Hiab Oyj

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.