Cargotec Corporation

Welcome to HIEB's full year 2025 results call. My name is Aki Vesikallia. I'm from Investor Relations. Today's results will be presented by CEO Scott Phillips and CFO Mikko Puolakko. As a reminder, please pay attention to the disclaimer in the presentation as we will be making forward-looking statements. Before handing over to Scott and Mikko, let's take a quick look at the highlights of the year. Market environment was characterized by increased trade tensions and uncertainties, and our orders received remained at past two years level. Sales declined by 6%, but we increased our comparable operating profit margin and achieved a new record of 13.7%. Also, our services business had a record year. Strong gas generation continued, and we acquired ING Cranes, significantly expanding our presence in Brazil. Let's then view today's agenda. First, Scott will present the group-level topics and strategic development. Mikko will go through the reporting segments, financials in more detail, and the outlook. After Mikko, Scott will join the stage for key takeaways before the Q&A session. With that, over to you, Scott. Thank you, Aki.

And good morning, everyone, from my side. So starting first with the demand environment, I'd characterize the full year situation as our orders remaining on a similar level to the prior two years. As you can see visually on the left-hand side of the slide, the last three years were quite on a similar level, and we've talked about the demand environment that's led to that. Drawing your attention a bit more to the right-hand side of the slide, going into the numbers, first starting with comparing quarter versus quarter. Orders received for the quarter last year were 375, or in 2025, 375 million euros versus prior year, 414 million euros for a 9% change in actual exchange rates, 6% change in constant currencies. And for the full year, orders received were 1.48 billion versus prior year 1.509, or a 2% change in actual exchange rates and essentially flat and constant currencies. As a consequence, our order book has decreased to 534 million euros, ending 2025 versus 648 million euros in 2024, so a decrease of 114 million euros, or 18%. So summarizing the overall environment, relatively stable and on a similar level in constant currencies. The decrease was primarily from our delivery equipment orders in the U.S. in 2025, somewhat offset by increases in our lifting equipment in Europe and APAC and other parts of the Americas and an increase overall in our services business. So in summary, our overall order book decreased only in equipment and not in services business. So looking in more detail within the regional perspective, starting on the left-hand side of the slide, our orders received for last year, for 2025, were 54% in EMEA, 39% in the Americas, and 8% in APAC. On a quarterly basis, looking into the numbers, that translated into 208 million euros in fourth quarter in EMEA versus 218 million euros in the comparable period, or a 5% decline. However, for the full year, EMEA order intake was 794 million euros versus 2024, 736 million euros, or an 8% increase. In the Americas, however, we saw a decline in fourth quarter to 137 million euros versus prior year of 164 million euros, or a 16% decline. A bit more acute in the U.S., and I'll provide a bit more color on that in a second. For the full year, total order intake was 572 million euros in the Americas versus prior year 668 or 14% decline. In Asia Pacific, we saw a slight decline in the comparison period on a quarterly basis at €30 million versus €32 million in the prior year, a 5% decline. However, for the full year, we saw a 10% increase to €114 million versus €104 million in the comparison period. Now, summarizing the operating environment, we saw a gradual recovery if you look at it on the full year basis in both EMEA and APAC. However, in the U.S., we continue to see soft demand. However, on a relatively stable level, if you think about the last three quarters. Now, why is that? The main reason, of course, are the trade tensions that elevated the level of uncertainty in the demand environment, in particular in the U.S. That led to our customers being quite cautious and especially shows up in our results as we are a short cycle business in both our equipment and services. Now looking into our sales for the full year, As you see on the left-hand side of the slide, we had a decline sequentially from 2024 to 1.556 billion euros, or 6% decline in actual exchange rates, 4% decline in constant currencies. Looking into the quarter, our sales was 396 million euros versus 412 million euros, or a 4% decline in actual exchange rates, relatively flat in terms of constant currencies. And our share of services in the quarter was 29%, the same level that it was the prior year. However, for the full year, our services as percent of sales was 30%, so up two percentage points versus the comparison period. Now, in summarizing the overall revenue environment, clearly our sales in the second half were lower than the first half by 9%. Currencies had an impact on the results by two percentage points in the negative direction on a full year basis. And as I mentioned earlier, our share of services sales increased from 28% to 30%. Now looking more deeply on a regional basis in terms of the sales environment for 2025, EMEA represented 50% of our overall sales, the Americas 44%, APAC 7%. And on a quarterly basis, EMEA was 212 million euros, up 3% in the comparison versus comparison period. In the Americas, however, we were down 14% versus comparison period at 154 million euros. And in APAC, we were up slightly, or by 8%, 30 million versus 28 million in the comparison period. And really pleased to report that our portfolio sales as a percentage and in absolute terms increased nicely year over year to 135 million euros or 34% of sales. And then on a full year basis, looking at starting with the EMEA region, full year sales were down