KSB Aktie

Dear ladies and gentlemen, it is our great pleasure to welcome you to the KSB earnings call on the half year results of 2026. My name is Sonja Ayasse, and I'm Head of Corporate Communications.

Our main speakers today are our CEO, Dr. Stephan Timmermann; and our CFO, Dr. Matthias Schmitz. After our joint welcome, Matthias will do a deep dive into the numbers of Q1 and Q2, followed by Stephan, who will summarize and also give an outlook on the remainder of the fiscal year 2026.

As usual, we will have a Q&A session at the end of this call. So please send in your questions using the little chat window anytime during the next hour, and we will get back to you. This call will end after approximately 1 hour. And as usual, we will publish a recording of the KSB earnings call on the KSB website, under Investor Relations.

But now I know that Stephan is very much looking forward to welcoming you personally. So Stephan, I pass on to you.

Thank you so much, Sonja. It is indeed a huge pleasure to welcome you and to give you a short overview regarding the agenda that we have. A few words from my side. And then for sure, the key part of today's presentations will be the financial update of the first half of the fiscal year 2026 by Matthias. I will then try to summarize it once more, give you an outlook and put a few words in terms of where do we see the fiscal year of 2026 in terms of long-term perspective. And then as you said, Sonja, questions and answers for all those who have questions at hand.

I welcome you, of course, in the name of the entire Board. Matthias and me, we have been given the job to present the figures. But of course, we do this in pleasure for the colleagues which are not here today, Stephan Bross and Ralf Kannefass. Having said this, a little bit of housekeeping.

As always, we will concentrate on the figures of the first half year. These figures do not blush. At the same time, especially regarding my part, then at the end of the presentations, we will give certain guidance, best estimations regarding the future development of the company. And these, as you know, these are no juristical guarantees. This is the best true and fair view that we, as a Board, have at the time.

And having said this, it's now a huge pleasure to hand over to you, Matthias, to give us a deep dive into the first half year of the year 2026. Matthias, please.

Thanks, Thank you, Stephan. It's a pleasure this time to give this update. So ladies and gentlemen, thank you, Stephan. I also want to take the opportunity to welcome you in this call. My pleasure today is and my duty, of course, to guide you through the figures of the first half year 2026.

Let's first talk about order intake and sales. We have increased the order intake by 8.8%. We have increased our sales revenue by 0.4%. So what is the message behind increasing order intake in these difficult times, in this very difficult political and economical environment. We are a company that is growing despite all these circumstances and in order intake and sales and of course, on profitability, we are on our path in order to fulfill what we have promised in our Mission TEN30.

We are showing a reported EBIT by EUR 98 million. EUR 98 million means this includes already effects from the first-time consolidation of Saudi Arabia, EUR 16.6 million. We talked about it in Q1, and we have spent EUR 12.3 million for the implementation of SAP HANA.

Talking about SAP HANA, let me make one special remark. First of all, in this year 2026, we will spend approximately EUR 26 million for the implementation of HANA, which means we are then more or less on the same level as previous year. Second message I want to give to you, SAP HANA project is running well, is on track, and we will go live in the first quarter of 2027, as it is planned.

We also can talk about an equity increase by EUR 45 million. And here, you have to take into account the EUR 61 million after tax we had -- we paid dividends of EUR 53 million. And later, I will elaborate a little bit about the OCI effect of EUR 37 million. You know OCI is other comprehensive income. These are effects that are only going through the equity, but will not be shown in the P&L.

Yes, we are a growing company. So for that reason, we have -- we had to increase compared with the end of the year, our working capital by EUR 85 million. Here also, you have to take into account the first-time consolidation of Saudi Arabia. This has an effect of approximately EUR 23 million. This is the half year highlight of KSB.

Now let's go and make a little bit of deep dive. First, let's compare the figures with 2024 to 2026. Again, you see order intake and sales revenue is growing. Yes, our EBIT is behind previous year. I will come to this later because what we see, what we are realizing is a strong quarter two. So the company is back on track.

In order intake, of course, we have increased the order intake by 8.8%. And here, you have to take something into account, which is valid for '26 as well as for '25. Also, we are only in the middle of the year, the currency effects -- FX effects compared with the previous year amount to a level of EUR 44 million. What does that mean? We are showing an order intake increase by EUR 150 million. Calculating these order intake effects for FX means that we have grown -- we should take them like-for-like to a level of EUR 190 million. If you compare Q1 with Q2 in the order intake, you see that, of course, Q2 is lower than Q1. Again, this is due to the big order intake we got by a great job, a big job in our Energy division.

Let's take a look at sales. We have increased our sales by 0.4%. And also here, you have to take into account currency exchange effects with a level of EUR 37 million. That means eliminating this FX effect compared with the previous year, we have grown by far more than EUR 40 million. We have grown by far more. This is a company that is growing. You can read our lips. We fulfill the growth path that we have in mind.

Let's compare Q1 2026 with Q2 2026. And one thing is really obvious here, we have increased our sales by nearly EUR 50 million. We have increased our sales by nearly EUR 50 million Q1 to Q2. Where did we increase our sales? We increased it in pumps, and we, of course, have increased our sales by EUR 27 million in SupremeServ. In all the meetings we had, I explained you that we are suffering in SupremeServ a little bit by the economy. But here you see SupremeServ is on its way back to track.

The EBIT, of course, is being influenced by the sales. And you see now that we have an EBIT of EUR 98 million, that means we are a little bit lower in pumps. We are a little bit better in valves, and we are a little bit worse in SupremeServ compared '26 with '25. And the reasons are obvious. The reasons are obvious. First of all, we had a not so good Q1, if you might remember. Secondly, we see that we have an increasing margin pressure. We see an increase in competition by Chinese competitors also in other areas. So the price pressure is increasing. And of course, with all the sales we did, we had to cover higher energy costs as well as logistic costs. On top, I mentioned it before, in the first quarter, our plants were not as much utilized regarding our capacity than we had in mind.

Let's make a deep dive and compare both quarters. I'd like to start with the Q1 2026. And you might remember that Stephan Timmermann and I -- he's close to me here right now, that we -- when we had our press conference, that we said it might be that the first quarter 2026 does not fulfill our expectations. Indeed, it did not. And indeed, this was reflected also in the stock market. And now take a look back to what we have achieved so far in Q2. We have EUR 64 million profitability, and we have a higher profitability in pumps. It increased by EUR 19 million.

And take a look at SupremeServ. SupremeServ is the profit contributor in the second half of the year with EUR 46.3 million profitability. What does this mean? Yes, we had a weak quarter. Q2, we see we are back on track. And I can promise you that the second half of the year, we will be even better, of course, than the first half of the year. And I take now the moment to make it summarize, yes, we stay in what we have promised in our prognosis.

Here is a short overview about the EBIT impact. And of course, we cannot cover all the costs. You see that the cost of materials have increased from a ratio of 39% to more than 40%. Here, the higher costs are integrated also to the logistical energy cost as well as material costs. You see we had an increase in other income. This is due to the first-time consolidation of Saudi Arabia. And of course, some other expenses are on the level of EUR 232 million. Here, the implementation costs for SAP HANA with an amount of EUR 12 million are integrated.

Again, we increased the total output of our operations. Here, you see the development in material costs. We were very low in the first half of the year 2025. We were above 40% in 2024. And of course, as we are not confident with this cost of material level, we have launched special programs in order to reduce our cost of material.

Our earnings after income tax is on a level of EUR 60 million. And what I really want to line out, we have a level of -- in our tax ratio of 31.7%. You might remember that in the last years, we had an up and down in our tax rate due to special effects. Now I can say our tax ratio at the end of the year will be anywhere on the level of 31%. This is our running rate for our tax ratio. So also here, we are in line with what we have promised and with the plans we are executing.

Finance income is a little bit lower than previous year. You see here all the major effects. It's interest expense for pensions. We have some hyperinflation effects that we have to take into account in Turkey and Argentina. And of course, the way how we calculate lease liabilities when you activate them in your balance sheet, we have to differentiate also interest expenses. This is an amount of EUR 1.5 million. And so you see it's a pretty stable consolidation we have here. Also tax will remain stable now and in the future.

Let's take a look to the balance sheet. Yes, we increased the total sum of our balance sheet to nearly EUR 3 billion. And here, we have to work out that the noncurrent assets increased due to the investments. The current assets increased due to the working capital. And despite all these economic effects, we still have a stable, slightly increased equity ratio of 48.4%. I want to take this opportunity in order to underline this is a very solid balance sheet. This is a sustainable balance sheet.

The increase in equity, how is it being influenced? On the one hand, of course, because of the earnings after taxes, we made dividend payments of EUR 53 million to all of the investors. And of course, we have 3 types of other comprehensive income translation effect for currency, pension, and the total sum for a lot of other smaller effects. At the end of the year, we also will have a better equity as we have right now. We are going on to do everything to further strengthen our balance sheet.

Working capital, there are two ways to look at it. On the one hand, you can say, your working capital has increased to a level of 29.7%. This is true. Bear in mind, once this management started, we were on a level of some 34%. We have decreased the working capital. And now we have reached a reasonable level of, let's say, 29% on average. We think it might be better at the end of the year. We are a growing company. And so our task is once we are growing, we have to utilize working capital, but it should be amongst the level of 30%. And this is what we're striving for. Therefore, we have a lot of action in place. We follow that up on a regular basis, and it works out we are below 30%.

Free cash flow. Yes, at this point of time, we see a free cash flow due to the reasons I have told you before that is lower than in the last year. And I can tell you it will improve in the second half of the year. We are aware of this situation. So what has happened -- and two things you have to take into account.

First of all, we see a lower cash flow in the operating activities due to lower EBIT. And of course, we had a first-time consolidation effect of Saudi Arabia with EUR 16.6 million. So this has an effect on your earnings after tax, but it has no effect on the cash flow. You have to bear that in mind once you want to make a kind of a link between earnings and cash.

