JOST Werke Aktie

Ladies and gentlemen, welcome to the JOST Werk SE Earnings Call for Q1 2026 Conference Call.

[Operator Instructions] The conference is being recorded.

At this time, it's my pleasure to hand over to Joachim Durr, CEO. Please go ahead, sir.

Yes. Thank you very much. Good morning, and a warm welcome to our Q1 2026 earnings conference. Myself and Oliver will guide you through what we think was a very strong start into this year with the Q1 performance.

So let's look at the Q1 highlights from our side. The Hyva integration is on track and the synergies are ramping up. And with that benefit, we could return into our profitability corridor, our strategic corridor between 10% and 12%, a little earlier than we initially expected. We have inaugurated a new hydraulic plant in Brazil, and that strengthens our regional footprint in that important region and expands our capacity for the future growth that we have planned for the Americas region in general. We've also increased our share capital by 10% in Q1 2026. We issued 1.49 million shares at a price of EUR 62.13. And with that, we had gross proceeds of approximately EUR 93 million.

From a market side, EMEA market recovered slightly. The APAC demand was quite positive. So with that, we could offset some of the challenges that we had, especially in the transport market in the U.S. And we've leveraged that market environment. And together with our drive in our organic growth pipeline, we were able to ramp up and use the organic growth and new customer gains to have what we think is a strong sales performance in the first quarter.

So let's come to the financial numbers, and let's start with sales. We have a record -- achieved a record sales level of EUR 417 million in 1 quarter. That's the first time and the record level for the JOST Group. That was up 12% compared to previous year. And, as you know, with the Hyva integration and the divestment of cranes, that is a bit complex. So that's why it's also important to look at the organic sales numbers, and that is a growth of 9% versus the last -- first quarter of last year. All regions and all business lines have contributed to this organic growth of plus 9%.

Also, adjusted EBIT is up 23% to a record level of EUR 44 million in the first quarter, and the adjusted EBIT margin improved to 10.6% back into our strategic margin corridor a little earlier than we initially expected in the integration planning. Our leverage improved to 1.75x. That was obviously supported by the 10% capital increase that I've just mentioned but also from a higher last 12 months adjusted EBITDA of EUR 204 million. So we're now well within the range between 1 and 2, which we consider the strategic or the target range for our leverage.

The adjusted net income grew by 17% to EUR 28 million and the adjusted earnings per share increased 12% to EUR 1.81 per share, and that is with the additional 10%, so, the larger number of shares in circulation. Strong start into the year. So we -- with that strong start, we can confirm our outlook for the fiscal year 2026. I've mentioned that the markets have been a little, how should I say, weak in Americas and a bit positive in EMEA and APAC. So let's look a little bit at the details. For Europe, Middle East and Africa, we had supporting markets in truck and trailers, also support in the tractor market and slight support, I would say, in construction and hydraulics. So our performance in those -- in that market was 8.4%, which is slightly above the market average, and that supported our organic growth.

If we look at Americas, I think that's an impressive performance. Markets were not supportive in North America for truck and trailers, which is an important part of the business. Also not in the tractor industry and the construction industry was more or less even. Our performance with a positive 5.2% on an organic basis is the win of new market shares, especially in agriculture but also some of additional trailer business in North America. But the vast majority of that overperformance comes from agriculture in North America and South America, new customers for our plant in Brazil.

Asia Pacific, the markets were supportive. Truck and trailer in India, China, also Australia, with a positive development, tractors also with a positive development, same as hydraulics and construction. Our performance, organic 14.5% growth in that region. So I think this is a good example.

We can go to the next slides of how our strategy that we are implementing contributes to the resilience that you see in the numbers. Our sales by destination in the first quarter has been 48% in Europe, Middle East and Africa. And then the rest is more or less split evenly between the Americas region and the APAC region. If you look at that from an adjusted EBIT, and Oliver can give you a bit more detail in that in his slides, we gained about 35% in our EMEA region, 25% in Americas and 38% contribution from APAC. So APAC is a very important region for us.

If we look at the industries that we serve, we serve 50% to transport industry, 20% the agriculture industry, and that has been going up. It used to be 18%. So you see the ramp-up in agriculture in also in those numbers and the construction and hydraulics industry was 30%.

So with that, I would like to hand over to Oliver for more financial details.

Thanks, Joachim, for the quick overview. And as usual, now let's look a little bit deeper into our performance KPIs and financials, starting with the EMEA region. We have seen a very solid growth momentum, and that is going to continue. The order book is quite nicely underway for EMEA, fully in line with the numbers that Joachim representing for the markets. And profitability has also significantly improved in EMEA through various regions.

In detail, we have seen an organic growth in the EMEA region of 8.4%, which is also more or less the reported growth as the M&A impact more or less levels out. The strongest growth we have seen in the business line agriculture with double-digit growth rates in the EMEA region for agriculture but also transport and hydraulics remain very robust and also forward-looking quite promising for the moment.

On the other side, we still see no significant negative impacts, at least on the order book side from the Iran Middle East conflict. However, we are used to be a little bit cautious here. All our products are investment goods. We need to see how that means. But again, I'll just confirm it for a moment, nothing visible here. No major FX impact in the top line. And when we then look for EMEA on the profitability, we have seen an increase in the EBIT margin from 6.1% to 7.7%. And that's partially driven by product mix, as I just mentioned, the growth in the agricultural business line is higher. That comes with higher gross profit margins and then turning into higher EBIT margins as well.

We have seen the positive impact versus prior year first quarter from the Cranes divestment as a second big point. And also, we are seeing the ramping up of the synergies, both companies, JOST and Hyva, so to speak, have their headquarter functions with R&D, IT, HR, et cetera, in the EMEA region. And the efforts that we did last year in leveraging those cost bases by realizing synergies are now turning into EBIT here as well.

On top, for sure, especially in transport, we see scale effects from the higher capacity utilization in our transport plants and partially also in agriculture. You might remember that last year for a certain couple of weeks in the first quarter, we were on short-time work in transport and agriculture. That's obviously gone, and that helps the overall P&L for EMEA as well. Yes. And my usual comment here is always keep in mind when you look into the EMEA region that the margins compared to the other regions is a little bit lower because of the headquarter burden. So that's EMEA.

For Americas, also a little bit mentioned already by Joachim, we see growth supported by M&A, but especially by market share gains. And that's quite impressive. The organic growth has been 5.2% from EUR 98 million to EUR 104 million in Americas for a single quarter. It's partially driven by customer gains in the transport sector in North America, especially in the trailer segment. But the predominant effect likewise in Europe is here that we have a stronger start into the agriculture business in both subregions, North America and especially in Brazil.

So that's quite helpful here. We had, on the other side, a relatively strong negative FX effect in the top line of minus 7.1% points, which is predominantly due to the USD versus the euro devaluation. And that's led to the situation that yes, the reported growth in organic growth looks more or less the same. On the adjusted EBIT, we have seen a more or less stable margin. Last year, first quarter, 10.8%, now 10.6%, which is firmly within our margin corridor for that region as well. We have here and there a little bit of a mix effect and also compared to last year's first quarter, a slight negative tariff impact here in the first quarter, and that explains that minor difference.

Overall, we are quite happy with the performance. The integration is on track in the region. And we see, especially for the cross-sell synergies in the Americas reaching further potential ramping up throughout the year. And in general, overall in the region, we are quite flexible with our cost base. So whatever happens in the second half of the year, that might be one question. What is happening with transport in the second half, we are flexible enough to ramping up or ramping down whatever the market will tell us. So quite happy also with the Americas performance.

Now looking into APAC, again, another very strong quarter. We have seen this beginning of mid of last year, especially China and then starting from September onwards also India is starting a recovery, and that turned directly into the first quarter numbers. We have seen a reported growth of 26%, if you adjust that for all the M&A and also a very strong FX impact coming from the Indian rupee. It's still almost 15% organic growth underlying our strong positioning in the region. Basically, that's in China. We had a very good start into the transport business in China, again, driven by huge export sales numbers from our Chinese customers.

But we have also seen a very strong growth of the Transport segment, organic growth, the transport segment in India. Oceania with a very solid performance. The only, let's say, a little bit down light is the mining business in the APAC region. What we see is that especially the mining segment in Indonesia is struggling a little bit, still healthy, but that comes normally with a very high EBIT margin. So that's a little bit of a, let's say, yellow light at the moment. But also here, it looks stable for the rest of the year.

Looking into the adjusted EBIT for the region, that has grown absolutely significantly from EUR 12.8 million to EUR 16.6 million, driven by that volume increase but also the margin is slightly up again, now from 14.6% last year to 15.1%, driven by -- obviously, by the synergies and also our very strong business in China in the first quarter. And also here, driven by a higher capacity utilization in our agricultural plant. As you may know, we have a big factory in India, producing agricultural parts, and this is export business to a certain extent into the U.S. And as we mentioned, the U.S. agriculture business is slightly picking up. That helps also the production in our Indian plant as well. So very happy with the APAC performance, again, another super quarter for this region.

When we look then for the total group, some numbers already mentioned by Joachim, reported growth by almost 12% to EUR 417 million, record for the group. And even organically, and I think that's more important to look at is plus 9%. And as was mentioned, all business lines and all regions contributed to that organic growth.

And a little bit more into details. Agriculture grew by 27% organically. Transport business line by organically 6%. And this includes the depressed -- still depressed transport business in the U.S. And also the Hydraulic business line contributed at least by 1% on a global level. We see here still potential for the Hydraulics business line in Europe. In Europe, we did a little bit of a supply chain change last year for the Hydraulics business and that capacity still needs to up from a demand -- customer demand, hydraulics in Europe for certain segments looks quite promising for the second half year as well. Overall, FX impact of minus 3.7% for the top line.

From a profitability point of view, very proud to say, again, like Joachim mentioned, we are back in our strategic profitability corridor, which is at least 10% EBIT margin. Now by 10.6%, which is 100 basis points above prior year. For sure, we have to mention the ones that are following us longer, we always have in a, let's say, normal year of -- where we have normal seasonality patterns. The first quarter is usually one of the strongest quarters because of working days, other seasonality impacts like when do your cost base increases, that's probably throughout April and May and not directly from January onwards. So all those things help normally the first quarter to be a little bit better than the other ones. Nevertheless, 10.6%, that's indeed a little bit earlier into that range that we anticipated and quite happy to show those numbers.

We see clearly the ramping up of the synergies. We see clearly scale effects from the high volume and the organic growth and also the overall higher share of higher-margin products help as promised on our gross margin then turning to EBIT. Yes. I think that's then for the overall group, EUR 44 million, again, is the total EBIT number for the first quarter.

If we then look into certain other KPIs, starting here with the adjusted net income and adjusted EPS, we start with a reported net income of almost a little bit more than EUR 16 million, adding up our tax expenses, financial result, plus the usual adjustments for our PPA allocations and certain other effect, we end up with that EUR 44 million, and that turns then into EUR 28 million adjusted net income or an adjusted EPS of EUR 1.81 per share. And that means for both for the adjusted net income, a growth of 17% but even more important for an adjusted EPS growth of 12% despite the higher number of shares circulating after our capital increase beginning of the year, I think a very successful growth also in terms of adjusted net income and adjusted EPS.

One last comment regarding the other exceptionals here. There is one exception that included of roughly EUR 3 million. We disclosed that a little bit more in our quarterly report. We are looking now that we are progressing with our integration of Hyva quite nicely, and that should be completed by mid of the year. We are also now looking in detail in each and every product line going forward from a more long-term strategic point of view, and we have seen the one or the other product line that we are questioning a little bit here at the moment, whether we want to continue for various reasons, right? And there's one product line that we detected in Far East and in India that we are ramping down at the moment, and that comes with one-off costs of roughly EUR 3 million that have been fully booked in the first quarter are included in the net income of EUR 16 million. From an outlook point of view, I don't expect from this point in time any material sales or EBIT impact in 2026. So that's for the adjusted net income bridge.

And if we then switch to our balance sheet and capital intense ratios KPI slide, we see a slight increase of our ROCE versus end of 2025, now close to 16%, which is compared to the first quarter last year, 240 basis points up and already approaching our strategic corridor only 1 year after the acquisition, I think, showing that we are using the capital of our shareholders quite efficiently and are well underway to deliver here our strategic numbers.

Equity ratio has raised up to 27.4%. There are 3 main reasons in here. Obviously, the biggest one is the capital increase with net proceeds of a little bit more than EUR 90 million directly going into the equity balance but also the EUR 16 million reported net income plus a positive FX effect of EUR 11 million helped to increase the equity in an absolute value of around EUR 120 million. So that means also here from a, let's say, from a CFO point of view, we are back in a stronger in a stronger corridor for our balance sheet figures, giving us financial flexibility for whatever comes going forward.

Net debt leverage has decreased significantly, also driven by the operating performance but the capital increased down to 1.75x long-term LTM EBITDA. Also here, we are in our strategic corridor and are able now to use the next 12, 15 months to further build on our corporate strategy. Joachim mentioned that the LTM EBITDA is now EUR 204 million. That's absolute record for JOST. We have, for the first time in our history, surpassed the EUR 200 million LTM EBITDA mark here. And net debt in absolute amount is 30 -- almost EUR 360 million.

Next page. Free cash flow, if you will, that's the one and only item where I'm probably not proud in the first quarter but it's okay. We are showing a conversion rate of more or less 0 at the moment and the free cash flow of also almost 0 at the moment. Why is this the case? It has nothing to do with the operating performance of the company. That's simply driven by the huge jump in business volume that we have seen over the last couple of months, especially versus the run rate of a very low November, December, seasonality low. And on top, when the Middle East conflict broke out end of February, we started immediately to look into our supply chain. Do we need to manage safety stocks here and there to be able to deliver going forward. And that's exactly what we did selectively, we build up a little bit inventory to be prepared for a potential longer conflict. And I think what we see still today is, I think that was the right decision that conflict will not be over very fast.

CapEx is still in line with our disciplined corridor, 2.3% in sales, almost EUR 10 million this first quarter, nothing special here at the moment. And also from a working capital point of view with 17.5%. This is fully in line with our strategic corridor and also fully in line with the goals that we have for 2025.

And then next page, I think that's then handing over to Joachim.

Okay. Yes. Thank you, Oliver, for the details. So that was a strong first quarter. So how -- what do we expect for the rest of the year? If you look at it from a market perspective, the expectations for the industry are for Europe, Middle East and Africa that we will have a slight recovery of the demand versus the prior year in trucks and in trailers. And also in tractors, we see a slight recovery for this market, and the same is true for hydraulics. But it's all on a very low level. And of course, it all depends on the geopolitical environment.

