ARB (ARB) investor relations material

Executive summary

• Sales revenue for 1H FY2026 was AUD 358.0 million, down 1% year-over-year amid challenging new vehicle sales and constrained consumer sentiment.

• Profit before tax declined 18.8% to AUD 57.1 million; profit after tax fell 17.2% to AUD 42.2 million; EPS dropped 17.9% to 50.6 cents.

• Export sales grew 8.8%, with US sales up 26.1%, offsetting declines in OEM and EMEA channels.

• OEM sales dropped 38.2% due to inventory build-up and weak new vehicle sales.

• The company expanded its retail network, launched a new e-commerce platform in Australia, and celebrated its 50th anniversary.

Financial highlights

• Gross margin declined due to a weaker AUD/THB exchange rate and lower factory overhead recoveries.

• Materials and consumables rose to 44% of sales from 41% last year, reducing margins.

• Depreciation expense increased 16% to AUD 17.8 million due to elevated capital expenditure.

• Cash from operating activities was AUD 63.9 million, up from AUD 45.9 million year-over-year; cash balance at period end was AUD 59.4 million with no debt.

• Interim fully franked dividend of AUD 0.34 per share declared, payout ratio 67.2%.

Outlook and guidance

• Sales margins in 2H FY2026 expected to be in line with the prior period, aided by favorable currency hedging and a recent price increase.

• Export order book and US market growth expected to drive improved performance in 2H FY2026.

• OEM sales anticipated to trend marginally better in 2H FY2026, supported by inventory reductions.

• Management expects improved financial performance in the second half, trading closer to the prior corresponding period.

• Australian Aftermarket remains challenging, but order book is healthy and daily sales intake is strong.