slightly 2%, 785 versus 804 million euros. In the Americas, we were down 10% in revenue, 662 versus 735 million euros, and in APAC, 110 million euros versus 108, or up 1%. Echo portfolio sales for the full year in absolute terms, up to 572 million versus 476 million, or 20% positive variance, and on a percentage basis, increased from 29% to 37%. So summarizing the regional environment, our America sales decline came wholly from the U.S., somewhat offset by growth in other regions or other markets within the region. In EMEA, our sales declined slightly in the full year, but grew towards the end of the year. We started to convert the uptake in the order intake from the first half of the year to as we moved into the end of the year last year. Our Asia-Pacific sales increased nicely. And then, as I mentioned earlier, our ECHO portfolio sales increased in our circular solutions, decreased somewhat in our climate solutions. Now looking into how our sales translated into profitability, as you can see on the visual on the left-hand side of the slide, the slope continues to be nicely positive in the prior three-year period of time. And that's, of course, despite the fact that we have a lower sales level year over year from 24 to 25. Looking at it into more detail, starting with the quarterly view, our comparable operating profit, It was 47 million euros versus the comparison period of 41 million euros. MECO will go into more details in terms of what that variance means. But it's a 15% positive variance quarter over quarter on a full year basis. Our comparable operating profit was 213 million euros versus 2024, 2017, so a 2% negative variance. But in relative terms, we had a nice 50 basis points improvement from 25 to 24, the 13.7% versus 13.2, which translated nicely into an improvement in our return on capital employed, looking at it on the last 12-month basis at 30.8% versus 28.2% in the prior year. So our full-year profitability in quarter four was burdened significantly by lower U.S. equipment sales. However, it was somewhat offset by looking at, on a total basis, a nice 100 basis points improvement in our gross profit margin. It's a nice example of executing in our strategy. At the same time, as we had communicated previously, we were targeting lower SG&A costs, so that somewhat offset the decline in the top line. all of which translated nicely into improving our return on capital employed, largely driven by a nice reduction in our networking capital that we continue to execute. Now, speaking of how the strategy is developing, I thought I'd transition a bit into how are we doing relative to what we talked about in our capital markets day in 2024. I'll start first with the next step in our evolution of our operating model. As we've stated earlier, we are quite adamant about driving radical transparency and accountability. and operating our business such that we have decision-making and ability to act on behalf of our customers at the point that's closest to impact to our customers. So the next step in our operating model to drive further transparency, accountability, and empowerment is a change that we're making into our organizational structure at the Hyatt leadership team level. So we're streamlining our business from six to five global functions, which we show here. And similarly, we will then evolve our business operations organizational design to three business areas is what we're proposing. all of which should be effective as of April 1st, pending the outcome of our labor negotiations. And if we're able to move forward on executing this plan, then the way that the organization will look will be organized into three business areas. Two equipment business areas, lifting solutions and delivery solutions, one led by Magdalena Vojtavich. Our delivery solutions led by Hermann Iluski. And then Mike Mikael Burnix will continue to lead our services business as a business area. Now, we're doing this, as I mentioned earlier, as a logical next step, both to simplify our organizational design and enable us to more effectively add additional business units divisions in the future. At the same time, it's key to our success in order to shrink the levels of organization from our colleagues within HIAB that impact our customer outcomes on a day-to-day basis with those that are located in our product management, sales support, R&D organizations to bring those constituents closer together so that we can act and react more effectively on behalf of our customers. either addressing day-to-day problems and opportunities or allowing seamless communication, being able to understand more deeply our customers' applications and translating those insights into the next generation solutions. By aligning our sales end to end with our business areas, we think that will significantly drive further accountability to the overall result in terms of customer experience, financial outcomes, and our own employee experience. And as I mentioned earlier, we think this organizational design will allow us to be much more agile and adapt to changes in our business in the future. So I think this is the key enabler to continue to drive the successful execution of our strategy and ensure long-term success. Now, just to give you a bit of color on the cost savings program that we announced previously with our Q3 results, as previously communicated, we target approximately 20 million euros of cost savings within the year. coming primarily from two vectors. On the one hand, the most significant piece of the cost savings that we are targeting will be personnel-related cost. Unfortunately, as a consequence, that could result in as many as 480 roles reduction globally. And then at the same time, we have a number of non-personnel-related activities that we plan to undertake that will also deliver cost savings according to our plan. All told, we estimate that our planned one-off cost would be approximately 30 million euros. This will be reflected in