If you look at Americas, we have the effect that the expectation for Class 8 has been going up because there is an emission regulation that kicks in at the end of the year, beginning of next year. And so we expect that there will be a prebuy effect that will hit the trucks. Therefore, a more positive judgment for the truck development in Americas in general. Brazil is continued to be expected at a low level like last year.

For trailers, there could be a slight decrease because of the truck investments that the fleets will have to make or will want to make. They may postpone some of the trailer volumes, and therefore, there's a slight decrease expected tractors and hydraulics still suffering in Americas, a little bit from the trade situation from the tariff situation that does not give the necessary stability, but overall, more or less on the level that we've seen in the previous years.

Looking at Asia and Pacific, truck demand, a slight growth, trailer demand also somewhat stronger growth. We see India more or less on a stable, slightly recovering level and China exports to the global south are also supporting the Chinese domestic environment is not growing, is not expected to grow, just put it like this. So for trailers, a little better, as I mentioned. And for tractors and hydraulics, we also see a slight improvement versus last year for APAC. So let's come to the outlook in numbers. We can confirm the guidance that we have given.

So for sales, we expect a single-digit growth on the basis of the EUR 1,534 million that we had last year. Adjusted EBIT should grow a little stronger, and you've seen the first quarter very promising on that. But there's also some certain effects that will not translate throughout the year. So -- but we still expect that to be higher than the sales growth, mid- to high single-digit growth. And the same for the adjusted EBIT margin that will obviously, by dividing the 2 numbers, will increase versus last year. CapEx to be expected around the 2.8% of sales that we also had last year in 2025 and working capital range between the 17.5% to 18.5%.

So let's sum it up. We had a strong start into 2026. We achieved new records for sales and for adjusted EBIT in the first quarter. The Hyva integration is on track and delivers the expected synergies, and that is helping our profitability to bring it to the range -- to our strategic range between 10% and 12%. We have achieved strong organic growth in a very mixed market environment, and that is because of our global positioning that we have developed over the years and also the diversification or rather the coverage, the broad coverage that we have across the relevant industries and the regions. Since we're back in our leverage range, we are now more actively working on M&A pipelines and expect that the market environment could create some attractive offers so that we are now in the range where from a finance point of view, we are able to act. The robust order intake continues with the possibility to further recover from the market. We, however, remain a bit cautious because of the macro and geopolitical framework that is more or less changing on a daily or weekly basis.

With that, we confirm the outlook for 2026. And that concludes our presentation, and we're looking forward to your questions.

[Operator Instructions] Our first verbal question comes from Nicolai Kempf from Deutsche Bank.

It's Nicolai from Deutsche Bank. Congrats to a really strong quarter. Let's start with Europe. Your message on European transport demand is similar to what peers have said, basically that the Middle East conflict has so far no impact on demand. I'm just wondering because of the higher diesel prices and because not every customer can pass them on, do you expect to see some impact going forward? That would be my first one.

Second one, on the U.S. market, also impressive that you showed growth here. And given that the base will likely get easier and the strong order intake we had from the Class 8 trucks, it appears that your guidance is rather cautious. Is that just a reflection of the potential macro headwind or anything other we should keep in mind?

Nicolai, yes, thank you for your questions. Indeed, we do not see any negative impacts yet in the call-offs that we get from the OEMs and also in the dealer orders, we don't see that. But we do believe there is probably a slight buildup in inventory on both ends. So that when the high fuel prices, the high energy prices, the high transport prices may affect the overall volume that we'll probably look at the higher stock level. I think everybody is increasing a little bit the stock level just to make sure that with the uncertainties, they are able to act and to deliver to their customers. So indeed, we don't see any of that, any downturn because of that at this point in time. But in the long range, we do expect that higher energy prices and higher transport costs will have a negative effect on the overall industry.

U.S. Class 8, indeed, we also expect the prebuy effect, I mentioned that in the presentation. We have a market share in North America of about 30% to 35%. So we will benefit from that to a certain degree. However, Brazil is still low. And you could see that maybe as an upside as compared to our guidance because when we developed the guidance, that was not in. But on the other hand, we are somewhat cautious with the effect that I've just mentioned that the high energy prices and the Iran conflict is not solved and that, that could have a subdued effect.

So we stick to our guidance. And if you would put the one on the -- that could be better than expected. The other one could be worse than expected because when we developed the guidance, there was no Iran conflict at this point in time.

I hope that answers your question, Nicolai?

Yes. Understood.

The next question comes from Yasmin Steilen with Berenberg.

I have 3, if I may. So the first one on the supply chain. You've increased your safety stock already in Q1. And just to understand, is this a cautious approach? Or do you experience already really a tightness in your supply chain from the Middle East conflict? And how should we think about the working capital ratio in '26 with Q1 ratio at the lower end of your guidance range for the full year?

Then the second question is on European agri. You have seen strong momentum in the first quarter. But looking at the sentiment, so business climate for agri machinery in Europe is deteriorating. So do you see or experience already any indications in your discussions with your customers or order intake dynamics from this?

And the last one, just coming back to Nicolai's question on the guidance. I also try to get my head around the guidance. So this is -- or kind of the only reason for you not becoming more optimistic on your outlook is just the Iran conflict and the little visibility you have. Is this the right kind of takeaway?

Thank you, Yasmin. I'll take the first one and the other 2 ones are with Joachim. Regarding supply chain, I would say to the vast majority, it's still taking a cautious approach just to be prepared. Here and there, especially in Far East Asia and in India, we see certain challenges in the supply chain, right? And predominantly, that's not us but these are suppliers for the whole industry here and there. The Indian economy is dependent highly on liquid gas and liquid gas comes out of Middle East, and that is affecting here and there the industry. And we see driven -- partially driven also by political decisions, prioritizations and who gets liquid gas in India.

And this is one reason why we want to prepare and try to, wherever possible, to use the current, let's say, financial strength that we have also versus competitors, especially local competitors in the region to use that in order to be more stable and to be able to deliver because also now we are delivering from India out into U.S., as an example, for agriculture products. So even in case the local demand is down and everyone would struggle from this, we could benefit if we can deliver our international customers still out of India. So that's the biggest reason at the moment that we are investing here and there in stocks.

I would say still it is a mid-single-digit number. So it's not a super huge number but we have a logistics task force in place, and this is looking basically every day or every second day in those situations. And yes, the most, let's say, regional focus here is Far East and India at the moment. For the rest of the regions, we don't see material impact.

Regarding working capital, I think with the 17.5% in terms of sales, we have seen the growth that I already anticipated for this year. I mentioned that in various calls over the past months that we will see organic growth of the JOST in 2026 despite the macroeconomic environment just because we have won projects and that need ramp-ups in inventory but also in sales, and that's obviously what happened in the first quarter. And I expect now that we are going to stay stable on that ratio in terms of working capital sales.

Okay. Then to your questions about European ag development. Yes, the sentiment is fluctuating. We have the sentiment index, and that is sometimes a bit more positive, sometimes a bit more negative. Overall, I expect that the market will be rather stable. We have a lot of effects that play a role. Crop prices are still very good, except for potatoes. Meat prices and milk prices are also still good. So our customers, the end customer still is gaining money, earning money that he can invest. Of course, high fertilizer prices, he needs to invest in fertilizers but most of them have that already booked for this year. So it will more or less hit them only at the end of this year.

And with that, we think that there will still be the capability to invest if they need to invest. So I would say we can follow the market and the market prediction that I've shown on this slide for the European ag. Outside of Europe, we are still ramping up some new customer projects and gaining market share. So there, we will be a bit more positive in North America and in APAC with the market shares that we're winning.

Concerning the guidance, yes, the year has started very strong. So we will probably see ourselves at the upper end of the guidance at this point in time. But certainly, on the sales level, there are uncertainties that come with the Iran conflict. And therefore, we were not planning to adjust that. And if we look at the earnings and the EBIT, we had a very strong quarter but you have to remember our overall seasonality that you have seen also over the course of the last years. And we also had a very positive mix in regional mix, as Oliver explained during the presentation. So we believe that we are still in that guidance. Probably from this point of view, depending on how the Iran conflict and other global trade implications and impacts will develop, we would see ourselves at the upper end of that guidance but still within the guidance that we've just repeated.

Okay. We have 2 questions coming in from the room chat, from Robert [indiscernible] from Opportunity Tree Capital. Given the recent capital increase, which appears value destructive at this stage, could you update us on the M&A pipeline? We are looking at a situation where dilution is set to effectively wipe out any organic earnings growth this year.

Yes. I would not confirm the statements that it will effectively wipe out any organic earnings because we've seen the earnings per share go up, and that is even with the higher share numbers that we have. But certainly, as I mentioned, we are now back in the range where we are able to work on deals. The most important deals that we've made that was the acquisition of our agricultural business and also the acquisition of our hydraulic business. were acquisitions that -- and discussions that we have initiated more or less outside of an existing process. And the big discussion with the vendor was, do you have the financial capability and do you have the strategic capability and the integration capability to act.

And that's why the capital increase was important for us because we're now back in a position where we can act. And out of that position, we are investigating and we are talking to potential targets. And as I said, to us, in the last 2 important acquisitions, that has been an important situation to be in. And since Q1 of 2026, we're back in that position. And we will, with all due respect and with all caution that needs to be taken, we will enter into those discussions and are already at the beginning of some of those discussions.

Oliver, you want to contribute?

I totally agree. I don't see the value destructive point at this moment in time.

There is another question from Sebastian Ubert from MPCM. Do you see the potential to remain above 10% adjusted EBIT margin for 2026 as a whole, which could be positive if adjusted EBIT is growing 9% at limit top line growth? How big was the impact on inventories due to the Iran war and the closure of the Strait of Hormuz?

Thanks, Sebastian, your first quarter, welcome to JOST universe. Second part of the question, I think I did mention already with Yasmin question. So that's a mid-single-digit safety stock increase that we did at the moment. That's basically the main impact that we see at the moment.

Regarding the first part of the question, yes, that's definitely possible, right? We have seen a strong profitability momentum. And in case there is the right ratio between sales growth on the one side, then we will definitely see or could see an adjusted EBIT that is at least close to 10%, if not slightly above, yes. But still in line with the guidance, potentially with the upper end of our current guidance.

Yes, I don't see any more written questions.

[Operator Instructions]

Okay. We have one more question from [indiscernible]. Could you please provide a full year guidance for exceptionals, financial results and tax rate?

Yes. [ Claudio, ] normally, we don't give guidance for those numbers but just give you a rough range. Regarding exceptionals, we guided, let's say, with beginning of the acquisition of Hyva that until, let's say, the closure of the PMI, we would may incur EUR 20 million, EUR 24 million of one-offs to do the full integration, restructuring, closing plans, layoff of certain people, and so on and so forth. We have consumed last year EUR 15 million. So there is another, let's say, mid- to high single-digit euro number going to be expected for this year.

I would exclude a little bit that EUR 3 million that I mentioned in the call regarding that portfolio optimization in Far East and India that has nothing specifically to do with the integration. Adding this on top, yes, it might be up to EUR 10 million. Again, for our guidance going in 2026, no impact. That's already everything what we do there is for our profitability in 2027.

Regarding financial results, we had a slight positive impact of FX in the financial result of first quarter. So that I think it's roughly EUR 6 million in the P&L for the first quarter. You cannot times four. It's probably a little bit more. I would expect between EUR 28 million up to EUR 30 million of financial result from interest, lease rates and so on and so forth for the full year. And regarding tax rate, tax rate, because we are doing M&A because you have PPA, you should always look into the adjusted net income and then the tax rate -- calculate your taxes versus the adjusted net income. And that rate is typically between 27%, 28%. I hope that answers your questions.

Ladies and gentlemen, this was our last question. I would now like to turn the conference back over to the management for any closing remarks.

Okay. Thank you very much for your interest in JOST. I think with the 2 records in sales and adjusted EBIT, we have had a very strong start into an interesting year 2026. So we'll see how it develops. But I think, as I mentioned, we're well positioned in the right industries, in the right regions and with the right customers to make this a successful year for JOST.

Thank you for your interest, and have a good day.

Thank you. Bye-bye.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.

Ladies and gentlemen, welcome to the JOST Werke SE Earnings Call Full Year 2025. I am George, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] At this time, it's my pleasure to hand over to Joachim Durr, CEO. Please go ahead.

Thank you very much. Good morning from our headquarters in Neu-Isenburg, and a warm welcome to our earnings conference for the financial year 2025. So let's look at the highlights of last year. We had a year of growth in JOST with the consolidation of our Hyva business. We successfully integrated that business into the group starting February 1, and we were able to capture the first synergies already in the year 2025.

Another part of that integration was that we successfully sold and carved out the noncore Cranes business that we've acquired with this transaction, and we're able to swiftly close that also in December of 2025. We also had support for market share gains through new customer projects as we successfully combined our local-for-local approach in regions with our global OEM contact and our global strength.

The market environment was not supportive last year. U.S. markets were shrinking by 25% to 30%. But despite this, we were able to manage and achieve an organic growth in the JOST organic business. So we've achieved our outlook for 2025 with earnings at the upper end of the corridor, supported by the fast implementation of the synergies of the Hyva transaction.

So let's look at the financial highlights. Sales growth of 44% to about EUR 1.5 billion in 2025, supported by the M&A effect, but also supported by an organic growth of about 2% in our continuous business. Our adjusted EBIT from continuous operations grew 29% to EUR 145 million, and the adjusted EBIT margin reached 9.5%, at constant currency 9.6%.

The free cash flow grew by 6% to EUR 126 million, reaching a new record, and that was driven by the Hyva contribution and the improvements in working capital. Our leverage came in at 2.27x at the end of 2025, reaching the target of 2.5 -- below 2.5 based on the debt financed Hyva acquisition.

The growth accelerated significantly in the fourth quarter. All regions were supporting and all business lines were supporting. So in Q4, we had a sales growth of 71% to EUR 387 million, and that was -- would organically supported by a 15% growth in our organic business. So adjusted net income from continuous operations went up 12% to EUR 84 million and adjusted EPS from continued organizations grew 11% to EUR 5.52.

Let's look at the market environment from last year. I were -- already mentioned that the markets were not supportive, But you can see, in transport, we had slightly positive markets in Europe, Middle East and Africa. Americas was low based on the uncertainties due to the tariff situation and also due to the emission regulations for 2027. Asia Pacific was slightly supportive in traders and supportive in trucks based on a strong Indian market and also export from the Chinese manufacturers to other regions.

Tractors, environment was still low, but for us, the business developed quite well based on the market share gains that we achieved, especially in the agricultural segment. But you can see, in Europe and North America, markets were contracting. Only in APAC, we had slightly positive market environment.

Hydraulics, we saw a stable market, and our Hydraulics business was integrated last year, and we could benefit from that stable market and get some of the synergies already on the sales side implemented.

