Palfinger Aktie

Good morning, everybody, and a warm welcome to PALFINGER AG's roundtable dedicated to the ad hoc regarding Russia topic. The CFO, Felix Strohbichler, will share a few insights, and then we will have an extensive Q&A. A few side notes. We will record this roundtable. [Operator Instructions] With all this in mind, I will now hand it over to Felix. It's all yours.

Thank you. Good morning, ladies and gentlemen, and thank you for joining this early morning call. Let me, first of all, go back a little bit in history to explain what happened yesterday in the Supervisory Board meeting of PALFINGER AG. As you all recall, PALFINGER from the beginning of the war had a very clear policy not to sell the entities for a low purchase price or to throw the entities away, but to keep the entities and to hope for an end of the war and to be able to recover control and to completely again, include those entities in our group organization.

Of course, we had to ring-fence the organization. We stopped all deliveries. We did stop any transfer of know-how, money, et cetera, in order to comply with sanctions. And we also, of course, made organizational measures to make sure that the ring-fencing is solid and established, which means mainly that we had guidelines in place, which clearly stated what must not be done in order to comply with sanctions. What happened at the beginning of this year was that the Russian entities of PALFINGER got on to the U.K. sanctions list. It was not possible for us to find out exactly reasons, but it's a matter of fact.

And since then, we also started to think about what could be ways to protect ourselves in case we run into problems. We did not really face any challenges so far due to the fact that our entities are on the U.K. sanction list. But still, we always had in mind what could happen if this will lead also to U.S. sanctions, if there would be further requests from eventually customers in the Defense segment to further get more distance, so to say, to our Russian entities. And this is why we also evaluated ways what we could do in case need be. And one of the measures was that we created a holding for the Russian entities in the last quarters, which is in the meantime, already in place.

As you all know, in the last years, the situation with Russia has rather become worse. We see hybrid warfare and escalation is more likely than de-escalation at the moment. And our hope that the war will end soon and that we will get back to normal, so to say, in our relations with Russia becomes rather unlikely, at least in the short and probably even in the midterm. In the Supervisory Board meeting yesterday, we discussed, as always, the risk portfolio of PALFINGER and the top risk or one of the top risks, as you can imagine, is always the setup in Russia. What does it mean? What are the options?

At this occasion, I also presented the legal structure implemented. And in an extensive discussion in the Supervisory Board, the decision was taken that we do not wait until we get under pressure to change something, but we rather want to proactively strengthen the ring-fencing by implementing a legal structure, which lifts our ring-fencing to the next level. So today, it's organizational ring-fencing by guidelines. Tomorrow, it will be a legal structure in between of PALFINGER AG and the Russian entities, which is -- which creates the impossibility for PALFINGER actually to give directions to the Russian entities.

So today, it's clearly regulated by guidelines. Tomorrow, it will be legally even impossible. So this is the major change, which we decided to implement. This still means that PALFINGER is the owner of the Russian entity. So we don't give the entities away. There is obviously no cash impact, but what changes as we give away in our control and as you all know, there have been a lot of discussions in the past why are the Russian entities still fully consolidated. This is the case because according to IFRS, we don't have any choice not to fully consolidate.

But now with this step of clearly establishing a legal structure, which makes it impossible for PALFINGER to give any directions to the Russian entities, we also have to change the accounting method and also the valuation. So first of all, we now talk about discontinued operations according to IFRS 5. And this means that we have a onetime impact of -- in the valuation. Before it was simply the assets as they were in the books, and there was no way to devaluate them. The only possibility would have been in theory if there would have been an impairment test not covering long-term assets. But now we have to look at what is the fair value of the Russian entities.

And if you look at what you get if you sell an entity, which is on the U.K. sanction list, it's towards 0, so to say. So we have a clear statement also from specialist lawyers telling us that probably you only get 5% of your assets if you would sell Russian entities today. So this means if we apply this, it's a devaluation or a write-off, actually a write-off of EUR 135 million, which will be shown below EBIT. So it's a separate line, results from discontinued operations. And we also have foreign exchange reserve of around EUR 45 million today, which means that the value of the assets does not change every quarter with the FX rate, but it's recorded separately in the so-called foreign exchange reserve.

And this foreign exchange reserve only can be recycled, which means actually shown in the result after implementation of the new ring-fencing structure. This structure has been decided. It's likely to be implemented within the next 12 months. So it's discontinued operations. The EUR 135 million will be shown already in Q3, but the EUR 45 million will only be shown after implementation or with the implementation of the new structure. What this means is that in the future, EBIT revenue of the Russian entities will not be included anymore in the consolidated group results, and this will apply from Q3 and already year-to-date, you will see that the turnover number of Russia will go out and also the EBIT, but the EBIT for Russia is 0. So this is not an impact. But obviously, there is an impact from the revenue.

There is one more effect I would like to highlight today. We have not yet communicated on this, and it's not ad hoc relevant, but it's also adding to the picture because last week, we have signed a contract to dispose of a noncore asset. You might recall that a few years back, we have carved out the Tail Lifts business of the global PALFINGER organization because there are almost no synergies. And we also communicated that in case there is an interested buyer with a reasonable purchase price, we would be willing to look into this. This has been the case. We have signed now a binding pre-agreement to sell of course, subject to closing conditions, which have to be fulfilled, but it's very likely that in the fourth quarter at the latest in Q1, this entity will also -- this transaction will also be closed.

And this also results in the fact that revenues and EBIT from Tail Lifts will be shown under discontinued operations for the time being now. And after closing of the deal, obviously, the Tail Lifts numbers will be done because the entity is disposed of. It's a similar effect. So we have now, as I said, results from discontinued operations, which adds something to the EBIT around 2.7%. There will be a negative effect due to the delta of purchase price and book value, a single-digit million amount, which is still open due to certain factors, which will impact the net profit or the net income. So this is the second topic.

The third topic I would like to talk about is, obviously, we also made a guidance regarding Q3 in our ad hoc statement. We mentioned that we expect around EUR 120 million. We also had communicated at the half year that we are targeting to exceed the numbers of the previous year for the full year. So we had a quite steep hockey stick in mind, which we still have in mind. However, due to the fact that the situation in Germany, in the Middle East, in the U.S. has not changed and not improved since our last communication, it's increasingly challenging to compensate for the shortfall of the first half year versus prior year.

So from today's perspective, it will be rather difficult or rather unrealistic to exceed the prior year's numbers. So this is also what obviously has been understood with this message that we have a delta of around EUR 10 million compared to Q3 year-to-date of the previous year. This was a lot of information in a very short period of time, but I think it's important to summarize where we are at, and I'm now open and welcome your questions.

Thank you so much for the insights, Felix. We are now progressing to the Q&A. [Operator Instructions] We have the first question coming from Daniel Lion. Give me 1 second. [Operator Instructions]

Thanks, Felix, for the intro. Actually, for the time being, I would have 2 questions. The one relating to the EUR 45 million that you already have in your equity related to the FX changes of the Russian assets. How does this affect the P&L after the new setup is implemented? Because I would take this EUR 45 million as actually being already more or less anyway deducted? Or is this a positive impact for the P&L...

Then, let me answer this question right away. So we have in total at the moment, assets of around EUR 180 million in our balance sheet for Russia. This is a relatively high value due to the FX development. And this is split in around EUR 135 million of actual assets for historical FX rates. And the rest is, so to say, the change of the currency. What we have to do is to write off more or less all of EUR 180 million with a few millions left because it's around 95% or so. And we have to do this in 2 steps. The first step is with discontinued operations, the assets have to be written off, but the foreign exchange reserve will only hit the P&L as soon as the structure is implemented.

And both effects will be shown below EBIT in a separate line results from discontinued operations. So it's in between of EBIT and net income, a separate line results from discontinued operations. So this year, you will see EUR 135 million plus some effect out of Tail Lifts, which still is not yet clear. Like also the EUR 135 million are not exactly clear. There are still some small variations possible, but in principle, this is the amount. And then you have next year, another effect of around EUR 45 million can also be EUR 30 million or EUR 50 million depending on the FX rates, further impact in discontinued operations, not affecting EBIT.

Also this year, EBIT is not really affected. It's only slightly affected because we have to add a small amount of EBIT from Tail Lifts because we had a negative result year-to-date, which now leads to an improvement, so to say, of the EBIT line, but of course, not of the net impact. And next year, you have EUR 45 million in discontinued operations, reducing the net income.

But I would understand the EUR 135 million anyway is the net asset value of the Russian entities because obviously, EUR 180 million on the asset side, if you want, and EUR 45 million if you really take it very superficially in equity as a negative item. So I don't see...

EUR 135 million plus EUR 45 million. The EUR 135 million go out immediately, the EUR 45 million will follow next year. It's 2x a negative impact. And this is why we communicated it immediately because it's already clear if the structure is implemented, this will follow. It's just not clear what the ruble exchange rate will look like next year. So we can't give you an exact amount.

Okay. Okay. I need to check. And then actually, the second thing you relate to the full year guidance. The EUR 120 million that you guide for the third quarter, this is, I guess, already excluding Russia, right?

Well, Russia is no impact. Russia was, I think, a loss of EUR 100,000 year-to-date roughly. So this is around 0.

Okay. Okay. I understand. And you would wait until the situation obviously clears in order to fully consolidate it again as it was up to now? Or is there any idea -- any different idea with the Russian assets going forward?

No, the idea is still to keep the ownership and not dispose of the ownership, but to give away our control rights in a formal way, which even hinders us to execute any control rights even if we would like to. So for example, it's not PALFINGER anymore to determine a new Managing Director if the Managing Director would leave the Russian entity, the Russian holding.

[Operator Instructions] And we will move on to the next question, which comes from Miro Zuzak. [Operator Instructions]

Can you hear me?

Yes.

Yes.

I have 1 question. So to better understand what's actually happening. So you're saying basically you're giving away control, but you're still keeping the ownership.

Yes.

So -- and still you have a loss from the deconsolidation, right? So basically, you booked EUR 135 million loss, but there is no -- is this an impairment of the assets? Or is this an effect of the deconsolidation?

It's an effect of the deconsolidation, so to say, actually, it's now classified as discontinued operations. And whereas before, the impairment test was, so to say, the measurement if the assets have a value or not. Today, it's the fair value, which means what an external party would pay for those assets minus the cost of disposal. And this is close to 0. So this is a different valuation method, and this leads to this big write-off of more or less all the asset value. It's a change of valuation method, which is actually the reason for this amount.

So there is no corresponding gain somewhere else, right? So it's just a write-off.

It's just -- it's a bookkeeping effect. So we still have the assets, but the assets are evaluated with a different perspective. It's not anymore what has been the historical value is the value covered by the net present value of future cash flows. The question is now what would an external party pay for those entities if we would dispose of those entities.

Okay. And just hypothetically, so if the entity would make a EUR 10 million profit next year, where would this be booked in the equity result?

No, it's not shown in our results. The numbers of Russia will be out of PALFINGER P&L. Of course, we will have some remaining position in our balance sheet for the assets which have not yet been written off, which will be a single-digit million amount. So this would remain and this would be a further risk if everything collapses. But in practice, the numbers are out of our balance sheet. So in the future, you have, so to say, a clean reporting from PALFINGER, first of all, without Russia and secondly, also without the noncore assets Tail Lifts.

And who would make then -- who would get the money?

Nobody gets the money because due to sanctions, you can't get money out of Russia. There is no...

Money stay in the entity...

As it was the case for the last 5 years or 4 years, we never took out any dividends simply because we also wanted to make sure that in case of difficulties, market downturn, which is the case now, the entities need money. They have funds available to avoid any nationalization or any -- not to make the Russian authorities aware of any issues which could lead to consequences. So in the end, we decided let's keep the money there. Let's rather make sure that the entities are stable. We can't get involved anymore. And with the wisdom of hindsight, it was also necessary to do that because as we all see today, the situation in the Russian economy is very difficult.

Okay. So there's -- it's like -- so for example, if for the next 5 years, the entity would make EUR 10 million each, there would be like a hidden reserve being accrued for 5 years or EUR 50 million. And then in the event that it would -- basically, there would be a peace deal with Russia and all the sanctions list would be basically ceased, then you would have EUR 50 million gain, extraordinary gain.

In theory, yes. In practice, I would not assume that those entities in the short term will make big profits.

No, no, of course. But it's just to understand. So and just how does the structure look like? Is this like a collective...

It's not yet finally designed, but the main hypothesis is that it could be a trust with 4 sanction lawyers as the Board members of the trust. And this trust obviously has no owner. And this trust would, so to say, have the administrative rights and also the voting rights for the Russian entities, but with a clear guideline to keep them alive, so to say.