Secondly, I think you're aware that we have increased our shares in Aromatic, in Eco. And we made -- we increased our shares in KSB Group, which is a pump and service group in East of Europe. Yes, we paid prices for them in a double-digit number. This also affected the free cash flow. The investments are still on a reasonable level, EUR 48 million. And we invested this as we are starting to build a new testing facility. We invested already EUR 4 million for that, a new testing facility for the energy department. We invested at GRW in the new CNC machine. And of course, we are modernizing our large parts production in Pegnitz.

So what does this mean for the net finance position? There's one very good way to read the chart. Take a look at 2024. You saw that at the end of 2024 until the mid of '25, the net finance position went down and it came up afterwards. The same in this year, we see that the net finance position to the end of June on a level of EUR 200 million. And the major effect here is, of course, that we paid EUR 53 million on dividend. The curve you're seeing right here is the curve we are facing year-on-year. For this reason, I can tell you the net finance position will increase until the end of the year. I think it will not be on the same level as in the end of 2025, but it will definitely increase by far more than EUR 250 million.

Market capitalization. Actually, we are talking about a market capitalization of more or less EUR 1.5 billion. I saw that our preference shares today have increased by EUR 50. So I'm absolutely convinced with the outlook we give you with a strong quarter two we have that our profitability will further increase. I can confirm we are on our way to fulfill Mission TEN30. And I think really, for this reason, I'm optimistic the share price will increase as we are steadily increasing the value of the company.

Let me summarize. We have increased the order intake by 8.8%. We have increased our sales revenue. We had a second quarter which was much stronger than the first quarter and which gives a positive out view for the second half of the year. So that means stronger sales revenue, EBIT as well as net financial position are expected in the second half of the year. So for this reason, we confirm the outlook for 2026, and the outlook is being summarized here.

I do not want to read all the figures. But again, we are on our way to fulfill what you can see here. Thank you very much.

Thank you so much, Matthias, for your very positive and bullish summary of the first half of the fiscal year 2026. And my job is now to wrap it up into the overall picture. And I would like to frame the boundary conditions that we are in today. Even if it might sound a little bit boring and to show how boring it is, these are the boundary conditions that we had in 2025. And as you know, 2025 was the most successful year of the company in the history of recording.

You now ask, have these boundary conditions significantly changed, especially in the light of the continued positive development of the company, I must clearly say they have changed a little. Only the ingredients of the soup have somewhat changed. And if you want the real big ones, of course, February, end of February, we had the unfortunate beginning of the Iran war, which is still ongoing, and which has huge repercussions all around the world in the smallest part of the continents where you wouldn't even expect them.

Then we have a slowdown in China, also nothing new, but the impact is becoming more and more graspable and also visible all around the world, especially by the efforts of our Chinese competitors, which I comment in full respect for what they are doing in exporting their products wherever they can. And it is not only the car industry, but also in the pump industry.

Then we have the economic downturn in Europe. Unfortunately, no true recipe in place yet to get the upswing going at short notice. And the big impact for us is, of course, the automotive industry especially in Germany and with all this automotive industry, the automotive supply industry and the tool machine industry. So this is a tough cookie if you know how big our exposure in Europe is. And last not least, the geopolitical fragmentation, which you know better than I, all of this really leads to boundary conditions, which have a multitude of impacts.

What is our remedy? And this might sound very simple, but we are responsible of leading a company of 17,000 employees again, through the sixth year of wild economy, cost awareness, extreme pressure and focus on costs, prudence in what we do, be it investments, be it working capital, be it the risk mitigation, but also a lot of confidence and a little bit of optimism because, again, if you lead a company, you have to be optimistic.

And coming to this optimism and putting it a little bit more graspable, what are our chances and our chances, they are there irrespective of the boundary conditions. The big one is at the moment, data center and data center for KSB, this is a big field of activity. It starts with the energy production where our power plant division, of course, steps in and then goes into the cooling, the primary circuit, the secondary circuit, the water supply, a real turf for KSB, and we are getting our foot into that door.

Power generation, worldwide as populations grow, power generation is necessary. As the climate gets warmer, more power generation is necessary. And of course, the big consumer again is data center.

Water, wastewater, if you were in Europe at the time, you can see we are really lacking water. And this lack of water, this has repercussions, positive repercussions on KSB, and be it that pumps, which pump water out of deeper areas below the surface are now necessitated for farming and who makes the best in the cars in Europe, it's KSB. And we see a nice demand there, a short-term demand solely based on the change of weather in Europe this summer.

And last not least, despite the fact that we are with own organizations in more than 100 countries, there is still a lot of room for expansion because KSB from the heating cellar to the nuclear power plant, we have such a big portfolio, and there are a lot of countries where our brand label is strong, but we still have opportunities.

And having said this, what is our way forward? Resilience in what we have started in our company strategy, flexibility in terms of the company setup. As soon as we see downturns, we have to react very quickly, and this is what we do. We focus on costs. We focus on liquidity. We focus on our profit structures. Of course, we utilize AI and all possibilities of digitalization. And SAP HANA for sure, as the biggest digitalization project that we're running at the time, it will have an impact on our costs.

And last not least, and this is the one that I want to deep dive with a few comments, a little bit more, take care of our structural costs because as the seas get rougher, you have to see that your ship gets lighter. Otherwise, in a dark big trout of valleys, you might hit the rocks, and this is not what we want to do. So if you continue with our strategy, everything that we have put in place from KSB SupremeServ via voice, via our customer orientation, Mission TEN30, the big cookie that we are now really focusing on is the question, how can we worldwide reduce our structural costs.

And here, we basically have two packets of measures, one short-term measures. And here for this fiscal year, Matthias forgot to mention it or gave the pleasure for me to mention it. We saw the downturn coming from the Iran war, and we took action rather quickly and asked our organization to reduce structural costs, variable structural costs up to the amount of EUR 30 million in order to safeguard our EBIT. And the nice thing about KSB, we have a management, if you whistle, they execute. And this, for sure, will help us not only grow our EBIT, but also mitigate any risk should there be a turndown in turnover, which I do not see at the time. And the next part of the structural cost will, of course, be to look into our headquarters worldwide and to see how we can make them a little bit more lighter, a little bit more flexible for the future to come because our target is clear. We want to grow our profitability.

And having said this, summary from my side, what do we do? Of course, we study the daily headlines in order to extract what trends do we see. We mobilize, we adapt our organization accordingly, but we lead with our long-term target. And our long-term target is to make this company by 2030, a EUR 4 billion-plus company with a return on sales of more than 10%. And this is what my Eagle -- our Eagle stands for.

With this, I thank you so much for your attention. And now Sonja, hand over to you. And I think now we have a nice half an hour for questions and answers.

Indeed, thanks a lot, Stephan, for your presentation and also Matthias for your insights. So it's now time for us to open the Q&A session. Therefore, we will move to our little Q&A corner. Please give us 2 minutes and we will be right back with you. You can use the 2 minutes also to send in your questions, we will be glad to answer them. See you in a minute.

So we are back, and thanks very much for sending in your questions. So let's start right away with the first question related to data centers. Stephan, I'm addressing you.

Could you provide more details on the size of orders for cooling pumps for data centers? Were these orders from different customers? And do you expect further orders in this area in the coming quarters? What do you estimate the annual revenue potential of this market opportunity to be? And who are the key competitors in this market segment? Are data center pumps more margin accretive than other applications?

Yes, Sonja, a lot of questions, exciting questions regarding data center. And I'll just come -- start from the bottom. Are they more accretive than other applications. Data center pumps, these are huge packages of pumps, and that makes them extremely interesting. We're talking about numbers where the smallest order is 100 pumps. And the vision that the customer groups give are in the thousands. And this is standardized pumps and one type, this for a factory, this is the best that we can have because we have economies of scale. We can really streamline the logistical processes from the procurement side to the own manufacturing side. And so far, this is a highly attractive business for us in terms of economies of scale.

Who are the customers? Of course, I cannot tell you explicitly the names of the customers because this is really a top secret business. But I can tell you there are 2 huge customer groups. And these are the Chinese and these are U.S.-based companies. And probably I guess these are all the big names in the business of AI, with really large-scale orders.

What makes this business extremely exceptional also for KSB is the speed. For some strange reason, maybe this is connected to the genetics of AI, speed is of essence. And we're not talking about months, we are talking about weeks. Customers expect prototype pumps in 4 weeks, and they expect the first orders to be executed in 2 months. And this is something where we really have to streamline our organization. And since I follow this in terms of somewhat guidance and godfathering, I am fascinated how our colleagues in China team up with their colleagues in Germany and make it happen or in France, or wherever these pumps come from.

And of course, I have asked the question, how big is this business going to be for us. The last estimation was, but this is accumulated that in the next 3 years, they expect about EUR 100 million in terms of order intake from data centers. But I feel this is not the holistic calculation because data centers, as I told you, it starts with the electricity generation. Outside of the data center, it continues with water generation. And as you know, a lot of these data centers are in the middle of nowhere. And it then ends in what you probably connect the data center, the cooling processes. And here, we have the primary circuits and the secondary circuit and the firefighting and the cooling of the building, the HVAC. So a lot of business.

Fast, extreme pressure in terms of delivery, but also connected to this urgency, the willingness to pay good margins and to give us the chance to execute with economies of scale.

Thank you, Stephan. So we take away, it's a matter of speed, actually. Matthias, I have a question for you.

The order backlog should provide good planning security, but the EBIT guidance range remains relatively wide. What did prevent you from narrowing the guidance range? And how confident are you in achieving the midpoint of the guidance range?