items affecting comparability and, of course, certainly subject to change as we complete the negotiation and the planning process and move into implementation. Concurrent with this action is a next step in executing on our supply chain strategy. So we announced that we would plan to change the Zepro tail lift assembly. The change would involve reducing and closing the operation in Viskard in Sweden, transferring the work to our facility in Stargardt, Poland. And the rationale here is pretty straightforward. We hope that we can improve efficiency, better leverage the facility that we have in Stargard, help ensure and secure competitiveness of the brand by reducing our bill of material cost, which should be a key enabler to driving future growth within this important brand within our overall Hyatt portfolio. So we think these are necessary actions both in terms of executing the strategy as well as reacting to the declining order book as we previously communicated the rationale to continue to reinforce and build our credibility on delivering a good track record of results and continue to focus on value creation despite the top line development. Now, looking further into a few additional insights in how our strategy execution is going, I'll start first with on the left-hand side, really proud to announce that we've recently signed two new dealers in the U.S. in line with our strategy we communicated in 24. So recently we announced that we had closed and signed agreements with MGX, a subsidiary of Manitowoc. as well as Custom Truck OneSource. Now, this brings us up to 16 new dealers that we've signed since we first announced this piece of the strategy in terms of growth in North America. And this brings us quite close to having now full coverage in the U.S., especially for our high-uploaded crane business. And we're inching closer and getting full coverage as well in our critical delivery solution businesses as well. So really pleased with this development, proud of the work that the team has done. on behalf of achieving this critical objective in our strategy, both in the U.S. as well as here in Europe. The second piece that I'm very proud to report is that we now have achieved a critical milestone. We're over 25,000 service contracts. As you'll recall, in 2024, we communicated we were targeting to be above $50,000 by the end of 2028, so we're nicely on track. And this is a critical element for us in order to ensure that we can continue to drive improvements in terms of our capture rates, and that's critical to our parts and other recurring revenue business with our services business area to be. At the same time, we also talked about another key data point. We were targeting to be above 90,000 units connected by the end of 2028, and we're now on a level of 56,000 units connected. So well on track on those two critical elements of the service growth strategy. And then finally on this particular slide, I'll end on highlighting that we did complete a strategic acquisition of ING in Brazil. This is critical to our growth in the Americas strategy. as well as giving us increased coverage and penetration in one of our key segments that we called out as part of the strategy as well, and that was our construction segment. So the combination of ING and Argos, we think, positions us quite nicely as complementary portfolios and will enable and catalyze significant growth in that part of the world. So a big, warm welcome to all of our new colleagues from ING to Hayab. Now, just closing and recapping on our strategy, proud of the work that the team is doing in terms of executing on the strategy. We remain keenly focused on our step-by-step approach to ensure that we are in leading niche attractive and market segments that are quite nicely aligned to essential industries that we learned about during the time of covid we seek to be number one or two in each of those exposures in order that we can set the tone in terms of technological superiority and deliver and through the that and backed up with a second to none service offering, then we know that's critical to delivering the best customer experience in the industry. When we talked about how we intended to grow faster than the market, there were three critical pieces to the strategy. One was we had four targeted segments that we seek to grow in, and we're progressing nicely in two or arguably three out of the four segments. We've yet to see the tailwind coming through in construction, but we continue to take steps in order to expand our share into the construction segment. We talked about growing in North America, in particular through increasing our coverage geographically. And so, as I mentioned earlier, we're now up to 16 new dealers that we've onboarded towards that end. And, of course, critical to our success as well as our customer success is growing our services business. Now, at the same time, we also talked about how we would improve profitability, which you see coming through in the results of improved profitability versus declining top line. And so we've talked quite a lot about improving our efficiency through higher business excellence and ensuring that we continue to execute through our decentralized operating model for the reasons that I gave earlier. And then finally, it's important to note that all of which is designed to help enable that we have sustainable industry-leading value creation across the business cycles. And the team is progressing quite nicely according to that plan. Now, what does that look like in terms of the numbers? We are behind in terms of our progress on delivering 7% across the cycle as we're at 5.5% now after the latest quarter. We're right on schedule or slightly ahead even in terms of delivering 16% at 13.7% in the last 12 months. Similarly, we remain nicely ahead of schedule in terms of our return on capital employed as we remain above 25% as we have at last 12 months of 30.8%. So with that, I'll turn it over to Mikko.