So if you look at the entire picture, the weak market environment, the strong growth in JOST, that is basis -- that is based on a resilient business model and that has various elements, one of them being that we are selling in all regions of the world with EMEA accounting for 47% of our sales, Americas, 27% of our sales; and APAC, 26% of our sales. We generate our EBIT also in all regions. So all regions contribute, Europe, 25%, 30% in Americas and 42% in APAC.

And we also serve different industries, the transport industry with 51%, the agriculture industry with 18% and growing and the hydraulics and infrastructure industry with 31%. So based on this resilient model, we were able to have a very successful year, and we could complete our outlook and fully achieve our outlook.

Next slide, please. Yes. Here you see the final results compared to the outlook...

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So just in case I summarize the achievements. We had a very strong year 2025 with the Hyva integration, obviously, being the biggest highlight of the year. And with that and in a fairly weak market environment and not supportive market environment, especially in North America, we're able to achieve our outlook for 2025. Our sales was confirming at EUR 1.534 million. That's up 43% versus the outlook where we said we would be up between 40% and 50%.

Also on adjusted EBIT and adjusted EBITDA, our growth is 28.6% on EBIT, 29% on EBITDA, and that is at the upper end of the range that we had in the outlook where we said 23% to 28% versus prior year. Our CapEx ended up being 2.8% of sales, which meets the outlook of approximately 2.9% of sales and our working capital ended up at 14.8%, which is below the target of 18.5% that we had given in the outlook.

So overall, for us, a year with exceptional growth, mainly based on the acquisition of Hyva, but also with our organic performance and meeting the outlook of 2025. And Oliver will lead you through some more details.

Thank you very much, Joachim. Welcome from my side. And as usually, let's go a little bit deeper into the numbers. First, starting with our EMEA region. You can see here in sales that driven obviously by the Hyva acquisition, we had a strong reported sales growth of 28%. Hyva was contributing there on a full year basis by EUR 126 million. But important is for us, even on an organic basis, we achieved a growth in EMEA by 5%. That is predominantly driven by our agriculture business line, which achieved for the full year a 7% organic growth. And even Transport, despite the challenging market, was more or less a black 0 on [indiscernible] basis.

And what we see on the fourth quarter development is that, that organic increase even accelerated in the second half of the year and especially also in the fourth quarter by an organic increase of sales by 15% to EUR 178 million in the fourth quarter, again, here also driven predominantly by the agriculture segment, but also Transport kicked up. However, we assess also in Europe this recovery, so to speak, as fragile at the moment. The Iran conflict might have influence here as well, but I believe Joachim will come to that point once we are discussing the outlook.

If we go down into the adjusted EBIT for the EMEA region, we see an expected dilution by consolidating of the Hyva business. So we achieved a roughly EUR 36 million adjusted EBIT in the EMEA region, which is close to 5% adjusted EBIT margin. And yes, the big effect is here that the Hyva business, Hydraulics business in the EMEA region is dilutive on the one hand, and on the other hand is, although Hyva has a strong presence in Americas and in APAC and generating the operating results, a lot of central costs for R&D, as an example, or other headquarters are allocated into the EMEA region, and that, together with certain adjustments in the fourth quarter between regions in terms of cost sharing led to a relatively weak EMEA adjusted EBIT in the fourth quarter. But all in all, fully as expected. Going forward, we see an improvement step-by-step now with the synergies also in the EMEA region ramping up, especially in the SG&A segment in 2026.

If we then go to the Americas region on the next slide, we also here see, first of all, a very strong reported growth by 24%. But also here, I think it's important to highlight that despite the strong market decline in transport in U.S., we achieved an organic decline of only minus 4% in the whole Americas region. And basically here, the same development then compared to EMEA, that growth, momentum growth recovery, so to speak, accelerated in the fourth quarter. We were strongly supported here by 2 effects. One is in South America. We have a strong business in South America consolidated in that region where we gained new business with customers like Caterpillar and CNH and that business has been started to ramp up by, let's say, the second quarter of last year and it's going to continue also in 2026.

So that supported organic growth in the region. And also, to a certain extent, in the trailer segment in the North America market, we gained the one or the other customer, partially driven by the tariff effects that in that sense here supported our market shares. So that helped that the overall organic decline, again, in the Americas region is only minus 4% for the full year.

And if we go down to the adjusted EBIT, we have also seen that, from our point of view, it was a very successful year despite the challenging markets. We achieved for the full year the same adjusted EBIT margin, it was 10.9% compared to the previous year despite the integration of the Hyva business, which indeed has a certain dilution. However, that dilution in the Americas region already disappeared fully in the second half of the year by a very strong business of Hyva in the second half of the year, resulting in an adjusted EBIT of EUR 44 million for the full year. And also here, we see an adjusted EBIT that the fourth quarter was quite successful, driven by all business lines, driven by the recovery of transport to a certain extent and also driven by the hydraulics contribution into that fourth quarter.

If we then go to the APAC region, definitely the region with the biggest change in 2025 in basically all numbers, for sure, driven by, again, the Hyva acquisition. We more than doubled our sales volume for the full year up to a little bit shy of EUR 400 million, starting from EUR 167 million in 2024. So that's plus 136% growth, driven by EUR 235 million incorporated from the Hyva acquisition. And also what we see here is the markets in APAC, as Joachim described, were a little bit up and down. We were benefiting despite FX headwinds here from a strong export business out of China basically across all business lines. So we are working closely together with Chinese customers that are successful at the moment by exporting their products into Far East, into Africa and other emerging markets with JOST products. And you also can see here, in the fourth quarter that, that growth even accelerated again in the fourth quarter like within the other regions.

Also here, a little bit like with India, we need to be a little bit, let's say, monitoring the whole situation. The APAC region might also be impacted by the Iran conflict. Nevertheless, what we see at the moment is still a strong order book in the region that supports us both for our China business and our India business, which gained a little bit momentum beginning from September last year when tax adjustments were done in India, supporting the economy overall there. So that from a sales perspective, a very successful year for the APAC region.

If you go down into adjusted EBIT, for sure, driven by the strong growth, adjusted EBIT went up to almost EUR 62 million. And also from a dilution point of view, we achieved a margin of almost 16% for the whole year in the region, which is better than we anticipated originally. We knew that we will have a little bit of a dilution through the acquisition of Hyva in the APAC region as well because of product and product mixes and also set up of the supply chains within Hyva a little bit different than in JOST. Nevertheless, with almost 16%, again, we are very proud and for sure, that helped massively the overall adjusted EBIT for the total group.

And also here, you see in the fourth quarter now with ramping up of the synergies, the huge potential of that region in the new combined group by having leverage effects from higher capacity utilization and so on and so forth.

So that's the summary for the 3 regions. If we now combine everything together into the group, as Joachim said, we have seen a strong reported growth of 44%. Organically, that means for the total group, still a positive organic growth by 2% despite all the challenges that we have and that underpins definitely our resilience models being present all over the world across all regions and being diverse via our customer base and our industries. And that organic growth has been in the fourth quarter, even 15%, up from EUR 226 million down to EUR 387 million reported-wise and organically, as I said, 15%.

If you go down to adjusted EBIT, also here, Joachim already mentioned, EBIT has grown from 113% million to 145.2%, representing a reported margin of 9.5%, also here better than we anticipated at the beginning of 2025. Several success factors were important here, as you all know. We have sold the Cranes business that we have acquired together with the Hyva acquisition that has a little bit of an EBIT kick, but on the other side and going forward, then even more important is that we see that the synergies are ramping up, that the combined business is more successful than the single ones, right, and that resulted then in an adjusted EBIT growth of almost 29%. And also, likewise, with the regions, we see a very strong fourth quarter with an adjusted EBIT that almost doubled from EUR 18 million up to EUR 35 million, again, driven by a very successful APAC region and a certain recovery in EMEA and in APAC.

So that's for sales and adjusted EBIT. Now let's have a look into adjusted net earnings or our adjusted net earnings bridge. We start with a net income of EUR 9 million, depressed as we have already announced with the [ Brilliance ], a little bit by extraordinary effects.

A big one here is the purchase price allocation effect that comes with the Hyva acquisition that has, in the initial year of the acquisition, an additional effect of almost EUR 20 million of inventory step-up, depreciation and order book depreciation. So that's why we see a total PPA in our P&L of EUR 55 million. The run rate going forward might be roughly EUR 20 million less, so just to let you know.

And on the other side, we had roughly EUR 15 million of exceptional items as we announced before. We will have with the with the integration costs and restructuring costs related to the Hyva acquisition, roughly EUR 20 million to EUR 24 million exceptional expenses from the start of the acquisition, which was beginning of last year, we have consumed now EUR 15 million, and this is predominantly by layoff costs, restructuring costs, consolidation costs of footprint, et cetera. So -- and that, together with the reported tax result and with the reported finance results, sums then up to an adjusted EBIT of EUR 145 million.

We then have to deduct again an adjusted finance results. There are 2 special effects in the finance result to report, which are combined account for EUR 6 million extraordinary expenses. So that's EUR 30 million finance result and actual tax expenditure of EUR 32 million, we are then ending up with an adjusted net income of EUR 84 million, and that's an increase versus prior year of roughly 11%, resulting into an adjusted net earnings per share of EUR 5.52, which will be then also the basis for our dividend for [indiscernible] going forward.

If we then go to the next page, some capital and cash flow efficiency numbers that we regularly report. First here is the ROCE. We had a ROCE of 16.9% last year in 2024. We ended up now with almost 16% also this in the first year of such a big acquisition, which dilutes a little bit the ROCE in the first year as you have a strong balance sheet expansion as you had -- as we have a higher debt load to finance the acquisition, I think it is a very decent result we are proud of.

When we look into the equity ratio, that has been now, as expected, decreased from end of 2024 to end of 2025, down to 21.2%. There are 2, 3 main effects that we did have to disclose here. The biggest one why of that decrease is simply the balance sheet extension. So we financed the acquisition of Hyva that expenses the balance sheet, and that's a dilution of the equity ratio.

But on the other side, as you probably all realized with other companies, we have net assets in regions all over the world, big as net assets, especially in the USD regime. And with the weakening USD versus the euro, we had a strong negative FX translation effect in equity accounting for almost 2 percent points of equity decrease or almost EUR 40 million.

Going forward and especially with the capital increase that we did end of February, that's going to significantly jump up already in the first quarter now.

When we look into net debt leverage, as Joachim mentioned, that has, as expected, grown, driven by the financial debt load to finance the Hyva acquisition. We show a leverage of 2.27x EBITDA, and that's indeed lower than our initial target that we have set for 2025. We wanted to make sure that we are, at the end of 2025, below 2.5, which is a little bit of a threshold for us in terms of credit ratings and so on and forth. So kind of an important threshold, proud to achieve that, and that also helps our finance expenses for this year.

If we then go to the next page, we see a very strong free cash flow. Again, like with the last year, cash conversion rate of 1.5% and absolute free cash flow of EUR 126.4 million. There is strong contribution from Hyva in the operating cash flow on the other side.

And on the other side, for sure, we try to optimize our working capital in 2025. Also, you never know what happens in the next year, and we all see this at the moment to be robust, to be ready for whatever is needed in terms of the future of the company. But yes, I think we can be proud again for another very good free cash flow performance.

CapEx spendings have been well under control, EUR 43 million we have spent, reflecting 2.8% of sales. And that includes already here and there certain investments into our future. So by the way, we have just opened last week in Brazil, a new off-highway cylinder production facility.

And we have also moved into a new modern facility in Melbourne in Australia. Both facilities will achieve further growth in the future. And that investment here, I think, is well spent, but still fully in range of our corridor and a little bit below the guidance that we initially pointed out for 2025.

And working capital, I already mentioned, very successful working capital year. The ratio in percent of sales is 14.8%. I think that's the all-time low. However, as I pointed out already in the one or the other meeting, this is partially driven by factoring line that we used and year-end working capital optimization. So that's probably not a through the year run rate, but nevertheless, a big achievement and supporting our deleveraging at JOST.

Next page, please. Yes, last quick snapshot on our ESG/sustainability performance. As you all know, our most important KPI that we are tracking here is energy consumption and CO2 emission in production hours, so to speak. For sure, the energy consumption driven by the M&A effect has grown, however, less than the turnover, so to speak. So there is efficiency in both in energy and gas supply incorporated in the numbers.

We are pushing in JOST pretty much all over the world, our photovoltaic usage to get our own energy production ramping up, and that supports not only the P&L, that also supports our CO2 footprint, very proud to present those numbers here. And when we look into the CO2 intensity, also here, we can see, and probably focusing on the right part of the lower chart, a minus 2% organic decline in the CO2 intensity. And this despite the fact that the number has already been grown -- has already been decreased more than 50% compared to our initial targets that have been set in 2020. And that 2.76 CO2 intensity number will be now the new basis going forward. We have just discussed a couple of weeks ago with the Supervisory Board new targets for that number until 2035, and the goal is to reduce that number on top by another 50% showcasing that JOST is willing to play its own part in CO2 emission in the world, so to speak.

I think then it's up back for Joachim.

Yes. Thank you, Oliver. Very important year 2025, very important for JOST in the growth trend in our Ambition 2030. So how do we look into 2026? So let me guide you through the current assumptions for the markets. If you look at the Transport markets, a slight increase in Europe, Middle East and Africa for trucks and trailer expected from the analysts and prognosis institutes. In Americas for truck, also a slight increase for trailer, around 0 -- slight decrease to around 0. And for APAC, also a slight decrease expected for this year.

On the agricultural markets, it is a slight increase in Europe, a slight decrease in North America and also in APAC. And hydraulics, more or less a stable market environment around 0. That's the expectation that we see from the institutes and from the analysts. There is a few upsides and a few risks, obviously, that we can discuss.

Upside is on the one hand that in Americas, we do have the tariff situation. And if that calms down and gives more stability or even a reduction in tariffs then that will lead to a market because I assume there is already some pent-up demand due to the low volumes that we've seen in the last year. So that's an upside potential if we see some stability there.

The other one would on the truck side be a potential prebuy effect for the 2027 EPA regulations that there is still some uncertainty around that. And if the White House and the administration clarifies that, then that is another upside potential. Downside potential, obviously, is the high energy cost and the high transport cost that could come with the current Iran conflict, and we will have to monitor that. So based on this market assumptions, our outlook for the year 2026 is that we will continue to grow despite the more or less stable market environment in a single-digit level. Our adjusted EBIT margin and our adjusted EBIT will grow higher than that. The adjusted EBIT grow higher, and therefore, the margin will increase. So single-digit growth in sales, mid- to high single-digit growth in adjusted EBIT and an increase in the adjusted EBIT margin comes out of that.