So first of all, if you take a look at your order backlog, I think it's the first time that we have an order backlog of more than EUR 2 billion. Taking this into account, you must bear in mind this order backlog is not only an order backlog for the actual year, but it has an extent of 3 and sometimes also on to 4 years, taking the big energy project, nuclear business projects into account. And of course, due to the big energy order we got, the order intake -- the order backlog increased by this more than EUR 150 million. So that means, yes, the order backlog is higher, but it's not only the order backlog for the end of the year.

Secondly, to give you a little bit guidance or an idea, if you have an order backlog, a rough calculation by some means that the order backlog we have is gives us full work for the next 6 months. That's a little bit kind of an estimation. And I think for that reason, there's no reason to narrow the guidance range. I don't think so.

Regarding the question, how confident are you in achieving the midpoint of the guiding range, I am confident.

That was clear. Thank you, Matthias. Stephan, I have a question for you regarding the Iran conflict.

So how does the Iran conflict impact your business currently in the Gulf region and in Asia?

I think basically from the two sides, one from the demand side, of course, there are no big investments at the moment directly in the near states which are impacted the most. This is Qatar. These are the Emirates. This is Oman. In Saudi, it's already a little bit different. The further you come away from the center of gravity, the bigger the investment appetite, which was very big rests. But I am sure that this investment appetite, which is there, it will resurge. It's just being somewhat strangled as long as the outcome of the war is not clear. And there, I think we all have the confidence there is a visible horizon for the end of this war.

The second impact is in the producing plants, we have a lot of orders which were supposed to be invoiced and sent into the region. Transport into the region is extremely difficult. And a lot of the customers are not willing to take the pumps and valves that they have ordered. So they remain in our plants, be it in Halle, be it in India. And of course, this postpones turnover. And out of both, if I were to summarize it, Sonja, it's just two chances the turnover will come, the one which is in the packed crates in our plants and the demand, be it for new building or be it for refurbishment of damaged plants, this will be present as soon as the investment possibilities are there again. So opportunities.

Very good. And I would like to add another question on the Iran conflict, and that's the impact on the forecast corridor. So is it more likely that you will end at the lower end of the guidance than at the upper end due to the ongoing Iran conflict. But I think here, Matthias already made a clear statement.

I confirm what I said. I'm confident we reached the midpoint.

Yes. Thank you for confirming that again. Then we have a question on the cost of materials ratio, which has increased from 39% to 40%. Has KSB been able to increase the selling prices? And did competitors also increase selling prices?

Very clear, yes. From 1st of June onwards, we increased our prices in alignment with the competition. So it's always a game who goes first and who follows how. The first ones raised their prices in May, and we then adjusted worldwide in June. Basically, based on the fact that our transport costs have gone up in many countries, the supply of raw materials. Again, India, let alone due to the gas shortage in India, foundry articles have increased by price 25%. And what we can pass on to customers, we pass on. Otherwise, we change our supply chains, which is, in many cases, not done overnight. So this is basically the mixture, passing on costs and finding alternatives. But we have raised our prices, yes.

Thank you, Stephan. Then we have a question on the EUR 30 million reduction in structural costs that you just mentioned. So Matthias, how much of this was delivered in the first half of the year and what is to come in the second half? What was or is the one-off costs associated with this? And is it being taken above the line?

Yes. So in the first half of the year, we could take out of that approximately value beyond EUR 10 million. So that means in the second half of the year, there will be an even bigger effect. This is due to the reason that in the first quarter, we had to work out this program. So far and until the end of the year, there will be no one-off costs because all the measures we are undertaking right now in order to safeguard the budget and our prognosis for the year 2026 do not contain any structural measures.

Thank you, Matthias. Then there is a question on Chinese competition that you mentioned. Is it mainly within China or increasingly outside of China, too? And which end markets is it mainly seen in?

The competition in China in itself, this is horrendous. And the reasons are rather simple. A key driver for the growth of the economy in the last years in China was infrastructure spending. And everybody happily lived on this. This infrastructure spending by the government is over for fiscal reasons of the government.

The supply of Chinese products are there for the little bit of the cake that is left in China, everybody is trying to get his part, and this is a purely cost-driven business, where, yes, due to our reputation, due to our people, due to our connections, we get a small part of the cake. But this is just a small part of the cake.

The much bigger part of the cake now for Chinese suppliers is the export business. And they have exported since decades. So this is nothing new. But now this is being driven with a high level of professionality, I must say, which you can admire and the starting corners where they are under the radar screen, be it South America, be it Africa, where they have been in the market long term.

Now it's just becoming much, much more fierce. And now, of course, they're also coming to Europe. And you see it in the car industry. I think this is in the headlines, the BYDs, which are now coming also to Germany. Do we like it? No? Can we prevent it? No. We are in competition. And today, Chinese products, many of them, they are of good quality, and we have to adapt accordingly.

Then I would like to continue with a question on the capacity utilization. Can you comment on that? And on the production process efficiency in the second quarter, what development do you expect for utilization levels in Q3 and Q4?

I can take over this question. When you talk about production and capacity utilization, you always have two parts. One, the variable part, the flexible part. And here, I must say I'm extremely proud, especially for the European plants. We have an extreme amount of flexibility together with the labor representatives and the unions to breathe according to the load. If we have a little load, we work into time accounts. We have a lot of load, we work out of time accounts. And this is what we utilized in the first half of the year.

What you can, of course, not change overnight are the structural costs, the investments that you have made into the factory, that is there. And this then hits you as soon as your turnover is lower than your breakeven, then you will have to bear these costs. And these are the things where I said in terms of SG&A costs on the office side, there we just have to come up with clever remedies, how we are more flexible to adapt.

Now as we look forward into the second half year, and this you can see if you compare all of our second half years, the second half year for whatever reason in mechanical engineering is always much stronger than the first half year. And this is what we not only expect, we already see in July, and this is what we count on.

And going back to the question of the workload that we have, there is no reason whatsoever why this should not also materialize this year.

Thank you very much, Stephan. So we have a question on KSB Pumps Arabia. What is the expected contribution, excluding the one-off EUR 16.6 million EBIT of this newly consolidated operation in 2026?

It's roughly between EUR 5 million and EUR 6 million.

Okay. And can you provide some more color on mining spare business in KSB SupremeServ and the sustainability of the improvement you saw in quarter 2.

Mining business, it sounds exotic, but it's a CapEx-driven business. And first of all, the good news, the mines all around the world, they are working at full power, be it the copper mines due to electrification and the change in electromobility and now, of course, the data centers. So they are running at full load. At the same time, of course, new mines are on the radar screen. But here, there's an extreme caution business in terms of investment because building a mine, once you have built at the point of no return is behind you. This is a huge investment and the according political environment has to stay stable.

And I think if you look at Panama and Chile and quite a few other countries in the past, it has become rather wobbly. So mine operators are very risk prone. And this you then also see in the variable part of the business. And this is the stockkeeping of spares, which is, of course, for us, a crucial part of our SupremeServ business. And I would say in the last half year of 2026, for the first time in my recording, I saw a big hesitation to buy spares.

There was a collective, basically, activity of reducing spares in order to safeguard liquidity. This went on into the first quarter of 2026, so this year. But now in the second quarter, we've seen that relaxation has come into the business. And again, since the mines are running, the time to buy spares, you can't postpone this forever. It will come. And this also makes me personally very bullish for the mining business. This is an extremely important part of our business and it will grow.

Thank you, Stephan. And we stay with mining and we stay also with KSB SupremeServ. So in the first half of the year, KSB SupremeServ was surprisingly stable considering that a major mine grounded to a halt in September last year and will only start to ramp up again in the second half of the year. So do you expect some orders as the mine ramps up to 65% towards the end of the year? Against that background, why are you no longer expecting KSB SupremeServ to grow in the second half of the year and thus on a full year basis?

First of all, I'm expecting SupremeServ to grow on a full year basis. Irrespective of this very specific question, which is -- touches the Freeport mine in Indonesia, which in terms of figures, this is for us a 15 million business in spares annually. And for those who are not so much in the detail, this mine, unfortunately, last year had a catastrophic accident. It's a mine underground, which basically collapsed. And unfortunately, to my knowledge, which is rather present, it won't open up, at least not the part which touches our pumps until 2028.

They wanted to open up this year, end of this year, and we were really happy about this, but this has now been shifted because there has been another mining accident and now the state of Indonesia is really looking into the boundary conditions of the mine. So this will be postponed. And EUR 15 million, we have to compensate. So looking for the good stories in SupremeServ to compensate EUR 15 million overnight, this is not so easy, but we've managed to do it.

And for us in this business of SupremeServ, especially the project business is crucial. This is mining. This is the chemical industry, and this is the energy industry. And coming back to these, the only one which is not growing at the time also to the known boundary conditions is the chemical industry, solely due to the fact that we have worldwide overcapacity in the chemical market. And this basically either leads to the shutdown of chemical plants or at least a huge risk mitigation in terms of doing too much repair work. And this is what we see at the time. But again, like in mining, the chemical industry will, after consolidation of capacity come back into track, and we are one of the big players. So I'm very positive.

Thank you, Stephan. Then we have another question on the water shortage, which is actually a very important topic right now also on the media. So can you provide some more information on how water shortage in Europe translate into sales? And what level of contribution do you expect for KSB?

The latter, how big is the contribution? I won't dare to give any guidance there. I can say, of course, and this is what we really see if you were to come to the workshop in Frankenthal. As we speak, we have one business area in the water section. These are what we call the UPA Pumps, sub-ground pumps [Foreign Language] at the beginning of the year, rather low in terms of order intake and suddenly with this heat period and the drought that we have a surge of order intake.

And if you then ask what is the reason, then you're told this is basically all farming business. The groundwater level has significantly gone down, which is explainable due to the drought and the farmers have to now extract the water from deeper levels. And for this, they need stronger pumps, and these are the pumps that they order at the time. And since I fear this hot summer will not be a one-off hot summer, but probably a new area, I do expect that the climate change even in Europe will have an impact on our business. A positive impact in that respect.