Thank you, Scott, and good morning, ladies and gentlemen, and gentlemen also from my side. Let's first have a look on the equipment segment performance in quarter four. Equipment segment financial performance was quite uneven between the lifting and delivery equipment in quarter four. Order intake totaled 258 million euros. This was minus 13% year on year, but if we clean the currency impact, so 10% down in constant currencies. Delivery equipment orders declined, especially in Americas, while then the lifting equipment orders were actually flat year on year, so actually quite nice development, very much also supported by the European market area. On full year basis, the orders decline came solely from Americas. We start in equipment business the year 2026 with 140 million euros lower order book. And to compensate this, we plan to reduce costs by 20 million euros this year, as Scott described earlier. Equipment sales was 280 million euros in quarter four. This is a decline of 5% from previous year or again minus 2% in constant currencies if we clean them, especially the US dollar weakening. In quarter four and on full year basis, the equipment segment comparable operating profit was negatively impacted by the lower sales, especially in the short cycle delivery equipment, and as mentioned earlier, especially in the U.S. market. Sales in the U.S. was 25 million euros lower in quarter four than in the comparison period, and this had roughly a 10 million euros negative impact in the equipment segment profitability in quarter four. We had some non-recurring costs in the operative results, €3 million in Q4 and €10 million for full year. And without this, the comparable operating profit would be 13.4% in Q4 and 13.8% for full year. Equipment segments profitability, as I mentioned earlier, was negatively impacted by the lower sales in the U.S. and this was partially offset by fixed cost reductions based on that cost savings program which we announced one year ago. Lower volumes impacted also the cross-profit margin as certain factory overheads do not scale 100% with the volumes. We had a 1 million euro negative impact from FX translation, effects mainly due to weaker US dollar, also as mentioned earlier. And then we had a positive impact coming from basically two elements. Firstly, in quarter four, 2024, we had 15 million euros costs, mainly related to the restructuring of our Italian operations. And then secondly, our SG&A costs were lower in the equipment segment due to the cost savings program, which has started in 2024. So on like to like basis without the previously mentioned non-recurring costs in quarter four 2025, the comparable operating profit was 13.4%. So on the same level as in 2024, despite the 5% decline in sales. Then on services, so services continue to grow Very much supported by growing the number of connected equipment and service contracts like Scott highlighted earlier. The weaker US dollar had a significant impact on our services top line. In constant currencies, services quarter four orders would have been 122 million euros, so up by 4%. And on full year basis, the orders would have been in constant currencies, 479 million euros, up by 7%. We have seen good growth in recurring services like spare parts and maintenance services, while then the installation services declined due to the lower new equipment sales as you have seen in the previous pages. Services quota for profitability was impacted by low installation services volumes and a €1 million booking, kind of non-recurring booking, to cover the deficit in our self-funded healthcare system in the US. On a full year basis, there has been a good development in services profitability, mainly supported by the recurring services growth. And on full year basis, services delivered a record high, 109 million euros comparable operating profit. And this is 23.2% margin. So nice, nice progress in services. When we look at the services profitability bridge, sales in constant currencies contributed positively to profitability. so kind of service volumes were developing well. As mentioned earlier, the recurring services had a positive impact on the growth while installation services declined. Lower installation services had also a negative impact on cross-profit margin because, for example, rents for the installation workshops are fixed. FX translation had a negative impact on services profitability, and as mentioned earlier, stemming very much from the weaker US dollar. And as mentioned earlier, we booked 1 million euros to cover the US healthcare deficit program, and here, basically in the picture, it's illustrated in the other bar on the right side of the bridge. So without this 1 million euros services profitability, profitability would have been 22% in quarter four. Next, let's have a look on HIAP's total financials. So HIAP's quarter four comparable operating profit improved 6 million euros from the comparison period, despite the 4% decline in sales. Main contribution came from not having similar kind of €15 million non-recurring costs, which there were in Q4 2024. Here, those non-recurring costs are pictured in the other bar on the right-hand side of the bridge. We have had negative cross-profit impact coming from the lower sales in the US, as mentioned earlier, and luckily this has been partially also offset by growing revenues in EMEA and APAC, as also illustrated earlier. Our quarter four operating profit included 5 million euros items affecting comparability. And these are mainly related to the planning of the 20 million euros restructuring program for this year. The tax rate for the full year was developing favorably. It was 25% versus 27% in 2024. And our net profit was 33 million euros for quarter four and then 151 million euros for full year. Our cash generation continued on a good level also in quarter four amounting to 56 million euros. EBITDA contributed 53 million euros to cash flow, and then we released 27 million euros from inventory in quarter four. While on the other hand, the accounts receivables increased from quarter three due to higher invoicing in the latter part of the year. Full year cash flow from operations was 308 million euros, so really strong performance from the whole organization. HIAP has a very, very strong balance sheet to support the strategic priorities like organic and inorganic growth. Our net cash declined from quarter three Here, basically, the main driver is the €100 million additional dividend, which was paid in October 2025. ING acquisition did not impact the net cash position as the transaction was closed in January 2026. On the debt side, we have basically one major bond, €150 million, that's maturing in November 2026. and basically the rest of our interest-bearing liabilities are mostly IFRS 16 lease liabilities. HIAC's board of directors is proposing a 50% dividend payout for the annual general meeting in March, according basically to the maximum of our dividend policy. This dividend proposal would be 1.17 euros per B share and the total dividend payout would be 75 million euros. Dividend payment date would be April 2nd, 2026. We have provided an outlook for 2026. And this outlook is basically based on few key assumptions. And let me elaborate some of those. As Scott indicated earlier, there has been gradual recovery in EMEA and in APAC. However, the US demand is still uncertain. That has remained stable during the last three quarters. Trade tensions are still expected to cause uncertainty around customers' investment decisions. Our last 12 months rolling order intake has been on 1.5 billion euros level, and we start the year 2026 with 114 million euros lower order book compared to 2025. Our outlook incorporates the plant earlier mentioned 20 million euros cost savings for 2026. These would be visible mainly in the reporting segments and then mostly visible in the second half of 2026. For group administration also for the outlook purposes, full year 2025 is a good base level for modeling. In addition, we are doing certain system development to simplify our processes and further improve our cost efficiency. And this will increase the group administration cost level by roughly 5 million euros in 2026, mainly skewed towards the second half. So based on these assumptions, we estimate that the 2026 comparable operating profit margin exceeds 13%. And as in previous years, this is the floor level. And then I would like to hand the presentation back to Scott for the summary and final remarks.