For CapEx, same as last year, we assume that we will be around 2.8% of sales and the working capital between 17.5% to 18.5% of sales, which is our normal range throughout the year. So those are the outlook numbers.

Summing it up, we are closing a very important year for 2025 with an exceptional growth for JOST based on the Hyva acquisition, but also with a positive organic growth in a difficult market environment. So we're on a good way to reach our Ambition 2030 goals. Sales being up 43%, EBIT being up 28%, record cash flow, so we consider that a very successful year 2025. And based on that, we're also well positioned to achieve further growth potential in 2026 and to continue to generate value for our shareholders. Based on that, we propose a dividend of EUR 1.5 per share, which is 30% of our adjusted net income. So that's the upper range like last year of our dividend corridor.

We expect the Hyva PMI to conclude in 2026, so that we can confirm our synergies by Q4 of 2026 that we will all synergies implemented by the last quarter of this year. And we continue to actively work our M&A pipeline to see what other opportunities there will be this year, and we believe that this year will be a year where there are opportunities that will come on the market at reasonable leverage and at reasonable prices.

So our diversification across the end industries and across customers and our regional strength that provides the resilience and the profitability in what could be another difficult market environment this year based on the slide that we've just seen and the upside -- and the downside potential, which requires the flexibility that we have been able to prove in the last years. We are seeing a very robust order intake in Q1 2026. So we see a visible recovery across all business lines and also across all regions. So the year has started quite well, and we will see if we can continue that way, but we're also closely monitoring the potential impact of the Iran conflict. There is energy prices going up, there is freight costs going up, and we will have to see how long that will be and how that will impact the overall global economy. We are prepared to swiftly and flexibly adjust to that.

So that's the summary, and we're open for your Q&A. Thank you very much.

[Operator Instructions] The first question comes from Yasmin Steilen with Berenberg.

I have 3 again. So I will take them one by one, if I may. So the first on the guidance, could you provide more granularity what you have baked into your guidance? Or put it the other way around, did I get correctly that the upper end of the guidance implies some positive upside from the Truck market, while the lower end reflects some impact from the Iran conflict? Or would this come on top?

Yes, I can take that directly. Thank you for your question. So currently, the guidance is based on the market environment that I have been showing. If we see the upside potential of -- especially on the U.S. market, that would come on top of that. So if indeed, we see the tariffs go down or if we see a pull-ahead effect for the purchases because the EPA 2027 regulations supports that pull-ahead effect, then that would increase the guidance range that we've currently given.

And on the down end, it does not assume any major and long-term impact from the Iran crisis. We're currently already seeing some increases in fuel costs and also in transport costs. But if that does not continue a long time, then we don't think there will be a big impact. But of course, depending on how long that conflict will be and how much impact that will have on the global economy, then that would be -- that is not included in the lower end of the guidance. So it assumes the global economy more or less as we've described in that slide about the markets.

Okay. Perfect. And maybe just a follow up. Do you expect any impact on your agri business from a potential shortage of fertilizers? Is there anything you've heard already from your direct lines or from a dealer side? So looking at the SIMA business parameter, it moved slightly to a negative territory again in March. So anything you can share from this side?

No, really, we don't expect a big impact on that based on the current situation as we see it, the SIMA has been moving around 0 for the last months. But we do see with the dealer stocks going down, we do see a bigger demand at the dealer channel and also at the OEM channel. The numbers that you're seeing on that market slide is for the entire tractor market.

Our segment is the mid-range tractors. And they are actually a little more positive than what you see on the general slide because there, we have seen the volumes go down earlier and on the high horsepower tractors, it went down later. Now the midrange tractors are coming back quicker than the high-range tractors. So it's actually a bit more positive than what you see on that slide. And we have no indication that the fertilizer will impact that market at this point in time.

Perfect. And then maybe a final question, just following the capital increase. Could you provide or share more color on kind of your time line in terms of M&A, to what extent maybe the current macroeconomic uncertainties might impact this time line? On the one hand, you maybe becoming a little more -- a bit more cautious keeping your powder dry. And on the other hand, potential impact on the pricing, if there's any?

We don't look at it that opportunistic. We look at it more strategic. We have a number of targets that we're looking at. And if we have an opportunity to close a deal with a target that fits into our strategy, then we will do that. At this point in time, I would not say that we're trying to keep our powder dry. We're continuing the same way as we would have done 4 or 8 or 12 weeks ago.

So no implication from that point. We have an industrial story that we've laid out in the Ambition 2030, and that is the main driver for our M&A ambition, not so much that if we have the capability or the power -- the firepower, it's more the strategic view. And I don't see a change to what we have communicated about 6 weeks ago. There is targets that are in the market, and it's mainly driven because of a change in the industry, a change in ownership. And I think we are well positioned, and we have the right financing structure to be able to act if we see the right targets and with the right industrial footprint and the right strategic fit to us. I don't know if you want to add anything to M&A?

No, I totally agree.

So we have some questions that were submitted by text from Jorge Gonzalez from Neways. I understand the cautious approach given the geopolitical events, but could you give us your view on the improvement momentum on truck and trailer ordering in the U.S. after a long recession, do you think there is more positive opportunity than further deterioration risk?

Yes. I think I've mentioned that a little bit. I believe that the replacement rates have been low the last year because of that uncertainty. So the vehicles have aged. There is some statistics that the aging in the last 2 years was 1 year of the vehicle age. And that means there is some pent-up demand.

That's why I mentioned the upside potential really is if there is some more stability in the pricing and the pricing depends a lot on the tariff situation, and if there's some more clarity on the EPA 2027 regulations, I think we will see that pent-up demand convert into numbers. So I'm personally more positive than what you see in the official numbers for the North American market, all depending, as I said, a little bit on the environment that -- and the stability that is given by the administration.

Okay. Thank you. We have another question submitted via text from [indiscernible] Ivers from [indiscernible].

Regarding the organic growth in the second half of 2025, how should we think about that given the weak performance in the first half of 2025? Can you give us some color on the development during the year? And how should we think about organic growth going forward?

Yes. I think you -- we have to take into account also, if you look at it that way, the previous year to '25, so '24. In 2024, we had a strong first half year and the weak second half year. So if you do that year-to-year comparison, it appears like 2025 has been weaker in the first half and stronger in the second half. It's actually from the build rates, and that's not really the case. It's only if you compare it year-over-year that you see that picture. So our organic growth, we have been following the markets, but we have, in addition to that market, gained market share, especially in the agricultural sector and especially in the Americas region, as Oliver has pointed out in his details.

And that has helped us to have the 2% growth in that market that was especially in North America, down 20% to 30% and also not very supportive in all the other regions. So I wouldn't say that we had a strong last half year and a weak first half year. I would say we had a strong overall year organically and of course, adding more potential with the Hyva integration. And as you probably have seen in previous presentations, in those synergies that we have with the Hyva integration, the EUR 20 million that we want to achieve overall, there is some sales synergies. So some of that will come with additional sales opportunities, and this is what we will capture in 2026.

Okay. One last question submitted by tax from Felix Odorfer, DMF Financial Services. Does the rising working capital requirement forecast in 2026 imply a weaker free cash flow conversion more towards the 1x target?

That's correct, Felix, right? And I mentioned that in the -- at one of the other investor event already. We were exceptionally good in 2025, also in 2024. Always, it's a little bit easier to manage working capital in phases where the market and the business is stable or slightly decreasing, right, to release working capital.

And with the topics that Joachim was mentioning for 2026, we see ramping up organic pipeline, especially in ag/off-highway for us that will consume a certain portion of working capital affecting then the free cash flow. And the other point is also, and we have to mention that we are, at the moment, a little bit cautious when it comes to supply chains all over the world, right, to protect our market share, to be able to deliver, to protect our customers like we did in very successful, by the way, during the COVID crisis. And that's why we have incorporated a little bit of a cushion in that working capital number. However, nevertheless, we will try to achieve the best result that we can and stick to our overall long-term target of 1.0 adjusted net earnings free cash flow conversion. But yes, answer is yes.

Okay. That was the last question submitted by text.

[Operator Instructions]

There's another one from Felix.

There's another one from Felix. Sorry, yes. this one. Yes, from Felix, a follow-up. Revenue growth forecast low single-digit to mid-single-digit growth, including 1 month of Hyva, which was consolidated as per February, which could add some 3%, perhaps a little less due to the Cranes carve-out. So roughly speaking, it's an organically flat scenario, what you currently believe is the...

I don't think that this is 100% true, Felix, because I mean, a little bit different to compare to other ones. We don't exclude any FX effect. We expect a certain FX -- negative FX effect in 2026, probably in the range of 2% to 4% as the average, let's say, euro rate versus main foreign exchange currencies that we have, Brazilian real, USD, also Chinese renminbi, that is still increasing, and that will hit just the reported sales top line. If you exclude that, we are coming back to that initial range that we said mid-single digit somehow is a realistic number up towards the upper end with more of an improvement in North America and probably even to the very upper end in case we have that pull effect from the EPA. So you need to take definitely for 2026 into account that there will be effects.

So we can say the guidance includes a negative effect?

We haven't excluded, right? So we stick to that guidance even in case we will see that FX effect.

That's it.

Ladies and gentlemen, this was our last question. I hand back over to Joachim Durr for any closing remarks.

Yes. Thank you very much for your interest. I think for us, as I mentioned, an important step in our Ambition 2030.

We have one question.

Please go ahead.

One from Fabio is still on the line. Sorry, just came in. If you can please, moderator, put him back in. I'm sorry for that. We did not see it.

Please go ahead.

Can you hear me?

Yes. Yes.

Okay. Perfect. One question left. On minority interest going forward, as far as I can see what's left now is mostly -- and I hope I'm pronouncing this correctly, Usimeca, the recycling business in Brazil, the 25%. You have earmarked EUR 15.4 million for the put option. Do you plan to exercise this in 2026? And if yes, would that translate to basically 0 minorities going forward?

Yes, yes and yes, Fabio. Let's hope that the minority shareholder is not listening this call at the moment. That's the provision/liability we booked based on the fair value assessment that we did in the annual report that the final price depends on final negotiations.

And probably it's not so much on that we decide to -- we have a call, he has a put. There is a high likelihood, right, that he will do the put option -- call the put option, so to speak. And then you're right, the most likely outcome will be that this liability then goes away. And on the other side, we will then consolidate to 100% of that business. And the reason why that put option has increased in value, jeopardizing a little bit the finance result is that this business has improved a lot over the last 12 months. So a very successful business. And also going forward, the outlook for 2026 and 2027 for that business is a very good one. I hope that answers your question.

It does.

So still not over. One more question from Felix. Are you willing to share some quantifications on synergies at EBIT level currently anticipated for 2026?

I mean that doesn't change to what we have initially said. So when we did the acquisition beginning of 2025, we said, over the 3 years, it would be around EUR 5 million in the first year, so 2025, and an incremental EUR 7 million or EUR 8 million in 2026. So summing up then of a run rate of around EUR 13 million in 2026 and then for 2027, the full EUR 20 million synergies. So you should expect an increment -- or incorporated is an incremental EUR 7 million to EUR 8 million EBIT for 2026.

Okay. It looks like now there are no more questions. I will wait a bit. Yes. Okay. Thank you very much for your interest on this. And Joachim, please go ahead.

Okay. Yes. Thank you very much for your interest and for the questions you're posing. For us, a very important step in 2025 on our Ambition 2030 plan is to increase our sales and our margins and a successful integration of Hyva to this point in time. Good basis for 2026. We see slightly positive environment, and we will be able to adjust upwards or downwards to use the opportunities or to manage the risks that we see currently and that we have discussed. So thanks again, and see you at the next meeting.

Bye-bye.

Bye-bye.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.

Ladies and gentlemen, welcome to the JOST Werke Q3 2025 Conference Call. [Operator Instructions] At this time, it's my pleasure to hand over to Joachim Durr, CEO. Please go ahead.

Yes. Thank you very much. A very good morning here from Neu-Isenburg, and a warm welcome to our Q3 earnings conference for JOST Werke SE. So I would like to start with the highlights of the first 9 months and the third quarter of this year. In the third quarter, we were able to accelerate our profitable growth despite the challenging market environment. This was supported by market share gains we had organic growth opportunities we could implement and of course, by the M&A of the Hyva Group. The Hyva Group PMI post-merger integration is fully on track. We see already a ramp-up of the synergies, and we advance further with new cross-selling opportunities that we have identified. We were able to obtain market share gains across all regions and in all business lines, and that is because we could successfully combine our local-for-local approach in operations, selling and production with the global strength of our business lines.

The market demand in Europe, Middle East and Africa has strengthened somewhat over -- in the Q3 compared to a weak Q3 in 2024. However, the demand in the U.S. has been contracting further due to the tariff concerns of our customers. With that performance, we can confirm our outlook for the fiscal year of 2025. Let's go a bit deeper into the financial highlights. Our operational model and our strategy proves its resilience and the strength in this challenging market environment. Our sales in the third quarter 2025 went up by 56% to EUR 383 million. This was, of course, supported by the Hyva merger and acquisition effect, but also by an organic growth of 10% that we had across all regions.

Our adjusted EBIT grew by 40% to EUR 37 million in the third quarter, and the adjusted EBIT margin reached 9.7%. That had a negative FX impact. So at constant currency, that would have been 9.9%. Our good operating performance and the realization of first synergy effects from the Hyva integration resulted on a 9-month basis in EUR 110 million adjusted EBIT, which is almost the value that we had for the entire fiscal year 2024. And the adjusted EBIT margin on those 9 months of 2025 reached 9.6%. Also, adjusted earnings per share increased 14% to EUR 1.11 for the quarter 3. This increase was also supported by an organic growth and of course, the contribution of the Hyva acquisition. Leverage has improved to 2.44 in the Q3, which means that we have been reaching the targets to be below 2.5x leverage by year-end faster than we initially expected. So we're very happy about that. Of course, a big help came from the free cash flow that was very good in Q3. It grew by 144% to EUR 56 million and the driving factors also here were the strong Hyva contribution, improvements in working capital, some factoring and some positive timing effects.

To give you a little bit more detail on what we are doing on the Hyva integration. We showed it already in previous conferences that our target is to reach EUR 20 million positive impact in the run rate by the end of 2026. And here, a bit more detail. So one part, an important part of those synergies is additional sales that we generate through cross-selling synergies. We are successfully offering our Hyva products to JOST's customers in various countries. We have good success there in Australia, but also in North America, where we see additional sales being generated by using that sales channel for the existing Hyva products. But vice versa, also, the JOST products are gaining access to new customers by leveraging Hyva dealers using the Hyva network in APAC and also in Americas. We see that especially in Canada and in some of the Asian markets. So we expect a total effect of EUR 8 million additional EBIT generated through additional sales that we find with these cross-selling synergies.