Thank you very much. And I take the last question and the last sentence and address it to you, Matthias. With respect to the EUR 30 million lowering of the structural cost, is this a set volume? Or could you step this easily up? Will there be costs associated with it? I think we have that one already.

I'm smiling because easily it's nothing in our business. Let me put it like this. The EUR 30 million cost savings, we are going on to safeguard the budget for this year. They are related to '26. At the moment, for the year '26, I do see no chance to increase it to EUR 40 million or EUR 50 million, whatever and not easily to make this very sure. Nevertheless, to increase our cost competition in SG&A cost all over the world, of course, we see a chance, and this is something which we bear in mind.

Thank you, Matthias. And we have another question on the service forecast for the end of the year. So the second quarter saw a nice pickup in service orders and revenues. What is your expectation on orders for the third quarter and thereafter? How is the Chinese competition affecting the service business? And what are the countermeasures, especially with respect to service business? Stephan, would you like to take that question?

Yes, I see. I had the discussion this morning in terms of service here for our mining business. The good thing about our company is our people. And especially in the service business, of course, you can sell spares, but the more critical the applications become, the more risk prone the customer becomes and the more he wants to know the people and have a good feeling that the ones that he employs know how to do the job. And even if they make mistakes, they have a company which stands up for the mistakes, mitigate the mistakes and gets the job done.

And KSB has created this reputation over more than 150 years. We're now in year 156. And this is what makes us extremely strong to paste and copy this, yes, you can try it. It will take an enormous amount of time and even more effort because it's a people-to-people's business. And for this, it is so crucial for me as a person, you have to keep your people, you have to motivate your people. You have to have a super company culture because at the end of the day, our success is based on people and where you see it the most is at the end of the day in service.

Thank you very much. So by the looks of it, there are no further questions at the moment. Let's wait a couple of seconds.

Is it over? This time, we got all of them. Okay.

That was very clear. If not, is there anything that you want to say as a final remark or statement?

I think this is the CEO task to make a final remark. Come on, Stephan.

Matthias, I do this with pleasure, and it was good to listen to you, Matthias, how you summarize the first half of the year. After the gains, before the gain, now we have the second half of the year in front of us. But I am, as you gave the guidance, very optimistic that despite these boundary conditions, which are, again, really cool if you're leading a company with 100 subsidies all around the world, which are cool and which are challenging, I'm very optimistic that we will get the job done because I see it on a daily basis, we have 17,000 highly motivated employees running the extra mile, mitigating costs, showing flexibility in tough markets, finding new chances. And this is what makes me proud and extremely confident.

Thank you very much for these closing words, Stephan. And if there are any further questions, of course, you can always contact Dieter Pott or Matthias Schmitz. They are at your availability.

And if you want, you can also dial in into the next KSB earnings call on the 25th of March 2027. We will be glad to meet you again. Thanks a lot for dialing in today, for spending the last hour with us. Thanks a lot for your questions. We wish you a wonderful summertime, and hope to see you soon again. Thank you very much.

Thank you.

Thank you.

Dear ladies and gentlemen, it is our great pleasure to welcome you to the KSB earnings call on the results of the fiscal year 2025. My name is Sonja Ayasse, and I'm heading Corporate Communications. Our main speakers today are our CEO, Dr. Stephan Timmermann; and our CFO, Dr. Matthias Schmitz. Stephan and Matthias will do a deep dive into our financial performance of the last fiscal year, and then we'll also comment a little bit on the current fiscal year.

As usual, after the presentations, we will have a Q&A session. [Operator Instructions]. This call will end after 1 hour. Any question that remains open will be answered afterwards. And as usual, we will provide a recording of this call on the KSB website under Investor Relations.

But now enough said, I would like to hand over to Stephan.

Yes, Sonja, thank you so much for the warm introduction and welcome. It's my honor to open our report on the fiscal year 2025. And as I do this, I, of course, say I have the pleasure to address the opening words in the name of Matthias, Matthias Schmitz, who will join me on stage to have the deep dive into the figures, but also Stephan Bross and Ralf Kannefass. And all of us -- we again had a short interruption. We are back on stage. Excuse me out there. We were just given the signal that there is no video signal, but the video signal seems to be back on track. So let me begin again.

I heartily welcome you in the name of the entire Board, Ralf Kannefass, Stephan Bross, Matthias Schmitz and me. And of course, we represent the 17,000 employees all around the world, including the top management, really fascinating guys who have done an extremely good job, and it's my honor and Matthias' honor to present the according results for the last year.

Before I start, as every year, the small disclaimer, everything which touches 2025 figures, dusted, these do not blush. Everything which concerns the year 2026, especially in the second part, when I touch the question, how do we see KSB developing in the year 2026, this is, of course, into the future. These are the best guesses, the best prognoses that we do at the time. Please no guarantees. The world is changing, at the moment, really on a daily basis. So this is the best guidance that we can give at the time.

Having said this, let me start. We have a short and sweet agenda. I will start with an introduction into the fiscal year 2025. Then for sure, Matthias will do a deep dive into all relevant and important figures, and I will wrap it up with 2 or 3 slides to explain what the drivers of KSB are, which especially for me as a person are extremely important, because we're not talking about onetime successes, we are talking about a company trend, a company development, and this gives me the huge optimism that irrespective of economic hiccups, we will continue on our path. And I will, of course, wrap this up with an outlook into the year 2026 and with a short summary.

Having said this, let me begin with an introduction. And I've used a few headlines. These are German newspapers, but I think you will guess immediately what the headlines are. This is what 2025 was all about. I mean, today, we live in a world which changes extremely fast. And we're now in 2026. Who still remembers 2025? And in order to give you some guidance there, this was the year where the U.S. got a new President. We're in the middle of the year, of course, somewhat attached to the new presidents. We had a lot of discussions and also disturbances due to taxes, which went to a level never seen before.

Connected to this, a lot of geographical hiccups in the world economy. As if this was not enough, we had a sizable, feelable slowdown in China, which is, of course, one of the economic drivers of the world today. Connected with this, the slowdown in Europe, which already started a little bit before that, especially in Germany. Here, 2 industries, which are extremely important for us, got impacted. This is the chemical industry and of course, the automotive industry. Here, we talk about structural problems -- not problems, challenges, the change in terms of electromobility, which costs a lot, which the automotive industry has to digest somehow. This is attached to legislation which is changing day by day. All of this, at the end of the day, a big turmoil. And to put it back into a nutshell, the year 2025, irrespective of the fact that we did quite a good job as we will show, it was a rough year.

If I were to summarize these headlines into more digestible words, this is what you would see. These are the headlines that you know, geographical uncertainty, armed conflicts, a lot of growth problems in China and in Europe, hiccups all around the world, which at the end of the day also led to the disruption of logistical chains. And we, as KSB, once again, in another year, the 5th year, I would say, after Corona, were truly challenged. And we did it in a way which we now have practiced, which is really proven and dusted. We showed that our troops all around the world, accompanied by fantastic management in our regions, in our markets showed real resilience. We proved once more that irrespective of the fact that it was a very rough world. Even in a rough world, we have confidence and we have optimism. We are flexible, we are agile when it comes to changes. And last not least, we are staying grounded on the earth, a lot of pragmatism and staying grounded accompanied all of this.

And having said this, 2025, this is what today is all about. What was the result for KSB? It was, again, in a nutshell, another best year ever. And this, of course, makes me extremely happy, extremely proud. And I say, again, is this a self-fulfilling prophecy, did it come out of the market? For sure not. Was it a onetime issue? For sure not. Because if you now look into how this fiscal year 2025 fits into the trend, this is the development of the order intake in the last years since this Management Board, Stephan Bross, Ralf Kannefass, Matthias and me, had the possibility to put our energy into KSB. This is the development of the order intake. And again, the EUR 3 billion mark, it had been surpassed already in 2024. We now took it one level higher in 2025.

Matthias will comment when he touches those figures. Yes, this was an absolute increase, but this increase would have basically been of double size if we would not have had the impacts of currency fluctuations. And this, I would like to stress also at this point, all the headlines that I showed you, the tariffs, the currency devaluations, they had a sizable impact, because KSB, as you know, we, at the end of the day, add up our big bills in the euro zone and the dollar, which was the one which had the biggest impact. Yes, it has repercussions on the Brazilian real. It has repercussions on the Indian rupee, of course, on the Chinese renminbi. And all of this, when we then draw the big line, it is sizable and it is feelable in our accounts. But irrespective of this, our order intake, it grew once again.

And having said this for the order intake, I come to the turnover. And here, too, we succeeded for the first time in the history of KSB, and this is not young. This is now 155 years. We succeeded to surpass the EUR 3 billion line, and this is just a great achievement. A growth of 2.3%, double if we would not have had these sizable currency devaluations. And currency devaluations you always have. This is normal course of business, but not in the magnitude that we had in 2025. So here too, absolutely good news.

And coming from the turnover, we come to the EBIT. And here, the EBIT, again, an all-time high, EUR 252 million, a jump of around about EUR 10 million, EUR 12 million. In comparison to 2024, a good result if I see what the world was all about. And it was not only a good result, it was a great result if I now don't take the currency into impact, but take the fact into impact that we are introducing SAP HANA at the time. SAP HANA, for sure, the biggest transformation program and project that this company in its 155 years of existence has ever had, transforming our present worldwide landscape onto the new model basis, SAP HANA.

And this costs money. And we decided at KSB rather early that we would not create a bill for the future, but take the costs as they come. And let alone last year in 2025, in terms of external costs, we nearly had EUR 27 million of external costs. So payouts, which you see in our liquidity immediately at the end of the year, to consultants whom we need in terms of their professionality to give us guidance in this important project.