Thank you, Mikko. All right. Managed to get this to go the right direction one more time. So thank you very much, Miko, again. And I'd like to leave you with five key takeaways. One, thinking through the demand environment, we have seen a gradual recovery if we look at broadly the full year 2025 in both EMEA and APAC. especially positively impacting our lifting equipment business. However, we do see a continued tough environment in the U.S. for our delivery equipment. And as I mentioned earlier, we've seen it quite stable in the prior three quarters. So we'd like to think that that's at a trough level. Number two, despite the decline in sales, we've reached a record high comparable operating profit margin. So nice example of the impact that we're creating through executing on the strategy. Similarly, key takeaway number three is that we're targeting to lower our cost level by approximately 20 million euros in 2026 compared to 2025, which Miko just elaborated. Number four, we continue to execute on the strategy, as I've mentioned a few times previously, with a focus on both growth opportunities, but at the same time, how we increase our relative value creation potential. and all of which should lead to our aim to continue to have an extremely strong balance sheet with excellent cash flow. So with that, I think I'll turn it over to you, Aki.

Thank you, Scott. Thank you, Mikko. With that, operator, we are ready for the Q&A session.

If you wish to ask a question, please dial pound key 5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key 6 on your telephone keypad. The next question comes from Antje Kansenen from SEB. Please go ahead.

Hi, guys. It's Antti from SCB. A couple of questions from me. I'll start with the comments on the U.S. demand, which you are talking about an uncertain environment, but at the same time not expecting any incremental weakness anymore. So could you maybe open up a little bit on those comments in the sense that have you seen something start of, let's say, 26 in the first couple of months that would indicate that your own business has stabilized? Is this more comment on what you are looking at the leading indicators and the overall macro environment, especially on the US delivery side?

Yeah, how about I start with that? Thank you, Auntie, and good morning to you. In terms of the U.S. side, to elaborate more broadly, we really see that the same factors that have led to the demand environment, especially that we saw in the latter part of Q1 last year and then, of course, through Q2, 3, and 4, should continue into 2026. So we aren't at this point seeing any variables that would lead us to believe that the environment gets more, let's say, unstable or an imminent additional risk. So we feel like we have pretty good visibility in terms of the risk. The environment, at least at this point, continues to be quite similar as it was in 2015. And also somewhat similar to the prior year period as well in terms of we still see more robust demand from our larger key account customers. So a good portion of the business is still driven by bigger, more lumpy key account orders. which accounts for a bit of the negative variance if you think about Q4 of 25 versus Q4 of 24. So on the other hand, we still see pretty significant pressure on our small and medium-sized customers who are, to the extent possible, delaying decision-making with the environment at hand that it's hard to understand the level of cost out into the future that they'll actually experience relative to the environment that they'll experience when they take possession of the equipment. So we do still continue to see the small and medium-sized customers softer demand through delayed decision-making.

Just maybe a reminder on how the start of 2025, let's say Q1, Q2 went, especially on the smaller clients in the U.S. Is this kind of a tough comparison if we think about the run rate that you're now entering this year versus what it was a year ago?

I'll answer it this way, and hopefully I hit the point you're getting to, Hanti. If you think about the Q4-24, we had a rather large key account order that hit our order intake in Q4 that we didn't match in the comparison period in 25 and Q4. We had a couple of nice-sized key account orders in 25, but not at the magnitude that we had in 24, which accounted for primarily the variance, especially in the U.S. market that you're mentioning. Now, if you think about the beginning of 25, the demand environment from the U.S. did give early indications that it might uptick. As we examine more closely the development sequentially throughout the year of order intake, and particularly in the U.S. But, of course, once the trade tensions manifested themselves, then, of course, we've seen a pretty consistent level of demand as a consequence from that point forward, and we still see that carrying forward into 26 at this point.

All right. Thank you. And then... couple of more, let's say, housekeeping related profitability questions. First is on the service profitability and understand the one billion negative impact that you point out, but the margin spend is still a little bit different than what we saw on second and third quarter. On the top line, that's not really that much different. So, is there something more in play? Just trying to get my estimates right for this year is kind of the 24, 25 margin level a bit too challenging for current environment or how should we think about it?

Thanks for the question. So basically quarter four service profitability without this one million euros US healthcare deficit coverage was 22%. And this is lower than, for example, as you indicated, lower than quarter one, two or three. And here basically the other underlying reason is the lower installation volumes, what we have had in services throughout 2025. And this is due to the fact that the equipment order book has declined and the equipment volumes have been lower, so there has been less installation volumes during quarter four. There are certain kind of fixed costs, like rent for the installation workshops, and this has lowered the service's profitability. That's basically the, those are the underlying reasons.

So the installation volumes, that impact service profitability dropped in Q4 versus the previous two quarters.

Yes, and also compared to Q4 2024. Okay.

And then the last one was on something that you said on the group admin side. I mean, 11 million for the quarter, if I remember now, a bit higher than what it has been. Is this a number that then you will further increase by, what was it, 5 million annually going into this year?

There are certain fluctuations, quarterly fluctuations in the group admin costs, so that should not necessarily be used as a run rate, but if you think the full year 2025 and what I indicated in the outlook that On top of that, we anticipate to have roughly 5 million euros related to the systems development, which is then expected to generate cost savings in the later years once the system landscape has been simplified.

Okay. Thank you very much.

The next question comes from Ponu Leighton Markey from Danske Bank. Please go ahead.

Hi, thanks for taking my questions. I have a few. I would start with the U.S. market outlook going back to the previous discussion. What do you think is the underlying reason causing the uncertainty? Is it that your product prices have increased and their customers are kind of They need to digest that, or is it just uncertainty around what happens with the tariffs next?