And then another big lever, of course, is material costs, logistic costs, production costs. The sales of the Cranes business has been signed. So that carve-out is ongoing and is certainly helping. But on the logistics cost, also, we have a consolidation and closure of first sites and warehouses that we have already implemented in Australia, in South Africa and also in Europe, and we see the first effects out of that. Over 50% of the purchasing and logistic contracts have already been bundled, and we are in the process of renegotiation. So that we expect here an effect and it should be the biggest effect of the entire EUR 20 million. Here, this effect should be EUR 8 million to EUR 10 million by the end of 2026. And of course, we are also trying to optimize and we will optimize our structure, selling, general and administrative costs. We are streamlining in our management and reporting structure worldwide. We're advancing very swiftly on this one, and we will have the structure implemented, the majority of that structure implemented by the end of this year.

We have savings from combined IT services contracts and license fees, but also the combination of shared service centers for accounting and auditing reduces those fees. But we're also integrating our marketing organization. We are running combined trade shows. We've just been -- I've just been on a trade show with the Agritechnica for the last 3 days. We had the Wuhan show last week, and we're already at these shows as one company, partially with one stand for Hyva, JOST and Quicke. So also here, we expect around EUR 8 million. EUR 5 million out of those EUR 20 million, we will already see by the end of 2025. Looking at the market development in Q3 versus the Q3 of last year. In Europe, Middle East and Africa, we have increasing markets. I already mentioned that it has been a weak quarter last year, Q3 and Q4 in Europe. In Americas, the tariffs take their toll. There's a lot of uncertainty that our customers sense with their customers. So production rates on trucks, but also on trailers is going down. And in APAC and the transport business, you can say it's more or less flat, a little better in trucks and a little weaker in trailers.

The tractors are still negative compared to last year. However, it's not hitting us so much because this is mainly the large tractors that are being impacted by this downturn on the dealer business. We see already a slight coming back of the market. So this is the official numbers for the markets, but our dealer channel is actually improving a little bit versus last year. And on Hydraulics, we -- you can say across, we have more or less stable markets, a little weaker in Americas, also a slight impact on the tariffs. But in the rest of the world, we see infrastructure still on a very solid basis. This resilience, it comes also from a nice distribution of markets, products and customers. And we've shown this slide before, but I think it shows very well that we are not dependent on any specific customer groups or any specific market. If you look at where our sales are being generated, you can see that it's 47% in Europe, Middle East and Africa, 27% in Americas, 26% in APAC. So already a very nice distribution.

If you look at it from an adjusted EBIT contribution, you can always say it's 1/3, 1/3, 1/3, 31% in Europe, Middle East and Africa. Americas with 30% plus 2% with the joint venture in Brazil and APAC region with 37% of our adjusted EBIT. So also that adds to our resilient business model. And if you look at the applications, we have about 50% in transport, still 53% and the growing agriculture business and hydraulics business with 18% and 29%, respectively. Yes, with that, I would hand over to Oliver for more financial details on our performance.

Thanks, Joachim, for the overview. Yes. And then indeed, let's go into the financials. As usual, first, a little bit more focusing on the quarterly results by region and then summing up into the group. Starting here with Europe, we have seen organic growth and the first synergies that improved also our profitability. The sales contribution by Hyva in the third quarter has been EUR 36 million, leaving then the rest of the growth with almost 13% of organic growth in the third quarter. This is driven by stabilization both in transport and agriculture and also the general overall order intake gained a little bit of a momentum. However, we still need to say that the situation in EMEA is somehow fragile, right? We need to stay flexible and need to be close to the customer group as especially in the DACH region, right, the whole effects from the infrastructure program are yet to come somehow. We had only minor FX effects in sales by 0.3 percent points. So that sums then up to an almost 41% of reported sales growth from EUR 129 million to EUR 182 million in the third quarter. Looking into EBIT, also there, a nice growth from EUR 7.3 million to EUR 11.4 million, driven by the margin increase.

On the one side, Joachim mentioned that also in Europe, we see the first synergies that are going to be realized. We are consolidating sites and warehouses. And on top, very helpful here is that we have a profitable business in agriculture, especially in EMEA, and that business has been organically grown by 25% compared to the fourth quarter -- third quarter of last year. That obviously helped to improve the profitability in EMEA as well. Please remind me that as in the past, the EMEA region carries, let's say, the big, big share of the headquarter cost, and that is also after the Hyva acquisition, still the case as the headquarter there in the Netherlands. So that's then the overall impact on the margin, but nevertheless, increased compared to prior year.

So that's the quick summary for EMEA. If we now go into Americas, we have seen growth in Americas in the third quarter. This is driven by our diversified model within the region and also, as Joachim mentioned, selective market share gains. The Hyva contribution to the growth was EUR 30 million, which led to a reported sales growth from EUR 77 million to EUR 107 million, so by almost 39%. However, even in Americas, we achieved an organic sales growth of 6%, which is partially driven by a very good situation in our trailer business and aftermarket business in North America on the one side that helped us to compensate also the margin effect from the truck downturn. And on the other side, a very successful quarter for our business in Brazil, an acquisition that you might remember, we did in 2023, which is strongly growing versus prior year, also by new projects and new customers with very solid margins. And that indeed then turned into a strong quarter from our point of view also in terms of EBIT for the region, absolutely wise growing from EUR 9.8 million to EUR 10.9 million to a margin of 10.3%. And that despite the Hyva dilution that we will have and still have in the region here, but we are fully on track to realize the synergies there.

And Joachim mentioned that we are benefiting here on both sides with regards to cross-sell effects. And so we are happy with the results here in Americas as well. And yes, looking forward for prosperous 2026. Then going to APAC. APAC has seen a very strong reported sales growth in the third quarter from EUR 40 million to EUR 95 million, so more than doubled. EUR 55 million of that growth has been driven by Hyva acquisition. As you know, Hyva is especially in China, a very, very strong player with high market shares and is currently benefiting also JOST, but especially Hyva from a very strong export business. So we have gained a lot of business with Chinese customers. And these Chinese customers are very successful now in the global market, so not only domestic, also in their export markets, and Hyva is growing with their customers. But also organically, so without the Hyva effect, we have grown by almost 7% in the region. And this is somehow by still solid transport business for JOST, again, also here driven by export business but also by a ramp-up of our agriculture business in India, so very successful here.

We had strong FX headwinds of almost 11% points. That's because of the strong euro, but nevertheless, have achieved almost EUR 100 million of sales in the region for the third quarter. Looking into EBIT now, again, very strong like in the second quarter, growing absolute wise, the EBIT from EUR 7.7 million last year's third quarter to almost EUR 40 million now in this year's third quarter. So the strongest region by far now in terms of EBIT and EBIT has grown by 80%. We see the first synergies are ramping up, as Joachim mentioned, across all, let's say, cost line items, so in COGS in SG&A, but also on the sales side with regards to cross-sales activities. So overall, from a region point of view, APAC has been very, very strong in the third quarter and also looking short term going forward, we still see a good momentum, especially in China for the moment.

Then summing up for the total group. We see an organic growth in all regions. And then together with the M&A contribution has boosted sales and earnings in the third quarter from EUR 246 million now to EUR [ 283 ] million, as Joachim mentioned, impact from Hyva stand-alone is EUR 121 million in the third quarter, leaving us with 10% of organic growth in such a geopolitical and worldwide environment. I think that's quite an amazing result and underlines the resilience of our business model and the exposure to various markets to all the big customers worldwide, including the new ones in China and in India helps us to balance that, so to speak, challenging environment very well. On top, we have seen a momentum increase in the agricultural business worldwide by now 18% year-over-year increase. And we need to see Joachim was just on the [indiscernible] seems to be that there -- we have definitely reached the bottom through the summer period in agriculture. So also there, we are slightly optimistic for the next months that this is going to continue.

When we look into EBIT, EBIT has grown by 40% from last year, EUR 26.5 million now to EUR 37.2 million. So a very decent margin of 9.7%, so almost close to our strategic corridor of 10%, again, in such a complicated environment. And if you would adjust this for the negative currency effects, both in sales and in EBIT, that would have been a constant currency rate of EBIT by 9.9%. So we are very glad and positive to show this number here. We see in all regions, the ramping up of the synergies, as we mentioned. On the other side, here and there, the situation remains fragile from the market point of view. We need to stay flexible. And I think we are well set with our business model to deal with whatever is upcoming over the next months.

And one last point to mention here, basically in all regions, but especially in North America, we have seen a very high market share for our aftermarket business that stabilized the margin here as well. So that's regarding sales and adjusted EBIT. If we now look into our adjusted net income and adjusted EPS bridge, we start with a net income of EUR 22 million for the 9 months, impacted for sure by the finance results, which is increasing definitely versus prior year because of the higher debt load and the interest. We also had a little bit higher taxes in the third quarter. There are some timing effects, partially are related to our PPA charges here and there. There is a phaseout definitely going to be expected over the next months. We need to look at this at year-end. Adjusted for both, we stand within a reported EBIT of EUR 58 million. And then for sure, as usually, we adjust the PPA charges that have significantly increased compared to prior year because we do now incorporate the purchase price allocation of Hyva. So that sums up to EUR 41 million. That's high, especially this year because we have in the first 12 months of the consolidation special PPA charges.

There's one detailed slide in the slide as well that will phase out until year-end. And then this D&A PPA charge is going to be significantly reduced from next year onwards. Then we add EUR 11 million exceptionals for the first 9 months. These are to 95% related to the integration of Hyva and then from a cost point of view, layoff costs consolidation costs, adviser costs, et cetera, so all related to the integration of Hyva. We are still fully in line with our overall guidance that we would expect between EUR 12 million to EUR 24 million integration costs of Hyva in the first 2 years. So with the EUR 11 million for this year, we are fully aligned, summing up then to an adjusted EBIT of EUR 110 million. And then again, if we do our retroactive calculation of finance result and the adjusted tax rate related to this, we are ending up with an adjusted net income of EUR 63 million, which we are very happy to announce, which is already then higher than last year despite the higher -- significantly higher finance result.

In adjusted EPS, that means then EUR 4.17, an increase from the EUR 4.04 last year. And I always like to mention also the adjusted net earnings to sales ratio, which reached again above 5%, which I think is in the current environment, still a very solid number. So then showing here again the details of the PPA charges, I mentioned it basically already. That's probably more for the readout material. One important point, the last bullet point on the right side is what I said. This year's net income is affected by that within the first year, special PPA charges, all that sums up to EUR 31 million. We expect that this is going to be lower by almost EUR 20 million from January next year onwards.

Coming now a little bit to capital efficiency and balance sheet figures. We have seen a ROCE by end of September of 14.3%. That's already for the first time now sequentially improved ROCE. In the second quarter, we had 13%. So that's a good signal, also showing the effect of the synergies and the EBIT growth. There's still a way to go for our overall target mid- and long-term target. But also here, we see that we are quite fast and happy to announce that 14.3%, showing that we see already that the Hyva M&A is value accretive and is managed in a capital-efficient way. Equity ratio has decreased from 40.4% end of last year to 21.3%. That's obviously clear from the financing of the Hyva acquisition. On the one side, that's probably 70% of the effect and the other 30% of the effect is that still by end of September, we see an impact of almost EUR 50 million currency translation in our balance sheet. We have -- and that's somehow then the other side of our diversified model all over the world.

We have net assets all over the world. And as you know, the euro currency has increased its value to a lot of currencies worldwide. So we see a translation effect, but it's only a translation effect, so to speak. Regarding leverage, quite happy to announce that because of a very strong cash flow in the third quarter, we were able to get the leverage number already below the 2.5 threshold, 2.5x EBITDA threshold that has been our target for end of this year. We have now reached already by end of the third quarter, and I'm confident that we can maintain at least that level until year-end. That, for sure, underlines our strong ability to generate cash flow. And Hyva again, is also here contributing to that.

Next page. Yes, here, you see the free cash flow as a result for the first 9 months has been now EUR 105 million. So the operating cash flow is improving through the acquisition and our organic growth on top, as Joachim mentioned, we have now a higher business volume, and that also gives us opportunities here and there for better working capital management. We are harmonizing factoring programs between JOST and Hyva. So that had positive impacts here as well, resulting in a conversion rate of 1.7% for the first 9 months, which I think is a good result despite the challenging environment. Looking into CapEx, we have spent so far EUR 28 million, which is 2.4% in terms of sales. So also here, fully in line. You may remember from our guidance that we want to stay below 3% this year. So I think we are well underway here. Nothing special to mention.

Regarding working capital, that's then vice versa a consequence of the working capital management. I think we did good in the third quarter. Working capital has been 16.2% and it's already below what is our target for the year and helping to improve our balance sheet. Next page, please. So that's it from my side. Handing back over to Joachim.

Yes. Thank you, Oliver. So let's look how the rest of the year is what we expect for the rest of the year. From a market point of view, this is not much different, obviously, than the slide you saw before, this was the 9 months. This is now the full year. So there's no expectation that the market environment will change. A quick summary of this is that Americas, mainly driven by U.S. and Brazil are much weaker markets than the year before. And also that's the ag market on the tractors remains weak. If you look at those numbers, we have been able [ to uncouple] our development a little bit of that, driven by market share gains that we have, by new contracts that we have, especially in the ag sector, by increasing sales channels, as I've already mentioned, and also by some positive pricing effects where we could implement the tariff pricing on our products. So that's why we are not fully hit by this market development. But certainly, the expectation is that we will also not get a lot of help from the markets in the remaining quarter.

As I mentioned, we are a bit uncoupled, and that's why we are happy to confirm our outlook for the year 2025. And you all know that outlook. Sales, we expect to be up by 40% to 50% versus prior year, mainly driven by the Hyva integration. And in 2024, we had EUR 1.069 billion in sales. Our adjusted EBIT should be up 23% to 28% versus prior year, where we had EUR 113 million in adjusted EBIT. Adjusted EBITDA also up between 23% and 28% versus prior year. The base is here EUR 148 million from last year. Our CapEx range will be around the 2.9%. Last year, we were at 3.1% and working capital, we expect to be below 18.5% of sales. Last year, we ended at 15.3%.

So let's summarize the quarter. We had a strong quarter in a challenging market environment, and we think that is proving our JOST strategy that we announced in the Ambition 2030 that we showcased you in the Capital Markets Day in September of last year. The diversification across the end industries, across the customers and our regions that strengthens our resilience and our profitability. The Hyva PMI integration advances swiftly, and we have a clear focus on the core business and on delivering the synergies that we are expecting. We are achieving organic growth in all regions and all business lines despite the weak market environment, and that is supported by market share gains and new contracts with new OEMs. Our local-for-local approach, our operational flexibility and our strong market access worldwide limits the impact from the tariffs and from the regional market downturns. And therefore, we could confirm our outlook for 2025 for our continuing operations. With that, I would like to conclude the presentation. Thank you for your interest, and we're open for questions.

