Koenig & Bauer Aktie

Good morning, good afternoon, good evening to anyone on the call. I'm very happy to welcome you to our Q1 financial call to present to you our business development in the last 3 months or in the first 3 months of this calendar year.

We have quite a lot to talk about today, and we'll just jump right into it. On Page 2 in the presentation, you see our typical just summary of what are the major highlights in Q1. As you've already seen the figures, it's clear that we're very happy to publish strong order intake. There's a lot of pressure in the markets.

We see it all over the newspapers, the press, our competitors, various industrial companies are really suffering under weak order intake and under market difficulty. So we're very, very happy with the order intake development in Q1, 21.4% above last year and a similar number above 2 years ago.

So it's the best order intake we've had in several years in Q1 to start the year. And this is not driven by one-off major orders from, for example, banknote or other major projects. This is really solid base business in our major business units across the board. We'll go into that in more detail.

So I think it's a very strong vote of confidence from our customers in Koenig & Bauer, even in these difficult times and a weak economy, they're willing to place orders and buy from us. On the operating side, we see 2 different trends that we'll also talk quite a bit about today.

On the one hand, we're very happy to finally show significant progress in the operating performance in the Special & New Technology segments. This is something that even in the old segments with Digital and Web and now in the new segment with S&T.

This has been our focus for the last roughly 2 years of the Spotlight program and our product strategies and cost-cutting initiatives have really had the strong focus on improving the S&T performance, and we're finally able to show you that significant year-on-year improvement also there driven by several business units, not just one or the other.

And despite headwinds in some of the businesses in S&T, which we'll also talk about in a few minutes. On the other hand, the Paper & Packaging segment, which we already started to talk about in Q4 and in publishing our full year figures earlier this year. The Paper & Packaging segment with its strong reliability on the global sheetfed offset business continues to be under pressure.

We've had an insolvency in the competitive environment with Manroland. We've had several other competitors that have announced weaker earnings. And we're seeing that the weakness in the global markets is finding its way into our margins in that segment.

And Q1 on top of the typical seasonality we see in that segment shows that drop in profitability that we'll talk about as well today. The third, we started to roll out our new strategic framework. This is not a program like a P24 or a Spotlight. This is really our strategic framework for how we're going to align our various and many initiatives going forward to transform the company and secure our long-term stability and competitiveness. And I'll go into it a little bit today, but this is something that will follow us over the next quarters and even years. This is a strategic framework to guide us in the time to come. And finally, despite this softening in Paper & Packaging in Q1 that we saw, we're also very happy and very confident based on our order intake, our order backlog, the ongoing cost-cutting programs and initiatives that we can confirm our full year target for 2026.

Despite the seasonality at the beginning of the year, we still see Koenig & Bauer at a stable group revenue of around EUR 1.3 billion and an operating EBIT at around EUR 80 million for the full year. So we're off to a good start on the order intake side, on the profitability in S&T -- on the Special & New Technology side and P&P with the typical seasonality, not off to a good start, but still confident by the end of the year, we're going to meet our targets.

Again, I won't go too much into detail today on IMPACT. We presented it already during our year-end closing and in our annual report, and we will be talking about it in our general assembly in June. But at the end, this is a strategic framework for how we're going to structure our initiatives.

We have over 40 initiatives ongoing at Koenig & Bauer already from products to cost cutting to AI programs to go-to-market strategies, technology developments, people, et cetera. And this is the way we're going to talk about it. Today, you'll hear about a couple of them, particularly on go-to-market and on competitiveness, some of the things that we pushed forward on in Q1 that we want to highlight for you as usual.

On Page 4, you see a new way we want to kind of talk about how to separate how do we see the short term or the actual business environment in some of our business segments or business units compared to the more long-term trends in those business units or segments.

And what you see at the top left is our banknote business is really performing well. It's one of the upsides of the geopolitical crisis and countries fighting for national sovereignty and reducing risk that we see that the banknote security business is strong. We had strong order intake in the last couple of years.

We didn't have exceptionally high order intake in banknote in Q1, but we see a very, very strong pipeline going forward in banknote business.

So this is not only an anchor business for 2026, we see going forward through the end -- towards the end of the decade that the banknote business is going to remain stable in the long term, which is very good news for Koenig & Bauer. The offset business, we're also confident it's going to stay stable. We see growth in the packaging business. We see declines in the commercial graphic arts business.

But that in the short term, these are the little round circles in the bottom right of each box -- in the short term, the offset business is very much under pressure due to the general economic environment and the competitive intensity we see in there, but we're still confident going forward.

I won't go into all of these to highlight some of the other topics, we're still seeing a strong performance in metal print and in our glass and hollow containers in the long term. But I would point out that one of our very good businesses in S&T the last few years, the last few decades has been our glass and hollow container business under Koenig & Bauer Kammann.

That's not something we talk too much about in these kinds of calls. But that, for example, is a business that in the long term, we see it very attractive. In the short term, it's under a lot of pressure because glass production is down worldwide due to the high energy prices. Plastic hollow container pricing is down in the short term due to high petroleum prices.

So this is a business that's under short-term pressure, but long term, we're not concerned. And I think the other thing I would point out, similar to digital printing, we're still seeing a long-term trend and that it will grow. It will drive our business going forward. But in the short term, there is some low impact.

Again, this shift to new technologies in uncertain times. We've talked about in the past is always a little bit more uncertain than in good times. So that's a new way to look at our businesses and trying to separate where we see the long-term growth for the company and the strategy compared to the short-term economic environment.

On Page 5, you see some of the new highlights. And as mentioned, we'll talk about go-to-market. So the IMPACT really means we've spent a lot of effort, a lot of money and a lot of time developing a new and broad product portfolio throughout the last 5 to 10 years.

And we're confident that portfolio is ready to scale more rapidly than has been in the past. It's about selling what we have and selling what we have to offer our customers now and pushing that into the market with more efficient sales structures and sales pushes throughout the globe. So in some cases, it's taking regional successes and making them global.

In other, it's about just launching new technologies. Two examples, we had a very successful trade show in Brazil, which is with the Mercosur deal that's still going through, but confident to go through the European Parliament that is going to push sales in South America.

We had a very successful show that helped us in Q1 with order leads, a few orders as well, but this will also help us going forward in Q2 and Q3 as some of those leads turn into fixed orders. We also, just last week, had a very big -- the last week of March, we had a very big trade show in Radebeul with the VariJET. This is our new digital printer that we launched at drupa in 2024, but are now, again, focused on go-to-market.

We have the fourth installation ongoing. That doesn't sound like a lot, but it's about moving from our first 2 machines that were the beta production, now having the first production machine and installing now the second production machine, so the fourth in total. And more important for us, at this VariJET 106 Executive Summit, 2 of those customers presented at our summit about how they're satisfied with the VariJET performance, how they're producing in a production environment with our digital printers.

And again, with 80 experts from the industry at the summit, we're pushing out our VariJET digital printer to the market. The same goes for the Special & New Technology segment, particularly our digital and web business unit that we continue to report separately, and Alexander Blum will show in a few minutes. We had technology days in Wurzburg with a strong focus on launching our CI-Flexo XD Pro. This is a program that many of you that have followed us for years is familiar.

This was the program we transferred from Italy to production in Wurzburg and during that transfer completely upgraded, revamped, reengineered and now relaunched this XD Pro CI-Flexo machine. And also here, an amazing presence from our -- we have roughly 150 visitors to this trade -- to this open house and technology days, presenting not just the XD Pro, it's about our digital solutions, also presenting the RotaJET, which is not pictured here, but is on the left side of this room. So again, it's about go-to-market and scaling up the machines we have in our portfolio.

And finally, on Page 7, an announcement we made in January and showing also that IMPACT is not just a strategic framework. It's about initiatives and delivering. We announced the closure of Albert-Frankenthal GmbH. We announced it in January with the intent to cease operations by May 31, 2026. For those of you that are familiar with German industry, you know how hard it is to close plants that are -- that are highly organized with labor unions, with works councils to negotiate social plans and to close on time is quite difficult in Germany. It's just a fact.

And also here, we're proud to announce that not only did we announce that we will close it and cease operations on May 31, this will now happen. So the deals are done. The contracts are signed. The employees have been released or have at least been informed of their released, and we will completely cease operations on May 31.

This is, of course, cash out and it's restructuring and it hits the P&L, EUR 6.6 million were recognized in the first quarter. It seems perhaps like a small topic with 75 affected employees, but this is over a 100-year-old factory. This was the last step of closing it and it was a difficult task for the operations team installed, and it did a fantastic job, and it's all about increasing competitiveness by increasing resilience and reducing structural costs and reducing our footprint.

So this is a project that it's never fun to close plants and dismiss employees, but it's simply necessary in the times in which we're in. And again, to show you, we're not just talking about our strategy. We're implementing it and doing that quite quickly. And the final highlight that I brought with me is our decision on how to proceed with our Koenig & Bauer Coding operations. We announced in the summer of last year that we are opening up a strategic dialogue with the market on how to manage Koenig & Bauer Coding going forward.

We were open for various solutions from a full sale of the business to potential joint ventures, strategic partnerships. And at the same time, we also evaluated the going concern under Koenig & Bauer management with Koenig & Bauer ownership, what can we do better and how can we develop the business. The result is, I think, twofold.

The first is through this process, we recognize how well positioned Koenig & Bauer Coding is and how much potential we have for this business going forward. And that's the good news. So the fundamental use of 2D QR codes, the regulations ongoing throughout the world, not just in Europe, about track and trace packaging require and will drive significant growth in the market in which Koenig & Bauer Coding is underway.

On the same side, the M&A market in Germany for German industrial companies is very, very weak. So we did evaluate a potential sale. We did have interested buyers. We had a lot of interested buyers, but we came to the conclusion that the pricing being offered and the multiples being offered for German industrial companies in the current environment, especially after the start of the latest crisis with the Iran war and the ongoing conflicts in the Middle East, we saw a rapid deterioration in the robustness of that M&A process starting in February that we had to come to the conclusion that we're not willing to sell coding undervalue.

And therefore, considering that coupled with the second view, it is a great market. It has great growth opportunity. We are now announcing to the capital markets and to the team in coding that we've decided to continue to develop the business as sole owner. We will continue and are discussing with various strategic partners how to cooperate better and scale the business faster, but we will remain the full owner in the coming years, and we'll develop the business on our own.

We're happy to report more about our initiatives there in future calls. The foundation is great. The business is profitable. It's generating cash. It is growing, and therefore, we'll keep it on that path. So that's the last update from my side. And I would hand over for the last business highlight to Alexander Blum before he presents the figures.

Thank you very much, Stephen. Information technology is at Koenig & Bauer as important as engineering technology. And that's why I'm very happy to start my presentation today to you with 2 examples that we have recently conducted. One is the one already knows, we have a close partnership with Google with regard to information technology. It's our technology partner and is offering a whole wide range of technologies from desktop to the cloud via the Google technology.

And we have continuous talks together with Google, how we can improve our operations, how we can improve the dealing with our information, with our data, with our operational flows and our operational systems. On the other hand, also artificial intelligence is very, very important, and it's a strategic initiative for us at Koenig & Bauer.

It has the highest priority in order to explore what we can do with AI and with regard to our bread and butter business to improve operations and be more -- to be better for our customers and more efficiently internally with regard of generating our services and machines.

And I had the pleasure to present our AI Champion model, our house of AI at Koenig & Bauer with the recent conference of our IT service provider, [indiscernible] group.

Having a look at our financials. The order intake, as Stephen Kimmich already mentioned, was very strong and it increased by over 21% from EUR 245 million up to EUR 279 (sic) [ EUR 297 ] million. We see an increase of order intake in both segments. On the one hand, Paper & Packaging had an increase by over 12%. And on the other hand, the Special & New Technology segment had a very strong plus of over 40%. So that gives us a very good tailwind for the rest of the year, and that's why we are still confident due to all the crisis and uncertainties with regard to the development -- the further development of the year 2026.

Order backlog increased -- decreased slightly, but it's again over EUR 1 billion. You probably remember, end of last year, it was below EUR 1 billion. Now again, it is over EUR 1 billion. And also, we need to remember that an order backlog above EUR 1 billion is not the normal case of case if you have a look back into the last 2 to 3 years with the history of Koenig & Bauer.

But this also is an important anchor for us in the volatile market environment that we are living in. Top line slightly increased as well by over 3%, and it brought us an increase in revenues up to EUR 260 million.

You have a look at the split of regions, first of all, the export group ratio increased from 84% to 88%. So export is, of course, very important to Koenig & Bauer. It always -- it always was and it still is, and it's still working. I think that is the very good message. And you also see in the graph on the left-hand side that the North American share also increased again by a quarter-on-quarter basis.

So we had last year a lot of trouble within the United States, probably not only me, but all the exporters from Europe or from outside the U.S.A. due to the tariffs. What we see right now is that the situation is getting back to normal.

On the other hand, Germany is under pressure. You see this on the very well [Audio Gap] on the bottom line, you see a decrease from nearly 19% -- EUR 39 million down to EUR 31 million. With regards to the profitability, and our operating EBITDA, we see a decrease in -- after the first 3 months.

I will show you in a second a little bit more deeper insight into our segments because this is twofolded where the development arise from. You see in the bridge that our Special & New Technology segment improved its profitability by 4.1% (sic) [ EUR 4.1 million ] And on the other hand, the pressure within the market of Paper & Packaging as a consequence, the profitability decreased on a year-on-year comparison by EUR 8.4 million. That basically is the reason why we see even though we had a very good order intake and a slight increase in revenues, that's the reason why we see as a group a small minus with regards to operating EBITDA after the first 3 months.

But please keep in mind, the first quarter always is by far the weakest at Koenig & Bauer. It was the same situation as last year, only a little bit bigger minus this year. But in general, the seasonality is what it is, and it's still the seasonality also the known seasonality from last year. It's still the same in 2026. One comment to the nonoperating extraordinary items. They amounted to EUR 6.6 million for the closure of the operations at Albert-Frankenthal GmbH.

Of course, within the number of the operating EBITDA, this is adjusted. So you don't see the costs within these numbers. But to be here very transparent also with regards to the reported EBITDA, there is a nonoperating extraordinary items of EUR 6.6 million included.

Having a look at our long-term trend with regard to the last 12 months development. And even though Q1 in 2026 was weak, you still find there a positive trend with regards to profitability. Now with regards to last 12 months operating EBITDA, we still reach -- after the first quarter, we still reach a margin of 5.9%, and this is better than the last 2 years.

Cash flow. Also with regard to strong order intake, cash flow was negative. As usual -- as this is usually the case with regards to the beginning of the year and with regards to the development or the stronger expected revenues in the following quarters. So that's why we always need to increase our working capital position at the beginning of the year in order to make the realization of our revenue growth happen during the last 9 months of the year.

The equity ratio is still in line more or less with the year-on-year figure with 22.3%. Our net working capital ratio improved to 23.7%. This is for the classical machinery business, each and every ratio, which is below 25% is a good KPI. And even though the overall working capital position increased by around EUR 5 million, the ratio was below due to the higher revenues.

And our net financial position is now with minus EUR 171 million. It reflects the negative free cash flow from the first quarter. Having a look in our segments, and let us start with the Paper & Packaging segment. First of all, you also see there the increase in order intake by 12.4% after EUR 172 million order intake last year's quarter -- last year's quarter, it is now EUR 194 million, the increase by 12%. And also the order backlog is slightly higher than the order backlog compared to on a year-on-year basis.