Okay. And obviously, the sales will be missed in the coming years, together with the Tail Lifts, I think you mentioned EUR 150 million roughly around-ish -- in total, will you update the midterm guidance? So how -- the EUR 2.7 billion, which you said would basically then -- anyway delayed...

In any case, now to have those 2 effects of Tail Lifts and Russia have not been factored in. It will help us to get closer to our EBIT margin target. But of course, it stretches the revenue target substantially, and we will have to look into this. It's too early now to communicate on this. This was not planned. It happened yesterday after an extensive discussion.

We took a decision, which I appreciate because I think it has a lot of benefits for PALFINGER, but we have not yet looked into what exactly does this mean for target settings, et cetera. And it does not change, I think, the EBIT margin targets and the ROCE targets. It will rather contribute to this, but it makes, of course, the revenue target much more challenging.

Okay. And the last question from my side, if I may. Could you please basically with the EUR 120 million year-to-date, we could see that Q3 is a bit softer, right? Or was a bit softer compared to last year? Could you also give a bit more color on Q4, what we should expect there in terms of basically the operational side of the business?

Yes. In Q4, we have quite a steep ramp-up in mind, and this was the reason why we had communicated at the half year, we target to exceed the previous year in terms of EBIT for the full year. We are seeing some obstacles in terms of availability of parts. This has been an issue already for several months for several reasons. So this is not 1 supplier, but it's kind of a pattern that we see that the ramp-up we have now started and which we are doing and which will increase in Q4 has not been followed completely by some suppliers because they have just not been able, obviously, to follow, which created some backlog, which is also a reason why in Q3, the number is lower than I had hoped for and I had expected.

We will recover this backlog, hopefully to a certain extent in Q4. But now we have a combination that we would have to recover the backlog out of Q3, and we would have to master the full ramp-up we had in mind, which is actually not only a challenge, which I would say, empirically, if we look at historical things, this is rather unlikely that everything will work out as it could work out in theory.

So probably we will remain under the previous year results, not dramatically, but to exceed the results of the previous year from today's perspective, with the backlog we have in Q3, with the fact that there is no improvement in the Middle East, that the service for Marine Middle East will not ramp up, that we have sales in the Middle East, which do not happen at the moment. If nothing changes and if we have to recover the backlog fully and we still need to do the ramp-up, I think there are a few risks which make it rather unlikely to exceed the previous year.

[Operator Instructions] We do have a lot of other questions that were submitted via chat since they were already entered while you were already answering some other questions. There might be some redundancy, Felix. So please feel free to answer them rather quickly if we already address some of the issues. The first question came from Gregor Koppensteiner from Raiffeisen Bank International. It reads, this accounts for less than 4% of group revenue. Why is the asset exposure of EUR 135 million comparatively high? And what was the historical profitability and capital employed of the Russian business?

Yes. The Russian business historically was substantially more important than today. So historically, we had around EUR 150 million of revenue in the best years and EBIT margin was getting even close or to 20% in the best years. So Russia has been an extremely strong, if not the strongest relative contributor to the bottom line of PALFINGER in history. This is also why the asset base is relatively big. We have here several factories, a very highly integrated value chain. So if you compare today's revenue of around EUR 75 million, EUR 80 million to the asset base, of course, this is disproportionate historically. And we also have to consider that there are 3 joint ventures included. So of course, in the revenue, we do not account for 3 joint ventures, which are also included in those EUR 135 million because these are equity consolidated.

Thank you. Next question comes from Lars Vom-Cleff, Deutsche Bank regarding the Tail Lifts business. Are you willing to share the price you get for the Tail Lifts business? And can you generate a book gain with the sale?

No, as I mentioned, we will see a slight book loss, which will be a single-digit million amount. I cannot share the purchase price because we have agreed with the purchaser not to disclose it. Perhaps we will change this still because this is only a pre-agreement. And eventually, there will be another communication in the future. But for the time being, I cannot disclose the exact valuation. But it's a valuation which is quite reasonable given the fact that we made losses this year.

Next question comes from Hans-Joachim Heimbuerger. And the question reads, how much sales will likely be lost on a full year basis in 2027 from the Russian deconsolidation? You might have already addressed this, but please.

I would assume it's around EUR 75 million to EUR 80 million of sales, which we'll miss and probably a similar amount or slightly higher from the Tail Lifts business.

Great. Next question is from Alexander Dominicus of Value-Holdings. It's 3 parts. The first part reads, what is the potential impact on dividend policy and government?

This is a non-cash effect. So it's actually cash neutral. And this is why the Board will propose to the Supervisory Board still to pay a dividend to be determined. But I would not assume that this means that PALFINGER will not pay a dividend next year. So I do assume that also the Supervisory Board and our general assembly will approve a dividend proposal of the Executive Board.

Second part is EUR 45 million negative FX impact comes also in the current year mark?

No, probably next year.

Okay. And the last part is, can you clarify your given statements on the full year guidance, excluding Russia?

I think I answered this question. So Russia will not have any impact on the bottom line. Tail Lifts will have a slightly positive impact on EBIT. And of course, the negative impacts are below the EBIT. So the impact is mainly on net income and not on EBIT.

Another question coming from Jens-Peter Rieck of mwb research. He's asking if you could provide a restated 9 months 2025 comparable?

We, of course, will have to communicate this very well because if you will look at the revenue number, this will be, so to say, shockingly low if you just compare half year against the third quarter. But of course, we will have to restate the whole year because these are those discontinued operations, and we need to compare apples with apples. We have not yet the time to look into how to show this, but we will have to show this in a very transparent way so that you know what to compare and that you can see the operational development.

And he also had a question on the Tail Lifts carve-out. But as you already mentioned, there is some information that you can't disclose. Coming to Lasse Stueben, he's wondering, could you give some more color on the regional demand development? And are you seeing any signs of improvement in Europe heading into 2027 given the backdrop of improving PMI data in this region?

Yes. So what we can say is that Europe actually performs quite well, except Germany and Austria. France is also not doing that bad, but not because the market would be great rather because we have been winning market shares over the last years in France. So the big potential in Europe is actually that markets, mainly the market in Germany, should improve, and this is what we also hope for, for the next year. We hear from our customers in the construction industry that infrastructure tenders are out. We also won in August or in July, a big tender from German Autobahn. So some things are happening, but it's still slow, and we do expect that we should see in line with what our customers tell us some impact starting from Q2 2027 onwards.

But of course, it's difficult to say. But overall, Northern Germany, Southern Germany is actually not doing better. Marine is doing very well. I think this has not changed now for quite some time. In North America, we see a slight recovery of truck registrations. But in principle, it's still a relatively low market for most product lines. Crane business is very good due to the investments in artificial intelligence, data centers, et cetera.

So crane sales this year are actually on, I think, even the highest level ever, but many other product lines suffer from a depressed market and rising interest and low confidence of consumers doesn't help at the moment in the U.S. Latin America is performing solid, no major change. And in Asia, there is also the situation unchanged. China is very low. India is developing well. We are pushing forward our investment in India. And I think Russia, we don't have to mention anymore. I think I covered all the regions.

Thank you so much, Felix. I appreciate the input that you've given us. We have budgeted 30 minutes for this call. 30 minutes are over. I don't see any additional questions. We are right on time. I appreciate the time you've spent with us today. I appreciate the questions everybody submitted, and I wish you all a great start into the day going forward. Thanks for your participation.

Thanks a lot. Goodbye.

Good morning, everybody, and thanks for joining the call. I'm very happy to present here our Q1 results, and you will see later on why we are really quite proud of it.

Where do we come from? I think just from memory here EUR 2.34 billion revenue in 2025, the third best year in the history of Palfinger, and again, we will see later on, we are aiming for that.

Why is this happening? Through our strong global presence, this means in terms of engineering and technology, in terms of our solid and strong sales and service network, 30 production sites worldwide and very well motivated 12,000 employees.

We go to the next slide. I think here, it's clear to us and very well understood about our equity story. We presented this already several times, but I just wanted to remind you where we are coming from and what does Palfinger mean? We are a true global technology company, again, year-over-year growth in revenue and EBIT, and this has proven that not only the equity story is right as well, the business model fits very well for our customers and for our dealers.

The equity story means that we are a technology leader. We are aiming for growth. Here, I think the areas are clearly identified, we are very resilient. I think also something especially in these days, usually, it's forgotten. But considering results we are seeing here, this is proven and great results and great earnings potential. And I think this is well something, especially for our investor side can be quite interesting.

If you move to the next slide, yes, we are resilient, and this is based on our strong and solid industry diversity. Here, you see the impact by the different industry sticking to our business. So still 18% infrastructure, but as everybody knows here, this is still something which is further growing. The governments, not only in Europe, are really supporting and subsidizing infrastructure, it's not only about road, it's about railway, it's about infrastructure, everything. So this is still a quite solid base.

On the other hand, our marine business. Here, we're talking about shipbuilding but as well the services which are coming along. They're not to forget about the transport and logistics. And then on the fourth level, building construction, here, you see that we are not that much depending as well on private housing, which is still somehow in a trend which is not fully recovering.

If we go to the next slide, yes, we are having the proper solutions for all our customer needs. The classical land side, 8 different solutions we are providing, 6 here on the marine side as well here, no further consolidation. We stick to our plan, and this is very much appreciated both by our customers and our dealers that we are having solid solution provider in terms of products and solutions.

If we go to the next slide, quite important here. You have seen already -- or some of you have seen already when we presented Reach Higher, our Strategy 2030+ which we redid last year, which was very well perceived by the marketplace by investors, but as well by our customers and dealers which has more or less 3 pillars, is lifting customer value. This means really staying close to our customer, customer requirements, customer satisfaction not only in terms of products and solutions, but as well in terms of services.

Then very quite important to balance profitable growth here to make sure not just shooting for profitability, not just shooting for volume to have the proper balance and to make sure that as well, businesses like service and spare parts, but as well the area working platform is kicking in, and this is the focus. Then as well execution excellence. This means making sure that we walk the talk. This means focusing on supply chain optimization and as well process system and data optimization. In total, we are identifying or we identified 18 programs. And if anybody is interested, still to learn more about it just watch our website and you can see more about it.

Yes, what does this mean? If you move to the next slide, in terms of where are the main drivers coming from. So before, we have shown and seen the different industries. Here, we are seeing the main drivers, the main drivers for our growth, as we said and as I mentioned already before, a big portion is service and spare parts. Then as well, the expected recovery in EMEA, which we are partially seeing despite, maybe Germany, but still, I would say, Iberia, Spain, Portugal is recovering, Italy is holding up quite strong and as well Portugal. And as you see here as well, an important part is AWP, Aerial Working Platform and all the other businesses as well as mentioned here.

If we move to the next slide and here, I'm talking about our Q1 2026 highlights. And I think this already shows and proves already that we walk the talk as well in terms of profitable growth and volume. Here, we managed to increase our revenue to EUR 561.5 million. The EBIT as well further increased to EUR 41.3 million, and our net results, even more important, EUR 24.6 million. This means more than 11% in terms of growth year-over-year. And if you consider this maybe with some other fellows in the industry in terms of benchmark in machinery industry or whatever, I think we can be very proud of it, and Felix will further explain what does this mean and where these numbers are coming from.

That is well coming back into the ATX here in Austria. Then important show in the United States, the CONEXPO, which is similar to the bauma in Europe where we were quite successful in terms of leads, in terms of presenting ourselves. And not to forget about our collaboration with ICON. Here, we are talking about 3D printing with [ porting ] and lifting solutions which is as well a major milestone moving forward.

Talking about the CONEXPO in 2026. Yes, this is the largest construction trade show in the world, not only in the U.S., in the world in 2026. Last year, we had to cover the bauma in Munich, takes place in U.S. in Las Vegas. We had more than 140,000 registered visitors overall and 33,500 people on our booth. And this is quite significant, yet as well in terms of leads, we got a very strong leads which is very strong requirements in terms of customers joining us, seeing us and asking for quotations and even closing some deals here.

On the next slide, a little bit of...

[Technical Difficulty]

Ladies and gentlemen, please hold the line. The connection with the speaker has been lost. The conference will continue shortly.

The speaker line is back.

Okay. Sorry, guys, for this interruption. I think these were maybe too many good news here from Bergheim, Salzburg that the line couldn't digest it, I apologize.

Yes, talking about ICON, a strong technology partner here based in Austin, Texas, which employs more than 400 people and is focusing here on robot-assisted 3D printing, which is quite unique in the industry and where Palfinger is here, the major contributor in terms of technology.

Saying this, now we are coming to the part where, Felix Strohbichler, our CFO, will further explain and talk about the numbers before then I am coming to the outlook. Please Felix, go ahead.