[Operator Instructions] Our first question comes from Yasmin Steilen from Berenberg.

I have 4, if I may. So the first one on the EMEA agri market. It's very nice to see sales growing by 25% year-over-year in the third quarter. Could you provide an update on your discussions with the dealers? So is it fair to assume that a significant amount of the stocks have been sold off in the meanwhile and the inventory levels are low. So Q3 is kind of underlying demand and how the development into Q4? Then the second question is on the U.S. truck and trailer market. So we have heard from most OEMs have idled production most recently. Could you share your assumption on the developments for the winter holiday breaks in the U.S.? Should we expect a normalized winter break? Or might we see extended breaks given the ongoing uncertainty? Then thirdly, I have one housekeeping question. If I remember correctly, you hedged the U.S. dollar purchase price for Hyva back in October '24. Should we expect FX gains in Q4 within your interest result? And finally, on the tax rate, again, just housekeeping, your tax rate in Q3 was extraordinarily high. Was there anything specific behind this? And do you still expect a tax rate of around 25% for the full year?

Okay. I will take the first 2 questions, and then I think Oliver can cover the last 2 questions better than I. On ag, yes, indeed, I think that is the picture that I can confirm that we -- the market for tractors is still not coming back at that level. But for the dealers, we see that the dealers are coming back. There's a lot of interest also because we've added new products in our portfolio, but there's a lot of interest also because they have reduced their stock levels. So the dealers had a really tough time. You know that in Europe, in Germany, BayWa in Sweden, [ Lantmannen ], they all had big financial problems. The OEMs had to help and pitch in to solve those problems. The dealers are coming back. They are active and they are interested and they have reduced their inventory so that they are preparing themselves for the new season. And we see a slight uplift, and that is also the uplift that you see already in our numbers and that we expect to continue.

My [ view ], always comparing to a low base from last year, right? So that's why the numbers look so attractive. On truck and trailer, it's hard to tell. I don't see a comeback, let's put it that way, in North America. Nobody has announced anything of the winter breaks so far. The volume in North America is down by about 30%. And it will be depending individually from OEM to OEM, how they manage their production over the winter break. But I certainly don't see that before the winter break or through the winter break that the market will come back. We expect also that when we look into the first quarter and what we see already from the call-offs that the run rate and production rate is going to be more or less at the level that we see today. So that uncertainty remains, but it will be an individual decision from OEM to OEM, how they manage that, if they reduce the daily production, if they close for a few more days or weeks, we don't have heard any announcements of that at this point in time.

Okay. Then regarding your 2 housekeeping questions, Yas. So regarding FX, no, no effect expected for the fourth quarter. So that has been single FX deals, which have been fully set when the purchase price has been paid end of January. So at that point in time, we realized already the FX gain. So it's already incorporated already in the first quarter, it has been incorporated, and there's no change going to expect it from that single topic that you are mentioning until the end of the year. Regarding the tax rate, yes, indeed, it's definitely higher in the third quarter. There are some technical shift effects, which will, to a certain extent, phase out until year-end. Nevertheless, the effective tax rate will be higher for the full year a little bit. And that has to do also with the fact that our APAC region is doing much, much better than in the past. And that means we pay global taxes, as an example, in China, which cannot be offset with tax losses carried forward that we carry in -- as an example, in Germany, right?

So it will be technically a little bit higher, but it also showcases that our operating entities are generating a lot of profit, which means that overseas, especially, which then turns into profit. But there will be -- you are somehow right, there will be a positive impact in the fourth quarter that's going to be expected, yes.

Okay. Just to follow up. So if you're talking about a little bit higher, so talking -- are we talking about something in the ballpark of 28% to 30% instead of the 25% tax rate for the full year?

Yes, I would assume that's a good and fair assumption. Anyhow, for this year, as I mentioned, we have this PPA effects this year where within the first 12 months, we have higher charges because we have inventory step-ups and order backlog step-ups that are depreciated within the first 12 months. I like to look, especially this year into the adjusted net income to see what is the real operating net profit run rate of the business.

[Operator Instructions] Our next question comes from Jorge Gonzalez with Hauck Aufhauser.

It is very pleasing to see the organic growth this quarter. And I was wondering if you can give us your early view on how this could be even accelerated next year? I'm especially curious about your view on the U.S. market. You have already talked a little bit, but how you see the development next year when your competitors adjust better to the fact that Mexico is not anymore in a good situation because of the tariffs and also taking into account that some of the truck OEs are expecting the growth to be more back-end loaded next year. How that -- how do you see that working for you? I'm also interested in Europe. You had very positive green shoots for the agriculture sector. And I was wondering if you see this also at some point starting to materialize this recovery in U.S. I think the market has been quite weak since '22 and also the sector has been a little bit hit by tariffs. How do you see this going on? Do you see we are at the worst in most of the sectors but it's difficult to a little bit put a figure there. But do you see growth in all your businesses going forward?

Yes. Some more details on the organic growth. We've added new products in our lineup, and that helps, especially in Europe. I already mentioned, especially in the implements and tools for our agricultural portfolio, we have added new products, and that generates a lot of interest with the dealers and the dealers are coming back. So that's where we see positive impacts. And that I expect will also carry through next year so that we see on ag, especially on that -- on those segments, but also on the loaders, a slight comeback for Europe, and that will help. Another big driver of the organic growth has been new contracts with OEMs that we had, especially in Brazil, but also in some other areas. And North America is one of them for agriculture. Those will slowly ramp up, and we will see some of that effect in the next year. As I mentioned, we don't expect a lot of help from the market in the coming 3 months and probably not in the coming 6 months. And therefore, that is a welcome improvement that we are counting on.

You had a question also on U.S. trucks. It's -- that is really hard to say. The tariff is changing, maybe not on a daily basis anymore, but it seems like still on a weekly or biweekly basis. And it's equally hard for our OE customers to manage their supply base and their supply chains, including their own production chains. We don't -- so I cannot tell you if we will be benefiting from any changes in tariffs with Mexico and so on. Our answer to all of that is flexibility. We try to be as flexible as possible with our local-for-local setup, with our flexible operations in production, but also with our flexible supply chain where we can swiftly change the sources of our products. And therefore, we will make the best out of it. And where possible, we will use the opportunities to grow our market penetration with that. But it's really so, I would say, so uncertain the environment in North America and unpredictable that we're not even trying to predict it. We're trying to act as flexible as possible and take the opportunities as they come.

Jorge you had a question about ag US, right?

Yes.

I think when you look here into Americas with the organic growth, this is then our combined region North and South America. And as Joachim partially mentioned already, so the stronger growth or the growth is coming at the moment from agriculture/construction business in South America. Nevertheless, this is partially export business to the U.S., so driven by U.S. demand. The local agriculture demand in the U.S., that's still somehow not improving that much, right, especially not in the third quarter. We see here over the past weeks the first signs of improvement. But again, like Joachim mentioned, we need to be careful here and close to the customers, close to the market and stay flexible. It's definitely not as solid recovery as in the other ag regions of the world. So the ag growth at the moment comes partially from India, partially from China. Strongly from Europe, strongly from the Brazilian market.

And I have a final question on Europe. So I understand that so far, the business has not really enjoyed and especially for Hyva due to this is more related to construction, but has still not benefit from the investment plans or the support from the government, especially in Germany. I am wondering if you are expecting this also to support your sales for Hyva in Europe next year? Or if you think that we will need several months to see a translation of the future support in investments for your business? How you are planning to budget this this part of the business for Europe?

Yes. Indeed, you're right. We don't see a lot of projects that came out of these big funding announcements at this point in time. And in general, we don't rely too much -- we don't like to rely too much on government announcements, more on a close collaboration with our customers and our products, our strong products. So I would say we have not seen any of that. We are certainly expecting that the construction and infrastructure sector will grow not only because of some potential funding wherever that will end up, but also because there's just a big need in replacing infrastructure and repairing and building new infrastructure. And that, combined with a stronger market presence that we have in the combination between JOST and Hyva and some additional products that we will add, I think that should be a good basis for a positive development in 2026 for that sector.

Our next question comes from Klaus Ringel with ODDO.

I have 2 to 3 of them and I would like to take them one by one. The first one on your guidance for sales and adjusted EBIT. And here, you've given these ranges and comparing this to your 9 months performance, it seems you're currently still slightly below the levels. So could you give us a bit more color here where you see yourself maybe finally ending up in this range, low end, mid or upper end?

Yes. I think we've always -- we've not adjusted our guidance throughout the year. So we are still working with the guidance that we gave you at the beginning of the year. And we've said in the last calls already, we are certainly at the lower end of that range. But we are still within that range. And we feel very confident that we will be in that range, probably on the mid- to lower level of that range by the end of the year. The Q4 of 2024 was also a very weak quarter. So you have to take that into account if you do an extrapolation of the existing numbers. Do you want to add?

No, perfect. I think and Klaus, to be honest, that's in line what we mentioned after the second quarter's call that it's probably between the low end and the mid.

Okay. Perfect. Second one, you had a very strong and nice free cash flow in Q3. And yes, you mentioned good contribution from Hyva here. And the question is what's a good cruise level looking ahead now here. So it's at these levels, slightly below? Or could you even do more per quarter?

No, no. I think it's I think it's already at the higher end. We need to be honest and to be fair here. We had some positive timing effects also, as Joachim mentioned. There has been also one positive impact that's laid out in our quarterly report that we had a payback from the purchase price. So the closing accounts mechanism for the Hyva deal has been closed now. There has been a small contribution in terms of cash flow. So that also helps. Also, we have a higher business volume, as I said, and that led to the situation that we could incorporate certain receivables from Hyva into factoring and so on and so forth.

Okay. And last but not least, it's good to see that you're bringing down your leverage step by step. Can you remind us, please, where is the leverage level where you would think about cash returns to shareholders?

Well, our range is -- we feel comfortable between 1x and 2x. And as you know, we've been below the 1, and we have not done that because we believe that we can better invest the money of our shareholders in the profitable growth. We see a lot of opportunities for us to continue to grow organically and inorganically. And I think we've seen that it's typically a much better use if we use that money to invest into our future and into our profitable growth. So it certainly would be probably below 1 where we would consider these.

Our next question comes from Nicolai Kempf with Deutsche Bank.

It's Nicolai from Deutsche. Well done for the quarter. Yes, my question was similar to the one of Klaus regarding cash return, but then let me put a different angle in here. If you would invest into new companies, would it follow the strategy outlined at the CMD that you would continue to look more on the agriculture side of things? And my second one, coming back to Germany. Yes, we are still missing momentum here on the infrastructure program. However, do you see any progress on the military side? And can you just remind us what is your exposure to the military applications?

Okay. Yes, concerning the M&A strategy, it is what we have announced. We see more growth opportunity in the off-highway sector than in the on-highway sector. That doesn't mean that if we have a good opportunity to grow externally that we wouldn't take that. But clearly, from a strategy point of view, and you've seen already the distribution of sales where we are around 50% in transport, we believe our opportunities in the off-highway sectors are more. There is more demand also from the customers. I've had very positive feedback on our strategy from the main customers that I met at Agritechnica. They do support our strategy. So that would be most likely where we would invest if we were to do the next step.

Concerning infrastructure and especially concerning military, our exposure to military is not very strong. And we have analyzed like everybody does these days, if that is something that we should focus on. But it's a very slow market. And we will certainly continue to offer the dual-use products to our customers that serve that industry, the defense industry but we don't have it as a clear strategic goal to invest into that industry, if that was the question.

But we [ clearly track ], right? And we see increase selectively here and there demand coming then from end application defense. But yes, again, it's not a strategic product field, right? It's. And regarding off-highway, so that does not mean Nicolai only agriculture, right? So that could be construction, mining, all these product groups come with needs for implements for tools, equipment and so on and so forth.

Yes. We call it agriculture and infrastructure. So that's more or less off-highway.

Our next question comes from Fabio Holscher with Warburg Research.

Two left. I want to first get back quickly to the market share gains you report. Americas, unusually strong versus market, I think. You mentioned mostly new business and agriculture. But in my model, it looks specifically like transport was much stronger as well versus the market. So just to frame the question back on those market share gains. Is it more due to your specific OEM exposure? Or have you actually also won new customers or additional business with existing customers?

Well, I think the majority certainly is agriculture and infrastructure growth. In North America, to my numbers, we are below in truck and trailer, but we are not as exposed on the truck. And so we benefit a little bit from the fact that the trailer industry has not suffered as much as the truck industry. I already mentioned there's some positive pricing effects also in that. The tariffs are driving the cost and the prices of those products. So that compensates somewhat. But you probably have the detailed numbers, but we should still be a little below the previous year in transport in North America.

[ But I mean, the explanation is right, so ] Fabio, so specifically transport you ask, we are much more -- the combined business that we have in trailer and in aftermarket is much, much bigger than in the truck OEM business. So the mix effect here helped in the third quarter, especially.

Okay. Then second question on the Hyva synergies because you highlighted your expectations for year-end '26. Do you expect additional incremental synergy potentials beyond 2026? So beyond those in midpoint, EUR 25 million that you've highlighted. And as an extension, cross-selling synergies, EUR 8 million [ a year ] and next year imply quite a top line growth. Can you describe where specifically you're making such good progress in terms of regions and products?

Yes. Of course, there will be synergies after 2026. But that to us is the daily operational work. We do that all the time. We -- even within our transport business, with our regional setup, we're trying to optimize regional structures. And these are more projects that I would consider ongoing business. But certainly, some of them you could still flag as synergies that you generate by just doing the business more efficiently together. So yes, there will still be positive effects, but we will not account them as synergies. We account them as continuous improvements that we typically run.

Second question was?

Where do you see the cross-sell.

The cross-selling, yes. Yes, EUR 8 million, that implies, of course, if you consider a 30% gross profit, that implies EUR 25 million additional sales. We will find sales opportunities certainly in Australia, where we have good access to customers and they will benefit from our new product lineup that we have. In North America, we have very good context. I just mentioned that we are very strong in the trailer industry. That is a big opportunity for Hyva Cylinders. There's other products, recycling products that we can scale up also in the European markets. There is technologies like the digital tipping system that will gain in penetration. So these will all be effects from the synergies, new products, new channels, new customers that we will use. And as I said, Australia, North America, Europe, those are probably the biggest regional opportunities. Did that answer your question, Fabio?

Our next question comes from Miro Zuzak with JMS.

Can you hear me?

Yes, perfectly.