The revenues decreased. It was a very weak and small cash flow, a small revenue in the first quarter 2026. This also is one of the reasons why the result is negative at first quarter with Paper & Packaging, next to the reason that there is a lot of dynamics in the market.

There's a lot of pressure in the market. Stephen mentioned the M&A Manroland insolvency. This was the #3 in Germany and also worldwide, probably #4 in the offset market. So that is a big player, which is disappearing from the market as it is announced by the solicitor.

And this is an example why this market is also -- it is under pressure. However, order intake is stable or not even stable, it's also increasing.

That's why we see that we feel now temporarily the pressure in the market, but we don't fear that this market will decrease in the future. Also, as Stephen Kimmich has told you the market analysis, it is expected to be stable on the long term.

And our results with regard to order intake and order backlog also is supporting this thesis. Special & New Technology is also a very nice development with regard to order intake, plus 40.6% compared to last year's quarter -- year-on-year quarter, and that is really a very good result because it is not only provided by the Banknote Solutions business, but also by MetalPrint and our digital and business unit.

So the Special & New Technology segment was always under pressure. And it was in the high-intensity care with us at management. And finally, we see positive results. Order intake is taking -- is increasing. Revenues increased by 24% and also the operating EBITDA increased tremendously by over EUR 12 million with regard to operating EBITDA.

So that is a fantastic development. And once again, not only supported by banknote business, but also by other business units within the S&T segment. So we feel very confident that this strong development and this operational turnaround will also help us through the year 2026, but also in the following years 2027, '28, '29. We still stick to the good old tradition to show you also details on our business unit, Digital & Web as part of the segment S&T. And first of all, you see there that the Digital & Web business unit could double its order intake compared to first quarter 2025.

So that's a very good result. The revenues have been more or less stable with only an increase by plus 1.6%. However, the increase in profitability was huge, and it was plus 88%. So nearly the operational breakeven was reached within the first quarter, and it shows really a very, very nice and a great increase in profitability.

And it also demonstrates that the measures taken in the past were the right ones. And finally, we also see the result. Current uncertainties, yes, it's a little bit of repetition of what we have said in the past, unfortunately. But however, we still see all the geopolitical escalations. We also feel the global trade impact.

And of course, this has operational consequences. However, with an export ratio of nearly 90% with a high -- with a good split of our operations throughout the whole globe, we feel prepared to also steer safely through this crisis or this ongoing crisis.

On the one hand -- on the other hand, we have a broad range of products, not only 1 segment, but 2 segments with different business units and different products that address different markets within different regionalities.

And this will help us in order to mitigate crisis in one or the other regions of the world. And that's why we also -- we also stick to our guidance. It remains what we have said for the year [ 2029 ]. We expect group revenues of EUR 1.3 billion. We expect an operating EBITDA of EUR 80 million as in the last year, and we keep up to have a high operating resilience with regards to a great order backlog of over EUR 1 billion.

Allow me to summarize the key takeaways of the first quarter 2026. First of all, Koenig & Bauer grew against the market trend, which is a very important proof point for us as management to see that our business model is working. And this was due to the growth in revenue, but even more important with regard to growth of order intake.

Secondly, strong order backlog. This is the anchor, and it is again over EUR 1 billion. It offers us planning certainties with regard how to use our internal operations. And last but not least, we saw -- we now see the turnaround. We see actually the turnaround within the S&T segment, and that also helps us to mitigate some pressures within other market segments that we are working in as well.

Thank you very much for your attention. This is the end of our presentation. On the following slide, you also see the current timetables -- of our financial calendar. But this also -- there is no news with it. The next big meeting is the General Meeting of Koenig & Bauer, the Annual General Meeting this June 17.

[Operator Instructions]

The first question comes from the line of Stefan Augustin from Warburg Research.

And first of all, congratulations to the Digital & Web performance and the reduction of the losses. I hope it's going to continue and be quite good. And coming to the first question is actually a bit on the broader situation. So you elaborated that there is Manroland insolvency that has put pricing under pressure.

Still, we have a very good order intake. So my question is a little bit, did you get opportunities from the insolvency of Manroland already? So were you able to, let's say, get on some orders that had been available due to their insolvency? And how do you look at the possibility, if I see that correctly, there is possibly a sale of the service business later in the year of Manroland. Is that -- would that something -- be something you could be interested in? How do you see the situation? That would be the first question.

I mean I think in general, Manroland, depending on the market study, had between 4% and 5% market share. They were the fourth largest, at least based on our market data between Heidelberger Druckmaschinen, Koenig & Bauer, Komori, and Manroland. Manroland was the fourth largest with, call it, around 5% market share. Considering that the offset business itself is not a growing market. It's -- overall, it's a slightly decreasing market.

We see it for ourselves as long-term stable. And part of the answer is that as Manroland disappears from the market, that market share has to be sorted out among the remaining players. And obviously, our expectations on our management team and our sales team is to take our fair share of that market share that is now open.

I'm 100% sure that Komori and Heidelberger Druckmaschinen have the exact same strategy to also capture as much of this market share as possible. It's too early to talk about expectations on that. Obviously, it is a chance for us, for our competitors to fill our plants a little bit better. And we expect that also to happen. But it's -- again, it's 5% of the total market share is now up for grabs, and it's much too early to talk about how that's going to play out.

Coming back here a little bit. If the pricing is so strongly under pressure in the offset market, as we can see also on the competitive side, still you have that good order intake. So how shall we look at the pricing quality in that order intake in the first quarter?

The idea was if you would have been able to capture some of the orders from Manroland, that would be an explanation. Let's bring that question a bit more to this point. How should we look at the quality in these orders? It's P&P.

So I think maybe I answer the first question -- part of that question, and I hand over to Alex to talk about the price quality question. I mean the Manroland obviously didn't happen until, I think, the second week of March. So it had no impact on order intake in Q1. And there was nothing that happened in Q1 that we would attribute to us taking order from Manroland. That's a clear answer from my side. I think to the price pressure, Alex Blum can discuss.

And also in addition, I mean, our sales teams are fighting against Manroland also in the months before and the years before, it was clear that Manroland was not extremely strong, and we always try to get as much clients from Manroland and shift to Koenig & Bauer, probably one of the reasons of the why they are now insolvent with the price pressures, we do not believe that the price pressure will remain for the full year 2026.

We also see that, yes, at the end of last year, prices were extremely under pressure. This was also especially true for the fourth quarter of last year. We also had a slow start in 2026, but it became better and better. And with regard to March, we see that prices are recovering. Hopefully, that trend remains the same. So that is the assumption that needs to be proven. But we have good reasons to believe that the prices will again stable on a decent level.

But prices in March is a good news. Another one I have is actually on Frankenthal. I hear in the back of my head that this was, let's say, mainly webfed business, at least in the past. What did you, in the end, finally produce there? And where is it shifted to? And will the -- will the EUR 6.6 million in charge we have at the EBITDA level, will that be a cash out later in the year? Or is that mainly noncash...

So I think we split that question to answer again among ourselves. I'll answer the first part and Alex can answer the second. So we produce in [indiscernible] rollers, Walzen in German. And the rollers are basically in all machines, sheet set and web machines for how to transport paper or transporting the substrate across rollers and through the machines.

So there's thousands and thousands of these produced every year for our various machines. It's with the exception of one type of -- the different types of rollers depending on the technical requirements, whether it's on the coating and various other technical requirements. But around 2/3 of these rollers, we would call commodities. And those have now been outsourced and we will be purchasing them from our supply base throughout the globe. And about 1/3 of them, which are more highly technical and less commoditized, that's open knowledge.

We are shifting that production to our component manufacturing facility in Wurzburg as just an on top additional volume for our facility there. So about 2/3 gone to outside suppliers and 1/3 to in-house production and that 1/3 is, again, the most technically demanding where it's difficult to purchase them in the free market.

With regard to cash effectiveness, yes, most of the EUR 6.6 million will be cash out, will be cash effective until end of the year.

And then I have one more left, which is on the coding business. Since you said you're going to develop ideas and strategic cooperation. Is there a possibility to think about solutions that in this cooperation, you would be able to monetize part of the value of coding as an idea, for example, you make a joint venture and in...

A clear answer, no. So we're no longer looking at equity participation in Koenig & Bauer Coding. That's -- it's -- our current plan is to remain 100% shareholder of the company and develop with arm's length strategic contractual partners throughout the globe, whether that's sales organizations or product development or suppliers or development projects. That's the big question.

But this is now a multiyear project. So we are now fully committed to the business in the years coming forward. And that was -- it was a clear result of this process, which is important to us. And to be honest, when you put a company like this up for sale to the market, you also learn a lot through the process through the feedback. We had strategic players looking in depth at the company and evaluating it and telling us where the strengths were and the weaknesses were.

So we learned a lot through the process as well. And we're happy, and I will be at the general assembly with the employees tomorrow morning at Koenig & Bauer Coding, and we're happy to keep them in the company. Again, the market dynamics are great. We would have also been happy with an M&A transaction at a fair market value. But again, it's a great business, great team, great products. And now we're committed to further developing it in the coming years as a 100% shareholder.

The next question comes from the line of Patrick Speck from Montega.

[Operator Instructions]

My first one is also on your coding business. I was wondering if -- I mean, you explained how you see the market potential, et cetera. I was wondering if you see the need for any additional investments by that, I mean, CapEx to take -- to get the business ready for these markets, new markets? Or are they already, yes, state-of-the-art?

No. I think it's certainly nothing that we could plan or you should plan or there's no -- absolutely no plans in that direction whatsoever. Koenig & Bauer Coding is a profitable business, generating free cash flow on its own. And our intention is to develop the company through its own strength and not with additional capital injections or additional major measures. We'll see what comes out of the development in the next couple of years, but it's certainly not part of any plan nor should you plan in any way.

That's why we also target strategic partnerships that also is limiting the need for all the investments.

Could you let us know what is the share of your order backlog that refers to coding?

Maybe for Landenberger, can take that -- Ms. Landenberger take that as a homework, but it's for just Koenig & Bauer Coding, it's -- I mean, it's less than -- less than 3%. It's low...

It's low because this is much more a serial production that we see with the coding business. And the lead times are -- or the production time and the lead times are much, much lower than within our own -- in our other businesses. So I don't expect this to have a very high influence in our order backlog.

And secondly, I mean, we know your seasonality is very back-end loaded. But I was wondering, I mean, you gave the comment that you saw the price pressure coming down a bit from March. I was wondering if you would be able to reach an EBIT on a breakeven level in Q2 already. Do you see that?

Honestly, I mean, with regard to EBITDA, we are very close to the breakeven. And we see improvements quarter-on-quarter, but kindly understand that we do not guide on the performance on each and every quarter.

But you see at least the improvement on a quarter-on-quarter level despite the new headwinds coming from the Iran war and pressure in supply chains, et cetera.

That's at least our management goal to be better and better each and every quarter and to improve and also to stabilize the situation. And you can also see this having a look at our LTM performance. That basically shows that with regard to the first quarter 2025, the first quarter 2026 is better. So the trend is showing definitely in the right direction, even though the first quarter 2026 had some, let's say, some special developments.

And lastly, will there be any more extraordinary effects from the closure of Frankenthal in Q2 or anything else extraordinary despite...

Yes, but they are much, much lower than the EUR 6.6 million that you have seen in the first quarter. There will be some more less, but yes, much lower than the EUR 6.6...

[Operator Instructions]

We now have a question from the line of Johannes Ries from Apus Capital GMBH.

Maybe some more words about the recovery in the -- for the ROTAjet market. What customers you have seen the recovery from what region? What have been the driver? And what is maybe a special effect? Or do you expect this could go on in the coming quarters?

I think your question refers to Digital & Web or overall.

Overall, yes, definitely.

Not just, ROTAjet.

ROTAjet is highlighted, yes.

I mean I think it's the Spotlight program, which you're familiar with, really addressed across the board at Digital & Web. All of our structural costs employee count, product costs, product strategies. So it's not one thing. It's across the board. And it's not -- I think that part of your question is very important. It's not one-off quick wins that don't recur.

This is stable cost reduction and margin improvement. I think you can expect EUR 6.7 million -- EUR 6 million improvement every quarter, but the general trend is heading in the right direction. We also had good orders in Q1, so also sold another.

[indiscernible] question on the order intake side.

Yes. So order intake in Q1, as mentioned on one of the slides, included also an additional RotaJET, which is very important. Also, we see our order backlog, the HP programs, which are digital printing, which is strong. And the customer technology days we did in Wurzburg a few weeks ago was focused only on Digital & Web technology. So the Flexo roll printers and the RotaJET Web digital printer.

And again, 150 guests at this kind of event is a very large presence, and we left that those days with a strong pipeline. So we have a completely new management across the board in the Digital & Web segment from sales, to engineering, to operations, to the CEO of the business unit. We have supported it strongly out of our holding and our strategy groups to really turn it around. And that the new management team has now been in place for, I guess, just over a year, the CEO for now 2 years. And these things take time, and we're finally seeing it happen, and we have to keep the momentum.

That was mainly the question of maybe the demand or maybe the order intake should stay at a higher level even going forward, looking at the pipeline, what you have done cost side, but it was also a revenue question and a problem in the past. And if that not only in one quarter and maybe even in the future could get better. That was the question, okay.

So we can -- absolutely, that is the positive trend, not just on sales and profit, the positive trend on order intake is one of the key focuses. We need volume. And again, the pipeline and the reaction from the customers gives an indication that we're heading in the right direction.

Second question, on your digital activities, you have been quite positive, say maybe in the positive area. Maybe you can update a little bit what happened in the first month of the year, how you maybe develop further this business?

So Kyana is fully -- I mean, it's on track in terms of -- since the launch, we're signing up customers every month, every quarter, more customers go online for Kyana business. That's still a developing business since we carved it out about a year ago. The Vision Protection, we're seeing also -- you've seen quite a few press releases the last several months and quarters that the first customers are signing up for it and in the program.

Auraveo is ongoing, but I think there's nothing new to talk about there today. Overall, there's several digital projects between Kyana and Vision Protection and Auraveo, and they're moving forward. And more to come, we'll keep you informed.

Super. And I believe nothing to say on the Volkswagen business like you said some weeks ago with the full year report...

Also there, the project continues. That's the most important message, and we continue to repeat it. The project is ongoing. The cooperation with Volkswagen is ongoing, and that's the news we have to publish. And we'll -- also there, we'll keep you updated when there's anything new to talk about.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Dr. Stephen Kimmich for any closing remarks.

So I'll keep it short. Thank you very much for joining. And I think Q1 showed in a lot of ways, we're heading in the right direction despite the difficulties in the market. A lot of things we've talked about with you in the last 1, 2 years are starting to show up in our figures, which is important to us here. And I hope you were able to get some insights. And Q1 is always seasonally our weakest quarter or has been in the last decade, and we're looking forward to publishing our Q2, Q3 and Q4 results in the coming quarters and to show you that we are remaining on track. So thank you very much for joining and talk to you next time.

Good afternoon, and welcome to today's conference call. Thank you for joining. And as just announced, we will, of course, walk you through our year-end results throughout the course of today's presentation.

I'm here together with CFO and my colleague, Dr. Alexander Blum. And I will start as usual and give a brief overview of what is happening at Koenig & Bauer, some of the highlights and what we're working on, and set the frame for what happened in 2025 and what we expect in 2026. And I'll hand over to Alex for walking you through the slides and the figures in more detail.