At the same time, near to 1,000 employees all around the world were working on the project. And these employees, these were not newly employed for SAP HANA. They have been existent already. So part of their work, which they did, of course, had to suffer due to the fact that they were now engaged in SAP HANA. This led to a loss of efficiency. And the same is, of course, applicable to the fact that latest by summer 2025, we froze all changes in our present software. We call this the software freeze. Why? Because you have to come to a certain point where you just say the existing software is not touched anymore, that you can copy it, golden copy into the new system as the test system, which will go live at the beginning of the next year.

And all of this led to inefficiencies. But irrespective of these inefficiencies and, of course, the big cost block of EUR 27 million for the external consultants, we managed to grow our profitability. And you see it here in hardcore absolute numbers, if I take the return on sales, which for us is an important figure, we reached a return on sales of 8.3%, all included, so including the HANA costs. If I would carve out the HANA costs and here just these external consultant costs of EUR 27 million, we would have been at a return on sales of 9.2%. Coming up from 8.8% last year without any HANA costs to 9.2%. So this shows you that irrespective of this really shaky difficult market of all the boundary conditions that we already had in 2025, we managed to grow our company in terms of order intake, in terms of turnover, in terms of EBIT and in terms of return on sales.

And if I am now asked as the last introductory words from my side, what do I think when I see these figures? I feel extreme pride, and I feel extreme satisfaction and even more thanks to all of those, the top the managers and all the employees all around the world for having been able to deliver such great results in shaky times.

And now, Matthias, I hand over to you that you really give us a deep dive into the figures, and I'll come back on stage to give you a few words on the possible drivers of this really successful story. And of course, the question, how do we see the continuation of the success story, how do we see the year 2026?

Thank you, Stephan. So now first I have to take a look at the camera. Am I positioned right, sir? Okay, I get an okay. So hello to everybody. This morning we had the press conference, and we already have published our results. Nevertheless, after the coverage story of Stephan Timmermann, I'd like to make a deep dive with you in order that you have a, by far, better understanding about our financial figures than you might have up to now.

Stephan highlighted it already. Order intake as well as sales has exceeded the hurdle rate of EUR 3 billion. We show an EBIT reported of 8.3% return on sales. And even if you take into account the SAP HANA project, which will, at the end, in the mid of the year 2028, cost about EUR 88 million to EUR 90 million. The EBIT adjusted is on a margin of 9.2%.

Equity ratio on a level of 48%. And one thing I want to really highlight, it's the first time that we show this figure here, the return on invested capital has exceeded our WACC, which is at about 8.3%. So KSB generates value gains exceeding cost of equity as well as borrowing costs. We are creating value.

When you take a look back, and I started this chart here in the year 2021, I could have gone back even further more, but you see this development of our story is a constant one. We have succeeded year-on-year, and now we end up with an earnings after tax of EUR 166 million and earnings per ordinary share of more than EUR 80, and we have a positive operating free cash flow. I come later to these figures a little bit more in detail.

Before, I told you it's a figure we follow up year-on-year, but it's the first time that I show you today. Since 2021, the return on invested capital has exceeded the cost of capital. It means it has exceeded the cost of equity and on top, the borrowing cost. So we have created a value of approximately EUR 60 million in the last years. If you might take a look to the year 2019, where our return on invested capital was at a level of 5.7%. You have to take into account we had Corona in the year 2020. So that means we really have a constant increase in our return on invested capital. And I want to outline, the figure is being calculated based on the earnings after tax. So 1 or 2 tax effects, special ones, we had in the 2 last years, of course, have an impact here.

KSB is a company that creates value. How do we create this value in the year 2025? And here, you see a really good overview. We have achieved EUR 3.2 billion in order intake. And Stephan Timmermann before, he mentioned the influence of FX. On the right-hand side of this chart, you see the magic figure of EUR 84.3 million. What does this mean? It means if we calculate the order intake based on the ratio of 2024, then our order intake would be higher by EUR 84 million. In other words, taking the same FX ratio like in the year 2024, our order intake would have grown by almost EUR 170 million. And one big driver we had, the water market really has increased its order intake.

One thing I want to highlight here, and this is also relevant when I talk later about sales, the strong euro, of course, had an impact, not only in terms of U.S. dollar. Everybody is talking about U.S. dollar. The U.S. dollar impact on the group order intake was on a level of EUR 13 million, Indian rupee 26 million, Brazilian real on a level of 12 million and China, 11 million. These are our big production countries where we are strong. And of course, once the euro is getting stronger, this has an immediate impact on our order intake, on our sales, as well as on our P&L. These are effects we cannot escape.

Nevertheless, if you take a look on the left-hand side of the chart, you see the orders on hand have increased on a level of EUR 1.7 billion. So this is very stable orders on hand. And I ask you to bear in mind these orders on hand does not mean they will, for sure, be sales in the year 2026, because we have also long-lasting projects like the energy project, they will become sales in the year 2029, '30, '31 and so on. Just as a calculation by thumb, you can say that 5 to 6 months sales is being guaranteed out of the orders on hand we already have. But it's just a rule by thumb.

Sales, we have mentioned it before, also here we have an order intake which is higher than EUR 3 billion. Last year, we promised, yes, we have an order intake higher than EUR 3 billion next year. We also will have an order intake -- sales which is more than EUR 3 billion, and this is what we made happen. You can read our lips. It happened the way we have promised. And here, we see the currency effect on a level of EUR 77 million.

You also might see that SupremeServ, I know everybody of you is focused on SupremeServ because there, we make the biggest profit with EUR 1,013 million. It's EUR 3 million beyond the year 2024, but please take into account 2 effects. First of all, we see that the spare parts business in mining as well as in the engineering business went down. Secondly, we have a currency effect of EUR 24 million. If you take only the EUR 24 million into account, you see that SupremeServ is doing okay and we are following our growth story.

EBIT, Stephan Timmermann mentioned before, we show a return on sales of 8.3%. And when you take a look to Pumps and Valves, you see Pumps make a high profit. Valves are anywhere on breakeven. I want to show you these figures without the HANA effect, because you have to know that the EUR 26.6 million, we split or we dedicate them to the segments we are reporting. This view you see here right now means this is the profitability without the SAP HANA project. And here, we are on a level of 9.2%. You see the Valves business is breakeven and SupremeServ makes 193%.

Watching these figures and knowing you all ask what about Valves. Valves does not make any profit. There's also one thing I ask you to bear in mind. Bear in mind means when we talk about the segment Pumps or Valves, this is only new business. This is only new business. It does not include spare parts. That means if you want to get an idea what is the profitability of the whole Valves business in this case, you have to add the profitability and the sales for Valves that are included in the case, the SupremeServ business. If you add sales or if you add the profitability for Valves new business plus Valves spare parts, the whole of the Valves business is on a level of something like 5% return on sales. Bear that in mind when you are taking a look at these figures. The Valves business, all in all, is a positive one.

Let's have a view on some selected income statement items. You see here cost of material, 39.5% of sales, staff cost 35%. I think these are reasonable numbers. And when you take a look at cost of material here on the right-hand side of the chart, you see that we came in the years before, we were on a much higher level. In 2023, we were on nearly 41%. Now we are 1.5% below the figures of '23. So you see the outcome of a constant improvement.

Development of staff costs. Yes, here, we increased by 1% in relation to sales. We have hired people. And most of them we hired in India. 50 people are coming out of new consolidated companies. And of course, we hired 100 people. The majority here we hired in the R&D area. We hired them in the energy business, yes, and also in the sales area.

Other expenses, what is other expenses for us, and you will see it in the annual report. We have administrative expenses, repairs, selling costs, other staff costs. If you eliminate or if you adjust the cost for HANA, we kept them stable. R&D, 2.2%. Here, we remain on the level we had in the previous year. We feel confident with that because these costs are, for us, absolutely okay to cover the needs for new R&D for new products. And Stephan Timmermann later on will give you an idea about new products we are having.

So besides the fact that we have a higher EBIT, we also have increased our earnings after tax with EUR 166 million, also with lower tax than in the previous years. I will come to this later on. And you see attributable to the shareholders of KSB have a profitability of EUR 141 million, and this is relevant for the calculation of dividend. I will show you later. The finance income is more or less stable compared to the previous years. When you take a look at the income tax or at the tax rate, you have to bear one thing into account. First of all, the tax rate in 2023 was very, very low due to written down deferred tax assets. '24, we had some special effects. And now we pay tax on an amount of EUR 74 million, which is 31%. And this is the tax rate where we are now, I would say, in the ordinary course of business. This is also the tax rate we expect for the year '26 and '27. This is now where we stay. All these ups and downs in the last years, now they are all cleaned up. 31%, this is the tax rate we expect for the year 2026.

Balance sheet, you see the total sum of balance sheet is more or less the same than previous year. One thing I ask you to focus on, this is equity. With almost EUR 1.4 billion, we have a EUR 56 million higher equity than in the previous years. So what's the message here? KSB has a reasonably good balance sheet, and we have a sustainable balance sheet. Whatever might come based on the crisis and all the things we might expect right now, KSB is secure. KSB has a solid balance sheet, and this is for us a precondition to go into the future.

Let's take a look at the fixed assets. You see an increase from EUR 804 million to EUR 852 million in the fixed assets. This is mainly due to the increase in investments. You see it on the left-hand side. We have invested in the last year EUR 182 million. On the one hand, you might say, well, this affects the cash flow. This is true. On the other hand, if you take a look on the right-hand side of the chart to understand the material acquisitions of investment, I give you an idea, just take a look at the first line, warehouse expansion Richmond. This is what we're doing to invest in the United States. We invested in the last year EUR 10 million, because we are on our way to establish our strategy in the United States, and we are on our way. Could the circumstances, could the economic field be better? Yes, of course. Nevertheless, we are convinced that the way we are going there, that we already started is the right way for KSB to invest. U.S.A. is a relevant market for KSB. There's absolutely no doubt.