Just a quick one on the adjustments between EBIT reported and EBIT adjusted. You had the step-up -- inventory step-up charges and the increased PPA depreciation. Can you give an indication, was this more of a one-off, the EUR 14 million? And will it go back to the [ EUR 6 million floor ] afterwards in Q4 and thereafter? Or will we have like elevated levels in this line for Q4? And also maybe you can give an indication about the next year.

It's a combination of both. And Slide 14 of our presentation should explain [ you all ] that probably some for the readout later in more detail. So if -- we have taking exceptionals aside purely from, let's say, integration costs, right? Just looking into PPA, we see for the full year roughly EUR 31 million of PPA charges. Almost 2/3 of this is one-off for this year coming from inventory step-ups, order backlog step-ups that has to be depreciated within the first 12 months just following IFRS rules. The sustainable effect going forward will be between EUR 10 million and EUR 14 million. That's then, but indeed, additional PPA compared to the situation before we acquired Hyva because we have incorporated assets in our balance sheet, fixed assets, the brand Hyva and so on and so forth. And this has to depreciate over a useful lifetime.

So just in order to make sure I fully understood what you just said. So then, let's say, 25-ish level from pre-Hyva will be go to EUR 35 million to EUR 40 million going forward? EUR 10 to EUR 14 million higher.

Yes. I think roughly it's okay.

Okay. And in terms of exceptionals for consulting and so on, what do you expect in Q4 and also next year?

More or less the same run rate, right? So the -- as I mentioned in the call, we have announced that we need 2 years of integration to realize the full synergy potential. And within those 2 years, we would expect between EUR 12 million and EUR 24 million of integration costs. We are now -- not all of the EUR 11 million is related fully to Hyva, but let's say, 90%, let's say, EUR 10 million. So we are at EUR 10 million from that EUR 24 million. So there is still some to come, right? We still do layoff. We still do restructuring. We still need to expense. The carve-out of Cranes has not been done yet. I don't expect that we will fully need until end of next year, the EUR 24 million, but probably the mid between EUR 12 million and EUR 24 million is a good assumption for the moment. Not all of this will come in the fourth quarter, but a certain amount.

Okay. And maybe connected to this, the gross margin compared to revenue after COGS basically declined. Can you please give us like an adjusted number because I think the split of the special charges was not given in which line you booked how much exactly. Maybe you can give us an adjusted gross profit margin in Q3? And maybe I don't know, even also for Q2, if you have.

That's a fair question. But to be honest, you can directly look into the quarterly report and there you see a detailed bridge with all the details.

Maybe I've overlooked that.

Ladies and gentlemen, this was our last question. I would now like to turn the conference back over to Joachim Durr for any closing remarks.

Yes. Thank you very much, everybody. I think this was a quarter, as I mentioned, not supported by the global markets, quite the opposite. But we were able to prove our resilient business model. And therefore, we are quite happy with the results we could present you today. We thank you for your interest and we look forward to seeing you next year and maybe to meet some of you at some of the future conferences. Thank you very much.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.

Thank you very much, and good morning from Neu-Isenburg, here in our headquarters, and a warm welcome to our earnings conference for the first half year of 2025 and Q2 of 2025. We had challenging global markets, but JOST was able to continue its growth plan, driven by the merger and acquisition of Hyva that we've taken, but also driven by some local market share gains. The Hyva post-merger integration is fully on track. The first synergies are being implemented and the exit of the noncore cranes business has been prepared in the second quarter of this year. We have signed the sales and purchase agreements this Monday on August 11, 2025.

We are also glad to report that we had some market share gains in agriculture in the APAC region and also in South America, where we were able to sign new long-term contracts with our agricultural OEMs. Market demand in Europe, Middle East and Africa was stabilized in the second quarter with order intakes slowly increasing. However, the demand in the U.S. slowed down dramatically due to uncertainties based on the tariff policy and the economic policy of the new administration.

We've also been able to place a promissory note loan of EUR 320 million, and we're very happy with the attractive conditions that we were able to obtain. Let's go to the financial highlights, and they show the resilience of our business model. Our sales in Q2 were up 31% on -- mainly supported by the Hyva M&A, and that effect already excludes the cranes business that is considered operations that we will discontinue. The organic sales were slightly down by minus 3% compared to the Q2 of 2024.

The adjusted EBIT grew 10% to EUR 37 million, and the adjusted EBIT margin reached 9.5%. This was supported by a solid operating performance and also had some positive effects on the classification of the crane business as discontinued operations. Hyva contributed positively also to an adjusted EPS in Q2 2025 offsetting the sales-driven organic decline of the earnings. And as a result, our adjusted EPS in Q2 2025 increased 3% to EUR 1.41 versus the Q2 of 2024. Our leverage calculates to 2.78x, which is temporarily above our target threshold of 2.5x due to the dividend payments that we have done in Q2 of 2025. We expect and target to be below the 2.5x threshold again by the end of 2025, end of this year.

Free cash flow declined to EUR 5 million. That is mainly because of higher working capital, driving factors here are the Hyva consolidation, the growing activity level in Europe and also a stock increase to make our supply chains more resilient and to protect the supply chains, especially towards North America.

Looking at the markets. The markets, as I said, were not supporting. You can see here that Europe, Middle East and Africa on truck and trailer were slightly positive compared to Q2 2024. However, on tractors and hydraulics, we had a contraction. North America contracted significantly based on the uncertainties, mainly on the tariffs. And APAC is, if you want to say, a mixed bag with some light in the truck business, some shadow in the trailer business. and tractor and hydraulics more or less around 0. Within that market environment, we operated quite resilient, and that is also because we have, meanwhile, a business model with a wide range of end markets and a wide range of products and customers.

If you look at our sales by destination, we sell less than half in Europe, Middle East and Africa, meanwhile, and the rest is distributed quite nicely between Americas and Asia Pacific. And if you look at the applications, you can see that a little more than half is transport application and the rest is hydraulics and also agriculture where we expect some growth so that we will be beyond 20% also in agriculture in the future. So meanwhile, a very nice setup and a very resilient setup. With that, I would like to hand over to Oliver to give us some more details on the financial performance.

Thanks, Joachim. And as always, let's start with the regions. And within the 3 regions, I will focus a little bit more on the isolated second quarter results and then when coming to the group, focusing a little bit more on the full half year results. So let's start with EMEA. As Joachim pointed out, we have seen in the second quarter a slight uptick of the demand.

The reported sales were increasing by 21%, which is, of course, driven by the M&A of Hyva. And all those numbers and all the numbers on the next slide, just as I noted in the beginning, are from continued operations, excluding the sales and results from the cranes business. And if we do this without the Hyva effect and at constant currency, we see an organic growth in the EMEA region by almost 4%. And that's the case because both transport and agriculture demand have stabilized a bit through the second quarter and the order book had gained some momentum.

However, we need to point out the whole situation remains very fragile and basically changes also from time to time. So we need to really be cautious going forward in assessing that. However, the momentum is better definitely than the weeks before. And if we then go down to the EBIT, we also see that profitability compared to the second quarter last year has increased in the EMEA region. And this is driven both from slightly higher fixed cost absorption effects and also significantly by the categorization of the cranes business without discontinued operations of cranes business. That helps a lot. And by that, the margin increased then from 5.4% last year to 5.8% this year.

Good signal is also that still it's the case that we don't use short-time work in the U.K. plants anymore, which should help us also in the weeks going ahead. Next page. If we then go to Americas, also here, Joachim mentioned reported-wise, the sales are increasing driven by M&A, so almost 8% reported sales growth. However, if you look at constant currency and without the Hyva acquisition, we report minus 11% decline. And this is basically driven by both transport and the agriculture market are significantly down versus prior year.

The good thing is on the EBIT side, we still show with 11%, a very decent margin in light of all the headwinds that we have there, which are not only the tariff discussions and then the underlying market downturn, it's also the FX effect. As you all know, the U.S. dollar has weakened a lot versus the Euro's currency and that puts pressure on both sales and EBIT, as we pointed out here. So that's why we are still happy with 11.0% EBIT margin in this region. We also should note prior year's very high margin in the Americas region was partially driven by, let's say, a special situation for 2 reasons.

One is we had a very solid agricultural business in the second quarter last year with very high shares of premium loader sales on the one side. And on the other side, we were benefiting from sharp declining in material prices, while selling prices still remained very high because of that material delay in material pass-through to the customers, we benefited last year as well. So overall, in light of the decline of the business in Americas, I would say we congratulate our teams there to a very solid contribution to the overall result.

If we then go to our third region, which is APAC. Yes, again, it's a little bit of a mixed picture here. The reported sales grew sharply by more than 100%, which is driven by the Hyva acquisition. Hyva has a very strong position in China, but also in India. But also here, if we exclude the acquisition effect and the FX effects, we see a decline of minus 10%. That means although China as a single country region is doing better than we anticipated before, and that helps us also in the overall reported organic numbers.

But we see a decline of the activities in India and also in selective other countries, especially in Australia and South Africa, where [ JOST ] has a very strong position, and so that's a little bit of a burden. When we look into the EBIT and EBIT margin in APAC, so go back, we see also almost a doubling of the EBIT numbers, which are driven by M&A. And despite the expected dilution of incorporation of Hyva, we see a solid EBIT margin of almost 14%. And this is not only driven by still a very good China business.

We also see that the first synergies really are implemented and start to incorporate in those numbers. And this is especially true in the APAC region as you know, Hyva business is in APAC, the biggest one. So we would have expected anyhow that the first synergies start to realize there. So that's about the regions.

Let's go to the group. Overall, we say a very solid result in light of all the economic topics around us here. So the sales from continued operations grew by 31% in the second quarter and for the full half year by 28%. If you exclude the M&A and FX effects, it's minus 3.2% for the second quarter and minus 6.5% for the first half year, which really say, especially the second quarter, we did quite well and we were able to, here and there, especially in the agricultural segment, benefit from slight market share gains, especially in the APAC region, but also partially in South America, as Joachim pointed out.

So that helps that with an organic decline of only 3% in the second quarter, we believe we did quite well in the overall economic environment here. When we look into the EBIT and EBIT margin, the absolute EBIT increased by almost 10% and the margin is at 9.5%. That's partially driven by the classification of the Cranes business as discontinued. But even excluding that, we were close to 9% for the second quarter and for the full half year, around 9% -- 9.1%, which is a strong result, again, in light of the tariff discussions and so on and so forth.

We still see overall that the direct tariff impacts are, let's say, as we always communicated, probably in the range of a mid-single-digit number. And we still strongly believe that within the second half year, we should compensate here and there. However, as we always pointed out, the indirect impact from economic downturn in the U.S., that is probably the bigger risk for us as a company. And we see materializing that the U.S. economy is really at the moment going down. We need to see what that will bring for the second half of the year.

However, also in Americas, we see a very strong aftermarket at the moment and that helped to stabilize the margin at a very decent level again. Then an extra slide that you don't know from before. Just for your reference, we also show here the bridge for the regions and for the total group, how would sales numbers have looked like in case we would incorporate the cranes business as discontinued, which is not the case, right? So -- and again, regarding the half year margin, we report 9.5%, excluding cranes and 9.1%, including cranes business, which is a very solid development for the first half year and then fully in line with our expectations that we had at the beginning of the year.

Next page is then our usual net income and adjusted EPS bridge. Reported net income declined for several reasons to EUR 20 million. The biggest impacts here are, for sure, noncash and pure accounting items, so to speak, resulting from the purchase price allocation that we do with the Hyva acquisition. And on top, we have to incorporate special PPA items for 2025, driven by inventory step-ups and order backlog capitalization that we need to do, which for the full year will roughly amount to EUR 20 million. So there is a significant portion incorporated in those numbers.

If we start from that EUR 20 million, add up the expense taxes and the finance result, we end up with a reported EBIT of EUR 40 million. Then comes this just mentioned PPA effects on top and roughly EUR 6 million of so far expensed integration costs, more or less 100% related to the Hyva integration, layoff costs, restructuring costs whatever we do there and fully in line of our expectation. We are then seeing an adjusted EBIT of EUR 73 million. And then we normalize the finance result and the tax rate ending up with an adjusted net income of EUR 46 million or EUR 3.06 earnings per share, which is exactly more or less the same like last year.

And that underlines somehow that, yes, we see an organic decline that has a volume impact on our P&L. But on the other side, there is right from the beginning now a positive contribution of the Hyva acquisition into the full P&L. That's a quick update. I don't want to go into the details, a slide that has been shown also with the Q1 presentation. It shows the acquired assets and liabilities at their fair value assessment at the date of the acquisition, so 31st of January 2025.

There have been some changes here and there because the valuation is still ongoing or was still ongoing after the Q1 reporting is now almost final. Two major topics have been incorporated, and you see then the result also in the goodwill position. One is we will start from beginning of this year to do a regular depreciation of trademarks, which will the Hyva trademark, but also the [indiscernible] trademark. The details are also laid out in our half year 2 report. And the other effect is related to the classification of the cranes business as discontinued operations. So we -- for that reason, we also had to anticipate the fair value and fair value adjustments of especially the inventory of that business unit, and that has been incorporated in those numbers.

Besides that, it's just, yes, minor effects. So that was the balance sheet effects from the acquisition. If we go into the P&L effects, most of them are already described. We have expensed roughly EUR 14 million of new PPA charges from the Hyva acquisition and on top this roughly EUR 7 million inventory step-ups PPA that I mentioned before, fully in line with our expectation, slightly higher just because we have now incorporated trademark depreciation and I promised last time to give a quick outlook for the full year once these adjustments have been made, and that's mentioned here on the last bullet point on the right side.

We expect now for 2025, a full year net income impact from the Hyva PPA of roughly EUR 28 million for 2025. And then going forward, 2026, probably around EUR 50 million. That's the basis of -- or based on the latest valuation status. It's almost final, and we shouldn't expect any further material deviation from that picture.

Next slide. Coming quickly to cash flow and also after that to our balance sheet KPIs. Joachim already mentioned, free cash flow in the second quarter was depressed by working capital topics especially driven by a slight increase of the activity in EMEA and also the incorporation of inventory that we had to secure in light of the tariff situation and safety stock discussions. For the full half year, it means still EUR 49 million free cash flow, which is still a conversion rate of 1.1 and therefore, above our threshold of 1.0. So we should be fine with that for the moment.

CapEx ratio stays well below our target at the moment, 2.3%. We communicated that it could be in 2025 up to 2.9%. So also here, you see we are managing somehow also the situation. It's not that we are canceling, let's say, smart projects. Whatever we can -- whatever we need to do to improve our P&L going forward, we will do. However, in light of the economic activity and the fragile situation, we do a careful spending, that's for sure.