Yeah. Hey, good morning, Pano. Thanks for the question. Just to clarify a bit, we still see the hangover from a couple of years prior where we still have a bit of the inflationary environment that we inherited from the COVID situation. followed by the increase in interest rates. Then, of course, the new variable that entered the equation last year was then the changing trade environment as a result of changes in tariff regime. So where we... see a slight difference that I hadn't articulated earlier is we do see that more acutely impacting our, let's say, retail last mile type customers. So, broadly speaking, we see it impacting still similarly in our building construction supplies, waste and recycling, construction logistics. But where we do see a difference here is in our retail last mile customers, if you're looking for a bit of, you know, what changed kind of sequentially through the year in 2025 and certainly more so in the second half of the year. Now, that both impacted the top line, and as Miko articulated earlier, also create a situation where we weren't quite able to keep up with cost out relative to the change in the top line, so we had a bit of trapped or underabsorbed costs that we'll attend to throughout this year, if you will, as part of our cost savings. But that mainly are the underlying factors there. So you still have the inflationary environment, the additional variable of the trade tensions, where we do see a bit of change in behavior, who, based on the changes in demand, was most impacted were the retail last-mile customers.

Okay, thank you. Then on the market outlook in Europe, could you talk about what are you seeing there and how are the different segments performing, especially interested on defense and construction?

Yeah, we certainly saw in Europe a nice or let's say a steady pickup in our logistics segments, which shows up in part of our lifting solutions. We still see a relatively stable construction environment, so we're yet to see real evidence of, let's say, a sustained uptick in the demand curve, but we have seen some green shoots there where we've perhaps, well, we've picked up our sales, whether it's an issue of gaining market share or not, we're not sure. I'd say more broadly, in some geographies, we're up, some down, so on balance, we're saying we're relatively stable in terms of the overall market shares in that segment. At the same time, of course, we're seeing a pickup in defense logistics. However, it's important to note that that's one area of our business where you'll tend to see a large spread. from taking the order or having order received versus the revenue recognition. Often those contracts are multi-year contracts to be delivered over a longer time series. So then the time between order received and rev rec might be longish. So there will be a bit of a spread between our order intake development versus seeing that in revenue. So I keep that in mind. and some of which will be dependent upon our partners in the transaction and how they choose to fulfill the orders that they have to the various military organizations that they provide those solutions to. And then in terms of services, similar story, more broadly speaking, we continue to see a nice steady uptick in both order intake as well as services, primarily in revenue rather, and then primarily driven by the execution of the strategy as I had mentioned earlier in the presentation. We see the nice uptick in our ProCare contract coverage. It's working nicely for both our dealers as well as executing in terms of the direct sales. And we have more to come there. Similarly, we see a nice uptick in connected units that are turned on, and now we're able to engage more meaningfully with our customers on an ongoing basis relative to how the install base is performing. But then at the same time, it also gives us a unique opportunity to engage with them in terms of the actual cost of and productivity and safety outcomes that they're experiencing, and that's translating into better services revenue uptake as well.

All right, thanks. Then my final question is on the guidance, or actually two things around the guidance. First one is that can you comment if the more than 30% margin is a guidance for each of the quarters this year, so will it be higher than 13 every quarter, and then more importantly, what are the kind of swing factors in the guidance? You said that it's a floor, and I get that it's quite early in the year, so it's probably conservative, but what are the kind of positives that could drive margin higher than the floor level, and any comments around those?

Yeah, thanks for the excellent question. As I mentioned in the kind of background of the outlook analysis, We have incorporated the €20 million cost savings in that outlook. And based on the Labour Union or Labour Works Council negotiations, we anticipate that the new organisation could come into force in quarter two. So that means that mostly those savings would be visible in the second half of October. So from that point of view, I would say that one can't say that it's every quarter above 13%. This is a full year outlook and we aim at being above that 13%. Okay, thank you.

The next question comes from Andreas Koski from BNP Paribas. Please go ahead.

Thank you and good morning. A number of questions from me as well. So if I can start with the backlog development. You now have a backlog that is 18% lower compared to a year ago. And I wonder how will this impact sales in 2026 compared to 2025? i.e. is there a lower absolute amount from the backlog that will be delivered in 26 compared to what we saw in 25?

Yeah, I'd say that, Andreas, thanks. Good morning, by the way, and thanks for the question. So I'd say the right way to think about the backlog and then how we're thinking about the sales realization in 2026 is as follows. So on the one hand, if I come back to the prior question from Panu, the lower order book by $114 million means that we have then that much less visibility to our revenue curve into 2026. So that's an influencing factor in terms of where we set the floor. Having said that, we've set the floor 100 basis points higher than we did each the prior two years. On the other hand, then, what I would say is the right way to think about the revenue recognition for 26 is a bit more a factor of looking at the trailing last 12 months order intake. And then as we've indicated, we're at or about the 1.5 billion euro range. So that's, for us, the right starting point of how we think about the potential for this year and then how it relates into setting the outlook for 26. At this point, we don't give the outlook relative to the top-line development, primarily because we're a short-cycle business, so we have this four to five months' worth of visibility into our revenue curve with where our order book stands, which is quite at a normal level now.