So we announced already a few weeks ago with our preliminary results that we're quite proud and happy to announce that we met our forecast for the full year the way we had promised the capital markets already at the beginning of 2025 when we first announced our guidance. We were able to close the year despite all of the surprises and changes and uncertainties and hurdles we had along the way. We're happy to again confirm with the final numbers that we met our original guidance within the original range and closed the year out positively.

I think more important under point two is that we not only achieved our EBIT corridor that we originally guided for; we were able to close out again with a very, very strong Q4. We closed the year out with a positive free cash flow, and Alex will walk you through that in a few minutes. But considering where we were at the end of September, this is a great result in Q4, and we're able to announce that for the full year we generated positive cash flow.

I think the other good news is our continuing high level of order backlog and good, solid order intake, not only in Q4, but as I'm sitting here on March 26 of -- towards the end of Q1, we can already today confirm that we will publish Q1 order intake higher than Q1 last year. So year-on-year, we're expecting a stronger Q1 order intake, which I think is an important message to all of our stakeholders, our employees, our customers, but of course, also our shareholders, that order intake in Q1 had a slight uptick versus prior year, and that gives us a strong foundation moving forward.

Of course, the year is still very uncertain with the events that happened now at the end of February in the Middle East. The overall economic situation remains challenging. But we will, of course, publish our guidance -- are publishing our guidance today for the full year again and confirming that we expect a stable business performance in 2026 on both turnover and on EBITDA. And there's nothing in the first 3 months that make us change our opinion on that. The order intake confirms that we're on the right track. And again, going forward, we'll see what other surprises the world has in store for us.

Under point three, I think it's important to walk you through a little bit. We -- in challenging times, it is important to readjust priorities and take a look at strategy and take a look at what our focus areas are on. So we started announcing just last week our new IMPACT strategy that is the theme around our annual report, and we'll be talking about this for the years to come, about what IMPACT is and what it means for us.

So on the next page, just really why something like IMPACT? Why are we announcing a new strategy? And at the end of the day, it is about a strategic realignment. It is about recognizing that there are new market realities out there, that the world is continuously volatile and any strategy that expects that to change, we're convinced, is wrong. The world will remain volatile. And despite volatile times, we must be able to continue to develop our business, improve our business, shift to take advantage of new opportunities, despite all of the geopolitical or other tensions around us.

And that's what we've been thinking about for the last few months, is how can we frame it? How can we talk about a new strategy, not just to you, our shareholders and capital market stakeholders, but also for our employees, for our -- for other stakeholders, for our customers.

And we settled on IMPACT. And IMPACT, I think just the word itself, it's a strong word. At the end of the day, it's about making an impact for our business, for our bottom line, for our customers and for each individual Koenig & Bauer employee.

It's 6 pillars, that I'll talk about on the next page. And these 6 pillars are going to be the way we frame our initiatives, our focus areas and our priorities in the years to come.

So starting with intelligence. Of course, it's -- everybody is talking about it. We know that AI is going to have a massive impact on society, on business, on our industry and on Koenig & Bauer. And we have started this AI empower program last year, we have great technology, and we will be pushing as a core part of our strategy, not just for establishing artificial intelligence internal at the individual workplace at our employees to improve efficiency, but more importantly, how can we leverage artificial intelligence in our products, in our software for automation and for our customers. So it's something we'll be talking about in the years to come.

Also a very clear message, it's about go-to-market. We have a fantastic portfolio. We've spent, and most of you on the call know it, we have spent huge amounts of time, effort and money the last years to expand our portfolio, to improve on our strategy and to address new markets. And now it's a focus on scaling those products that are now finished and ready to go. At the same time, we have to go into the markets where they're growing. We know that Europe continues to remain weak. We know that the growth is happening in Asia, in Latin America and India. And we have to -- we will focus and are focusing more on how to better address those markets, including reorganizations and strengthening our local teams.

It's, of course, about people, not just us. It's also about our customers. So how can we not only invest in our global teams and strengthen our local organizations, but also help our customers to be better trained, to be better equipped to handle the challenges that they face?

At the top right, adaptability. At the end of the day, that's about resilience. There's no R in impact. But at the end of the day, what is behind adaptability? It's about attacking these volatile times by increasing our resilience or adaptability. That means, on the one hand, focusing even more on structural cost and structural cost flexibility, but also on strengthening our recurring revenue, our service business, our consumables business, software, recurring revenue to lead us better through tough times.

The fifth pillar is competitiveness. We know that a company like ours with a strong footprint in Germany, in Europe has its weaknesses in its structural organization, in its footprint. And it's an overarching point for German industry, what can we do to improve our competitiveness on the world stage? It's not only about leaner process; it's about really optimizing our manufacturing costs and our supply chain. And only by doing this we would be able to win in these growth markets that are strongly focused on mid-tech. So also here, you'll be hearing a lot about our initiatives to improve our competitiveness in the coming quarters and years.

And finally, it's about technology. Technology is the core of our DNA. We are and will and want to remain technological leaders in all of our business areas. But this means going beyond classical CapEx, machine building. We have to embrace new workflow and software solutions. We have to continue pushing in digital printing to remain at the forefront of industrial digital print, and we have to focus on the automation trends and robotic trends that will change our industry.

So IMPACT is a strategic framework that, again, we will be talking about a lot in the coming years. Because it's strategy, it's a multiyear program. It's not just about short term, next quarter. It's about how we expect to build and maintain Koenig & Bauer fit for the future. And that's something we're announcing to you as of today.

And to make that a little bit more easy to understand, at the end, it's not just about 6 pillars. It's about coordinating our many, many initiatives within these 6 pillars. And I brought 5 examples with me today so you can better understand what we really mean by these various fields that we're focusing on.

Top left, we announced in January that we'll be closing our manufacturing facility out of Frankenthal on May 31, 2026. So this is a plant -- it's a traditional plant, over 100 years, in the printing industry. It's been a subject of restructuring rounds in the past and the decision to ultimately close it. It's 75 employees.

It's not a huge plant. But at the end, it does generate structural cost savings. It does generate efficiency in the group. We'll be shifting some of that work to our plant in Wuerzburg. Some will be outsourced into lower-cost countries. And at the end of the day, it's a clear business case that we can reduce AFT. This is all about resilience, this idea of adaptability, reducing our structural costs and making ourselves leaner and with less of a footprint than we have had in the past.

Number two, Digital 1.0. This is about go-to-market. We have the broadest digital printing portfolio for industrial applications of any competitor out there. Some of our competitors, for example, Landa, have gone into insolvency. So we're alone in some of these markets. We have the technology.

And 2 examples we can also announce today, we just closed an order on an additional RotaJET in Q1 of this year. So these are big programs, large programs, 2-digit million euro contract orders for the RotaJET that we successfully closed again in Q1. The VariJET, which we've been developing together with our joint venture partner, Durst, over the last few years, we're now installing the fourth machine. This is the first post-beta phase machine that's now being installed as we speak at a major customer in an Eastern European country.

So we're moving forward with scaling up our new products, scaling up our digital printing. And this is clearly part of our go-to-market: sell the portfolio that we have and ramp it up.

Third, AI Empower initiative. We launched last year a massive program to train up over 500 employees at Koenig & Bauer. We have over 30% use rate of AI on a regular basis at the company. We have great technological partner in Google and a group-wide rollout of artificial intelligence under that intelligence pillar in our strategy.

And on the bottom right, you see technology. It's about embracing software, embracing new ways of doing business. We announced our Vision and Protection product at the Capital Market Day in August of last year, and it's ramping up. We've now started to certify our first customers. They're paying for a certification so that they can then be certified to their customers to offer protection technologies, authentication technologies into the packaging market for various applications.

And the market is accepting it. We've had great blue-chip customers working with us over the last few months to get certified, to validate the business model. And we see a huge demand from Asia, from South America, from India, for example, for protecting pharmaceutical packaging, protecting high-end packaging. So many different applications. And it's another good example of our pillar, technology, and how to embrace software going forward.

And the fifth example I brought with me is the people. It's not just about training our employees or training our customers. It's also about strengthening our local organizations. We spent a lot of time, and I personally spent a lot of time, in the last 3, 4 months of last year, visiting China, visiting India multiple times, visiting Middle East multiple times, to talk about what are our local strategies. We know we have the right products coming out of our facilities in Germany, but how to bring them into the markets.

And I think Middle East is a great example today. We need a strong local presence in the Middle East for times where we're unable to send our technicians from Germany to the Middle East. So we need stronger partners in the various local markets. We have them already, but strengthening these relationships, becoming more resilient for these volatile times is a big part of our strategic framework going forward.

So all these 6 pillars, they interchange, they overlap, one feeds the other. And I don't want to overdo it today that this is the big number one topic, but I think it's important that we have the strategic framework, that we align not just ourselves, but our employees, our teams and our customers for the challenges going forward. And I think with this framework, we have the right way to talk about it, the right way to structure it, and it's the way we'll be talking to you going forward.

So that was a brief introduction. And then I would hand over to the CFO, my Board colleague, Dr. Alexander Blum, who will walk you through the rest of the figures. Thank you.

Thank you very much, Stephen, and very much welcome and good day from my side as well.

The year 2025 was also not only marked that we achieved our targets, but also by very important events to Koenig & Bauer, and it is the year, the 40th anniversary of our stock market listing, which we celebrated in August 2025. And we did our Capital Markets Day on the same day in connection with this celebration, and we had a wonderful event at the German Stock Exchange at Frankfurt.

With regard to our numbers, in 2025, we saw an order intake of over EUR 1.2 billion. This was expectedly -- we saw there a normalization effect compared to last year, the year 2024. In 2024, we had a very strong effect with regard to the fair, Drupa, which is, of course, for offset printing, an important -- very important trade fair. But also with regard to the banknote business, there we saw some exceptional high order entries from the Federal Reserve Bank out of the United States. Having in mind these 2 effects, we see a natural decrease compared to 2025 -- 2024. But with regard to the overall level, we are very happy that the order intake 2025 was on a very solid level.

This also translates into an order backlog of over EUR 970 million. Again, it is a little lower than 2024. But having said before, these 2 exceptional events also influenced positively the order backlog 2024, but having in mind that an order backlog still close to EUR 1 billion is not a normal situation for Koenig & Bauer compared to a few years ago.

With regard to revenue, we increased slightly our revenues due to promising developments in the segment of Paper & Packaging as well as in the segment of Special & New Technologies. I will show you, present you the numbers later a little bit more in detail with regard to our segments. But we also saw that Koenig & Bauer was able to grow the business again in 2025.

On this slide, you see our regional split of our revenue sales. And you'll also see that we had an increase of over 30% in our Asia Pacific region. And this is a very, very strong growth momentum for us as these markets performed very nicely in the last year. And also, we strongly believe that they will perform even better in the future. And therefore, it was for Koenig & Bauer a successful step in 2025 to increase our market share, our market position, demonstrated by an increase in our revenues.

The operational performance increased significantly due to efficiency improvements, due to some -- the effects out of the old program, Spotlight, but also due to positive volume effects. And we had a significant lower amount of nonoperating extra items in 2025. So our results also normalized quite a lot in 2025 compared to 2024.

The overall profitability steadily improved over the last 2 years. And what you find on this slide is the LTM EBITDA, operating EBITDA, which reached a level of 6.1 million -- of 6.1%, excuse me. And it shows the increase compared to the last to the last 2 years. And it also demonstrates that the work that Koenig & Bauer did in the last years with regard to improvements of efficiency is paying out.

This slide just demonstrates we met what we have promised. We met our targets. We kept what we have promised. And we met the guidance that we gave to the capital markets.

Our free cash flow position also was positive in 2025 due to a very strong and outstanding final quarter last year. It clearly showed that, again, the seasonality, unfortunately, is quite strong in our business model, and we are very eager to level it up a little bit and clean it up. But it is, unfortunately, due to the dynamics of our business, not that easy. However, it is a very positive result that, after we had a cash-intensive first half-year of 2025, that we still reached and managed -- that we successfully managed a positive year-end closing with a positive cash flow of over EUR 7 million.

This also, these developments with regard to profitability and cash flow, also improved our balance sheet. The equity ratio improved to 24%. Our net working capital position decreased to EUR 281 million, which is a ratio of lower than 22% of -- compared to our revenues. This also is a positive improvement compared to last year. And our net financial position slightly improved by slightly -- by close to EUR 4 million.

The Paper/Packaging segment, you find on this slide, and the overall dynamic of the market shows that we have a slight increase in top line, that we have slight decrease in top line by -- excuse me, that we have a slight decrease in the order entry level of minus 3.9% due to especially the strong effects in 2024 with regard to Drupa fair, but also due to the geographic challenges that we faced in 2025, especially with regard to our U.S. markets. However, revenues slightly increased by 1% and EBIT improved significantly up to EUR 46.2 million within the Paper & Packaging segment.

The situation in our Special & New Technologies segment was nearly the same, only that the order intake situation was more challenging in 2025 due to the big order intake in the banknote business in the year 2024. That's why we find there a decrease in order entry by minus 19.7%. However, we grew the business due to the out -- to the very high order backlog or the high backlog that we reached, and we are now delivering the machines and working on the open orders. And we were able to improve the profitability of this segment significantly due to all the positive effects by program Spotlight, which focused especially on the S&T segment, with special regards to the digital and web-fed business. The digital and web-fed segments or business units you'll find on this page, and there you especially see the challenging situation with regard to order entry.

The flexo business, developed quite good in last year. However, we saw a high demand restraint in the capital-intensive web digital printing machines. And this is especially the HP business on the one hand and, on the other hand, the RotaJET machine business, which is our own machine. These machines require higher capital investments. And due to the shift in our markets due to geographical challenges, this segment was especially hit by these developments with lower order intake than expected.

The revenue decreased by minus 15%. But again, the profitability, even with the lower revenues and lower order entry, was able to -- we were able to increase it significantly and to improve it significantly by over 45%. Looking at today's market environment and situation, we unfortunately see -- and of course, that's not new to you at all, and this is also true for a lot of other companies, but we face a lot of -- still a lot of uncertainties with regards to U.S. trade conflicts or the new geographical crises and risks that arose beginning of this year. So it means the situation is not yet stable. And we at Koenig & Bauer expect to have again a challenging year with regards to the overall economic and geographical situation, which we need to tackle in 2026. However, we feel very comfortable to keep our business performance stable even though the geopolitical crises are there and even though the environment is quite volatile.

We also announced, beginning of the year, that we shifted our guidance from EBIT to EBITDA, of course, both operating KPIs, because we strongly believe that this is a better KPI to, first of all, show the comparability with our peer group on the market. On the other hand, it is much more appropriate to have a link to the operational cash generation and it is also something which we see with regards to the coming IFRS 18 new accounting standard. So from our perspective, this -- today was the right time to change the guidance principle from operating EBIT to EBITDA.

With regard to the guidance for 2026, we say that our revenues are expected to remain stable and to end up at the same level as last year's revenues of around EUR 1.3 billion. And also our operating EBITDA is expected to remain stable at a level of around EUR 80 million.

With regard to our 2 segments, we expect that Paper/Packaging segment remains more or less stable. However, we are facing there a slightly lower profitability due to intense competition and due to geographical situations at the markets. And on the other hand, with regard to our Special & New Technologies segment, we expect an increase in revenues and also an increase in our profitability, which will help us to stabilize our business and also to shift our revenues and our business more to new technologies, which you are quite familiar with and which you also find on this page on the very right hand, for example, Vision and Protect or the Kyana.