Thank you, Andreas. Good morning, ladies and gentlemen. As you know, probably, we are steering the company in 3 segments. First of all, the segment Sales and Service, which includes, as the name says, all service and sales activities for our products and solutions except manufacturing for third parties.

So if you look at the next slide, you can see the market developments in the several regions, and these were obviously not in one direction only. On the one hand, we saw improved market environment in EMEA, except for Germany, Austria and France, but Southern Europe, as Andreas Klauser already mentioned, in Northern Europe performed quite well. Also in the Middle East, the situation despite of the war was actually quite okay. So in total, we saw a significantly higher revenue and even more importantly, significantly higher earnings from EMEA in the first quarter.

In North America, we still see, of course, that the geopolitical tensions, the war in Iran, the tariff policies slowed down customers' decisions. This resulted again in lower demand and also in a lower profitability for the region North America. Going to Latin America, we could show some slight growth despite of the fact that we see now a decline in demand in Brazil.

Moving on to APAC. India is still a growth driver in the region even if there is a certain impact now from the war in the Middle East. The Chinese market remains soft, a little movement, but not really a recovery.

Coming to Marine. Marine was the second very strong pillar in the first quarter next to EMEA. So outstanding performance driven by major orders from wind, offshore cranes and the cruise ship sectors and the outlook for the rest of the year in marine is again also positive. Last but not least, CIS another drop in revenue and earnings due to the fact that the overall economic situation in Russia as a consequence of the sanctions is really difficult.

So what does this mean in terms of numbers? An increase of 2.2% in external revenue to EUR 506 million. EBIT went down by [ 12% ] to EUR 46.6 million to an EBIT margin of 9.2%. But please keep in mind that the EBIT lines in all 3 segments are impacted by intercompany transfer pricing and also in the company service charges. So it's always a little bit difficult to compare periods against the latest period simply due to ongoing changes in intercompany invoicing and service charges.

If you go to the order book level, this is a very positive line because despite of a slight decrease of 3% compared to the end of Q1 2025, we actually had an increase of EUR 65 million compared to the end of the year. 2025 despite of high output. The service revenue share is 2% lower than in the first quarter 2024. We have a clear plan to catch up here in the coming quarters.

Moving on to the segment operations, which includes all manufacturing and assembly activities of Palfinger. On the one hand, in Europe, we have seen a strong demand, as already mentioned before, due to the better market environment and this also led to a high utilization, especially for Loader Cranes and Hookloaders. In the U.S., on the other hand, the subdued demand also led to a lower capacity utilization. And the same is true in CIS due to the difficult economic situation, there is also a persistently low utilization of our plants.

If you go to the numbers of the segment operations, let's focus on the external revenue, as I said already, EBIT is impacted always by transfer pricing. You see here a slight improvement of 6% in production for third parties, but compared to levels we have seen in '22, 2023, this is still far below what we have already experienced in the past. So this reflects still a relatively difficult market environment for many players in related industries who our customers in this activity.

Coming to the third and last segment, other nonreported segments, which includes, on the one hand, strategic projects on group level, but also the Tail Lift division, which has been carved out a few years ago. And if you look at the external revenue, this obviously reflects the development of the Tail Lift business. And as we are mainly active in the core markets, Germany and the U.S. which are still difficult and not recovering, the revenue has declined by 18.3% to 18.8%. Again, if you look at the EBIT line, you see a slight improvement. But again, this is also due to the fact that we have invoiced more services to the other sectors.

Coming now to the Palfinger Group. As Andreas Klauser already mentioned, revenue increased by 1.6% to EUR 561.5 million, which means that the EBIT margin has improved slightly to 7.4%. So overproportionately by plus 3%. And what is, of course, the most important KPI is the consolidated net result which has improved by almost 12% to EUR 24.6 million. So the further down we go the P&L, the better it gets overproportionately growth in profitability.

On the right side of the chart, you see the revenue distribution by region in the first quarter due to the fact that North America and CIS have been difficult to see an increasing market or increasing revenue share of EMEA, which has gone up to 64%. North America is at 22%. APAC and Lat Am 5%, respectively, 6% in CIS, in the meantime, is only accounting for 3% of the group revenue.

Coming to our free cash flow. In the first quarter, we still recorded a negative free cash flow of EUR 19.2 million. This is mainly 2 reasons. On the one hand, the investing activities have been relatively high, at least significantly higher than the first quarter of last year. But more importantly, we had an impact from changing working capital. So there was a certain buildup of inventory, mainly in the first quarter, which will be reversed in the coming quarters. So we, of course, maintain our free cash flow target of more than EUR 100 million for the full year 2026.

Coming now to our balance sheet. You have already seen at the year-end a massive improvement in our balance sheet ratios. And this is, of course, the same now if we compare Q1 2025 to Q1 2026. Equity ratio has come up by 7.2% to 43.8%. Gearing is at almost 52% and ROC is at 9.5%. So the balance sheet is extremely solid, EUR 950 million of equity, net debt-to-EBITDA at the extremely healthy level of 1.8. And this also, of course, is reflected in our net financial debt, which has come down by around EUR 150 million compared to the first quarter of 2025. So now we have a net debt level of EUR 491.5 million. Our financing is very solid, long-term, 3.24 years, remaining EUR 200 million average debt has gone up slightly also due to the fact that we had to pay back last year some attractive variable financing due to the fact that we had excess cash also following the sale of treasury shares.

With this, I would like to hand back to Andreas Klauser for the outlook.

Yes. Thank you, Felix. I think no doubt, a very strong start, and we are aiming for the same for the half year. So we will be slightly above for prior year. This is what we expected for the first half of 2026. More we will then disclose later on in our half year call about the full year. As well quite important here that we are aiming as well to have in terms of revenue and EBIT above previous year. So in the second half of 2026, this should amount as well to another successful entire year.

The goal is as well to have one of the most successful years in terms of Palfinger company's history. I think this is well quite important for you guys being the investors understanding that we are not just protecting our territory, that we are as well aiming to further grow. Yes, this is certainly subject to certain developments we see, especially for 2027 here, I think, further based on the recovery, which is expected from Germany. We are not really seeing this so far, but as well what we are getting here out of the marketplace, the tools and all the relevant environment is now provided that we can do so. And as well on the other hand, the upstream in U.S., where we, for example, truck-mounted forklift, we already see some positive trends and movements, which will materialize latest then in 2027.

If you go to the next slide, our financial target did not change. The financial target for 2030, the EUR 3 billion in terms of revenue. 15% ROCE, 12% EBIT margin and as well quite important remaining and further building our #1 position for crane and lifting solutions in the entire industry. As well here looking into the marketplace, not only talking about CONEXPO U.S., we can clearly see that this is happening.

And I think it's also important if you go to the next slide to see some real examples in terms of opportunities, which we are ahead of us, that's the overall investment in Germany, which is still announced and not fully kicking in infrastructure investment gap, we are talking here between EUR 500 billion to EUR 800 billion a year. Not to forget about the U.S. target project with EUR 500 billion and as well at a certain point in time, of reconstruction of Ukraine. And this is not yet built into our business plan. So you can clearly see here the potential is huge. And we are quite confident that we are getting a certain kind of portion of this business, which is upcoming in the next couple of years.

At this point in time, I want to say thank you for your attention. And sorry for the short interruption here. But I think there was too many good news to digest, and I'm handing back to the operator. Thank you.

[Operator Instructions]. The first question comes from the line of Markus Remis from ODDO BHF.

Congrats to the numbers and a few questions from my side. Firstly, on the guidance in the full year results call, it was mentioned that in the first half, you expect EBIT growth to be actually under proportionate compared to the top line growth? And wondering if that is still the case. And also if you can put into perspective, the second half year guidance, what it means for the margin. So should the margins go up slightly or is there -- yes, possibility that it will be rather flattish or even slightly down if it's growing underproportionately. That would be the first one.

Perhaps, let me come to the guidance for the first half year. So our expectation in terms of EBIT margin has slightly improved. So last time I said it's probably the same or eventually a slightly lower EBIT margin at the higher level of revenue. From this perspective, we believe that the EBIT margin will be on the same or on a slightly higher level compared to the previous year. So this is a slight improvement in terms of EBIT margin expectation for the first half year. And for the second half year, we do expect this development to continue. So we expect also for the second half year revenue and EBIT above previous year's level. And of course, if revenue goes up, typically, this also helps with the EBIT margin. So I would not expect a huge increase in EBIT margin, but there should be a slight increase.

Okay. The kind of improvement in the first half margin profile, is that a mix effect? Or is it more coming on the cost side? Can you elaborate a bit on that?

Well, what we can see is that in the first quarter, we still have positive impact also in terms of material costs, steel costs, et cetera, we are still on a reasonable level in the first quarter, now the war in Iran, and not only this, also some improvements in certain areas lead to a higher cost from suppliers, raw material, which will kick in, in the remainder of the year. So this will put some pressure. Of course, we will also react with price increases to a certain extent, but all of this will kick in.

But of course, there are several impacts in the first quarter, which helped. So it's material cost, but it's also mix. It was mentioned, for example, that especially crane in EMEA has been very strong. And of course, this is one of the best contributor, so to say, in terms of EBIT margin. And the same is true for Marine. So the 2 strong contributors, Marine and EMEA are actually in terms of profit margin, also very good contributors.

Okay. Very clear. And then on kind of the order or demand trends that you're currently seeing. Can you outline kind of the momentum in April and kind of the perception you currently have for the second quarter, as you point out, it will be also kind of a decisive part whether 2027 is going to the EUR 2.7 billion direction?

No, clearly, and I think in terms of business intake, order intake, we are getting some orders, further orders here on the defense side, it's an opportunity we can't really disclose here too much. We will understand for different obvious reasons. Defense side is kicking in very well, which is leading as well into some further shipments next year already. The same on the marine side, Germany, as I said, is still in a recovery phase, but we can see now that our customers, like the major construction companies, are getting deals awarded in terms of infrastructure. There, we see some movement, but very solid already, as I mentioned, Spain, Italy where the order intake is quite strong and as well as some major deals are coming back from North America. So I'm quite confident that we will see a further positive trend for the entire year of 2026, but as well 2027.

Would you expect the Q2 order intake to be above Q1?

Could be slightly above Q1, yes, but not only for the second half of the year. It might really start now in Q2 because we are working on some major deals which should kick in sooner than later.

Okay. And then 1 question regarding the U.S. Can you outline the impact that you've penciled in, into your guidance regarding the U.S. areas? And I think the narrative would be that there is some pent-up demand waiting on the sidelines, but for all these obvious reasons, political noise, et cetera, is not materializing. I mean, how long can this situation prevail and I mean this uncertainty is, therefore, for quite some quarters arguably. Do you think that there is a kind of an unwinding of this pent-up demand we expected anytime soon?

No. First of all, I think there are no North Americans here in the call because they see it a little bit from a different angle. And North America is maybe not that fragile as we think on one hand side. On the other hand, yes, people are hesitating and seeing if tariffs are moving, going down whatever and in their business decisions. So we are currently working on a bigger deal, closing again on track-mounted forklift, a significant number. And here, these guys are investing. They have their investment plans, and they don't care too much about politics at the moment luckily.

The smaller ones, yes, the smaller ones are still hesitating. There are still huge demand, and we have clearly seen it at the CONEXPO here in Las Vegas that the requirements, the interest, interest for growth is there. So this means business is sitting there. The decision-making process, and I fully agree with you, is a bit more complicated and delayed. So they are postponing because they might see a further recovery in terms of -- not in terms of business, but in terms of tariffs.

Mostly of it, we can offset with our local footprint we have in North America, the 3 plants and as well the USMCA agreement, which is still helping in terms of Canadian production assembly. And yes, we don't see the critical, we still have, let's say, here, a task force in place always on a weekly base, identifying which kind of moves can be done but then I'm looking out of Felix. And I think now in the numbers looking forward, this is fully embedded. And I would even expect a further upswing and positive drive in terms of related to the current situation.

Yes, of course, the tariff situation in the U.S. based on the current tariff regime is fully embedded in our guidance. So this is clear. And of course, there is still a certain impact not so much from the country tariffs, what is the major impact is clearly Section 232.

Okay. And then kind of the earnings burden, would you be willing to share that -- in 2025.

Well, as in 2025, we saw a steadily increasing level of tariffs. You cannot just compare it year-over-year. So compared to the last year, probably the impact will be on a similar level despite of the fact that in total, it's substantially more. But of course, with price increases, it's somehow compensated to a certain extent and also with footprint measures. There are also some measures in place to mitigate the impact, but it will still be a double-digit million amount, a lower double-digit million amount, which will be the impact in 2026 in our P&L.

The next question comes from Daniel Lion from Erste Group.

