Business performance 2025: A solid foundation in a challenging environment

Both the Transportation and Life Sciences & Environment segments experienced slight volume declines during the reporting year, yet gross margins held steady or improved modestly despite the volume shortfall. The Filtration Materials segment generated no external revenue during the reporting year, as it will not reach full operational effectiveness until 2026.

Transportation revenues in 2025 came in at €3,762.1 million, a decline of €278.8 million or 6.9% compared to the prior year (€4,041.0 million). A negative currency effect of €142.2 million was a significant contributing factor. On a currency-adjusted basis, the decline was €136.7 million or 3.4%. While Europe and Asia remained largely stable, revenue in the North American aftermarket was notably weaker.

Revenue in this segment declined modestly year over year when adjusted for currency and one-time effects. Our focus is on high-margin innovations that are seeing growing demand driven by the shift toward electric mobility or new regulatory requirements. We presented these new developments at Auto Shanghai during the reporting year.

The growing cabin air filter segment is benefiting from heightened health awareness and growing recognition of the dangers of air pollution – particularly in Asia. Our cabin air filter portfolio goes well beyond basic pollen filters to include high-performance particulate and gas filters. Our new cabin air filters follow the growing trend toward healthy in-vehicle air: high-performance HEPA filters deliver optimal air quality with "smart" activation – switching on only when needed, thereby preserving battery capacity and extending the range of electric vehicles.

In battery-powered vehicles, thermal runaway events can release harmful gases and particles. We have therefore developed a smoke filter with a degassing unit that already meets future Chinese regulatory requirements today. Electric vehicles also use compressed air systems for air suspension – we supply the filtration technologies for these systems and are well positioned to benefit from the growing market share of battery electric vehicles.

With the New Energy Tech Center, MANN+HUMMEL is investing in the future: it is a long-term research and development center for new mobility technologies that secures our leadership position in electric mobility. We are an established supplier to major European and U.S. automakers and are focused on strengthening that position in the fast-growing Asian markets – particularly China and South Korea.

Europe: Declining passenger car production in Europe led to a modest revenue decline in the OE business, also driven by softening demand for combustion engine vehicles. Product mix optimization and margin stabilization through cost pass-through helped steady results. GM recognized MANN+HUMMEL Czech Republic with the General Motors Supplier Quality Excellence Award for the second consecutive year. The Ministry of Industry of Zenica-Doboj canton in Bosnia and Herzegovina honored our local facility as one of the "Top 5 Exporters". The leading online recruiting and career platform in Bosnia and Herzegovina recognized us as "Employer of First Choice".

Americas: In North America, we achieved significant gains well above general market growth through higher delivery volumes with major customers. In South America, revenue was largely stable. MANN+HUMMEL Brazil was honored with the General Motors Supplier Quality Excellence Award for the third consecutive year.

Asia: The divestiture of the high-performance plastics division in 2022 continued to weigh on revenues in China during the reporting year. Revenue also declined modestly in other Asian markets, largely in line with expectations.

Revenue in this segment grew noticeably in the mid-single-digit percentage range. Alongside conventional diesel technology, we are focused on future drivetrain alternatives including hydrogen combustion engines, fuel cells, and battery-electric systems. This diversification spreads risk and secures the long-term competitiveness of the Heavy Duty segment. We are also proactively addressing anticipated regulatory requirements to reduce fine particulate and tire wear emissions: we are developing filtration solutions for dust and abrasion sources, positioning ourselves as a technology leader in areas that will face tighter environmental standards going forward.

Europe: Despite a challenging market environment, we secured supply contracts with both existing and new customers during the reporting year totaling an annual contract value of €42 million – the strongest order intake in the Heavy Duty sector since we entered the market. Product mix optimization and margin improvements contributed positively to results.

Americas: Weaker demand in heavy-duty segments led to modest revenue declines in North America, driven by economic uncertainty and delayed starts on major projects. Order intake nonetheless reached €6 million from leading manufacturers. John Deere recognized us with its Innovation Award, while Caterpillar honored MANN+HUMMEL with its Supplier Excellence Award. In South America, by contrast, we achieved strong revenue growth. In Brazil, CNH Industrial recognized our performance with the Supplier of the Year Award.