So as key takeaways, we want to emphasize that we further successfully improved our profitability in 2025, which was for Koenig & Bauer a very important step forward and an important goal to reach. We also have a very solid order backlog for 2026 with close to EUR 1 billion in sales. And we also expect that the order intake in the first quarter of this year is higher than the order intake in the first quarter of last year.

So these 2 aspects show -- demonstrate to us that we will be able, even due to all the crises and uncertainties, to remain our business on a stable level and a solid basis, on a stable level, with a stable performance compared to the performance -- the financial performance of 2025. And we are very happy and eager to further successfully develop, especially our Special & New Technologies segment with the banknote business and the new technologies.

This is the end of our presentation and we are very happy now to step into the Q&A and answer all of your questions.

[Operator Instructions] And the first question comes from Patrick Speck from Montega AG.

My first question is on your guidance. I mean you're guiding for a stable business performance in this year and again an EBITDA of EUR 80 million. Is it fair to assume then that your net result should be slightly negative again as it was last year?

Thank you for your question. No, we expect that our earnings this year will be positive. Our earnings before taxes in 2025 have already been positive. And only because to a very high tax result, negative tax result, our earnings became negative in 2025. But this tax result was extremely influenced by the deferred tax assets, which we needed to a certain degree to revaluate them. And they influenced the tax result by minus EUR 10 million negatively, and we don't expect this effect to happen again.

And if you expect a positive result then, should we also expect that you will be able to pay a dividend this year? I mean it's a bit early, I know, but most analysts, or the consensus, expects it. And I think one of your comments in one of the former earnings calls was that you are targeting for a dividend. So what conditions must be met from your point of view?

According to the dividend policy that we also published, we need to -- we at Koenig & Bauer want, first of all, to achieve a minimum earnings level before we pay dividends. And we very likely in this year, this situation will still be a little bit too early. We are happy to show that we are on the right track, and our goal is to show a positive net income in 2026. But maybe 1 year too early with regard to the payment of dividends to our shareholders.

Yes. Understood. Another question on your order backlog. Could you let us know to what extent is your strong order backlog protected by price escalation clause?

So I think first major answer is that, I mean, all of our contracts, I mean, allow customers to cancel, but we have received no cancellations. Also since the escalation of the war in the Middle East, we've had no cancellations coming from that region. So we don't see a problem there.

Pricing since COVID times, from the time of 2022 when we had the high inflation rates, that we protect ourselves on that front for sudden shifts and sudden changes. That's our normal course of business, and we feel quite comfortable that we have that under control. And yes, I think -- I hope that answers your question.

Yes, fair enough. And lastly, could you give any updates on your project with PowerCo?

It's ongoing. That's the best update I can give you, and it's a good update. There's nothing new to publish. Be assured, we will publish when we have news. But I think the main message is, and that's positive, it is absolutely ongoing with the full support of our team and Volkswagen. And it's a joint development project with very high management attention.

And it's also a project which takes quite a while, so that we are not yet able to publish any positive news. It's not un-normal or unexpected. It is still in course of the normal project duration that we expected.

Ladies and gentlemen, this was the last question. I would now like to turn the conference back over to Dr. Stephen Kimmich for any closing remarks. I'm sorry, we just got one question coming in. So the next question comes from Johannes Ries from Apus Capital GmbH.

Yes. I thought there would be more questions. Maybe on the IMPACT program. How much this program is also reducing your cost base? Or is it more a different target you're following with the project, if I read it right?

Yes. We call this a strategic framework. It's not a project. It's just a way to align ourselves and align our projects to ensure that we have a common direction for the entire group and that we're focusing on the right things. So there's no price tag or cost we put on it. At the end, it's all in our ordinary course of business of how we manage our various initiatives, various projects throughout the world. But as mentioned, as we talk about individual projects, for example, the closing of Albert-Frankenthal, or other future initiatives, of course, we'll talk about price tags or sales for various initiatives within that framework.

But at the moment, we're simply announcing the new framework and the new direction and the new priorities. And there's, of course, going to be more to come.

But within the framework, I think we can also -- clearly, what we have shown today is that there are strategic aspects and renewals included as well as, of course, efficiency improvement programs with regard to cost base or to machine costs.

Yes. And structural costs.

And structural costs.

On the regional focus, you mentioned Asia was strong last year and you expect it stays and get even stronger in the future. You also invest in people there. What could be maybe the share of revenue of Asia in 2 or 3 years or so? Is that one of the main drivers you're still targeting to increase your revenues in 4, 5 years to EUR 1.5 billion?

Yes, absolutely. It's a mixture of geographic growth and our new product portfolio. But clearly, the market data is clear that Asia Pacific and Latin America are growing faster than the rest of the world. So we want to grow with it.

Your direct business in Middle East, how big was it? Is it -- which maybe now is directly affected by the Iran war?

I think we'll have to publish -- we've never published that separately. It's not a 3-digit million figure. It's significantly below that. But it's significant enough that it's important for us, and the growth is important for us. But it's not a -- it's within this EUR 109 million on Page 12. The EUR 109 million: Africa, Latin America, Middle East, is within that figure, but we haven't broken it down past that.

On the new businesses, is it -- if I read it right, Vision and Protection has started stronger than Kyana?

I wouldn't say stronger than. We're launching them both at the same time. But we've given a lot of updates on Kyana in the past. We just picked Vision and Protection as an example, but it's certainly not an exclusive example.

Okay. But Kyana is also developing like we expected?

Yes, we're signing customers every quarter. I mean customers are signing up to Kyana as we speak.

AURAVEO is also something which is, yes, show customer interest and signed maybe some orders or some contracts?

With regard to AURAVEO, there are a lot of test cases running right now with quite prominent brands. Until now, we cannot disclose any of these discussions that we have. But we are quite confident that with -- during the course of 2026, there will be positive news from AURAVEO.

And last question, any update on your maybe discussions, maybe talks with Mr. Leibinger?

I think that's something you'll have to ask him.

Okay. Nothing new on this front. Okay, thanks a lot.

So ladies and gentlemen, this was now the last question. So I would like to turn the conference back over to Dr. Stephen Kimmich for any closing remarks.

Okay. So thank you very much for your interest and your attention and for taking the time to listen to us. For me, it was the first time publishing annual results as a CEO in my new role. And if we can bring one thing across, I think it's not just me, it's with Dr. Blum, with our new management team around us, Koenig & Bauer is heading in the right direction. I hope we're able to convince you of that, in challenging times.

And we're looking forward to talking to you again in a few weeks already about our Q1 results, where we're already confident we're going to show you great order intake. And we'll stay in touch. So thank you very much, and enjoy the rest of your week. Bye-bye.

Good morning, good afternoon. Thank you for joining today's call. I'm very happy to welcome you. And I'm very happy to start off by simply saying that we're going to be presenting to you the strongest Q3 operational performance that Koenig & Bauer has had in the last 7 years. So our strongest Q3 since 2018, showing that we're clearly well on our way to our operational turnaround in terms of profitability. And therefore, we'll also confirm our guidance today for the full year. If we look at Koenig & Bauer at a glance, as usual, on the first page of the presentation that you can also see in the webcast, there's a lot going on.

On the market side, of course, I mean, everybody reads the newspaper and knows that the global markets are difficult throughout the world in every corner of the globe, but we've done a lot. We had a lot of activities in Q3, trying to develop our alternative markets, strategic market development I will talk about in India and Middle East, also very active on the market and making Koenig & Bauer as visual as possible to our customers at various trade shows throughout the world and also marketing and launching new products, particularly on the software side, which I'll also talk a little bit about today.

But I think the main message and the focus in these calls is, of course, the operating performance in the quarter. And as you see under point 3, and as mentioned, our Q3 operating EBIT improved significantly. After the first 9 months, we're now up EUR 37.6 million compared to the prior year and at plus EUR 6.4 million after 9 months. That compared to last year, where at the same time, we were presenting figures with minus EUR 31.2 million.

So operationally, as mentioned, driven by our Spotlight program and the strong cost savings programs that we've done in the last 18 months, a very strong improvement. Revenue, order intake and order backlog, my colleague, Alexander Blum, will be talking about more in detail. Also here, a strong revenue, strong turnover compared to prior year.

Order intake slightly down, but still sitting, and that's perhaps the next major message, sitting on a very high and stable order backlog at the group. Our order backlog of over EUR 1.04 billion at a historically high level in a very difficult market times, but we're quite comfortable now moving into the next quarter on meeting our guidance and bringing us into 2026.

If we look at the two segments on Paper & Packaging, we'll report positive revenue development and a significant operational earnings improvement and a strong Q3. And also there, strong order intake, just very slightly down year-on-year, still well over EUR 500 million or above around EUR 500 million year-to-date. In our segment, S&T, also here, a very strong earnings improvement. S&T, to remind you, was the focus of the Spotlight program, and you can see it in the earnings that there they're hitting the bottom line and helping us improve profitability significantly.

And please also remember when we look at the order intake in that segment that 2024 was buoyed by a very strong order intake from our Banknote business. If we correct for that, also here only a slight reduction in order intake year-on-year. So the main message is operationally, we're clearly on track. Our programs that we've been talking about the last quarters have worked. They're hitting the bottom line. We've become more profitable and we'll end the year profitably. And that's been our major task the last 4 to 6 quarters.

And on the order intake side, despite the challenging times, we were still able to book orders in Q3 and maintain an order backlog at a very healthy level above EUR 1 billion. So if we move into more detail on Page 3. Also here, just repeating some of the points I made in the introduction, Spotlight delivered. We were talking about savings of EUR 40 million to EUR 50 million compared to 2023, and we've delivered. We're now looking at a Q3 EBIT that's the best we've had since 2018 at EUR 15.4 million, a very strong 3 months.

And this is what we needed for profitability improvements for stabilizing the business. Q3 after 9 months improved now from this minus EUR 31.2 million to plus EUR 6.4 million. So the trend we had promised you and didn't quite show you in Q1, but started to show you in Q2. We made a huge step forward in Q3 in our operational performance driven by Spotlight. At the bottom of the slide, you see the order backlog development. And I know there's already first comments out there about order backlog -- order intake being down, but I'd like to really focus on this page.

Our order backlog of EUR 1.036 billion is historically high. Even having a book-to-bill in Q3 slightly under EUR 1 billion compared this to where were we in Q3 '23, Q3 '18, '19, '20, our order backlog moving into the rest of the year, moving into next year is still quite healthy. We're able to book orders, not at the same level that we booked revenue in Q3, but I just, again, would like to point out, we do have a solid basis for the final quarter and beyond, and our order backlog is strong compared to where we used to be.

On Page 4, a little bit more detail on order intake for the single quarter. After 9 months, we're at EUR 857 million. Also here, Alex Blum will talk more in detail. At a first glance, this is 13.3% down. But I remind you, last year was driven by a single one-off large Banknote order.

If we correct both years for the stochastic Banknote, then we're talking about order backlog more in the lines of -- or sorry, order intake more in the lines of minus 3% year-on-year, which considering all of the peer group studies that you know from perhaps the German manufacturing associations or various other publications and order intake decline on our core business without considering banknote of only minus 3%, I think, is a quite good result.

We're pushing our products into the market in this difficult times at a level that we're still able to report these strong order backlogs. If we look at the two segments, Sheetfed at -- I am sorry, the Paper & Packaging Sheetfed Systems at EUR 150 million, slightly down versus prior year. The biggest drop you see here in the S&T segment, where Banknote is also located. Tariffs are out there. I mean I've spent a lot of time traveling in the last 6 months. I just came back to the United States last year.

The tariffs, it's a reality. It affects our order intake in the United States, and it does have an impact in the way countries throughout the world are considering their investments throughout the world. We're managing it. We are selling machines in the United States, but the trade policy tensions are something we simply have to be aware of and figure out how to manage it. How are we doing that? We're putting a lot of focus on alternative markets, particularly today, I will highlight India and the Middle East.

We're strengthening our presence at trade shows throughout the globe, and we're developing these new products and launching these new products so that we can generate revenue from new sources. If I go into that in more detail on Page 5 --two, I think, main messages. Koenig & Bauer will close 2025 with the strongest year in India ever, and we will close 2025 with the strongest year in the Middle East ever. We spent a lot of time this year focusing on these markets. Also me personally visiting both countries and extended visits because we see them being alternative growth sources for Koenig & Bauer in these new markets.

We see in India, we expect the packaging market to grow by double digits, over 10% in the UAE between 5% and 6%. These are markets we have to penetrate and have to be successful. We've been present in these markets since the 1970s, 1980s. We have decades-long partnerships with our agents there, with our customers there. And now it's about just increasing our presence and increasing our sales to these alternative markets.

And I think we're doing quite a good job. These are just two examples. Of course, we have activities ongoing in Latin America, in China, in Asia as well. The main message is at a macro level, we clearly see the European market still being weak. We see the United States being weak. And we -- but we're a global company with presence throughout the world, and we spend a lot of energy with our sales teams, with our business units, figuring out how to address these markets.

On Page 6, you see the other big push. It's not just about getting sales teams and traveling and visiting customers. It's about being present in the markets. We had five major trade shows in Q3 that we were present at in Bangkok, in Dusseldorf, in Nuremberg and Rome and another time the K 2025 is similar -- it's one of the largest trade shows in the world for flexible packaging, where we also had a major booth.

So we're present in the markets. We're present with our customers and these various trade shows are different parts of our business from flexible packaging to metal printing to corrugated board to our traditional sheetfed offset packaging shows. And that's the initiative. I think the main message we're trying to bring is the two singular biggest tasks the last months have been managing our profitability improvements and managing our order intake and the profitability improvements you can clearly see, Spotlight worked.

And the order intake, even it is slightly down year-on-year, still been able to maintain this large order backlog. And Alex Blum will give you some more focus on what that means in our financials. And of course, the third big topic of our guidance, et cetera. So on Page 7, the last highlight for me, and then I hand over. We announced at our Capital Markets Day and throughout the summer, two new product lines on the software side. On the left, you see the launch of our protected at print initiative, which is designed for product protection, so brand security.

And this is a very interesting product because the know-how comes from our Banknote business in developing secure banknotes and counterfeit secure banknotes, and we develop software solutions for how you can use an app, an iPhone to verify that a banknote is real based on the security features embedded in it. This is a very specific know-how to our industry, a very specific know-how to Koenig & Bauer. And I think the update today is that we launched these just really a matter of -- just a couple of months ago in around August, September, we launched these products.

And on the vision and protection side for protected at print, we have already successully acquired not just the first customers on the brand side, but also one of the strategies here is to find packaging manufacturers as multiplicators for our technology. And we have the two , Schwarz Druck and EURPACK that have been -- have now been certified by us as being able to offer to their customers our solution, protected at print.

And this has all happened really just within a matter of weeks after launching the product. On the right, you see our second software with AURAVEO. This is a different type of solution in our Koenig & Bauer Kyana spin-off. It's focusing more on connected packaging and how to embed as a digital tool, a way to connect packaging to the consumer.

Also here through not just apps, it's about entire technology stack supported by Google and how we can use, for example, also the new barcode laws in Europe that are being relaunched requiring new identifications on individual packaging. How can we leverage that at the part of the value chain that we support and we, I would say, even own in the pre-press workflow solutions in our presses of what has to be printed, how can we use that step to embed information and embed more value into the package itself or into the printed material itself.

So very interesting times. Both of these products were just recently launched just a matter of weeks ago. We're not to the point, of course, where we're going to talk about sales and revenue and EBIT. But I think the main message, what we want to say is we're working on a lot of different areas in our traditional business throughout the globe in new products and in innovative products in order to secure the future of Koenig & Bauer going forward.

