Hiab Oyj Unsp/Adr

Welcome to HIAP's third quarter 2025 results call. My name is Haki Vesikallio. I'm from the investor relations. Today's results will be presented by CEO Scott Phillips and CFO Mikko Puolakko. And as a reminder, please pay attention to the disclaimer in the presentation as we will be making forward-looking statements. HIAP's Q3 profitability was affected by lower sales in the US. Our orders decreased slightly. Comparable operating profit margin decreased to 11.4% due to lower sales in the US, which was caused by elevated market uncertainty due to increased trade tensions. However, our services business continued to grow. Sale of McGregor was closed on 31st of July, and the business is now separated from the company. Let's then view today's agenda. First, Scott will present the group-level topics. Mikko will go through reporting segments, finance sales 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 greetings, everyone, from my side. I will start with a few highlights looking towards executing on our strategy of profitable growth for the future. First, I am pleased to share with you that we announced a partnership with Fortera to further develop automated solutions for our load handling systems business. It's a really exciting development there. Next, we launched a new 3.5-ton truck-mounted forklift for the EU, which will enable our Moffett branded solutions to be the clear industry leader in this size class of delivery solutions. And I would also like to highlight that we announced the launch of the smartest cable hoist solution in the U.S. market under our Golfab brand, so really proud of the work the teams have done on both sides of the Atlantic there. And finally, we are pleased to announce the revised long-range climate targets, aiming to be net zero by 2050. Now, getting into the financials for the quarter, I'll start first with order intake. Our orders received in the quarter declined by 3% to €351 million versus last year comparison period of €361 million. And then as a consequence, as you see on the left-hand side of the slide, we've gone from 900 million euro order book to roughly 636 million at this time last year, and now stabilizing out around 557 million euros following this quarter. Now, for a period year to date, our order intake is up one percentage point to 1.1 billion versus last year. And as you think about the last 12 months' order intake, we're somewhere around the 1.5 billion euro level, which has been the case for approximately the last two years. Now, the decrease in orders received was driven primarily by this delayed customer decision-making in the U.S. Of course, that was partially offset by defense logistics, and we won a nice win segment order that we announced previously in the quarter. Currencies had a two percentage point negative impact on orders received in Q3, which we had highlighted would be the case with last quarter's results call. Now looking further into the geographic distribution of the order intake, our EMEA market was represented 56% of the orders for the quarter, or 195 million euros versus last year at 155 million. So that's up 26%. Year-to-date, we're at 587 million euros versus 518 million last year. That's a change of 13% year-over-year, year-to-date. In the Americas, however, a bit different picture. In the quarter, we were 132 million euros versus last year at 185 million euros, so that's a 29% reduction. Therefore, year-to-date, we're down 14% versus last year at 435 million euros versus 504 million the prior year. And in APAC, we were up nicely in the quarter by 11% from 24 to 22 versus 22 million euros last year. Year-to-date, we're at 84 million euros versus last year's year-to-date figure of 72 million euros, or up 16%. In terms of the operating environment, we do continue to have positive momentum in our defense logistics and energy segment opportunities, so that's good. We have also a big, robust replacement demand that's driving the majority of our business. Of course, on the negative side, we still have the uncertainty of the trade tensions. And this, of course, has impacted the demand curve, in particular in the Americas, and in particular drilling further in the U.S. market, which, of course, means our U.S. customers have remained quite cautious. Then moving into the sales development, sales in the quarter were down 11%, so 346 million euros versus last year's comparison period of 388 million euros. And year-to-date, we're at 1.16 billion, which is 6% below last year's level at this time, which is 1.235 billion euros. And then on an organic basis or in constant currencies, we're down 8% in the quarter versus last year and 5% year-to-date. Of course, our services percent of sales grew in the quarter to 34% versus last year's comparison period at 29% year-to-date. Services represent 30% of sales versus last year's year-to-date figure at 28%. So sales have leveled out at approximately the level that we would expect given our prior 11, 12 quarters worth of order intake adjusted for the seasonality effect. But of course the big story was the negative impact that we had in the US market, which I'll cover in the next slide. So looking into the geographic distribution of the sales EMEA represented 51% of our sales in the quarter, down slightly from last year, 5%. Year-to-date, EMEA is at 573 million euros versus last year at this time at 599 million. So that's a 4% decline. In the Americas, however, is where we had the biggest decline. Americas in the quarter was 140 million euros versus 177 million last year, 21% drop year-to-date. We're at 9% down versus last year, 508 million versus 556 million. And in APAC, much like the order intake, we were up slightly, 29 million in sales versus last year's Q3 at 24 million in sales, representing an 18% positive variance. Then year-to-date in APAC, we're down 1% or 1 million euros, 79 million versus last year at 80 million. Our ECHO portfolio sales continues on a positive development. We're at 140 million euros in the quarter of ECHO portfolio sales versus last year comparison period of 114 million, so that's up 23%. Year-to-date, 437 million euros versus last year. Year-to-date at 354 million euros, up 23%. So as indicated earlier, our sales decline was most prominent in the Americas. EMEA sales declined slightly, of course, linked quite closely to the order intake development in the region. APAC sales increased slightly, which, of course, also linked to the order intake development in APAC. And on the positive note, our echo portfolio sales increased, in particular in our circular solutions from our service business, as well as our climate solutions and our lifting solutions equipment business. Then looking into the profitability, for the quarter, our comparable operating profit was 40 million euros versus last year, 52 million euros. That's 24% drop on the 42 million drop in sales quarter over quarter. That puts our year-to-date comparable operating profit at 166 million euros versus last year's 176 million, representing a 6% drop, which, of course, all occurred within the quarter. On a percentage basis, our comparable operating profit percentage was 11.4% versus 13.4% last year. And year-to-date, we're at 14.3%, which is on the same level as last year due to our good performance in the first half of this year. We were primarily impacted by the $20 million negative impact from our lower sales in the U.S. I highlighted on previous slides. Our gross profit margin also decreased slightly by 80 basis points, primarily due to the change in the revenue curve, which we weren't able to fully offset with cost out in line with sales development or the revenue development. However, our SG&A costs were lower in the quarter by approximately 5 million euros, 1 million euros lower in sales and marketing, 4 million lower in administrative costs, so well in line with our 20 million euro cost reduction program that we announced last year. And then as a consequence, our operative return on capital employed improved, driven by a the nice development of managing the working capital within the team, especially as it relates to the day sales outstanding. So really strong execution in that regard. Then as we've done each of the past few quarters, we'll want to highlight where we are relative to our long-term targets. So just to remind you, our long-term target was to was to be on a level of 7% CAGR over the cycle, 16% comparable operating profit, and above 25% return on capital employed. Our progress as of Q3 of this year, our rolling 10-year average is down now slightly to 6%. Our last 12 months comparable operating profit is at 13.1%. This compares to 12.7% where we were at this time last year. And our last 12 months return on capital employed is at 29.8%. So with that, I'll hand it over to Mikko.