I would like to continue a little bit on the outlook and order backlog. What would be a level that you need to reach now the half year or maybe by the end of the year in order to make sure that fiscal '27 guidance is -- or can be met -- talking about maybe -- yes.

What we would need is a level of EUR 220 million of order intake on average in every single month. So this is what is required. Obviously, if you multiply by 12, it's a level which comes close to the EUR 2.7 billion. But this is actually what we need in order to take the decision to really ramp up the capacities to a level that allows us in 2027 to produce at this output level.

EUR 220 million, but this doesn't sound that you're so far away from such a level?

EUR 220 million is still significantly more than we have seen. So in the end, we had some months where we were at the EUR 220 million, but we need it on an average basis. And this is not where we are at the moment.

But for the first half, we are nearly fully covered. So I think as well as we can disclose here. The first half is already relatively safe here as well in terms of just materializing the deals and making the proper shipments. But yes, it is for sure a challenge. But I think what we are seeing now in the offers which out in the marketplace, the hit rate we have, we are still confident that we get it.

We will communicate, as already announced when we talked about our financial year 2025, a few weeks ago that you would communicate at the latest end of July, when we talk about the half year result, if we can maintain or if we can confirm the 2027 targets and what will be required to get there is around EUR 650 million of order intake in the second quarter. I think this is what you were asking for.

Yes, exactly. Just have something to hold on. And regarding -- especially in Germany, why are -- hesitant when they see first infrastructure projects being awarded already, so what's the feedback you're receiving? Why demand is not picking up stronger yet?

I mean we have seen an anticipation already last year, to be honest, when the announcement was taken. So some of our customers decided to be prepared here for this upswing. But then the funds were not really released. So it was a little bit of a delay now that we're a little bit cautious for further orders. So one portion, I would say 1/3 was already covered with a good order intake last year, which we are still providing to the marketplace Germany this year.

But for the -- to other 1/3, they are still a little bit hesitating and waiting, but this is coming. I mean, I think there's no question that these projects will take place whatever the amount will be, and this will be a further boost, and that's the reason as well why we are ready in terms of capacity in the plants in our operation that we can do so.

Okay, sounds good. And then maybe last one for the time being. Are you thinking to align CapEx? Or is it too early to think about it depending on the development of order intake in the course of the year or are you actually sure to invest some EUR 120 million, EUR 130 million this year...

So our CapEx plans are actually based on a long-term strategy. So of course, if things would really turn bad, what we don't see for the time being, we always have the possibility to cut back and to reduce the CapEx level to a certain extent. However, for the time being, we clearly see that we will push the implementation of our 2030+ strategy which includes the investment in Sales and Service, which includes the buildup of the factory in India and which also includes the footprint optimization we have in mind for Europe. So if the situation is slightly better or stable, we'll not change dramatically our CapEx plan only if things would really go south, of course, we will adapt.

[Operator Instructions]. The next question comes from the line of Lars Vom-Cleff from Deutsche Bank.

Lars Vom-Cleff, Deutsche Bank. Two quick follow-up questions, if I may. In order to get a better feeling for your operating leverage. I mean consensus currently expecting 4% sales growth, 11% EBIT growth. You indicated that a slight relative profitability improvement could be possible this year. Does the current consensus sound reasonable? Or do you still regard it as a bit too optimistic with regards to your operating leverage?

I don't want now to be more precise in our guidance than we have been on this slide. But I think in terms of revenue guidance, it's realistic in terms of EBIT guidance. It's also not that far away.

Okay. Perfect. And then a quick follow-up question on Section 232, which you also mentioned, excuse my ignorance. If I remember correctly, it's a 15% tax on material handling. And I assume that comes on top of the general tax so more or less double the burden? Or am I wrong in this regard?

Actually, it changes almost constantly. So we had, in the meantime, the third wave of changes. And please don't this now or take it with a grain of salt because this is actually highly complex. But the latest change is that it's not just a tariff on the steel components or aluminum components, it's a tariff level of 25% on the complete product independent of the steel aluminum content, which is, in fact, another increase. So this was the late change on the sixth or eighth of April came into force with immediate effect in April.

But what you need to consider as well that we see the same impact, especially on Loader Cranes on all the other competitors. This means our competitiveness does not suffer vis-a-vis the peers vis-a-vis the competition. But in terms of customers hesitating to close the deal is exactly what I mentioned before. They are always trying to wait for the best moment, okay? And this makes it a little bit unpredictable. But the business the requirement, the demand is still sitting there.

The next question is a follow-up from Markus Remis from ODDO BHF.

I would have 2 more cash flow-related question. Firstly, on the working capital swing that we saw in the first quarter. I mean, I would assume it's partially because of the low level at year-end. Any thoughts you can share with us on the kind of progression going forward and also looking at your free cash flow guidance, more than EUR 100 million. Just to remind us of the absolute level of CapEx that you target for this year?

Well, the seasonality is typically like you have seen it. You already mentioned that year-end was extremely strong. So actually, we emptied our inventory to a very large extent at the year-end. And the rebound, therefore, was slightly higher than it should have been. We also had some special impacts, for example, in the Middle East, we could not ship all products, minor amount. But in the end, it all sums up, So this is something which we hope to see trending in the other direction already in Q2. But typically, the strongest improvement is always in Q4, and you could see this also in the last year. So at the latest in Q4, we do expect a full reversal of this number and probably even a positive impact of working capital change.

Sorry, just to add on, it also depends, of course, on the revenue we expect for 2027. So the better actually the outlook, the higher is the working capital. So this is, of course, actually always the opposite, the better, the higher is also the working capital.

Okay. But so working capital in 2026 would then entail no or very moderate growth for 2027 is kind of -- is that the message?

So if we see clearly now the order intake of EUR 650 million, EUR 660 million plus in the second quarter, if we maintain our 2027 target, probably there is no positive impact out of change of working capital to the free cash flow, perhaps even slightly negative impact if the level would be, let me say, a EUR 2.6 billion next year, I think we should get to a number of close to 0 or even slightly positive.

Okay. That's very clear. And the CapEx number that is baked in for the EUR 100 million?

CapEx impact will be around EUR 160 million. I would assume our plans are slightly higher, but I think realistically, this should be what you can expect.

EUR 160 million, okay. Thank you very much.

[Operator Instructions]. There are no more questions at this time. I would now like to turn the conference back over to Andreas Klauser for any closing remarks.

Yes. Thank you, everybody for attending, as well for your questions. I think we really further clarified and could provide a proper overview of what's happening so far, what's expected in the near future. No doubt, we are living in a very volatile environment, but still considering our product portfolio, our solutions we can provide to the marketplace, we are quite confident that we can hit the targets which we have announced.

So wish you a great day. Stay safe and see you soon. Thank you very much.

Ladies and gentlemen, welcome to the PALFINGER IR Call Earnings Release Full Year 2025. I'm Lorenzo, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast.

At this time, it's my pleasure to hand over to Felix Strohbichler, CFO. Please go ahead, sir.

Thank you. Good morning, ladies and gentlemen. A warm welcome to our presentation of the results of the financial year 2025 for PALFINGER AG.

First of all, let me remind you a little bit about what is PALFINGER about. So PALFINGER is a true global player with a revenue of EUR 2.34 billion revenue in 2025. We are present worldwide with engineering centers with 30 production sites and, of course, thousands of sales and service points around the world with around 12,000 employees at the end of 2025. What makes us stand out? What is the equity story of PALFINGER?

PALFINGER is, at the same time, technology leader and industry leader. So it's not just about being the top player in terms of technology, but also leading the market in volume at the same time.

Second topic is PALFINGER is highly resilient. We have a very broad product portfolio. We are globally present. We have a huge industry diversity. And due to local value creation, we are much less dependent on developments like tariffs, et cetera, compared to other players.

Third point is PALFINGER is clearly a growth company. On the one hand, there is a momentum in Europe and a big potential or even a huge potential in Europe, and we focus on growth markets like North America, APAC and Marine. And of course, there is a major growth potential in the Service segment, which is also over proportionately profitable.

And when we talk about profit, also the earnings potential of PALFINGER is significantly above current levels because we can still increase our profitability, not only through growth, but also through digitization, standardization and optimization of our footprint. I mentioned resilience.

On this slide, you can see our customer segmentation. And obviously, this is very well balanced. The first and the most important industry segment is infrastructure. And obviously, this is a growing segment, and we expect more to come here, not only from Germany, but also from other markets.

And then you see that the second biggest industry segment is Marine, and then it's very well balanced between 7% and 11% of share of our revenue for each customer segment. I also would like to highlight the public sector and railway in this sector, we also find the defense share of revenue.

On the next slide, you see, again, our product portfolio. You know it, it has not changed. On the one hand, we have solutions on trucks and rail cars like different sorts of cranes, aerial work platforms, hook loaders, tail lifts, et cetera. On the other hand, we have our Marine Solutions from very large offshore cranes on oil rigs to wind cranes on wind farms, targets and boats Wind System and Slipway Systems, for example, for defense applications and what all those solutions have in common are the digital solutions, which make our products connected and which bring us even closer to our customers.

Last year, we launched our new Strategy 2030+, reach higher and the key pillars of this strategy are 3 strategic directions. On the one hand, lifting customer value; secondly, balanced profitable growth; and last but not least, execution excellence. These 3 strategic directions are backed by in total 18 programs to drive our growth and profitability, and we have defined 5 key must-win action themes, which are also mentioned here.

On the one hand, it's to further improve our positioning as customer-focused technology and market leader. Secondly, a massive expansion of service and spare parts business with a big impact on profitability. Third point is aerial work platforms have to become an additional core pillar of PALFINGER in our portfolio.

In execution excellence, we focus on supply chain optimization, footprint optimization and setup of our global footprint in an even better way. And last but not least, process system and data optimization is a key lever for the future to be able to leverage also artificial intelligence and possibilities of the future.

Coming now to our segments. As you might recall, we have 3 segments. On the one hand, the segment Sales and Service, which includes all the Sales and Service activities, then we have the segment Operations with all factories for assembly and manufacturing. And last but not least, we have the segment Other nonreportables. I will come to this later.

Starting with the segment Sales and Service. Let me walk you through the individual markets which had quite a different development last year. Even within EMEA, we didn't see a unified picture. On the one hand, we have already a very good development in Southern Europe over the last years. In Northern Europe, we could see a good improvement in 2025. Germany had also come back a little bit from a very weak situation in 2023 already at the end of 2024. However, the infrastructure package in Germany did not show any positive effect yet in 2025. Hopefully, we will see something in 2026.

Coming to North America, obviously, the tariff situation, especially Section 232 had an impact on the demand. This was actually the biggest impact of the tariffs and also, of course, the tariffs which could not 100% be passed on to our customers, lead in total to reduced profitability. In LATAM, on the other hand, despite of the volatile situation in Argentina, we could report a record revenue in LATAM. In APAC, we also have a very different development within the region on the one hand. In China, we didn't see any major economic recovery since COVID.

On the other hand, India is the key growth driver in APAC, big growth rates, a very attractive market and a market we will invest in heavily in the years to come. The Marine business has an excellent performance, driven by major orders from offshore wind, oil and gas, cruise ships and other segments. So everything is performing very well. So we have a consistently good order intake, and there is no sign of a change here.

And last but not least, as you might recall, we have a setup in Russia, which is completely ring-fenced, acting autonomously. Here, we have now a major impact of the sanctions in 2025, which means that there was a decline in revenue and also in earnings, not making losses, but also no contribution to the bottom line for PALFINGER.

So coming now to the KPIs of the segment Sales and Service. First of all, you can see the external revenue was on the same level, so very stable. EBIT margin went up by 9.5%. However, we also have to acknowledge that if you look at the 2 segments, allocations and transfer pricing have an important effect. This is why I recommend to rather focus on the group numbers. However, what is important to mention is mainly the numbers you see at the bottom of the slide. First of all, order book development.

You recall that in the COVID phase or post-COVID phase, there was a huge demand. We had an order backlog of 1 year in 2022. In 2023, we still had a very quick order book at the end of the year, and this even spilled over to a certain extent into 2024. We had a good start in 2024 due to the backlog from the past. And in 2025, we managed to keep the order book almost stable, so only a very slight decline despite of the fact that we don't benefit anymore from the backlog of the post-COVID time.

So this means that the order intake is more or less on the same level as the output, and we have a reach of 4 to 5 months visibility, which is a very good situation to be, which is also in line with the customers' demand in terms of delivery times. Our Service business share went up from 15% in 2023 now to 17.4%, in line with our strategy to push the Service business share. And of course, this development should go and we want to exceed the 20% mark within the next years.