So that was it for me on the Koenig & Bauer at a glance and a few of the business highlights in the quarter. And that being said, I would hand over to my CFO colleague, Alex Blum, to walk you through the rest of the slides and the financials.

Thank you very much, Stephen. Having a look at our revenues first, we were able to increase our revenues in the first 9 months of this year by 5% and if you have a look at the very left-hand quadrant, we have nearly at the same level still in order intake. So the book-to-bill ratio at Koenig & Bauer up to date -- year-to-date is very close to 1.0.

And keep in mind, as Stephen Kimmich already said, we have a very high order backlog with over EUR 1 billion. You can find this on the very right-hand side. And here you have a closer look to the line diagram below, you find there the historic order backlog that Koenig & Bauer had.

And there you will see that we are still on a very, very high and decent level up to now. On the next page, you have the -- you have a closer look at our profitability. And for a better reading and for a like-for-like comparison, we are not only showing to you the reported EBIT according to IFRS, which you will find on the left-hand column, but also on a very adjusted EBIT, which is maybe a better view on a like-for-like comparison basis.

But let me start with the reported EBIT. Koenig & Bauer managed to achieve a positive result after 9 months of EUR 1.6 million. And that is a fantastic result considering the last years, which were negative. And we have -- we show an improvement of nearly EUR 60 million on a year-on-year basis. In the middle, you see the EBIT bridge, where does the EUR 60 million improvement derived from? Yes, there are nonoperational extraordinary items of EUR 30 million, but you also find there additional nearly EUR 30 million of operational improvements.

The volume effect is nearly EUR 15 million. But within this volume effect, please keep in mind that there also is an improvement of the use of our capacities and utilization measures of EUR 1.3 million. So this effect is not only valid due to higher revenues, which we achieved by 5%, but also by a better management of our existing capacities. And on the other hand, you still find there the operating effect of above EUR 12 million, which strongly belong to the Spotlight product project by reducing costs, but also improving the prices and the product mix as well as our manufacturing costs.

Having a closer look on the third quarter stand-alone, you will see on the bottom line how the profitability has especially developed in the recent quarter. We improved it on a reported basis by nearly EUR 40 million, but we also -- we still improve it, which is on the bottom line on the very left hand, but we still improved it on an adjusted operating basis still by nearly EUR 12 million, up to EUR 60 million quarter results operating EBIT which is a very strong development.

On the revenue side, on the headline, you find there an improvement by over 20%, which is showing -- which is the result of strong efforts in the third quarter also to flatten out our year-on-year business or our business over the year. You still remember the fourth quarter is still very, very important and very strong. And historically, especially in the last year, it was very, very strong.

But we have mentioned this quite often, this is not healthy. We want to have -- we see a more stable development over the quarters within the year, and we want to flatten out the seasonality within the year. And as a first result, we managed to achieve revenues by over EUR 300 million already in the third quarter, which is a very good result of our management approach with regard to the seasonality.

The order intake, you find also on this slide in the third quarter was challenging. You see there a decrease by 28% compared to a year-on-year basis. But keep in mind that there was one of the stochastic order intakes of the Banknote business included in the third quarter last year. And this was an order intake not only for the next 12 months, but this is an order intake for the next 3 years for Koenig & Bauer. So we adjusted it to have -- to give you a better idea how the order intake adjusted by the B&S order intake would look like. And then you see there a drop of 12.5%.

This 12.5% is within the range or even better if you take compare it to the peers of Koenig & Bauer or to the general machinery business within Germany. The association for machinery, the VDMA just announced the last results in October and -- sorry, for September. And this -- the decrease that you see in this publication was above this 12.5%.

On the next slide, we see the LTM development of EBITDA ratio. And LTM is without seasonality as it simulates always the last 12 months as a full comparable to a calendar year. And we were still able to increase from Q2 to Q3, now up to an EBITDA margin of 7.4%. Very nice result. It shows you two things. First of all, the overall trend within our profitability. It is not only a quarterly result, which you see, which is improving, but you see there a general trend over the last quarters on an adjusted basis and an LTM basis.

And you also can see that the result without depreciation is even stronger improving compared to the EBIT. I think over the group income statement, we don't need it line by line. Let me just add two comments. The increase in the administrative costs is explainable. It's not big. Nevertheless, it is not what we are aiming for. We are not satisfied with this development, and we will place further emphasis and management attention to also to these cost types and working on further improvements.

And on the second note, with regard to the interest result, it improved compared to last year due to lower Euribor on the one hand. But on the other hand, we also had to hand out more accruals more -- guarantees, thank you very much. Guarantees for our strong order backlog. And that's this position, the interest result is a mixture of these two positions. On the next page, we are having a look on the Q3 cash flow, which was with nearly EUR 22 million in Q3 2025, very positive. And this shows if we have the right quarters with a strong revenue after the operational improvements that we took that also the cash flow is positive.

The overall net working capital is comparable to the level of last year, but it is still pretty high as we had to increase our inventory significantly compared to the end of last year. And having said that, we jump to the cash flow statement for the first 9 months. And there you still see a free cash flow, which is negative by minus EUR 62 million. And this is the result of the -- especially of the strong order -- of the strong increase in inventories that is necessary in order to perform the existing orders that we have in order to fulfill the order backlog that we have still on hand.

We also see that the prepayments that we receive that these are challenging times. First of all, we see more revenues in the Eastern part of the world and prepayments in the Eastern part of the world is more difficult to receive compared to the Western part. So that is -- this is also impacting our cash position after the first 9 months of this year. And on the other hand, we were presenting to you the order intake of Q3, which was lower compared to last year.

And of course, this has also a negative impact on the level of prepayments. Having said that, basically, we can summarize the free cash flow by these two events and explain it. Strong increase in inventories compared to the end of last year, where it was comparably low -- on a low level and the prepayments are -- receiving enough prepayments is -- was challenging, especially in the last 3 months.

The balance sheet is for reading only one comment with regard to equity. It is nearly unchanged and still on a ratio of nearly 23%. Having a look at our two segments. The Paper & Packaging segment is with regard to order entry on a -- still on a very high level. The order intake, you find there with EUR 500 million after 9 months, only minus 2.2% below last year. And remember, last year, there was a drupa event, which, of course, has especially for the offset printing business, a big effect.

So having this in mind, the development this year with regard to order intake is still very strong. We also -- you find also revenues with plus 4.4% compared to last year with an EBIT, which was a little bit below last year. The reasons for the decrease in EBIT is that we see there a geographical shift within our revenues. We were very good in increasing our revenues in the Southeast Asia side and in the Middle East geographics, as Stephen Kimmich described to you in his presentation.

But in these areas of the world, the margin -- the contribution margins for Koenig & Bauer is lower than in the regions of the Western world. And if you take a look at the regional report and the regional level, you find there a big decrease within the North America area from nearly EUR 230 million last year to only EUR 200 million this year. And this is also true because this year, we still have there some impact in the revenue numbers of the tariffs and the customs, which is increasing the revenue side on the one hand, but it's not adding any contribution rate.

If you jump back to the segments and if we have a look at the S&T segment, there you see that the order intake was significantly lower this year compared to last year, but this is especially true because of the big order intake by Banknote business last year, which was not expected to be repeated this year.

So the main effect is due to Banknote business. With regard to operational performance, S&T segment made a huge step forward and improved its profitability significantly by nearly EUR 35 million plus. And this is especially also, as Stephen mentioned, due to Spotlight program where all the attention was shifted to the S&T segment to improve profitability. And we managed to improve profitability significantly in this year, even though the challenging times and even though the order intake was much below last year.

You also find in the backup the Digital & Web business unit. And if you have a special look at the order intake with Digital & Web, you find there that the America tariff situation affected the DNV business unit, especially because the order intake dropped from EUR 100 million last year to around EUR 60 million this year.

With a higher order intake in this business unit, we would have achieved also an profitable EBIT in the S&T segment after 9 months. Having a short look on the situation with regard to trade agreements between EU -- the Europe and the U.S.A. and I'm sure you're all familiar with it. We only want to quickly summarize this. We are affected by the tariffs of at least 15% plus on our machines. But not only this 15%, you also have some parts which belong to the section -- so-called Section 232 of the Trade Expansion Act.

And that says that these parts have a special taxation of minimum 50% plus with regard to steel, copper and aluminum. And our machines are partly affected by the special Section 232 as well. Having this in mind, this, of course, explains why the shift in markets or the shift in revenue, which is also repeated on this side on the bottom left -- right-hand corner, you see the decrease, and this explains mainly the decrease in sales.

The U.S. and the customers in the U.S. are very curious to place orders with regard to CapEx items, and we find this in our revenue by region as well as in our order intake situation. Having said this, we are more than happy that we still confirm our guidance and the outlook for 2025. We stick to the revenue growth to EUR 1.3 billion, and we stick to the corridor of the EBIT between EUR 35 million to EUR 50 million.

But it is more fair to say and to state that with regard to the challenging geopolitical development as well as the trade policy uncertainties just mentioned within the United States, or the general macroeconomic conditions that we find it more realistic to end up with an EBIT in the lower half of the mentioned corridor.

With regards to expectation management and with regards to regaining and building trust within the financial community, Stephen and I, we decided to be there very, very straightforward and try to manage the expectations as good as possible in order to walk our talk and to be straight with the financial markets.

So this was the end of our presentation. And now I'm happy to hand over to the operator for your questions.

[Operator Instructions] Our first question comes from Stefan Augustin with Warburg Research.

Congratulations to the good earnings in Q3. But indeed, my first question will arise around the order intake. Unfortunately, I think the tariffs will not go away in the near term. So we might see this continuing for a while. And looking at your last year's order intake in Q4, it was very, very strong in both segments, also in Paper and Packaging. If you want to have an order intake around your guided sales level, you would need more than EUR 400 million of order intake in Q4 again this year. Do you think this is possible? And could you also comment a little bit here on the Banknote order pipeline, big order pipeline you have in special? That's my first question.

Sure. Maybe I can start, and then Alex can expand if necessary. So I mean, I think two or three different parts of the answer. First, the straight answer, we don't guide for order intake. So we're not going to answer that part of the question. We're trying to win every award we can. And of course, the goal is always to have a high order backlog and high order intake. We're comfortable with our order backlog so that the order intake in Q4 is not linked directly to our sales performance in 2026. So I think that's just kind of a technical answer, but we don't guide for expected order intake.

The market in the U.S. is tough, and I think the tariffs are here to stay. It's my personal opinion. The market will absorb them eventually, but margins become under pressure and what becomes more expensive gets sold less. So I think there are a 2-part answer. We are selling machines to the U.S. It's not that the market has disappeared. The machines that we're selling are taking longer in the decision-making. The customers are a little hesitant to order, but the market is still there and margins, of course, become under pressure as things get more expensive.

And we're not overly reliant on the United States. We have opportunities outside the United States to compensate. I think that we mentioned often enough in our presentation. And we have our new products that we can also push into the market. So that overall, I think we're doing everything we can. And even the order intake level in Q3 is not something that makes us nervous. I mean we're placing orders in difficult times, and we just have to keep pushing. So I think that answered all your questions. And we, as a company, I think the entire industry and has to just prepared that this new reality of tariffs for the United States is part of doing business with the United States and not sit back and expect that to change anytime soon.

Maybe a quick add-on that one. If I look at their Digital & Web orders and order intake also that, as you mentioned, was a bit hurt. And basically, many of your key customers here from the first products have been in the U.S. So do you see emergence of interest for these products in the other regions as well? Or do we need to think that this might remain a difficult pocket of the product?

I mean, I think it's clear that Digital & Web still remains our most difficult challenge. It's solved on the cost side. I think the spotlight is clear. We can show you that the structural cost measures we did for Digital & Web, they worked. But now we have the second challenge now on the top line. U.S. is an important market for hi-tech, and that is the digital -- particularly digital printers and Digital & Web. But we absolutely see markets outside of the U.S. We're installing the first machine in Korea. I was visiting -- I visited a RotaJET three weeks ago, installed in India. We -- I had discussions in the Middle East of customers that are interested in buying RotaJET. It's a shame that the U.S. is softening. Of course, that doesn't make our job easier. But absolutely, we see markets other -- outside of the United States, and that's the task. That's the management task going forward.

And Koenig & Bauer is successfully addressing these markets, as you can see in the order intake. Otherwise, our order intake and our book-to-bill ratio after 9 months wouldn't be 1.0.

Two other ones. The first is, would you make a comment on your cash flow expectations for the full year? And can you remind me if there is any, let's say, considerable amounts due from operational restructurings or spotlight to flow out? And the last one is actually technicality. In Q1, you very successfully hedged U.S. dollar expected sales. Do I find the respective gains on the exchange rate in, let's say, the paper and special divisions? Or is it rather coming up in the holding and consolidation line?

Yes, happy to answer. Let's start with the cash flow. We don't guide specifically on cash flow, but the cash flow in Q4 is definitely to be expected on a high -- on a positive level as well. We expect to decrease our net debt also in Q4. So we will see improvements with regards to debt and with further improvements with regard to free cash flow in the first -- in the fourth quarter.

With regards to the hedging, the most positive effects of the hedging are directly booked as other comprehensive income to the equity. So the most gains out of these hedging does not touch our P&L. So it means our P&L is not at all inflated by any hedging gains. It is more or less -- it is pure operational performance within the P&L. We only see a very small effect of hedging gains of EUR 1.6 million, which is directly booked to the revenues and which is indirectly affecting positive results. But the P&L is very much not touched, not inflated by the book gains of the hedging business.

Is this EUR 1.7 million then in Q3 alone or 9 months?

It was after 9 months.

All right. And then just the cash outs from spotlight, first of all, is anything missing? Or is everything already?

In the -- up to now, it is 95% to 100% already done. And we -- but it is a very good question because in 2025, we saw a cash out of nearly EUR 10 million out of the Spotlight measures. We don't adjust it in our free cash flow. So it is affecting negatively our free cash flow after the first 9 months this year and by roughly EUR 10 million cash out due to spotlight measures.

Our next question comes from Jorge Gonzalez with Hauck Aufhäuser Investment Banking.

Firstly, congratulations on the progression of the margins, very impressive. And my first question is on this regard. I know that you have still not detailed the guidance for next year, but let's say that in a scenario that you have a flat development, which is the additional support in EBITDA or EBIT that you are expecting, thanks to the improvement in terms of the salaries reduction and other cost efficiencies that you have achieved at this point. Can you give us some color on the expectations of the support from cost savings for next year? That will be my first question, please.

Yes, I mean, we can restate that you find there some -- that you see a lot of cost reductions within -- out of the spotlight program within our P&L. And there are different ways to report them. The way how we were for our banks, for instantly calculating the spotlight reductions that we have, it was on a stand-alone basis compared to the end of 2023. And maybe you remember the numbers because I think they were also shared with you in the investor telephone conferences of EUR 50 million to EUR 60 million.

So all the measures reached an effect of, let's say, EUR 55 million. But compared to the level -- to the end of -- compared to the base or the baseline was end of 2023 on the one hand. And on the other hand, increases -- cost increases were not shown in this number. So it is a broad -- excuse me, a gross number and not a net saving numbers.

But if you have again a look on the EBIT page in our presentation, and I think you can -- it is presented to you and is shared via the screen to you, you see -- no, it's not. Then let me say the number -- it's Page #9 in our presentation. Within the EBIT bridge, you find other operating effects of at least EUR 12 million compared on a year-on-year basis. And this is mainly due to the cost reduction measures out of the Spotlight program. And as I mentioned within my presentation, with the other volume effect of savings of nearly EUR 15 million, out of the EUR 15 million, there are EUR 3.5 million due to better utilization of our capacities on hand within our group. And that is also partly effect of Spotlight. So within the EBIT bridge, within the, let's say, nearly EUR 30 million operating improvements, most of these effects are due to the Spotlight program.