Good morning also from my side. Let's first have a look on the equipment segments performance in the third quarter. Equipment segment had a slightly positive book to bill in quarter three with 239 million euros order intake. Lifting equipment quarter three orders were actually flat while the delivery equipment orders declined. This delivery equipment orders decline came from the U.S., as mentioned already earlier by Scott, and this is very much caused by the trade tensions, driven slowness in our customers' investment decisions. Equipment sales was 230 million euros. This is a 17% decline from prior year. Lifting equipment sales was flat year on year, so the decline came solely from the delivery equipment and in particular from the US market. Equipment comparable operating profit declined to 20 million euros, which represents a 8.8% margin. This decline in margin is solely again attributable to the delivery equipment sales decline and very much attributable to the U.S. market. You can see clearly in the bridge on the right-hand side what kind of impact the 46 million euros decline in delivery equipment volumes had in our profitability in quarter three. The cross-profit margin was negatively impacted by lower volumes. So all in all, the equipment, as well as the whole high-up quarter three profitability, was impacted by the lower delivery equipment sales in the U.S. Services grew nicely in quarter three. We continue to increase the number of connected units and there has been also really good intake for maintenance contracts as well. The growth both in orders and sales came from recurring services like spare parts and maintenance. Services grew even in Americas as there is an installed base which needs to be up and running every day. Services profitability was on a good level. 23.5%, especially thanks to the higher sales as well as commercial and sourcing actions. When we look at the services profitability bridge, profitability improved by 5 million euros in Q3. The main drivers for better profitability were €4 million higher sales, as well as the previously mentioned commercial and sourcing actions, which improved the cross-profit margin in services. Also, the services' fixed costs were slightly lower compared to the previous year. The foreign exchange or the translation impact had roughly 3% units negative impact in services, quarter three orders, sales, as well as profitability. Let's have a look then at the total high-up financials, and I'll focus here more on the right-hand side, the profitability bridge. The comparable operating profit declined 12 million euros from the comparison period. Here the 42 million euros decline in sales is the main factor behind the lower profitability. As described earlier in the call, this lower sales stems from the delivery equipment in the USA. Lower sales impacted also our cross-profit margin. As mentioned by Scott earlier, it was 0.8% units lower. It's good to remember that some of the costs above the cross-profit margin, like factory overheads, those are not fully scalable within a few quarters. So when we have lower revenues like we had in quarter three, that has a slight negative impact on the cross-profit margin. We got some tailwind from the lower SGNAs, which were roughly 5 million euros lower than last year, and then 8 million euros year-to-date September. The currencies, as you can see from the picture, had a minor, roughly 1 million euros negative impact on our profitability in quarter three. On a positive note, our cash conversion, i.e. the cash flow versus comparable operating profit, was 173% for third quarter. Networking capital decline was the biggest contributor to the over 100% cash conversion, and the networking capital declined mainly in accounts receivables. Reported cash flow still includes July cash flow from McGregor, but as can be seen on the chart, the contribution to the overall cash flow was relatively small. When we look at our balance sheet, McGregor has now fully been removed from HIAP's balance sheet at the end of July 2025. HIAP had now €308 million net cash position and this converts to a minus 32% gearing at the end of September. As you have noted, we have also paid an additional dividend of roughly €100 million in October. This is not yet visible in these September balance sheet numbers. If the dividend payment would have taken place in September, our gearing would have been minus 21% in September. Still a very, very strong balance sheet. On the right-hand side, you can see that we have a couple of outstanding interest-bearing debts, one 25 million euros maturing this year and another bond 150 million euros maturing in September 26th. About our outlook, we reiterate our outlook for 2025. Our estimation is that the comparable operating profit margin for 2025 is above 13.5%. And please note, this is the floor for our profitability. This outlook is based on the year-to-date September comparable operating profit margin of 14.3%, as well as the order book that we have in hand at the moment, and then also the current situation related to ongoing trade tensions. And then I would like to hand the presentation back to Scott for the quarter three summary.