Coming now to the segment operations. First of all, we have seen here capacity adjustments in both directions. On the one hand, we had to expand, fortunately, our capacity in Europe, especially for aerial work platforms and for loader cranes. On the other hand, due to the tariff policy and the dampened demand, we had a lower capacity utilization in the United States and of course, also reduced output in the CIS due to the economic situation in Russia.

Coming to the numbers of the segment operations. First of all, let me highlight the external revenues. This is extremely stable, so the same level as last year, which also shows because we already had almost EUR 200 million in the past that the overall economic situation is still somehow on a low level. And this, of course, also translates into the profitability of production of third parties. So of course, the main activity in the segment operations is production for our segment Sales and Service, but in the external revenue, we only see production for third parties.

I already mentioned when I talked about the EBIT of Sales and Service that there are always shifts in terms of transfer pricing and allocation. So the reduction you see here is to a large extent also due to a shift of allocations.

Coming now to the segment Other nonreportable segments. This includes, on the one hand, the holding activities, so strategic initiatives for the whole group. And on the other hand, it includes the segment Tail Lift, which is too small to be reported separately. In the external revenue line, you see the development of the Tail Lift business.

Unfortunately, in 2025, the market was extremely difficult in Germany as well as in the U.S. for reasons everybody knows, which led to a decline in external revenue. The EBIT line was stable in this segment with around EUR 44 million negative, of course, because this is a cost center to a large extent for the holding project. What does this mean now for the group numbers?

2025 was the third best year in history in terms of revenue and EBIT despite a very volatile environment, especially in North America and CIS. So we managed actually to almost compensate the situation in North America and CIS with positive developments in Latin America, in APAC, in Marine and also to a certain extent, in EMEA. So the revenue was almost the same, minus 0.9% reduction to EUR 2.339 billion. EBIT at EUR 174.3 million, which is a decline of 6%. However, what is the most important topic for our investors, shareholders is the consolidated net result.

You can see only a very small decline of 3%. So we can report here EUR 96.7 million of consolidated net result, which in combination with the good cash flow we will come to in a minute, allows us to propose a dividend of EUR 0.90, which is together with the dividend in 2024, the second highest dividend ever in PALFINGER's history.

On the right hand, you see the revenue share of PALFINGER, so 60% EMEA, around 1/4 North America and the rest split between LATAM, APAC and CIS. And here, you can also see that CIS is constantly reducing the importance in terms of overall revenue going now down to 4% in the total picture. I already mentioned that free cash flow has been positive. I have to correct this. Free cash flow has been great. It's the best free cash flow ever in PALFINGER's history, EUR 181.5 million of free cash flow compared to the already very good free cash flow of last year of EUR 120 million. How was this possible?

The starting point with the EBITDA is more or less the same. However, we had another positive impact in the working capital with EUR 57 million. And we have also been rather low on the investing activities with around EUR 100 million. There will be some compensation of this relatively low number in 2026. However, in total, this is a very big success to come with this high number of free cash flow.

Of course, a good cash generation, a good operational performance also helped a lot to improve our balance sheet. The equity ratio has gone up to 43% coming from 35%. Gearing ratio at very healthy 50%. Net debt to EBITDA, the KPI banks are looking at 1.71 is a great number, far below 2.0. So a very good set of balance sheet KPIs. Even more impressive is if you look at the last line of this slide, the net debt has been reduced by more than EUR 200 million to a level of EUR 460 million.

So we came down from EUR 662 million to EUR 460 million within a year. You also see that the interest rate has again come down, however, comparing to the years 2020, 2021, when we were talking about 2%, it's still relatively high. And despite of the fact that we have repaid quite a few debt positions in the last 12 months due to the good cash flow, we still have a very good remaining term debt of 3.17 years.

So I mentioned that the operational performance was a major lever to lead to this very strong and rock-solid balance sheet. The second big pillar was the sale of treasury shares, which was implemented in summer last year. So we placed shares for proceeds of EUR 100 million, which support the implementation of our Strategy 2030+.

So this will help us with the expansion of our service locations, our mobile service in North America, with our investments in defense projects. We opened last autumn our spare parts hub in North America. We are going to further expand our service locations in EMEA, and we are also going to invest in a new plant in India, just to name a few out of the strategic initiatives in our Strategy 2030+.

Of course, next to this increase in room for maneuver, it also helped to improve our equity ratio, gearing, et cetera, the whole balance sheet. And this measure also increased the free float to nowadays 43.8%, which was the basis for the inclusion in the ATX. And I'm very happy to be able to report that yesterday, it was made official that PALFINGER will be part of the ATX index as of 23rd of March.

On the bottom of this slide, you see the share price development last year. So a plus 30% share price increase within 2025, also another increase in 2026 despite of the actual developments in the Middle East. And what this ATX inclusion will lead to is improved visibility. So PALFINGER now officially ranks among the top 20 stock titles on the Vienna Stock Exchange. Index funds will have to invest in PALFINGER, which further increases our liquidity and in total, this should give us easier access to international investors because now it's more or less official that the liquidity of PALFINGER has now reached a healthy level, which is attractive for our investors.

Coming now to the outlook, first of all, for 2026. So we have an order backlog, I mentioned it before, of about 4 to 5 months. So we already have a visibility into summer and beyond the first half of 2026. So from today's perspective, we can say that for the first half year, we expect revenue as well as EBIT to be slightly above the prior year level. We are also confident for the full year.

So we do see that in the first months of the year, for example, in Germany, order intake has gone slightly up. It's not yet the full recovery. So what we need in order to achieve our financial targets by 2027 is a further recovery in Germany and also an upswing in the U.S., which we do not yet fully see. This has to happen now in the coming months to be able to get to the EUR 2.7 billion revenue, 10% EBIT margin and more than 12% ROCE by 2027.

We have set ourselves ambitious financial targets for 2030 in our strategy reach higher. We want to reach more than EUR 3 billion, and please do not forget more than -- this is important to highlight at the 12% EBIT margin and 50% ROCE, of course, as the #1 for crane and lifting solutions in our industry. Where do this -- where does this growth come from?

On this chart, you can see the contributors to the growth. And obviously, Service with a very high impact also on profitability is a very big lever. But also recovery EMEA is a big potential for us because EMEA is still far below its potential. Aerial work platform is another big pillar, also a key initiative for us where we expect a lot of growth. And then we have other activities like TMF in North America, which is important for us.

In APAC, we will invest in the plant in India. In Latin America, we expect further growth. And then you can also see Marine and Defense. And you would, for example, expect that Marine and Defense would show a larger share. You have to account for the fact that a lot of the revenue in Marine, but also in Defense is allocated to Service because these are very service-intensive parts of our business.

On the next slide, this is translated into the profitability improvement levers. So this is just the additional profitability where should it come from. And obviously, it's the same level as on the last chart, but there is an additional lever, which is footprint and efficiency optimization, which will also help us to get to the profitability targets on top to the growth initiatives. All those initiatives are based on growth with basic or let me say, normal development of the world. On top of this, there are some global investment programs on the horizon, which account in total to EUR 2.8 trillion.

And these create huge opportunities to PALFINGER, even if not all the EUR 2.8 trillion will be probably spend, not everything will go in industries where PALFINGER will benefit from, but still there will be some business, some substantial business for PALFINGER in these initiatives. Just let me highlight the fiscal package in Germany, EUR 500 billion. Rearm Europe, EUR 800 billion, InvestEU, almost EUR 400 billion, REpower Europe. The U.S. Stargate Project, EUR 500 billion, which, by the way, shows major effects already for us.

So we deliver a lot of cranes, which are linked to this U.S. Stargate Project for infrastructure, for artificial intelligence. And last but not least, reconstruction of Ukraine will also need EUR 500 billion of investments in infrastructure, housing, et cetera, and PALFINGER is very well positioned to benefit from this. And this is something which should support us also in the years to come.

Thank you for your attention. I'm looking forward to your questions.

[Operator Instructions] The first question comes from the line of Markus Remis from ODDO.

Congrats to the ATX inclusion. First question relates to the order intake. If you could shed some light on the development early in the year, as you pointed out, the dynamics will be very, very crucial to get to 2027. So how was the beginning of the year with -- maybe with a special focus on the U.S. and the situation in that market?

First of all, I can say that in EMEA, we had 2 strong months, January and February. However, it's too early to say that this is now a sustainable development. This is why I'm still cautious. However, the first 2 months were clearly above previous year's numbers. And this makes us also confident that we have a good chance here to see an improvement in the coming months. However, it's a little bit early after 2 months to say this is now really a start of a recovery.

We also have, of course, some geopolitical developments at the moment where we need to look what this means. But coming back to your question, very clearly, the first 2 months actually were higher than in the last year and showed a good momentum, especially in EMEA. In the U.S., the situation is still a little bit calm. So here, we clearly need more momentum to be able to get to the 2027 targets.

Can you also give us an indication where the North American market stands in terms of order intake year-on-year?

Year-on-year, the order intake is stronger because it's a low basis. But again, in order to reach our target, we need here a stronger recovery in the U.S.

Okay. Okay. Very clear. Then the second question, staying with the U.S. We've seen Hiab putting out some news that they're going to expand in the -- especially in the Service market. Can you share your thoughts on how your competition is shaping up at the moment?

Well, of course, it's always difficult to talk about competition. What we can see is because Hiab is publishing, of course, also their order intake and their service revenue by region that we are winning market shares in every region compared to the Hiab numbers, which also underlines the fact that PALFINGER is putting the right focus on customer proximity, pushing Service business, investing in our Sales and Service setup.

Hiab in the last years has been extremely cost focused, which also is translated, of course, in the profitability, which really has to be acknowledged as outstanding. However, our customers obviously seem to feel a difference here between a supplier who is investing in Sales and Service and the supplier who is rather focused on cost cutting also in areas where customers can feel it. And I think this is probably the main difference between the approaches of Hiab and PALFINGER in the last 24 months.

Okay. Okay. Sorry, I have again to stay with the U.S. I think in the last year, you had a burden of roughly EUR 15 million related to the tariffs. So if I remember correctly, it's kind of already including the countermeasures. What's kind of the scope for 2026 and especially now that, I mean, again, Trump has changed the tariff framework. How does that impact your outlook?

Yes. So first of all, if we look at the tariff implication in the meantime, we had, of course, the chance also to analyze in detail what was the real impact. And even if we don't disclose the final number, actually, the tariff implication was a little bit smaller than we had anticipated and estimated. So in fact, the amount we had to pay in total in tariffs was still a significant double-digit million EBIT amount, but not as high as anticipated and estimated.

The major impact was actually the decrease in the market. So the lower demand, demand was compared to the budget, an even bigger impact than what remained in terms of tariffs because the tariffs could be compensated, of course, to a certain extent with measures like price increases, et cetera. There is still a gap which is significant. And this gap will be closed on the one hand with measures in terms of supply chain, but I guess this will be even faster as soon as the North American market picks up every supplier and every competitor will, of course, strive to pass on cost increases of the past, which has not been fully possible in a rather low market environment.

So I think that this year, we can talk about still an impact, but it won't be a game changer for PALFINGER. So probably it's a double-digit million EBIT amount, but not a high one. So a low double-digit million amount, maybe the impact. And as soon the market recovers, of course, this will further decrease with countermeasures, especially with price increases.

Okay. And then the last question relates to your cash flow. So I mean, congrats on the development here, but partially, it was helped by factoring, at least as far as I can see, about half of the working capital improvement came from factoring. Can you outline your strategy here going forward now that the balance sheet is arguably on a much more solid footing? Is it going to stay at these levels? Or do you now see the leeway to reduce factoring again?

I think actually, we do not have plans to reduce factoring. However, if you look at the total picture of our balance sheet, it's now extremely healthy. We have no intention to make the picture worse. As you know, our strategy is clearly organic growth. There are investments, of course, involved and the next years will still be years of rather heavy investments.

So we are talking about investment volumes of about EUR 150 million per year for the 3 years to come as we have some strategic projects on the go. But in total, our balance sheet will at least remain on this solid level. And the plan is, of course, for the years to come to even further improve it despite of the growth initiatives as there is no M&A included, at least not on a major scale and nothing which would change the picture to the negative.

The next question comes from the line of Daniel Lion from Erste Group.

I would like to follow up a little bit on the order intake situation and then going forward, in order to meet '27 targets, when would you expect to -- that it would be necessary to see a tickup in order intake in order to make '27 realistic?

Yes. So it will be very clear in the second quarter. So at the latest in the communication of our half year results, it will be clear or hopefully, it will be clear based on the order intake, if we can ramp up capacities. And this is actually the starting point, and this is the decisive factor. When do we dare to ramp up capacities to be able to reach an output of EUR 2.7 billion in 2027. We will only there to ramp up capacities if there is a healthy order intake over several months. So this is, so to say, the preconditions.