Understood. And is it fair to say that it sounds like you expect the recovery to continue in EMEA and APAC, and you're now saying that the U.S. market is at trough? So in total, it sounds like you expect total orders to move upwards from the stable level that we have now seen for a number of years. Is that the correct reading of what you're saying?

Well, what we're saying is that if you look at the trends throughout 2025, we see a nice recovery in EMEA and APAC, but of course, if you think back to Q4, for example. So Q4, compared to the comparison period, we had a negative variance, whereas we had positive variance for the entire year. So there is still a bit of variability, which is also part of why we're, at this point, not providing guidance on order intake or revenue for the year. And at the same time, we see that if the environment in the U.S. continues as it was in 2025, then we would expect for the demand environment to look similar to what it did in 2025 at this point.

Okay, understood. And then on the 16 new dealers that you have signed since the beginning of 2024, are most of them at full speed now? And do you see that you are performing better than the market because of these new dealer agreements?

Yeah, excellent question. And I would say, broadly speaking, not yet. Many of the dealers that we've onboarded have been into the latter half of 24 and then throughout 25. So we're, let's say, sequencing the onboarding of the dealers, which, of course, is quite a nice and involved process. in terms of getting them up to speed on our offering, getting the systems behind to support, and then at the same time getting everyone and both the dealers as well as on our side up and mobilized in order to help ensure and secure that our dealers are able to deliver on behalf of today's and tomorrow's customers. So we're at varying stages of delivery. mobilizing the dealers. So I would say, broadly speaking, no, all 16 dealers aren't at full speed yet, but some of which are, and we're over time getting all of the dealers up to speed. And then we would anticipate to continue to add additional dealers as we progress through 26.

And then quickly on the balance sheet, Is the board considering any more extraordinary dividends in the years to come, or is the priority now to do acquisitions and grow organically?

Well, I'd say that we have a full mandate to leverage the balance sheet to catalyze growth both organically and inorganically and continue to explore ways in which we would successfully deliver value creation back to our shareholders.

That's great. Thank you very much.

The next question comes from Tom Scottman from DNB Carnegie. Please go ahead. 358503390901 your line is now unmuted. Please go ahead. The next question comes from Mikhail Dopal from Nordea. Please go ahead.

Yes, hi. Good morning, everybody. This is Mikhail Dopal from Nordea. Thanks for taking my question. So a couple of questions from my side. First of all, how big part of your DOTA revenues or orders was the defense based on Nordea?

Yeah, on an order basis, our defense for full year 25 is approximately 7%, so a little bit up from 24. Okay.

Well, that's very clear. And then secondly, if you look at 2026, I mean, I understand that you have your cost . But if you look at the underlying trends in costs, how do you see that developing in terms of material costs, in terms of labor costs? And also, are you still on just the price upwards to promo force? Just a bit on the price-cost kind of equation.

Yeah, yeah. So, in terms of material cost, they're... We still have in our execution plans specific actions that are both process-related as well as design-related that we think on balance are going to provide favorable variance in terms of our bill of material cost. Labor costs, of course, we have the statutory increases that we assume will come. We don't yet have visibility in terms of what the magnitude of that impact will be. which we're taking into consideration relative to our cost savings program. And then in terms of our pricing environment, as always, there are certain products that we surely are seeking additional pricing for, which we've already announced, both in terms of equipment as well as the services side of the business. And there may be a number of SKUs where we go into this year with flat pricing. It all depends on the market list pricing, which is the nature of the environment in which we compete in.

Okay, so that is clear. And then just related to pricing, just a brief follow-up. So do you see, I mean, there's a carriage. Would you say that you are still fully able to compensate on that, or do you expect that to have some sort of impact on your margin in 2026?

Yeah, broadly speaking, the answer is yes. And, of course, there's always variance around timing, Mikhail, but broadly speaking, so far, yes.

All in all, as discussed earlier, basically our principle has been to treat the tariff as a cost element. So we pass that cost to our customers. We don't put the profit margin on the tariff. And basically in last year, the tariffs had roughly 20 million euros impact, kind of a tailwind to our order intake and then roughly 15 million euros in sales.

Related to pricing, we have also one question from the webcast. So are customers pushing back more on pricing compared to prior periods?

I'd say, as always, our customers are seeking for the best possible price. And we have great customers, so we have tough negotiators. But I wouldn't say that it's a different level of environment as compared to what we're normally seeing. So it's our obligation to offer the best possible price.

The next question comes from Antti Kansenen from SEB. Please go ahead.

Yeah, thank you for taking the follow-ups. Maybe you already answered on the previous one, but I was just wanting to ask how much of that kind of zero percent organic order growth in 25 was pricing? I mean, you said that tariffs had a 20 million impact, but how about price increases otherwise?

Yeah, I would say that in our equipment business globally without the tariffs and in Europe and in Americas, I would say that the pricing has been fairly flat in 2025 compared to 2024. In services we have done certain low single digit price increases mainly to reflect for example topics like labor inflation. And then as mentioned earlier we have implemented in the US since the inflection of the tariffs and the tariff surcharge but it's not in a price list but it's a separate kind of cost item in the customer invoice.