I would only add, I mean, when we announced Spotlight, we had said $40 million to $50 million in '25 and $50 million to $60 million in '26. So roughly $10 million difference between '25 and '26 on average. I think that was your question about what do we expect in '26. And it's too early for us to say. We sped Spotlight up as much as possible. So the year-on-year impact '26 versus '25, there will certainly be an impact for measures that were not fully installed in 2025, but we're talking about a much smaller figure, and that's not going to be a key driver for profitability improvements next year. With Spotlight, we would consider to be closed out and finished at the end of December 31, 2025, that Spotlight is done. And next year, we're not going to be sitting here talking to you about Spotlight impact in '26.

Okay. Very clear. Maybe -- so the bridge is around EUR 10 million 1 year to the other. But how much are you expecting in Q4 similar to Q3? Or there is any even improvement for Q4 in terms of the year-on-year cost savings comparison that I should take into account?

No, I think the way to think about it is that Spotlight is finished, is installed. So the further year-on-year impacts starting Q4 and 2026 versus prior year, they will decline towards -- that will not be the driver of future profitability increases. So I wouldn't model for Spotlight effects in Q4.

Okay. And this -- regarding the first comment that you have for '26, this 5% to 6% margin. This was referred to -- in the case of achieving a sales revenue of around EUR 1.5 billion -- or up to EUR 1.5 billion as you have in your original target or this corridor is also compatible with a flat development in sales? Do you have a view on that at this point?

It is -- yes, it is a strategic target of Koenig & Bauer, and it is in line with -- and the target EBIT margin of 5.6% is also -- it is bound to a revenue level of EUR 1.55 billion. But with regard to next year, we don't want to -- as we are in the middle of the budget process and internal discussions, we don't want to guide today on the next year, but we will come to you with regard to 2026 on a later date.

Okay. And last one, if I may, regarding also the demand levels. And I know that you don't want to speak much about this year. But I'm wondering if your general view is that we see the worst in North America in terms of demand, and it is more like a wait and see strategy of the clients just to obviously avoid paying above final prices. And then it will depend on the clients' view on if the tariffs will remain or not. And so demand will resume at some point? Or do you think maybe we see further deterioration in North America? That will be helpful because I imagine this is basically the region where maybe you have less visibility at this point.

That's a very good question. And what we can see is that we -- yes, there are still orders from North America. And the situation improved also a little bit with regards to our Paper and Packaging segment in the last month. So is it already the end of the corridor? I'm not sure. I mean, we have seen so many surprises with regard to the U.S., it's really difficult to say. But we can definitely confirm, first of all, there are orders from the U.S. And yes, we also see a slight improvement or we see a slightly improving situation with our Paper and Packaging segment with regard to order intake from North America. But I'm still -- as a finance guy, you're always careful. So to talk often completely change in the situation with regard to demand. I think this might be too early. But at least it is what we also don't see, it is not further worsening.

I would only expand, I just came back to the U.S. last week. It is very tough to judge what will happen and the policies are very erratic. But I think the straight answer to the question would be, I think the U.S. customers are now pricing in the tariffs in their business models and no longer in a wait-and-see mode of maybe the tariffs will go away. This is a fantasy, frankly, in my opinion. And my impression from the U.S. customers is that they're accepting that the tariffs are a fact. They're pricing it into their business models. They're putting pressure on pricing and margins because the machines are more expensive due to the tariffs. But there's this wait-and-see attitude of let's just not buy anything because maybe the tariffs will go away, that is getting much, much less. What hits demand is the more expensive machine due to the tariffs, making business cases less attractive and therefore, driving to fewer buy decisions. But it's less the uncertainty and more just the general -- or less the tariff uncertainty and more just the general everything is more expensive. I hope that makes sense.

Yes. No, makes all the sense. Maybe you can help us here. In terms of units, can you give us how it compares this year with the historical average of the last 4 to 5 years? I mean is -- maybe you have seen a year that could be a floor in terms of units or because you are delivering also machines pre tariffs during the year is not -- I mean, it's difficult to compare, I don't know. If you can see in the numbers that maybe -- yes, I mean, we have seen the worst here, but that doesn't mean that it's going to recover fast, but I don't know. Is there any green shoots there that you can share with us?

No, I think understood, and I think it's too difficult of a question to answer today in the call. We'll think about how to communicate in some way, how do we see the North American market. It's a clear question. It's not so easy to answer. So I think for today, we have to leave it at that. And if it's okay with you, I think we have only 5 minutes left and I have one more person in the line if we can move on.

[Operator Instructions] Our next question comes from Patrick Speck with Montega.

And also from my side, congrats on the -- yes, very strong development in Q3, especially in earnings. When I look at the details, I was a bit surprised by the decline in operating EBIT in the P&P segment. Was this mainly due to the tariff situation? Or was there anything else?

Yes, it was indirectly due to the tariff situation because the geographic mix changed in the Paper and Packaging segment. We generated more revenues within Asia Pacific area as well as Africa and Latin America, slightly increased, but a significant lower part within the North America business, and Europe was nearly stable. So that is the main reason for the decrease -- the relative decrease in profitability within Paper and Packaging.

Understood. And would you assume that -- yes, a similar development in Q4 for both of the segments or a slight decline in Paper and Packaging in EBIT and a strong recovery in S&T?

Basically, the strong recovery in S&T. That is the main driver of the result. As you can see within the segment reporting, Paper and Packaging is more or less stable, and the increase derived from the S&T segment. And this will stay true for the fourth quarter as well.

I would also -- I find hard to talk about a decline in Paper and Packaging. I mean at the size of the business unit, we can talk about really it's more of just a flat development. I mean it's a few hundred thousand euros down year-on-year, but I would not describe that as a declining profitability. I would say it's more or less a flat development in terms of operating performance. And I totally agree with Alex, but I remind everybody on the call, the focus of our organization and our management in the last 18 months has been improving profitability in S&T. Deliberately was the focus and spotlight on S&T. That doesn't mean we ignored Paper and Packaging, but I think you can see the results, and they're obvious in all the charts no matter where you look. We did a good job in fixing the profitability of S&T, particularly in Banknote and MetalPrint, also on our holding costs, and did have success in Digital & Web that unfortunately is being counteracted by volume effects in that segment. So we just keep pushing.

And secondly, supply chains are coming up as a topic again, especially in automotive industries, but also in the capital goods sector. How dependent are you on chips, for example, or anything else? Do you see any upcoming and increasing risks for your supply chain?

Not until now. So the exterior effect, which was in the press, we don't see it right now in the supply chain. And personally, I do not expect another supply chain topic in the recent -- in the next months, at least not for putting above -- sorry, a little bit more specific.

And lastly, a quick update on your PowerCo cooperation would be helpful if you can share some information about that.

It's ongoing. That's -- and we are working hard with Volkswagen together to industrialize. There's no new status to report. We promise to come back to you when there's something new. I think the only real status update is, it's -- we're also there, we're pushing forward. And we are still very positive on that -- on the further development.

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

So thank you very much for joining, and we are exactly on time, 1 minute before 2 o'clock here in Germany. And thanks for your attention and your interest in Koenig & Bauer. It was -- I think to sum up today's call, you can clearly see our operational performance improvements and our focus on cost and cost and cost, and becoming more resilient at a new structural cost basis. That's working. That's been our big effort.

And the second big challenge now is alternative markets getting products into the field. And the market is challenging. We're doing a good job. We're happy with our order backlog. Of course, you can always do better, but I think we're still well positioned moving now and towards the end of the year and look forward to talking to you all again, most likely in February when we publish our preliminary results and no later than March in our annual report then on March '26. We'll look forward to talking to you again until then. Talk to you soon. Thank you very much.

Thank you very much, and welcome to conference call where we will present our first half financial results. It's a very special day for Koenig & Bauer and special day for myself as it is my first conference call in my new role as the CEO of Koenig & Bauer AG. And also on my side, the first conference call for our new CFO, Dr. Alexander Blum.

So it's a very special day, but not only that, it's also a very unique day as we're broadcasting live from Frankfurt online. And because it's a special day, we also have a special guest, our Chairman of the Supervisory Board, Prof. Dr. Raimund Klinkner, is also here and is joining today's call and will say a couple of introductory remarks and explain why today is so important.

Thank you very much for your kind introduction and remarks. Good morning into the room. Good morning in the virtual audience. I only would like to add some information. In this year, as we've already mentioned, and especially today, we are celebrating remarkable anniversary milestones. As a company, we are more than 200 years old, to be precise, 208 years old. And we had our 100th Annual General Meeting on the 4th of June in this year.

And today, exactly today, we are celebrating 40 years on the capital market. Looking back to these last 40 years, we moved more or less from a narrow focus on newspaper and banknote printing to a global technology partner for a broad scope of chemistries and substrates. That means continuous transformation and further development is core of our DNA. And this also applies to our organizational development.

With this year's already mentioned 100th Annual General Meeting, we completed the long planned and well-orchestrated change of leadership, bringing Dr. Kimmich into the CEO position. He is not new in the company, but new in this role. And with this step-up into the CEO position, we, [ KBA ], we intentionally searched an external candidate shaping the future operationally. And of course, it's not the task of the Supervisory Board to transport that to you. That are my introduction remarks to welcome you here in the special occasion and special room, and we are looking forward to exchanging with you our future. Thank you very much.

So thank you, Prof. Klinkner. And now we'll move on to the more detailed presentation of our first half results in the format that you've become accustomed to at Koenig & Bauer in the previous years.

I as CEO, will run through the highlights and give you an overview of what's happened in the last few months at Koenig & Bauer. And then Alexander Blum will present in detail the financial figures and how we were able to close out Q2 just recently.

So if you look at the business performance in Koenig & Bauer at a glance, we're very happy that we are able to present a strong second quarter. If you look back 3 months ago, the first quarter, we were very confident. We tried to explain to you and the capital markets that we are on track, but you couldn't quite see it in our P&L, and we had to explain that there were some temporary effects in Q1 that covered up the operating improvements that we knew were coming or that we knew were there.

In Q2, you can clearly see our operating improvement. We were able to strengthen our operating performance significantly over the prior year. And I think you'll be able to see in the next 40 minutes that we're on track and the profitability improvements that we need are coming.

We'll talk a little bit today about our new focuses, where are we focusing in the company, and I will show that in a couple of pages.

What has happened in the first half of this year, I think one of the other significant announcements recently is that part of our strategy is focus. Koenig & Bauer is a very broad portfolio, and we have to focus on doing what we have, bring it to the market and make it more profitable. So in doing this, we looked through our portfolio and decided to initiate a project for reviewing the future alignment of Koenig & Bauer, Coding GmbH. It's one of our many subsidiaries. It's in a very unique business position in coding and marking. The synergies with the rest of the group are not particularly high, which is why we put this into the market for discussion on our future strategy.

We also had two big market developments in the last 3 months. We had the China Print in May, which was one of the two largest trade shows in Asia, where we were able to successfully book a lot of business. And we also see with the Print4All, another trade show in Italy and the Italian government support programs and subsidy programs that we were able to book significant orders in Southern Europe in the last few months so that overall, our top line and our order backlog continues to look good.

We're making progress in digital printing. I'll also talk about this later. We also made great progress in our cooperation with Volkswagen, where we officially announced already at the general assembly in June that we have made good progress with our dry-coating -- battery dry-coating development project. We successfully closed out the proof of concept, and that project continues.

And finally, what we'll talk about today is a large program, which I think every company is looking at and every company is starting initiatives, but Koenig & Bauer is really going all-in on getting our company up to speed and state-of-the-art in the future of artificial intelligence and what it means for our internal processes and what it means for our products and our customers.

If we look at the figures, order intake was slightly down over the previous year, but please remember, last year was a drupa year. Sorry, I wasn't quite finished with that slide. Apologies for the quick disruption. Order intake was down over the previous year, but please remember, last year was a strong Q2 in -- due to drupa. And therefore, we're quite happy with our order intake in this year. Book-to-bill was again greater than 1, which is always a good sign for capital goods.

Revenue was up, which we did not have after the Q1 figures. So now year-to-date, revenue was up. And EBIT, as mentioned, a significant operating improvement in our profitability, which Alexander Blum will talk about in a second. Also in net working capital, we continue to show year-on-year improvement as we have in the past.

Overall, in both our segments, we show positive revenue development and in Special & New Technologies, a continued you'll see year-on-year a slight weakness in order intake, particularly on the digital printing solutions, which have a strong U.S. focus.

Overall, I think the key message today is that we're on track. We confirm our guidance for this year. We confirm that we're absolutely generating the savings that we had intended on our Spotlight program, and we see ourselves on a path to have a strong 2025 and a significant improvement over last year.

So if I move now into just the highlight on the figures. I think the main focus on this page is really just the order backlog on the top left, EUR 1.096 billion of order backlog, the highest figure in the youngest or the most recent corporate history of Koenig & Bauer.

We seem to be moving from one peak to the next peak to the next peak. We've made that statement 3 times, I think, in the last 18 months that we're at the historic highest order backlog. And that's again the case at EUR 1.096 billion, the third time we've broken the record in the last 6 quarters. Great news for us in very uncertain times that we have a lot of tailwind from our order backlog to support us in the coming quarters as the impact of the tariffs and the global economic uncertainty plays out.

Everything else I mentioned, book-to-bill good, revenue up year-on-year and operating EBIT, also a significant improvement now in Q2 compared to prior year.

So the next few minutes, I'll talk more about the business highlights, and I've presented this slide at the general assembly, but just to give you a feeling of how the new Board is approaching Koenig & Bauer and where we intend to have our focus. If you look back in the last decades, we've done a lot.

I'm thankful for all of my predecessors in the last 40 years and particularly here in the last 25 years that we've handled the disruption to our print industry quite well, a huge age of diversification where we entered new markets with M&A. We developed our own new products. And we spent the last 5 years in very difficult times, pandemics, energy crisis, wars, supply chains, energy shocks, et cetera, really finishing out this portfolio completion, the diversification, spin-offs, new products.

But we spent a lot of effort and a lot of money getting these products and getting into these diversified markets and getting ready to scale. And now our focus is very clear, it's about performing. It's about making Koenig & Bauer more profitable. It's about getting these products that we finished, getting these new businesses that we've started, getting them into the market, scaling the business and moving the company forward profitably.

We're going to have five focus points. I've talked about this again in previous -- at the general assembly, and it will be a focus on our Capital Markets Day today. On the right, it's about go-to-market. Koenig & Bauer has a very broad portfolio. It's not dogmatic that we say we're never going to do anything new, but the general message is, focus on the portfolio we have and getting it more profitable and into the market and scale.

Second, it's about competitiveness. I am a huge fan of Germany and German competitiveness, and I'm confident that we'll be able to compete on a global scale, but it requires work. It requires thinking differently and it requires a lot of focus on competitiveness in terms of improving processes, improving costs, improving structures.

Resilience as the third major topic. In volatile times, we have to become more flexible. We have to work on our structures to become more adaptable and to become faster in adapting to change. Resilience in terms of financial resilience, operating resilience and supply chain resilience is something that I think all industrial companies need to improve on in the coming years to emerge from these kinds of crisis even stronger.