If in summer, we do not sit on an order book, which makes us confident that we can increase our capacity and our output to this level, then probably it will become difficult because we need some lead time to ramp up capacities and output.

So this would mean just to put it some figures indicatively does it mean like 20% intake in order intake at least or like 10% to 20%, 15%, I don't know, what range would you require in order to step up capacity expansion?

Yes. This is not so easy to answer because it's depending on product lines. So of course, it's depending on regions and product lines. And in some areas, we have even overcapacity like in the U.S. So it's relatively easy to ramp up in other areas, it's perhaps a little bit more complex. So it's not like one number, which has to come in. It's a mix of factors. It's also a product and regional mix question. But of course, we need some improvement.

And in the U.S., for example, if we say a 10-plus percent increase is already significant and helps a lot. In EMEA, it's even not 10% because the basis is relatively high. But if we assume that there would be a 10% improvement in the U.S. and in Europe, I would feel confident to say that we could increase capacity. Of course, this is not a strict message. But as an indication, I would say a 10% increase would give us the necessary confidence to increase capacity to the required level.

Can you maybe also look back at '25, can you quantify the FX impact to some extent, especially the U.S. dollar, just to get a feeling of sensitivity in case we see some shifts or changes here in '26?

We have around 25% of our revenue in the U.S. or in U.S. dollars. So it's above EUR 500 million. Of course, if we have a fluctuation of exchange rate by 10%, it's a EUR 50 million impact in the one or the other direction. However, this is not completely true because if, for example, we have a change in exchange rate, we have some products where we have components exported from Europe, where also all our competitors are exporting from Europe, like, for example, for the loader crane, in such case, we adjust the prices and the USD effect is not as big because it's translated into higher prices than in U.S. dollars. So it's not a 100% effect, probably it's a 70% effect.

What about EBIT level?

Can you repeat the question?

What about EBIT level, EBIT margin level? How do you see the impact there?

You mean in the U.S.?

From FX, yes.

Yes, the impact of the exchange rate is limited because on the one hand, we have products which come from Europe and where also competition is coming from Europe. So here, there is more or less no major impact.

Of course, in absolute terms, for the revenue share of USD, which is translated where also the EBIT line is translated, of course, the EBIT share goes down as well as the revenue share. So this is more or less the same factor. But in terms of operational EBIT margin in the region, the impact is very limited.

Okay. And then a situation on the -- or a question on the situation in Middle East. Do you see any direct impact or maybe indirect impacts on the business in the near term or going forward?

Well, first of all, of course, we have stopped our operations. We have some offices there and also some Service activities. So of course, we are not asking people not to go to work, but this is not an impact you will see in the year-end or even not in the quarterly results, but this is, of course, the first obligation of the management to make sure that we protect our people.

In terms of business, of course, now we see energy prices going up. PALFINGER is not that energy intensive. So this is also not the major impact. In terms of supply chains, we also do not expect any impact. I think the biggest impact would actually be if there is a longer-term conflict. If the global economic outlook would deteriorate, of course, this would also have an impact on PALFINGER.

Apart from this, we do not expect a major impact on PALFINGER if the war ends rather soon, of course, we rather have to take into consideration. We have seen this, for example, in Israel with the destruction, I have to say, of the Gaza Strip that we see a huge improvement of demand in Israel. And historically, Iran, for example, was a core market for PALFINGER with 70% market share in the ancient times.

So if the sanction should go away, if there would be a regime change, this could be a major opportunity even for PALFINGER. So of course, we hope that in the midterm, this could even turn out as an opportunity.

And last one on Defense demand and development. Could you provide some more insight how your revenue share is and how you expect this to develop in the coming, say, 1, 2, 3 years?

Sorry, you were talking about Service revenue share?

No, Defense.

Defense, sorry, connection is not always that good. So the Defense share at the moment is at roughly 2%. We expect it to grow to 4% and you have to take into consideration that the Defense business is very service intensive. So this helps not only in the Service revenue share of Defense, but also helps, of course, in the growth of Service business.

And the profitability, obviously, is relatively high also because the investments to be able to participate in this business, the risk also to enter this business and eventually not to get the tender is higher. So also the profitability has to be higher.

The next question comes from the line of Lars Vom-Cleff from Deutsche Bank.

Two quick follow-up questions, if I may. One is a quick housekeeping question. Tax rate for '26, I think '25 was 23%, 24%. Is that a fair assumption for '26 as well?

Well, we had quite some good tax rates in 2024 and 2025. So I would, for a model, not recommend to take this number, but I think slightly below 25% is a good assumption going forward.

Okay. Perfect. And then, unfortunately, so far, you're only providing us with a qualitative guidance on the first half and the full year. I mean, if we take slightly up year-on-year for the first half and compare it to the current Bloomberg consensus, which looks for a revenue increase of 3% and an EBIT increase of 7%, does that cause sweaty palms Or is that something you can live with?

Well, I would say that in terms of EBIT improvement of 7%, this is aggressive for the first half year. In terms of revenue increase, it's rather modest.

The next question comes from the line of Lasse Stueben from Berenberg.

Could you provide just some color on the Q4 EBIT margin? That was a bit weaker. I understand Q4 has some seasonality impacts, but if there's any kind of operational sort of reasons why the margin was lower there. I'm guessing probably caused by the U.S. But any color would be helpful. And then the second point is just on working capital and CapEx. The colleague already mentioned the factoring in the working capital.

Are you expecting a further reduction in sort of working capital as a share of revenue in the coming years? Or is this kind of the level where you feel comfortable? And if you could remind us on the level of CapEx spending planned for the next 2 to 3 years, that would also be helpful.

Okay. So first of all, development of the quarter. So if we compare EBIT level of Q4 2025 to Q4 2024, it was a significant increase. And I think you were comparing now Q4 to which quarter because I do not see now where you see the deterioration in the fourth quarter.

So the EBIT margin, of course, if you look at the EBIT margin, it went down. However, there are several effects in there. It's mainly in the contribution margin. So it was a mix effect to a certain extent, but this is not a substantial change. It's rather, I would say, a timing issue.

Okay. That's clear. And then on working capital and CapEx.

Well, in working capital, of course, we have some good opportunities in the last 2 to 3 years to compensate for the massive increases in working capital in the post-COVID times. This effect to counteract with measures against the high increases is going away more and more. So we still have some small pockets where we believe that we still have overstocked some topics, which we can further reduce. But now it's going more into hard work to consistently optimize our stock levels.

So here, the potential to reduce working capital with further inventory reductions is getting more and more limited. So you won't see this big lever in terms of free cash flow for working capital in the years to come. So the main lever to further improve our free cash flow is actual profitability. It's the -- it's a starting point of the cash flow statement rather than working capital reductions even if there are still some opportunities to further improve. But as I said, this is now rather small compared to what we have seen in the past few years.

And then you were asking about CapEx development. Last year was relatively low at EUR 100 million. At the beginning of last year, I mentioned probably EUR 130 million, which was our budget and which was our plan for several reasons. Some investments took a little bit longer than planned. Unfortunately, this doesn't mean that these investments will disappear. It will just take a little bit longer and the time shifts. So these investments will happen now in 2026, which means that we are expecting around EUR 150 million of CapEx in 2026.

And it will remain -- the CapEx level will remain on a similar level also until 2029 as we have some major CapEx programs ongoing also linked to our Strategy 2030+.

The next question comes from the line of Miro Zuzak from JMS Investment.

I have mainly 2 questions. The first one is on order intake. I mean you do not report order intake, but you do backlog and sales. And if I take just the difference between the 2 numbers, basically, I can give -- calculate a proxy on order intake.

Now if I look at Q4, the number has sequentially come down. So Q1 and Q2, Q3 were very strong against, let's also say, a lower base. Q4, the base was a bit more difficult, but still it was now negative. And you mentioned before that you expect H1 2026 to be above H1 2025. Does this refer to order intake or sales? Maybe you can also comment on what I just said, whether it's correct or not. Maybe take the second question afterwards.

Yes. So first of all, you talked about our order book development, and it's a matter of fact that the last months of the last year were not overproportionately strong. However, the output, especially in December was very strong. So we had a strong fourth quarter in terms of revenue. And this was, so to say, the combination of those 2 effects where you saw this decrease in order book in the fourth quarter.

Now looking at our guidance for the first half year, when we say slightly better, as I said before, talking about revenue, but also EBIT and of course, also order intake because even if now we have more or less the first half year already in hand. So of course, you can always have some surprises. But in terms of order book, the first half year is quite safe. But still, we also expect an improvement in order intake compared to the last year, also because the first 2 months were actually a good start.

Okay. Cool. The second question is basically relates to your 2027 guidance of 10% EBIT. And then trying to model the 10% in the next 2 years, basically. If I look at the last 2 years, I see that the gross margin was good and has improved in 2025 by 80 basis points, which is in line with basically your aspiration of improving operational efficiency and so on.

But if I look then at the OpEx cost, I see that more than that is basically eaten up by the Service cost and also R&D cost and also G&A costs, basically in percentage of sales, all these 3 lines, they worsened 2025. And if you now make the bridge to the 2027, the 10%, what is basically the mix between these 2, let's say, 2 lines, the COGS line and the OpEx line. Where does the improvement of 250 basis points come from?

So first of all, the beauty of the last 2 years was that the tailwind wasn't really there. So we had no increase in revenue, but 2 years in a row, a slight decrease in revenue. At the same time, we had a strong inflation, especially on the personnel cost. So even if material costs have remained quite stable or in some cases, have even come down, inflation on personnel cost was a major impact in absolute terms in Europe and in the U.S. in relative terms, even stronger than also, for example, in countries like in the Eastern European production sites. So this was one impact.

The second impact was we have a growth strategy, and we are investing to grow the company to more than EUR 3 billion. And this is nothing you can do overnight. So this requires investments with a certain confidence in the future. Unfortunately, these investments are not only CapEx, it's also OpEx. It's like implementation of our EP system globally. It's a lot of R&D investments we have done. And all those things, unfortunately impact structural cost. This is a big delta, as I also mentioned before, to our competitor Hiab. They are, of course, in the same market. Their reaction is different. they have started to dramatically cut cost.

PALFINGER has taken the decision to further invest in the future. And the main lever for the profitability increase is actually to benefit from the growth we have been preparing ourselves over the last 2 years. So this is the main lever to get to the 10% EBIT margin because we have the structures in place to get there. But in the last 2 years -- and not only in the last 2 years, probably in the last years, you can see that PALFINGER has invested in structures, in Service sites, et cetera. And in early phases of such investments, it's a cost and not a benefit.

And to answer then the question, that would mean that the improvement mainly comes from the OpEx lines because...

Within the time frame of 1.5 years, it can only come from the top line because such a short-term cost improvement on the structural cost would not be possible to such an extent, not without cutting arms or legs.

We have a follow-up question from the line of Markus Remis from ODDO.

The first one would be on Russia. What's kind of the expectation for that business? You indicated a roughly breakeven situation in 2025. So what's kind of the scope for revenue development? And is there a risk of Russia falling into losses?

And then the second question is a very specific one. In Q4, I see that in the holding and nonreportable segment, EBIT was negative at EUR 14 million, which is quite a hefty number, almost double or more than double of last year and also sequentially compared to Q3, the loss doubled. Were there any specifics that you would like to outline here?

Actually, I would have to look it up because it's not one single impact, but what happens typically in Q4 that certain positions take effect or provisions are made. So it's not an operational topic. This is rather an accounting and timing issue. There was no special event in Q4, which would have led to this change in the result.

Okay. And on Russia?

Yes. So for Russia, if you ask me for an outlook, this is, of course, very difficult to say. As we are also not controlling those entities, we rather report the numbers and get the information, so to say, and then report with the wisdom of hindsight. However, what I can say is that in 2025, the situation was really difficult.

The management managed to turn around the liquidity situation to achieve a clearly positive cash flow in the second half of the year after a negative first half year, the profitability was slightly positive, and we already see a slightly positive development. But of course, if I talk about the positive development, I mean that we expect a slightly positive situation and no losses, we won't see double-digit EBIT margins in Russia.

So I cannot answer the question based on fact figures and my knowledge deep inside the market. But what I can say is that from today's perspective, and this is also reflected in our budget, we expect that the entities will remain stable in terms of liquidity and also stable in terms of profitability. And the good thing is that we have a very experienced management there, and they have proven in the meantime, in some cases, over decades that they know what they are doing.

Okay. And maybe a very nice one to have it specifically mentioned here. When you say regarding the first half, you say, okay, revenues should be higher. And then the notion on the earnings, should also be EBIT and margin be higher or just EBIT?

So as I said, we expect the revenue to be higher and also the EBIT to be higher, the revenue a little bit more than the EBIT, but this is what is our guidance now for the first half year.