Working capital, I want to highlight that despite the fact we are growing, despite we have very difficult economical circumstances around us, we talk now about EUR 860 million in working capital. It's a little bit higher than previous year. And we are talking now about a cash cycle of 126 days. We are talking about 28.8% of sales. And here, you have to take into account when we are talking about sales, we are talking about the average of the last 12 months. It's not a year-end calculation. And when you see, we decreased our cost of material in terms of sales. We are decreasing the level of working capital we have. These are 2 signs where you should really get an idea that we are working hard in order to improve our operational excellence. We started -- if you go back to the year 2018, then we had some 34% of sales. The cash cycle was at 135 days. So we constantly improved step-by-step our operational key ratios.

Equity, I said it before, now we have a level of 48.3%, which is one really relevant sign for the sustainability of our balance sheet. You see here how did the equity develop. We paid dividend for EUR 53 million. Of course, this does not go through the P&L. Of course not. It goes directly into the equity. You also see on the other side, on the right-hand side, positively the net profit contributed with EUR 166 million. These are the effects we really have under control. What we do not have under control are the EUR 85 million other comprehensive income. This is, of course, linked to the interest and to currency. This is what we cannot control. But despite the fact, here, we have a negative impact of EUR 85 million, we anyhow increased our equity. I think 48% is an excellent figure. Nothing more to say about noncurrent liabilities as well as current liabilities. You see the noncurrent liabilities went down by almost EUR 30 million, EUR 35 million. Main effect are the pensions, because here we had the possibility to calculate with the new interest rate. This was the most obvious effect. The rest is business as usual.

Let's take a look at the free cash flow. And here, you see in the year 2024, we had EUR 371 million. Now our net financial position is at EUR 315 million. This is a difference of 56% (sic) [ EUR 56 million ]. And where is it coming from? It's coming from about EUR 20 million out of FX, not to be forgotten. It's coming out in a level of EUR 25 million to EUR 26 million working capital. And bear in mind, we have invested more in the year 2025 than in the year 2024. These are the 3 main effects for the change in our net financial position, and we are convinced that we have invested this money in good manners for the long future of KSB.

Share price. The share price at the end of the year was at about, well, more or less EUR 958, let's say, roughly EUR 1,000. The market capitalization was at about EUR 1.7 billion. So the market capitalization is EUR 500 million more than the equity that is attributable to the shareholders of KSB. And I think here, this is a very relevant information to you. We are a EUR 1.7 billion company. And in between the last weeks, we were on a level of EUR 2 billion. I saw that the share price went a little bit down today or even more than a little bit, but I'm absolutely sure, as we are going our path, as we are implementing MT30, the share price will further increase. That's my strong belief.

Let's come a little bit to the dividend. Take a look at the share price relevant indicators within KSB Group. At the end, the earnings after tax for the KSB shareholders is EUR 141 million. And based on that, we will ask the shareholders' meeting for a dividend of EUR 26.50 per share, which is 33%. I've spoken to maybe 80%, 90% of all of you, and I told you all the time that we will leave the dividend minimum. On the level of previous year, we will leave it in the frame of from 30% to 40%. And so we kept our promise. You maybe have expected a little bit more. You have to take one thing into account. In the year 2024, we have increased the dividend by EUR 0.50 in order to set aside also the profitability per ordinary share was lower. This was because of special tax effect, and we thought, in these times, then it makes sense to offer a dividend at the level of EUR 26.50. If you go back to the year 2023, there we had a higher profit per ordinary share than in the year 2025. Nevertheless, this year, we kept the dividend higher than in the year 2023. That's our way of thinking.

For this reason, let's make a summary. The order intake and sales, the revenue exceeded, or both exceeded the figure of EUR 3 billion. The EBIT increased to 8.3%. If you take out HANA, we are talking about 9.2%. We are on our way to exceed the 10% return on sales that we have promised in our discussions in our presentations. Also Stephan Timmermann did in the press conference this morning. Equity ratio is at 48%. Yes, the net finance position is lower in the last year because of working capital of all the investment we did. And of course, it's being affected by the FX ratio. We have a positive value added of EUR 60 million, and our market capitalization is nearly 4x as high as it has been when the 4 of us started in 2018 with a level of EUR 1.7 billion.

Now I'm at the end of my presentation. I hope that you got a little bit more deeper insight in the financial figures than you may have heard this morning when you only went through the press release. And of course, all the questions we might not answer today as we have a little bit of lack of time. Maybe after 1 hour, we are happy to explain in individual talks.

Thank you very much so far. And now I hand over to Stephan, who will explain you the drivers for success.

Yes. With pleasure, Matthias. Unfortunately, our time is limited. So I really have to summarize the drivers of success. But for me, they are extremely crucial and important. Matthias showed you the continuous development of KSB over the last 7 to 8 years, which we have been able to manage the company. I gave you the indicator in terms of order intake, turnover, EBIT and profitability. All of this has a root cause. I'm now in management for more than 30 years. I've seen it all. Today, I have the confidence, if you put the right things on track and you give the company, especially a sizable company like KSB with 17,000 employees, the possibility to develop, you can take it to the next level. And this is exactly what we at KSB are doing.

And the measures that we have put in place, KSB SupremeServ, KSB Voice, KSB Climb 21, the Red List, and our positioning of the brand in terms of KSB next level. These are the things that have been started, year-by-year one rocket more, which slowly but surely are showing impact. And if you were now to ask me, when do your rockets stop to blow, I say we have a lot of blowing ahead of us. All of these things are cultural changes of the mindset of the company, a lot of growth opportunities in our more than 100 KSB companies all around the world. We are about halfway through our possibilities, those which I see at the time.

And this gives me the extreme confidence that this track record, which we have shown in the last years, especially in the last 5 years from 2020 to '25, which were extremely challenging economic years, this will continue. And we have put this into our house of strategy. This you see, it has the title Mission TEN30. The TEN30, latest by the year 2030, we want to have reached our 10% plus return on sales. Matthias just showed it once more. We are at the time, if I exclude these one-off costs of HANA, which will be gone in 2 years, we are already at the time at 9.2%. And this really gives me the bullishness to say, yes, we're on the right track. And the best thing is we have the right troops in place. We have the right strategy. We have the right mission. We have the right mindset. We have the right subjects of focus, and this will push the company ahead.

If you now ask me to summarize it a little bit more in detail, what I would propose, these are the 9 big cornerstones of the success. And it starts with our product portfolio. This morning, in terms of the press conference, I showed concrete examples of new products that we developed in the last year 2025, the AmaRex Pro, the Multitec, our new solar controlled water pumps, which we sell out of India, the new controlled valves, which come out of MIL, what we are now taking up as valve business, huge valves, MAMMOTH valves in China, absolutely incredible. And all of this is new business, add-on business which we're putting into the market, which drives our success.

Then we have this market orientation. What is market orientation? Today that we are thinking in 8 markets, 6 markets in the Pumps, then the holistic Valve business and the SupremeServ business. And this is headed by market presidents who really understand what mining is all about, what the water, dewatering is all about, firefighting, building, the petrochemical industry. And they do it in a matrix in a superb collaboration with 9 regions, and this makes us unbeatable. And KSB SupremeServ, of course, this is the big bracket, the aftermarket business, which goes from the valves and goes into every pump. We've started this journey. We're the first company who has really put a strong brand label on all of this. Are we at the end of this journey? Of course, not. We are somewhere in the middle, and there's such a lot to come. Do we have chances when big markets like the mining markets have a hiccup? Of course not, but we compensate it as much as we can, and we grow. And this makes this part of our business, based on 155 years of population put into the market, an extremely strong pillar of our resilience.

Then our global presence, find a company in the Pump and Valve business, which has more than 100 owned entities all around the world. It was started with the first generation of the founders of this company. Today, it's the stronghold, especially as the world gets more and more disrupted. We have our factories in China, we have our factories in India, we have them in Brazil. Of course, we have them in Europe. We have them in the U.S. now with the investment that Matthias mentioned, our great GRW factory for the mining business in Augusta and now the big warehouse with the possibility to go into knockdown assemblies in Richmond, where let alone at the time, we're investing EUR 26 million to get our foot into the world's biggest economy of the world with absolute great people, superb managers in place just making it happen.

And having said this, the employees, I can only underline it again and again, our 17,000 employees running the extra mile, irrespective of how strong the winds are, we team up, we get what we can out of the market. This makes me extremely proud, and this makes me confident that the money, the investment, the EUR 181 million, which we spent last year, let alone last year, which, of course, has an impact in our cash flow. You can only spend the euro or the dollar, the renminbi once, you see that, but it has a huge impact on our future, because we're investing into new factories, into extended capacity, into digitalization, of course, into sustainability, but also into working environment for our employees, because company culture is just extremely important for us. And this touches corporate culture, which is, as I said, one of the cornerstones of KSB, and I'm extremely proud to be part of this. But corporate culture also means when the times get rough, get that cost awareness into place and push that brand. And these are the things that KSB is really good at.

And having said this, I now come to the last chapter, and this is for you, for sure, the interesting part, the outlook in summary, because the last year is last year, after the game is before the game. And again, this year, we thought it might be a little bit sweeter than the 5 years before in a positive sense. Unfortunately, with the Iran war, which took off a few weeks ago already, it has really become very challenging. And I've just put one picture onto the screen that you see what this is all about. I mean we have sites in Dubai and Abu Dhabi, in Qatar. Of course, we have a big factory in Saudi Arabia. This is 150 kilometers away across the Strait of Hormuz to Iran. And all around this region, you have U.S. military bases. And this, of course, explains that if you get into a war with Iran, you cannot just keep it in Iran.