And also when we look into the net working capital factors, we see that despite the situation I just was describing in the second quarter with EMEA and the safety stock discussions, we are managing a net working capital ratio of 17.5% at the end of the first half year, which is well below our full year guidance of 18.5%. So we should here be very safe for the year-end outlook.

If we then go to our capital figures, we see ROCE decreasing from last year by 4.1% points down to 13%, again, fully in line with our internal models after the acquisition of Hyva and the dilution EBIT has an impact also here on ROCE. Nevertheless, our goal is, for sure, once the full synergy potential has been reached that we are back in our corridor, which should be above 17.5%. Equity ratio is for 2 reasons at the moment, depressed and has been gone down versus end of last year down to 21.3%.

The big effect is the dilution and the financing of the Hyva acquisition, so the extension of the balance sheet. But on the other side, and as you all know, this was especially an effect from the second quarter, the devaluation of the USD versus the euro had a huge FX translation effect in our equity because we hold big positions in USD net assets, our own U.S. business, but also the Hyva business is denominated in USD. And that has for the full half year, an effect of minus -- almost minus EUR 60 million, just pure translation effect. So it's noncash, et cetera.

However, it shows up in the equity ratio and has stand-alone an impact of almost 3.5 percent points. So without that, adjusted for that, it's almost 25% and then even slightly better than we thought. Initially, leverage, already mentioned by Joachim is at the moment at 2.78x, also in line with the expectations. We always see a slight uptick of the leverage in the second quarter, driven by the cash out of the dividend, nothing else this year, and we stick to our target by end of this year to remain below the 2.5x threshold. That's from my side. And with that, I hand over again to you.

Thanks, Oliver. So let's see how we see the rest of the year. Looking at the markets, going through it, Europe, Middle East and Africa, we see a slight market upturn like we've seen already in the Q2 for truck and trailer, slight contraction in tractors and slight uptick in hydraulics. So overall, I would say, for Europe, Middle East and Africa, slightly positive. In Americas, it will continue weak. We've had a very weak first half year, and we expect that the second half of the year will be more or less equally impacted by the uncertainty caused by the politics of the new administration, especially the tariffs politics.

While in APAC, we see a little positive -- a few positive trends, so stabilizing and slightly positive outlook for the APAC markets. Based on that market outlook and based on a solid half year 1 performance, we're happy to confirm our outlook for the fiscal year 2025. The numbers that I will show here are for the continued operations. So sales will be up 40% to 50% versus prior year. Last year, we had sales of EUR 1.069 billion. Adjusted EBIT will be up 23% to 28% versus prior year. The same for the adjusted EBITDA.

And you see the numbers of last year here with EUR 113 million for the adjusted EBIT and EUR 148 million for the adjusted EBITDA. CapEx ratio, we are targeting 2.9% of sales and working capital, we target to be below 18.5% of sales. So certainly, the outlook for 2025, including the discontinued operations also remains unchanged. And we -- I would like to add that we're probably at the lower end of that range right now because of the market contraction, but we're still very comfortable to confirm this outlook for 2025.

So let's come to the summary. We believe we had a solid Q2 in the -- in a rough market environment, proving that our business model has become more and more resilient over the years. The Hyva PMI integration is well on track, and we're focusing on our core business and the Hyva core business to generate and to continue our profitable growth story. The disposal of the cranes business has been successfully prepared in Q2, and we've been able to sign it this week. We expect closing within Q4 of 2025. Slight upside potential for European, Middle East and Africa and also for our agricultural business.

But certainly, tariff uncertainties will continue to affect Americas and the weak Indian market will also slow down the recovery in Asia Pacific. Our local-for-local approach, our strong market access worldwide and our high customer diversification limits the impact of those uncertainties, the tariff uncertainties and the shifts in regional demand. And so it's very confirming for our overall strategy. And as I said, we're happy to confirm our outlook for 2025. So with that, I would like to thank you for your attention, and we're open for your questions and remarks.

[Operator Instructions] Our first question comes from Jorge Gonzalez with Hauck Aufhäuser.

Yes. Can you hear me now?

Yes.

Perfect. I have a few questions. Do you mind I go by one by one?

Yes.

Okay. So the first time is on regards these long-term new contracts in agriculture. It sounds promising. Can you give us a reference of roughly of how much this can contribute next year and the year after?

Well, I'll tell you a little bit about the background. So for us, it's very confirming that our strategy to be a global Tier 1 for those global agricultural groups, be it CNH, be it AGCO, be it John Deere that, that strategy is being confirmed by our customers. So we were able to enter into long-term contracts. You can calculate the size of those contracts once they're all active as a low double-digit million number.

But of course, there will be contracts running out and there will be phasing in. So I don't have a number, and I also would not like to share a number for the next year of what the new contracts will be. But we certainly see our ag business on a very good path and also on a growing path, as I mentioned, because of those long-term contracts and also because of an underlying market that we expect to come back.

Can we expect already low double digit next year? Or we should be prudent with the growth?

Yes, I would say you can expect that for next year.

Amazing. So then on Hyva, it will be very helpful if you can share with us more or less the contribution in adjusted EBIT, just to reconciliate the new divisions and to have a better idea of how the synergies are impacting already? Maybe you can give us the synergies instead.

Regarding EBIT, I think last time we set forward that the run rate was around 6%, something like this, which is more slightly higher than already last year. That has been confirmed in the second quarter. And if you just exclude then the cranes business on a continued basis, it's already above the 7%, probably between 7% and 8% run rate of adjusted EBIT margin. And regarding the synergies, they are starting now to be realized, right? So -- and I would still stick to the calculation that we set the run rate of 2025 should incorporate roughly EUR 45 million of [indiscernible] 2025.

Okay. Very useful. And in fact regarding synergies you were commenting I don't know why I thought that in the previous call, we commented about a potential of '27 could be the case?

Yes, yes, full year effect once realized. I'm just talking about the isolated effect in 2025 that is to be found in the P&L. We still stick to the range that initial target was above EUR 20 million. We somehow precise that last call to probably EUR 23 million or slightly more. I don't expect too much. There might be a slight impact downwards from the discontinuation of the cranes business because obviously, there's purchasing volume related to the cranes business. But still definitely the run rate once we have fully implemented all synergies should be above the EUR 20 million, EUR 20 million plus.

But that's size of the run rate at the end of 2026. So that has always been the communication...

So no changes here regarding phasing at the moment...

Okay. So the 20% is the run rate at the end of '25?

'26.

Also. Okay. Okay. Perfect. And on the aftermarket, there are a few comments that was quite strong in Q2. Can you indicate us more or less how much for the group, how much was for the group in Q2?

Definitely above 30%. And you might recap '24, it was around 27%, something like this. But I'd say, the very useful contribution here was that especially in the Americas region and there, especially in North America, it was in some months, not the whole full half year, but in most of the months, close to 40% even. And that then overall contributed to the overall group aftermarket share being jumping over 30%. But especially in the U.S...

Perfect. And last 2 on the outlook. So you commented that you were expecting the same trend to continue in North America. But this means H2 is going to be similar to H1? Or do you see a decline? Because looking to the production rates that some of these like FDR and ACTR are guiding for the second part, I believe that production rates are going to go down, but I don't know your view. You have obviously a better view than them. Are you expecting more or less same volumes in the second part in North America or some decline?

Well, you're right, the [ comments ] of our customers, they may be slightly down at this point in time. But I would say, overall, we are calculating that the second half year is more or less on the same level than the first half year.

Okay. Perfect. And maybe last one on agriculture. So '25 was a little bit below the initial expectations of initial recovery now because of the stocks being low. How do you see '26? I mean, is there any substantial change that invite you to be more positive for next year? I see some of the indices for the perception of the companies in Europe improving, although they saw some correction in July. So I was wondering how you see next year and how are the stocks or the dealers, is there anything you can share with us?

Yes. Dealer stocks are certainly being reduced. So dealer stocks are much more healthy right now as they compared to what they've been last year. And so new orders will translate into new production of tractors and also into new production of loaders much quicker than they did in the past because in the past, they would sell off the dealer stocks. So that is a much healthier state. So I expect a stabilization for the agricultural business and in our case, supported with some market share gains, especially in APAC and in Americas.

That's it. Thank you very much, Oliver and Joachim and have a great rest of holiday.

The next question comes from Yasmin Steilen with Berenberg.

Can you hear me?

Yes, perfectly.

I have 3 topics, if I may. So first, on the portfolio pruning. So congrats with the disposal of the cranes business. That was really a very positive surprise. Is it fair to assume that the disposal is free of debt and EV should be in a very low double-digit euro million amount, just reflecting a significant discount to the EV multiples, for example, of PALFINGER? And does the disposal contract include any earn-outs or guarantee obligation? Or is it all set with the closing? That's my first question.

Yes. I can do this. I think your assumptions are quite fair. So we will hand over free of debt. And yes, EV is a very low double-digit number. And still at least we get a positive purchase price of a single-digit euro number, so equity purchase price, that's what we expect to be incorporated in the fourth quarter. Your question regarding PALFINGER, I would say that's probably a little bit of a difficult comparison because obviously, the cranes business unit isn't in the same shape like PALFINGER. That's why we sell them. And if you -- I mean, multiply 6x 0 or 10x 0, it's still 0, right? So we are quite okay. For us, it was more important. It was clearly identified right in the beginning as a noncore business unit. And to be honest, we are happy that with such an accelerated speed, we can now concentrate on the other 2 businesses that we acquired this Hyva acquisition. And then what the second question was?

How much earn-out...

How much earn-out? There is a portion of earn-out, and we will report this once the Hyva has been fully incorporated into the numbers. It's probably 60 -- probably 2/3 is fixed and 1/3 is somehow an earn-out or performance clause that single-digit equity value purchase price.

Perfect. Very clear. Then on Agri, you mentioned 4% organic growth in EMEA, but attributable to both Transport and Agri. What was the development at Agri stand-alone in the second quarter in EMEA?

In EMEA?

Yes.

7% -- around 7%.

Okay. Very encouraging number.

Somehow.

Yes. And I mean, you mentioned already that...

It's fair to say it's a very fragile situation as we, right? So it seems to be the case that at the moment for the farmers, the overall environment starts to improve, interest seem to be really at the bottom and probably are not falling further. So that gives certainty that we have reached the lower end of interest rates in Europe. Inflation is between 1.7%, now 2%. So it seems to be that the investment environment confidence at least is increasing. However...

And on top of that, I think one of the other reasons, especially in Europe was that the OEMs, the agricultural tractor OEMs were very rigid in their pricing, and they had very ambitious price positioning based on the cost increases that they've had. And I think they're more flexible in the negotiation right now. So that I think will also help the market to come back that the farmers are able, financing is getting more accessible and also there's more flexibility on finding a transaction price that both sides can live with.

Okay. Perfect. And maybe the last one on truck and trailer market in North America. I mean, you mentioned already that H2 should be kind of comparable to the first half. Could you share some color on the current trading or discussions you have with your customers with regards to extended holidays? Or do you expect -- how do you expect the business development after the summer holiday season? And might there be a risk for further cost measures to safeguard profitability if the business will deteriorate further?

Yes. So from an outlook, I would say the first half year, we had more or less weekly adjustments downwards in the call-offs that we've seen with our weak customers in North America. I expect that to be a lot more stable. They've now adjusted to a level that they believe in. And so I expect that we have a more stable business environment at a low level, similar to the level that we've seen in Q1 -- in half year 1.

So -- and in terms of cost flexibility, I mean, we've always proven that we are able to adjust our operational cost and also to a certain extent, our structural cost to a certain level. We are certainly at the level right now where we -- it gets more and more difficult to reduce structural cost. But at the same time, we have the synergies that we already talked about with the Hyva integration, and that is also a synergy that we will find in all regions, and that will help us compensate some of that.

The next question comes from Nicolai Kempf from Deutsche Bank.

It's Nicolai from Deutsche Bank. Well done for a solid Q2. My first one would be on the guidance. And I think you've touched on it basically because the guidance assumes that H2 will be stronger than H1 in terms of growth rate. And I assume that this is partly driven by 1 more month of consolidation of Hyva and then the recovery of Europe as well as the APAC region, right?

I would say it's a fair summary.

Definitely. Yes, there is this technical effect from the acquisition, but also growth rates should be higher also because the comparables have been much lower.

That's the third part exactly. If you -- the comparable base from last year is much lower for the second half year than for the first half year. But those are the 3 effects that should be correct.

Okay. Got it. And then on the German infrastructure program, so far from the truck OEMs, we've heard that hopes are higher, but so far, this has not materialized in the actual numbers. So it's more like a story for 2026. Would you share this view?

Yes, I would share that view. That view has been changing. So -- but no, the view of the OEMs and of the industry has been changing. In April, when it was announced, but May, there was a lot of hope and that -- then reality kicked in to a certain degree. I think right now, there is not too much hope that this will have a significant impact soon, but I'm sure it will, at one point in time, have an impact. So if you're talking about sentiment in the industry, I would share that view that right now, everybody is questioning on how is that actually going to impact that. So if you want on a positive spin, that's some upside potential because it's right now not reflected in the outlook that our customers are having.

Exactly, but I want to mention that again. Even our first guidance or the guidance that still exists issued end of March has never incorporated any effect from the infrastructure program. We were always a little bit cautious in saying, will this really have an impact in [ 2029 ]? Yes or no. And I think it's proven, really very difficult to see something here.

Okay. Got it. And my last one, I mean, I think the sale of the cranes business is appreciated. Any other measures we can expect or that you plan to maybe lower leverage at a faster rate?

In general, we are still in the process, let's say, of PMI -- of the 2-year PMI phase and part of that 2-year PMI phase is very clear on the long-term portfolio. And as you know, Hyva is not only signal producing the [ assets ] as well. But for the time being, there is no other thing on the table. We are doing smaller portfolio cleans up as always, also in the [indiscernible] world. That's probably the main focus for the next 6 months.

Yes. No, there's -- I mean, don't expect any significant changes in our portfolio right now. As Oliver said, we have continuous portfolio reviews. We've taken out some noncore products out of our transport portfolio recently. And we do that continuous updates and review of our entire portfolio.

But right now, with the business that we have and that we claim as continued business, that's a business we're committed to and that we are going to invest in. And on top of that, that's the business that we also need to generate the synergies that we want to generate. As we mentioned, the EUR 4 million to EUR 5 million that you would see at the run rate P&L this year and EUR 20 million that we have committed for the run rate end of next year.

Ladies and gentlemen, this was our last question. I hand back over to Joachim for any closing remarks.

Okay. Well, thank you very much. I think in a very difficult market, we were able to prove that our business model became more and more resilient over the years, and we're very happy that we could demonstrate that in the Q2 and also in the outlook that we have given. And we thank you for your interest and your questions, and wish you a wonderful day. Bye-bye.