Asia: The Heavy Duty OE market in China recovered during the reporting year. Through additional sales activities, we achieved very strong revenue growth. Order intake in China and other Asian markets reached an annual contract value of €24 million, with China alone accounting for €13 million. Notable wins include a first-ever order for self-cleaning air filters from a leading mining vehicle manufacturer, as well as substantial air filter orders for tractors and combine harvesters. CNHTC recognized MANN+HUMMEL as "Excellent Supplier" for the 16^th consecutive year. FAW presented us with the Best Quality Award, and Lovol awarded us the Collaborative Innovation Award. We also recorded strong growth in India.

Revenue in the OE Industrial segment grew significantly in the high single-digit percentage range during the reporting year. We achieved revenue growth in nearly all regions, with the Americas broadly stable. For use in electrical discharge machining (EDM), we developed a range of filters with a mountain pleat geometry – featuring a filtration surface area more than 10% larger than conventional filters. In the home appliance segment, we successfully acquired several large international customers.

Europe: Despite difficult market conditions, we achieved revenue growth. Product mix optimization and margin improvements contributed positively, as did the renewal of our ScandMist oil mist, smoke, and vapor separator product range. In the rail segment, we significantly expanded our business with a major customer.

Americas: In the United States, we built out production capacity for air-oil separators (AOS) as part of our "Local for Local" initiative. Politically driven uncertainty and general market stagnation weighed on new business development.

Asia: We recorded strong revenue growth in Asia, with our electrostatic precipitator (ESP) portfolio continuing to grow in China. In India, we are focused on developing and manufacturing industrial centrifuges for industrial manufacturing and mobility applications.

Revenue in the reporting year declined by 4.3% on a currency-adjusted basis to €452.8 million. Market conditions were particularly challenging in Asia, while we recorded growth in the Americas. Standardization of payment terms and successful negotiations to shorten payment periods led to improved liquidity. The Water and Membrane Solutions segment also received €9.5 million in subsidies as well as an additional €8 million loan from the Italian government.

Air Filtration revenue declined modestly in the low single-digit percentage range during the reporting year. While revenue in Europe held steady and the Americas business actually grew, sales in Asia dropped noticeably due to restrained demand from several large customers. We are prioritizing investment and resources in areas with the highest growth potential and are also engaged in publicly funded projects. During the reporting year, we streamlined our production facilities to sharpen focus, improve product quality, and increase manufacturing efficiency. This organizational consolidation enables us to deliver even greater value across industries: in healthcare, our EPA, HEPA, and ULPA filter solutions meet the highest quality standards; in data centers, we work with distributors to maximize operational efficiency.

Innovation is the clearest proof of this strategy. Products such as the Airpocket Eco Shortlength A+ and the Ultra Synthetic Nano Bag Filter set new benchmarks in sustainability and energy efficiency. With our new product range without added PFAS, developed in close collaboration with suppliers, we are opening the next chapter in sustainable filtration.

Europe: Revenue in Europe declined modestly. Buildings account for 40% of total EU energy consumption and 36% of CO₂ emissions, with HVAC systems contributing 16% of that total. Our air filtration solutions therefore help improve the environmental footprint of the built environment. We made further improvements across all areas – with a leaner portfolio, a clearer brand message, and integrated campaigns spanning marketing, sales, and customer service. The launch of a dedicated B2B online shop for air filtration is increasing customer engagement and driving more efficient processes. The Bundesverband Marketing Clubs Deutschland presented MANN+HUMMEL and advertising agency WOB with the BOB Award in Silver in the Cross-Media Communication category for the "Knowing What Counts" campaign. The campaign also won the German Online Communication Award (DPOK) and the Annual Multimedia Award in Silver.

Americas: In the United States, we continued to expand our market presence and strengthen our distribution partner network, with revenue growing modestly during the reporting year. Filter solutions in the highest filter classes, meeting the most stringent ASHRAE and ISO standards, are strengthening our offering in heavily regulated applications. Our data center revenue grew 30% in fiscal year 2025 – and we expect further gains ahead. In data centers, filtration directly impacts energy consumption, uptime, equipment lifespan, and total cost of ownership.

Asia: We continued to advance the integration of U-Air, our Chinese air filtration specialist. Revenue in Asia declined sharply, however – primarily due to falling delivery volumes to major customers and aggressive price competition. General uncertainty stemming from tariff conflicts also played a significant role. We view these difficult conditions as a temporary phenomenon, as the business potential in China, India, and other Asian markets remains compelling. Through a new partnership, we are targeting new segments such as data centers.