And this is happening, and the worldwide repercussions, I will not go into them. I tried to summarize it on a slide. This slide, you can actualize every day. The impacts yesterday, they were somewhat of a prediction. Today, of course, they're feelable. All of us feel the rising prices of fuel and gas and oil as we go to the gas stations. In countries like Pakistan and India, if you go to a restaurant, the restaurant will be closed because today, gas shortage is really already visible in your daily life. If the war goes on for a longer time, this impact will, of course, go all across the world. What we can already feel today is, of course, logistics. We are an exporting company. We, of course, use the train, we use the ship and we use the planes. The plane freights have become extremely expensive. And if you try to export into the region of MEA, depending what port you choose, it has become really tough, because most of these ports are either completely congested or closed.

All of this, of course, leads to inflation. This leads to an impact on the interest rates. This you know, the European Central Bank has already put the foot on to lowering interest rates. The Fed has done exactly the same. It has, of course, an impact depending on how long all of this lasts, on consumption, on payment morale and, last not least, on the investment climate that we have. And to say that KSB, despite the fact that we are an absolute great company and have a superb track record also, in year of crisis will have the possibility to escape completely. I'm a born optimist, but this optimism, I would not present in front of you.

And if I were to summarize this, what does it mean? It means, again, a year which is impacted by market weaknesses, by currency fluctuations, by trade barriers, by high competition. None of our competitors, unfortunately, also not in the last years, have died away. Now we have a very big one, in a positive way. This is China, as the market in China, their own captive market is getting weaker, the Chinese go into export, the Chinese EPC. Today, they're really in good quality. And this, of course, is something that we have to counterbalance either by participating by our Chinese factories which, of course, is a good ,choice or by being extremely competitive wherever we meet Chinese competitors in South America or in Africa.

And last not least, geopolitical alliances, whether more armed conflicts will come out of all of this, I do not know. I can tell you, we stay resilient and we stay optimistic. What I can tell you is that the first 2 months, and this is what we see at the time, January and February, in terms of what would we have wished in the best case, yes, the order intake and the turnover day were weak. Would this have made me nervous in any way today? No, because January and February, especially if Easter is very early, as it is this case, are always weak months, especially in terms of turnover. Now of course, if you have a January and February which forces you to catch up, the bet is on how are the next 10 months going to develop. And this is the only part of the risk in the bet.

But we, at KSB, we are resilient, and we are very optimistic that we will keep our course. Why? Because the recipes that we have to put in place in order to safeguard our resilience and to play our cards, as we have done in the last 5 years of crisis, they are a proven pattern. It's again, batten the hatches, it's again pushing sales, especially short-term sales, and this is, in our case, the standard business. It's, of course, the SupremeServ business. It's cost cutting as the normal part of the exercise. When you batten the hatches, you really rethink every spending. Do you have to do it? Does it make sense? Or can you defer it? This is what we are used to and doing again. Securing the margins, adapting capacity wherever is the important part, but the most important part is to keep our troops together, to really focus on corporate culture, to inform, to have the commitment of all those on board and then, of course, a little bit of luck and a lot of commitment.

Now having said this, what will this year be all about? Just doom, no, of course, not. We also have a lot of chances. And I've just written down a few of the big titles. KSB, as you know, from the heating cellar to the nuclear power plant, we're everywhere. And where we're extremely strong is in electricity production. And today, growth in energy of all kinds, be it nuclear, be it conventional, let alone driven via AI and according data center. This is, of course, one of the big drivers also for KSB. And you might have read it, one of the biggest orders ever received in the history of the company, more than EUR 150 million. We booked it a week ago. These are energy pumps going into a power plant, which we will produce here in Germany.

Then the meteorological change of the weather due to global warming, it will not be impacted by the conflict that we see at the time. And thus, all activities, all growth opportunities in water and wastewater for flooding, for desalination, for irrigation, they are still there, and we will take our part of the cake. The same, of course, applies to the valves. Matthias, you already mentioned it. For us, the valves is a growth opportunity. The good thing about it is, we know how to fix the valves. We are fixing the valves, and this will be a part of our not only growth story, but also profitability stories as we sweat out the losses which we were used to in the past in the Valve business. And last not least, in terms of business chances, there are a lot of business chances. We are present all around the world. The Iran conflict, even if the repercussions are all around the world, there are a lot of growth opportunities in countries where we are present today already, where we have just not taken our share of the pie, and now we're doing this.

Having said this, what is our guidance? The guidance corridor that we have given to you and all of our shareholders. In the best case, of course, this remains my hope, we can achieve another best year ever. This is basically the top of our corridor. In the worst case, we will end a little bit below the results of the last year. Where do my hopes lie? That we maneuver very solidly through this corridor that we have given.

And having said this, I start to summarize. And once again, today, it's about 2025. And again, 2025, it was a tough year. Luckily, we forget all of this, but we continued our superb success story in 2025 despite all of these boundary conditions. And we will do the same job in 2026. Unfortunately, again, no winds out of the market which propel us to success. So we have to put a lot of energy into it by ourselves. But I think we are very good at this, because in a nutshell, what is KSB all about? What makes KSB so good? KSB, we have a plan. We have our strategy. We don't change that strategy. We follow up this strategy. We're executing this plan. And slowly, but surely, we are reaping the success, which, in my world, will take us where we belong, to fly with the eagles.

And with this, I say thank you so much for your attention. I hand over to Sonja as we have a little bit of time for the questions and answers.

Yes, we do. Thank you very much, Stephan and also Matthias, for your insights. So now it's time to open the Q&A session. For that purpose, we move to our little Q&A corner in the back. This will take approximately 1 minute. So please bear with us. We already have a lot of questions, so I hope we can answer as many of them as possible in the remaining 5 to 6 minutes. So see you in a minute.

So we are back in our session. And let's start with the first question. It's actually on the profitability of Valves, Matthias. Can you please explain what caused that? What practical measures have been taken to improve the profitability? And what is the realistic time line to bring the operating margin to a decent level, say, above 5% of sales?

Okay. So the 5% of sales, we already have achieved. That's the good news, because one thing I really want you to bear in mind, and I mentioned it during my presentation. When we talk about Valves, where we see more or less the breakeven, this is only new business. Taking into account also the spare part business, the whole of the Valves business all over the world makes a return on sales of some anywhere at 5%. So again, I really want to place this message here. The whole of the Valve business, new parts as well as spare part business has a positive return on sales of 5%.

Secondly, what are we doing right now? First of all, we have started several measures in order to increase profitability, especially in our plant in La Roche Chalais. Secondly, we are shifting products to China. And third, we got rid of the Cryogenic Valve business, which is a very special business where we made no profit. I'm absolutely sure the profitability of the new Valve business will be positive in the year 2026. We are on our way to reorganize the business and to bring it back in a good position.

Thank you, Matthias. Then let's move on with our transformation project on SAP S/4HANA. First, what are the costs for the year 2026? And then is the SAP S/4HANA project meeting its deployment and cost milestones as of year-to-date 2026? And are there opportunities to lower the total deployment costs by using AI?

Yes. So the answer is yes, yes, yes. What does this mean? First of all, we expect cost in the year 2026 for SAP HANA for the implementation on almost the same level as in the year 2025. And once we are talking about cash flow and the expectations about cash flow, you also have to keep in mind that these costs are one-to-one cash affected, because they are only external costs and no internal costs. Secondly, the SAP project will go live in the January 2027. Nevertheless, in '27 and '28, we will also have some process improvements, but we will spend, in '27, approximately EUR 12 million for this project and in the year '28, maybe EUR 6 million. And I can say regarding cost, this project is in budget.

Then Stephan, let's move to the region, Middle East and Africa. So it saw the fastest growth this year. Do you think this growth will continue? And are there any risks finishing projects in 2026?

Let me start with the risks. There are risks everywhere and anywhere. And of course, in Middle East, there are risks at the time. Finishing projects, this mainly depends on the length of the war and the possibility to freight into the region. At the moment, I already said that, that's extremely difficult. But today, we are in March and the year luckily still has 9 months. So I remain rather optimistic. I mean, it highly depends on how the war will now continue. Middle East, Saudi Arabia, if you would have asked me 6 weeks ago, this was one of our hottest growth spots in the KSB world. We have a big factory, a sizable factory in Riyadh.

Saudi, as you know, has a lot of very big investment programs, which will not be changed by the war. These are the Olympic (sic) [ Asian ] Winter Games as well as football championship. This is in Salman Park, the biggest green area in the city worldwide. These are huge projects which are, of course, executed. And if you want to do business in Saudi, due to the very stringent and consequent Saudification Project, you have to produce in Saudi Arabia. And we are the only Pump and Valve producer, to my knowledge, who has a full-fledged factory at place, and we profit from this. And will this continue? Will this be impacted by the unfortunate war at the time? Maybe yes. Will the growth be stopped? Of course, not. It will, in the best place, be deferred. And is this going to be a sizable impact for KSB? I do not think so.

Okay. Thank you very much. There's another question on our forecast. So mid-February at your preliminary figures, you still expected growth for sales and EBIT for the year 2026. How do now you expect flat sales and declining EBIT at midpoint? So what changed actually?

So first of all, I think this is also what Stephan said, growth is still possible. For example, if you take a look at your order intake, when we got this -- well, it's a EUR 200 million order, in fact, the biggest job in energy KSB ever got. But one thing, of course, is now even more obvious than it has been at the beginning of February, this is the crisis in Iran, and of course, at this point of time, we did not oversee what it means for the MEA and Middle East. And we did also not foresee what this can mean for the whole of the world. And we see kind of reluctancy regarding further investments.

And honestly, this is a situation we cannot really foresee. We cannot quantify what that means. And so for this reason, growth in terms of order intake, we see still is possible. But of course, taking all these effects, Stephan Timmermann thought into account, we have to be a little bit more cautious definitely. And we want to stick to our guidance. We want to appear reliable. And so these are the reasons why we see the world a little bit different than 6 weeks ago.

And I think this is very understandable. So you are the beneficiary of inflation. You have pricing power. Is it still the case?