Okay. So slightly lower EBIT margin then?

Slightly lower EBIT margin or almost stable, but probably a slightly lower EBIT margin, but a higher revenue and also slightly better EBIT.

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

Yes. Thank you very much for your attention and for your questions. I just want to remind you once again at the end of this call, PALFINGER is a very attractive company as a market and technology leader with a lot of growth potential and earnings potential with a highly resilient setup.

So please keep -- stay tuned, and we have good opportunities for the future, and I'm confident that at the half year, we will have the next good news for you. Hopefully, we hear each other in 3 months again for the quarterly call. Thank you. Bye.

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

Good morning, and welcome to our Q3 earnings call. Just let us start on the first slide with our equity story, what sets us apart. I think it's the clear market leadership, so the added value we can provide to our customers as well as dealers. The strong resilience, this is driven by the broad product portfolio we have. The solid growth opportunity, I think here, despite the Service segment, still North America, APAC and Marine offers great opportunities and the huge earnings potential by increased profitability.

I think that's an important part and all the other ingredients will follow what was presented now. Yes, we are a true global player with EUR 2.36 billion revenue in 2024 with a strong global presence, which is driven by the engineering and technology competence, sales and service network worldwide, the 30 production sites worldwide and even more important, highly motivated employees all around the globe.

In addition, we are very proud that we have a strong resilience throughout the industry diversity. So we are in many different areas of doing business. And that's the reason as well when one of the activities, one of the businesses might slow down, others can compensate. And here as well, you can see the spread throughout the globe.

On the next slide, and it is also something we also would like to remind yourself is stick to our product portfolio, including a very successful marine business, which we'll see later on in the presentation of Felix is strongly contributing to our results. But we are never standing still. We reach higher. So we worked for more than 9 months quite intensely on our reach higher strategy 2030+. We had a strong solid process behind, which is really bottom up and as well fully kicked off by the Board and challenged by an outside consultant.

I think this is something which we will hear later on more about it and as well in the next months to come. Where are we coming from? We have a strong focus on 5 must-win action fields. One is related to lifting customer value, so the customer focus. The second area is the balanced profitable growth of the service and spare parts business expansion and as well the working platform as an additional core pillar, which is heavily requested and required in the marketplace.

And the third part is execution excellence, supply chain optimization and process system and data optimization as well here to make sure that we are more efficient, we are faster in better dealing with our customers and dealers. So all in all, we are talking here about 18 programs to drive future growth and profitability.

And on the next slide, this will lead, first of all, to keep our #1 position for Crane and Lifting solutions. This is very clear commitment we have. On the other hand, as well our financial targets by 2030 is EUR 3 billion revenue, a 12% EBIT margin, 15% ROCE and as well EUR 150 million bigger, the free cash flow side. And I think these are the elements where we are working towards and which are heavily supported by all the actions which are in place and the strategy which is defined.

The growth target just that you can better understand where we are coming from and where we are going to. So where is the biggest portion of growth coming from? No doubt it's on the service side, followed by recovery in EMEA, which is expected, which is more related to the marketplace. Even more important, the area working platform as well a clear strategy to roll out new solutions, new successful solutions for our customers and for our dealers.

Before then coming to the outlook for 2025, I ask Felix, hope you can hear for his presentation on the results to better understand where we are coming from. Please, Felix go ahead.

Thank you, Andreas. Good morning, ladies and gentlemen. As you are aware of, we have 3 segments in which we are steering the company and how we also report our numbers, starting with the segment Sales and Service, which comprises all sales activities of Products and Solutions as well as the service activities of Palfinger, but not the external revenue in production for third parties, which is another segment.

So looking at the key developments of the first 3 quarters. First of all, in EMEA, we have seen a substantial improvement of the order intake in Q4 of last year. This order intake has remained stable for the last 4 quarters. However, on the other hand, we have to say that the infrastructure package, for example, in Germany has not yet showed any impact, which on the one hand, is bad news, but it's also good news because it means that all the potentials out of those infrastructure packages in Europe are still ahead of us.

If we then go to North America, we had quite some developments in summer, the increase of tariffs from 10% to 15%. Then more importantly, the Section 232 has been introduced, which has, on the one hand, a negative impact on demand, which is not surprising if you consider that some products have become more expensive by 10% to 20% for customers. So this leads to a slump in demand and also the reduction in profitability because that all the impacts of those tariffs can be fully passed on and compensated.

So this also leads to a certain reduction in profitability of around EUR 10 million to EUR 12 million in 2025, which was not expected only a few months ago. Coming then to Latin America, we have here a very positive development, especially in Brazil. Due to the latest developments in Argentina, we also hope that here we will see a positive outlook.

APAC is clearly dominated by India, which is driving the growth in the region. Marine, Andreas has already mentioned that Marine is a very important contributor to our bottom line, also to our top line, but even more important to our bottom line. The market environment is still very positive and the profitability is on a very good level.

And last but not least, typically, we don't talk about Russia. Here, we have to mention it because in the last quarters, we have experienced a massive slump in the economy and therefore, also a sharp decline in sales and earnings, which leads to the fact that at the moment, Russia is more or less at breakeven and there is no bottom line contribution out of Russia anymore for the time being.

So what does this mean for the numbers in the segment Sales and Service? So first of all, the external revenue has declined slightly by 2.5% with a profit EBIT of EUR 150 million, which represents an EBIT margin of close to 10%. So a slight decline compared to last year. However, we will recover to a large extent in the fourth quarter, but Andreas will talk about the outlook later. What I would like to highlight here is clearly the order book development.

So as you all remember, we had a very large order book in the years 2022 and 2023 due to the inflated demand in the post-COVID phase. In the meantime, we have come down to EUR 1 billion of order book, which is a very healthy level. And this order book level has been stabilized over the last 12 months and even increased slightly. So we are now quite exactly at EUR 1 billion of order book in the segment Sales and Service.

And what is also important, especially having in mind that one of our key strategic pillars is growth in service. Our Service business share has increased to almost 19% compared to 17.4% in the same period of the last year.

Coming now to the second segment, the Segment Operations, which includes all the manufacturing and assembly activities of PALFINGER and also the production for third parties, starting with production for third parties, of course, this activity has been impacted by the challenging economic environment overall. So here, we are producing components for other machinery producers and of course, we can feel here the still calm overall environment.

If we then go further, we see capacity adjustments in both directions. On the one hand, we increased our capacity at the moment and have been increasing our capacity in Europe and also in Brazil due to the fact that the order intake developments have been positive. On the other hand, due to the tariff policies, we have underutilization in the U.S., and I also mentioned already the fact that in Russia, the market is quite down. So we see underutilization in the U.S. CIS whereas we increased capacity in Europe and Brazil.

What does this mean in terms of numbers? The external revenue has come down by another 5%. So every year after 2023 or 2022, we have now seen a certain decline, again, mirroring the overall economic development. The EBIT line is at EUR 10.7 million compared to EUR 22.3 million the year before and driven on the one hand, of course, by the lower utilization in production for third parties, but also by North America and CIS.

Coming then to the segment other nonreportable segments. So this sounds a little bit complicated in the end. It's just a combination of 2 small units on the one hand, it's the holding unit, which comprises projects and activities for the whole group. On the other hand, it's the Tail Lifts business, which has been carved out of the Global PALFINGER Organization because it's a different industry with specific requirements. As you can see in the external revenue, the market environment for Tail Lifts, especially in our core markets, Germany and U.S. is difficult. This has led to a decline in sales for Tail Lifts by almost 20%.

In the EBIT line, you see an improvement of EUR 7 million. However, this is not coming from Tail Lifts. This is mainly because we have increased our intercompany invoicing of projects to other entities. So this is the main effect of this improvement here in this segment.

So coming now to the numbers for the complete group, starting with the revenue. So the revenue is still 3.5% below the previous year. But as you know from our guidance, we expect now ramp-up and an effect of our ramp-up in capacities in Europe. The EBIT line is by minus 17.6% down to EUR 130.7 million. And this means an EBIT margin of 7.8% and a consolidated net result of EUR 72.4 million.

So important is to understand that we have now the opposite development compared to the previous year when we started with 2 record quarters based on the record order book we had and then we had a reduction of capacity and now it's the opposite. We are ramping up capacities in 2025. So we expect here a positive development in Q4.

And if you then look at the chart on the right hand, you can see that EMEA has become, again, even a little bit more important due to the positive order intake in the last quarter. So 59% coming from EMEA in the first 3 quarters, 25% from North America, LatAm and APAC at around 6%. And CIS has declined in importance due to the market development, as mentioned, with around 4%.

So coming now to our balance sheet, and this is really a great development. Our equity has improved by EUR 140 million to EUR 884.7 million, which represents an equity ratio of 41.3%. The net debt has come down from almost EUR 760 million to EUR 577 million. The gearing ratio, net debt to EBITDA is now -- are now at extremely healthy levels. So what you can see here is an extremely solid and stable balance sheet of PALFINGER.

So our financial strength is absolutely positive. And this is also coming from the sale of treasury shares, not completed, but also one of the impacts was the sale of treasury shares in summer. So we had proceeds of EUR 100 million by selling 7.5% of the issued shares at the placement price of EUR 35.40. So this strengthened the balance sheet with an improvement in equity ratio of more than 3% and reduced the gearing ratio by more than 15%. But what is perhaps at least as important, especially for our investors is that this has dramatically increased the attractiveness for our investors. Now the free float is 43.5%. So this is a substantially higher level than before.

So the liquidity of the share is much better. And now we also have not only a chance, but I would even say a high probability of inclusion in the ATX. At the moment, we are the #20 on the list, and there is quite a big gap to the #21.

At the bottom of the slide, you can see to whom we sold the shares. So it's long only mainly 3/4 to long-only investors. And then if we look at the regions, we are happy to report that we could also internationalize and diversify our investor bases, especially the U.K., France and the U.S. with the sale of the treasury shares. What will we do with the EUR 100 million proceeds we could generate from the sale of treasury shares. Here, you can see several projects we have ahead of us. Of course, these proceeds will help us and enable us to fund these strategic investments to pull some of those forward.

So we will especially expand our service business by investing in service locations in mobile services, especially in North America, but also in service locations in EMEA. We are driving a defense project to generate a product portfolio of highly developed solutions for the armed forces to improve our market position here.

We have already invested in the spare parts hub in North America, which has been opened in September, which cost around EUR 10 million, and we have the investment in a new assembly plant in India ahead of us, which will cost EUR 30 million. Just some examples of what we are going to do. But as you can see, we can make very good use of the proceeds.

Last but not least, let me come to our cash flow statement. Let me start with Q1 to Q3 2024. You see at the bottom line, the free cash flow was minus EUR 2 million. In the end, we reached even EUR 120 million of positive free cash flow at the year-end, driven by inventory reduction mainly. This year, we are already EUR 56 million ahead of last year. So we are fully on track to achieve more than EUR 100 million of free cash flow for the full year. And the main difference compared to the last year is that on the one hand, we will have less potential from change in working capital. However, the level of investing activities is substantially lower compared to the previous year.

So we are happy to report that our target is absolutely realistic, and we are full on track. With this, I would like to hand back to Andreas Klauser for the outlook.

Yes. Thank you, Felix. Now let's see what does this mean in nutshell for full year 2025. As Felix already mentioned, unfortunately, U.S. tariffs were costing us profitability and as well caused a slowdown in our output. Nevertheless, on the other hand, we expect an output increase in Europe. The good news is here, we are having the orders on hand. So this will be mostly compensated our first 9 months and should result in a quite successful closure of 2025, which also means still good results.

And what does this mean in terms of programs that we are counting on, which is not, let's say, in for 2025. There is a strong fiscal package in Germany, ReArm Europe, I think the amounts are quite well known in Western Europe, RePower Europe. So all these are the ingredients not to forget about the U.S.A. Stargate project and potentially as well at a certain point in time, the Reconstruction of Ukraine. It is just a small reminder which kind of areas, which kind of programs are already somehow announced and where we can count on in the future to fully participate.

Saying this, yes, we reach higher with our 2030 plus strategy. This also means, as I mentioned earlier already, strong solid financial targets for 2030. This means on one hand side, EUR 3 billion revenue. On the other hand, a 12% EBIT margin, 15% ROCE and as a commitment to the market as a commitment to our customers, #1 for Crane and Lifting solutions. At this point in time, let me say thank you for your attention, and we will take your questions now.

[Operator Instructions]

The first question comes from the line of Daniel Lion from Erste Group.

First question regarding your '27 outlook. As I haven't read it, just to make sure that the guidance for '27 is still valid?

Yes, the 2027 targets were actually in the presentation of Andreas. So this was Slide #7.

Okay. Okay. Sorry, then I didn't read that.