And finally, intelligence. Intelligence means artificial intelligence for ourselves, for our customers, but also means finding solutions to help our customers and to help our staff worldwide to face the challenges coming forward.

And that all -- even if customer first, I mentioned last, it's deliberate because these points, four points are all under the mantra of our customer is in focus. It's the strength of Koenig & Bauer for 208 years, and developing with our customers and making our customers more successful ensures our success as well.

If we move on to the next page. I go through a few of the more detailed business highlights. Our Spotlight program that we announced in, I believe, Q2 last year is absolutely fully on track. It's nearing completion in terms of implemented savings. You see it in the year-on-year improvement Q2 versus Q2. It's our digital and web project in [ Würzburg ], banknote, metal print and are reducing our holding costs. We had, again, a small amount of extraordinary charges in Q2 that we had announced, and you should have been expecting.

Overall, the program is nearing its full completion and full implementation, and this is what's driving our profitability improvements year-on-year and will also drive further profitability improvements in 2026 compared to 2025.

And also, of course, part of the holding cost reductions is streamlining, management streamlining the Executive Board and reducing from five to two, which is now operating and fully implemented. And until the end of the year, we remain three, but the path to two is already clear for 2026.

On the next page, I already mentioned in my highlights, we've decided to approach the market for future -- for a new alignment of our Koenig & Bauer Coding business, Coding subsidiary. This is less than 5% of the Koenig & Bauer turnover, but it is a very nice business. It's profitable. It's successful. It's growing. It's got 300 employees that have been dedicated to this business for decades. We're happy with it, but we recognize, one, Koenig & Bauer is a very complex company with a very broad portfolio. And number two, Koenig & Bauer Coding, if you look at all of our businesses across the entire spectrum, Koenig & Bauer Coding has the smallest overlap with the rest of the business. Instead of where we are either focusing on banknotes or on packaging manufacturers, so the company is making packaging, Coding is focusing more on the companies that are filling their packages. They're focusing on industrial applications like industrial cables, tires. It's a different market, different customers, different sales channels and the overlap, both technology and from the market is simply the smallest of any of our businesses.

And under our overall philosophy of more focus in the company and more resilience in the company, we've announced last week that Koenig & Bauer Coding is under investigation for its new alignment. What that means is open, whether it means new strategic partnerships, joint ventures where we give up part of our shares or a full sale of 100% of the shares to a new buyer, to a new owner. That's open, but the basic message is we're realigning this business going forward. And I think it's clear that, that's in line with the rest of our strategy and our main focus going forward.

I mentioned already on the next page, the China Print and Print4All in Italy. These were two major trade shows. And you'll see -- I mentioned already book-to-bill 1.2, highest order intake of all time, also driven by two markets. It's not only about the U.S. You'll see in the backup that our U.S. sales are significantly down year-on-year but overall sales are up. This means also focusing on new markets. It means not just being overly reliant on one region. So great successes in China during China Print. And I can only reiterate the Italian industrial support from the Italian government has really led to a boom in 2025 for demand for our machines from Italy, combined with the trade fair in Milan, we were able -- we announced that we had over EUR 50 million of order intake just in Italy, one country in one quarter.

So I think this slide is really meant to show we're in a global market. We have 83%, 85% export. And being successful in markets across the world is another key to our success as a company.

On the next page, on Page 11, a short reminder that we have a very broad portfolio in many different packaging markets. And we now have digital solutions for all these markets, whether it's folding carton, corrugated, metal print or here, also glass printing. We are the market leader in glass printing for traditional silk screen direct-to-glass printing.

And very quietly, without a lot of press and media, we now have nearly 20 machines installed for glass -- digital glass printing at Koenig & Bauer Kammann. You see one series here with Johnnie Walker. It is directly printed on the glass. Every one of these labels, it's not really a label because it's directly printed, is unique. It's an SKU of one. So a unique marketing campaign for, in this case, Johnnie Walker.

This follows something we announced last year with Louis Vuitton had something similar. We won a lot of awards because this is a very difficult process and a very difficult 3-dimensional shape to print on. We've done it. We've done it well. And we've done this also not because we have to do everything ourselves.

I think you've seen many times in the past that Koenig & Bauer is very good at cooperations. We're very good at partnerships. We don't have to do everything ourselves. And this is an example in one of our other small subsidiaries, also less than 5% of Koenig & Bauer, now becoming the leader in digital printing on glass as an example of our flexibility and our ability to evolve the business.

On Page 12, as already presented at the general assembly, we also announced in Q2 that we successfully achieved the next milestone of our cooperation with Volkswagen for the dry-coating and machine for the dry-coating of battery cells. This is still a development project. It's now moving into the next phase.

And now it's about scaling together with Volkswagen PowerCo. And we've now finalized the commercial framework agreement between the parties and moving to the next phase. I can't tell you today when will that next phase be announced. But at the end, we've now been in roughly 2 years in this cooperation, and we keep moving from milestone to the milestone and successfully pushing the project forward.

And I would also remind a lot of talk today about diversification in the markets and how do companies move into new markets. This is a great example of how Koenig & Bauer takes its core know-how, in this case, out of banknote business and applies it to new markets. So this project is moving along quite nicely. Whether it's successful in the industrialization and the scaling remains to be seen, but we're clearly moving forward.

Page 13, and I'm almost done with the highlights. AI Empower. So we kicked off internally a massive training program for enabling a large portion of our employees in using our AI tools. We have a partner with Google since many, many years for Google Workspace and for Google BigQuery, Google data warehousing for a lot of our digital products. And Google Gemini as their AI tool is integrated in our every employee's workspace that they have access to it. But how to use it. Also Gemini Advanced, NotebookLM, other Google tools. We're training over 500 of our 5,200 employees are getting intensive training and have been for a couple of months. So that roughly 10% of our workforce will be intensively trained on how to use AI internally for processes. Even Dr. Blum and myself get trained on the use of AI, Monday this week as a small little example. We spent 1.5 hours with Google for the second time, learning how does AI work in detail and how can you use it and what does it mean for companies like Koenig & Bauer.

It's a massive project. Even within these 500, we've defined a smaller group of champions to get even more training and more intensive, how to get AI knowledge into the company and get a multiplicator effect into the employees and figure out what does it mean for our internal processes.

On top of that, we have in our Koenig & Bauer Kyana spin-off that existed since April 1, 2025, is the other question of how do we use AI for our products, for our machines, for our customers, again, in partnership with Google and other partners, led by Sandra Wagner, who will also present this afternoon on our Capital Markets Day.

It's an ecosystem for our customers, how to use any information on our machines, whether it's training manuals, machine data, benchmarking among customers, energy management. It's how to use AI in our digital solutions. And this is something we are already scaling and already into the market with.

This is not just future products. These products are now sold to customers, being used by customers and is a large part of our strategic focus going forward.

So that is it for me as the 20-minute introduction in terms of Koenig & Bauer at a glance and what are the business highlights that have happened in the last 3 or 4 months. For those of you that attend our Capital Markets Day this afternoon, we're, of course, going to have a deep dive in many of these topics that we talk about more and have more members of management to present. But that being said, thank you for listening.

I will hand over to Alexander Blum, who will walk you through the financial figures, and then we'll open up for Q&A. Thank you.

Thank you, Stephen. Good morning, ladies and gentlemen. It's my great pleasure to present to you for the very -- my very first time, the first quarter results of Koenig & Bauer. And it's also not only a pleasure to present these numbers, but it's a true pleasure to be on board of this fantastic company. Later on during our Capital Markets Day, we are happy also to show you some further insights and the future strategy. But let's now start with finally some numbers, some financials.

As Dr. Kimmich already has stated, the order intake is a little bit down on a year-on-year basis by minus 5.4%. But considering the macroeconomic level that we had, considering the state that we last year had the drupa fair, this is a good result and is offering us a very good basis.

Revenues, we are increasing. This is part of our growth strategy, growth initiatives and also part of the guidance for this year. And the order backlog is on a fantastic level of nearly EUR 1.1 billion.

With regard to operating profitability and EBIT, the EBIT increased tremendously on a year-on-year basis, plus 20.1% this year compared to last year. You can see what are the drivers behind this increase, profitability increase. One driver is higher revenues and an increase of volume. But the other one, which is even greater is the operating effects, which consists out of a mix -- product price mixture, but also on savings with regard to functional costs, savings with regard to our cost of goods sold of our production costs. And this is also the reflection and the consequence -- the positive consequence of our Spotlight program from the recent past.

You also see that our nonoperating effects increased -- decreased, which is a good result because last year with EUR 9 million of nonoperational effect, this was a quite high number. This year, we only see EUR 4.2 million. So that -- this is a significant decrease and also a good result.

You see on the very right-hand corner, the operating EBIT adjusted for drupa costs, which is offering you a view on the operational performance of the company. And also with regard to this KPI, we increased our profitability by over EUR 15 million year-on-year.

On the next page, you find the Q2 numbers stand-alone. And Q2 2015 (sic) [ Q2 2025 ] was indeed very successful for Koenig & Bauer. On the one hand, you see the increase in revenues compared to last quarter -- last year quarter by plus 7%. You see the increase in order backlog by over 7%. And you see on the bottom line, the three KPIs of EBIT, which also show big step of improvements.

Why three indicators? Just to make it very clear because maybe in the past, this could have been a little bit confusing. On the left-hand side, you find the reported EBIT according to IFRS. That includes basically everything. And there, you see that we achieved a positive EBIT in Q2 stand-alone this year by EUR 0.4 million. It's an increase by plus EUR 24.1 million.

In the middle column, you find the operating EBIT also according to IFRS, which is deducting all the nonoperational effects. And there you also find a positive number for this year's quarter of EUR 1.8 million. And on the very right-hand side, you find the comparison, especially with an adjusted basis of 2024 by the drupa costs. And also with regard to this KPI, you still see an increase of profitability of over EUR 16 million. And that is for Koenig & Bauer within recent years and history, a very good step forward. And at the end, we also will talk about the guidance, but we have confirmed our guidance for 2025.

On the next slide, and this is a new presentation, you find the LTM operating EBITDA. So last 12 months, level is also showing nice indications. It is showing a trend level, which you can see here. And it also shows that the operating performance after or before the depreciation and amortization is increasing even stronger as on the level of EBIT, and it also shows a positive trend over the last quarters.

What you see is that our profitability level is now above 2023. And you can also see that we have reached an EBITDA margin of 6.5% on the basis of last 12 months. So that is something which is also bringing up confidence to us that the operational performance and the profitability level of our company is improving and the development is absolutely in the right direction.

With regard to the full P&L, we have already presented the most important KPIs to you. Just let me state on two more lines of the P&L. One is the administrative costs, which show an increase year-on-year. This is due to overall price increases like leasing and rents, which we show -- which we see in the market, unfortunately, and it's shift in provisions. This is not an expression that we are stepping down from our strategy of a lean structure and a lean company, but it has impacts which are on the market and which belongs to bookings and provisions, but not on a shift on productivity or on our focus strategy and on our strong belief that we want to be a leaner company and have a leaner structure.

The second line, which might be of interest is the financial result, which increased by a small amount compared to last year. And this is due to a higher utilization of our accrual line. And the higher accruals that we had to hand out is due to the high order backlog.

So it is more money involved, but it's a positive sign. It also says that we have this strong order backlog, which we utilize for our further growth. We also see some positive trends with regards to our interest rates paid for the bank loans and liabilities. Of course, there the Euribor is decreasing on the one hand. But on the other hand, the premium interest, the premium margin that we are paying at Koenig & Bauer is decreasing as well due to a better position of ourselves within our margin grid due to a lower leverage ratio, which we were able to achieve.

On the next page, you find some key indicators with regards to cash and working capital. And the free cash flow looks, of course, net positive on a year-on-year comparison, but it is due to a big increase in our working capital. Last year, in the cash flow 2024, there was a decrease of working capital and therefore, a cash-in of over EUR 20 million. This year, we have -- compared to end of last year, we have increased our working capital by over EUR 40 million. So it has a cash-out of minus EUR 40 million. And this difference between plus EUR 20 million last year, minus EUR 40 million this year is more or less the whole development of our cash flow this year compared to last year.

You see on the lower left-hand side, the net working capital position. And even though we have a strong increase in the first half of 2025, we were able to decrease our overall net working capital position by nearly EUR 20 million. And we also increased it on a relative terms to up to a level or down to a level of 26.3%.

So this is the right tendency and my colleagues have started in the past an intensive discussion about cash and working capital and how we allocate our resources. And this is something which is also one of the most striking points for me and most important topics in future for Koenig & Bauer to have a very close look at our cash positions, on our liquidity and also with regard to working capital to be and become more and more efficient over time.

The equity is still over EUR 300 million with an equity margin of nearly 20 -- with an equity ratio of nearly 23%. So there, we are still on a good level. The decrease is, of course, to the net loss that we have achieved in the first half of the year, but we are still on a considerably good amount.

With regard to the group cash flow statement, let me emphasize two more points to you. First of all, the gross cash flow improved significantly by the better result that we were able to achieve this year compared to last year. The cash from operating activities, that is changing due to an increase in working capital and also due to the comparison of last year's cash flow, which had a decrease of working capital.

And you also can see the investing activities this year are below the level of last year. And this is due to a very good investment story in the last years. And now Koenig & Bauer is in a position to profit and to benefit from the CapEx spend in the last year. So we can deliberately lower our level of necessary investments even though to be prepared for the future on the one hand. And on the other hand, of course, it is our constant task and job to be very careful with our capital expenditures and to save our liquidity on an appropriate level.

With regard to balance sheet on the next page, there you find all the details. But maybe we can -- let me pound out four more specific topics to you. The decrease in our tangible and intangible assets is due to a lower CapEx level this year. The current assets are slightly below the level of last year by minus EUR 2.8 million. And there is a mixture of effects, which we see. We see an increase in inventories. We see an increase in our financial receivables, which belongs to our receivables towards our joint venture with the company Durst, for digital printing.

We see an increase of the other assets, which is a result of the POC accounting, especially with the Banknote Solution business, higher prepayments for our suppliers due to the strong order backlog and due to an increase of other taxes on the one hand. On the other hand, we see, of course, a bigger decrease in our cash position, which is bringing the overall current assets position a little bit down.

The development of our equity is due to the net loss of the period. And the small decrease of our pension provisions and similar obligations is due to an increase in the discount rate by 0.3 basis points.

Last but not least, our bank liabilities, there you see a shift between the current liabilities, current bank liabilities or current financial liabilities and the noncurrent liabilities -- bank liabilities by roughly EUR 40 million. But this is not due to a change in our financing structures or this is not due to a change in the due dates. This is only an expression of our own sentiment, of our own planning, how we will decrease the bank liabilities until year-end.

Last but not least, have us -- let us have a closer look to our two segments on the next page. On the next page. Here we go. Thank you very much. Paper Packaging (sic) [ Paper & Packaging ]and Special & New Technologies. The order intake of Paper Packaging is nearly at the level of last year. And this is a very, very positive news because last year, there has been the big drupa fair. This year, there was no drupa. But nevertheless, Paper Packaging order intake on the same level.

With regard to order backlog, it's a little bit lower. But with regard to order intake, it's on the same level. And the order backlog is also lower because revenues have been increased in the segment, Paper Packaging compared to last year.

With regard to Special & New Technologies, it looks a little bit different. The order intake is a little bit lower compared to last year. This is due to the situation that we had last year, a lot of order intakes from the American State for the Bureau of Printing and Engraving (sic) [ Bureau of Engraving and Printing ] from the Federal Reserve Banks. And of course, this year, the order intake is a little bit lower. So that's why the order intake decreased on a year-on-year level comparison, but the order backlog has strongly increased compared to last year, and this is also due to the fact that we are still working on these big orders from the past.