And this is kind of a positive or neutral versus kind of cost increases that you have accrued?

I would say neutral.

Yeah. Okay. And then, I mean, I understand that there's no sales guidance, but I'll try anyways. Because you mentioned that kind of 12-month rolling order intake, maybe the starting point, around 1.5 billion, that's also the Q4 run rate we are right now. Then you'll add 50 million plus from the Brazilian acquisition, And then you are kind of seeing European market recovering, U.S. market not coming down. So if I then add that scenario, that would be a growing top line and maybe together with the savings also growing earnings. Is there something that I'm misunderstanding here or being too optimistic?

One topic to consider is that we have still in, if you look the run rate for the revenues, we had more than 400 million euros revenues in the first and second quarter of 2025. And that was still coming from the a bit higher kind of order intake run rate from 2024. and the backlog as well. So perhaps look in the kind of second half. Well, like I said, the rolling 12 months is the indicator what we are using for kind of sizing our costs and planning the operational activities.

And then the ING acquisition, is there anything you want to point out on how much margin dilutive that would be on the equipment business, if anything, or is there some kind of a cost-saving synergies that would already impact this year's numbers?

There is certain BPA impact. I would say that on On an EBITDA level, it would be fairly stable as an equipment business. But then on an EBIT level, there is a certain BPA element, which we will then open as we proceed in 2026 reporting.

Fantastic. Thank you very much.

The next question comes from Tom Skogman from DNB Carnegie. Please go ahead.

Yes, hello. I would just like to start by asking, do you have expectations for larger defense orders in 26? I guess these are protests that have been discussed for a long time. What do you know?

Yeah, I'll start there, and please chip in, Miko, if I missed something here. But the backlog is pretty robust, exactly as you described, Tom. We're fairly well known and understood. As we have discussed, maybe since late 24, however, we have seen a number of, let's say, shorter cycle opportunities that have popped up. And that's maybe one of the key differences that we've seen in the demand environment with defense logistics. So whilst we have a view today in terms of what the value of the backlog is and what each individual opportunity is, it could easily be so that there are new opportunities that present themselves throughout the year that we didn't foresee as we speak right now. So that's probably the one change. In terms of the expectation of how we'll convert that this year, extremely hard to call as those orders are frustrating at best to dial in as part of a forecast. I'll put it that way.

But overall, I would say that the funnel looks good for the defense business. But the timing is really critical.

Okay. And then on your service business, how large share of sales in 2025 related to installation of new equipment?

Yeah, you can think of it this way. Our non-recurring revenue for 2025 was around 24%, 25%, which is linked to our new equipment sales. Installation specifically slightly down probably from the last time that I think we had this conversation, so between 10% and 15%. Okay.

Okay. And then what about the utilization rates of your equipment? I didn't see any slide on that, and you have your sensors. Is it still the situation in the U.S. that equipment is used a lot, but they don't order?

Yeah, we've seen a lot of change in variability in the utilization. Some periods have been up, some down. Also changes as it relates to equipment in Europe versus equipment in the Americas. So on balance, fairly stable as it related to the prior year period. But to your point, Tom, we're still in this environment where our customers are sweating the assets. That's no question about that.

And then when you get new distributors, is it so that they start by building up an inventory or do you need to shift kind of things just to display to them? Or how does it usually work now when you get these kind of larger new distribution contracts?

It depends on the nature of the equipment. Some equipment is advantageous for the distributors to have inventory of other equipment. It's not necessarily based on our lead times. So it all depends on the focus of the particular dealer. Not so insightful if I make a broad statement of some dealers will build up a bit of inventory because they're going to focus more on longer cycle business or longer lead time businesses versus others that will have, let's say, relatively short cycle equipment. Having said that, an example where that's a bit counterintuitive is tail lifts would be a great example where we have distributors in Europe that do maintain a level of inventory because of the need for less than a day fulfillment, both in terms of the tail lift as well as the parts that are associated with the tail lift. So it all depends.

Yeah, but the U.S. distributors do not really have inventories of crane freight.

Correct. Correct.

And then the 10 million post savings, how is it split between OPEX and SG&A costs?

Part of this cost savings, we have not specified how much comes to the SG&A cost. Part of that will be visible also above gross profit. But overall 20 million euros savings in 26 versus the 2025 cost level, yeah.

And just a bit more color, if you think about it compared to 25, then we anticipate a bit more shift towards the below gross profit level cost savings. But at this point, too early to say as we need to complete the labor negotiations process first. Then we can provide a bit more color on that as we progress through the year, Tom.

And then finally, you know, with the current FX rates and especially the dollar rate, how big impact do you expect it to have on EBIT after all hedges and everything?

Well, I would say that if we would take, say, 10% weakening of the US dollar from the, let's say, average second half of... US euro rate, that 10% would mean roughly 8 million euros decline in comparable operating profit.

Okay, thank you.

There are no more questions at this time, so I hand the conference back to the speakers.

Okay, thank you for the good questions and for the presentation and answer from Mikko and Scott. We will be back on 24th of April with our first quarter results, 2026. Thank you. Thank you, everybody.