Slide #8. Financial targets 2027, EUR 2.7 billion, 10% EBIT margin, 12% ROCE and the free cash flow.

Okay. I'm seeing it already, sorry. And then on your order backlog, currently at EUR 1 billion, we should expect now a stronger fourth quarter, catching up with some of the declines we've seen throughout the year. But what does this mean now for first half year? How does your visibility look like? And maybe also sneaking preview to next year? If possible, to what extent will you need some of these packages to materialize that you show as potentials in order to show further grow towards your '27 targets?

And the good thing is that we are not materializing all the shipments, all the orders we have just in 2025. I think it's already good coverage for Q1 2026. And this is partially driven already by some of the projects like the fiscal package in Germany. Our dealers are preparing themselves, our customers are preparing themselves now already placing orders to have the equipment available to work on the infrastructure projects.

The same is for ReArm Europe. So most of the European armies, we were already ordering some logistic equipment. Unfortunately, we can't disclose this further as you understand for sure, the reason. So for us, the starting point looks already good. And then we will see how it will evolve. But in general, all these projects which are announced are somehow considered but only partially. So this is not something that all these ingredients need to happen next year that PALFINGER can do its results. We are quite confident that what we see now and what we have in the pipeline will lead us already to a good result in 2026.

Okay. And reflecting on the services share, it's up more than 1 percentage point. How do you think this will develop going forward, especially also with the potential you have on the equipment business? Do you expect the share to grow materially in the next 2 years? Or do you think that it will more or less keep the share and increase together with the overall growth that you expect to show?

No, our expectation here is really that the service business will outperform maybe other growth areas, which we have on the equipment. This is clearly defined in the strategy and as well what we see now that our customers might even be willing to extend the life cycle of our products. So they're investing in service, they're investing in parts and we are doing this as well in North America, we had already established our new spare parts hub Huntley. We are doing certain things, which you have seen earlier in Felix presentation in Europe.

So this will be quite -- should be a quite quick win, which we can see over the next couple of months. And on the other hand, yes, we will kicking in with new equipment on the AWP, Aerial Work Platform. Aerial Work Platform for example, which will still take a bit of time. But all the ingredients together are making us quite confident that we can get there.

So perhaps to refer to the Slide #9, where you can see that service accounts for around 1/3 of our growth potential. So this means that the 1/3 of growth potential is more than the 19% of service share we have today. So service is growing over proportionately.

But this will be a gradual improvement. So it's not like back-end loaded. This is actually a steady trend that we should be seeing in the figures, right?

This is what you can already see in the last years as well.

The next question comes from the line of Patrick Steiner from ODDO BHF.

Patrick Steiner speaking. Two from my side. First one, how should we interpret the new 2025 guidance? Do you expect to come close to the 2024 results in terms of EBIT? And the second one is, could you give us a bit more information on the fundamental development of the North American business? Did you expect -- or do you expect any market share losses as a result of the tariffs?

So let me start with the 2025 guidance, how to read this. As you might recall, our target has been even when we communicated the half year results that we aimed for even exceeding the second best year 2024 in terms of EBIT, which would be EUR 186 million. At that time, we were not, of course, considering that there may be the impact, especially of Section 232, as I said, it's an impact of around EUR 10 million to EUR 12 million for this year's profitability. So this means that you have to assume that we won't get to this level, but we won't be that far away. So we are talking here about an impact of around EUR 10 million to EUR 12 million, which is now a deviation from our previous guidance. But apart from this, everything remains unchanged.

And about the North American market, here, we can already see that further orders are coming in especially as well now on the service side, which was a little bit slow earlier this year, but now it's coming back. The market is coming back. So I don't expect here any negative impact for 2026 coming from North America.

So also no market share losses?

Yes, the market share loss, clearly no market share losses, even if you consider the truck mounted forklift, here, we gained market share, but still the U.S. American market, the customers are a little bit hesitant, we are a little bit hesitant to provide orders first to see what's happening, especially on the logistics part, but clearly no market share in the game.

We now have a question from the line of Elias New from Kepler Cheuvreux.

Two questions from my side on tariffs. So firstly, I mean, you mentioned the EUR 10 million to EUR 12 million hit to EBIT in 2025 due to the 232 tariffs. Given these tariffs were only introduced in the summer and assuming nothing changes with regard to this tariff policy, if I were to annualize that run rate, would it be correct to assume a sort of similar hit of, say, EUR 20 million to EUR 24 million in 2026? Or is there any reason to expect this impact to fade in 2026?

Well, of course, you're right that the Section 232 has to be considered to remain in place. And it would be more or less even 3x the amount if there wouldn't be any counteraction. But of course, we are constantly improving here our value chain and taking measures to limit the impact of the tariffs. So we do not expect now EUR 36 million. But yes, there will be a certain impact out of the tariffs also in 2025 because we cannot fully compensate in terms of change of supply chain within a few months or even a few quarters.

But we also have to say that we have implemented price increases of up to 18% depending on the product group, which sometimes has already taken effect in some cases, will take effect. So yes, there will be an impact in 2026, but it won't be 3x the impact of 2025, but it will be also probably a double-digit million number, which still remains as an impact for 2026 from today's perspective at least.

Okay. Great. That's very clear. And just on that tariff again. I mean, how much of this tariff surcharge are you currently passing through to customers, both the reciprocal and tariffs Section 232? And how you sort of try to balance increasing your price and passing that through versus accepting lower volumes? How do you kind of think about balancing that equation? And perhaps whether you are following the same approach here as your competitors or how you see sort of other players in the market kind of choosing to increase prices?

So first of all, everybody tries to pass on the cost increases to the customers. This is also what we do. As I mentioned, price increases of up to 18%. But the reality is also that it's a lose-lose situation. So everybody has different strengths and weaknesses. And whenever somebody, for example, with one competitor for Tail Lifts in the U.S. They have just opened up a new assembly plant in Mexico. So they've doubled the capacity, market is extremely down. So they decided not to pass on any price increases, and they are the #1 player in the North American market.

So there are always some competitive effects you also have to take into consideration. For example, for Cranes, we are the clear market leader. We can here also dictate more or less what is acceptable and everybody else also has imports from Europe. But for some other product groups, it's not the case that we can always fully pass on all the cost increases. And this is also true for competition. So in the end, the tariff situation creates a lose-lose situation for every competitor, but also for the customers.

That's very clear. Just as a reminder, if I understand correctly, you are just as well positioned in the U.S. in terms of manufacturing, et cetera, than your competitors. I know it differs by product, but it's not like you're structurally worse positioned than competitors?

It depends on the product group. So for example, for loader cranes, we are better positioned than everybody else because we have an assembly plant in Canada, and there is a USMCA agreement in place between Canada and the U.S. We have assembly plants and manufacturing plants in the U.S. for products, which are also coming from the U.S. from other manufacturers. So here, we have more or less a local footprint against local competitors. But it's only in a few cases like for loader cranes where we have a substantial advantage. In some cases, we had advantages in the past like bringing components from Brazil or Europe from low-cost production sites to the U.S.

Now this advantage has disappeared because we are impacted by tariffs to bring these components to the U.S. would also not help because then the cost advantage goes away even if you save some tariffs, it doesn't help a lot. So in the end, it's not only that it has been an advantage to be in the U.S. It's also that in some cases, we have competitors with a similar setup so that in total, I would say it's a picture where we have still to do some homework to compensate fully the impact of the tariffs, but we'll get there to compensate fully will probably take another year or even 1.5 years.

[Operator Instructions]

The next question comes from the line of Lars Vom-Cleff from Deutsche Bank.

You already alluded on the U.S. headwind, EUR 10 million to EUR 12 million you expect for this year's EBIT. But if I would bluntly subtract that from the EUR 186 million you generated last year, I'll end up with EUR 175 million, but that wouldn't imply any improvement of the operating performance this year or year-on-year, although your capacity is higher and Brazil Marine seems to be developed well. Is fair to assume a flat underlying -- organic underlying development, leaving U.S. impacts aside for the moment?

I think you have to consider again the development last year and this year, I tried to highlight this in the overall group profit development. So we had a record first half year last year. And now we have the opposite development. So we had a rather weak start into the year with a lower order book and are ramping up capacity. So it's just the mirroring of what we have seen last year. And if you now say it's the same, it's not true because if we look at the individual regions, for example, Russia has had still a significant EBIT impact in 2024, which has completely done away and which has been fully compensated by other regions like Marine, for example.

Okay. Perfect. And then you also already shared some thoughts about the U.S. tariff impact you're expecting for next year. Is it too early to ask how you're looking at next year from an operating business performance? Are you expecting a significant recovery, investment packages finally starting to materialize? I mean the U.S. is the U.S., pretty sure we can't make any forecast regarding that region. So would you be okay with me assuming a significant better performance next year? Or would you still say rather be cautious in this regard?

So let me answer this with Slide #8. I think it was showing the 2027 targets. So our assumption is, of course, that next year, we will see some impact of all those programs. If we would not see any tailwind, of course, we could also not keep our 2027 target. So the underlying assumption is still that we will see already in the first half year of 2026, some momentum in Europe. If this does not kick in, of course, it would become very difficult to show the year or the results we target for 2026, which has to be somewhere in between of this year results and the 2027 target. So yes, the underlying assumption is we have to see some positive impact in 2026, which shall also lead then to a substantially better year 2026 in terms of financial results.

Understood. And then last one for you, Felix. I mean, order backlog up 2% year-on-year. And you're commenting on the order intake by saying order intake stable at a solid level. If I do a back of the envelope calculation, given your revenue development, order backlog development, I would calculate a Q3 order intake that rose around about 20% year-on-year. Am I doing something wrong in my calculation?

Well, it's a matter of fact that in the last 12 months, every single month with 1 or 2 exceptions has been substantially higher than the comparable month 1 year before. So if this was the question, yes, this is absolutely correct that we have seen this on a constant basis now more or less almost every month.

Okay. Perfect. No, I was only wondering because you stating order intake stable at a solid level for me, sounds more conservative than what I'm calculating.

Means stable over the last 12 months, but not stable compared to 14, 15 months ago. So we have seen in 2023 and until end of Q3 2024, much lower order intake than output. So we have been eating up order book more or less every single month for 18 or even more than 18 months. And this has stopped in Q4. Since then, the order book -- the order intake is more or less on a similar level than the output, which means that the order book has stabilized on a reasonable level of EUR 1 billion. So the order book has changed dramatically anymore for the last 12 months.

[Operator Instructions]

We have a follow-up question from the line of Elias New from Kepler Cheuvreux.

Yes. Just one follow-up question from me. Just on sort of growth drivers for 2026 and beyond. I mean you clearly mentioned that EMEA is the growth driver for Q4 now, but order intake is stable since Q4. So just wondering when you expect this to start improving materially? Are you sort of starting to see trends already that expect a meaningful pickup into 2026? Or is the growth in 2026 to be driven more by North America. So despite tariff headwinds, et cetera, I mean, the CapEx cannot be deferred forever, right? So I'm still guessing that despite these headwinds, the U.S. will be a huge growth opportunity going forward. So do you expect that also to meaningfully drive growth in 2026?

Well, in the end, it's very difficult to predict when all those packages will kick in. What is important to understand is that PALFINGER is early in the cycle. So for example, in 2020, after COVID, our order intake picked up already in July, whereas for many industries, it took until the fourth quarter when the improvement happened. So we assume, and this is more or less what banks sometimes think, and I think there are some bankers also in this call now that there might be an impact in the second half. If we are early in the cycle, we should see already the order intake development, hopefully, at the end of the first half year, and this is also needed upside, we will not see it in the output in half year 2.

So our expectation, and of course, this is not the guidance because at the moment, it has not happened, and it's an expectation, a hope an assumption that we should see an order intake improvement already in Q2, which should then lead to an improvement of output and profitability, especially in the second half year 2026.

And here, just to add, as I mentioned earlier, that the German package is already somehow kicking in so that we see already an increase in orders because potentially our customers are expecting the infrastructure deals, which need to anyway happen. The same is that we got provided some orders from some major army as well in Europe. So this is something which is already slightly kicking in, but not yet to the full amount. And for the others, we are ready to deal with it. It's just to show you the potential and to show you that it's on our radar that we are not caught [indiscernible].

Okay. Great. And so it's both ideally the U.S. and Europe that will be driving growth in 2026. So there's no reason to assume that the U.S. will remain kind of sluggish in '26?

So we expect a certain growth from the U.S., but this is not the big driver. The big driver for 2026 from the base point of view is a recovery in Europe.

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

Yes. Thank you very much for your attention as well, I think for all the questions which you provided. I think this has shown how interesting PALFINGER is and as well how clearly we can explain our performance. Stay well and see you soon. Thank you.