With regard to revenue, we see a small increase on a year-on-year basis. With regard to profitability, the positive effect is that the profitability within both segments could have been improved on a year-on-year basis.

On the next page, allow us a little summary of the current situation with regard to uniform customs and tariffs. I think that is a topic which is striking to all of us and to a lot of companies. What we see right now is that there is the cap on tariffs of our machines of 15%. And hopefully, there won't be a shift anymore after the deal was made. So on the one hand, we see the plus 15%. And on the same time, we also -- we see a change in the FX rates, euro to U.S. dollar, which as you all know this, the dollar is weaker right now. So with regards to foreign exchange rates, it is also the second effect, which makes our machines more expensive for U.S. customers.

And now we have the two ends of the same equation. The positive thing is that we have no more uncertainty or that we have much more clarity with regard to customs. That is positive. On the other hand, we see an increase in the prices or we see it is more expensive due to the increased tariffs on the one hand and the changed FX rates on the other hand. So which effect will be more stronger. That is the existing -- the exciting question for the future, and that is something which we will observe very closely within the next months. And that brings us also to our outlook for this year and our midterm guidance.

We are absolutely convinced that we can confirm our guidance and that we will receive and achieve our guidance of 2025. We will see a slight increase of revenues up to EUR 1.3 billion, and we definitely see an increase in the operating EBIT to a range of EUR 35 million to EUR 50 million. And once we have achieved that step will be also a further big improvement with regard to the last year and also a very big step in the right direction for Koenig & Bauer.

We will -- we also confirm our strategic outlook. We are aiming up to -- revenues of up to EUR 1.5 billion with an operating EBIT margin of 5% to 6%. That is our ambition level, and we see that this is positive, this is possible. We also will see a further increase within profitability in the next year compared to this year compared to 2025. However, a more precise guidance on the next year due to the uncertainties, due to the developments also with regard to tariffs with regard to the trade and the business with the U.S. We cannot give you today, but we will give it to you at a very -- at a near point in future, latest beginning of the next year.

So thank you very much, Alex. I think that closes out the presentation of our business highlights and the financial figures. And now we hand over back to the operator for -- I'm sorry, we stay here in the room. I apologize. We're going to first go to stay here in the room if there's any questions here in Frankfurt regarding our H1 figures.

So again, just please raise your hand and a microphone will be brought to you. We start here with Mr. Rothenaicher from Baader Bank. And because the operator will not announce your names, I mean I know all of you, I think, but I'd be happy if you can please introduce yourselves and then answer the question -- ask the question.

Peter Rothenaicher from Baader Bank. First question on order intake. So order intake in the second quarter was quite good given the high basis last year.

I have Rothenaicher here, the EBIT numbers you may want.

Regarding security printing and digital and web, so you do not separate anymore. But can you give us some information how did Digital & Web perform in relation to security printing in the second quarter?

Sure. You can jump in the backup -- Slide 2 of the backup. There you find the Digital & Web business unit as a breakdown of our segment S&T. Yes, this one. Thank you very much. And there you see that we are facing a decrease in order intake with the Digital & Web business. And this is due to the business that we are doing within this business unit with Hewlett Packard USA. So this is a direct impact and the most direct impact we are facing due to the situation with tariffs. And we can unfortunately directly link it to the U.S.

Okay, you do the RotaJET. But let me also show you one other big improvement. This is on the level of EBIT. Even though we have a decline in revenue year-on-year in this segment due to a lower increase -- due to lower order intake and due to lower business with the U.S., we also see an improvement within our profitability. And that is a good sign as well. Of course, it is still on a level which is absolutely not appropriate, but Koenig & Bauer and the business unit and the business is developing in the right direction.

I would only add that it's softening in the business in general, the large digital printers is both the HP business and the RotaJET. The largest -- we have the installed base for those big, massive digital printers is to a large degree in the U.S. The U.S. has been adopting those products faster. And that certainly softened a lot in the last 6 months. That hits us both on the order intake side and on the revenue side because we have POC accounting. But we promised you when we resegmented that we will continue to publish the Digital & Web results for a certain amount of time for transparency reasons. So that's why they will always remain in the backup. And you can see we still have quite a lot of work to do, but we've already done a lot of work.

My next question is on free cash flow. So in the first half of the year, you were strongly negative. What is your expectation for the full year? Do you expect positive free cash flow for '25?

Yes, we knew this. We expect it. Similar to last year. We promised last year, we would have -- by end of the year, we expect positive cash flow. Still a lot of work to do, obviously. But that commitment we gave in Q1 that we expect a full year positive cash flow and it still stands. We have a lot of working capital to support our strong second half of the year.

It's a seasonality effect that we are facing right now, which is, to one reason, it is also due to the higher order backlog and also the strong H2 that we are looking ahead to. But at the year-end, also with the improved profitability, cash flow should be on the same level at least as last year, our cash position.

And my last question is on security printing, particularly with your big customer in the U.S. Do you have here some statement to what extent have the tariffs and the FX situation some impact here on demand?

Both we can say none. So the tariffs is fully covered by the customer. That's already contractually agreed, and we have also received the first reimbursement of tariffs after importing. So it's also working. It's not just a paper.

And second, we told you already in Q1 that we had executed a very large hedge for U.S. dollars. That was one of the reasons we had a temporary effect in Q1 that drove down profitability a little bit. So we feel comfortable on the FX rate for at least, I would say, 2026 and into 2027.

[indiscernible] Maybe following on the U.S. You showed it's an important end market for you. Can you explain us a little bit more how important the market is? It had been weaker already in the first half compared to last year, and it was 23% and was 20% in the full year -- in the first half.

How important is the market? And what do you see maybe seen to your competitors, how your position is? I think there is no major printing machine producer in the U.S. I'm not aware of it. They are coming from Europe and Japan, but maybe partly of China now in the low end.

But how do you see your positioning going forward? So how easy it is maybe to push the tariffs to the customer and so on, a little bit more insight and how profitable this activity was in the past? Was it above the average or below the average?

Certainly. That's a great question. I mean the U.S. is very important for us. I think for all export companies, it's a massive market. It's the largest export market in the world. And if you look also in the backup in terms of revenue last year in 2024, it was significantly higher than now in 2025. So it's disappointing that the free trade is under pressure and that the tariffs have hit as well as the exchange rate issue that with 30% more expensive machines going into the U.S. in dollars, we expect obviously a decrease in demand.

What you can obviously see in our results and in our order intake is that we're very capable in transitioning to other markets and selling our machines into new markets, particularly in Asia and China. I think in my personal opinion, this overall disruption we see through protectionism throughout the world leads to diversification of production throughout the world. So that is driving investment in one of the other countries. We see a lot of Chinese companies investing heavily outside of China, building up capacities in Southeast Asia or in Latin America. So it is driving reactionary investments in other parts of the world. And I think that's certainly one driver of our successes in Southeast Asia and China.

We have to see. U.S. is important. It's not only just the sales. It's also traditionally a country that invests in high tech. It invests in the most advanced machines. It invests in digital printing and tends to be on the forefront of productivity. So it's not just mix. We're able to compensate that quite well.

But I think we mentioned already in Q1, margins are under pressure and payment terms even. Payment terms of Chinese and Asian companies are typically, with letters of credit, not as attractive as traditional Western payment terms. The machines are a little bit less automated, a little bit more basic. So it means the margins are perhaps not as strong or the price point per machine is not quite as strong. It's a shift that we can manage and we are managing. It's part of our job, and it's part of our daily business. But the real answer is it's -- again, the U.S. is important, and we have to find the answers there.

From a competitive position, we're quite comfortable. As you mentioned, none of our major competitors are in the U.S. They're all in Europe, in Switzerland or in Japan. And as you also mentioned, Chinese competitors are more in low end and not directly competing with us. So it's not about market share. It's more about the market itself and how will the U.S. market develop. And we're quite -- again, with EUR 1.08 billion of order backlog or nearly EUR 1.1 billion of order backlog, we're comfortable moving into the next quarters. But free trade would be better.

Very short follow-on. In your CRM system, how has the pipeline in U.S. developed? Had been the pull effect, it don't look like, but have you seen any impact on the pipeline because of...

So we have -- it's a very good question as well. It's not that we're losing projects. So the customers are just stopping and saying just -- so the projects are still alive. The decision time frame is taking longer. So the time between opening up a tender or a project with a customer and getting the decision is certainly taking longer than it used to. We had a lot of contracts that were ready to be signed and the customer said, let's wait, let's wait, maybe the tariffs go away. And because as mentioned, we passed through the tariffs to our customers. So we had quite a few customers saying we think the 10 is going to go down or I think the 30 is going to go down, let's wait, wait, wait. I think that basically answers the question. We will see.

But the pipeline itself, I guess maybe one last comment. It's not shrinking. It's taking longer, and we are still booking orders in the U.S. The last major comment I should repeat. It's not that the market is gone. It's -- I would even say it's down to COVID levels or just disappeared. It's still there. The U.S., it's a rich country. It's -- they also have -- it's not just about tariffs. They have a clear onshoring strategy in the U.S. to -- that we can find good or find bad. But we are placing orders -- our customers are placing orders. We are selling machines and the pipeline is there. It's certainly not as robust as you think back 2023, 2024, the U.S. was just booming, and that's not the case in 2025.

Let me add one point, maybe our American colleagues are very optimistic. So -- maybe they tend to be more optimistic than the Germans. But at the end, it's a EUR 1 million question, how the tariffs now the new situation will turn out and how it will affect the business.

Second question to your Coding business, which under review. If I'm not totally wrong, your new major shareholder, [ Mr. Leibinger ] is also in this business. Are you in contact with him about this topic?

As a shareholder, and we have to ask him if he has any intent in that direction, but the two topics have nothing to do with each other. Coding was on our list of potential new alignment long before we had a change to our shareholder structure. And now the decision is also completely independent of any shareholder structures. But of course, there may be discussions in that direction in the future, but you have to ask our investors, not me.

Is he an active investor?

Sorry.

Is he an active investor or maybe push you to do things? Or is he only on the side?

I think very supportive as a strategic investor. I think active is the way I would define it. At general assemblies and in meetings, I think that's not the case. But we're very happy to have a strategic investor on board in these difficult times. And we see it as a commitment to German industry, and it's a good sign for us.

And finally, to your full year outlook. It looked first ambition to have a sequential growth of 35%. But last year, it was even a little bit stronger. And you had the same -- you plan now for EUR 750 million and now you expect the same. Is it prudent given your high order backlog or looking at the environment, you have to expect the same figure as last year? Or is it even maybe optimistic given that the environment is so difficult and you have the tariffs now and so on only a little bit compared to -- you are guiding for a flat revenue compared to last year.

I mean the second half of last year was very strong indeed, and we expect it to be very strong this year again. The overall guidance from our point of view is absolutely realistic. But the second, again, a very strong second half year is, of course, ambitious. That's normal for us. And Koenig & Bauer proved it very well last year that they are able to achieve and to realize the goal. And this year, again, the same, the same ambition level.

I would only agree after my sixth year at Koenig & Bauer. So we're very confident that we'll be able to execute Q2 -- second half of the year as in our guidance is implied. We know how to do it. We've done it many times. We also prefer a much more front-loaded year and not have to chase it towards Christmas, but we know we can do it.

Last year was extraordinary. We had a lot of things that went from in the first half of the year into the second half of the year. So that kind of double-loaded the second half of the year. So I wouldn't just take the second half of the year plus the first half of this year and just add them together, it's going to look a little bit different this year. But we're going -- so as we're sitting here, I hope we make a relatively relaxed impression. We're confident in this guidance and our ability to execute.

Jorge González from Hauck Aufhäuser. So I would like to go back to the free cash flow and the Spotlight. So it was not clear -- very clear to me looking to the increase of the administrative cost, if you already had a good support from the Spotlight this quarter? That will be my first question.

I see that in digital and the banknote segment, you have a strong improvement, but I don't know if it's related to the catch-up in the second quarter with the accounting of banknotes sales or if you already had a big support? That will be my first question.

We had definitely a big support from the recent program, Spotlight. And you maybe can see it in the best way, if you look at the EBIT bridge on Page 16 where you have operating effects, positive effects in the first half of this year compared to the first half of last year of over EUR 10 million, of nearly EUR 11 million. And that, of course, is also part of Spotlight.

The volume effect is lower because of the current situation, but the operating effect is even higher. And that is the main driver behind the increase in profitability that we are facing today. And this is also, of course, partly due to Spotlight.

And can you give us some hint of what is the run rate per quarter of savings that you're going to have from now on offline?

This is difficult to say because Spotlight originally was also for our financing partners measured in a very special way. First of all, it only showed the -- it did not show the net savings, but only the gross savings. And secondly, it was always compared to the basis end of 2023.

So this measurement and this calculation is absolutely correct, and it is also audited by an external expert, but it is difficult to say how this translates into the current numbers that you see in the financial report, also with regard to the comparison of last year. So what we prefer is to show you the direct impacts that we see on a year-on-year basis and which you also can find directly in our financial reports.

Maybe in another way, do you have more -- additional savings coming in the second part of the year? Or do you have achieved most of the plan?

No, we have achieved the majority of the plan, the vast majority of the plan, but we still expect some more savings in the second half of this year -- the second half of 2025 due to Spotlight.

Okay. Because following that question, I see that you have reduced substantially the provisions. This means that the outflows related to the Spotlight have been also completed. So you have already paid for the already reduced of the FTEs and all that?

Yes, correct.

Okay. Okay. And maybe a follow-up on the North America topic, the tariffs and the order intake. So is there a way you can give us a hint or idea of where is the cycle for Sheetfed in North America?

And also, I'm interested in Germany to a little bit have a clearer picture where we are if you take, obviously, the good news in Italy, the good news in China. And I think the sales are not going to show us a clear view on where we are in North America because you have the banknotes. We are already at a low cycle in North America and in Germany, and this can improve from now on or?

The U.S. is just a big question. Nobody knows when or if or how it's going to develop. That's really -- I think nobody has a crystal ball and anybody who claims to know it, I think I would approach with a lot of skepticism.

Germany is still weak, slightly improving. It's getting a little bit better, but certainly no effect there. In general, I wouldn't say Sheetfed -- Sheetfed is a large part of our company, but the reliance in the U.S. is similar to the group in general. We see the biggest impact in Digital & Web, which you saw earlier with the big digital machines where the order backlog is down.

Sheetfed is having perhaps, again, the stable development in the U.S. considering the circumstances, and it's also Sheetfed that was driving the Italian and China uptick that's mostly coming from the paper and packaging sector. But there's no business that's not doing business with the U.S. I mean we're exposed across all of our businesses to the U.S. market.

I would only repeat, I think Sheetfed is robust. Digital & Web is suffering a little bit more, again, on top of all the other topics. But I think the time is up. You have 1, maybe 30 seconds, Jorge, if you.

I can ask some questions later, if you want.

So we don't have any questions in the call. I just received the message, and it is exactly 12:00. So we are very punctual, but that was the plan.

So thank you very much for joining our first half conference call for the June 30 results. It was a pleasure for me the first time as CEO to present the figures. Thank you for your attendance. I look forward to seeing many of you, I hope, at 1:00 at our Capital Markets Day and discussing further. So thank you very much, and good afternoon. And operator, you can close the call. Thank you.

Thank you.