We have the same pricing power as our competitors. Nevertheless, we have to take into account that the price pressure that is coming from our competitors, also especially in China, not only in Europe, but all over the world, is increasing more and more. So it's not in the last years that we can say we want to have 2%, 3%, 4% higher prices and we get it from our customers. These times are over. Yes, we will increase the prices, but on a level of maybe 1.5%, something like that. It depends region on region.

Okay. Thank you. Then we have another question regarding CapEx. So do you see CapEx in 2026 relative to the EUR 150 million in 2025? Should we expect further progress on the net working capital days in the next 2 to 3 years? So who would like to comment a little bit on the investment and the net working capital?

No, we will do it combined. We are extremely prudent in terms of the money that we spend. And every euro that you have spent is gone out of your cash, and we think this through. At the same time, we realize, first of all, if we want to grow the company, we have to invest. Today, growth is about new market opportunities, new technologies, new countries, and all of this has to be done by presence on the ground. The time where we could fly out of Germany into Chile in order to do business is over. Today, we have to be present. And from all that we see at the time, the globalization that we knew yesterday, it will not come back.

So being local and investing locally, this is absolutely imperative. To be local, but also in many cases, like in the case of Saudi, but today, also in the case of Indonesia, yesterday already in the case of Brazil, possibly also in the case of the U.S., to just be able to produce locally because local legislation asks you to do this. And this costs money, either you skip this part of the game or you take the bet. And this has been somewhat accompanying our investment decisions in the past.

Of course, it is accompanied by digitalization. Of course, it is accompanied by sustainability. Of course, it is accompanied by the fact that we need working environments, which are attractive for new talents, which we need employees, I can only underline it again. They are the backbone of our success. We're a qualification-driven company, and thus, we must invest into workplaces. Will this stop tomorrow? No. Will we do it very consciously in line with the way that we have done it yesterday, yes. And of course, we now have a very special focus on our cash flow, because cash is always limited. And we want to go secure through every rough water. And this would be my summary, Matthias.

Thank you. Then a short question on the forecast, and please also a short answer. Is the weak start to the year already reflected in the midpoint of the guidance or the forecast corridor?

So the guidance already reflects the situation in the near Middle East. This is the reason why you maybe expected the higher guidance. This is all we can say regarding this. We took the crisis into account, expecting that the crisis is not a long-term crisis.

Thank you very much. Then we have a question on KSB SupremeServ. Can KSB SupremeServ get back to a growth trajectory that exceeds the growth of the rest of the business as more aftersales business is captured? Or has KSB reached the ceiling on providing aftersales for existing business and therefore, grow in line with the rest?

Yes. I'll start with the last one. Has KSB SupremeServ reached the ceiling? Of course, not. As we said during the presentations, KSB SupremeServ, this is the backbone of all of our business. In every one of our big market areas, we harvest whatever KSB SupremeServ possibilities there are. There are certain markets, and this is the mining market where the spare part proportion of the market is extremely big. It's part of the business model. We put pumps into mines in order then to very professionally serve the customer with the coating wear and tear parts, which come in the aftermath.

If markets like mining, or in the last year also energy and petrochemicals, are weak due to the boundary conditions, then, of course, we have this impact, and this cannot be compensated overnight by the growth in SupremeServ, which takes place. Are we at the end of any road? Of course, not. I said that I personally presume we're somewhere 50% down the road. We have such a lot of opportunities. And it's not about technical service. It's not just about spares. It's about digital services today, online monitoring. It's about efficiency consultancy services. It's about a lot of new things that we provide. And we do this all around the world. And everywhere, the seeds are being planted and growth is taking place. So I'm very optimistic. This is really the backbone of KSB, and KSB is very fortunate that we have a product which has an aftermarket, and this is good.

And there is another short question. I'm not sure if this relates to SupremeServ as well. What was the EUR 28 million provision outflow?

I also do not know whether it's related to SupremeServ. In general, I can say, we had some reduction in provisions because, for example, we have better means lower cost of quality and also for our standard business as well as for our project business. I think this is what the question means. I'm not that sure.

And what could be an impact from energy and logistics costs in 2026?

Regarding energy cost, I do expect a smaller impact because, of course, the energy costs are rising, but we do not, in our cost structure, depend too much on the energy cost. I think the amount is at about 2% in our P&L. And regarding logistic cost, honestly, yes, they are increasing when we see the rates in ships. But what is more important for us that the logistics will deliver our pumps, our products to the customer in time and that we get the parts in order that we can keep on running with our production time.

Okay. Stephan, you mentioned Chinese competition earlier. Can you elaborate a little bit on that?

Yes, of course. And I do this with full respect for Chinese companies, which today are providing top quality, unfortunately, at an unbeatable price. This is, of course, where the sentiment then steps in. Since the captive market, China is down at the time, and there are a lot of drivers which will tell you it will not go up in at least the next months to come, maybe years.

The Chinese, who are by nature international tradesmen, go into the world and we meet them as new competition, accompanying established European, U.S. competition increasingly all around the world. And this is now where our value proposition has to step in. And it's not just about price, it's the combination of local presence, SupremeServ and absolute high-tech quality products, reliability as an OEM. We stick to our promise. This must be our value proposition. So I respect the Chinese competition. I notice how it is increasing all around the world, but it's another challenge, and we are taking up this challenge.

Okay. Thank you, Stephan. Do we want to take another question, Matthias?

Yes.

It's already 9 past, but okay. Another one on KSB SupremeServ. Did the shutdown of the Grasberg mine had any impact in 2025? If so, could you give us a sense of the magnitude of the impact on EBIT? And do you expect any catch-up effect in 2026? Where do you see spare parts inventory levels at your key mining customers at the moment?

Of course, what we are not doing here right now is to give impact on our profitability, which are due to some special effect. But in general, you can say that the shutdown of Grasberg, or also if you take, for example, the problems when the mine in Indonesia had...

Freeport had the accident.

We had this big accident. This, of course, affects our sales and profitability, also especially in the region of Asia and of course, in our spare parts business and of course, at GIW, no doubt about it. And these are effects we had to compensate. And a little bit of this you can see in the P&L in the year 2025. When I take a look at our Freeport mine -- the Freeport mine, it's not ours, it will not be open before end of this year or beginning in 2027. So this, of course, has an effect on our spare parts business, but it's already included in the budget 2026, because we have been aware of this. It has not been impacted in the budget 2025 because the accident happened in the year 2025.

Thank you. And I think you also answered another question on that line. Good. Then there is a question on La Roche, our Valve plant. On the restructuring of the La Roche plant, can you update us on where you currently stand in the process? What additional measures still need to be implemented?

Yes, I think, with pleasure. La Roche, first of all, our plant, 450 employees near Bordeaux. You might still remember, 3 years ago, they had a huge impact due to a hailstorm. This hailstorm was very local, damaged the roof, which would not have been that bad. Unfortunately, the roof contained asbestos, which in France still sometimes happens, and this led to the fact that we basically had to close the factory for a year. And these repercussions, they took 2.5 years in order to fix. And this is now totally irrespective of restructuring. This meant a new roof, complete new cladding, now really taking out every asbestos fiber out of this big plant and putting the workplaces back into track, luckily using the chance to optimize the workflow and to invest into clever things.

Having said this, La Roche consists of 2 big parts. It consists one of the standard business. These are standard valves, which go into the European market, sold by mainly KSB entities all around Europe. This part is now back on track. It is profitable. Here, the hiccups from this hailstorm, they really have to go out of the system now. And these hiccups are that we now have to regain confidence with the customers, because if you are not able to deliver for more than 1.5 years, the customer looks for alternative, which is normally. And here's our job now to bring back these valves into the market, and we're being increasingly successful there.

The second part of La Roche, and this is the really painful one, it's high-technology valves. It's cryogenic valves. These are valves which you operate at minus 170 degrees in LNG tankers, extremely specialized mechanical engineering in terms of the proprietary knowledge of the materials that you use and the way you engineer these things. Unfortunately, this LNG market is not in Europe anymore. It is today in Korea, increasingly in China, and a little bit in Japan. And to export out of La Roche into these markets, with increasing competition, again, out of China, but today, out of Korea, this is not a good idea because, one, you have the European costs; and two, you have the delivery time. And the delivery time today for everything that we do is becoming more and more essential. And this brought us to the decision now 2 years ago that we would step out of the cryogenic business in La Roche for these super-complicated valves for LNG tankers.

LNG tankers on top, it's a very cyclical business. This is another boundary condition that you have. And we said all of this, we will not be able to make money. So being KSB, we will fulfill our order book, but then step out of the market. And this is what we're doing. And as we are doing this, the profitability comes back into place. And we're talking now about the new products, not the aftersales business, which also in the cryogenic valve business is extremely profitable and which we will, of course, safeguard.

Thank you for the explanation, Stephan. Let's take one last question. It's a question that just came in, the last question, actually. Is the price pressure from Chinese competitors part of the weaker EBIT guidance? Or is the weakness only related to the situation in the Middle East?

No, for sure, not. We do not take competitors' pricing to give our guidance. This is just something that we are aware of, which I do not blush to communicate, again, in full respect in regards to very professional Chinese EPCs today. Our job is to follow and contribute to these EPCs via our factories, which we have in Shanghai, in Changzhou, in Dalian and of course, to bring our costs into competitive holistic value packages, which today also include KSB SupremeServ. And this is a big differentiation criteria of KSB. We have KSB SupremeServ, and it's not just about selling something, it's also about taking care of the product in the aftermath, and this for decades, and this is a stronghold of KSB worldwide.

Thank you, Stephan. I think now we really stretched our and your time line a lot, another quarter of an hour, but I think there were so many questions. It was really good to take this time and to answer your questions. If you have any further questions, please get back to our Investor Relations team.

So now I want to draw your attention to the 6th of August. That's actually the date of our next KSB earnings call on the half year results 2026. For the moment, we would like to say thanks a lot for your attention, for your interest and your questions. We wish you a wonderful spring time. Be safe, and goodbye.