below expectations in H1 2026 • Longer receivable payment terms in China increase working capital requirements, though these are partially offset by extended payables terms • Labor availability is the primary capacity constraint for German manufacturing, requiring the use of contract workers to meet growing demand and creating training and quality execution risks • The company currently cannot obtain required payment guarantees for European contracts, resulting in lower cash advances and higher working capital needs than normalized levels • The construction and ramp-up of the new Chinese manufacturing campus will take until Q4 2027, creating near-term capacity constraints in China • Forward-looking statements are subject to material risks and uncertainties that could cause actual results to differ materially from expectations, per SEC disclosures

Analyst Q&A

• Q: Given 97 million euro year-to-date order intake already by mid-August, how much of the remaining required order intake to hit guidance is already in negotiations, and what gives management confidence to hit the upper half of the range?

  A: The vast majority of projected remaining order intake for 2026 is already in active customer negotiations, and the company's production schedule for H2 2026 is largely already set. Most new orders received in the coming months will flow to 2027 revenue recognition.

• Q: Following the recent $20 million convertible financing, is the balance sheet sufficient to fund growth, or is additional financing needed?

  A: The company is currently well-capitalized, and expects customer prepayments for existing orders to cover near-term growth needs. Management does not anticipate needing additional equity financing in the next six months, and has attractive access to non-recourse project debt in China to fund working capital and expansion needs, with average funding costs around 2.7%.

• Q: What revenue capacity will the new expanded China campus support, and will owning rather than renting improve unit economics?

  A: The two existing leased Chinese facilities can support ~50 million euros in annual revenue; the new consolidated campus will double effective capacity to ~100 million euros in annual revenue, thanks to eliminated inefficiencies from inter-facility shipping. Once production volume increases by ~20% from current levels, unit economics will improve over the current leased setup, and owning the facility removes long-term rent increase risk.

• Q: What is driving the recent acceleration in demand after a slow Q1?

  A: After an IC substrate shortage in late 2025, large substrate manufacturers paused incremental investments in Q1 2026 while they planned large-scale new factory capacity expansions. These plans were finalized in Q2, and demand for Schmid's manufacturing equipment has accelerated as these new factories begin equipment procurement, a trend that is expected to continue through 2027.

• Q: What milestones should investors watch for glass core substrate commercialization, and what are the key bottlenecks?

  A: The primary technical bottleneck for glass core substrates is metallization of through-glass vias (TGVs), where Schmid already holds a strong solution. The key milestone to watch is completion of end-customer qualification, which will signal a shift from proof-of-concept to volume production. Schmid is currently engaged with most major players across leading semiconductor supply chains to support glass core substrate development.